they're buying the 45 calls out in january during the show. >> i think that is the best trade right here in my portfolio. >> we're going to keep our eyes on the white house today a big meeting on trade, dow is off the best levels and still at triple-digit gage for the industrials. that does it for us. thanks for watching. "the exchange" starts right now. yes, it does and thank you and welcome to "the exchange" and i'm brian sullivan there is a lot ahead not just a pause in tariffs but a cut in existing ones that is what reports say could be under consideration as part of a trade deal. the marks bought it but should reality set in the math of elizabeth warren's tax plan does not add up and that author is here. and wheels up for delta airlines the business person of the decade and learning how to be an adult. it is a real story and that is all ahead on rapid fire. but let's begin with the

record-breaking rally. dom chu, we're still up but as scott told us we've come down. >> and we are still adults in the situation. but yes. let's talk about everything happening with the dow industrials. i'll put stars next to each one of these because at one point we hit record highs in all three of the indices but in the middle of the range, 17 points to the upside for the s&p and at the highs of the day up 34 points, at the lows down 3 so hovering in the middle. coming down from the highs now if you look at transportation, brian alluded to one. delta airlines and airlines moving transportation stocks higher but here we are still below the levels of the 52-week highs over the course of the past year. still airlines a big deal. delta kind of putting its profit forecast for 2020 above estimates. and if you want to look at stocks on the move, generally speaking today it is trade-related or economically sensitive ones take a look at micron, up 3%

caterpillar up 1% and fedex up 3% and exxon-mobil up 1% president trump saying we're close to a deal. again the optimism tempered by trade sensitive stocks like these in semiconductor and energy moving today. we'll send it back over to you. >> dom chu, thank you very much. so there are the numbers now let's get to the news behind them and we begin where else, in d.c. and the rather familiar tune that a trade deal is reportedly near i mean like this close maybe. kay lar tashy is live at the white house. what do we know right now? >> reporter: today it is very close with very in all caps according to the president's tweet today. he was very positive he seemed to be in a deal-making mood today not only with that tweet that moved the stock market up but also these remarks earlier today at an event celebrating the passage of 12 weeks paid family leave for federal workers here is the president

>> you look at europe, you look at asia and a lot of different places and we won't talk about china because we're working a deal with china but i would say up until now they've loved me. >> reporter: there is a meeting in the oval office to consider next steps on trade with days to go before the december 15th consumer focused tariffs and sources tell me last week the u.s. made an offer to china to cancel that round of tariffs but also cut in half the tariff levels on the previously-implemented $360 in tariffed goods what remains to be seen is whether china has accepted the deal and what happened in the intervening days so we'll see exactly what happens out of that meeting. meanwhile, on the other end of pennsylvania avenue, bob lighthizer is briefing republicans on another deal. the usmca. he has been absorbed by the deal leaving china talks up to the deputies so we'll see what the

principals decide later today. republicans on the hill, brian, have been frustrated with being left out of a deal negotiated between the white house and democrats but you can be sure they'll ask questions about what happens with china as well >> kayla, can i ask you one question because we talked last night in the 5:00 p.m. show, some guy named ron vera put out the op-ed said forgetting about trade one trade deals and do you think this tweet was a reaction to the negativity of the report last night from the bizarre op-ed. >> reporter: and there is a potential, brian, that that email memo circulated byron vera was to troll people who have been covering these trade talks for the last months and last several years. navarro has been fighting upstream against the phase one deal since october advocating against the rollback of tariffs, against a short-term

limited deal so certainly the president seems to be favoring a deal. at least as far as his public remarks go and so perhaps that circulation of that memo byron vera this week was simply to try to drum up support for that argument or perhaps a different ulterior mode there. >> maybe the possibility of election trump's thank you. a big spike up when the news of tad talks but that euphoria short lived. mostly given up gains, about half and main investors are coming around to the words like "soon, close, nearing, productive" and others like it don't carry as much weight any more listen to this >> we had very productive meeting. >> we made progress. >> we're making headway. >> our hope is in the final weeks of agreement. >> it has a very good chance of

happening. >> very productive. >> i think it is a strong day frankly. but we'll see. >> they were constructive discussions between both parties. >> we've come to a deal pretty much subject to getting it written. it will take probably three weeks four weeks or five weeks. >> i think their chance to reach an agreement, they're in the sweet spot now. >> we're close a significant phase one trade deal with china could happen could happen soon. >> in some ways i think it is better to wait until after the election you want to know the truth. >> the reality is constructive talks almost daily talks, we are, in fact, close. >> all right so let's bring in derek scissors from the american enterprise institution and andre garcia ceo of zoe financial and derek i'll start with you one hand you look at this as a year-plus long head fake and if

you vary at over the 9.5% you probably won that bet but let's be real. a deal like this would take a long time so why wouldn't we get these kind of comments for more than a year and maybe we shouldn't be so critical about the fact the administration is dragging it on because it takes time how do you look at it? >> well, we certainly shouldn't be critical of the administration as dragging it on i think it should take more time we want fundamental changes in the u.s./china economic relationship and you don't get those by negotiating against a fixed deadline even an election. so i would say the president's remark about wait until after 2020 is spot on. where the administration is false is they appear to be pandering to the stock market. it is close. it is close. don't negotiate in public. don't say it is close. wait until you have a deal and wait until then. the problem is the constant public commentary. >> maybe they should sit tight

and the bond market, long 30-year notes up for auction and now to rick santelli. >> before we get into it, i want to show the audience two charts. first is the yield we normally show and yields are elevated today. but let's look at a price start. these are 30-year bond futures because the price goes down when the yield goes up and when you have an auction people want to buy. price going down means, wow, maybe things are on sale and indeed that is the inter pretation. 60,000,000,030-year bonds 2.307 and it was 232 1/2 on yield and the price was a blow out to the upside 2.46 best since january of '18 63.4 indirect best in a year 21.1 directs best since december of '14 and call that five years.

i gave this action an a-plus i don't know if i've ever given one but if you want to know what a concession looks like at a government auction, these would be those results brian, back to you. >> professor santelli, you are handing out an a-plus, this is a curve? >> no, this is a dynamic auction and gives us a huge amount of information. you know what it tells us, people think that the selloff that push yields up will not last and the same market after the last fed meeting in october and went into the mid 190s and failing and we touches 190 today and already backing down. >> if anybody won the lottery because i'm buying a ticket because miracles do happen thank youabout the conversatio about trade. andre, can we say this, the risk of no deal or an implosion of the talks has at least minimized?

>> i think the market is trying to look at it from a probability standpoint and say you know what things like it won't get worse and i think that is the key. that for a while it seems like they were going toward the direction things will get worse and this is taking it back ultimately what got us here when it comes to double-digit returns this year has not been the trade potential trade deal let me read a couple of things here so brazil caught 200 basis points, russia 125 basis points, korea, i could go down the list. >> you say the move up is primarily due to coordinated rate-cutting action and increase of liquidity and the market plunger protection team from the federal reserve. >> and coordinated -- >> feds around the world. >> yeah. and from that perspective i think what the market is really apprising and put aside the noise on maybe a deal or not which we've heard i don't know

how many times this year is that the market is trying to see through the noise and see if there is going to be a v-shape recovery next year despite the fact that we have tariffs. >> and so, derek, listen, everybody knows the trade deal matters. there is a lot of optics around it but the amount of goods and services that we sell into china is slightly less than the gross domestic product of the great state of maryland. even if we get a deal, how much will it matter economically? >> well, that is exactly right it won't matter very much economically at all. i think what you want to rule out is dramatic escalation and then if you take that off the table, which it seems we are doing today with very likely putting off the 1215 tariffs or canceling them then none of this matters. even if the president were to anoun a big deal and $40 billion worth of purchases, that is a drop in the bucket compared to the u.s. economy so neutralization of uncertainty

from today if that happens is a step forward in terms of announcing a deal. it is a nonevent for u.s. growth next year. >> nonevent. would you agree with that? tough words. nonevent it is leading our shows every day so i don't know if it is nonevent. >> it would affect global growth meaning outside of the u.s., this would affect china and affect europe. all of the negotiations are are affecting china's economic growth a lot more and that affects global markets. >> so let's not forget the possibility of the european tariffs which are a big deal great discussion good to see you. thank you very much. we've got a newsalert on boeing phil lebeau has that now. >> take a look at shares of boeing the ceo is in washington today and within the next hour he will be meeting with the head of the faa. why? because steve dixon who runs the faa will make it very clear that

boeing and the faa need to be on the same page when it comes to the return of the 737 max. specifically and this is in a note the faa sent to the hill explaining this meeting, the administrator is concerned that boeing continues to pursue a return to service schedule that is not realistic due to delays that have accumulated for a variety of reasons and more concerning the administrator wants to address the perception that some of boeing's public statements have been designed to force faa into taking quicker action brian, we talked with steve dixon yesterday and he said the plane is not going to be certified this year. again that runs counter to what boeing has been saying it is still targeting recertification this year. it is clear this meeting is steve dixon saying to dennis muilenburg, you want to get on the same page, that is the quickest round to the 737 max returning to service and again the faa is not expecting that to happen until

early next year. recertification, they're not putting a timeline on this but i would expect maybe early to mid-january, maybe late january. somewhere in that time frame and then you've got airlines likely flying the plane again. if there are no further delays, maybe in march maybe in april brian. >> okay, phil, breaking news i want to ask you something else more about editorialized by you personally and it is one side of the story that we haven't talked about enough the plane is certified and back into service do we have any idea what would happen if passengers reject flying on it we've talking about it i have spoken with numerous people who said i -- by the way, inside of this building and out who said i will never get on a 737 max. maybe they're just saying that if there are no other options they will. is there any risk it puts back into service and nobody shows up. >> i think there are some

flights where there are so many people who are not comfortable that they change their reservations that perhaps some airlines are going to have to say, look, if we put five of these maxes back into our fleet and on certain days, on certain routes we don't have enough people flying so we have to pull that flight and those people will have to be rebooked by the way, every single airline with the max in the fleet has said if someone is not comfortable, we'll put them on a different flight they are not going to force people to get on to this plane do i think that is going to happen widespread, brian i think perhaps maybe a little more overstated than what is really going to happen i think there will be some flights canceled because there are too few people but i also think that over time the public and the memory fades and if there are no incidents and nothing happens, eventually more and more people will fly the max and maybe two years from now people will look back and say remember when nobody would get on the max and everybody is flying it. >> well said phil lebeau, thank you very

much breaking news on boeing. so in the meantime, this year turns out to be another strong year for venture capital, start-ups raising $100 billion yet again but questions are brewing about what is ahead in 2020 because there has been a, let's say, some issues let's take a look at soft bank one of the biggest vc players in silicon valley and the world soft bank is coming off the first quarterly loss in 14 years. just sold back the entire stake to wag and one of the backed company slashed the price by nearly a third what can we expect for vc in 2020 year joined by jeff ghraibo and deirdre boss who has done stellar diving into the numbers which are not publicly available. jeff, let's start with you what is your view on 2020 because $100 billion is a big number. >> yeah. and it is amazing to see it twice in a row

any price is under $100 billion and the venture market is driven by a technology perspective and the opportunity to invest and also there is a massive amount of cash moved into the market basically from investors seeking yield. >> from where? who? where is the money coming from >> private equity, hedge fund, sof ridge wealth and all of that we've been in a cash bubble for quite sometime because we've been in a zero interest rate environment for over a decade and that is driven behavior we didn't see the last decade. >> deirdre, when you talk to people out there every day, is there a bigger effect, is there soft bank the big loud kid in the class that keeps making inappropriate comments that ruins it for everybody i'm asking for a friend. is there a soft bank effect? >> the kid that the other vc's like to make fun of you. must engs -- you mentioned wag

but there are some bets that have turned out. they played a big part in the number over the last two years with is $00 billion fund on its own. what i'm hearing, though, is that vc's aren't being scared and neither are mutual funds or private equity industry instead looking for a different kind of company. take a look at recent series a these are the smallest rounds right after the seed rounds that a company would raise. these are massive by historical standards. there are are three recently one password raised $200 million and a round another company and galileo and it's profitable for 19 years and rose $77 million and it tells you perhaps money is going in earlier and more money is going in earlier and the guidelines are a little stricter. >> quickly, are we going to see venture capital companies go faster, jeff >> i think so in 2020. and i think that will play out in the decade with less money in the private market and then go and raise the capital in the

public markets -- >> as they should. so our viewers get a shot of making some money and not give the monies and all of the growth is gone and then they go public and get stuck holding the bag. thank you very much. appreciate it. here is what else is ahead on "the exchange." >> announcer: coming up, $1 trillion short. a new study shows that the imagine behind elizabeth warren's wealth tax just doesn't add up. plus, fannie mae and freddie mac are getting ready to pull back on certain mortgages they think may be risky the changes and the impact it could have on the market. and the business person of the dw-- of the decade is -- >> announcer: this is "the exchange" on cnbc. ew level of py and security.

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welcome back maybe a bit of a reality check on senator elizabeth warren's wng tax proposal the budget projects it would only raise about $2.7 trillion over ten years that is a lot of money but it is about a trillion dollars less than some estimates. maybe 30% or even $1 trillion shortfall. let's bring in kate smetters who led the estimates. we're going to keep politics out

of it because you need the revenue, what is the biggest issue with the revenue idea wealth tax concept was it the fact in 1991, 12 oec companies had the wealth tax. >> the other countries had problems trying to raise money because there are ways of trying to avoid the wealth tax. and these aren't just illegal ways, called evasion there are legal ways of how you use foundations, there is always debates on how much private businesses are worth so a lot of that countries have found it to be a struggle. and in our own analysis we incorporate not just the experience from the other countries but talk with a lot of u.s. tax experts including the people that work at the penn wharton budget model and other experts about how could the government try to enforce the wealth tax

and so we incorporate those estimates. the warren campaign said they have new ideas that they will release at speaker pelo release -- they will release and when they do we'll incorporate that in our analysis. >> and they also found that basically it did not do much to reduce wealth inequality for a variety of reasons you found out that for households not subject to the wealth tax, the average household out there, there might be a reduction in their average hourly earnings because the reduction in capital formation in other words a wealth tax might not raise much money but hurt the average american family >> well, there is a fundmental tradeoff if you believe that the wealth tax can raise a lot of money you believe that the tax has more bite to it and if the tax has more bite to it, folks who are subject to the wealth tax, their investments in businesses and

they are worked by people who are not billionaires, people like you and me. and if those investments go down, then wages will go down a little bit we estimate by about 1% to 2% over the long run. now assuming the same people could be helped by transfer that the wealth tax helps, pre-k education or health care and things like that so there are other things that could come into play but certainly wages would be expected to go down if the wealth tax actually has some bite to it. >> is there any part of the study, because i know the study mentioned the administrative sort of difficulty in cost i think what a lot of people don't realize is that when we pay taxes there has to be human beings in washington or your state capitol who work to help administer that tax. if you pay $1 to the federal government they're not sending it out to a children's program, there are salary and administrative costs that go into that administration

is that also part of it? you'll have to hire a lot of federal workers to do this you don't get all of the benefit of it? >> that is right and what other countries have found and the administration has been very challenging. it is much harder to tax astoc of wealth than it is to tax the income that comes from that wealth so very quick example, suppose that you have a private business that is worth more than $50 million would be subject to the 2% wealth tax under this plan you don't necessarily want that family to have to sell that private business and so one of the ideas that economists working with the campaign have suggested is maybe those families can give the government some equity in the business, create some shares and gives the government some equity but that is challenging. >> that sounds like the china model. >> yeah, and it becomes -- >> every country or government is a partner -- partner. loosely defined.

>> well i'll put the politics aside but the administration is challenging because then what happens the government wants money so if they sell those shares to other -- other buyers, now you have some people that you don't even know who are owners in your business. and now they want to figure out are you paying yourself too much money and denying shareholders their return so should we be using oxley and socks compliance to administer those businesses so those are challenging. other countries like spain for example, they excluded private businesses altogether. but that also created a lot of incentive now to take publicly traded companies private so it is much easier -- yeah, it is much easier. >> the law of unintended consequences we have to go. breaking news. kent smetters, thank you very much really interesting stuff. coming up, biotech had a great year, 30% or more, but there is a troubling trend in

the space this year. what that is and what does it mean for next year. plus major money flowing into major league baseball the staggering numbers and whether or not it is just dumb icarnd ailed as a businessman. he borrowed billions and left a trail of bankruptcy and broken promises. he hasn't changed. i started a tiny investment business, and over 27 years, grew it successfully to 36 billion dollars. i'm tom steyer and i approve this message. i'm running for president because unlike other candidates, i can go head to head with donald trump on the economy, and expose him fo what he is: a fraud and a failure. so servicenow put your workflows imm-hm.cloud, huh? your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team.

will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.

♪ ♪ ♪ ♪ welcome back here are some of the big movers to pay attention to at this hour take a look at shares of bill.com soaring 60%. the software maker ipo priced at

$22 per share. first trade $37.25 and shares of ge upgraded to a buy at ubs and saying ge is positive inflection into next year because of the debt repayment plans and better free cash flow and charles schwab is up and a story is one investors should pay attention to following the deal to buy td ameritrade. and let's get an update with sue herera. >> thank you very much here is what is happening at this hour. the house judiciary committee continuing to debate the articles of impeachment against president trump. they are expected to vote later today on whether to bring it to a full house vote. >> it is important to remind all of us that the president abused his power and is a continuing threat not only to democracy, but to our national security

we do not take this lightly. we take it very seriously. >> article one in this resolution ignores the truth and the facts, it ignores what happened and what has been laid out for the american people over the last three weeks >> speaking at an obama foundation event in malaysia, michelle obama said there is still much work to be done toward ending racism in america. she and actress julia roberts spoke out about promoting education for girls with hundreds of young leaders from across the asia-pacific region you are up to date, brian. that is the news update this hour back to you. >> sue, thank you very much. still much more to do. here is what else is coming up on "the exchange." >> announcer: ahead, goldman sachs sees gained blooming for blooming brands. delta has good news for investors. the money is flowing again in baseball and it is been a year of biotech

bankruptcies it is all coming up on "the exchange."

welcome back to "the exchange." want to bring you up to date on trade and breaking news. the president will meet with his

trade advisers about a china trade deal at 2:30 p.m. eastern in the oval office so in one hour from now the president will indeed meet in the oval office with the advisers and if we get any headlines we'll bring them to you because that news has been moving markets. jeff bezos gets another win i name and goldman sachs said buy the onion and it is timer for rapid fire y'all ready? first up goldman sachs making the case for convenience as part of the latest note. the firm initiating restaurant company blooming brands the parent of outback steakhouse and brink international the parent of -- >> chili's baby back ribs. >> we didn't plan that they have rolled out third party delivery and goldman said that will give them a boost this is too long what do you make of this note,

morgan brennan. >> >> it is interesting. that they site higher commodity of pork and beef and we're talking about the parent company of outback steakhouse. and the stat that got my attention here, since 2010 casual dining traffic has declined every quarter. >> the one i just read in the intro. i just said that that is the entire lead segment. >> i was thinking about what i was going to say and i wasn't listening. >> is the premise that -- is the premise delivery >> i think that is -- >> are you really going to get margin off delivery? >> so those dynamics are interesting because the traffic is the issue the traffic declined. >> every quarter since -- >> did you know that >> but delivery plays into that discussion, right. the ole idea that people are not

going to that restaurant and just ordering -- >> now they'll order and they still won't go, but they'll be at their house and still get the blooming onion just not in the store. >> right so the traffic may not be as relevant going forward for a metric but you can say there is one place where people will pum back the last and that is especially with fast casual restaurants. >> you don't make much profit off making food and picking it up. >> the booze is everything and what was that stat a couple of months ago, 28% of food delivery drivers sampling the food because they're driving and just -- oh, just one. >> the french fries came right out of the fryer. >> i can't believe jeff bose means business the amazon founder named business person of the decade and cnbc global cfo council and one-third of the cfo's named bezos on the top spot. it is the most obvious result

ever. >> you can't be the richest man in the word and ascended to that thrown -- >> with zero not like he was born with money. >> this is crazy you go back to the stories about this this is a reason why and he got caught so much in this hubbub of not being able to make money amazon was not a profitable business and he weathered all of that and then all of a sudden you have the richest man in the world. >> who, by the way, robert frank, people forget this. jeff bezos was making money at de shaw the hedge fund and he packed up everything with his then wife and drove to seattle and started working in a garage. he left a high-paying career to start amazon. >> and everybody said jeff you're crazy it is one thing if you are a poor student out of college but he was a successful hedge fund employee and to drop that and start selling books -- >> just books. >> and the discipline, the scale, the fact that he keeps changing the game as big as they

are every single day it is just amazing. >> he thinks intensely about management and leadership and corporate culture. i've been in fireside chats where this is the topic dominating and people are hungry to hear what he has to say one other thing i got to say jack ma and elon musk came in second and third. >> but jack ma got 0% of american or european ceo's voted for jack ma. all of the votes came from asia. because everybody knows that alibaba was helped by the chinese government in a major way. he got that ccp boost as they say. next up. this is all you robert a real estate deal for the record books lock lynn murdock paying $150 for the beverly hillbillies estate making it the second priciest home sale ever in the u.s. it is known as chartwell born in the 1930s. but as we head, off of the beverly hillbillies, why is he

buying this house. >> he has a house. he needs another nice house. what makes the property special is you are astounding to hear this, you need to tear it down or completely renovate it. >> what? >> because it is a $150 million fixer-upper. because the inside is extremely dated. >> you've been in it. >> we have been in it and shot it and we have great video what is valuable is it is ten acres in the heart primary of bel air which is the nicest part of l.a so you have many of the billionaires elon musk is nearby, jay-z and beyonce nearby this is the nicest piece of land come available in bel air so you wouldn't be surprised if he tears it down. >> here is what got my attention. the fact that we've seen a string of $100 million plus home purchases and that when you talk about l.a. specifically, the ultra high end of the market, that is the strongest market in the country, even as you see the salt tax impact and foreign

buyers starting to dry up and yet l.a. is still so strong. >> so we've had 300 ml million dollars sales and between 10 and 100 it is bad so the mass luxury market there is still so much oversupply of spec homes they can't sell them. >> if you are buying a $100 million home you don't care about salt or property tax deductions you don't care about that. >> but the comparables in $100 million home price range is bananas. >> it is the security. murdock who is australian by birth wanted to get a blooming onion through outback. >> with uber eats. >> could he deliver to the door or is there 65 layers of security finally, millennials need life lessons it sounds fake but it is not uc berkeley is offering a class in adulting where students learn to create budgets and build and

navigate relationships and this is in popularity as high schools abandon classes like home eck. fewer than half were accepted and i would argument people take it because they think it is easy that is why i took any elective in college. >> i don't think so. i think high school and home economics are not as popular the way they once were and we have a lot of up and coming adults -- >> where are the parents it is called parenting, not adulting. >> which is ironic because what we're doing is we're adulting our children >> we're outsourcing -- >> we're adulting our children it is like a 10-year-old ceo who did this, we're making our kid news adulls prematurely and now teaching adults how to be adults. >> or telling the schools they need to parent you need to teach your kids how to budget, how to clean, how to

be an if adult that is what parents do. >> there is time when finishing schools and all of the other camps and programs to teach your kids etiquette were all of the rage. it was maybe about 15, 20 years ago and this is the cycle happening all over again. >> this is how to budget and operate a home. >> this is an idea that you have to teach people how to be grown-up how to eat with which fork and deal with whatever >> but i do think it is necessary and there should be more of it because a lot of the stuff i learned in high school and college is not useful. >> you want to go deeper it is all social media fault. >> that is it. in the community you're finding you have to -- >> and social media is like -- it is 1915 and everybody has a car but no one knows how to drive. we're just blowing each other to smithereens. social media will be changed or gone in ten years. you heard it here. dom, morgan and robert, thank you very much. coming up, have you been following baseball spending spree? all of this money.

tke is $00,000 a strikeout. ishat a good thing for baseball and is it a good thing for the fans we'll talk about it coming up.

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right in the wallet app. well it is really been a stunning week in major league baseball with record-shattering deals coming hot and heavy every day. eric chemi is here with some of the numbers that are hard to believe. >> they're all about $35 million per year for these three big signing that we've got gerrit cole and stephen strasburg and anthony rendon and we're talking $200 million and $300 million and the achblgs averages are $35 million and all players represented by the same agent scott bore so he's doing great. we had him on the exchange a few months ago because his issue was last year you weren't getting the big deals. the teams weren't giving out paychecks this year it is a hot

market just like the stock market sometimes there is fear and sometimes there is greed. >> so boris could make 9 or $10 million a year because most agents take 10% -- >> no. it is cut back it is 5% the baseball percentage is -- >> rendon, the angels. >> i thought you were padres. >> i like the angels he plays every day gerrit cole and strasburg, gerrit cole will make $135,000 a strikeout if he averages what he did in the past. >> you're seeing teams close to winning the title like the yankees and the washington nationals and you're willing to pay up because they matter the most when it comes to playoff time. >> these are big, big numbers. eric chemi, thank you very much. still ahead, fannie and freddie cutting back on risky mortgages but does that counter home ownership more affordable

and attainable for the american public that story is next. >> announcer: deeper data at cnbc traffic for december 7th showing a sharp decline, down 9.4% from the same week last year. fun fact: 1 in 4 of us millennials have debt we might die with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right by consolidating your credit card debt into one monthly payment. including your interest rate right by locking in a fixed low rate today. and you can get your money right with sofi. check your rate in two minutes or less. get a no-fee personal loan up to $100k.

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fannie mae and freddie mac are cutting back on loans. part of the push from a federal housing finance agency to limit default and try to boost profit to get the company to go private again. critics say this goes against their core mission which is to help make american homeownership more affordable and attainable daryl, welcome it is a quandary i understand the goal. you don't want taxpayers on the hook for bail outs and buyers go bust but they also want to make homes for affordable in your mind, are they threading that needle? >> this change will make the mortgage industry safer.

buyers who put less money down are more likely to enter delynn quincy and default the fact they won't be buying the loans mean they will be more resilient. prices have gone up so much that many first time home buyers can't afford to put down 20% they may be completely shout out of the housing market. >> i was looking at some numbers. let's call the average median home price in los angeles county about $550,000 that's about ten times the median income for the same area. you have a two income household, the reality is this most people are putting down less than 10% and buying homes, six, seven, eight times their income are we getting, sorry, dumb again, in the housing market in. >> since they won't be allowing people to put less money down, it can slow down the market.

we say more investors swoop in because there will be more people looking to rent homes >> 60% of home buyers put down 6% or less on that home. how? i thought we ended most of that practice after 2008. >> during the downturn fannie and freddie wanted to sustain the housing market, keep it strong and make sure there's enough demand but they don't need to do that anymore because there's more buyers than sellers right now. if anything, we may enter a scenario where house prices accelerate too quickly pumping the brakes a bit may be what the housing market needs. >> all right it's a pleasure. an important story one that will only grow. see you again. thank you. >> thank you switching gears to another interesting trend completely outside of housing if you haven't been paying attention, 11 bio teches have gone bust this year.

that's the most in nearly a decade what's going on here joining us is andrew dunn and meg terrell. what's going on, meg >> boi teches don't take on a lot of debt. it's a couple of trends we're seeing one is that some opioid base companies with the legal risks that's going on. we found some antibiotic makers have gotten into bankruptcy. antibiotics are not considered a good business. even when companies get on the market they can't make enough

money selling. >> i read some of the stuff. some of the company, one of them had some good stuff but the problem is they raised prices and couldn't get covered by insurance. they couldn't set the product they were making is that the primary reason why some of these companies have gone bankrupt? >> yeah. thanks for having me it's hard to put the dot on one specific reason. i think there's general buckets of legal and political risk that are both going to be in play on 2020 until we get that settled out that will be major head wind for them i think we have seen it with the leading democratic drug pricing proposal there's a lot of talk going into the election year about the risk

politically. >> andrew, tell us about the potential for next year. you lay out 31 companies at risk of goingba bankrupt next year. some of them are quite large not all companies have taken on a lot of debt. what could drive these companies out? >> right it's really a range of all the risks with the industry. drug development is a very high risk industry where clinical failures are at a high rate. some are on the list for that reason a lot of them it's high leverage i think teva is a great example as far as the biggest company on the list we have seen a lot of price depreciation and waiting for generic pricing to stabilize there's a lot of head winds with the business and they have a massive amount of debt they'll

have deal with >> teva is a major company some of these companies that went bankrupt this year, i looked at their peak market caps and there were 700 million they weren't big companies are we going to see not only this kind of pace but to meg's point, some big companies fail down the road? i don't think most investors looking at 10 billion company and going the risk of them going bankrupt is high >> that's a great point. i think when you look at someone like teva that makes large proportion of the generic drug supply they have an importance to the u.s. health care system and the global health care system where i don't think it's in the best interest of a lot of the people it's necessarily go for bank rupts bankruptcy they have been centered around how can we find way to settle in a way that keeps teva in business because they want a

payment from a settlement. it's definitely not a fore gone conclusion the industry is known for their lobbying power as well as their legal power. i would expect that would wou s counter balance. >> the difference between how bio tech performed cently which has been good. >> when you look at the xpi the first nine months and two months have been two different tails. in the last two months we have seen it shoot up 25% i think that kind of gets at how

with the head winds of when you think of politics and legal threats the industry faces that kind of lays down a play book of how they will get through the next year. >> an important segment. thank you very much. appreciate that. that does it for us at the exchange power lunch starts now thank you very much. it was tweet herd all around wall street. president trump says he is quote, very close to making a very big deal with china and stocks are rising. plus the wife in the peloton ad speaking out as the stock falls but could the ad turn tout be the big that gives on giving to peloton. later, to buy or not to