stocks are higher, time to lighten up. >> what happens if you get a meaningful advancement from the trade talks? >> from the 17% lows >> from the trade talks. >> pick your stocks, be careful. there's no rush here. >> thanks for being here "the exchange" begins now. thank you, scott here's what's ahead this hour. retail sales posted their worst month since the financial crisis are we looking at a tapped out consumer or one resting amid the shutdown coke is getting crushed, those shares are tumbling, is it another sign of consumer spending fizzling out? amazon's bombshell the company pulling out of new york city and will not build hq2 there. the fallout from that and what could be next. first to don to take us inside the numbers. >> the numbers are mixed right now, better than they were this morning. at one point we were down 235

points in the dow jones industrial average you can see down by 30 points that the stage. the s&p green right now. and the nasdaq up one third of 1% so watch those trades play out finals is key, interest rates somewhat lower today we are seeing regional banks taking a hit they're down a percent now, they were down more than that since december 24th. and then the stock of the day, from an earnings perspective, has to be coke, those shares off 7.5% right now a huge move lower on the heels of earnings that matched estimates. sales came in better, so is organic growth but it's disappointing investors out there. the biggest point drop in the dow today, kelly. welcome to the exchange everybody, i'm kelly evans we had big cuts to fourth quarter gdp numbers after the terrible report this morning

rbc took its estimate from 2.8% down to just 2%. china's import and export data last night was better than feared so that's what the markets are digesting. let's drill down on this now >> the session started with concern, before the sentiment shifted to doubt so futures immediately dropped as the commerce department's delayed december numbers came in at a dismal print, the worst since december 2009. but the s&p moved back up into positive territory economists are suspicious of the retail data, despite the fact the government said the shutdown didn't affect the quality or collection of the data those catering to the higher income consumers are lower than those catering to low and mid income, that makes sense and

happens when we see market volatility trade talks are still far apart, resolution is about 50% priced in, so that leaves room on equity headlines. >> i wanted to ask about the nrf out there, and it's talking about 2.9% growth. also kind of -- it's not as bad as the retail sales report at 8:30 but still looking pretty weak. >> exactly holiday sales for november and december grew 2.9% it forecast growth of 4.3 to 4.8% so that is much lower than expected basically what they're saying is if you look at the december numbers from the government, that was much worse than we expected how the nrf gets the number, they look at the government reports from november and december and pull out select categories, those that make up true sort of holiday spending. so if you get a big revision in that government number, you very

well could get a big revision in the nrf number it is the input for that holiday sales result. >> right now it looks pretty grim thanks, court, appreciate it what did that retail sales report tell us about the economy and the sector joining me is michelle meyer, and brian nagle. welcome to you both. michelle, let me start with you. if we take the nrf data, this shows how much of a december problem we had in november the figure was up 5% year on year in december it was up 1% what happened? >> that speaks to the fact we're supposed to be careful in terms of extrapolating trends from one month of report. december was clearly weak. you have to acknowledge that it's hard to dispute but november was strong. so if you look at a trend, it shows a weakening in the trend for consumer spending but not necessarily a collapse. >> in fact, this morning some of

the economists said the data is so bad it's suspect, not in the tampering sense but because of the decline. was it the government shutdown i wonder if households weren't using credit, they were piling up cash, there's only a couple million people directly employed but i've seen numbers of 13.5 million households affected by that? >> we look at our own data here, we look at aggregated spend on bank of america credit and debit cards. what it shows, similar to the government we saw a weakening but unlike that government data, we did not see as big of a decline. if you look at the trend in our data, versus the government it shows softness versus collapse the government is important how the shutdown impacts -- >> it looks like that decline is larger than the others. >> that's right. so the shutdown played a role. if you're a government worker

and you weren't working, receiving a paycheck, you did cut down spending and our data revealed that. when you look at the bigger picture it doesn't look like it moved the needle too much on aggregate. >> so brian, let me bring you in, i remember when we spoke about this back in december when people were asking you about recession and how would you know if one was coming by looking at the companies you cover, you said back before the downturn last time you see odd reports, a company would have a bad month or saturday would be strong and tuesday would be weak, things like that. what are you seeing out there? does it point toward a slowing economy, consumer, or not? >> that's right. we talked about that a few weeks ago now, i agree with my colleague there, first i spent a lot of time over the last few weeks or so digesting a number of holiday reports from leading retailers. what i saw in those reports was m some indications of weakness,

particularly the high end, like tiffany called out the impact -- presume the impact of stock market volatility. also some impact of weaker spending on the part of foreign tourists, particularly chinese there were also some good reports. so i look at the result, you know, the retail sales reported on delayed basis today, and i -- to me there's a big disconnect >> yeah. >> between that report today and what i've heard from my retailers. >> you said last time that home depot, for example, in the past, again last cycle would see trade down in their stores instead they're seeing trade up. are there things like that happening? are you changing any estimates on the companies you follow on the back of this >> that's great. with home depot we made the point what their management team commented in the past and heading into slower spending or economic times they see

consumers trading down, choppiness by the day. as of the last communications they had not seen that to answer your question, have i seen it elsewhere? no there was clearly an impact on various companies like i said before, stock market volatility, i think the government shutdown had some impact on retail sales, either by those or temporarily out of jobs or maybe just the noise around that. but overall, i have not seen the type of slowing in retail sales that was suggested in today's report. >> we're left with about a 2% estimate for a fourth quarter gdp, is it going to be better this year? >> on the back of the consumer spending numbers we have been tweaking our forecast, looks like we're tracking a one handle for q 4 and probably also q 1, even if you resume some provision and pay back, there's damage done, shutdown related, so it looks like we'll get a mid

1% growth story for the turn of the year that's not that different from what we have been forecasted it's a moderation in growth, not a collapse, a moderation in growth >> could we get back to 3% this year or does that look unlikely to you >> that looks pretty unlikely. >> that's better than what we were thinking this morning thank you both for the context it, appreciate it. let's get to amazon, pulling out of new york city it's no longer planning to build part of its headquarters there >> this decision comes after a huge amount of opposition to the project. amazon says that it's disappointed, but that, quote, a number of state and local politicians have made it clear that they oppose our presence and will not work with us. now among the loudest critics, rep alexandria cortez, and mike gianris who spoke to us

yesterday and slammed the deal. >> the deal is so bad i can't fathom that's going to form the foundation of a productive negotiation. sitting here and wrath every than show they're responsible neighbors to help the community they want to join, everyone knows that long island city, they're building, building they're doing the typical amazon tactics. >> you would say it's good if they pull out of the deal? >> yes >> this is a victory for him too he was set to play a bigger role in the product, but it's a blow to governor andrew cuomo, last week when they said amazon was rethinking the project he said it would be government malfeasance. >> does it mean they're going to take the existing footprints in d.c. and nashville and build from it that way a lot of people have been pointing to google and its

organic growth in new york city, still a huge company, spent billions of dollars but have done it in a much more piecemeal way. >> amazon says it has no plans for another hq2 location but plans for virginia and nashville are on track amazon says we hope to have future collapses to collaborate as we continue to build our presence in new york over time the company saying it's going to build up its presence but without perhaps the $3 billion of incentives, so maybe going the route of google. >> doing it much more quietly. the news could have a major impact on new york real estate let's get to die unanimoana. >> we've seen huge numbers, contracts to buy homes, mostly condos, jumped 181% compared to

the same period the year before, that's from patrick smith, he's been sending me these reports every week with the crazy numbers. so thanks, patrick that is 135 sales compared to just 48 the year before. long island city had been popular you'd seen a lot of building in the area even before the amazon announcement but that is going to pull interest away from the area. we're talking about the residential reads, avalon bay and equity residential is in manhattan in general not specifically long island city. but remember they had five subway lines one stop from manhattan. so equity was benefitting from this choice. the reaction right now to thes stocks is a bit overdone because they are a national reed and

they will still do well. he says demand for residential in manhattan is still strong so it's that initial stock bump we're told sl green is down, and three in the d.c. area are up sl green strong president in manhattan. but presence from google, et cetera but the big bump in the d.c. area is will amazon expand even more in the area in northern virginia, as well as long island city now that it doesn't have long island city that could benefit the reits there. as long as avalon bay does have properties in northern virginia. it's the huge jump in condo sales in long island cities. now you have to wonder will people who signed the contracts will they be pulling out of the deals? >> we'll be looking to see how

they're going to react thank you, diana there's a whole lot more ahead on the exchange. >> will he or won't he reports say the president may be ready to push back his march 1st deadline on tariffs. how optimistic should investors be taxes, trade and push back. and charlie munger holds court. we'll hear from the outspoken chairman this is "the exchange" on cnbc you.

all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything,

and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. exchange we have a news alert mayor bill de blasio putting out a statement on amazon pulling out of new york city. >> this is interesting in light of the fact that he really fought for this deal for amazon alongside the governor we have a statement by him it says, you have to be tough to make it in new york city we gave amazon the opportunity to be a good neighbor and do business in the greatest city of the world instead of working with the community, amazon threw away that opportunity. we have the best island in the world and every day we are

growing stronger and fairer economy for everyone if amazon can't recognize what that's worth, it competitors will so a strong statement from him who was an advocate of the deal. we just talked about the others, one of the them being google that retail sales report today was overshadowed by positive trade headlines that the president may be willing to push back the march 1 trade deadline let's get the latest from kayla, who's doing her best to track it it seems the warring headlines lately mean there has to be some decent about this. >> the fact is the facts of the situation change every single week and we are getting closer to that march 1st deadline, an extension of which i'm told is being actively discussed, according to my sources and bloomberg news is saying the extension could be 60 days larry kudlow said there's been

no final decision made but he's getting good vibes from beijing. >> i talked to the group they're covering all the ground. they're hard at it they are going to meet with president xi, so that's a good sign they're soldiering on. i like that story. i will stay with the phrase the vibe is good the meeting with president xi comes after four days of meetings during which the two sides remained far apart on the sturkt sturkt churl or permanent reforms. china is said to be offering what they offered in 2017 and 2018, in hopes president trump would be keener to reach a deal. we'll see if that's enough for the negotiating team or if they'll add something to make it viable. >> the market down only about 40 points right now the trump tax cuts are causing

headaches this year. plus our investigation into a private jet company why former homendecitla sury chief tom ridge is at the center of controversy. that's ahead on "the exchange" back in two. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved. i was blessed to be part of building one of the greatest game shows in history. during that time, we handed out millions of dollars to thousands of contestants. and i thought, what if we paid the contestants their winnings in gold instead of cash and prizes? back in 1976, we had a wonderful contestant

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hurt by returns in the equity and credit market. they're down 6.5%. broom and bran seeing a pop. a bright spot was outback steak house. bloom and brand is up about 6, 8, maybe a 9%. and cisco is moving higher after better than reported earnings. they're also increasing the stock buy back program by $15 billion. over to sue for a news update. >> here's what's happening at this hour. british prime minister theresa may suffered another defeat for her brexit plan losing a vote that called for an extension of three months on article 50 the deadline of the uk leaving the european union andrew cuomo signing extensions

of the sex abuse >> this bill legally changes the law and gives victims up their 55th birthday to bring a civil suit, their 28th birthday for felony charges and their 25th birthday to seek misdemeanor charges. it creates a one year window to revive barred cases. that is good but the bill to me does something else that is frankly more important this bill brings justice to people who were abused the bill rights the wrongs that went unacknowledged and unpunished and that compounded the pain the irs says the average tax refund so far this year is

$1,949, but that is down about 9% from the same period a year ago. however the treasury department said the drop is due to lower withholding and larger paychecks for some last year following tax reform that's a surprise to a lot of people i'll send it back to you. >> that is not a pleasant surprise. >> it's going to make a lot of people unhappy >> and retailers, too. 30 minutes to go until power lunch. >> i was chiming in there as a disembodied voice. you and sue were having a nice conversation happy valentine's day. >> and to you. we'll have some chocolate next hour. >> ceo of mars will be back with us, introducing a new flavor, i'm going to keep it a secret for now, but i guarantee my son will like it she'll take us through a look of the american consumer. we got data that's not terribly good there and the chief of rider systems

will talk about what he is seeing out there in the real economy in terms of shipping, deliveries, and so forth. >> supply chain. >> and, of course, we'll talk about amazon >> yes, we will. >> definitely amazon. >> many angles to this. >> i wonder what governor cuomo was thinking as he signed that bill >> he must have known. >> yes he didn't look happy here's what's ahead on the exchange coming up, coke goes flat. the first bank backed it toe currency. the goose goes south and table for one. that's all coming up in rapid fire california phones offers free specialized phones... like cordless phones,

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call or visit welcome back let's catch you up on a few stories that should be on your radar today. time for rapid fire. here with their takes, the top story amazon announcing its canceling plans to build a campus in long island city queens this after local politicians pushed back hard, they didn't like the tax breaks, what it would do to the subway system.

it is a loss for new york and the northeast as a whole. >> i'm a connecticut resident, i remember what i thought when they got hq 2 why couldn't they do it in stanford or bridgeport. there's been an exodus of companies in my home state and it could bring -- >> there's empty corpus campuses all over that. >> yes i used to work at ubs in stanford, it's the biggest trading floor in the world and it sits empty now. the idea that you could speculate about the wide ranging impacts of amazon and have it kind of pulled completely away in literally five minutes. >> and the amount of investment that's already gone into it. i was speaking to two real estate developers who bought these prime buildings hoping it would appreciate over time. >> over time it will do fine

it's not to say this is a community that has nothing else going for it, but i think their whole strategy, the publicity about the hq2 thing backfired. they didn't read the public -- >> the local politicians >> the local aspects of it. >> i agree the whole thing at first sounded brilliant. you have the race, the local governments offering their plans in order to push this thing through in their city. and all of a sudden they choose new york and the d.c. area, and the entire public -- i grew up in kansas where the local politicians there were why couldn't you come to topeka, kansas city -- >> being such a main part of those stories -- it's different from foxcon, who knows how many jobs will be there i can see why they said this one made more sense, the jobs are more real. but there's no -- it created more enemies than it did friends.

>> it became controversial. >> especially for people in the area who think they don't want to have to deal with this, and they're not going to go anywhere. >> the timing came around the midterms when you saw the rise of the democratic socialists activists so they turned to this story as a political platform. >> now we see the fallout. topic two is coca-cola's fourth quarter earnings but the 2019 outlook has the shares having their worst day in a decade. >> the consumer staples trade has been one of the more favorable one in the last couple years in a low interest rate environment where people wanted to see more defensive posturing yet have growth and get paid a healthy dividend the underlying reasons are curious for the huge decline here because it was a pretty decent report. the outlook maybe not as robust but to have an 8% decline is a rough thing to watch. >> it's also the latest example

of a consumer staple raises prices we saw amazon whole foods needing to race prices this week so there's a lot of under the radar price and elasticities going on in the markets that's spooking consumers and investors. >> do we get pepsi tomorrow on tap -- well, on tap so to speak. but if they don't have a similar narrative to coke we'll see. >> these price increases that will serve as a case study for these companies specializing in the beverages at a time when the consumer is said to move away from sugary drinks. >> but with pepsi-co, snacks are a large part of that business. the coat maker canada goose, raise d its guidance and filled 10%. what's going on with this story? >> i was at the virgin events

this year, bean capital is their major invester and behind canada goose, i said what's going on, he didn't know what's going on it's perhaps come off the retail sales number. >> all of these companies and the consumer space not getting any benefit of the doubt today. >> that as well as canada goose is a global company. they're trying to move into the chinese market at a time when tension surrounding the whole canada, u.s., china relationship are really, really high. the tensions are really, really high at this point so it's difficult when you're a consumer brand, and a notable consumer brand with the word canada in your name to break into that market. >> selling thousand dollar jackets. >> do we have a photo of the jacket there's like an amazon -- >> the green one. >> yes, it's all the rage. jamie diamond bashed bitcoin

as a fraud saying if you're stupid enough to buy it, you'll pay for it and he's since walked those comments back and j.p. morgan came up with the coin this was the back end story. >> this is not bitcoins, not really a cryptocurrency it's more of a stable coin backed by the dollar the objective is to help clients facilitate cross border payments instead of relying on services like swift and western union, this doesn't have that time limitation it's supposed to help clients get that money overseas. >> boring is good when it comes to crypto. there's nothing sexy about it. >> it's about what jamie diamond said, the technology, block jane, this is not like jpm joins have a fluctuations in value

it's keeping track of payments, on a ledger and have chain of custody. >> which has impliatiocations if they get it right. >> i was spoking to a reporter who broke this story this morning and he said at the end of the day it's about the new technology right now it's a small minority of their corporate customers who will be able to use this, it's not something they expect a mass rollout, i think it's a $6 trillion market for just j.p. morgan and so, because of that, it's almost like an experimental thing for them but it's one of those things we could probably expect to see a lot of other banks, especially citi, doing that. >> it's funny because it's j.p. morgan, not goldman sachs. >> i give them credit going straight for it despite all that this is important we'll get it right. topic five, according to open table, new york city restaurants are seeing a big

jump in, yes, tables for one booking for solo diners up 80% from 2014 to 2018. this as the nrf announced that fewer americans are celebrating valentine's day. only 51% are celebrating it. >> i think getting a table for one is a great thing covering the travel sector you're seeing a rise in solo travel more people getting married at a later age -- >> this was my whole 20s by the way. >> it's great. why not. >> i go to the movies by myself all the time when i could with a child at home it's tough. i did it >> what about at a restaurant. would you go to dinner and a movie by yourself? >> i think i could do it it might be a nice break nothing against my wife or daughter, but it might be a nice way to get our own time. >> i would do. the four of us should go to dinner by ourselves. >> corners of the restaurants. >> you bring a book. >> catching up on e-mails.

get a nice quiet place i think it's interesting they said it's driven by foodies who want the experience of the food not to be interpreted by other people. >> who needs conversation. >> what are we doing here, guys? we should be at the solo table. >> how often are you at dinner and the other person is on their phone or you're on your phone, so it works out. >> happy valentine's day to everybody. hope you celebrate together. coming up charlie munger is speaking right now he's making headlines already with his open and blunt commentary on the markets. >> want to get social with the exchange e-mail us at theexchange at cnbc.com or find us on twitter at cnbc the exchange

welcome back to the exchange one of the selling points of flying private is getting to

skip tsa lines and screening but for customers of jet smarter, the lack of security checks has created questions about the roleof former homeland security chief, tom ridge. an investigation last month is now revealing new information about security on flights. here's robert flank with tailspin >> it was the private jet flight that became infamous cnbc obtained video of a volatile dj threatening to kill other passengers aboard a jet flight fall last month jet smarter, the celebrity endorsed so called uber of private jets in the wake of our report jet smarter sent this e-mail to membe members touting its security saying its security on the ground was designed with

guidance from tom ridge, the first secretary of the u.s. department of homeland security. ridge named to the board in 2016 said jet smarter's security measures were designed to not only comply with federal requirements but to exceed them. but customers and crew told cnbc that jet smarter does not always follow its stated policies daniel is a jet smarter member who was boarding a flight in austin, texas two and a half years ago when a fellow passenger revealed he was carrying a handgun. >> while we were walking the gentleman next to me said, in these exact words, he said to the pilot, i'm carrying. i deduced he had a gun >> he told us the passenger turned over the gun to the pilot. >> at that point i started to have some serious questions about the safety on these flights and who's on the

flights. >> tsa guidelines for private jets say passengers should be positively identified by the aircraft crew. the agency says private jet security and screening are required to meet tsa standards, which are confidential, the prohibited items on a commercial jet are also prohibited on a private jet. jet smarter told us, it has stricter and more deliberately enforced security procedures than other private aviation companies. it says it runs digital background searches as well as additional k-9 screenings and checks for unauthorized explosives, weapons, narcotics and other items prohibited on board. but customers say bags were checked by dogs at some airports and not others in most cases passengers themselves didn't go through a metal detector or physical check and sometimes they say they witnessed dangerous lapses this drug paraphernalia confiscated from a passenger, as

well as this suspected marijuana. the pictures taken by crew members. jet smarter member sally says she witnessed occasions security was enforced. >> they had drug sniffing dogs and those dogs would find the cash that smelled like pot or whatever. >> however she told us jet smarter was popular among people who it appear d could not pass tsa checks. >> i met one person who said he signed up for jet smarter after getting detained at an airport for pot-smelling cash. >> people would tell me they'd move weed between states where it's legal to have it and illegal to have it and they were able to use jet smarter as part of their business. >> perhaps jet smarter is the

poster child of this bad behavior, but there's no way they're the only ones. the more and more people are flying private in the skies, there has to be a crack down is more security coming? >> you would think this industry was built around the premises you charter a plane for your family and company. now with these apps, you get on a plane with eight or ten other strangers and they have not cleared security and the security systems have not caught up to the changes in the industry >> that's a glaring problem now. maybe it was developing all along but nows in the way quote/unquote this is going, people should brace themselves. >> yes. coming up, could the bring home buying season get derailed because of the tax cuts? we'll get into that right after this and a dock with a boat, maybe.

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all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. the trump tax cuts are causing headaches for some taxpayers this year, especially with the cap on state and local tax deductions, now there's concern the laws will disrupt the home buying season

let's talk with bills a kristen welker -- congressman, thanks for joining me. >> good to talk to you this afternoon. >> i have to say -- yes. you've had quite a morning i appreciate your time before we dive into this, can i ask you about the news just about an hour ago amazon is not putting its hq2 in new york city this is going to affect the whole tri-state area, isn't it >> it sure is. you talk about over 25,000 jobs. i know some of the congressman on the bus -- we just came back from congressman dingell's funeral. and on the bus we learned about this they weren't very happy at all when you see how much the state and taxpayers are investing and what the return is, this is a no brainer. i think it's a very important thing. let new yorkers decide what they want they don't need people from new jersey telling them.

>> it's interesting to hear a democrat saying this, sir. >> i'm telling you what i heard. and people weren't very happy about it you know, and i'm sure those who were against it supposedly had good reasons butit, supposedly, good reasons but i don't see, you know, when you look at what the return was going to be on the investment, bring it over to new jersey, we'll take it. >> in new jersey, we say, send to newark, they've got audible there already. these are related because the sole issue -- >> yes, they are -- >> -- hitting says the hardest concerns now, give an example of what your constituents are facing this year, by capping their deduction for state and local tax at 10,000, are we talking about people owing multiple thousands of dollars on their bills? >> they're not get back anywhere near they thought they were getting back we know, in my district, the

average house is paying close to $18,000, and certain parts of bergen county, the lower part of bergen county, and it's worse in the northern part of the county, they're paying $24,000. >> are they going to leave the state? >> no, i don't think they will, but i hope they won't. but this is something we have to overcome, we can't accept this there are 11 or 12 states targeted in the enormous, terrible, scam of taxes. that's why he didn't run on it last year. come on. they were losing on it, when they saw poll after poll they know what the results are. >> the attitude in the country as a whole seems to be there's not a lot of sympathy for the wealthy, and even though in your district talking about basically middle income people -- >> that's right. >> -- compared to rest of the country, hire income, they'll say, tough. >> the high tax states where

there are more people, more concentration, more density, where the needs are different than if you live in the state of montana, i don't have anything gen against the state of montana, but in montana it's a different situation. far less people in montana and states like montana using that deduction. it means something in states like illinois, new jersey, new york, california, maryland, connecticut. it means more in those particular states. this deduction -- by the way, this is the oldest deduction on the books. >> right, since 1913 >> no, excuse me you're wrong you're wrong. >> even longer, yeah. >> not really wrong, but it goes back to the civil war. >> okay. >> that's before the code, the tax code, even existed so the states and counties would have money to do their business and the federal government wouldn't take everything. this is the perfect example of double tax ache. here's the case, i put in the legislation tuesday.

we got bipartisan support. we've got to take this off the books and give people back the money they have coming to them. >> it's the stop attacking local taxpayers act, restore the full deduction. but it also raises the bracket for the highest earners towards 40%, right. >> the way to pay for part -- the other side pays for nothing -- i felt, putting this bill together you, have to have some way to offset the cost. and this was like $630 billion over 10 years, taking this deduction away, that the government was going to have to give corporations and those at the top of the realm more money which is totally ridiculous. i believe in middle class tax cuts, help the middle class, first of all i supported bringing down -- >> all right. >> -- the corporate tax from -- to 25% but not 21% these are all give-aways the middle class is paying for

looking in mnew jersey, my disdig, average between 75,000, 200,000 of people who apply for it 60%, 65%. >> right. >> this is not a rich giveaway don't let them kid you. >> it's a pleasure speaking to you about this please come back >> my pleasure, kelli. we have charlie munger on the markets. the outspoken berkshire vice chair on where he thinks we're headed servicenow put our workflows in the cloud. this changes everything.

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welcome back charlie munger, berkshire hathaways vice chasir speaking now. he's been chair since 1977 known for blunt assessments. becky quick is there and joins us live always fun to listen to. >> he is, there are more than 700 people here. this is the overflow room behind me, and it's overflowing, too. it's an amazing story when you consider this is a couple with a few hundred employees and 440 shareholders, to get this turnout for the annual meeting they come because they want to hear all kinds of wit and wisdom from charlie munger.

he calls this his groupies and he's been holding court. all sort of life wisdom pieces he's tossed out, thoughts on business including this parable he told that describes one type of business on wall street. >> this has this wonderful horse, an easy gait, good looking and everything, works wonderfully but also occasion occasionally gets dangerous, ambitious and causes enormous trouble and breaks arms and legs he goes to the vet, what can i do about the horse the vet says it's an easy problem. what should i do the man says next time your horse is behaving well, sell it. [ laughter ] well, think of what a moral that is and haven't i just described

what private equity has to do? >> when it comes to what he's talking about in terms of life, how he thinks people here should be live their lives, they said there was a young man, 23 years old, came to mozart and said i want to write symphonies can you tell me how to write symphonies. he said, how old he said 23 he said you're too young he said didn't you write symphonies when you were 10, he said, yes, i did but i wasn't running around asking people how do it. despite his brilliant in the situation, lived an unhappy life he overspent his income, drastically, and he had all kinds of petty jealousies that made him die young, broke, unhappy. charlie said there are lessons we can all learn from that the truth of the matter is not everybody can do everything and no matter how good you there, there will always be somebody else that can do something you can. you better live with those

things if you want a happy life help took a shot at elon musk. i'm not sure what that was but i'm going to go back >> more to come. becky, change you so much. becky quick. that does it for "the exchange" "power lunch" begins right now >> i, folks, walking proof of munger's that you can't do very well and proof that other people can do things better i'm tyler mathisen amazon, out of here. prime, no. out of this plan to build a second headquarters in new york city prime no slime, say the new yorkers. the fallout, ahead the biggest retail sales drop in a decade, time to fear a recession or a one-month blip where exzo