next week expiration disney, scott. >> abc, amerisource. looks like it's going high but i also think it will be sold part of walgreen's boots. >> appropriately, the vest. >> teledoc, i am invested in this name. >> all right good stuff enjoy the weekend. "the exchange" starts now. scott, thank you very much and here's what's ahead on "the exchange" for our friday president trump and president xi want to make a deal but the former says he's not anxious to hash one out and the latter says china's not afraid to fight back so how should investors read this war of words? plus the vaping debate heads to the white house with juul ceo set to meet with the president as the administration gets pushback on banning flavored vapes. we will bring you the latest and tesla's cybertruck shatters expectations. while wework's board seeks to

work out its future. we begin today with the markets and dom chu has the numbers. >> i appreciate the puniness for sure let's take a look at the numbers so far it's been green pretty much all session long but it's fairly tight the range. at the highs of the day, the dow industrial's up about 105 points at the lows of the day, we were up 7 so yes, marginally higher to higher most of the day so far, the s&p 500 tight range as well. the nasdaq just about flat so that's the way the state of play is shaping up right now retail has been a huge focus this week. a slew coming out with the results and on balance you can see today it's up a percent but over the week, consumer discretionary as a sector in the s&p, one of the worst performers and by the way, this particular etf that tracks retailers is down about 2% over the course of this last week so maybe on balance, retail not as positive as we thought earlier on and then if you take a look at the stock of the day consumers still in focus a staples company. smuckers is up 4%. at one point, it was up 8% in the day.

they come out with a mixed earnings report. yes, earnings were better. sales coming a little bit short of expectations and they cut their forecast saying that premium pet foods are still soft on their end still though. a company with 6% of its shares outstanding short. perhaps some of that action is driving that upside. tyler, i'll send things back over to you. >> dom, thank you very much. and we begin with president trump saying that u.s. is quote, very close to a trade deal with china. we've heard this before. but both he and xi don't seem to be in any rush let's bring in kayla tausche who's been following this story from washington. >> president trump yet again saying a deal could potentially be very close. but without putting much detail on why he also says again it can't be an even deal because china's gotten an unfair head start. but two new complicating factors arose this week. today, an fcc order preventing telecom carriers from using government funds to purchase huawei and zte equipment, which

huawei called unlawful then there's the bipartisan bill supporting the hong kong protestors now awaiting president trump's signature. but trump suggested he might not sign it. he said this morning in an interview quote, i stand with freedom. i stand with all the things i want to do but we are also in the process of making one of the largest trade deals in history and if we could do that, it would be great certainly, adding bargaining chips to the negotiating table as the two countries remain at odds over what to do with all of those tariffs. tyler. >> do you read the president's words there as suggesting he might not sign that resolution >> signals he's leaving the door open, tyler. he wouldn't say one way or another whether he would, in fact, sign it. or whether he would potentially veto it. of course, there are some laws around what happens to it if it just sits there without a signature. so, certainly, it adds to the pressure on china for what needs to happen in the intervening weeks. >> correct me if i'm wrong but i believe it pass the both houses

of congress. >> correct. >> the major averages are taking a sort of wait and see approach to these latest signals, mixed signals on trade let's bring in jeff crumpleman, chief investment strategist and head of equities at mariner. and derrick scissors an asia economist at the american enterprise institute mr. scissors, let me begin with you because you have an interesting take on all of the -- the -- the trade headlines that swirl around. and it is this the far more important trade pact to push through is not any deal or a nib-let of a deal with china, a phase one deal. but the usmca. why do you say that? and what do you expect to happen >> thanks for the question three reasons. number one, the usmca has a sunset clause that's 16 years. which means it provides the certainty that traders want. a china trade deal probably has a sunset clause of 16 weeks. it's not gonna get -- we're not

gonna stick with it. canada and mexico are now both larger trade partners than china, which means the volume of the deal is much more important in usmca than a china trade deal and the deal would be passed by the congress if it does pass, which means it would be set in law rather than be reversed in an election year or after an election if we get a new administration so for all those reasons, usmca dwarves the china talks in importance unfortunately, this week, speaker pelosi looked to be gaming the deal a little bit and time is not on the side of the deal because it's hard to pass trade deals during election year so with every week that goes by, the odds for usmca fall. that would be a much bigger blow to the american economy. >> as an asia economist, derrick, how do you interpret what kayla tausche just read of the president's words about whether he is inclined to sign or not sign the joint resolution that came out of congress siding with the protestors in hong kong

>> well, the president as we know can be very clear when he wants to be. and he decided not to be clear there. so i think he knows exactly what he's doing it would be very unwise and risky for him to ultimately not sign the document, as you guys pointed out. it was overwhelmingly supported by congress. it would make the chinese think they have a hold on him with regard to the trade deal but he's going to milk it for all it's worth because if he can get the chinese to make concessions in the interim, why not wait >> all right let's talk a little bit about the markets and their sort of captivity to trade headlines because that's what it's been. good trade headline, market up bad trade headline, market down. is that what we should expect for the next six weeks of this -- of this year and into 2020 >> i think that's going to be more of the same last week, we saw the market reach four fresh highs based on positivity around trade. the market's not moving very much but when it does move, it's generally because of rhetoric

tied to trade, not necessarily action tied to trade this phase-one deal is pretty small compared to all the things that are on the table in terms of a negotiated agreement. and we're still struggling to get through phase one. so, yes, expect in 2020 more of the same and i think more volatility attached to trade because we're far from late innings in terms of the trade talks. >> jeff, let me turn to you as we turn from 2019 into 2020. what kind of market do you expect to see next year based on your outlook for the economy based on where stock prices are today? based on the possibility of impeachment proceedings and an election and all of it >> so we -- we have a favorable outlook on 2020. and i think the setup going into q4 of 2019 is so much better than a year ago where there was a lot of fear out there. it looked like the fed was gonna hike to infinity

xi and the donald were not getting along in -- in any degree and you had these tough compares with earnings where they had been very robust in '18 and looked to slow significantly in '19. and i think we have the opposite of that perfect storm going into 2020 where you have the fed actually behaving pretty well here certainly, not arm geden in trade. it's not solved but it's not armageddon and you have earnings that are stubbornly positive. they're not great but they're stubbornly positive, which we think is a pretty good setup going into the year. >> so what -- what are the likelihoods, jeff, of -- of -- of a correction in 2020? we went through this year really without one. 2018, we had one but there are a lot of things out there that could trip stock investors, aren't there? >> yeah. certainly, that wall of worry list has been out there actually all the way going back to 2009 and there's a whole list of kind

of headline-oriented items and you mentioned a couple of 'em. you know, the election trade is still not solved. but we've called it the wash, rinse, repeat cycle. where these emotional items get out there. the market sells off you get that correction. we think that's highly possible as we go out through the year. i heard the other speaker talk about volatility we think it will be there. but when the data's released and it proves to be better than feared, that's when you get that rally and we move on to higher highs and we think that's what's going to happen again. i would be very balanced with what i own, however, and i wouldn't make a heroic shift to cyclicals or value i would be very balanced between growth and value as part of that kind of volatility that we'll see. risk on followed by risk off followed by risk on. >> quick final thoughts. derrick, what do you think the odds are that ultimately the usmca gets passed by congress? better than 50%? >> i think -- yeah, i think the

odds are falling below 50% it's obviously a tough call but you push into an election year with a democratic primary dominated by anti-trade candidates, none of which have supported usmca, that puts speaker pelosi in a tough position i really would love usmca to pass but i think we're at 49% now and dropping. >> nela, final thought here. 2019 was better than expected for bonds. what do you think 2020 looks like >> we will not see that kind of performance. you know, rates are so low yields are so low. we do think they increase at some point during the cycle. but we're not going to see bond yields drop any further, much lower down in order to generate this large return. so, yes, we are expecting lower returns both in equities and in bonds. but still growth still the bull market continues. it's just trotting, not running in 2020. >> nela, thank you very much derek, thank you and jeff, we appreciate your time we have some developing news on wework live in san francisco with the details. hi, deidra.

>> hey, tyler. i have some details from would he weworks all hands meeting executive chairman spoke for over an hour and he took 30 minutes of q and a he outlined a new strategy with six key areas of focusment most critically, though, he said that wework aims to be adjusted ebitda positive by 2021 and free cash flow positive by 2023 remember, guys, the company lost more than $1 billion last quarter alone so that is a long path to get there. in terms of the six areas of focus, they include things like monetizing spaces, expanding geographically in a smart and profitable way diversifying the way the business is operating by looking at more jvs, revenue sharing, and potentially franchising in the long-term. guys, more details to come out of that. but wework declined to comment back to you. >> deidra, thank you very much we are just moments away from a vaping meeting at the white house. the idea is kind of neck

snapping featuring a diverse group including representatives from the vaping industry, medical associations, and advocacy groups. eamon javers is outside the white house with details hi, eamon. >> yeah, tyler, that meeting starts within the hour we've been seeing some of the presidents and ceos of these various companies and organizations arriving here at the white house for this meeting with president trump interestingly enough, we don't know yet exactly who from the administration is going to be taking part in this meeting with president trump. remember, the president said back in september he wanted a ban on flavored e-cigarettes he said he was finalizing that ban in september that hasn't happened yet so the industry folks who are here today are eager to hear from the president to find out what exactly he has in mind. and he's calling this a listening session that he's going to conduct with those industry executives. i just talked with the president of the american vaping association as he walked in for this meeting just a couple seconds ago. here's what he told me. >> prohibition failed for marijuana. it failed for alcohol. and it will fail miserably for

nicotine vaping products over 10,000 small businesses are counting on the president to do the right thing. and the right thing is actual regulations and sensible policy, not prohibition. >> and, tyler, one wildcard to watch here president of the vaping association told me he doesn't know whether melania trump, the first lady, is going to be in this meeting or not. remember, she is a being anti-vaping activist she's been pushing the president on this. the president said this issue is very important to her back in september. but when he talked about this ban initially going into place, we'll see whether she decide to attend this meeting or not guys. >> one of the cards that i assume the industry is playing is the number of jobs that are tied up in the vaping industry either through retailers, distributors, manufacturers. >> yeah. that's right and they're calling this a small-business issue for a lot of those small vape shops that you see in shopping malls across the country these days but they're also -- also here are some of the big tobacco

companies. reynolds and others are here represented as well. so there is a big industry piece to this absolutely as well. >> all right eamon, thanks very much. here's what else -- what else is ahead on "the exchange." coming up. don't worry about china? why one of our next guests says their economy is destined to decline. plus, uber gets an upgrade while its ceo gets a thumbs down from an early investor and wework's board is working on a new five-year plan. plus softbank may be taking a look at newman's billion-dollar exit deal this is "the exchange" on cnbc

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china, impeachment, the 2020 election all three could affect the economy and the markets but will they and if so, how much? let's bring in syndicated columnist who is an msnbc and nbc news political analyst mr. will, welcome and welcome backment always good to see you. >> glad to be with you. >> i know you're a life-long washingtonian as i grew up there. i just want to start by saying go nats. the markets, i'm sure you have noticed have been setting all-time record highs. and one can look at those numbers as either an affirmation or prediction of economic performance.

the president with not unreasonably says it's a referendum on his stewardship of the economy. but day by day and hour by hour, it all seems to trace back to china and trade and the possibility of a deal there. what is your view of our trade policy with respect to china and more broadly, around the world, how is our economic competition and rivalry with china likely to play out how worried should we be about that and third, how should american businesses be approaching china, a country that is imprisoning thousands in western china and looking like it's about to crack down in hong kong. >> complicated question but you can unpack it. >> well, first, it's more than a million in western china and something that looks like ethnic cleansing and this is relevant because america's tendency to look with -- with starry eyes at china is, i think, crashing. it's crashing in part because of

hong kong. and by the way, people watching the markets should pay attention to the fact that the house passed with only one dissenting voice and the senate passed by unanimous consent a bill imposing sanctions on hong kong officials for what they're doing there now. the president can hardly veto it because those are veto-proof majorities if he signs it, imagine the tantrum china could have considering just what they had when a houston rockets executive tweeted something sympathetic to hong kong. furthermore, by the way, the president could wake up some morning on the wrong side of the bed and decide that imported automobiles from europe are a -- a national security threat and suddenly, you would have germany, the german economy dealt a body blow, which would hurt all of europe, which would hurt the rest of the world which is to say, as you said in your question, we have a lot of variables varying right now. >> let's talk a little bit about our -- our -- our broader rivalry with china

we have certain advantages they have certain advantages i know you've written about sort of the dangerous demographics that are hanging over china. >> it -- it's an aging population and it may be the first country to become old before it becomes rich we tend to forget that there are maybe 300 million chinese at least who are most concerned about finding drinking water still in many parts with many hundreds of millions of people a peasant country. i know no one and i was just in asia talking to people, i know no one who trusts china's national income statistics they say they're growing only at 6% there are some people over there who say that's probably twice the rate and it could be negative right now now, that threatens the stability of a regime that is said they have a transactional relationship with their own people you give us obedience. we'll give you prosperity. as prosperity becomes more attenuated in china, you see them resorting more and more to

nationalism. well, hong kong, they try and fight hong kong by arousing nationalism among their people but hong kong is stirring the nationalism of the taiwanese this year began on january 2nd, 1919 president xi gave a talk saying really the test of china's dream, as he calls it, is to bring taiwan into the fold well, they're about to have a presidential election there and the opponent of the one country/two systems doctrine is very apt to win. another setback for president xi. >> i want to get to impeachment and the election let's start with impeachment just your general impressions of what has taken place over the last two weeks and do you see impeachment affecting either the markets or the autonomy or does anybody seem to care >> i -- i think it affects neither. i think there's a foregone conclusion here. those who dislike the president

see that there's a smoking gun on the table those who don't -- those who like the president say it's not smoking and it's not a gun this will play out in the senate the senate might in hard republican gamesmanship try to prolong the trial to keep a number of democratic senators off the campaign trail and to prevent them from talking about things that the american people might actually vote on. impeachment not being one of them. >> let's turn to the election very quickly i find an irony in the idea that president trump partly won office based on running against the elites, on championing the cause of the under-represented saying that the system was rigged and now, at least two and maybe more democrats, ms. warren and senator sanders, have staked out the same turf. basically, the system is rigged. i am against the elites. i'm against the wealthy. how do you see that collision playing out? >> there are just not enough of

those disaffected, white, non-college educated voters to go around. the president's going to get his share. he's going to keep most of what he got last time so the -- the warren/sanders wing of the democratic party or as they like to say the democratic wing of the democratic party, is going to have to go hutting ducks elsewhere. my strong feeling is that the democrats are not going to nominate elizabeth warren. i -- i -- i'm feeling this stronger than ever before because i think she did herself serious injury when she actually responded to the bait from her -- her rivals and spelled out how she proposed to finance medicare for all her answer was so preposterously cooked numbers i think she hurt her stature and at this point, i think that people are going to start looking around for someone who,

a, doesn't cook the books as much as even mr. trump does. and, therefore, someone who can actually perhaps beat mr. trump. >> george will, thank you so much have a great weekend, sir. >> glad to be with you. >> appreciate it. >> still ahead, housing supply has reached a critical level in some areas of the market d t a good way. whether it's time to worry about the broader state of housing as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. if you're on medicare, remember, the annual enrollment period is here. the time to choose your medicare coverage... begins october 15th and ends december 7th.

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here's what's happening at this hour the parents of -- who died after being held in north korea aftfo8 months said they are going to -- cindy said she has something to say to north korea and she is going to the dmz to say it >> i hate you so much. but you can't hurt me anymore. so i'm coming out to see you i want to look you in the eye and see evil and face it and know that as good people, we will win. >> secretary of state mike pompeo greeting the foreign minister at the state department today. president trump said pompeo loves what he's doing but if he thought there was a chance of losing the kansas senate seat, he would run and win in a landslide. and bumble bee foods is filing for chapter 11 bankruptc protection with an agreement from its largest creditor to purchase its assets for about

$925 million in 2017, the tuna maker plead guilty to price fixing -- for forming a cartel with chicken of the sea and starkist tuna. >> all the cartels i could ever have imagined. >> yeah. tuna cartel is not what comes to mind. >> the canned tuna cartel would have eluded me sue, thank you here's what else is coming up on "the exchange. ahead, bitcoin tumbles and china could be to blame. plus, can wework's board work out its future? and tesla's new cybertruck shatters expectations. literally. that's all coming up on "the exchange." spend at a small business, an average of 67 cents stays local. shop small and watch it add up. small business saturday by american express is november 30th.

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all right. let's catch you up on a few stories that should be on your radar. it's time for rapid fire here with their takes, leslie picker, robert frank, seema mody nice to see you. uber founder and former ceo has sold nearly $1.5 billion worth of stock since the company's lock-up period expired on november 6th that leaves him with a mere $45

million shares or 45 million shares or about 2.5% of the company he founded meanwhile, early uber investor bradley tusk, not to be confused with elon musk, joined squawk box this morning with some strong words on the company and its current ceo. >> from when travis left till today, uber's worth less than half of what it was when dara came in. but if it's a company based on radical innovation and the market doesn't believe the ceo is capable of being a real innovator, they're not going to reward them by buying the shares the market has clearly voted with their feet on uber but at the end of the day, either you believe this person can really transform transportation or you don't. the market does not believe he can. >> so tusk also noted that he is selling his shares but he isn't fully sold out meanwhile, stifle upgrades the stock from a buy to a hold saying its valuation presents a more reasonable entry point. that will leave us about 40 seconds. all of our topics here today i guess my question here is mr.

tusk seems to lay the blame for the fall in the stock on the current ceo. did i pronounce it right close enough. >> yeah. that was good. >> is that fair? >> i don't know if it's totally dara's fault, you know, why the stock has not performed well it's hard to say because he's been ceo ever since this company has been public. and so it's hard to know kind of like what part of the business model execution was something that was more of a travis legacy versus, you know, at the heels of dara. i know that's been a concern for analysts for quite some time but if you look at the contentious nature by which travis was ousted from the company two years ago, it's not supersurprising to see he would be selling his shares. i think a lot of people were surprised by which the timing of it that it was so quick after the lock-up agreement that he decided to do that i don't know if it's necessarily a direct reflection on his view on dara. i think, you know, he's just like i found this company. they ousted me yes, i'm still director but i -- i just want to move my money and put it elsewhere.

>> and he has a new company which is a company that buys real estate and uses them for restaurants to make for food delivery companies and they recently got new funding from the saudi wealth fund for $400 million and what i understand, travis is using a lot of the proceeds from his uber sale. >> investors like companies that make money they do like that but this one hasn't. >> yeah. and it's hard to say i don't think you can just blame dara for what could be a fundamentally flawed business model. and who knows if travis was still there you would still have the underlying problem. >> let's move on to bitcoin. it's plunging to a six-month low. china central bank has launched a fresh crackdown on cryptocurrency bit coin down 6% right now s sema, how big a blow is this >> the chinese have been trying to crack down on trading

think i this does coincide with a number of reports that suggest china is working on a state-backed digital currency that would compete with the likes of facebook's libra if that ever gets on the market but the idea is really wants to create its own government-backed digital currency and if that's the case, they really don't want bitcoin to be around. >> china doesn't like what it can't control. >> no and i think everyone was underestimating the degree to which bitcoin was supported by chinese offshoring remember, we had a period of time where the chinese were pouring all this money overseas. chinese government cracked down. where did that money go? it went to bitcoin, especially last summer. the chinese wealthy wanted somewhere to put it so i think this is going to be a big downward pressure on bitcoin going forward. >> on we go to another company that has faced some challenges lately wework holding an all hands on deck meeting amidst a series of job cuts

the company unveiled its strategic plan to be ebitda positive by 2021 and free cash-flow positive by 2023 meanwhile, executives at softbank are reportedly looking for a way to reduce the size of its $3 billion offer to buy out wework and pay off its founder. >> the question is, is it going to be community adjusted ebitda positive >> yeah. >> remember those accounting metrics they were looking at you know, i think this is a ship that is gonna have a really hard time righting itself and they gave themselves a long -- a long timeline to do so but obviously some really deep pain in the near term with these job cuts they're looking to unwind some of the recent acquisitions they made which would result in even more job cuts. and these things take a lot of time to -- to move forward so it's not an easy job that they have in their hands. >> this is a work-out for wework. >> i'm surprised it's not deeper i'm surprised that the -- >> the cuts.

>> -- yeah, the cuts the whole risk structuring i thought they were going to go in there and just start slashing and burning and find the value which could be there but at a much smaller scale but it just seems like drip, drip, drip. they're going to reduce the offering price they're going to have to go through three or four layoffs. >> sorry i was just going to say if softbank is actually looking to reduce the $3 billion worth of the bailout that they were planning on giving to wework, does that make it, you know, cause for even steeper cuts and even steeper types of reductions there? i don't know if they can rework that at this point. >> when you think about uber and wework in the same sentence or the same block as we just have, you have two sort of unicorn companies with very controversial founders that have cultural issues going on as well and now, both one way or another getting worked out let's move to the shatter heard

round the world. tesla's chief designer through a metal ball against the bullet-proof window of tesla's all electric pick-up truck and let's just say it didn't go as planned. the video has gone viral so was this an epic fail or did tesla strike social media gold or both? julia boorstin may have some thoughts julia. >> tyler, it's absolutely both it was an epic fail and it's striking social media gold i'm surprised that you hadn't seen it yet because it seems like everyone has seen it. i mean, this -- this -- the shatter, the rock hitting the window really has gone viral on twitter, facebook. also, millions of views on youtube. it's worth noting if you look at the statistics here, the unveil of the tesla cybertruck has had nearly as many mentions in less than 18 hours than the unveil of the ford mustang mock e had since sunday night look at that so 442,000 in less than seven

days versus 412,000 just in the past day for tesla so we're just showing how -- if you have a fail like that, it could sometimes drive even more attention. now, it is worth noting that the buzz around cybertruck started a week ago because there was so much curiosity about what it would look like. it really spiked after the rock broke the unbreakable glass window it's also getting a lot of attention, tyler, because it's so funny looking. >> yeah. the -- the car itself or the truck itself is -- i don't see a lot of people in oklahoma and texas buying that as a pick-up. >> but you know what i still think this product launch pow tententially was a ss for tesla. we're talking about it and i think that's exactly what elon musk wanted. >> under the all publicity, any publicity is good publicity rule, right? can we show the video again? i just want to see it. i haven't even seen it can we show it again >> yeah. no i think that this was -- there was one meme where -- >> that ought to be the guy

those all state commercials. >> then he threw it too hard so elon said, well, let's throw it not quite as hard. so he throws the second one and the second one breaks even though he just kind of tosses it against the window. >> i wonder if that guy still has a job at tesla. >> just a little dainty toss. wow. >> you do have to wonder how many of these impressions on social media, though, actually turn people into buyers of this car. or is it just, you know, look at this mars rover-style truck that -- >> and it just makes you wonder their production value how could they have not sort of done a test first? >> yeah. >> before you do this. >> got to leave it there julia, thank you very much folks, leslie, robert, sema, thank you. up next, a new cnbc investigation has video of brazen stealing from the nation retailers and here comes courty reagan to tell us about that. >> hi, tyler this is bigger than shoplifting. it's organized retail crime

largely connected to the opioid crisis as this crime hits all-time highs, retailers like home depot are taking action and taking down crime ranks i have the investigation coming up on "the exchange. lower calories. ♪ higher expectations. ♪ the light beer you've been waiting for has arrived.

welcome back to "the exchange." home depot has a theft problem and it's bigger than your typical small-scale shoplifters. in the latest cnbc investigation, grab and go, courtney reagan got a firsthand look at organized retail crime. >> yeah. tyler, so retail crime losses at an all-time high and it's hurting retailers profits. earlier this week, lowe's and home depot both reported earnings and a negative impact from increasing theft. home depot gave us exclusive access to see how it fights a never-ending battle against stealing >> you're watching brazen retail theft. the suspects are so sure they

won't get caught that some even get aggressive when stopped, as this surveillance video from home depot shows most likely, these people aren't shoplifters or people who steal items for their own use. instead, it's a bigger problem known as organized retail crime with criminals working together to steal for profit. home depot's jamie born investigates the theft it all starts with boosters. >> a booster is somebody that is basically a professional shoplifter they're doing it for a profit. not just for personal use. >> are they just guessing what items are in demand? do they know it from history i know that i can sell a lot of drills. >> there are many locations out there that are giving lists to the boosters. >> if they're giving lists, they're part of the crime, too, are they not >> absolutely. >> one of those locations was this pawn shop the manager was charged with selling stolen property. the case is ongoing. our next stop, this raid

>> police! search warrant >> born and his team helped when law enforcement served a search warrant on this utah home. >> when we do search warrants with law enforcement, we can provide them the value of the merchandise. >> the suspect allegedly sold stolen power drills and other tools on facebook. he was arrested. law enforcement seized a pallet full of items from the home. they were brought to this warehouse. it may look like home depot but this is actually an evidence room inside is over $1 million worth of stolen product seized from a raid of seven pawn shops. >> we'll actually see on the inside of a pawn shop, they'll say lowe's and home depot's price, you know, $129.99 our price, $79.99. >> chris walden is a special agent with the utah attorney general's office. >> how is it that these

secondhand merchants are selling it for less? >> they found the answer in these sting operations >> sell 'em? pawn 'em >> yeah. sell 'em. >> this is undercover video of law enforcement selling items that seem stolen to those pawn shops. the case led to a new utah law that makes it harder for pawn shops to buy unopened product. >> since we've passed the new law, it seems like it's getting a little bit better. what we've seen is a shift over to ecommerce. >> just like the power tools we saw confiscated during the raid, here they were for sale on facebook organized retail crime is growing and cost the industry nearly $800,000 per every billion in sales home depot said its profit took a hit in the last three quarters because of higher loss of goods, which includes organized retail crime. >> while we don't comment on our particular numbers, we are seeing shrinkage rates rise across the country. >> scott glenn is in charge of asset protection for home depot.

>> organized retail crime drives other crimes it drives drugs. it drives guns it drives human trafficking. i think the opioid and drug epidemic is a piece of it. >> why should consumers care that this is happening isn't home depot big enough to absorb this issue? >> we have been very good about not raising prices as a result of our shrink equation but if it gets to a point where we cannot continue to do business this way, ultimately we will have to pass it along >> and just yesterday, charges were announced against five people from two pawn shops in rochester, new york, for selling stolen goods among other charges. home depot, target, walmart, and grocery store wagman's cooperated with law enforcement in those cases the four retailers recovered millions of dollars worth of product. >> how do they get the stuff out the door >> often times, they walk right out with it. >> and alarms don't go off >> alarms may go off and they keep walking and often don't get stopped because home depot has told their employees not to stop them many of these people are armed as you saw in some of that

surveillance video, some of them will fight back and push back. and so they don't want the employees or the customers to be put in harm's way. >> let me ask you the other thing. you call it organized retail crime. how organized is it? and by whom? are these small-scale, local operators? or is it something bigger operating behind it? >> it can be both. in the case in utah, they were talking to us about a crime ring of about 100 people. and sometimes they're given lists directly from someone, perhaps at a pawn shop, or someone else that's a middle man, often they are giving it to someone who has a drug problem they need cash immediately they go in they steal the product give it to the person that directed them. they give them cash and then that product gets resold. >> gets pawned or resold courtney reagan, thank you coming up, new data shows major u.s. cities are experiencing double-digit percent drops in housing supply omg?here a any housing crisis that's ahead on "the exchange.

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join me and american express on small business saturday, november 30th, and see how shopping small adds up. welcome to the exchange. housing supply across the country the falling hard according to new data and for some cities and price points the numbers getting really worrisome. d diana joining us >> at the end of october, housing inventory fell to a record low 3.9 month supply according to realtors. that's how long it would take to sell all the nearly two million homes available for sale

a healthy market balanced between buyers and sixeellers i considered a six month supply. it's not just the california markets. we're seeing seattle, phoenix, cincinnati, pittsburgh, st. louis, kansas city and right here in d.c. down double digits compare todsd to a year ago. young workers are flocking to the south. the luxury supply is growing >> stay with us as we bring in chief u.s. economist at oxford economics. why is inventory so low? are people just choosing not to move >> i think it's largely a supply story. we have seen weak construction activity over the past few years. it's a story in which the cost of labor, the cost of lots and lumber have really increased and have reduced supply.

in that environment we're not seeing much inventory rise what we did see over the past 18 months was some inventory rise because there was reduced act e activity on the demand side. with lower interest rates we have people coming back into the housing market and that's pulled down inventory even lower. >> i would assume to the extent that building new units is the issue, building them at the low price point is even more the issue. >> it's absolutely the issue the builders are starting to pivot toward that lower end side of the market but it's difficult for them to make their budgets because they have increased cost per land, labor, materials and all kinds of rules and regulations that they need to do for building i wonder from greg do you think it's more people moving to the midwest because they are seeing better jobs there rr because of the affordability? >> we're seeing some migration in the u.s yesterday the u.s. census data showed that migration in the

u.s. is the weakest since world war ii we are seeing less migration part of the effort has been linked to higher cost prices on the cost of both sides of the country. that migration effect even today is weaker than it's been vi time since world war ii that is not helping ear and the demographics with people aging is leading to people staying in place longer and not really moving out of housing and constraining inventory on the housing market >> what would unlock supply, gregory? what would unmake builders build? >> to unlock supply you need to have the cost of labor to be lower than it is today we know that wages in the construction sector have risen and are constraint in terms of building you need to have an environment in which builders see the potential for stronger demand for lower income households and for lower cost housing and in the current environment where we

see a weakening and slower income growth, i don't think you'll see that any time soon. >> the lower end of the market is the least profitable end, right? >> that's in part why we haven't seen builders jump into this low end market builders have focused on the high end market where the luxury end have been doing well buyers with a loot t of cash on hand were able the buy into the market you're not going to see builders edge in. >> existing homes which means previously built homes, that's where the big inventory decline maz co has come down. are fewer people moving because they can't afford doernor don't to move up >> i think very few people are moving especially the baby boomers we thought were going to move are staying put.

kids are moving home we're not seeing the migration out of those larger homes into retirement communities that we have seen in past generations. >> thank you very much appreciate it. beautiful shot you go there. greg, thank you very much as well that does it for "the exchange." i'm going to join melissa on "power lunch." a top executive at air b and n is out ahead oiff its expected ipo. former uber ceo is dumping billions of dollars worth of stock. are unicorns losing their magic touch? it's a bitcoin blood bath. what's wrong with the crypto currency alternative milk like almond, soy, oat are moving up in consumer diets kraet