it's . twtr >> apple i still think goes higher everyone reduced positions in q4 >> great weekend everybody as well "the exchange" with kelly begins right now. >> thank you, scott. hi, everyone and here's what's ahead. stocks are in the red for a third straight day as trade worries linger is the january rebound in danger of being snuffed out amazon is in the spotlight big time as ceo jeff bezos excuses the "national enquirer" of blackmail the company is also reportedly reconsidering new york city for its hq2. a bad surprise why your tax refund this year may be a shock and not in a good way. we'll see if you're affected let's begin with today's sell off. >> red across the board but we're off the worse levels of the day. dow jones off by 182 points.

three quarters of a percent to the down side. half of a percent for the s&p and nasdaq off by a similar percent. one of the themes playing now slowing growth globally possibly, trade discussions with the u.s. and china playing out in the ten year treasury note yield. right now around 2.6%. at one point last year we were at 3.75% for ten year yield. steep move lower banks are part of that discussion today then our stock of the day, the worst performer in the s&p 500, goodyear tire, those shares have decline by 44% to the down side today and earnings report that game in worse than expected due in large part to slowing auto sales and manufacturing in plus -- places like china and india. >> welcome to the "the exchange". estimates for first quarter growth and gdp are being

revised. the new york fed lowering to it 2% for this quarter but the gdp still looks positive not the same for earnings. bob pisani joins us with more from the new york stock exchange what are your seeing >> don was referencing slower global growth. those concerns are now starting to show up in earnings estimates here in the united states. 40% of profits from the s&p earned overseas and today in the first quarter for the first time in a long time we are seeing negative earnings expectations we had been expecting the fir quarter to be up 8% beginning in october but that was before all these concerns about trade today we've gone negative. negative can be very important the last time we had negative earnings growth was back in the second quarter of 2016 and several quarters prior to that that was the last earnings recession. the market sniffed that out. it was down in 2015. we'll see if that 2018 down year

correctly estimated what was going to happen with earnings this year. back to you. >> we'll see if it explains the squishiness in stocks. a senior administration tells us march 1st trade deal for china can move as in getting pushed back. not much relief in equities. u.s. trade rep robe prcp roberte and steve mnuchkin get ready for talks. great to have you both patrick, first with you, we have reports yesterday that, you know, we're not going to have president trump and xi meet before march 1 markets are spooked. today that's being walked back a little bit we're not seeing a lot of relief why? >> markets should look on the

bright side that the deadline is flexible as long as they are talking and not escalating then you don't have those tariffs that everyone back in the fourth quarter -- one of the reasons you had the sell off in the fourth quarter, a bunch of different reasons but one reason was that there was this prospect of deep and broad tariffs being applied by the united states at the end of the year and then trying to retaliate. a lot of companies said that would be serious bad news for the economy. as long as that keeps getting pushed back, it will take a long time to resolve all the trade issues between the u.s. and china. >> would you be a buyer of goodyear tire which is an interesting example against the backdrop of what many people are worried about. tariffs maybe it is coming and then slowing global growth >> the other story is slow down in china there are some people including the president saying the reason why china is slowing is because of the trade war trade sanctions from the united states

i disagree china would be slowing now with or without a trade war and what that means, because there are deep entrenched issues going on even if they struck a deal tomorrow china's problems aren't going away i don't think if a trade deal was reached tomorrow, i don't think that markets should react by saying okay everything is fine >> all clear at the same time many made the point it's very rare that the u.s. gets pushed into any kind of downturn by the rest of the world. we lead the way. they rely on us. it's not the other way around. do you agree can we grow at a slower pace even with china as weak as it is >> it's questionable about 15% of the economy in the u.s. is related to trade so you can argue that the u.s. consumer that keeping us immune to what's going on overseas and i have to question how long can that last? i believe the direction of the stock market actually can affect

consumer behavior here feign look at the s&p 500, 40% of revenue is sourced overseas so we are going to get infected. it's just a question of to what degree can the stock market after this rally that i believe was fed induced, is that sustainable when global growth is clearly slowing. >> as bob has pointed out. do you think then that we've kind of, you know, the fed says we'll change our tune, peter, we may not raise interest rates this year, doe that buy us a couple of weeks of a rallying stock market off a terrible fourth quarter >> look at the last two times the fed ended a tightening cycle. right in the midst of a recession. you don't want the fed in a way to be done with this rate hike cycle and then the next move to be a cut >> they paused before in this expansion. they paused in 2016. is this another one of those episodes this time it's weird interest rates are solo while this growth and expansion continues. >> you hope for a soft landing

but the odds of that are pretty low. since world war ii it's only 20% they've accomplished that. you can't ignore what's going on with yields around the world that the japanese ten year is back below zero again. german yields out to nine years are below zero and ten year is at ten basis points. u.s. ten year is down 60 basis points just within the last couple of months >> here's the odd thing. how would you invest if we do something like a 2% growth even for the year you have interest rates as low as they are doesn't that argue for stocks? >> the equity risk premium right now, the valuation of stocks is relative, relative to where you put them the thing with equity is well above average, 5.6%. historically that has actually argued for above average returns over five years. doesn't tell you what the stock market will do in the next year. you could have a recession or a serious downturn but over

time -- >> the potential rewards are greater. >> right because everyone is so scared of the next recession that they are pricing that into stocks relative to the returns that they could get in low interest rates. at some point, maybe after the next cycle, after the cycle has ended and after we go through a recession that unwinds and you get above average returns. unless you think you can perfectly time the market which i'm skeptical, you look more at that four or five year time horizon. >> and the fund are in gold, cash >> value stocks. cheap is good right now. because the market has shown that when you're an expensive stock there's no room for error and getting more difficult to execute in a slowing environment. therefore, high pe multiples are very difficult to sustain. >> i think there's a lot of room

for stocks to come in fashion. >> thank you very much to both of you here's what else is coming up on "the exchange" >> announcer: the bezoz bomb shell. he accuses the "national enquirer" of blackmail the tabloid says it acted lawfully should investors worry about distraction and a long legal fight? plus you could be in for a tax shocker when you file this year. we'll explain. and transparency or confusion? one drug company is getting set to put prices in its commercials. the details and the debate ahead. issues facing our worl >> announcer: this is "the exchange" on cnbc. what do you s? we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception.

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learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. . welcome back shares of amazon are under pressure following the bezos bomb shell accusations of blackmail by the "national enquirer". the tabloid's parents company believes it acted lawfully we got word amazon may be reconsidering its new york headquarters after that lengthy search for hq2 here's more from san francisco >> reporter: that report comes from "the washington post" earlier today and amazon is reconsidering due to local opposition at a press conference just moments ago governor andrew cuomo, who hailed the deal as a

triumph is responding to the report and defending the project. >> amazon -- i'll have more to say about it in a moment is the largest economic development in the history of new york 25,000 jobs. average salary $150,000. it brings us into the tech economy in a big step forward. it synergyizes the long island and r and d we're doing on long island we have to make amazon a reality. >> reporter: crypts say the sweeping incentive package offered to amazon by the state and city would far outstrip any of those economic benefits that cuomo was talking about. one of those is representative alexandria occasio-cortez. she tweeted a link to "the washington post" report saying can every day people come together and effectively organize against creeping

overreach of one of the world's biggest corporations yes, they can. that remains to be determined, kelly. according to this report amazon is reconsidering some of those plans. >> every day in the "new york post" there's a story about push back against this push back. just recently de blasio was encouraging unionization of employees. if amazon pulls out where will they turn to next? >> reporter: the report says that it is unclear what a plan b might be but some options on table, remember there was a long list of, a very long list of cities across the nation that really wanted this amazon headquarters they wanted the economic development. como just pointed to this in his press conference so potentially amazon to go and do what google did and expand its footprint in new york but without incentives and expanding it at a smaller scale. >> expanding it piece by piece

let's get to the story that's sending shockwaves from silicon valley to world series anticipate that's jeff bezos alleging in a bomb shell most on media.com he's being extorted and black mailed by american media the parent company of "national enquirer". he's accusing the publisher to post exclusive photos he texted to his miss stretress if he didt make a public acknowledgment that ami wasn't influenced by political forces great to have you both here. robert let me just start with you on the reverberations here how are people reacting to bezos decision to go this route? >> there's a couple of pieces of news one ami put out a statement saying that they were negotiating in good faith with bezos during the process by which he took those emails and

letters from the attorneys out so that raises the possibility since we never had any communications revealed from bezos to ami we don't know that side of the story. second thing is we know there were reports federal prosecutors are now looking at whether ami may have violated its terms of none prosecution agreement with the justice department >> which was part of the mueller investigation. before we go down that rabbit hole and before i bring in ellie, what are amazon shareholders supposed to think and how are they to trust the judgment of mr. bezos. >> on january 9th jeff bezos tweeted he and his wife were getting a divorce. it was amicable. everything was signed, sealed and delivered nothing to see, nothing to bother. fast forward today the divorce hasn't been filed. getting incredibly complicated we don't know what will happen to the 16% shares he and his wife own together.

she's entitled to half secondly you can argue this is not going huge distraction for jeff bezos you can't argue he's not critical on a day-to-day basis to this company. i'm surprised the shares aren't down more. >> down 2.5% if he pursues this case against "national enquirer" does he have one? >> it's going to be a huge distraction for ami. look, it's difficult to prove extortion in a criminal setting. there's a reason why you hire lawyers to break your legs, right? partially because what you and i think of as extortion is not really the legal standard. if a lawyer says pay me a million dollars or else i'll tell everything i know that's like lawyer foreplay pay me a million dollars and i'll kill your dog, now that's getting into -- >> what's the difference because this involves the "national enquirer" and first amendment protection >> was "national enquirer" legally allowed to publish the

photos that they had i think that gives bezos a bit of a case. while first amendment protections are strong and should be for media this gets close to revenge >> we think of blackmail ami wanted something major from bezos in exchange for not publishing this. he wanted him to stop being politically motivated which we haven't seen any evidence anyway will that make it tougher for anyone to legally claim there was blackmail because what they were asking in return seems fairly minor they western asking for money, not asking for anything he had proof of yet >> i think it makes it harder -- makes it easier for bezos to have a case because they were asking bezos to do something as if -- this is a problem that in the trump era these people think bezos is sitting at the computer

editing "the washington post" before it goes live. that's not what happens. you need to show there's a nexus between what they were asking for and what bezos credibly can do bezos is not in position to tell "the washington post" stop reporting about saudi arabia >> but himself had investigations, he had asked private security to look into how these leaks into "national enquirer". were they okay to ask him to call that off >> that's why we play our game again -- >> if jeff bezos decides he wants to pursue this route of criminal suit against ami, what are we talking about in term of the amount of time that would play out, the kind of information that could be released during all of this, including more information about his affair, his divorce that's not filed yet. what should we expect? >> i'm old enough to remember when gawker existed. if i was advising bezos as a regular person, no this is not a great case but as an extremely wealthy man

who wouldn't even notice the legal fees that he would be paying on this, these kinds of suits if it goes really bad for ami could go really, really bad for ami. >> what is the possibility they broke their federal prosecution agreement and would they have to be found to have criminally black mailed -- >> exactly it's a bit of the dog chasing the tail if we're going to say that they were criminally -- >> if they violated that and the whole agreement goes down the tubes then you have two criminal problems violation of the agreement on one hand plus blackmail. does this company survive? >> you have to show the criminal blackmail really to get that consent decree in trouble. >> if they say it's not blackmail, it let's them off the hook with regard to the other suit also if it's not blackmail means jeff bezos is pursuing something in a very high-profile way that could see more information coming out about his personal life for nothing >> bezos does not care about

these pictures coming out any more >> shareholders do here's my issue. all of this may be good for bezos personally, may distract from this affair and pictures he took from a shareholder point of view he used to be far removed from the donald trump back and forth. he was far removed from getting involved in accusations against "the washington post". he wasn't involved in the khashoggi murder now he's front and center in all of these debates and i can't think that shareholders are happy. >> we have to leave it there great discussion coming up, what if you could attend college for free upfront in exchange for a percentage of your income. one school is offering you just that plus why did morgan find herself tank we'll take y touo lima, ohio when "the exchange" comes back when "the exchange" comes back in two. - as the original host of wheel of fortune,

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expedia is on an crease. expedia shares adding 2.5% over to sue herrera. >> here's what's happening white house spokesman hogan gidly telling reporters another government shutdown is looming because democrats won't negotiate. the deadline is one week away. >> we're on the verge of a government shutdown again because democrats won't come to the table and have a conversation about securing the country and so the president has outlined his plan. >> venezuela's elm battled president nicolas maduro alleging humanitarian aid being brought into his country is a show whose solepurpose is to topple his government. came at a news conference from the international press that was broadcast on state television. >> lindsey vonn who is retiring after sunday's downhill finals says she's recovering from her tuesday crash during the super g event.

despite sporting a schreiner under her right eye she says things look positive for sunday. we wish her the very best of luck you're up to date. kelly, back to you melissa lee is here and amazon story of the day. >> what a juicy story. >> i just wonder about -- i know we're talking about what the shareholders should think and what the legal implications are. what poor judgment >> let me ask you this question. do you think there's a premium embedded in amazon stock because jeff bezos is the ceo. >> probably yes. >> if things come out that questions jeff bezos judgment as the billionaire founder of this company should the stock take a hit? i think that's the question that people are grappling with today. also does it put amazon in the cross-hairs of the trump administration even more so than it had already been. that's the next question that shareholders have to ask themselves when we look at amazon stock

it's a underperforming the nasdaq 100, underperforming it's peers today. clearly some concern here. >> it has to relate do you separate judgment in this sphere from running amazon otherwise quite capably as it seems. these are the questions to ask because he's such a big owner of the company and so much in charge day-to-day we're not hearing any reports. he checked out five years ago and other people are running thing. >> nobody would say jeff bezos checked out on any level you have to won what the board thinks of at this point. if he had poor judgment to have this material in some way even on his private phone, material he could be extorted with you have to wonder if there's something else out there by the way do you have $25 million? we have a great house. anybody with $25 million spare, we have a great house on market. we'll get all the details on the home of the boston red sox owner

which is up for sale >> it better buy you a lot >> 41,000 square feet >> upkeep would cost more. >> here's was ahead on "the exchange". >> barbie is back and hot wheels are hot. plus the sneaker market is red hot. om zwhy electronic arts went frero to hero. it's all ahead in rapid fire at your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market.

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welcome back let catch you up on a few stories. today it's time for rapid fire and here with our takes. welcome. first up a "toy story" mattel shares are soaring after sales barbie hit a high and hot wheels are hot. hasbro has an earnings missed. blamed toys "r" us closures. why didn't it hurt mattel? >> the kinds of toys that are getting all this traction again, hot wheels and barbie. old line toys. newer line toys like american girl really starting to fall off. thomas the train maybe not doing as well these days

whole dynamic in toys, toys "r" us had a huge impact on it why it's not affecting some and not others it should have affected everybody >> you should look at marketing here if your 5-year-olds asked santa claus as mine did for hot wheels gator car wash it's very specific it's amazing i'm just saying it took santa like three or four hours to put it together. there's no way that those kids are not going to get that for christmas. you know why they ask for something that specific? over and over and over again they saw it advertised on their favorite shows the marketing must have been incredible >> what's interesting if you go back five years hasbro is up 67% down, mattel is down 65% this is bringing them back closer to each other >> hasbro is still three times the size of mattel investors are thinking is this an inflicks point. how about this, moving on, j and

j will announce it will start providing the list price of its prescription drugs in tv ads this makes j and j the first drugmaker to put prices in its ads. that's starting next month what will this look like >> it will look like a car ad. >> the numbers on at the end and some guy talking really fast it's not going to matter nobody pays that price. oh, the price for this is $8 billion but you got 50 bucks >> depending on your insurer >> i don't understand how this provides transparency. >> it puts pressure on the farm benefits manager to even up the cost and, remember, they are getting the blame for where price are differentiated >> trump administration coming after them >> politically they are trying to forestall the government stepping in and regulating these prices >> by disclosing they are hoping

at least some transparency will be good for the whole industry unless it causes for confusion >> is at any time price of what we pay with our insurance or the list price which nobody pays >> nobody pays the list price. again, if you're one of the people who is insured and depending on the type of insurance you have, if it's medicare, whatever else it is everybody pays a different price. it would be meaningful to me if i knew what i would pay. >> they must have reached some conclusion about this. it will be interesting to watch. make those ads even more painful. >> trying to watch "wheel of fortune" with three minutes of commercial >> foot locker is announcing $100 million strategic investment in the goat group i thought it was a tom brady reference. the company says the largest investments in its history is part of pushing customer

engagement i heard josh brown say he liked to push foot locker ever higher. >> sneakers are bigger than the nba. look how much these star players make on the court. many make more money off the court. they can change teams because the stock is worth more. they want to turn shoe selling like stocks where you buy it and sell it. you treat them like they are gold >> is it possible these are the next beany babies? >> this is interesting e-bay started that way we have a colleague in the building, so to speak -- >> say who it is >> i protect my sources. this person has a child who is apparently making mint reselling nike supreme sneakers on this goat platform. this is amazing to me only it does spawn industries. >> what percentage do they take?

>> 10% to 30%. >> e-bay where you can go on and look at mint condition shoes takes 10%. you have to wonder about the competition. i know there's -- >> these guys started it because they got ripped off trying to buy cool air jordans online. >> one last quick thing. would this company have been a better fit for the likes of e-bay than foot locker >> also luxury resale is doing great. like you got lots of options there. they do the same thing you'll get stuff that's like new. >> $100 billion industry much bigger than any sport think of those guys. nba players walk in with their shoes so they can see it >> electronic arts is surging today. just had a terrible fourth

quarter but then it announced it's new battle royale game. hit 10,000 users the first 72 hours online it has completely rebounded. people are saying this is the new fortnight. >> that's the key. it took fortnight weeks to get to where apex got to those user accounts right now that's not to say this is not a fortnight killer right off the mouth. but the gaming community got a lot of buzz for this thing >> they paid these other guys money to spend a couple of days playing the game for their followers. >> apparently speaking of marketing again, they had streamers coming across when people were playing other games to say hey this is coming out. they offer -- you can try it for free i tried to but i don't have the right set up or whatever >> it was a gamble by the company to give it away to free,

to join this idea of a community gaming this. >> fortnight is free >> they raised a ton of revenue. >> same publisher who did the titan series you get a familiarity. >> i have to put this in perspective. it took the lube all of last year to hit 10,000 and they had help from jay-z. >> good for ea to being the next fortnight. >> nba trade deadline came and went last night with a ton of moves. some players were traded two or three times. the point here this dominated sports, tv sports, upstaged the lead up to the super bowl, all the buzz about anthony davis what does that tell you about the nba >> they put out these numbers, $1.9 billion is the average team that's an s&p 500 company in the

entire league. up 13% from last year. each player on an nba team matters more than any individual player in any sport. when you move a player it affects, the team, the city. >> the nfl used to be really america's sport. is nba starting to claim that crown. >> nba is becoming the world sport. so many international players. think about it you have reporters hat make over a million dollars a year just talking about who gets traded. that's how important this industry is. it's because they are selling shoes. >> the espn angle as well. we talk about disney launching espn plus. a lot depends on their ability -- >> look at the bets that some of these sports franchises have made globally speaking fifa and basketball. there was a seed planted for

international growth in basketball decades ago now as streaming enables everybody to watch around the world, it's the companies and the players and the leagues that have now established themselves on a global stage. >> think about the guy that bought these teams that we think are crazy valuations >> for 500 million >> what about the guys with the bucks. they have the second best player in the league. the second most votes for the all-star weekend coming up >> he's an african born in greece now an american star in milwaukee. think about that >> if contessa can pronounce it -- >> spell it. >> come tupg price of admission. with the student loan crisis growing colleges are finding ways to ease the burden. we go live to purr ddue universy

>> reporter: we talked about this when student debt was trillion dollars now it's worse purdue is one of the places that may have a way to make a den in that we'll tell you about it coming up on the exchange we're ok. just ok? we got a saying here. if the brakes don't stop it, something will. that's not a real saying. it is around here. i wrote it. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network, according to america's biggest test. now with 5g e. more for your thing. that's our thing.

welcome back to "the exchange". college tuition is rising at twice the rate of inflation. four years of out of state at university of michigan will set you back $50,000 plus room and board. no wonder the vast majority of college students have to take out loans, entering the workforce with crippling debt. there has to be a better way. >> reporter: the numbers are enough to make even a math major's head spin. the cost to attend a public college after financial aid up

30% in the last decade student loan debt up 60% 1.6 trillion and counting. the average graduate leaving school with about $28,000 in loans. education major savannah williams worried about racking up that kind of debt >> i'm going to be a teacher and i will make a whole lot of income in the future >> reporter: but purdue university offered an alternative. instead of taking out a loan she pays part of her income in her case 7.5% for ten years after graduation >> with a traditional loan i would have to pay it off who knows how long that would have taken >> reporter: purdue president said these inkcome is a model. by the time the payment to income the university is taking the risk instead of the student.

>> scott cohen joins us now. we had a guest here earlier say whoa, that's terrible for students to sign their life away at such a young age. is there a cap on how many years of earnings they are going to hand over to these investors >> reporter: yeah. there's a cap. in the case of the purdue program, it's 10 years it's a percentage based on their major. so different percentages for different majors they are signing their life away in the case of a student loan, probably even more so. if they don't get a job that makes up for those payments, well then, like i said, the risk is on them whereas in this case it's a percentage of income so they say that's a better deal. at the same time they are still taking on an obligation. you could call it debt and, you know, that's going to stay with them for quite a while. but this they say is a better deal than for state of the union

loans or parental student loans that don't have a government subsidy. >> is that a best deal no degree i notice employers are starting to say maybe we don't care about the diploma. we can tell you're skilled >> reporter: the calculus is changing now because yes you've seen a lot of companies that are saying because they need workers, they are easing those degree requirements. purdue is an outlier here. they held the line on tuition for seven years in a row you look at the rate of increase 30% the net cost of attending a public school and you got places like university of michigan, out of state tuition close to 50 grand. university of virginia is up there as well. south dakota is about 12 grand still a lot of money that calculus is change field goal you don't need a degree to get that good job. mitch daniels here at purdue

says for some state of the union in some areas a degree isn't necessarily worth it, but in general terms a college degree will make you more money in the job market than no college at all. >> we applaud his efforts or anybody's efforts to keep costs down and look for other people to get a degree. scott, great stuff coming up there's one surviving tank factory left in america. business has been pretty good there lately morgan brennan has that story. >> reporter: i'm in lima, ohio and this is the last remaining tank factory in america and seeing a rema assistance we'll be talking tanks when "the exchange" returns. looked at cha. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions.

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this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. welcome back to "the exchange." general dynamics is the only tank factory left in america and just a few years ago, it was struggling to keep production going. general dynamics in lime, ohio with that story. hey, morgan. >> reporter: hey, kelly. that's right so this is the only place left in the western hemisphere that still makes tanks. it's actually government-owned facility but it is operated by

general dynamics it's a joint systems manufacturing center here in lime, ohio five years ago, the army thought they made not need more tanks and thought about idling operations here but as the geopolitical threats shifted and the military looks to modernize, that has changed so last year, congress allocated $1.5 billion to this program, the abrams tank program. this year? $2.1 billion to put in perspective, recently as december 2016, this facility was turning out just one tank a month for other countries. today, it's turning out six. next year, it expects to produce 34 tanks per month for both domestic and international customers. more production means more jobs. three years ago, this place employed 300 employees today, that's doubled and by next year, expected to have tripled to more than 900 employees. in terms of the tank itself,

this is the m1a2 abrams tank the latest variant $12 million for one of these but not built from scratch we haven't seen one of those since 1996 but rather started their lives in the 1980s and stripped down to the haul and then remade with more electronics, more capabilities to make them more lethal, new armor and the result is what you see right here big machines that weigh 70 tons and that can go up to 42 miles per hour now, kelly, i know earlier this week that you took your test drive of that $200,000 lamborghini. i did a test drive of my own this morning >> and >> reporter: while we didn't go as fast, i would say it was still very impressive. a degree incline and braked, this is quite a machine. >> i mean, the fuel mileage must

be terrible but why is demand up so substantially for these tanks all of the sudden? >> reporter: yeah, well, so first of all, in terms of the fuel mileage, i'll tell you, it's 2 gallons per mile. 68 gallons just to start one of these tanks but in terms of the demand, the geopolitical threats are shifting so as the u.s. looks to adjust and change its national defense strategy to more of a peer situation, looking to russia, china, iran, et cetera, shifting away from counterinsurgency and means more battle tanks. >> certainly does. and morgan, getting to try one out as well. thank you. terrible gas mileage but good for jobs morgan brennan could you be in foa d r ba

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[kno♪king] ♪ memories. what we deliver by delivering. we're only two weeks into tax season but some early filers are already complaining about a

surprise tax bill or seeing smaller refunds than expected. why? and how can they avoid the same problem next year? let's bring in jeff levin. blueprint wealth alliance. how many people are getting a nasty surprise, by the way >> it's a lot of people. even if we say 80% is paying lower taxes thanks to this bill, still means 20% will be paying more and 20% times a really big number is a lot of people who are going to be upset this year. >> some of your clients presumably >> yes, similar to the relative value of the country, most having lower tax bills this year but certainly some of them are higher and saying, how could this be? i thought this tax rate was supposed to lower taxes for middle america and middle income americans like he. >> what are some of the reasons they find ending up with the higher bill? >> we had an elimination of the personal exemptions. so many changes. it's hard to look at one single thing and say, this is why your tax rate increased or decreased.

when you have a simple bill, oftentimes, you can do that but this was the largest change to the tax code in more than 30 years. and so you could look at one area and say, well, this negatively impacted you such as those elimination of the exemptions but if you have young children like me, i have a 2-year-old and a 4-year-old. a bigger tax credit for them this year, more than offsets this exemption it's such a personal thing. >> what's the typical cross section of those worse affected by this, do you think? >> well, again, high income tax states, those who have salt limitations. now you used to be able to take an unlimited amount of deduction there. capped now at $10,000. that's certainly one possibility but again, looking at another provision. they eliminated the amt for most people it's a very high exemption amount the phaseout doesn't kick in until a higher amount but didn't technically eliminated it but effectively eliminated for most people and those impacted in the past by that alternative minimum tax weren't getting state and local tax benefits anyway. >> okay.

>> it's such a crapshoot. >> the takeaways for us then the gdp, growth point of view, 80% of people had a little lower tax bill is that the same as saying they'll get the refunds they're used to or the refunds are going to be different? >> that's the problem, right everybody says, lower tax rate equals higher refund less in april. that's not the truth all your tax return is a tal tallying up of the year. i owe this much and pay this much throughout the year maybe you didn't pay as much as you thought you should have or maybe your estimates weren't quite as high as they needed to be so even if your tax refund is lower this year than it was in previous years, you might still have less tax than you did last year because you paid less throughout the year. >> of that 80% with lower taxes, how many do you think will have lower refunds? >> many of them see lower refunds because the w2, the withholdings all changed people's estimates were changed via cpas in many instances so a lot of people in for a nasty surprise but the good thing is

this the laws we have now are basically going to be the same until 2026 there's a small change here or there but what you see this year is what you expect going forward. >> i'm sure it's good for your business jeff levin, thank you. that does it for "the exchange." i'll join tyler and melissa on "power lunch" which begins right now. >> see you shortly i'm melissa lee with tyler mathisen new at 2:00, stocks sinking again. keep buying on this dip or buyer beware growing concerns ahead of next week's crucial trade talks with china. what's the state of play amazon in the spotlight. jeff bezos' accusation of blackmail and word at new headquarters in new york could be in jeopardy all the details. "power lunch" starts right now >> melissa, thank you. welcome to "power lunch. i'm tyler is