great show everybody thanks so much see you this weekend. saturday, sunday morning future on sunday here's vanny and company and stuart over to you. stuart: thank you very much indeed on the edge of history or on et edge of total failure. decision day on taxes it is now. good friday morning everyone. start with a market. futures just turned around. mildly positive a few momenting ago. they were down triple tijts at one stage. now a real comeback after house majority leader kechi mccarthy says yes senate does have the 50 votes needed to pass it. more optimism in the markets this the mommy. but we have to bring you this number. shopght shouldn't be there but at this number 6.1 trillion that's how much the value of stocks has gone up since the election of donald j. trump what is a rally and a half had.

it's the latest runup or the least runup is as a result of strong growth strong profit and until last night it looked like a sure fire yes on tax cuts. there's new momentum begun this morning, however, on the tax plan. and ron johnson and both smart and both republicans they are now a yes. add that to the news from kevin earlier and we could see history unfold again on this program this morning. now this -- it was not murder. it was not manslaughter. the jury has decide that when jose shot and killed kate steinly it an accident now we'ra financial program but we deal in politics and we will be covering extensively sanctuary cities in my opinion allow this outrage to happen. "varney & company" is about to begin.

>> i'm going to start with the markets because that's the all important factor on today's program and looks at them down 2 points for the dow industrial. clearly off their lows down over 100 much earlier on this morning but remember we're following a huge record close yesterday. way over 24,000. who is with me? on a friday morning, this man rights here james freeman wall street journal kind of guy with the editorial board. okay, new momentum this morning. dane johnson both senators say yes we're in had. yes, yes, yes. kevin mccarthy says yeah we have 50 votes i'm looking at a -- i'm looking at a vote todays and it is a yes. >> yes, it's a yes they have the ball first single on the one yard line senator bob corker urged them to pullables last night they think what you're seeing this morning is -- that that view that we ought to say no to american revival is not tearing the did i as you see

dane and johnson getting onboortd. >> i don't it really matters that much. what tinkering they do at last minute -- to get a yes -- because it could be change haded easily in the house senate conference committee that is going to this weekend maybe. chg that's true. and i think they are toxed as you are on getting to yes an getting that done today but details do matter. you, obviously, want to set the table for successful negotiation in that conference probably won't last very long so i think they do have to say no to the idea that -- it used to be called a trigger mow it's just -- it deinvolved last night into a is that straight out reduction in tax cut scaling back of the growth potential, the economic potential for this country. that would be a mistake. i don't think they're going to go there. >> lizzy? >> republicans need to get better at messaging again. where were all of the deficit talks in the democrats side when bernie sanders wanted to do his single payer plan or upon obama care or obama doubling the debt?

now they're about giving us the money and the deficit now? >> do you think that bob corker senator corker is doing this. i'm saying he gummed the works is it personal because he's got a nasty spat with the president? >> there is, i think will he do good for the p party or personal and there's a lot of personal animosity in there as well. >> we have a lot more coming up on what's beginning on the markets with the tax cuts vote because we have it there for you. i have to turn to this, a not guilty verdict in the trial of a e illegal graduate who shot and killed kate steinle the jury belief it was an accident and prosecutors not aloud to admit criminal deportation history and judge andrew napolitano joins us now own the phone. judge, do you think that this was a mischaracter of justice? >> i think it was the wrong result stuart i mean this is classic case of involuntary

manslaughter even if you accept and believe that defendants version of this which is that without explaining how he acquired gun we pretty much now how it accidentally went off. tabuns doapght go off by accident a human being has to -- involve trigger. but he found this gun i canned up in a t-shirt beneath a bench. he unwrapped it and it went off. the jury believed him what do you make of that? >> even that is involuntary manslaughter. the reckless use of a dangerous instrument. but there were so many other issueses with the case. the police interrogation permitted the defendants to present to the jury a variety of different theories. government insist it shall >> terribly sorry to jump in like this biff a bee in my bonnet was that jury influenced by politics

was it a political -- >> probably. i don't know the answer to that but it would be a reasonable conclusion to assume that it was. this is the most liberal anti-trump part of the united states of america. the president pounded away that this guy was the poster boy of a -- inappropriately working immigration system and now this may have a long-term effect with respect to the efforts of the democrats to include daca reform but the outcome unjust and motivation was probably political. >> all right. this is a guess an educated guess i wasn't in the jury room with them. obviously a very important situation here and we appreciate you being with us. thanks judge i'm staying on this steinl ergs murder trial president trump saying this kate killer came back and back over

the weakly protected obama border always committing crimes and being violent and yet this info was not used in court. is axon exoneration is travesty of justice saying build the wall. joining us now fox news contributor rachel el i want to dwell on politics of this. seems to me this verdict enhances the political opposition to sanctuary cities and enhances vow that we have to o build a wall. what say you? >> it is the case for what donald trump is saying and if youen will to what -- the democrats are saying or actually not saying because they're not even addressing this if you turn on some of the liberal media this morning you won't see it as much coverage as you're seeing on fox for example they're continuing to be out of touch with where people are. i mean, even if yowpght immigration reform as i do you want border security span and said the average american is not a against it and certainly people who live in border states

aren't against it so question is when will democratics sweep san francisco as the judge said, that verdict probably came out because that is a very liberal part of the country that very deeply hates trump and hates that he used this issue or. but people don't feel that way. average american wants border secured. >> you're of historic desent i believe. isn't this all about the historic vote in california and in particular in san francisco? that look which democrat politician can afford to say oh, yes we want border security, build the wall. no democrat can say that because that is historic vote. >> no nancy pelosi needs to say that to win her district but the point is they've -- but democrats have lost the average american many democrats votedded for trump on this issue. >> not in california -- >> not in california but there's a bigger issue here. this is beyond california. this is what happened yesterday is going to have national implications that reenforce the issues that trump won on. and i think it's going to make

the case for him and when we see daca i have more for you where are we on stock futures we have turned around as we said earl years first thing this morning we were down roughly 100 points. now we're up 9. the difference being that two senators are now saying yes to tax cuts and we also have -- kevin mccarthy saying yes they have 50 votes that turned thing had around. individual stock here ul it a beauty salon chain rather. weak outlook don't ever do that even if you have to. down 6.8%, $206 on ulta. now look at facebook, amazon, apple. all of them were down big time earlier this week, obviously, no bounce book, bounceback this it premarket trading all three of them are down. fiat chrysler reporting sales

numbers, up 2% in november. compared to last year -- all right here's what's coming up, much more on the kate steinle verdict cofounder of the remembrance project that's a supreme support group met with the president on this issue and she'll join us next. big corporate news look at this general motors plans to roll out a fleet of self-driving taxes by -- 2019 that's a couple of years away. things are move hadding fast and first family lights the the national christmas tree and you're going to love the two words that the president said after it happened. financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65.

having someone coach you through it is really the value of a financial advisor. catherine stein

fiches suggest a turn arngd and we're beginning to move higher there's a reason for this why it is happening right now ash what? >> one of the holdout smarts possibly was ron johnson he was on a wisconsin with radio station this morning he said look, i got what i wanted. i wases able to push up that deduction rate from 17.4% to

23%. also he said i was able to negotiate a seat at the table for the conference committee when they finally get the senate bill done and try to combine it with the house he was also asked this stuart for bob corker he said, quote, not so sure. i don't think so i think corker are not happy about this bill so -- says we can still pass it. stuart: still can pass it sos that's a positive and markets have rebated positively. now we're up 16 points on the future qk look at the other markets specifically oil. been going up recently today it is up there are 58.30 up nearly a buck now details on ron johnson got that. and futures are now up nearly 20 points pretty good stuff. back to the steinle verdict. the remembrance project now that is an anti-illegal immigration nonprofit based in texas and it maintains a list of american citizens killed by illegal immigrants in america. joining us cofounder national

director maria, maria, i just run up the bat -- i'm trying to imagine what it would be like to be kate steinle parents to receive this verdict. your reaction please? >> shocking stuart thank you for having me on again. it's a -- a terrible travesty to all americans not just the steinle family but so many families who are suffering continue to suffer, stuart, and this is a blow to them and i want to give out our phone number where they can call where our families call to get help. i know this is devastating to them 1-800- 22-96 -9d -- 1-800-222-9691 an place illegal aliens above these american citizens. >> well maria is is this all about the hispanic vote can a democrat politician the city of like san francisco afford to say no, we're not going to be a

sanctuary city, yes build a wall. no democrat can say that. >> it is not all about votes stuart, as you know, many republicans like our even speak or of the house paul ryan, you know, they are out to open borders, lobbyist, special interest groups in order to be reelected so this has to stop. the common sense must be injengted injected into our society again and force current law. build the wall, and force either by all across the united states mandate that is done by every company all the way down to the contractors. so you know, i -- ask your listeners to put their lengted officials on every level of government their phone number until your speed dial and call and call and call and don't give up and we have et remembrance project will not give up and win this for every family and every american. >> you are hispanic yourself or

hispanic desent i believe your father was from mexico settled in texas, is that correct? >> yes. that's right, stuart, and he came here the right way my mother is fifth generation, and however look at this. it doesn't matter if you're hispanic. right. >> we want laws enforced we want safe communities where our family, our children can play and where we can work and be fruitful when there are about joes for americans. and those legally authorized to work in the united states -- we don't want cay chaos and ms13 gang members recruiting from our schools you know we have a duty and our elected officials have a duty to protect our country and enforce borders, and place president donald trump's america first agenda as their first and foremost priorities and build the wall. >> maria thank you very much for being with us this morning. it is much appreciated. >> thank you, stuart. god bless you. smtion god bless indeed.

senate back in session next hour. vote to resume in about 90 minutes. one way or another the gop assuring us they'll pass the bill we've had that from several sources we're on that, throughout the program and following its progress via the market too. how about this one? bit coin -- about oh, been on a wild ride this week back above $10,000 because they get exchange in chicago we'll admit a future market in bitcoin that's why it is up again today. we'll be back. are you on medicare?

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>> here's the headline michael flynn will plead guilty to lying to the fbi blake berman what else do you have? >> stuart we've got the two-page complaingt here many which it spell spes out two different occasions. in which michael flynn president forger national security advisor admit to lying to federal investigators. the dates here are important because it says on orb january 24th of earlier this year, five days into the trump presidency, flynn and i quote here did willfully knowingly make materially false fictitious and fraudulent statement that according to the complaingt there are two different instances here in which it say it is that flynn admittedded to lying to federal to federal

investigators once on december 29th of 2016. another time on december 22nd of 2016 both involving the russian ambassador who at that time as we know was i late in 2016 took place during the transition just as the president was set to come into office here in washington. flynn as we know was later fired months later by the president for essentially lying to him and to the vice president. so when you look at the bigger picture of this, you have michael plin who will plead guilty in just we believe about an hour or so now from a federal court, the next question is, whether or not he will then cooperate with whatever else might come down o the line with the mueller investigation. keep in mind already papadopoulos pled guilty to lying and paul manafort and rick gates have pled thought to essentially defrauding the government from before their

trump campaign involvement. but this is a major headline here as we expect hike el flynn to walk into a federal courtroom moments from now stuart and plead guilty to lying. >> berman it is a political headline but draw our viewers attention to this not having any impact this particular political story no impact on the market whatsoever. because we continue to move higher -- dow industrial now going to open up about 30 3-3 points way above 24,300. and now if i may, personal story. 20 years ago i was in hawaii. [laughter] i went for a long walk along the beach i got as far as is i could go, and sat down on some steps that led up to a rather grand beachside house. a man e emergencied he was taking out his garbage i had my back to him. he backed up to me, with i turned around and man said well, i'll be. stuart is varney golly it was gym and he knew me that was a

fine moment to be known by such a great american who was and still is really a very big deal. it was a big deal to me. i had watch jim and gomer poil and familiar with shazam and i have heard his wonderful, wonderful singing voice he took me into his house he was gracious, he was funny and he was a very generous man jim passed yesterday he was 87. he was a good man. ♪

♪ ♪ stuart: i wonder if this is going to be another huge day like yesterday was. i'm not referring just to the rally, i'm referring to the excitement that was generated throughout the day because as the day wore on, it became pretty clear there could well be a yes vote on the senate's tax cut deal. okay, it was stymied late at night, but the run-up to that point was very exciting, and the dow industrials went way up more than 300 points, closing yesterday above 24,300. all right, 20 minutes -- sorry, 20 seconds from now we'll be opening up again this friday morning right before the weekend. where are we going to go? well, the futures market is

pointing just a little bit higher because we have some positive news on a yes vote in the senate. with two senators say yes, house minority -- majority leader kevin mccarthy says they're going to get the 50 votes. here we go. it's 9:30 ian time friday morning -- eastern time. i see some green. we're up 30 points. yes. we're up 35 points. okay, we're up 30 points -- >> 700 points from dow 25. [laughter] finish. stuart: you're right. it's fun, isn't it? ladies and gentlemen, it is genuinely exciting to be working on a ram that is financially oriented when you have got this kind of rally going on with this kind of political development. okay, so we're up .1% for the dow. show me the s&p, i hope it's up, and i believe it is -- no, it is down a tiny fraction. >> outrageous. stuart: how about the nasdaq, where is that? it is down nearly a half percentage point.

i bet the big tech stocks are down. let me see, please. big tech, where is it, opening this morning, big tech, big tech? down. there you go. that's why the index is down. every single one of the big five on the downside this friday morning. who's with me? ashley webster, elizabeth mac don, jeff sica, i think the market is telling us it's a yes on taxes in the senate today. >> well, welcome to the theater of the absurd, the fact that the entire direction of the market is contingent on this incompetent, the incompetent half-wits in congress is just amazing. every time someone says something, the market moves in that direction. probably yes if the -- if we get the tax cuts, the martial will continue to move -- the marketed willen continue to move up. we need to flip the switch, the

script. everybody yesterday didn't think this far into the game we would be talking about deficits -- stuart: true. >> this is not a new issue. this has been on the table for quite a while. i'm not overly confident that the market is completely dependent on this. stuart: steve cortes, i cannot imagine that at the very last second the republican party in the senate will say, oh, no, no, we can't do tax cuts. it cannot happen, can it, steve? >> i certainly think you're correct now, but let's not count our chickens quite yet. these guys are the keystone cops, and if anybody can mess this up, they can, and they despise our president. they still live with a 2015 mentality. they don't understand what the voters demanded in 2016. all that said, it does look like this is going to get over the finish line. i think it's huge not just for the financial markets. that's wonderful, and we love talking about rising markets, but it's also fantastic for main

street because the market's done well for a decade. main street has not. we're seeing wages pick up, consumer optimism, manufacturing surveys, so this is a palpable real growth and belief on the ground, and this tax reform is going to only accelerate that process for all americans. stuart: regrettably, steve, i think the market was listening to jeff sica and his skepticism because it turned from a 35-point gain to a 1-point loss in the space of a blink of an eye, but i'll leave you out of it for a second. you've done enough damage. [laughter] let me talk about the big tech stocks. the nasdaq, the overall technology indicator, if you like are, it's been down significantly. now the big tech stocks, all of them are down. alphabet, very small gain this morning. steve, would you buy any of them? would you buy any of these tech stocks at the moment, the big five? >> you know, i wouldn't right now because i do think rotation is going to be the name of the game particularly as we get into

2018. i think we'll accelerate more with the tax cuts, but that said sometimes like the bible said the fist shall be last and the last shall be first, i think there's going to be rotation in energy, small caps. i'm not anti-tech, but it's had an amazing run. the. stuart: you've got that right, steve. now i want to focus on facebook. barclays, big bank, says facebook's in a good position to raise ad prices which would be good for the stock, liz. >> for the next ten years. in other words, they still have not maximized the potential. goggle is raising prices for -- google is raising prices, so they see a 23% upside to the stock. stuart: they do? that's up about 40, 50 points -- >> yeah, pretty much on the nose. and facebook is getting really much better at how telepatrick it is on the ads it shows on your own personal facebook site. they kind of know what you're

look for because they scrape off the internet and off what you post what you're interested in. stuart: you love it. >> i don't know, i think it's kind of weird. stuart: down nearly 20 points. we've been bopping around break even all morning, now we're down 15. look at that rate, 24,257. some individual stocks that are moving. do you know ulta salons? they gave a back forecast, and they're down 4%. big lots, they raised their full-year earnings forecast. the sales fell short, that was the problem. how does the market balance that out? good forecast, lousy sales, down 6%. fiat chrysler, sales numbers up 2% in november compared to last year. no change for the stock. ford, they reported november sales figures up 6.7% compared to last year, a minor leagues move up, seven cents higher. that's it. now this, amazon has reportedly discussed getting into the pharmacy business with generic

drugmakers. meanwhile, cvs closes in on a deal to buy aetna. the two, i think, are connected, amazon, cvs, aetna. jeff, we hear talk, what does happen if amazon get into the pharmacy business? >> keep in mind this is a $3 trillion industry, and cvs buying aetna had everything to do with their scramble because of what amazon is doing. if they do get into this business, if the regulators met them get into this business -- because i think they're going to try to stop them -- it's going to be much like the whole foods acquisition. they will have brick and mortar which cvs dominates in, and they will have the retail pharmacy which is what they already want. showing yet again that jeff bezos is setting out to conquer the world, and this will give him a leg up in that. stuart: it certainly would. general motors, driverless taxis by 2019. that's coming real fast at us. what is this, ashley?

big profits in that? >> they do. large scale fleets of taxis in big cities by 2019, but what they say is that they earn a profit margin of about 7.5% on their regular auto sales right now. they say by 2025 the profit margin on these, you know, autonomous vehicles will be in the 20-30% range. >> that's pretty fat. >> that is a huge profit. stuart: it surely is. >> the revolution here is that cars are seen as part of the services sector, right? so the mid-sized and smaller cars are being sold for robot taxi uses whereas the families are out there buying pickup trucks and suvs. so the carmakers really have to -- are retooling their product inventory. stuart: listen to this one, because it's a reality related story -- related story. volvo, they've got a subscription idea. you pay $600 a month, and you get the volvo brand new, and you also get insurance, maintenance and service all for $600 -- >> and do you know what else is

interesting? unlike cadillac and ford, no down payment, no initiation fee. you just sign up -- >> yeah. you can't buy the car at the end of the deal like a lease, right? stuart: jeff sica's going to say something nasty about volvo, aren't you? >> go. [laughter] >> i owned and drove a volvo, and it was an embarrassing, hard time in my life. stuart: really? >> i just don't like them. i don't know what it is -- stuart: volvo is chinese-owned now. >> vehicles known for their safety. stuart: what's that movie where they describe volvo as boxy but good? [laughter] i can't remember the name of the movie. hold on a second, i've got a political question for steve. you know, we've got michael flynn, he's going to plead guilty to making false statements to the fbi. that's a big political story, steve. do you think that's got anything to do with the down side move in stocks? are the two connected at all? >> it could, because the

suspicion because he's being convicted of something very minor, the suspicion is did he make a deal, right? does he have the goods on the trump campaign or the white house. now, i certainly don't believe that, and i say that as a trump partisan. i think there is no there there. in my view, you know, we'll find this out in the coming days and weeks. in my view after millions of dollars and months and months of intense investigation the most they could come up with is that he lied to the fbi. i'm not excusing that, but if that's the best they can do, then i think this story will go away. the collusion delusion has been something that the left has tried to thrust upon us largely because they still don't understand why trump won. i'm confident that the prime minister and his senior -- the president and his senior team will be exonerated. >> i think it was the movie crazy people. stuart: no, it wasn't. albert brooks. >> i'm looking at it right now.

it says crazy people. yeah, that movie. stuart: look, i don't know much about movies -- >> we just don't like the love the viewers happening. stuart: i'll give in. i've got to talk bitcoin, a lot of interest in it. it's back above $10,000 per bitcoin. jeff, i think the cme, they're going to make a futures market out of it. that's respectability, i guess. >> right. keep in mind bitcoin is finally being taken seriously by everybody. but i will tell you the fact that they're being taken more seriously concerns me because you have this irs who constantly wants to get as much tax as they can get out of every huey p. long that walks the -- human being that walks the face of the everett. so they're look at bitcoin as being the number one threat to our pocketbook. you're going to see a big press by the irs trying to get more involved in bitcoin. stuart: okay. it's that time, ladies and gentlemen, i have to say good bye to jeff and steve.

gentlemen, thanks very much for being with us this morning. >> thank you. stoort institute it is clearly a big day for your money. the dow holding really close to those record high levels. the senate moving towards passing, we think, saying yes on tax cuts. these are the big stories of the day. politics and money. back in a second. ♪ ♪

stuart: now we're down 25 points on theg board at 24,239 this friday morning. barnes & noble, they're desperate to save themselves. what are they doing about it? nicole, tell me, please. >> reporter: oh, a real shift in strategy. we know what happened to borders books, right?

this is a tough, tough business. they have to compete against the likes of amazon and others. they're changing the strategy. you ever go into barnes & noble? there's so many things, gifts and games and journallings. they themselves say you want a journal, you come here, but we have too many. they are going to focus on books. books, wow! that's their new focus and strategy. and it turns out two weeks ago an activist investor actually proposed taking the company private. they've had disappointing sales results over the last ten quarters. the new strategy is to get rid of all the clutter in there. there will be some but much less and focus on bookings. stuart that's a pretty good idea. you sell books, sell bookings. nicole, thanks very much, indeed. now, i do see the market down 44 points, and i amp beginning to wonder if the news about michael flynn has had some impact on your money. specifically, the stock market. ash, michael flynn is going to plead guilty to making false statements to the fbi. do we know anything else? >> no, that's about it.

his attorney stopped talking to attorneys on the legal team of the president. yeah, he lied to the fbi on two separate occasions involving his contact with the russian ambassador. he's going to go to court today and say, yep, i did exactly that. stuart: the concern could be that he's got something on president trump because the -- >> that would be -- [inaudible] stuart: fbi took time during the transition period. >> right. stuart: congresswoman martha mcsally joins us now, republican, arizona. what do you make of this, michael flynn pleading guilty to lying to the fbi. is the president in danger here, do you know? >> i'm sorry, i just joined you. i thought we were talking about conyers. so what is the topic? [laughter] stuart: i'm sorry, the news broke that michael flynn is going to plead guilty to making false statements to the fbi. we see the stock is market declining. not a lot, but a little bit. we're wondering if maybe michael flynn opens the door to going after president trump. i mean, surely that's a concern

in the republican party. >> sure. again, like to talk about the dirty old man conyers now and why he needs to step down. i really don't have a comment on that. stuart: okay, let's talk about conyers. let's do that. nancy pelosi has turned around and said, look, now she wants him to resign. but you can't actually force him out, can you? you can put pressure on him, but congress can't say you're out. >> what he did is disgusting. this looks like it's a repetitive abuse of power towards his subordinates who trusted him, and now he's checked into a hospital for stress? what about the stress on his victims? his actions are deplorable, and he needs to resign. when we look at the procedures that we have, we can do some things. he's under house ethics investigation, and the most we can do, what with i understand is what we call an expulsion, but we can't make him resign. but we literally could have some actions where he couldn't meaningfully participate as a

member of the house. nobody wants that, he needs to just get out of here. stuart: you can't force him out, can you? >> no. he seems to have some health issues, so why doesn't he just focus on that. the money that he paid out needs to come back out of his pocket. there should be no slush fund, no secrecy, there should be all accountability for dirtbags like this. look, there's legislation that i'm a co-sponsor on that we hope to move to the floor that is actually going to unmask anybody who has had taxpayer dollars spent for sexual harassment claims, make them pay them back, make the names be revealed and never have this happen again in the future. stuart: martha, i wonder if you will address for us the kate steinle, the trial of the illegal immigrant. now, as you know, i'm sure, he was found innocent. it's not murder. it's not manslaughter. the jury said it was an accident. now, you're from a border state. >> yeah. stuart: does this make a stronger case to build the wall? does it give impetus to

republicans who want to build that wall? >> well, let me just say this was a shocking decision. we, of course, have a system for juries to make decisions, but this was clearly shocking. this man came illegally to the united states five times, one time at least through arizona. we have the sanctuary cities in san francisco where he had a detainer, federal officials said, please, this man is a danger. hand him over to us. and they refused to. kate steinle was killed because the laws on the books were not enforced and because of the dangerous policies of people that are not -- cities like san francisco that are not safe for americans and their family like kate steinle. so we have some legislation, kate's law, that needs to get to the president's desk. sanctuary cities being cut off from federal grants and and other things, and we absolutely need to be increasing our border start to include -- security to include physical structures and allowing border patrol to do their job to stop the entry of illegal felons like him.

stuart: martha mcsally, thank you very much for joining us. i do apologize for throwing you a curve at the beginning. >> no problem. stuart: that's okay. martha, thank you. appreciate it. let's have a look at markets again. that's a broad look at the 30 dow stockings. it looks like 50/50 winners and losers. overall the dow is down 45 points this friday morn manager. and this, britain's theresa may, the prime minister, criticizing president trump over to his retweeting of some, i would say, very questionable videos. here's our question: how does this affect the trade relationship that she, the prime minister, wants to build with us? america's president trump. we'll be back. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st.

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stuart: britain's prime minister, theresa may, not happy about president trump's retweets from a far-right group with. roll tape. >> the fact that we work together does not mean that we're afraid to say when we think the united states have got it wrong, and to be very clear with them. and i'm very clear that retweeting from britain first was the wrong thing to do. stuart: joining us now is steve hilton, the host of "the next revolution" on the fox news channel. steve, i think president trump was dead wrong to retweet this

dubious video. i think it interferes with the britain-america relationship. what say you? >> well, hang on a second, stu. i thought we were talking about mike flynn. what's all this about? i'm confused. i'm just joking. [laughter] stuart: oh, you got me. >> i'm going to do a mcsally on you. [laughter] i'll get to your point. i think you're completely right. i think that -- i agree with what you said, but i think the important thing is to remember in a situation like this what really matters is for everyone to try and lower the temperature, not raise it. so, yes, the president was wrong to have done this. it wasn't part of some calculated strategy. it was an impulsive mistake. it shouldn't have happened, but now that it has happened, you've got all these people over in the u.k. trying to raise the temperature, jumping up and down, calling him a fascist, saying that his state visit that was agreed when theresa may came over here earlier in the year should be canceled. now, you asked earlier what

should this mean for the really important question of trade between the two countries. and actually here, i think, the president can do something quite smart because if you think about all the people in the u.k. who really hate him over this and other matters, they're getting ready to have a really big demonstration. they're going to say it's going to be the biggest protest ever if president trump comes over. what he should do is to cancel his visit. he should say i'm not coming, but do something else that will really annoy them. because those same people that really hate him, they also really hate brexit. so the best thing he can do is give theresa may a big, beautiful trade deal that will show that brexit is a success, and that is the best way to annoy all his critics in the u.k. stuart: do you think that the state visit, which had been planned for next year -- prime minister may says, well, we don't have a date yet -- do you think it will ultimately be canceled? if our president went to britain, england, there will be

massive street demonstrations in london. it could get really ugly. i think that will not happen. i don't think there'll be a state visit, and you? >> i completely agree, and i think there shouldn't be. no good will come out of it. we've had an incredibly close relationship between these two countries. that will continue irrespective of any kind of flummery of a state visit. i think you've got the u.k. right in the middle of this very intense investigation with the e.u.6789 the e.u. want to punish britain to set an example for other countries. the u.s. can play a really important role here and say to the e.u. not only should -- not only are we not going to punish britain, we're going to help britain. you, the e.u., you'd better not punish them either because then you might face consequences from the u.s. the u.s. has a really powerful role to play in this whole brexit process, and i think it's an opportunity for president trump to basically win argument and not suffer the protests

exactly as you described. stuart: you're right, steve hilton. and there's always room for another british accent on the fox news channel. >> can exactly. [laughter] stuart: we'll see you again soon. hour two coming up for you. to , looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock. ♪i'm living that yacht life, life, life top speed fifty knots life on the caribbean seas it's a champagne and models potpourri on my yacht made of cuban mahogany, gany, gany, gany♪

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stuart: it was not murder, it was not manslaughter, the death of kate steinle was judged an accident. the illegal may be deported again. our concern is not the verdict but the events that led to the shooting and the politics of sanctuary cities. in march 2015, josé zarate had been arrested in san francisco in a charge of selling marijuana. yet a long criminal record and deported before. but he was released even though immigration officials wanted him detained. san francisco is a sanctuary city, the feds can't identify and deport illegals. four months later, kate steinle

was shot. josé zarate fired the gun. clearly sanctuary city status led to the death of the young woman. unfortunately court rulings and leftist politicians have kept sanctuary cities in place and governor brown recently made california a sanctuary state. the political and media elites are protecting criminals at the expense of americans and if you want reform, you're a racist. the steile case is a water shed, it will add momentum to the president and attorney general to roll back sanctuary rules. it will add momentum to the push to build a wall and it will make the sanctuary city crowd accountable because the parents of kate steinle are suing the city of san francisco. good, about time they got justice. the second hour of varney & company is about to begin. ♪

♪ stuart: check the big board. how is the market doing this friday morning, big rally yesterday, down 30 points today. maybe there's something in the flynn, michael flynn pleading guilty to lying to the fbi, maybe that's a minor negative and he has just turned himself in to the authorities. liz: according to reuters. stuart: i have to show you the big-tech names because they have been all over the place recently. mostly down, they are down again this morning. facebook, amazon, alphabet, apple down, microsoft struggling to a gain of 25 cents at 84.45. i've got to get back to news, we broke it about an hour, michael flynn has now turned himself in to the fbi. do we have the judge with us? we do not? >> yes, you do.

stuart: judge napolitano, the significance here seems to be that maybe him pleading guilty opens the door, pathway directly to president trump, is that the case? >> i think it probably is the case, stuart. let me give you -- since you're a number's person, if general flynn had been charged and convicted of all of the crimes for which the government says it has evidence against him, he would have been facing 60 years, 6-0 years in jail. as a result of the guilty plea this morning that's been reduced to somewhere between 6 and 12 months. now that enormous reduction does not come easily. it comes when you give the government something that they desperately want so question is what is it that general flynn has, knowledge of behavior and communications and interactions of people in the trump campaign with the russian government in a time period june 2015 until the

president's election. now, we saw some of this coming when last week the day before thanksgiving the generals' lawyers told the white house that they would no longer participate in joint defense agreement, agreement amongst the general for president and general flynn in which they agree they will share evidence and share communications and not point fingers at each other. once general flynn's lawyers withdrew from the agreement, they went to the special prosecutor and must have cut a deal on monday which is when they visited him. so sometime between monday and today they reduced the deal to writing, the prosecutors' lawyers are satisfied. the general has real evidence that we can really use to prosecute someone, perhaps the president, we don't know and in order to lock the general in they've got him to plea guilty this morning. now, once he pleads guilty we will see a written plea agreement, a document somewhere between 5 and 10 pages in length

which will tell us what the general has agreed to do and what the government has agreed not to do to him in return for what he's going to tell them. stuart: all right, judge, thank you very much, indeed, this is very important stuff and we are appreciate it. by the way, look at the dow industrials, now down 67 points. even though it looks like we are moving forward on tax cuts in the senate, the news about general flynn has -- i believe it's had some negative impact on the stock market this morning. that's the situation as we speak. we are down nearly 70 points. back to my take, that would be the not guilty verdict, wasn't murder, wasn't manslaughter, it was an accident for josé zarate, the man who shot and killed kate steinle. tammy bruce is with us this morning. i'm not interested so much in the jury verdict, although that is, of course, an outrage, i'm interested in politics going forward. that verdict would seem to me to add impetus to the idea that you

have to get rid of the sanctuary cities and you have to build the wall, where am i going wrong? >> you're absolutely right. it's more than techniccallty of the two issues, this is about, we have to mention the jury a little bit. messaging to people in general in these environments that illegal aliens, illegal immigrants are not held to the same standard, that they must be protected and i'm content that this is a framework that's affected perhaps the jury, certainly pulled from that community about who the individuals are and that they are either more special or need to be protected from the system other issue, of course, this is the national argument, who are we protecting, the citizens of a city or those individual who is have come here illegally and i think because it wasn't just murder, of course, but involuntary manslaughter and even a gun charge that he was found not guilty of which is very strange. you don't even need to have intent to kill anyone, you can have an accident like if you're driving in distracted way and kill someone on the road, that,

of course, you can get charged with involuntary manslaughter. it's a very strange verdict that speaks to the notion that somehow this man according to the jury i would argue needs to be protected from something larger and that is the impact of this political conversation we are having. stuart: incredible to me that the jury believed him, he said he found the gun wrapped in a t-shirt under a bench, unwrapped it and went off and kate steinle is dead. i believe that version of it. >> a previous flown, violated the law -- stuart: they didn't know that. the jury wasn't allowed to know that. >> over the conversation of the time leading up to this trial, they did not come from mars, they came from a pool of people who had already seen the news in a variety of different ways. stuart: it is an outrage and will have political repercussions, my opinion. stay there, i have more for you. congressman lieu -- lou gohmert, i want to talk about the steile

case and building the wall, the border right there, surely this adds impetus, build the wall. >> stuart, it adds all kinds of impetus, the wall is just a starter and thank god we elected a president that wants to do something about it. that's the only good news i can see out of this. how a jury could come down like they did is absolutely astounding, i mean, i tried -- i had thousands of felony cases come to my court when i was a felony judge and juries can sometimes surprise you but this is such an outrage, just as you just heard especially when they even said no to any kind of homicide. it didn't even require intent, just negligence. my word, it has to be because of all the rhetoric in san francisco about how illegal

aliens have to be protected. this guy came in five times, deported five times, came back five times and i have one guy that i sentenced that had 9dwi's and by the time he came to felony court he actually hurt somebody and since he had not been deported, i sent him to prison for years and he's back in my court within six months. i said, how did you get back in my court, he said, 90 days after i sent him to prison, finally he got deported and as soon as they drove away, after they watched him go cross the border, he came back. that same -- within a 30 minutes he was back. stuart: build the wall. >> it has to have a wall. everywhere we need it and i heart somebody on fox news say last night that well, in texas, they don't really want a wall. i heard people say from texas, let me tell you, those are the massive hundreds of thousands of

acres topped farms, you caulk to small farms, 500,000 acres, 100 acres, those people are scared to death every night. stuart: i heard it. >> they need a wall. you have a 100,000 acres, you have your own army. they need our help. stuart: juice majority -- house majority leader, they got the 50 points, that's putting impetus and the idea that we are going to get this deal, do you agree with this? we are going to get the deal? >> we are going to get it. we are absolutely going to get it and so you've got senator mccain on board and so many on board but the bottom line is, the mesh people are demanding it, we promised it, we've got to deliver on this, but let me tell you, stuart, i just came from a meeting that we were told, hey,

guys, we want to do a cr just till december 22nd, let me tell you, if there's a cr that ends december 22nd, it's because somebody wants a spending bill to hide all kinds of garbage in it and, you know, they feel like they'll be enough of us that will not want to be here christmas, i will stay christmas, ten years in a row before i will vote for the kind of garbage they are probably trying to hide in there. we don't need a cr. stuart: continuing resolution. that's why you are a favored guest of our audience on our program. >> that's outrageous. thank you for noticing. stuart: colin cap kaepernick beg honored by sports illustrated in the fight for social justice, i'm not joking.

my brother lawrence jones is coming. later this hour, steve scalise, he will be with us. we will be right back. are you on medicare?

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sfx: mnemonic stuart: here we are. we are down 26 points now marketing coming back a little. we have been down 60 just a few moments ago. all through the markets, let's have a look, the price of oil 2% higher, 58.64 on oil. watch out for gas prices. they are going to head higher, price of gold no change. then we have colin kaepernick, of course, he is the nfl player who spear-headed the anthem protest, he's being honored by sports illustrated, the magazine chooses a person each year who use a sports as a way to change the world, the protests in my opinion are really hurting the

nfl. let's bring in the blaze host lawrence jones. look, i don't get this. i really don't get this. what on earth is sports illustrated up to? this is my opinion, lawrence, i think mr. kaepernick did a great deal to hurt his sport. >> and he's also not playing anymore. let's not forget that during the time that colin cop -- kaepernick there were only two or three other players doing it with him. there weren't any statements by the union of players, it wasn't until the president got involved and everybody else start today kneel, and that's over now. so i think sports illustrated could have picked players that are actually playing on the field as well contributing to our community, people like ben watson who has been in the lead for 13 years and trying to bring people together in our community, but instead sports

illustrated wanted to take a political agenda and take a side with a guy that's not even playing football anymore. stuart: you know that sports illustrated is part of time, inc and being bought out by another corporation by the koch brothers. i think this kind of thing is going to happen in the future if the koch brothers finance a deal that takes over time incorporated. i don't see it happening again, can you? >> you know the coch koch brothers are libertarian like i am. a lot of athletes that believe in the same message, i think this is good for sports illustrated. i think the koch brothers, businessmen can get it back on track. stuart: all right, bro, this is what i want to talk about you, my brother specifically, brown university announced it's allowing students to choose their ethnicity.

so can you imagine it, lawrence, i could go to this university and say i am black, therefore, i wish to partake in the affirmative action program, the new lawrence stay out because you're going declare yourself white. [laughter] >> well, that's what elizabeth warren did and sean king. so, look, the liberals have set a standard for this type of absurd behavior, you get the saying that either -- you get to pick your race, you get to pick if you're a male or female, so this is what's going to happen, but what's going to get ready to happen, they are going to piss a lot of black folks are, social justice warriors or piss off a minority in their party with the black folks which they're not going the like being able to choose, i can just be black and get affirmative action and all that good stuff. stuart: you're right, la rents jones. you better come up to new york.

i want the bro hug again. we need to practice. >> i'm taking a special trip to new york next week just to see you. stuart: you're on, son. you're on, son. [laughter] stuart: thank you, lawrence. >> thank you. stuart: tommy bruce is with me, pick your own ethnicity. >> what's amazing is i would prefer, of course, if we could pick being a dolphin or something other, dog. [laughter] >> this is a problem, of course, when it comes to even grasping of reality and this is one of the issues when it comes to where they want to kids to be, they don't want based them in facts of the matter of life and easier to move people along when you kind of conditioned, even when it comes to personal identity that facts don't matter except when it comes to global warming because science does matter. other than that it doesn't matter. stuart: bureau nonsense. liz: i like what dan hanger --

hanninger. stuart: i think dan said he would like to be 16. i want to be 18. [laughter] >> wouldn't that be fabulous. stuart: i would give my right arm. we are waiting for michael flynn's abriefl at the federal courthouse in washington, he's expected to plea guilty this hour, there's a great deal doing on, we will tell you all about it after this

retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. stuart: moments ago michael flynn arrived to the courthouse in washington, d.c., he's expected to go inside. he is inside. he's expected to plead guilty to lying to the fbi about meetings that he had had with the russian ambassador to the united states. there it is. literally moments ago. he gets out of the car, he's

running through the press there, of course, because this is a big deal, indeed n washington, d.c. at the very least. according to judge napolitano whom with spoke to earlier, the fbi has a great deal of evidence against general flynn which could have put him in prison for 60 years. he has done, however, a plea deal which might if he pleads guilty to these charges could put him in prison for just 6 to 12 months. so how did he get that sentence down, maybe by offering prosecutors some kind of link to president trump outing someone above him in the administration. that is the theory. anything to say on this? >> you have two people indicted, manafort, money laundering, et cetera, that's -- we figured it was manafort and flynn were in the most trouble. remember, also why flynn had to leave the white house for lying allegedly to the vice president. this is a man who regardless of

whether or not what he was doing was okay, he was tending to not -- he was tending to have a problem with the truth apparently. so i think perhaps this is a bit of a plea deal but this is all guess work, this, in fact, might be the only thing that they could really get, we still don't know because these are effectively leaks still. stuart: you're right, tammy, it is guess work, but he has done a deal getting it down from 60 years in prison to maybe six months. what did he give to get that deal? liz: his legal team is no longer working with the white house team. ashley: what good does he have? >> it's more on manafort. that's my contention. that's who they have have have e been aggressively on. 11 million-dollar bail because this is -- that's the man that he seemed to be focus on. ashley: according to court papers, he's facing one count to

willfully and knowingly lying to the fbi on january 24th. stuart: political question of the day, what did he give up, who did he give up to get it reduced to that level, that minimum level of one charge. what did he give up? we don't know. when he files in court, i believe, they'll be a document filed, well, we may know a little bit more about where this whole thing is going. few minutes ago -- a few minutes ago we had the market come right down. i thought that maybe had something to do with the flynn pleading guilty, maybe it also had something to do with the weak manufacturing report that we got at 10:00 o'clock, we turned that around. the dow industrials up 1 point but we are up and we will be back with more varney after this.

stuart: well, it is now a dead flat market. there are contradictory themes on the market today. general flynn is about to plead guilty in court to lying to the fbi. some see that as a negative to the administration as a whole and therefore negative for the market. on the other hand u looks like we are moving towards ever so gradually but today a probable, yes, vote on tax cuts in the united states senate, therefore, contradictory influences, we are dead flat but up 3 points at 24,272. big-tech names, same story, pretty much a mixed bag. they have been down most of the week, no significant rebound at this point. all right, more on taxes. what i would call the positive influence on the dow jones industrial average, the debate is underway again in the united states senate, joining us now steve scalise, house majority whip. sir, welcome back.

>> great to be back with you, stuart. stuart: here is my contention. i'm not sure it matters that much what emerges from the senate so long as they say yes because you guys can fix it in the house-senate conference, can't you? >> that's exactly right, stuart. i'm encouraging senate colleagues to pass the bill and i think they will get to 50 votes, vice president pence can break the tie and on monday we will come back in the house and send the bill to a conference committee. i was with chairman kevin brady this morning, he's already working on some of the things where we have differences between the house and senate that we need to work out but we both are in agreement house and senate that we need to lower tax rates across the board, we need to make our corporate rate competitive, we are working hard with president trump because ultimately this is a bill, we want him to be able to assign by the end of the year, what a great christmas president to families that are working hard out there and they want to see jobs come back to america.

stuart: that's the timetable which you think we can stick to, vote yes in the senate today, goes to a house senate conference on monday, you work that out, you put a bill on the president's desk before christmas, and he signs it, is that pretty much what you're looking at? >> stuart, that's been our goal from the beginning and if you look at the timetable we are right on track to do that, let the senate get this work through, whatever their bill ultimately does, a lot of the key components are in the bill, there are some differences we need to work out monday night, the house will vote to go to conference committee and then that work is already underway on how to resolve those differences, so we can get a bill on president trump's desk to get the economy moving again. stuart: the president says he wants a maximum tax credit -- excuse me, maximum tax rate of corporations of 20%, that's what he wants. no more than that, 20%. we understand that the senate might be moving towards a higher rate than that, are you u telling me -- that would not be

good for the economy can you x that in committee? >> its a 20% rat in the house rsion and i have heard some of those potential options that the senate is looking at to go higher, we want a 20% rate, we don't want to be average with the rest of the world, we are the highest in the industrialized world and it's killing jobs, moving jobs overseas, if we want to bring jobs back, let's jump ahead of everybody else and be the world leader and we can do that, our bill in the house does it and we will work out differences in conference. stuart: you were on the show many times this year and i always said to you, okay, okay, i know that we ought to do this, we must do this and i said to you, will we do this, i have the same question again, can you tell me, i know you can't guaranty it but can you tell me with the upmost degree of certainty that, yes, sir, we will get this thing done, can you say that? >> stuart, i've said from the beginning we will will get this done, we have met every one of

our objectives along the way, we have to get this done, stuart, for the american people who want to have more money in pockets and they want to see the economy moving. for eight years we had stagnant economy under president obama, you are seeing the markets go up and uptick based on anticipation of us passing the bill. we have to pass the bill and do it by tend of the year so that president trump can really go lead the charge at continuing to get the economy moving and making america great again. stuart: on behalf of myself and our crew and viewers, we hope that you are well and have a wonderful christmas, sir. >> thank you so much, stuart, merry christmas to you. stuart: thank you, congressman. i'm going get back to breaking news earlier this morning, michael flynn, he's arrived tat federal courthouse in washington, d.c. a few minutes ago, charlie gasparino tweeting this after the news broke this morning. charlie gasparino our own in fbn, poe us the has told friends and associates he expects to be

cleared on the russian probe soon, he gave no date but indicated he is in the clear. charlie gasparino joins us now. you have the information that suggests the president is in the clear. you have a source, i take it. >> more than a source. i spoke to one person, excuse me, stuart, i spoke to one person that spoke to the president directly, i spoke to another person who knows someone who knows to the president directly and what they said is this, this whole flynn matter was coming to a head, we have been hearing leaks that he's soon to be charged or cut a deal, clearly this has been in the news lately as that was happening, the president has been telling associates of his, i would say associates as friends and people that -- that talk to the president regularly that he believes based on his conversations with his lawyer that he believes that he will be clear in the russian probe, meaning the russian -- his involvement -- his potential involvement in anything related to russia's influence in the

2016 election that is being probed by robert mueller the special prosecutor. let's be real clear, the same associates, what else they told me, this does not preclude they believe themselves, the information from mueller, but what they told me, charlie, here is one of the things that, you know, the president may not be taking serious and maybe he has no reason to take it as serious, this does not preclude mueller finding something outside the russian meddling probe, as you know, paul manafort, associate of donald trump who was campaign manager for a time, you remember he was charged not with something directly to russian meddling probe, something extraneous that was brought in when mueller was looking at the whole topic. flynn we have to see exactly what they're -- what they are getting him on. let me make this one point, what they are worrying about the associates, they somehow get

donald trump -- somehow find something on the president that's extraneous to the probe. he's being narrow in his beliefs and coobs naive in beliefs. on the russian matter, he believes it's done for him and be able to announce that soon. that's what he's saying. we should point out that the white house had no point on this, mueller's office had no comment on this. this is essentially what the president is saying, i'm sorry i interrupted you. stuart: not at all, charlie gasparino right there, good stuff, sir. thank you. we still have a dead flat market dealing with competing influences, it's still -- as you heard from mr. scalise, it does look like we are going to get a tax deal done fairly soon. he's very confident of that. at the same time you have this possible negative coming in from general flynn. again, right now we are up just 1 point on the dow industrials. ly call that a dead flat steal

mate on the market as we speak. 24,271, andy puzder is with me. policy adviser for america first policies, a very slight change of subject, if i may, andy, you have all of the commotion going on about general flynn and the administration at the time of the changeover from president obama to president trump, you also have the idea that mr. tillerson, secretary of state, will be leaving in january. can i call that -- strong word, but chaos and confusion in the cabinet? you've been there, am i accurate? >> well, stuart, i don't think that there's chaos and confusion. i want to make it very clear. look, the president of the united states donald j. trump did not collude, he did not conspire with the russians, people should put that out of their mind, they shouldn't let the media build this up into something that it's not, so -- i want to be really clear about that. this is not going to go

anywhere. like charlie just said, there maybe something else they try and get the president on, i can't imagine what that would be, but it's not going to be colluding or conspiring with the russians. secondly, with respect to tillerson, i think we need to be very careful, there's been rumors about secretary tillerson such that he was going to resign or call the president a moron, they were completely discredited, we have to be careful what rumors we pay attention to, however, if the president decides that somebody -- there's a better person for the position of secretary of state particularly with what's going on in the world, if he thinks mike pompeo is the better guy, he should appoint mike pompeo, i don't know that that's going to happen. i don't even suspect it's going to happen. i know tillerson and the president are having lunch today. we may know letter, but right now i think i just take it easy on the rumors of secretary tillerson. stuart: andy, would you stay there, i have to take a commercial break. there's a great deal more on the program. the markets, flynn, tacks, we are covering it all after this.

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ashley: well, starting to look more hopeful that senate republicans can get a tax plan passed. james freeman, make no mistake the devil will be in the details. roll tape. >> i think they are focused as you are on getting to yes and getting that done today but the details do matter, you obviously want to set the table for a

successful negotiation in that conference, probably won't last very long, so i think they do have to say no to this idea that it used to be call a trigger, now it's just -- it evolved last night into a straight-out reduction in the tax cut, scaling back on the growth potential, the economic potential for this country. that would be a mistake. i don't think they're going to go there. ♪ ♪ what? it's just.... we were going to ask about it but we weren't sure when. so thanks. being upfront is how edward jones makes sense of investing.

stuart: and now the debate over bitcoin, nobel prize economist says bitcoin should be banned. look, there's no oversight and this thing could collapse at any time. andy puzder is still was, i say it's a speculative bubble. >> i think it's speculative. people look at bitcoin and try to analyze it as currency than commodity. it's really much like gold than dollars or euros. all of the commodities are speculative, they can go way down and way up. goal has value because we attribute dollar to it and it's rare. the problem with it is that the fees that are charged, if you want to do a transaction with bitcoin, even the median rate is about 11.40, you're not going to buy a cup of coffee or hamburger and pay 11.40 fee, but if they

can get fees down, it can become a viable currency. i wouldn't be surprised if some nations, some country outside the united states would adopt bitcoin as national currency and really give some energy to this thingment it could go up, it could go down. it's like any other commodity investment. stuart: you don't think it's a speculative bubble and won't crash. [laughter] stuart: look, it's friday, i have an interesting story for you, andy, off base, listen to this. apple biz, restaurant chain, new promotion, one dollar long island iced teas, vodka, rum, splash of cola. seems to me awful lot of alcohol, andy, you've run restaurant chains, doesn't this gave applebees some liability if some customers drink too much? >> well, number one, i should be

careful because the chief marketing officer is a friend of mine and knowing him i'm not at all surprised that this is a product that they came up with. but it's just like any other place that sells alcohol, you can always be liable if you don't comply with the dram shop acts in the states involved. you can always be subjected to liability, so i hope people be careful. it sounds like a great drink but i hope people will be care nfl consuming. stuart: whatever you say, andy. whatever you say. [laughter] stuart: thank you very much, indeed, sir, see you soon. >> thanks, stuart. stuart: now this, the new york times content for the president has reached its fashion section, vanessa freedman goes to great lengths to score, that blackjack et was borderline cultural appropriation, that's the new sin in the fashion business. and then there's ms. freedman, she quotes some very critical

local fashion people, green dress looked like, quote, wall paper and then she looked like indian barbie doll. the times local critic. i think you can tell where i stand on this. tammy bruce, what about you? >> it's funny because this woman, ms. freedman was less stripping than content, jealousy. the mean girl in high school, the lovely nice girl comes in, class and style and ms. freedman has her marker, she needs to be sent to the principal's office and grow up a little bit. cultural appropriations, i would guess ms. freedman probably speaks french. is that cultural appropriation? because you dare to learn the language of the other people you're speaking with, why not then also honor them and honor ourselves within this global world of enjoying the fashion of other nations and other cultures

also. stuart: on the screen right there. >> beautifully done and she was praised in india and the other thing i'm sure she considers herself a feminist, it was an indian writer that referred to her as a barbie, complementarily and she said, well, i'm sure that's not ivanka intended but the point is that why is that writer referring to this woman in quite a position of power in the world as a barbie, that would be the point for a woman who might consider herself a feminist, no, it was all ivanka's fault. this is also we are seeing in hollywood, this isolated bubble, protecting themselves and making other people who are interfering with the status quo as the other and it's dripping, with jealousy and envy and ms. and mrs. trump need to realize that and they probably do because they look fabulous on the international scene and we are extremely proud

and maybe ms. freedman needs one of those drinks we just discussed. maybe she these to head to applebees. [laughter] liz: ivanka trump was talking about prosperity and for women in india, doesn't the new york city times have better things to write about. stuart: oozing content for the president an his family, case close. the senate will start its vote, it's called voterama. we whether take you there. we will bring you any updates. the dow moves up 25 points. back in a second. ♪

ashley: new etf artificial intelligence debut last night, can analyze information for around 6,000 equities and each data processes more than a million filings to try and beat the market and humans, joining us now are the cofounders amador and cheetah catour, let me begin with art, artificial intelligence, machine learning techniques, how exactly does it

work? >> yes, the high level concept is that our artificial intelligence technology mimics the investment process of research analysts around the clock and we are processing articles every day to build a portfolio of stocks that we believe has the highest opportunity for capital appreciation. ashley: aim is to beat the market, how are you doing so far? >> as any systems, perform -- [inaudible] >> and so far we are doing great. the last two weeks we are almost beating overbroad market and i think the intend is not to see as short-term, hour plan is to beat it like one.

ashley: art, the really screw uptakes a computer, how much do you realize on this and do you have back-ups? >> actually one of the things that we do and this is when ip is around, we validate the data, the truth or the trust and credibility within the information that we are processing, of those million ne work s -- news articles, we have a quality assurance check where we can go in and see why the system is recommending what it's recommending which is very different than the way that other ai systems work.

ashley: right. >> other ai systems are more of a black system because we know exactly what it's looking at to make the investments, it gives deeper insight and we can do quality assurance before the facts get -- the positions get into the portfolio. in addition, to that, there's a human portfolio manager who looks after we do internal qa and goes to partner who then does the check who ultimately sends the trades out to brocker who executes the trade. lots of human quality assurance checks. ashley: we are out of time, thank you so much. etf, electronic traded fund that goes symbol aieq, another example that we are, indeed n robot era, we will have more varney right after this.

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stuart: 11:00 eastern time, and this is the hour when the tax cut deal rolls on and, yes, it appears to be gaining momentum once again. senators ron johnson and steve daines both were holdouts who wanted a better rate for small businesses. both are now in the yes column. earlier this morning congressman kevin mccarthy told maria bartiromo that there are, indeed, 50 yes votes in the senate. he also said the final bill will have a 20% corporate tax rate, it will be permanent. that's what the president wants above all else. so much for caucus monkey wrench. yeah, he was concerned about the deficit. his concerns brought the bill to a dead stop last night, but we're back on again this morning. there is an element of uncertainty, but barring another surprise, it looks like at the end of the day -- maybe late tonight -- the bill will pass. looks like it.

so stand by. right about now you'll start to see a voterama, that is frequent votes on amendments. then later today or maybe late tonight the final vote. no matter what's in the bill, i think it's going to be a yes. and the third hour of "varney & company" is about to begin. [laughter] ♪ ♪ stuart: taxes, the story of the day. voting starting this hour in the senate. blake burman at the white house. blake, identify got to believe that the -- i've got to believe that the white house is totally confident they've got the 50 votes, right? >> reporter: the phrase i was given is they feel the 50 are locked in. however, there is a cautionary tale here, and that is the health care vote. the example that was given to me saying, look, you do not want to go to the floor with just 50 votes, so they are still trying to get some more, 51, 52 added in. the bottom line though is on

this day the numbers keep on pushing toward their favor as you just laid out. ron johnson and steve daines who were holdouts over what would happen through pass-throughs, he was come in as yes votes, so that leaves a few here to look forward to, bob corker, jeff flake and susan collins, though i am told, stuart, here at the white house they are not necessarily worried about collins, it is corker and flake and their deficit concerns that you might want to keep an eye on. i'm also told as it pertains to in that the corporate rate could be stepped you have over time. here -- stepped up over time. a majority of the republican caucus opportunity want to do that. bottom line here, stuart, they do think that the 50 are locked in. however, they will continue to try to get to 51 or 52. stuart: oh, yeah. what a day. what a day. blake, thanks for joining us, appreciate it. >> reporter: you got it. stuart: you may have seen on the left-hand side of your screen voting tallies in the senate. i'm sorry, that was in the

house, okay? that's a separate issue entirely. okay, got it. now let's bring in john moody, he's -- john lonski -- i'm sorry, john, it's a big day. [laughter] >> friday, come on. stuart: also friday. thank you very much, indeed. look, it sounds like there is momentum towards 50 yes votes in the senate. now, you're an outside observer, you're on wall street. you've got to be watching real closely. am i right in saying that there is momentum towards a yes? >> i think you're exactly right, and it could, indeed, be approved later today. stuart: now what do you make of this idea that maybe the corporate tax rate starts out at a maximum 20% but then could be stepped up in future years? i think that's a terrible idea. >> horrible. the idea was to simplify the tax code, and now we have this moving tax rate that rises over time. that's going to hurt corporate planning. and how do you convince companies to move or keep more of their operations and not go overseas to take advantage of a lower tax rate? it makes absolutely no sense.

stuart: so you want them to get rid of it -- >> right, fix it. if it has to be 21%, fine, but don't have a 20%, next year and so on. stuart: okay. scott shellady is with us, and i think he's joining us from london. is that -- oh, i see big ben in the background there. [laughter] you're a very good observer of the scene, so even though you're look over there to what's going on over here, are you reading it the same way from london, that, yes, momentum is building towards a yes vote? >> yeah, you know what? as traders look at things, we look at trends, right in and trends are your friend. so this one is absolutely trending in the right direction. so a lot of traders would say that looks as though something's going to happen to the positive here and, yeah, you're going to get something done which would be great. and i agree we can't be monkeys around with different levels. businesses need to be able to plan, and whatever we agree to today should stay what we agree to today. stuart: okay.

assuming the bill passes the senate, then it goes on to the committee stage, house and senate. john, can anything be fixed? i mean, like stepping up the corporate tax rate or monkeying around with something else? i mean, you can fix this in committee, right? >> oh, you can, but i think the changes will not be all that great. revisions will be relatively minor, that's what i would be looking for. stuart: so once you got it through the senate -- >> home free, put it that way. >> you agree with that, scott? whatever needs fixing in the house/senate conference could be fixed but probably not much will need to be fixed, yeah? >> no, i think -- yeah, i think the senate's the highest hurdle. if that's cleared, then things should be looking good from there, yes. stuart: all right. now, let's check the big board. as of now we've got a 33-point gain for the dow industrials. let's proceed under the expectation that we get a yes vote in the senate, that it's pretty much a done deal. scott shellady, if that to considers -- occurs, do we get another leg up on the dow

industrials, stock prices, from where we are already? >> well, we're going to get another leg up in the stock prices if a number of things continue to happen. i love to see what's going on with the gdp prints over 3%, that's great. low unemployment, that's great. low inflation, that's really a big driver as well, and throw the cherry on top with the taxes. so i knew we were going to talk about 25,000 as soon as we went through 24,000, and that's all well and good, but at the end of the day it's about the guts of the issue. and those things are starting to look prettied -- pretty good. gdp, low inflation, low unemployment, as long as those things continue to fall in line, this is only going to be fuel to fire that thing even further. stuart: you know, scott, you're always the show-me guy. now they're showing it to you -- >> that's exactly right. and that's what i'm saying. i like what i'm seeing here. stuart: okay. you're finally happy? >> he didn't say that.

[laughter] >> i'm less disappointed, how does that sound? i can't go that far. i love the gdp, i love those -- you know, the unemployment rate and putting people back to work at the same time the economy's growing is a good thing and, yeah, taxes are only going to help. i'm more excited than i've been in a long time, stuart. stuart: there you go. i was waiting for. that finally we got there. okay. john lonski, another leg up? bearing in mind we're at 24,300, another leg up -- >> i think it's less than 3% to 25,000, that could happen by the end of the year. and scott is right, we have a much-improved trade-off between economic growth and inflation. we could have the unemployment rate drop down to 3-3.5% and still find that inflation's well contained. let's not forget we also have a low rate of manufacturing capacity utilization in the united states. that can go up a couple of percentage points. that would imply a good deal more growth for the economy,

and, of course, more jobs. stuart: okay. now, a lot of i viewers ask me would you put a buck or $10,000 into a bitcoin, because bitcoin's had an extraordinary run, up again today. $10,561 per bitcoin as we speak. so, scott shellady can, over there in london, am i right when i say that bitcoin is a speculative bubble and i wouldn't touch it with a 10-foot pole? >> oh, my good, stuart, you just saved me there. i mean, with all the licenses that i have, i could not risk all the education i put into getting them and tell folks to get into bitcoin right now. it's 100% speculative right now. most of the folks involved with it probably don't know anything about it, which is not a prerequisite, but that's something you have to be careful of. and look at a chart. i've got a bridge to sell you here in london. stuart: that was a good answer, scott, thanks very much, indeed. same question to john. i say bitcoin's a pecklative

bubble, and you say? >> i think bitcoin is going to be to money what subprime was to mortgages. stuart: oh, so if you get a crash, it could upset the whole financial system concern. >> no, i didn't mean it in that sense, it's a speculative bubble, without any question. stuart: okay. hold on, everybody. we just saw the dow took a big, sudden drop. we were dead flat literally 90 seconds ago, and suddenly we're down 57 points. now, we're working on this. we're trying to figure out what it was, what news development -- you got anything, liz? >> it's the sausage making. susan collins is saying -- they're down to the wire right now. here's what she wanted, susan collins, expanded child tax credit, she wants to keep the state and local tax deduction, she wants to have subsidies for the health insurance exchanges under obamacare, and corker and flake are still on the fence. so they're down to the wire. what are they getting right now in order to get this thing out of that committee vote. stuart: if her demands are so extensive as to be keep the

deduction for state and local taxes -- >> right. stuart: -- if that's what took this market down, i just don't see how -- >> and we know that corker and flake are worried about the deficit as well. stuart: look, we are coming back a little bit. okay, we're down 30 points. but that's intriguing. susan collins wants a lot to get her into a yes vote. >> to get her yes vote. >> oh, okay. stuart: i still put her in the undecided column. >> thank you. stuart: more coming in to us, james lankford, the republican from oklahoma, senator lankford, now, he was a waverer. i think he was concerned about the deficit. he is now a yes vote. >> yeah. stuart: so you've got -- look, as you say, liz, this is sausage making at the very last minute. one senator stands up and says i want this, other one says, okay, i've got it -- >> the thing is are they looking for backstops to stop the deficit from growing. do they want the triggers, what is it -- stuart: it's sausage making, and i wonder how much point the --

>> you know, when you're look at the deficit, everybody forgets about spending. why not put limits on government spending? stuart: good luck getting that through. all right, i've got to go. many of you are faithful viewers. a little over two years ago i became a u.s. citizen. that picture is of me after the ceremony. after the break, i'll play you the clip when a congressman handed me an american flag through the tv to congratulate me. it was a moment to remember, and it was two years ago today. how about that? >> oh, my gosh. stuart: and the senate continues to vote hour. history in the making, don't want to miss a thing so stay right there. ♪ ♪ well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out.

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we were down 200, now down 174. look, this is a selloff, and it occurred very suddenly. it may be because abc news is saying that general flynn will testify about president trump. >> as soon as that came out, we saw the markets take a big step lower. the question has always been if he's getting a deal to plead guilty, what does he have, what potentially could he have on the administration. now we get news, that unsettles the markets. stuart: literally, within seconds, we were down 200, down to a -146 as we speak. there was other news concerning the tax cut deal in the senate, and, liz, let me see if i can get this right. >> sure. stuart: susan collins, republican from maine -- >> correct. stuart: -- she is asking to keep the state and local tax deduction, keep it. >> that's correct. stuart: increase the child tax credit and offer considerable subsidies for obamacare.

>> that's correct. stuart: that would break the bank. >> and corker and flake are still on the fence as well. there's other news. the u.s. house ethics committee are now demanding all records related to any house member on sexual harassment charges. stuart: i don't think that's going to affect the market. >> well, it could hang up the house members, you know, it's a distraction. stuart: justin, repeat what you just said. okay. i've got the dow industrials now down 128 -- >> they've come back a little bit. stuart: it has come back a little bit, but abc news is reporting general flynn will testify about president trump. i think that's the words they used. >> yes, that's exactly the words. stuart: that, i think, was the trigger for a -200 reading, now it's -127. susan collins, republican from maine, her concerns are extreme, she's demanding an awful lot. if you kept the state and local tax deduction, that means that you're not saving very much money at all. >> and just moments ago she

still says she is not a yes. so it's questionable now whether the gop does have the votes. she's still a holdout on the tax bill. stuart: she said she is not at this point a yes. >> despite what john cornyn is saying about having the votes. stuart: charlie kirk is with us, turning point usa guy. i know you've been listening to this, charlie, looks like it's not a sure thing when you've got three, looks like three holdouts at this point. >> it's going to be awfully tight, i'll tell you what. and like you said, this is the process of sausage making, right? it's going to be cattle trading and horse trading now to the end. i think they'll get there, but the question is how much are they going to sacrifice. and here's the challenge. so let's say they give on the state and local deductions to senator collins. they might lose two more senators because of that. they have to find some sort of bargaining chip in the middle where they can actually agree without losing other votes. so if they give on maybe the estate tax issue, which i know senator collins does not want to

see in there at all, they might lose three other senators from somewhere else. i would not want to be in mitch mcconnell or john cornyn's shoes right now. stuart: if they gave in to anything senator collins is demanding, it's much less of a tax cut, much less. >> yes. stuart: it takes a lot less money out of the treasury's -- i'm getting this wrong. it takes a lot more money out of the pockets of individuals. and, actually with, gives more to the treasury if you agree. that makes it, it's a watered-down tax deal, i believe. am i reading that correctly? >> i think you are. stuart: i think that's where it is. >> yes. stuart: on the other hand, we do have senator lappingford, republican from oklahoma, he is saying he is now a yes. he'd been concerned about the debt, now he is a yes. this market's all over the place, ladies and gentlemen. we were down 200 points within seconds of the abc news breaking that general flynn will testify according to abc news about

president trump, immediately it dropped 200 points, and then we came back to a -108, now we're down 12 the 7 points. nicole -- 127 points. nicole, that was a bombshell that broke a moment ago. >> reporter: yeah, it really was. traders actually really saw it coming, they started to run around saying, what's happening? one even came to our booth. of course, we've been following the tax story, and that's propped up the market, but this is all about michael flynn and he pleads guilty to lying to the fbi, concerns about what he said to russians, and that investigation. and the concern over here is now what will he say against president trump. it started on one of the outlets that the traders follow, fly on the wall, and then trickled out to bloomberg and other outlets as well. so the traders want to know that piece of uncertainty puts pressure on the markets. so you can see here that we are, in fact, selling off and now down about a half of 1%.

stuart: okay. thank you very much, nicole. i've got a little bit more on what abc news is saying. they are saying that general flynn is prepared to say that president trump urged him, general flynn, to make contact with the russians. okay, that's the raw report there from abc news. as soon as that hit, down went this market. charlie kirk, all right, come on. that's a connection, direct connection, general flynn and president trump. that's not looking good politically for the administration. go. >> well, let's take a quick pause. we know abc news and nbc news has been historic at trying to exaggerate. so it might have been that president trump asked his national security adviser to maybe make diplomatic mends with russia, not have any sort of russian political collusion. so let's take a deep breath before, you know, we take this account of abc news at face value. look, i will say this, if you

look at mueller's strategy when he went with manafort and with flynn, if he would have had strong, concrete evidence of collusion between the trump campaign and russia in the 2016 election, he would have already pursued it. he went on a secondary type strategy which is to try and get flynn wrapped up in his lies with the fbi and then use him in a plea bargain deal to try to then go after the president. it might be an effective legal strategy but, quite honestly, if the evidence was already there, they would have found it, and we'll see. it's going to be a he said/she said, and if this really is true, that would be significant. again, let's take a deep breath before we take these accounts serious -- and we know sometimes they've gone throughout the process. stuart: well said. >> and and charlie's point, michael flynn is accused of speaking to the russian ambassador on the same day the obama administration issued those sanctions and expelled the diplomats out of the country. stuart: if you're just joining us, ladies and gentlemen, we're

looking at two negatives for the stock market. you may be wondering why all of a sudden the dow industrials really plunged. we were at break even and suddenly we were down 200 points, and we're still down 154. the two negatives are as follows: ab, this use is reporting -- abc news is reporting that general flynn was told by president trump or asked by president trump to make contact with the russians. let's not read too much into this, as charlie kirk suggested. it could have been a request to get out and make diplomatic representations. we don't know that. but we also have another negative, and this is about taxes and the tax deal in the senate. senator susan collins, republican of maine, is saying that she wants to keep the state and local tax deduction. that would take a big bite out of the efficiency of the tax deal. she also wants more subsidies for obamacare, and she wants an expanded tax credit. that would really blow the thing

out of the water. chad pilgrim, give me an update with the tax vote with senator collins and all the rest. >> reporter: right. well, susan collins is still looking at this. the other two wildcards at this stage are jeff flake, republican of arizona, and also bob corker. now, the white house anticipates that they seem to be -- indicates than they seem to be in a better position they were last night. they worked feverishly throughout the night, and they appeared to be at least at 50 votes. that would entail breaking a tie with vice president pence. they would obviously like to have 51 or 52, have the entire republican senate conference onboard. they are walking through the changes with the republican senators right now. what comes next is a voterama where they vote for hours on end and they're waiting for this final modifying amendment which would make last changes to the bill and then presumably sometime late tonight they would vote on tax reform. stuart: chad, you know more about this than i do from the inside there in d.c.

do you think that susan collins would be the republican who says no to this tax deal and kills the prime minister's growth agenda -- the president's growth agenda and, i think, the gop in the elections next year? would she be the one? >> she's somebody who was absolutely on the edge when it came to health care. when i spoke with her late last night after the bill blew up -- they thought they were going to vote last night -- she described this to me as a, quote, inelegant process. she could be. remember, john mccain was someone who we were looking at a couple of days ago. he signaled yesterday morning that he would be a yes, so now the eyes are on collins, flake and corker. they got a big win this morning when ron johnson from wisconsin said he was a yes. he was very concerned about the writeoffs, the deductions for small businesses. the rate's currently about 17.3%. in the original bill it went to 20%, and now it's up in the 23% range. stuart: again, you know this better than i do. do you think it's possible that senators corker and flake are

reacting personally to the president? >> no, it doesn't seem that way because, you know, you have two republican senators who have had their differences, you have two republican senators who are retiring. my history here at the capitol when i've covered these folks, even though they're retiring or have personal differences with somebody, people don't go and vote the other way just to spite someone or if it's not right for their state or district. senators flake and corker are both deficit hawks, there are a lot of reservations about exploding the deficit here. you know, they were trying to put in these triggers that would impose tax increases or new revenues that would kick in they weren't -- if they weren't getting the deficit reduction spurred by the economy, and elizabeth mcdonough, the senate parliamentarian, ruled that out last night. that was something bob corker was pushing for, and you could tell that he was pretty stressed about this. he's sticking to his guns on this deficit reduction question. stuart: chad, stay there for just one moment because i've got the dow industrials now dropping 200 points.

it's a very volatile situation. ash, have you got more -- >> we're getting some headlines saying prosecutors say mike flynn spoke with a senior official of trump's transition team who was at mar-a-lago result to discuss what to communicate to the russian ambassador. so that shows that it went beyond just him. >> it's about the u.s. sanctions. >> yes. anden then it goes on to talk about the vote, and prosecutors say flynn was told by a senior member of the trump transition team to reach out to other countries to influence the u.n. vote or defeat the resolution with regard to sanctions on russia. stuart: is that wrong? is there something wrong with that? look, i don't know the diplomacy here or the protocol, but what's wrong with -- >> trying to influence -- >> it's a link between flynn and senior members of the trump team influencing sanctions put in place by the obama administration against russia. and it's, you know, it's implicating trump's senior team. stiewfer stuart that's got nothing to do with the election.

>> it's russian hacking into the election, that's why the sanctions were put in place. >> they're trying to create a line between the trump administration and russia, and they believe flynn clearly can do this -- stuart: and the imposition of sanctions. >> remember, the obama administration expelled 35 diplomats in and around the time that flynn was speaking with the russian ambassador. stuart: chad pilgrim, back again to you, please. look, t it's a little confusing here. can you sum up the flynn situation and the danger that it poses to president trump? >> well, probably the best way i've had it put here this morning was by dianne feinstein, the top democrat on the senate judiciary committee. she put out a statement that says this raises questions as what was the relationship between the trump campaign or maybe even the trump administration maybe through michael flynn liasing with the russians. those are the questions that she wants to know. it was interesting that just a few moments ago we chased richard burr, the chairman of the senate intelligence committee, out of the capitol. you know, they're having meeting

on tax reform, and he said i have no comment, i have nothing to say to you today. but senator feinstein is pretty clear, you know, she says, you know, what is that nexus? what were they doing, and did that cross the linesome and that is something that has to be resod in court and may have been resolved today. stuart: okay, quickly, liz. >> quickly, abc news is reporting that michael flynn is prepared to testify that it was president trump himself who directed mike flynn to make contact with the russians. stuart: repeat that. >> that mike flynn -- that president trump himself directed mike flynn to make contact with the russians via the russian ambassador. stuart: okay. christian white pen is with us. christian, you were in, you were a senior adviser to the trump people, i believe, is that correct, christian? >> i was. i worked on communications on the transition at the state department. stuart: okay, we've got this breaking story. i'm sure you're up to speed with it. it looks like general flynn may be able to establish a line between himself, the president

and the russians. i can sum it up in those words. it looks like a danger and a threat to the president, doesn't it? >> no, it doesn't. i don't think there's anything here. he was the national security adviser that the president advised him to make contact with the russians at a time, incidentally, when we didn't have a confirmed secretary of state because the senate hadn't confirmed rex tillerson. that's called diplomacy. i'd be surpriseed if the president hadn't tried to establish contact with the russians. this was well into his administration. i'd say what happened is probably mueller, the fbi threw a bunch of prospective charges at flynn saying we're coming after you, we're going to go after your son, we're going to go after others, or you can just take this plea. and what flynn had to do is decide between spending hundreds of thousands, potentially millions on a protracted legal fight even if he was not guilty or to take this plea deal. so, you know, to me this says that the investigation might,

frankly, be winding down. if you're going to extract information, you do that before the plea. so i think there's a lot less here than meets the eye. stuart: all right, christian, hold on a second. we now have a new low for the dow, off 270 points as we speak. judge napolitano on the phone. i want some clarity, judge, and you're good at it. we hear reports that general flynn is prepared to testify on trump and russia. what do you make of this? >> well, it depends on when and about what. for example, as your previous guest said, if general flynn is speaking to the russians in the first, in the 24 days that he's national security advisor because there is no secretary of state, that's normal, rational and to be expected. but if general flynn is speaking to the russians between june of 2015 when donald trump announced his campaign plans and general flynn signed onboard to be the national security adviser and

november of 2016 when donald trump was elected, then we have a very serious probability here. the probability is that the president of the united states is in the crosshairs of bob mueller for a criminal prosecution or a referral to the house of representatives of evidence would, had it not been committed by a person now in the white house, be sufficient to prosecute for a felony. stuart: so what is the crime? spell it out. what may be the crime? >> facilitating the russian interference in the american presidential election. the interference has been well documented. it consisted largely of the use of computers to hack and mislead the american public. if bob mueller can show out of the mouth of michael flynn that

donald trump acquiesced in that, orchestrated it, benefited from it, knew about it, we have a very serious constitutional crisis on our hands. stuart: okay. hold on a second, judge. chad pilgrim right in the middle of d.c. with news. what have you got, chad? >> yeah. and i want to read exactly what might be the crime issue here, and this is in the dianne feinstein statement off my phone here. she says this shows a trump associate negotiating with the russians against u.s. policy and interests before donald trump took office and after it was announced that russia had interfeared in our election. -- interfered in our election. she says that's a stunning revelation that could violate the logan act, any citizen who directly or indirectly initiates commune can case with foreign to governments. so what we might be dealing with here as senator feinstein suggests is the logan act and a

violation of that. stuart: okay. thanks, chad. back to you, judge, if you're still on the line there -- >> yes. stuart: -- we're now at a new low for the dow jones industrials. i think the market is taking very seriously this probable breach of what chad described as the logan act. fill us in a little bit more, please, judge. give us some clarity here. >> well, chad is correct in that that is a federal statute that basically prohibits a private person -- michael flynn as the emissary of candidate donald trump -- from interfering with a the foreign policy of the government of the united states. it would have been president obama and secretary of state kerry whom michael flynn is alleged to have interfered with. that is the least of their worries. it's a 200-year-old statute that's never come into play. their greater worry is the interference in the election with the acquiescence,

encouragement, participation or instruction of the person who, according to this theory, benefited from that interference by being elected president. the logan act exposes mike flynn to three years in jail, the far more serious ones are being involved as a foreign agent while you're an employee of the federal government expositives him to 20 -- exposes him to 20. stuart: moments ago we were down 340, now we're down 260 points. >> bouncing all over the place. stuart: bouncing all over the place as investors try to weigh up the seriousness and, indeed, the threat to president trump and his position and what was going on before the election vis-a-vis general flynn. john fund is with me. you've been listening to all of this, john, and you're shaking your head as if it's of no great concern. is that my correct reading of your head shake? >> the news from abc is that trump and flynn talked.

i think that because we don't know the details of course you're going to see a seesaw in the market. three things. first of all, this is not going to affect passage of the tax bill. we're not going to know any more by the time the tax bill passes. i think the tax bill will pass. two, there's a legal issue here -- that's the logan act which has never, ever been prosecuted. and i think it's a stretch to believe that the trump people were actively coordinating with the russians on interfering in our election process. the third thing is political damage. that's real. if donald trump was playing footsie, being cute -- and, believe me, this is a man who actually in public said to the russians if you have the wikileaks stuff, please release them. so he was playing with fire. there may be political damage to the trump administration, very little legal exposure, i think ultimately, and the market reacting to lots of news because it's nervous and it's an important day on the tax bill, so it's a day to be nervous. stuart: the market is reacting with gusto all over the place, quite frankly. we were down 340 points

literally five minutes ago. now we're down 230 points. the bottom line here is investors are trying to assess what threat there is to president trump bearing in mind that general flip is going to plead -- general flynn is going to plead guilty about lying to the fbi, and he will testify about russia and mr. trump. so the market's trying to figure out how serious is this, what does it mean. as you said, john, there may well be political damage, but it doesn't affect the immediate passage of the tax deal. so you've got contradictory forces here -- >> which is why you have the up and down. stuart: i mean, investors want a tax deal, and they want it today. that's a positive, and we're likely to get it. that's a plus. on the other hand, they don't want rump's position -- president trump's position threatened by general flynn, am i right? >> yeah. we're not going to know any more about flynn between now and tuesday which is when the tax

bill is going to be resolved. that is weeks or months in the future. stuart: show me the big techs, we've got them on the screen, the very popular stocks that have been wildly traded recently, mostly down. they are all down right now about 1% with the exception of microsoft which is down a third of a percent, down significantly. now show me the banks. their all down -- they're all down. again, i don't think this has to do with the tax deal, this has the to do with political damage and threats to president trump's position. all the financial stocks from jpmorgan, morgan stanley, wells, all of them down on the downside. christian whiteon, you said -- you suggested that the investigation, the russia probe, may be winding down. are you holding to that with this market all over the place? >> i am, i think so. if there was something bigger

here, then they wouldn't allow general flynn to only plead to misleading the fbi, and this is sort of akin to -- not to suggest that flynn did anything more significant, but, you know, with al capone we didn't get him for murder, it was tax evasion. getting people for misleading statements which can be a mistake or a failure to recollect things which are later clarified -- that's what they got scooter libby on, and he was completely innocent, i would argue -- you know, there's nothing here with papadopoulos, the others who have been involved, the idea that this can trace back to the initial democrat charge which is that donald trump somehow got the russians to interfere with the u.s. election in a material way and that's why he's president and hillary is not. there's just nothing there. and if you look at the legal steps, there are a bunch of people who are going to be charged and plea to things who wouldn't otherwise had they not been closely associated with this political firestorm. but the idea that this leads to something more, you know, we'll have a few days of a freak-out here in washington, but beyond that the trump administration d

frankly, i would have suggested firing mueller about a month ago, but now i'd say let's let it run course because we're probably past the -- stuart: okay. so christian is telling us no threat to president trump. what do you say, john fund? vigorously trying to make a point there. >> well -- [laughter] obviously, i'm not a fan of mr. mueller or special counsels. having said that, flynn actually is very lucky here because he clearly violated the federal registration act. he accepted money from turkey, he accepted money from a russia-linked company that engages in propaganda, and he didn't report it. he's supposed to as a former d the ia chief do that. he certainly could have been prosecuted for that. he got a very good deal out of this. i suspect, though, that he didn't deliver all that much. he's still going to have to pay the piper. stuart: by the way, the market has come back -- >> yeah. stuart: -- very significantly. now we're down 180. i guess investors are saying that it's not that big a threat

to president trump directly. >> i think it's all about the timing, stu. this all happened pre-election, and i think does that get to the logan act i think is what the judge was talking about. it was the interference prior to actually being elected. it wasn't part of the transition team at that point, it was prior to the election that the contact was made with the russians which adds to the argument that there was collusion between the trump camp and russia, and, of course, ultimately interfering in the election. >>. it also has to do with michael flynn interfering and pressuring countries about this u.n. vote on israeli settlements. they tried to -- the trump administration, the incoming trump administration via flynn tried to get that vote sculptorred. that's involved here. this is part of the charging document. he's lied about that. that's according to the charging document. stuart: but that's not a threat to president trump. it's only the russian connection -- >> it's both because it had to do with pressuring russia on that vote as well. stuart: i got it. we're all the way back to a

-172. now, general flynn has released a statement, and is here it is. i'll read it for you. after over 33 years of military service to our country including nearly five years in combat away from my family and then my decision to continue to serve the united states, it has been extraordinarily painful to endure these many months of false accusations of treason and other outrageous acts such as, such false accusations are contrary to everything i have ever done and stood for. but i recognize that the actions i acknowledged in court today were wrong, and through my faith in god i'm working to set things right. my guilty plea and agreement to cooperate with the special counsel's office reflect a decision i made in the best interests of my family and of our country. i accept full responsibility for my actions. no hint there of the connection with president trump and russia. >> no. stuart: it's a personal statement about his position, where he stands and where he's

going in the future. >> this news was a leak. if there had been real substance, there would have been a second sentence which is what did trump and flynn actually talk about. this is what in washington is called a half leak. it tantalizes everyone and gets the markets going, gets all kinds of speculation. believe me, if someone had a real leak on this, there would have been a second sentence about what did they talk about, not just that -- >> well, that's going to be coming out because he's turned state's witness. i hear what you're saying, the markets did react violently on this news. >> this is a half story. >> yeah, i hear you. stuart: fred barnes is with us. dare i say veteran political observer. i can say that, fred, because we're in the same vintage, i do believe. >> yes. stuart: all right. can you assess for us what threat there may be to president trump? >> well, it doesn't look like there's much of one now. "the washington post" said the plea by, that we just heard this

morning was a monumental development. i don't think so at all. there's no indication of that. there were always going to be some minor people -- i wouldn't say he's minor, but anyway, people who were charged with small things that were picked up along the way in mueller's investigation. so maybe there's more, but this does not break open anything that shows that there, indeed, was collusion with the russians during the election. stuart: okay. hold on a second, fred. i'm going to go direct to the floor of the new york stock exchange. nicole petallides, what are traders doing and saying? >> reporter: it's really interesting. first of all, you've seen the wild swings back and forth and why does that happen. the traders are saying, obviously, because they're reacting to the every single one of the headline ares, one using the phrase double whammy, concerns about the tax cuts and now coupled with flynn and the wildcard to that. another will tell you the bulls will tell you this is an

overreact to the news we already knew. if there is bad recourse, the president is at risk, and that would be bad for the market. some of the traders are saying you buy them here because this is a market that will then move through and finish higher than where we are now at least and maybe even in the green. we've had one record day after another. there are traders who are buying this dip as well. at our lowest point we were down 350 points and some are saying how is anybody going to prove anything, it's he said/she said whether or not candidate trump told flynn to go and do this, you know, prior to him being the president. so that's the question now and remains the uncertainty in the market. that being said, some are actually buying on the dip. we saw this on the night of the election too. i don't know what to tell you. stuart: yes, we did. it's a fast moving situation. look, developments are coming thick and fast, and chad's still with us in d.c. what do you have, chad? >> well, here's some reaction that's just come in, again, i'm going to read this off my phone from elijiah cummings, top democrat on the house oversight

committee which has been looking at some of these russia issues with the trump administration. the next critical question, quote, is why president trump tried to get the fbi to drop its investigation of flynn and then fired the fbi director for pressing ahead against the president's wishes. and also just on the house floor a few moments ago steve cohen, democratic congressman from tennessee, from memphis, he just said on the house floor, quote: we are repeating the horrors of watergate. he's someone who is pushing this effort to impeach the president of the united states. stuart: okay. well, that's strong language, indeed. thanks very much, chad. what our viewers are seeing on the screens was general flynn emerging from the d.c. courthouse. he got straight into his car, that happened moments ago. more news. >> yeah. sources close to flynn say that there's another side to this. he was under tremendous motional pressure but also financial pressure. he was basically broke. he is planning to sell a house just to meet his financial demands and basically knew he couldn't finance two or

three-year, lengthy court battle. so that was a big reason as to why he made this agreement with investigators -- stuart: so you can be financially stressed into doing a deal. >> i think so. if you just don't have the money to continue to fight this, he felt, you know -- stuart: it's the lawyers. an arm and a leg here. you could run up a very large legal bill very quickly. >> also if someone like general flynn were to be before a district of columbia jury, the odds of getting acquitted are zero, the odds of being convicted are high. the best you could hope for is a mistrial. stuart: the white house has released a statement from ty cobb, the president's attorney. today, michael flynn, a former national security adviser at the white house for 25 days during the trump administration and a former obama administration official, entered a guilty plea to a single count of making a false statement to the fbi. the false statements involved

mirror, the false statements to white house officials which resulted in his resignation in february of this year. nothing about the guilty plea or the charges implicates anyone other other than mr. flynn. the conclusion of this phase demonstrates again that the special counsel is moving with all deliberate speed and clears the way for a prompt and reasonable conclusion. [laughter] the president's lawyer there putting a lot of distance between himself and general flynn and saying it's a big kerfuffle about pretty much nothing. >> let's have clarity here. here's what's at issue, that the u.n. was going to vote on the israeli settlements. russia, the ambassador spoke with michael flynn about it before the trump administration came in. and basically, the implication is that michael flynn did pressure the russian ambassador to delay the anti-israel vote on the settlements. that's a violation of the lo to began act. the question is why wasn't

michael flynn himself charged with violating the logan act? because he's turning state's witness. because he's now saying he did it at the behest of the incoming trump administration. that's the issue. stuart: so the fact -- >> the timing. stuart: it was the timing. >> it was in december before. stuart: before -- >> he came in. stuart: -- the president became the actual president. >> yes. they are private citizens undercutting foreign policy. stuart: that's the logan act deal. >> that's the issue. >> right. stuart: fred barnes, come on in. i know you've been listening to all this, and we're trying to give some clarity. can you give us an update on your opinion here? >> my opinion is that nobody will be charged under the logan act. i don't think anybody has in a hundred years or more. it just doesn't happen. there are plenty of opportunities. look, it's defunct. it may still be on the books, but it's defunct. i think there's very little here. this happens with independent counsels. they come in and if they can't get who they're really looking

for -- of course, in this case it's donald trump -- then they go after the little people, and they just sort of pick up this stuff along the way. i think that's the case here. stuart: okay. hold on a second, fred. lizzie, what have you got? >> it's important to note the u.n. vote went ahead anyway, and israel was condemned for its settlements. that's the important footnote. stuart: the market is now down 224 points. we've been all over the place. we were down 343, then we were down 180, now we're down 229, all of this is in the space of about half an hour. i've got dan schafer on the phone, he is the bear, a frequent guest on this program. dan, do you think that this is the turning point for the market, this is where the big downturn givens? >> yes, stuart, i do. i believe that this is the beginning of the end, and you can clearly see based on the charts and things that happened yesterday in the vix which was up for some big reason while the market was up. you know, as i was on your show

many weeks ago, i talked about what happened with the ancient greek society and when political levels start to fight amongst each other at the high levels, it becomes a major problem for an economy. we're due for a major selloff, and this could be disastrous. stuart: okay, dan, we do hear you. i've got james freeman, wall street journal -- no, we don't, sorry. we don't have him. you're exasperated, john fund. go. [laughter] >> well, of course the market can't stay up forever. but we're about to pass a tax bill which is the most pro-growth legislation this country has seen in 30 years probably. so the market is going to have a little bit more run in as it absorbs this news once we pass the tax bill and once it becomes clear how much economic growth this will sustain. you know, the economy's in good shape. the tax bill is going to make it even better. stuart: okay. now, we just broke below 24,000 heading towards a -300 on the dow industrials. i think i want to refer back to

the tax deal, because there is a negative on that. and the negative comes from senator zune collins. susan collins. republican of maine. she is holding out. she wants to keep the state and local tax deduction which will be enormously -- >> it would unravel the whole deal. but senator flake, i think in the end, is going to be a yes on this vote. he does have deficit concerns. he's not like bob corker who i i think is an old-fashioned green eyeshade republican. jeff flake is a pro-growth supply-sider. if collins drops out, he will finally come in. stuart: fred barnes, come on in, please -- >> i agree with john fund on that. look, this is, the republicans, i think, are still in a very good place. i mean, but look at the people who are intervening. we have the parliamentarian. for heaven sakes! are we going to let the parliamentarian decide whether we have a tax cut or not? i mean, the parliamentarian is,

obviously, an unelected official. then we have one of these groups that looks into and makes predictions about what the future's going to be, look like and how much money will come in and so on. this is the joint taxation group. they're always wrong, others are wrong. i mean, they're not quite as wrong as the congressional budget office which is historically wrong. the republicans, i think, are going to move ahead on this without susan collins. they always move ahead without susan collins. stuart: okay. chad is back with us in d.c. chad, i believe the senate is back in session. what -- can you assess for us the degree of uncertainty? i know that's a very difficult assessment to make, but do it anyway. >> right. yeah, they're much more confident here. again, as fred says, if it's susan collins and a jeff flake and bob corker, they've got a problem. but if it's just two of those three, they're at 50/50, and they can have vice president pence break the tie.

it might be that susan collins is kind of the wedge vote at this stage. the senate is voting on amendments and motions in relation to the tax bill. they took a conference meeting for about an hour, hour and a half here, came back into session after they briefed republican senators on the changes overnight. the rest of the schedule for the day remains hazy. at some point we're going to get to this voterama where they vote for hour upon hour upon hour and this culminates, presumably, in final passage perhaps late tonight. we have been told repeatedly they don't want to go too late because they are concerned about the health of thad cochran, republican of mississippi, who's had some issues as well as john mccain. they don't want to keep them there too late. they're thinking, hopefully, they can wrap this up in the early part of the evening. i should point out one thing, too, about the parliamentarian here. fred's right, there is a question, the parliamentarian ruled out these triggers, the idea that they could reimpose revenue if they were starting to explode the deficit. they can defeat the

parliamentarian's ruling under in this special process if you can get 60 votes. that's the problem. under this process you just need 51, but you take it to 60if you want to overrule the -- stuart: your reporting this morning, chad, has been all about the tax deal and the senate and the debate in the senate. has there been any influence on the senators? is there any talk on the floor there, talk around you about this general flynn development? >> right. and, again, you know, most of the chatter here has been about the tax deal. this erupted just a couple of moments ago about flynn when the house was leaving session. in fact, we have some tape from a couple of members and their reaction. i've not even gotten a chance to listen to it. what we've heard mostly is from dianne feinstein, the top democrat on the judiciary committee. but what was pretty clear a little while ago is that rip ard burr, the republican from north carolina, the chair of the senate intelligence committee which is smugglesly probing the russia matter didn't want to have any comment at all on flynn

or where this stood or how it impacted his probe. stuart: this is just coming out, senator lindsey graham says, yes, we've got the 50. so that takes some pressure off the, this column which is assessing the tax cut deal versus the general flynn column over here. we're till down 186 points -- still down 186 points. but as we're speaking about lindsey graham saying, yeah, we've got 50, the market is coming back a little. so, john, they can afford to lose collins, they can afford to lose maybe corker and that's it. >> if senators are very well informed about washington politics and all the rumors, if they really thought donald trump was under tremendous pressure from something general flynn will testify to, you would hear a lot more nervousness behind the scenes on capitol hill. you're not hearing that. stuart: not hearing that, okay. can we show, please, i want to see the big name technology stocks because they've been so important in this overall market rally, and now we see a very

significant pullback on the dow. i want to know how these stocks are doing because so many investors, so many of them do have money in that market as we speak. that camera that's just crossing my vision there -- >> oh! stuart: we're all right. all is good. we'll move the camera shortly, and that's a promise. okay. we're down 237, and the big tech stocks are, all of them, on downside. along with, of course, the overall market. james freeman, do you have a microphone on? yes, you do. [laughter] look, you've been following this. let's talk the general flynn side of the column. >> okay. stuart: in your estimation as you see this thing unfolding, is there a direct threat to president trump here? >> well, certainly not good news when you hear that one of your former aides is going to testify. but as we look at it, what he seems to be pleading to is lying about talking to the russians which is, of course, the reason he got fired in january, the reason we learned all about it

was a leak of classified info about him which i i think also ought to be investigated -- stuart: james, would you hold the line, chad, you've got news from adam schiff, i believe, who is on the house intelligence committee. >> right. he's the top democrat on the intelligence committee. we talked about the logan act and even though they haven't prosecuted under this, he indicates that this might be a problem. we have the tape, we'll get this back to you guys as soon as possible and get this on the air. he also says this does indicate that there is a problem with obstruction of justice. that's the issue that people are talking about. and, you know, you asked about reaction a few moments ago and the tenor in the building, whether people were nervous about this. all of the piling on seems to be coming at this stage from the democratic side of the aisle. is that partisan politics? perhaps. [laughter] stuart: you think? are you surprised, chad pilgrim? you've spent your life in the halls of congress. why on earth are you surprised? >> i'm shocked, shocked. gambling in the casino.

[laughter] stuart: let me point something out here. this market is coming back. all of a sudden now we're down 150. i mean, look, it's like this, obviously, it's like this: there are competing influences on this market -- >> by the end of the day, we'll be much more stabilized. a lot, but not much. stuart: you say we'll be much more stabilized. back to james freeman. i interrupted you horribly. spell it out. what do you think, if any, is the direct threat to president trump? >> well, like all of these recent charges from mueller, i think what he would have hoped is that he was charging people with something related to what this investigation was supposed to be about which is allegedly rigging the election with russia. we're still not seeing that. we're talking about what flynn said, and as we mentioned, he got fired in january because he lied to the vice president. so i also, this question of is it partisan with adam schiff and the congress, the answer is, yes. [laughter] because as those of us old

enough to remember when he used to spend a lot of his time talking about how worried he was about government surveillance, when-used against mr. trip -- when it was used against mr. flynn, he doesn't seem to care that much -- >> or leaks based on that surveillance. stuart: i've got fred barnes with just a couple of seconds, last word to you, fred. sum it up. >> the most preposterous thing was congressman steve cohen. he used the word "watergate." this shows you how preposterous people are in trying to assess this thing with flynn. there doesn't seem to be much there and certainly not anything that smacks of watergate. but, you know, democrats are desperate! so they say stuff like that. [laughter] stuart: thank you, everybody. i've got to say thank you to john and james and fred and everybody else who's either on the phone or with us. i do want to point this out, the dow's come back. now we're down 147 points. in part, i think, it's because

with lindsey graham says, yes, there are 50 votes, and now senator mitch mcconnell, leader of the republicans in the senate, he too has said, yes, we've got those 50 votes. the market likes it. we're down 143. neil, it's yours. busy day. neil: yeah, i think you're right. i think that graham, you know, prediction did change things. for how long, is anyone's guess. thank you, stuart. in the meantime, stocks had been dropping actually all over the place as you've been seeing on this abc news report. only abc news, we should stress, right now. no one is double or triple confirming this, that michael flynn is not only prepared to testify against the president, but that the president directed him to contact the russians. in and of itself, that would not be a huge deal. of course, it depends at what point he wanted that contact assured, as president-elect or soon into to oval office itself. that would be natural for the president to follow up in establishing relations with the russians if you didn't have a cynical view of this. if you do and you're saying that