hearing and the manafort trial as we learn this hour that president trump's former campaign manager and his former lawyer both found guilty michael cohen pleading guilty to eight criminal counts including violating finance law and manafort found guilty on eight counts of fraud. just an unbelievable hour of news coverage. all sorts of implications and the potential market reaction. we will hand it over to our colleague michelle caruso-cabrera on "fast money" to pick up our coverage. >> hi there, sue excuse me, hi there sara, hi there, david >> we saw a sell-off toward the close here, don't you think? that's part of what was happening today? there was uncertainty about what was going to happen with both of these situations and why would you go long into them? >> the headlines in the earlier afternoon didn't seem to shake the market you are right into the close art cashen came by as he always does in the set, $2 billion to sell was a heavy amount and he did cite nervousness and uncertainty into some of these

headline, but mike santolli brought up a point that the market likes, taxes and deregulation has been put in place so the question remains what does it mean for the markets and the economy when you have uncertainty around the presidency. >> thank you, guys thank you, david thank you, sara. >> let's go to sue herera. she has the latest on the paul manafort trial. >> indeed, thank you very much here's the lodown on what has happened this afternoon. michael cohen, president trump's former lawyer pleading guilty to eight criminal counts in manhattan federal court today including twovilleatio violatiof campaign finance law mr. cohen says at the direct for, quote, candidate for federal office, that would be the now president trump, he arranged to make payments, quote, for the principal purpose of influencing the election.

basically, sentencing is going to be december 12th for mr. cohen. bail was set at $500,000 for mr. manafort, there were 18 count against mr. paul manafort, alleging a variety of misdeeds including filing false taxes and failing to report foreign bank and financial accounts and bank fraud. he was guilty, found guilty on all five false tax reports and that carries a total maximum of 15 years he was found guilty on count 12 which was failure to file reports of foreign bank and financial accounts and he faces five years on that maximum the bank fraud 525, and a maximum of 30 years and count 27 bank fraud guilty, maximum of 30 years. the jury came out with a guilty verdict on eight count, ten counts they could not come to a consensus and the judge has

declared a mistrial. the judge has given the attorneys and prosecutors about a month to decide about whether they want to retry mr. manafort on those ten remaining counts. so mr. cohen is going to do a plea deal. we don't know whether that plea deal includes his being forced to cooperate with prosecutors. that has not been revealed and mr. manafort basically faces up to close to 80 years in prison if he gets the maximum on all of those charges. we should note that the u.s. attorney is scheduled to speak in just a short while and we will have those headlines for you, as well michelle, back to you. >> thank you, sue herera for running this up for us and we'll keep this up in the manafort hearing in virginia and cohen in new york, and we'll carry the important news conferences live. ed in meantime, let's trade what happened here. what do you guys think did we see a sell-off because this was happening and there was uncertainty about it

>> we've had a lot of political uncertainty during this administration >> would you say this was a new level of such and convictions for folks directly tied to the president are going to lead to a lot more speculation again, what is the michael cohen plea and how does that directly implicate the president. the bottom line is othemarkets,d they'll be unwound the biggest issue is when you get to midterm elections where someone wants to imput, a member of this administration to control the house and the judiciary and tech tiff branches and frankly, we've heard a lot of news before. >> the market did sell off based on what we're hearing. when you saw the types and the line coming across the tape. cohen, everyone thought he was going to cooperate and then you don't know if he'll really cooperate and go against the president. the market definitely sold off from that, but i think it's more about impeachment. >> and whether it's acceptable to do it >> what does the midterm election look like is it possible to impeach him.

this isn't for what has been done and what is the potential future of this administration. >> what's left on the trum agenda say that he's not going to be able to do what's left on his agenda to me, front and center and what has been all summer is trade what is the trade policy going to be? does this weaken him in an effort to try to be strong for china or the eu? i'm not certain. i don't know >> it would probably rally account market in my opinion. >> if he were to be softer, maybe. maybe. i'm not really sure although in general, a weakened president who is so pro-business is probably not a good thing for the market in the short term >> as you mentioned the midterms and say the dems take back the house. in some ways it's like dampening in my opinion. this whole administration has been lots of tape bombs and the market hasn't cared unless this last six months where we've been

grinding around here and as things have been heating up over the last month, the s&p has gone from 2700 to 2850. the market participantses have not really cared and in my mind if you were to see at least one house, okay? and if you were so see one house in congress you are basically taking the risk out and you have to compromise on things like that >> i get the theory behind that. on some level it allows you that what has happened has happened and we can move on and if you thought there was disorder before, i think the market will be totally opposite of that. if you saw a change in the house the market would lose 5% let's be clear this could be the opposite of what we've seen. >> the market -- if i can go back to your point about delisting. say he gets impeached by the house, the democrats are even more anti-trade. i don't think trade gets softer

at all if hillary clinton had won -- >> i think point is the last 18 months there's been no compromise any which way. >> you said the market hasn't done a lot though. >> understand. listen, let's go back to the tariff stuff and president trump said it himself and the stock market is at all-time highs and let's re-negotiate the trade deals and i don't think anybody disagrees with the thought process whatsoever and we are at all-time highs and the s&p is pushing into high single digits on the year. i just think a lot of people don't like the way it's been done >> if you look at it, the s&p 500, it's low about a third of a percent. >> if it's natural, it would come back a little bit >> if there was no news today, seeing us test the twr2873 level and give ground back totally makes sense. these are quiet, quiet markets

this has been a move without a whole lot of liquidity belined it and i agree i don't think anyone is getting terribly worked up here and i think you have a dynamic here where karen talked about the dynamic of trade and how this president, you know, whether he's strong or not, i think the president if anything has proven he will be more aggressive even if the perception is that he's got less of of a foundation underneath him because that's how he rolls and if anything, i think he'll dig harder into trade because i think he feels that's what he's supposed to do. >> i think when you also have to not discount is the ability when you have the tape reading algos when you hear about the cohen plea deal and it sells the market off and we see the intraday chart, the market did sell off small, but it did sell off nonetheless. >> without knowing exactly what it was >> look at the dollar and the index has given back 2% over the

last couple of days and we talk about this often on the show and the dollar is often for quality and when the dollar has been sold and wooe been at the weakest point in the past month is when you will see the global economy, oh, we can actually rally and all of the other markets are interesting. oh, even some of our multinationals do better in this environment. i think the dollar continuing to weaken is something else that you have to watch and let's face it, that's also been part of the dialogue it's been the fed and the dollar and what this administration wants and right now they're getting that and that's been very important for markets >> we've had good earnings today and we'll get back to the fundamentals those were some very good numbers today. we've had really strong retail numbers and we still have s&p earnings coming out. >> hold on we'll take this live picture here as you see michael cohen coming out of the courthouse with his lawyers and see if he'll talk to the media at this point. he often does.

michael cohen -- >> just had a plea deal, not speaking to the press and his attorney trying to fight to get into the car here. >> sue herera told you earlier, the most consequential, at the direction of a candidate for federal office he was told to make payments for the principal purpose of influencing elections. >> that is probably the key headline here and the one headline that perhaps puts the president most at risk at this point. no surprise you'll see a big melee of reporters outside of lower manhattan federal court. let's bring in cnbc's editor-at-large john harwood with more. john >> michelle, i wanted to add to the discussion you all were having about trade president trump has had a consistent pattern throughout his presidency that when he experiences adversity he reinforces and doubles down and goes back at the things that he believes has been most successful in keeping his base

loyal to him so i think there's every reason to think at this point that his actions on trade where he sees the ability to add unilaterally, imposing tariffs and negotiating and taking actions as using his executive authority, every reason to think he's going to do that even more intently now than he has been doing it, as he tries to demonstrate that he still has power and he can still do things. obviously, everything will change as you guys were discussing as one house of congress flips most forecasters believe that the house of representatives is likely to flip, possible the senate could flip and much less likely than the house, and so that creates the prospect that the administration will be consumed by investigations and potentially impeachment and that sort of thing, but i do think in the near-term you should expect the trade actions to get more intense rather than less >> when he feels cornered or

under pressure, john, he gets more aggressive. >> and we will show this video one more time. this is really incredible, huh what a turn of events for michael cohen, the man who used to be so defensive of president trump and now turning on him no details about exactly when he's going to do in terms of if he's going to identify or not against the president, but we're in a situation that is just unthinkable a year ago. >> michelle, just to point out, he already has testified in other words, he has said that he committed a fl felony at the beleft of donald trump whether or not there is a cooperation agreement and summons of more information from him, that is plenty damaging on its own, that he has confessed to a crime that he said he committed at the direction of the president. >> absolutely.

>> the key question is let's bring in eamon javers with the latest development >> eamon, we're wondering if that's it or if there's more to come for michael cohen >> michelle, as you raise that issue, we are just getting a hard copy here of the michael cohen plea agreement and i'm just scrolling through it in real time with you looking at some of the details here in the agreement. one of the things that we'll be looking for is whether cohen has agreed to cooperate with investigators on an ongoing basis and what the details around the cooperation are, and i'm just looking at the document now. we don't know if the document is silent on that piece of this or not. it's possible now that the document could be silent on michael cohen's potential cooperation, and i am told on extras that are filed under seal and therefore are still secret it is a possible situation that we don't know all of the facts here that the southern district of new york is aware of and some

of this may still be under seal and we're not necessarily looking at a complete set of facts, but according to the plea agreement, michael cohen here is pleading guilty to eight counts here and what the agreement says is the total maximum terms of imprisonment on counts one through eight is 65 years. a significant potential prison sentence for michael cohen and that would imagine, that would be a hefty sentence. >> hold on we're going to manafort's attorney speaking in virginia. >> he's evaluating all of his options at this point. thank you, everyone. >> that was quick. >> once again, if you're having trouble keeping the players straight, that was paul manafort's attorney down in alexandria, virginia, where he was found guilty of eight counts the former campaign manager for president trump. michael cohen entered a plea agreement and let's go back to eamon javers and maybe he's had

a chance to look at that document to see if he has more details about what michael cohen is willing to do >> we don't know and i'm literally reading this on my television right now which is never a good way to do reporting. >> no. struck there, by kevin downing, the attorney for paul manafort who we saw coming out of virginia saying manafort is considering all of his options the question is does he have an appeal in mind and what is the question here on the jury being deadlocked. if you're paul manafort's lawyers here on the one hand, it's a devastating loss, but on the other hand, the jury was unable to come to a consensus on more than half of the count against your client. so you feel like you might have some kind of a leg to stand on here legally and they'll have options there to consider and clearly, you can see that they're going to weigh that and make a decision about how to proceed. ultimately, though, it looked like paul manafort will be facing some potential jail time there in virginia. michael cohen facing a

significant amount of jail time in new york and all of that incentive for cohen and manafort presumably to cooperate with inquiries from the special counsel in terms of what they know about the interactions they have with president trump. all of that has to make people here at the white house very, very nervous and has to be by the president. >> we will interrupt you, eamon. let's listen >> the office of the irs also with me are the prosecutors from the united states attorney's office in the southern district of new york who prosecuted the cohen matter. i'm going to have a brief statement and will not be take anythi ing any questions. >> michael cohen pled guilty to eight felony charges, five of those dealt with tax evasion for the years 2012 through 2016 in which he failed to report approximately $4.1 million in

reported income. approximately 2.5 of that money was interest payments from a personal loan that he failed to report approximately 1.3 million of that money was from the operation of his taxi medallion business, approximately $100,000 of that money was from brokerage commissions and over $200,000 was from consulting fees that's over $4.3 million over a five-year period which translates into a loss to the united states treasury of approximately $1.3 million in addition in count six, mr. cohen pled guilty to making false statements to a financial institution in connection to an application for a home equity line of credit in that application he failed to disclose nearly $14 million in debt that he had, and as a result of that concealment he obtained that $500,000 line of

credit which he would not have been entitled to had he been candid and honest. in addition, mr. cohen pled guilty to two campaign finance charges. one for causing an unlawful corporate contribution and a second one for personally making an excessive personal contribution both for the purpose of influencing the 2016 election in addition, what he did was he worked to pay money to silence two women who had information that he believed would be detrimental to the 2016 campaign and to the candidate and the campaign in addition, mr. cohen sought reemborsment for that money by submitting invoices to the candidate's company which were untrue and false they indicated that the reimbursement was for services

rendered for the year 2017 when in fact those invoices were a sham he provided no legal services for the year 2017 and it was simply a means to obtain reimbursement for the unlawful campaign contribution. a couple of points i'd like to make first, these are very serious charges and reflect a pattern of lies and dishonesty over an extended period of time. they are significant in their own right. they are particularly significant when done by a lawyer a lawyer who through training and tradition understand what it means to be a lawyer, to engage in honest and fair dealing in adherence to the law mr. cohen disregarded that training and disregarded that tradition and decided that he was above the law and for that he was going to pay a very, very serious price. with respect to the campaign finance violation, they're

designed to prevent the illegal money to maintain the integrity of those elections mr. cohen made guilty pleas for those campaign violations and those are poor violations and what he did was he -- was remind us that it is illegal for corporations to make contributions to candidates and it is illegal to make contributions in excess of the amount that congress set for individuals. that is a strong message today and we will not be -- we will not fear prosecuting additional corporation -- campaign finance cases. lastly, and perhaps most importantly, this case is unique in many ways just witness the gathering of you here today and in other ways it's unique, as well, but in really important way, this case is not unlike many cases that my

office and the attorney's office brings and the entire office of justice brings and that the law enforcement agencies do, as well including the fbi and the irs. this case has more in common than all those cases because they all share the same message and that message is that the rule of law applies and that for law enforcement, all of whom are gathered here, it is our commitment that we will pursue and vindicate those who choose to break the law and vindicate the majority of people who live law-abiding lives and who follow honest and fair dealings and live lives of lawful behavior. the message is that we are here. prosecutors are here, law enforcement is here, the department of justice is here and the law enforcement agency is here. we are a nation of laws and the

essence of what this case is about is justice and an equal playing field for all persons in the eyes of the law and that is a lesson that mr. cohen learned today and it is a very harsh one for him. thank you very much. >> who was the candidate you're talking about. >> i'm sorry, one other thing. i would also like to introduce -- sorry, my fault i really want to thank mr. sweeney and james rodnet of the fbi and the irs and the agents who work for them. we do many, many cases with them, and their determination and their fair dealing and their vigor with which they pursue their cases is inspirational to the prosecutors in my office i cannot express the gratitude for the hard work that they did in this case and that is assisting the united states attorneys andrea griswald and rick gruss, and rachel, and the

deputy chief of the public corruption unit and russell capone, the cheap of the public corruption unit. for all of these people, i can go on and on about their many virtues and talent, but the one important thing is they all are satisfied with simply being known as public servants and prosecutors and law enforcement agents who are doing their job thank you very much. >> new york attorney robert kazami there in lower manhattan. an incredible confluence of events, two men within the space of an hour have been found guilty of federal law and both will be going to federal prison. for more, let's bring back in editor-at-large john harwood >> hearing from robert kazami saying we are a nation of laws is a reminder that for all of the sensation that we attach to

things that president trump says and the sort of spekts akel around his presidency, you do, in fact, have the justice suspect asystem moving forward it's a branch of the government and president trump has criticized attorney general sessions and put the word justice in quote marks when he's talking about the justice department, but that is the department staffed with serious people who are going to do their jobs and it's notable that this particular guilty plea was obtained by kozami who is not robert mueller remember, president trump has been attacking robert mueller who he calls the angry democrats who work for him even though they're not angry democrat, but has been trying to undercut public support for the mueller investigation. this is separate from that, although the matter may have been referred by robert mueller, this is a separate prosecutor and the more different avenues

of justice that are being pursued in this case that touched on president trump makes it more difficult for him to undercut and discredit all of those efforts. >> john harwood, thank you so much tim seymour, what do the markets do >> i think the market that runs up in terms of the high if we'd done this on a day without this news, i still think the market might have taken a breath tomorrow it's a process that drags on for a long time. i care a lot more about what the fed is doing and i care a lot more about earnings. in the short run i think the market has taken a pause, but i don't think the market will fall out of bed tomorrow. >> we were waiting for a verdict and it was cohen that was unhinged with the uncertainty. >> because what his lawyer just said is he is considering his options and if he's going to cut

a deal he has to rat out someone above him and that only leaves the president, his son and son-in-law and it's tightening this web closer and closer that's the tape bomb that's next what is manafort going to do, right? and the president this weekend he tweeted he could get involved in the special counsel's investigation. are we going have a saturday night massacre the markets will care. >> let's get to sue herera in the newsroom shes had the latest on the manafort news. >> to recap, guilty verdicts on eight. just a few moments ago we heard from manafort's attorney, mr. downing. here's what he had to say. >> you may have heard that the jury reached a verdict on only eight of the 18 counts on ten of those counts they did not reach a verdict. mr. manafort is disappointed of not getting acquittals all of the way through or a complete hung jury on all counts.

however, he would like to thank judge ellis for granting him a fair trial, thank the jury for their very long and hard-fought deliberations. he is evaluating all of his options at this point. thank you, everyone. >> and now the question is, michelle, do prosecutors go back and re-examine those tencounts that resulted in a mistrial and decide whether or not to retry also, keep in mind, mr. manafort has a second trial on separate charges coming up in the middle of september he asked to have two separate trials the speculation is that basically if he could get off on a number of the initial counts that perhaps he might get a pardon from the president if he was found guilty that was the speculation that was swirling around and then maybe the second trial wouldn't happen, but he has been found guilty on eight counts and that second trial is scheduled to go

forward in the middle of september. back to you. >> we'll be watching that one, too. thank you very much, sue herera. >> eamon javers has the latest on the new developments. the president tweeted out he is headed to west virginia, this evening, a place where he is very comfortable in, overwhelming support for him in that state he's not going to change that tonight? >> that rally will be boisterous and you saw the stream of tweets from the president over the past several days about all of this and the president very much frustrated by the special counsel's investigation overall and so i think you can see -- you can expect to see a very feisty president trump in west virginia tonight one point that i wanted to lay out for you as we were going through these documents and we're learning more and more about michael cohen's plea and an important piece of this is in part of that excessive campaign contribution allegation here that michael cohen has now pled

guilty to, he's saying that he paid a woman $130,000 from a company under his control in coordination with and at the direction of the presidential candidate in october of 2016 remember, president trump denied knowing anything about the payments to stormy daniels in that timeframe, the former porn star, the current porn star and stripper, stormy daniels this is saying very clearly that this payment was made in coordination with and at the direction of the candidate for president, that is donald trump. this is michael cohen pleading guilty in a federal document saying trump knew about that and directed that payment. this is astonishing stuff and it will be a dramatic moment here for the president tonight as he tries to recover his political footing and put the best base on all of this. it's a dramatic and politically damaging you can't imagine many other presidents being able to take on this much political water and to

john's point, has been able to do it this far and provide politically. >> porn star, so judgmental. adult film actress >> however you want to put it. >> eamon javers, live at the white house. are we going to tony dwyer >> tony dwyer joining us on the set. what do you think it will matter to the markets >> i'm kind of with him, i think. karen, what you have to look at what drives the market over time president clinton was impeached in the end of 1998 that wasn't the peak of the tape president nixon was impeached in -- wasn't impeached, or resigned in 1974 that was the low of the tape >> it was a low. >> well, yeah. >> for the s&p 500 -- >> you're right. it traded at an all-time high at 120. >> hold on, can i ask a different question >> hold on -- people -- hold on

one second people are going to tune in right now and they'll see the intraday chart and they'll know that this news started to break late in the day. what do you draw from the chart? the chart sold off because of what was happening this afternoon or do you say it's off by a third of a percent and it's shrugging off what happened today. >> both are true that's a pretty modest sell-off. very modest, actually. a lot of people thinking if the market really gaps down a lot i would love to step in and buy. i think there's a lot of money >> it is in really good shape. ultimately, the market moves with credit with the direction of earnings which is driven by economic activity which is driven by the availability of credit last friday i'm on the phone with a bunch of clients and i asked them two simple questions. everyone is worried about liquidity and a shutting down of liquidity to spend and i asked every portfolio manager i talked to, are you hearing from your companies that business is slowing dramatically and the answer is universally no

are you hearing that they're having trouble accessing capital? the answer was universally no. so educationally and academically, there is a liquidity shutdown and it's showing up in turkey from the emerging economies, and it is not showing up here yet. it will. this is going to end badly i don't think dad and i -- this market will end badly. >> no, this will take a hit. >> what do you do with it? so when you say it will end poorly, so when i look at the united states outperforming the emerging markets, is it going to be where the emerging markets now, we flip-flop and now the emerging markets rally or do the united states catch up to the down side of the emerging markets? >> the question -- the only way to answer it is what is the ecb and bank of japan is going to do it's no surprise that you've had mixed performance and we talked about it on the show because you don't have every global, central

bank pumping money into the system if every central bank is printing money, of course, you want to go to the riskiest place with the most growth possible when 24% of the global gdp, the u.s. is tightening monetary policy it's a mixed picture and we did it on the show and we're very neutral on emerging and overdeveloped and here is a news flash. >> if you have a european economic surprise indices. >> let's get to sue herera in the newsroom, and also stormy daniels. >> indeed, i do. the statement is from her and also her attorney michael avenatti and here it is. this is the statement he gave to nbc news, quote, michael and i are vindicated and we look forward to the apologies from the people who claimed we were wrong, end quote mr. cohen's guilty plea included an admission that he violated

campaign finance laws by paying $130,000 to stephanie clifford otherwise known as stormy daniels, a month before the election so, michelle, back to you. >> and he said he did it at the direction of a candidate >> indeed, and of course, the president has denied repeatedly knowing about that particular payment. >> thank you sue herera who is at the breaking news desk as more of these details. >> i want to clarify something because dan is right and i'm about the integrity of data. the difference between 1974 and you had a 50% decline in 1973 to '674, it was about to shut down credit, high inflation and high interest rate. in 1974 that was a low year and dan was correct. however, 1998, crowe didn't have a shutdown >> it was a very good time >> this is very important -- >> hold on, i want to tell meme what we're looking at. i assume president trump, is he taking off or landing in west virginia okay he's got a -- he's landed in

west virginia and we'll watch him emerge from the plane. oftentimes he comes out and talks to reporters who are on the tarmac >> are you talking to me >> finish your thought in 1974 197 1974 -- >> in 1973 the stocks was at an all-time high. when he fired the special counsel thsh counsel, this is president nixon, it went down over the next six weeks and it went down to 90 and that was a significant move you can talk about inflation and talk about whatever and you know what happened in 1974, six months after his impeachment and resignation? >> you are in a recession. >> but tony, we were nothing. >> we discounted every piece of bad news that we saw over the -- >> do you think that president trump is integral to this

market because i don't. i think when we elected president trump who thought we needed to deregulate the parts of the market. >> and what is the most important institution? >> we're talking about the market what does the market care the most about the market cares the most about the market that's business friendly that won't change if trump leaves office. >> you're right. all of the things that -- >> that was elected by the people you have to assume that was the pendulum we can sit here and argue about it and i'm telling you what happened in 1973. >> we have to examine are we in that environment now forget the from and are we in that environment now in that case, no, but -- in january of 1937 they would have a bunch of dummies like us saying how rosy everything was and we'll go -- [ indiscernible

>> my point is do you think that banks are going to have a target stacked on their backs do you think it will be harder for small businesses to get loans? do you think the tax rate will go higher? >> the economic environment is not e kwiquivalent to the marke environment. >> which drove it and ultimately shut down the availability of money. businesses and households cannot have access to capital they'll cut spending and cut back. >> on that point, you talked about businesses saying they have plenty of access to capital. they've got a lot of demands and do they have access to labor isn't that the big risk here inflation? >> we're having over 20% growth in the s&p 500 according to david at thompson reuters. >> we're getting over 20% capital spending growth to offset the labor inflation that's called the productivity trade that we talked about on the desk

you have a rampant productivity because you don't have access to labor. >> you invest in machines, robotics and et cetera because you don't have people to hire. >> non-financial profit margins at record high two years ago, people were fearing it would collapse and that's with the increased cost >> is that capex enough to keep wage inflation lower >> the average hourly earnings are saying yes >> here's president trump emerging from air force one in west virginia as he heads to a rally in charlottesville, west virginia >> have you spoken to michael cohen? your reaction to michael cohen

>> so far president trump ignoring questions from the media. let's see. he often talks to the press regardless of the situation. the welcome that he's getting from members of the military on the ground >> i feel badly for him. i must tell you that paul manafort is a good man he was with ronald reagan and he's worked for a lot of different people over the years and i feel very sad about that it doesn't involve me, but i still feel it's a very sad thing that happened. this has nothing to do with russian collusion. it started as russian collusion and this has absolutely nothing to do. it's a witch hunt and it's a disgrace this has nothing to do with what they started out looking for russians involved in our campaign there were none. i feel very badly for paul manafort again, he worked for bob dole.

he worked for ronald reagan and he worked for many people and this is the way it ends up and it was not the original mission, believe me it was something very much different. it had nothing to do with russian collusion. they continue the witch hunt thank you very much. [ indiscernible >>. >> president trump walking away after taking those -- speaking to reporters there saying i feel very bad for paul manafort paul manafort was a good man it doesn't involve me and it has nothing to do with russian collusion. this is a witch hunt and he was silent on michael cohen and he spoke only about paul manafort as he arrived in west virginia. >> look, bottom line is what we heard from khuzami earlier michael cohen said he'd take a bullet for the president and let's face it, these guys are dirty. he feels bad for him and he's

trying to disassociate himself with him and other politicians from a market perspective, we're not terribly far from where we were before we got this news >> let's bring back cnbc's editor-at-large. >> you are not surprised by the president's response as he came off the plane. >> i was surprised that he would come over and take questions at all and he would only speak to manafort rather than cohen it's obvious the calculation there because he points to manafort, ties him to reagan and says that the charges didn't have anything to do with russia, but remember, he was at the trump tower meeting and he is under increased pressure will he subsequently cooperate with special counsel he, the president, doubled down and said it's a witch hunt there's no reason to think that it's a witch hunt and, you know,

he's -- he's playing the -- his hand as best he can and it's not a very good hand >> paul manafort was not meeting with the russian lawyer and the trial was very much about things he did while working for the russian puppet these are very, very old events relative to the campaign. >> that's right. and there was an investigation of paul manafort that predated the campaign p, and some of the actions that -- of paul manafort is charged with, the financial crimes that he's charged with did, in fact, occur while he was head of the campaign, but they didn't relate to the campaign. they related to him. remember, paul manafort was in financial distress when he accepted the no-pay job as chairman of the trump campaign, and we've seen from some of the evidence that has come out that he hoped to use his position to

alleviate the financial distress and how can we use the press i'm getting to get a hold of his russian oligarch who he had been close to so there is a nexus to him and russia i have to say one thing about your discussion on set i agree. there's nothing that changes economic fundamentals about this and the tax cut has passid and i think that's much more consequential because a lot more of the regulation hasn't done all that much. he was suspending things that obama had planned and hadn't really taken effect, but i don't think this is a barrier-smashing event for the economy itself and if the president is ultimately forced from office and mike pence becomes president for the rest of this term, i don't see

how that has a dramatic effect on the american economy unless it just depends on how you value the whole uncertainty issue and i don't know exactly what is certainty and what isn't nothing in life is certain. >> that's why we have you cover politics [ laughter ] >> we're a long way from president trump being forced from office, but i want to tease that out a little bit. what would the market do, tony dwyer, if we had a president pence instead of a president trump? would it go down or would it go up >> it would follow the direction of earnings no matter who is in the white house, that's why republicans and democrats alike, if the market is in a positive trajectory, that's what the viewers should focus on. this stuff, we've been very clear. this is going to be high volatility going forward and not whether you can have market

pullback what are you doing with them in a positive credit and positive economy you would buy them. >> would a president pence be more predictable less uncertain would that lead to a rally >> you might get less done >> he would not get reelected, i don't think. >> president trump is far more priss mati prismatich to his base pence, i don't think, has anywhere near the charisma that trump does to his base so i don't think he would be re-elected if you see a blowback then everything goes back to the democrats, then it would be a very different market. >> i agree with that, karen and there's been nothing about this president's volatile personality and actions that has dented the market this is a president that's gotten a fair amount done and maybe it's circumstance and he was elected with a mandate because this is what this country wanted for the economy.

>> i'm not sure this is what they wanted, but this is what -- he lost the popular vote >> not utsch mmuch of a fan base >> president trump just landed in west virginia moments ago and offered his first comments since manafort was found guilty and cohen pled guilty. here's what he had to say. >> i feel badly for paul paul manafort is a good man. he was with ronald reagan and a lot of different people over the years, and i feel very sad about that it doesn't involve me, but i still feel, you know, it's a very sad thing that happened this has nothing to do with russian collusion. this started as russian collusion and this has nothing to do and it's a witch hunt and it's a disgrace, but this has nothing to do with what they started out looking for russians involved in our campaign and there were none. i feel very badly for paul manafort again, he worked for bob dole and he worked for ronald reagan,

and he worked for many people and this is the way it ends up and it was not the original mission, believe me. there was nothing very much different. it had nothing to do with russian collusion. we continue the witch hunt thank you very much. >> president trump in west virginia let's get back to eamon javers he's at the white house. eamon? >> that's right. the president there clearly frustrated with what he's seen today and all of these developments across the board saying he feels badly for paul manafort and not answering there the key political question there and perhaps the key legal question is is the president going to offer a pardon to any of the people who were involved today to michael cohen or to paul manafort. the president has that option in his hip pocket should he choose to use it. i can tell you that there are intense meetings going on in the west wing and i was in the white

house moments ago and i was spotted by the white house chief of staff and i asked general kelly for his reaction on today's, vents and he simply walked by and didn't say anything at all. >> sarah huckabee referred back to the president who just spoke. the president referring to the aides and the president doing the speaking for them in virginia. >> paul manafort cooperating and we don't know for sure about michael cohen if he discovered that he is not cooperate and maybe they think exactly that that they wait for a pardon from the president. >> that's the thing about this case that's so unlike the white-collar cases that we covered in the past. none of the wall street cases never had a realistic option in holding out for a presidential pardon that element is alive in these cases and so it stretches the

theories of the case for the defense in terms of how you handle all of this you saw manafort's lawyer, kevin downing, suggesting he'll weigh one of his options and one of them is to hold out for a pardon >> does it really matter in the cohen case if he were to get a pardon in this case. the feds have the documentation they have the recordings and the testimony over the past couple of months. go ahead, at that point he can't plead the fifth and he has to answer everything that the special counsel asks him. >> it's a great question and at this point, you're right, investigators do have all of that material that they've gathered from the raid at his office and the place where he was staying in his hotel room and they do have a lot of information from michael cohen and it may be the case about a future case of some significance do you want, if you're the prosecution, to put michael cohen on the stand as a witness in any case given his unique personality and history and set of circumstances michael cohen might not be the most savory witness in front of a jury at some point down the

line you might want his recordings and evidence and you might not necessarily want michael cohen himself sitting on the stand talking to a jury. >> incredible turn of events, and we've been showing this video over and over again of michael cohen walking out of court. the man who said that he would do anything for president trump now coming to this and what an irony in the same hour as paul manafort, two men so close to the president and both facing the fact that they'll go to federal prison. >> yeah. >> here's a guy who said he would take a bullet for president trump. his first loyalty is to his family and to his loyalty. that shift in michael cohen's loyalty is a dramatic moment for a guy who has built his career at the hip of president trump and engaging to what he pled guilty to in the most unsavory

dealings in terms of allegedly paying off women for their silence and donald trump's most deepest, darkest and apparently secrets. >> you don't have to say allegedly, anymore, eamon. >> that's right. >> we've been doing this for 12 hours today. >> right >> that's the point. this is now a matter of record he's pled guilty and that is significant and damaging to the president and the white house will have to respond to that in some way and you can see the staff here working hard to come up with what their response is going to be and you can see the president signaling that he's ready to fight. >> thank you eamon javers live at the white house. >> this is all about the midterm elections at this point. what perception does this carry going forward in the next couple of months? how does that jockey for the midterms this is a play for the midterms right now and the midterms hold the key for the rest of the market and it's not the economy. >> what if the house turns >> say that's a given. >> it's a problem.

>> the senate is less likely than the house and what does the house need 20, 24 whatever that number is. it's a problem, right? i don't really know what it means to be the market i think the market stays on track. >> earnings's okay the market is okay >> this is something that we won't remember >> his base is solid there's one side and there's the other side you're not going to shake them and the people in the middle and maybe you possibly take them, but this was about middle america that took this selection. >> john harwood, we're talking about what this means for the midterm elections. what is president trump's base are they less interested in coming out because of the convictions and plea agreements? >> yes bad news like this is always depressive for the side that's receiving the bad news we've already seen for months now that democrats have shown a much higher level of engagement

in the election. that will exacerbate that condition and the disparity between republicans because they're looking at circumstances surrounding the president and even if they liked the president they see nothing, but bad stuff going on and they're invigorated by the idea of change. there is no question that this is going to be a help to the democratic campaign which as we've been discussing throughout the hour appears likely to flip the house from republican to democrat and could also flip the senate less likely, there are a lot of seats in trump-friendly states, but those seats are held by democratic incumbent and they usually have skills or they wouldn't be incumbents and there are enough possibilities out there for democrats that it's not inconceivable that they could win chambers so if this is all about the midterms this was a bad day for

president trump and for his party. >> all right, john thank you. let's get to sue herera in the newsroom who has more reaction coming in from a variety of people sue? >> this one from u.s. sen thor richard blumenthal a democrat from connecticut. he says, quote, the white house is looking increasingly like a criminal enterprise with the convictions today of president trump's former campaign manager and personal lawyer. basically, he says, get, no one is above the law and the special counsel is for real and not a witch hunt in relationship to a possible pardon, here's what he says, the loose talk about a possible pardon should end now. for the president to pardon either of these individuals would be reprehensible and irresponsible an abuse of power and possible obstruction of justice. >> we expect more comments from both sides of the aisle. mark warner is weighing in >> he's not happy, either.

>> quote, this verdict makes it absolutely clear that the mueller probe is not a witch hunt it is a serious investigation that is rooting out corruption and russian influence on our political system at the highest levels i am just reading it for the first time so basically, that's the gist of it he's repeating what mr. blumenthal said which is this is not a witch hunt by the special counsel and it will continue >> i think the responses will be -- >> i think you're right, michelle >> thank you >> sue herera. all right. eamon, do you have anything tomorrow >> i see alphabet and i see it down $6. that's not enough for me to do anything. >> the market is overbought. >> i think we framed it pretty well >> the bottom line is real interest rates are negative in this country the fed will continue to do something. stocks, tremendous economic

backdrop and we have valuations that probably if you look at price per sales or ebitda, we're at bubble ishs levels on the metrics. the market's at all-time highs and is it time to go two feet in for me, i don't think with this news you changed anything that you were going to do tomorrow. >> stocks are expensive or no? >> it depends on the stock >> but when we talk about the forward earnings on the s&p 500 like a j.p. morgan or something like that? the big money center banks are not expensive. >> the airline >> i'm long, so if i stay long that's the same as buying. >> absolutely. >> they're at 19 times earnings as you were in december 2016 well before the tax cuts happened you're at 19 times trailing 12 earnings today there's got to be some kind of economic armageddon to make it wrong. you've had 19 multiple on both sides. is this going to compress the

multiple with 20% earnings growth over the next two quarters to 17 times and when you have core inflation between 1 and 3% which it currently is at 1.9 the market trades at 19 times so i'm not -- >> would you agree that another fed hiking cycles that the market multiples contracting regardless of how strong earnings are >> obviously, if earnings are growing 20-plus percent and i don't think we're going do that in perpetuity. i think, in fact -- >> you can offset. >> there is a sugar high >> let's be clear, there is a sugar high from the tax hikes and i think that's something to think about, but we have inflation and we have negative rates in this country. negative real rates. whatever you want to believe, we're having trouble, we're having trouble filling jobs or they can pay people, but ultimately, that will feed through. >> let's look at what drives the business, and it has a near

record level and the highest level of this cycle. your median period between a cycle high in the nfib optimism and the recession is 41 months so i totally agree with tim. my problem isn't that this is going to go on forever you cannot fix debt with exponentially fix debt and make it more expensive and what you need to do is have a negative economy. >> let's bring in eamon javers he's got more reaction at the white house. eamon? >> that's right, michelle. a couple of things moving here at the same time the white house now reacting to a news story, this from "the washington post," trump adviser larry kudlow at his home, a tough headline that the publisher of a website that serves as a platform for white nationalism were the guests last weekend at the home of president trump's top economic adviser larry kudlow i hung up the phone with larry kudlow and he told me this, i am

disappointed to learn of these viewpoints and these activities and if i'd known any of that i would never have invited with him. i don't agree with any of it, none of it and i am a jack kemp civil rights republican and always will be larry kudlow denying he knew of the viewpoints mentioned in the washington story and the damaging headline here for larry kudlow and larry kudlow saying he was completely unaware of these views. >> that's a tough one. eamon javers at the white house. >> any market impact of that one? >> no. >> no. >> no. >> only if you thought larry was at risk for any reason larry is the guy behind, no barrier, no subsidies which is a very different -- >> i think he was with navarro what are you talking about >> think he's stayed pretty prg matich >> i respect a guy who steps in and says this is what i stand

for. >> i think he's been very clear and he's embraced the president's position on trade. >> he's definitely softer. >> all right that's been an incredibly dramatic "fast money," thanks for joining us >> thank >> "mad money" with jim cramer right now. my mission is simple -- to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to save you some money my job isn't just to entertain you but to educate and teach you. call me at 1-800-743-cnbc. or tweet me @jimcramer you don't get to be the longest bull market ever, 3,453 days without doing a lot of things right. so on still on