here. >> small, small position in jmsmucker. coming off the bottom. you got to be careful. >> teen use tiny >> small. >> you said small twice. thank you, scott hi, everybody. slow down, what slow down? fourth quarter gdb beads the estimates. we'll dive into those numbers and impact >> autoloan delinquencies arrive, with borrowing hitting record levels. what does this mean? >> an interview and a test how both the nfl and corporate america are using the same i.q. test to make hiring decisions. maybe i took it, too we'll tell you about that. dom chu hasn't taken it, but here are the numbers. >> i have not taken it, but you

spoke about testing before you can see the dow just about flat so a very static marketplace it's in the industrial side of things so geopolitical the shares moving higher s. by the way. if you're looking for the disasters du jour, box off by 19%, and these two, by the way,

right here the worth performers in the s&p 500, earnings records are key. back over to you. >> certainly is. dom, thank you so much nec director larry kudlow said progress on a china deal -- trade deal with china has been terrific and a historical deal is on the horizon. steve mnuchin, bullish on china as well, say it will be, quote, a real agreement now in china itselves, the economy continues to show signs of a slowdown let's drill down, seema mody is at the nyse today. >> hey, kelly, the dow on place for the third -- >> take a like alternate what we have seen, the rally has been extraordinary.

china up 18%, its best two-months run, europe seeing the strongest start to the year since 2015 the question is, what can derail this rally with no u.s./north korea summit -- or with in a summit ending early, does this increase or decrease the chances of a trade deal what's the impact of the india/pakistan tensions. that seems to be on hold for now. lastly is a currency impact. companies citing some kind of negative impact of foreign exchange as the headwind we're trying to see the clear picture of what's happening today. dom mentioned a lot of they companies gave poor guidance, but is the dollar part of that that would help explain -- the chicago pmi was fantastic this

morning. that's about as forward-looking you can get for the u.s. could that explain the mismatch? >> i think there's a multitude of headwinds that is certainly one of the reasons from ibm, apple to procter & gamble have brought down the earnings expectations for the next quarter the other big factor is the slowdown great stuff, seema the commerce defendant reporting -- steer liesman is any washington to dig into this more for us. >> kelly, thanks a pretty strong number two was the average on the street it came in at 2.6, which is half a point plus one, which was better than the estimate business investment was also stronger than expected

the residential numbers were negative that's been hit by higher interest rates government, not much of a factor, up 0.4, though that spending did help we'll take a look at the trajectory we had a steady decline from the readily good second quarter, which was north of four, down to a better number, but the estimate, just so you know, we go down to 1.8, 1.9 in the first quarter. that's no actual data to back it up the award guys goes to mike england add bret rye yar had 2.7. kelly, i haven't taken that test i'm smart enough to know not to play in the nfl. don't needs a test for that. i think you would do phenomenally well on it. >> maybe on the test, but not in the nfl. before you go, this is not

the finally revised figure, right? especially with the strange reports in december. >> no, you're absolutely right, kelly. a little history of that where we are is i think we missed the first report. this is the second iteration, i think. there would be one other one, revised over time over the next five years from report to report, compared to the actual that we're going to get, when we get the i.r.s. data and can chew it up, the average is -- there will be victory declared, defeat, victory, defeat until we get to the actual number three to five years from now. >> but as you said, it can move quite a bit. steve, thank you so much good to see you. let's bring in john harwood. george la vonnia is here on the set with me. we want to ask you both about these figures. john, i raise this there's so much focus on whether the growth for the year was 2.9

or 3.1%. you know, it's going to move around can't we call it 3% and go home? >> well, you could as an economic matter, it probably doesn't make much difference the significance of 3% has principally political. remember, in 20 16z, donald trump ran, saying that barack obama was the first president in modern history never to reach 3% growth in a year he saidtwo things. one, with tax cuts and deregulation, we will achieve that second, we will sustain it what the annual numbers show now is what trump has gotten this year is the seam peak that obama got. so lardry said, let's just call it 3%. that's fine, but that would apply to obama as well and undercut the claim that he never got 3% second, it's declining as steve showed in that court in the 1s for a the first

quarter of 2019, the fed has downgraded to 2.3% for the year, and the long-return fed projects is 1.9%, so the question is, did they achieve 3%, and there he sustain it the answer on both is no. >> joe, it's important in order for the tax cup to pay for itself it need to be about a person point, certainties not below. >> i want to come back to snowing john ked, q4 ovthe annul average is positive. >> so you're 3.1% guy? >> that's how you're supposed to do it. tell us why again. >> you could show you an annual average that shows growth for the year, but sequentially there's no gdp, because the fourth quarter is up in the previous year a lot relative to where the new years is.

>> i don't disagree with joe, kelly. he said he himself prefers the q4 to q4. >> but that was not basis of the attack on obama. >> that may be so. i'm trying to stay as apolitical as possible. 3 had the 1 to me is the right number can you sustain it to me that's the biggest issue that depends on product activity t really for the past 17, 18 years. there's been a real downshift both here and globally that's anybody's guess it depends if you want to be an optimist i'm an optimist, but can we sustain 3% growth? probably not. >> this is going to be a tough question to answer, but what gets product activity up if the trump administration said, you know what? the obama administration depressed it, because it had a heavy regulatory hand, could the trump administration say we're

creating the factors that will flock that what do you like for >> main factor is capital deepening, but there are many other factors, which would sound like the investment we got as a result of the tax cud or not >> we did, but this is measured over years, not month or quarters the other issue is if the look at some of the work done from possession at m.i.t. and product activity cycles, it looks like a step a cycle. op it's conceivable all these cool things now we can do with the phones, maybe we're on the cusp of another product activity boom >> i like to they we're more protective than we realize. >> joe is right, it is a step function we saw in the 1990s there was a sudden burst of product activity improvement from the digital revolution when it arrives, it arrives, we

don't know but you can't necessarily say we're going to have a given level of growth on the hope and assumption that that's what's going to happen. product activity could go up talk to doug holtz-eeken his question are is we decelerating to 2.5 or to 2, and the question of whether we can get 3 in the long run will not be answered for years. >> what is your personal point of view about gdp. >> low to mid 2s, but i would say, look, if the fed doesn't go -- this comes back to what john was saying -- they have to see if the economy can run hot, to see if we have a product activity jump. >> guys, great discussion. joe lavorgna, and john harwood, thank you for joining us today here's what's coming up on "the exchange." >> announcer: no deal. president trump leaves north korea without any agreement.

what could it be telling us about how he'll handle china negotiations delinquencies and borrowing hits record highs, but not in housing. in autos what it could mean for the economy. passing, running, catching and an i.q. test how the sports world and now compses, are using them to make hiring decisions servicenow put our workflows in the cloud.

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welcome back president trump's efforts with north korea collapsed. eamon is still in vietnam. the president unable to make a deal i was shocked this morning when i read the headlines. >> it was a fascinating moment we just had another fascinating moment over here in hanoi. the north korean group head a press conference, telling reporters who gathered hayly that ultimately they did not ask for the removal of all of the sanctions, just certain sanctions. they also said the offer they made to the american side was,

quote, practical that's not what the president said in his press conference overnig overnight. he said they asked for the removal of all the sanctions here's what he said. >> basically they wanted the sanctions lifted in their entirety, and we couldn't do that they were willing to denuke a large portions of the areas we wanted, but we couldn't give up all of the sanctions for that. we'll continue to work, and we'll see, but we had to walk away from that particular suggestion we had to walk away from that. >> reporter: kelly, in the wake of that press conference which we just got in the past hour, we now have a dispute on the negotiation itself then a dispute about what the dispute was about here, because the north koreans are say they didn't asked for the removal of all sanctioning, the president saying they asked for the entirety of sanctions.

so we'll continue to see if we can find out what -- the bottom line is no deal. the president hoping the economic progress this country has made would be an example, but clearly it wasn't enough to entire the north koreans to give up their nuclear weapons let's bring in summi terry at the center for strategic international studies and nbc news contributor s sue, i want to ask about the significance of the collapse of the talks and in and out this dispute that's arising >> well,s surprising, because i thought there was going to be an interim deal out of hanoi. the north koreans were going to sort of promise tick the more toreius. through a five hef megawatt reactor. in return, would ease sanctions. not a lot of it, but perhaps

allowing south korea to i don't for the united nations to get the exemption necessary to reopen the kaesong complex, so they could do the inter-korean complex, and at least a peace declaration. i think this indicates that two leaders wildly misjudged each other. president trump thought he could get kim jong-un to make concrete steps toward denuclearization, he came to the negotiating table. and kim jong-un, probably misjudged president trump thinking that in singapore, he decided to sort of give away the joint military exercises that they do in south korea, to scrap it he thought, you know, president trump was so eager to have a foreign policy success he could get something out of the president trump. obviously there was no deal. it's problematic going forward, because we don't have

agreed-upon definition of denuclearization, even though it's been eight months since the singapore summit, and now there's a dispute on top of it all in what made this summit fall apart i think we have a long road ahead of us. >> eamon set, no, we're talking away happy, they tried to paint it in that light is that -- does that that stick as we move through the day and as we're heaved the response, is he only left with the option of agreeing to a nong tangible, nothing on paper

openly they didn't open liaison offices in each country, which was an idea floated. they didn't dolleclare an end to the war, and they didn't agree on a definition of what denuclearization even means. they're saying they made progress, but it's unclear exactly what they're remembering to here. ultimately the president left here empty-handed. >> sue, do you think the north koreans will be so unhappy with the outcome as to look like their old selves of the past couple years, even start to look at resuming weapons testing? >> i don't think so. not any time sign, but north koreans do not want to get back to testing, which would then lead to, you know, further reaction from us i think what they're going to do is just a slow roll this process and wait out this administration the problem is medical tear

exercises. after some couple months pass, let's say in the summer, there's major military exercises coming up what are we going to do? is the trump administration going to stop that or resume that if you resume that, then i think it gives that execute to north koreans to resume testing. that's a little further down the road i think immediately everybody is going to try to reassess that situation, but again, it doesn't look good. >> sue mi terry, thank you for joining us eamon jafrs, thank you as well it's the i.q. test that can determine the future of nfl stars, and it's being used in corporate america. a closer look how it works we're back in two. capital one is anything but typical. that's why we designed capital one cafes. you can get savings and checking accounts with

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we see hat emerson,kthroughs when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. the fashion retailer claiming declining sales, and weaker than expected full-year guidance. celgene is lower as well bristol-myers top shareholder coming out against the proposed deal to buy celgene saying it's

too risky and expensive. now to sue herera for a cnbc news update. >> hi, kelly at his press conference, president trump commented on the michael cohen testimony. he said he was a little impressed that his former attorney told congress there was no collusion between his presidential campaign and russia >> he lied a lot, but it was interesting, because he didn't lie about one thing. he set no collusion with the russian hoax i was impressed that he didn't think i was well for this reason or that. he said no collusion. new england patriots owner robert kraft has pleaded not guilty to solicitation of prostitution he was charged by jupiter, florida, police last week after hundreds of people were arrested in an investigation regarding human trafficking an massage parlors. kia and hyundai are recalling nearly half a million

vehicles the larger recall covers neely 379,000 kia soul models from 2012 to 2016 hyundai is recalling 152,000 tucson and sportage suvs from the year 2011 to 2013. you are up to date that's the news update this hour. >> tyler has to check his driveway. >> i have my kia i don't think it was covered there, but we'll find out. thank you. i am with tyler mathisen until just about a half hour to "power lunch." we're going to put everybody in touch with their inner wonk this is garnering a lot of attention in washington and political circles these days called modern monetary theory. it is one of the theories that underlying some of the democratic agenda items with respect to medicare for all, the green new deal, and so forth i don't begin to understand it,

but we have one of the originators, one of the leading theorists on it. dan mitchell will be here to debate it, and we will educate the audience about that and so much more today. modern monetary theory. and we have chicken wings. >> we'll talk about the wing biz. we're going to wing it. yes, we are. here's what's ahead on "the exchange." >> announcer: coming up, who says beer sales have gone flat fitbit isn't so fit. martha stewart's new venture is -- pot. >> the rihanna empire gets bigger it's all ahead on "rapid fire. guess who just got reinstated! well, not officially. nervous? yeah. yeah me too. don't worry about it, we'll figure it out.

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welcome back let's catch you up on a few stories that should be on your radar. "rapid fire" frankly speaking today. melissa had to graciously agree, because we begged her not to round things out today, but -- >> it's to make the frank-lee

thinking happen. did you not get that >> no. that's why you're here. >> and she's here because she has notes. she's always the best prepared students robert will be sneak that is note buck. >> they did strong performances from budweiser and premium brands, also forecasted strong retch and profit growth. the stock is up 19% this year, even as we keep talking about the secular decline of this category. >> it's a great year for beer. if you're asking me, is beer back well, maybe, but it actually never went anywhere. around the world beer is still popular and has a lower price point than wine and spirits. if you look at ab of-inbev's business, they're growing, with one of the shottest ipo by

spinning off their brewing business in asia around the world it's still really popular. >> i thought it wasn't as pop ulair with mill len yale. >> this is something called the premiumization of beer, where they're trying to hawk the higher-end craft-looking beers, as opposed to the budweiser that sell well in other parts of the years. >> i covered the beverage beat for "wall street journal" for years, it's all about scale. if you're going premium and cheaper beers in the undeveloped markets, you lose your kale. the other problem is this is a company with $100 billion in debt. >> wow this is one of the most indepartmented corporate balance sheets out there right now they have to start earning a lot and growing a lot. >> the saves grace for that is the bulk of it, somewhere around 94% is fixed rate, which they

just refinanced, so at least it won't fluctuate, but that's still a lot of debt to be carrying around. in the era of kraft, heinz, what happened to that, you have to wonder if they'll get re-rated as a group, the highly levered companies whose strategy has been acquiring, acquiring, acquiring, which may not have the price leverage that they necessarily need. >> here's the other thing that is happening, maybe eating away at the category. martha stewart, and sometimes we say this as a sign -- she's teaming up with canopy growth. her first task will be develop a new line of cbd products for animals? this isn't their first partnership, their first was with snoop dogg. martha has a fabulous way of always jumping to the next big thing. does that tell us for cannabis,

it's that? >> this is, by 2022, the cbd market is expected to bow to $22 billion. bev to remember that he all this stuff is a commodity how do you differentiate you brand it youput martha stewart on it, similar to what she did with k-mart if you slap martha stewart's name on it, it sells for ten. >> i loved that line myself. i know more about sheets, nots cbd. >> is not growing at the expense of beer and some of the deals that consolation has been breaking >> it's still very new it's more thc, if you overlap where sales are for beer, where marijuana has legalized, you were seen more softness in those particular states, but this is a land grab a this point with the passage of the farm bill, cbd has become legal you can get scale for a lot of

these products cap pit the specifically invested in a hemp project in upstate new york the wild card still is regulation the fda just announced yesterday -- gottlieb was asked about it yesterday on the hill -- they'll have the first hearings about contract bd in fool products. it's not legal, and there have been crackdowns, because there's no monitoring in terms of the level, the amount -- >> we have a candy truck that goes around our neighborhood, cbd candy. >> really? >> it's called weed candy. you don't know what it is, but there's always a line for the cbd candy truck. >> is it still operating >> it's probably doing better than ever. shares of fitbit are plunging today we've talked a lot about wearables, the company issued weaker than expected guidance and is struggling to compete with appear 8. that might not sound like, of course, we can understand that,

but garmenting had great wearable sales, best bide said wearables helped their sales what's going on with fitbit? >> they're moving away from the fitness trackers to watches and wellness, and they have a program with health insurance for their products i don't see what the must-have application is for fitbit products yet. >> it used to be the steps, but now the steps have been commoditized. >> the olympic problem is their prices will continue to come down if you're not getting primeius prices, not growing that margin, as a new tech company, i don't see where you go, especially against apple. >> $27 billion instrument by 2022, but whether we're talking about wearables, you mile this ises about something on your wrist, but apple is working on airpods. they're working on those to do the biometric, and around here

everybody has an air pod in their near that he time apple is ahead of the curve, where they might have missed the market on a really expensive phone, but the air pods are just easy to wear. >> and they have the ekg and other application and they're trying to own this market. how about this one the number of pedestrians killed on u.s. roadways, just hit the highest level in 28 years. that was also according to a new report from the governor's highway safety association saying an estimated about 62 had you pedestrians were killed last year people are being distracted by their smartphones. will waeshling start that? >> if apple wands to do mandkid good they should have an auto mode, where you can only engage it if you're using siri or some other voice-controlled system. i don't understand why this does not exist already. it seems like a very simple fix. >> here's an anecdotefrom.

i turned on siri on the phone, but i now can't use voice in my car when the phone is plugged in >> you can't talk to yourself anymore? >> i can still sing along to all nigh favorite songs from 2003, but i can't actually -- the car itself has a voice system where i can saw call robert frank, but if i plug in my phone, unless i have siri on, now i can't use it the point being we either have to be all-in on these operations or not >> there's two factors there's also people walking and texting. >> that's pedestrians, too. >> which everybody is guilty of. how many times have you crossed a street looking down on your phone. >> never, never, never, that is the most foolish thing. >> i do it all the time. >> i see it all the time unfortunately. >> apparently in germany they have lights on the bottom of some of the crosswalks that help

to catch your attention, hey, look up. >> that's pretty smart. >> that might be the only way. it's almost like rumble strips for people, some way of alerting you. >> they have to juls give out a lot of tickets, raise the fines. people only remember if they are financially harmed. >> walking while texting, $100 that's a revenue builder. rihanna's empire is getting bigger, partnering with lvmh, apparently investing much of her own money in the venture they haven't launched a new branding since 1987. they're call her the next coco chanel >> this is how it's changing the whole consult during they thought make she'll do a deal with did i das or puma. lvmh is the luxury standard in the world. for them to say we're going to invest $30 million with you, she's going to partner -- >> to only have half of the partnership. >> they haven't done this in 31

years. she's got 6 million followers on instagram. her beauty product with kendo, one of the their beauty lines. that will hit a billion in sales. so it's working. >> but what if we're at peak rihanna? that's a lot of -- they have a long-term view on her. >> i think there's a lot the roadway for rihanna left to go, but a "forbes" story said 92% trust social media influencers than ads this is the ultimate influencer. this also will expand just beyond clothes and makeup. supposedly it would be garden tools, furniture -- >> garden tools? i know an lvmh hoe >> oh, oh. >> that just came out -- i don't have garden tools. i thought, i'm not going to go there. >> h-o-e, people

>> imagine her singing about her clothes. it's a broad -- >> i have a lot of thoughts now. thank you all so much. melissa, i'll see you soon. auto loan delinquencies hit an all-time low. that's next.

welcome back expe expirian is out today with a new report, say dlin wanes have climbed. again the backdrop of a strong economy, what are they delinquencies here to tell us about. phil, first of all, walk us through this new report. >> what you have from expertian, they look alternate millions of auto loans

ritz still unit 1%, but it's an increase the record loan is at a record high that's how much people are borrowing to buy a new vehicle then the average monthly payment for a new vehicle, now at a record high of $545. bottom line is this -- people are borrowing more, paying bigger amounts every month to repay those loans, and for a small percentage, they're struggling with make those payments torston, what do you take from this >> this is very symptomatic of where we are in the business cycle. it was easy a few years ago to get loans on credit cards, autos, lending was going well. the problem is we've begun to

see it creep higher, and that's getting more problematic it eventually also is the case that the unemployment rate begins to go up. we don't want to paint too dark a picture here, but the trend is interesting. why. >> and we can show your cart about the unemployment rate following the delinquencies, but sometimes it did take four, five years. >> war people in the industry saying >> it's other people as well you talk about the fact that this is coming maybe four, five years after somebody takes out a

loan the average term length on an auto loan is just under 70 months you're getting close to six years. it may be somebody is upsidedown on that loan for four, five years, and something happens, if they lose their job, have a medical emergency, that's when they fall behind. >> torsten, i want you to let us know when we need to star to worry. >> of course, will do. thank you very much. nfl hopefuls also need to prove they're quick thinkers off the field. we'll talk a like at the iq test had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills.

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simple. easy. awesome. welcome back the nfl combine is now under way. it's not just speed, strength and agility. we have a look at the iq test that players are facing. >>ed wonderlic test has been a staple since the 197 ons there's also the 7-year-old aiq test that more and more teams are using. i decided to take both to see how i would fare

that was wrong the math, vocabulary and logic and had visual puzzles. >> only the, adults average 21. >> i ended territory of some top quarterbacks while this is one indicator teams look at, the best players don't always have the best scores. >> it's really tough it's a speeded test, so a lot of what we're measuring there is processing speed you can tell is really important in any sort of athletic role. >> it goes way beyond football the wunderlich test used by fortune 500 companies to assess possible new hires wunderlich's core business far exceeds what it does for sports. >> the shapes will flash at different times in random order, so stay hear the. >> the iq is specifically for athletes no math and vocabulary it's pattern recognition, reaction time and memory my strengths were spatial

awareness and decision making but weaker in retention and memory. >> one head coach who once referred to the aiq as his wubby, just a sense of security with how much relevant the data was and how spot on he was when comparing it to game film. >> while mentally ready for the nfl, my 40 time bench pressing vertical jump will probably hold me back. >> there you go. >> eric joins me now, realizing he may not make it in the nfl. >> i'm not. >> since you're the smarty pants, i'm the one who played a college sport. maybe i would crush this test. i took too it and here's a look at what happened yes, 38, baby. >> you beat me so frustrating to me. >> i thought in the aiq test, this was hilarious too, our scores were identical. >> identical 103, relative to 100 average but all these

different components to it so i don't know how you beat me in the wunderlich. i thought i was going to beat you by a lot. >> mr. valedictorian, perfect mit guy. >> but we don't know the breakdown. we know the total number on that but the aiq, you thought you did well in spatial awareness. >> i played midfield. >> if you rotate, turn around, your whole body rotates and now everyone in a different position on the field, how quickly can you adjust to that >> you beat me >> i beat you on that and much better in target comparison. >> here's the issue though people will say, okay, what if you didn't come, a lot of these guys in college are barely studying >> it's been around for almost a hundred years. meant for corporates they add it to the nfl a long time ago but it's for athletes only. >> literally athlete iq.

>> no vocabulary you can be a fourth grade education, not speak english, be a latin american baseball player but if your processing are good, you'll get a higher score on this. >> it was much more difficult than expected. i'm watching these guys with a whole new sense of respect out there. eric, thank you so much. eric chemi. didn't get as large of a tax return as expected in luck. some states are returning cash to taxpayers those details are next at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. frstill, we never stoppedss wmaking it stronger.e. faster. smarter. because to be the best, is to never ever stop making it better.

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welcome back i'm julia boorstin with a news alert on youtube youtube making dramatic change in the wake of concerns about pedophiles comments on videos of kids youtube saying, quote, we'll begin suspending comments on most with minors except for a small number of channels that actively moderate comments and take additional steps to protect children the company saying this will impact tens of millions of videos this after advertisers including hasbro and mattel and nestle suspended ads on the platform. youtube has said last week they had already taken action on this issue but could now moving forward impact youtube's bottom line because comments are a key way for content creators to connect with their audience on

the platform back other to you. >> must just think it's worth it thank you so much, julia boorstin the u.s. economy grew at about 3% in 2018 some of the strong economy behind them, some dealing with a good problem to have a surplus in cash. whether they choose to cut it by increasing services or both, what affect could these have across your portfolio? let's bring in craig brandon welcome. >> thanks, kelly >> the first line here saying it all. lowering income tax rate and tax rebate who file returns, in florida, might lower property and sales taxes. i wish we could do this up here. what do you make of it >> it's like you said. it's a very good problem to have from a municipal perspective we look at top line revenue growth just like the company would look at top line revenue growth and see if it's sustainable. over time, we've seen a long

steady climb in our economy. a long steady climb in the equity markets and the states who primarily rely on personal income taxes and sales taxes for revenue benefitted from this so it's good solid fundamental top line growth which we view as a positive thing in the world. >> have states done enough to grow the rainy day funds they'll need for the next downturn states unlike the federal economy, they have to balance their budget for the most part they don't have the luxury of running deficits should they be adding to reserves instead of returning the money? >> you know, it's a state by state choice obviously, some states are in better shape than others most of the states are in good shape and building their rainy day funds. there's other things you have to look at though one of the biggest things on the expense side are pension and pension underfunding and how much a state is funding their pension because a pension, if underfunded, could crowd out underspending. it's one of the things we look

at when we decide what the states are doing. >> the most underfunded, these were not a surprise. new jersey, illinois, pennsylvania, connecticut. why is kentucky dealing with an underfunded situation? >> kentucky is underfunded i say it's sort of the silent expense. when you're balancing a budget, you can either raise taxes or cut spending a lot don't want to cut spending, so one of the ways you can cut spending without people seeing it is cutting the amount of money you're putting into your pension every year. so there's a certain amount of actuariaial spending you're supposed to have and underfunding your pension generally flies under the radar, what some states like kentucky have done over the years is not making the hard decisions. >> new york someone of the most full fended penguins out thesioe past your final point, even in a state like illinois, you can look to bonds for things like

the airport and feel more secure than for the state overall thank you for joining me and talk again soon, craig appreciate it. >> thanks, kelly. >> craig brandon from eaton vance. time to join tyler and melissa for "power lunch" which begins right now. >> kelly, thank you very much. we'll see you over here in just a minute i'm tyler mathisen with melissa lee. new at 2:00 this day, the american economy still showing a lot of muscle. will it keep doing that? will it keep growing what does this mean for the market and no deal, the president walks out of his summit with north korea's leader what does it signal about trade talks with china if anything modern monetary cherry i know you've been wondering about this as i have been. they're getting a lot of attention these days but what exactly is it? we're going to talk to a leading proponent in this growing movement "power lunch" begins right now