>> great show, everybody. thank you so much for joining us. "varney & company" begins now. here's stuart. stuart: yes, it does. way to go, tim cook. you are doing the right thing. apple gives back. good morning, everyone. it's a big win for america. apple, they get a tax break on the profits, a tax break on the money they keep overseas, and they're putting 350 billion to work in america in the next five years. we've said before that business got just about everything they wanted in the tax deal and now they have to do the responsible thing and pass it along and that's what they're doing. 170 companies and counting have given bonuses, better pensions, higher wages, or all of it above because of the tax

cuts. more than # million people have benefited directly. here's the key point. there's more to come. $2.8trillion parked overseas. a lot of it will come back here. business is coming through. today the market opens well above the 26,000 level, flat to ever so slightly higher expected for the dow but no big selloff, despite the explosive run-up this year. investors are not worried about a possible government shut down. my opinion if shut down the government to protect illegal immigrants, they're going to get the blame. "varney & company" is about to begin. ♪ ♪ . stuart: president trump tweeting about apple's big move. here it is. i promise that my policies would allow companies like apple to bring massive amounts of money back to the united

states. great to see apple follow through as a result of tax cuts. huge win for american workers and the usa. given the details, what are they doing? ashley: they're going to bring back $352 billion in cash and invest 350 billion over the next five years. government build a new domestic headquarters, they're going to create more than 20,000 jobs, they've also given their employees $2,500 bonus in restricted stock, and that's almost all employees around the world, which counts about 120,000 employees. so all in all, not bad business for the u.s. . stuart: but they don't have to bring all of the 350 billion back. ashley: but they're going to pay 15.5%. before this went through, they're saving about 38, $39 billion in taxes. that's enabling them of bringing it back because they're paying a one-time fee. stuart: and that's $38 billion that goes to the united states

treasury. ashley: correct. liz: and they can also deduct the stock grant they're giving employees on their tax returns. ashley: everyone wins. stuart: big deal. everybody wins. ashley: i might bring back my 20 pounds in the british bank. >> poster child for what american companies hope for from the tax bill. the repatriation of apple's money is sort of setting the standard for other companies going to do in response to this bill. this is huge. stuart: now, wait a second. the other big tech companies. microsoft, in particular, they've got a ton of cash. >> they all do. liz: 143 billion. stuart: they're going to bring it back. certainly going to get taxed on it. are they going to do going to do the same thing? >> i think they all will. because they don't know if this is going to last forever. they have been borrowing. apple has been borrowing against their overseas holdings to fund things like dividends and capital spending here. but i think honestly the bigger story that has not been addressed, and i think has to

become apparent over the next year or two is that american companies and international companies want to invest in the united states, and they have been prevented from doing so because of our dysfunctional tax system. you know, i mean, democrats write off america as a manufacturing place, as a leader in production. we are not. we have so many advantages and this has been the reason up until now. stuart: i think you should write an op-ed for the new york times. >> that will be the day. stuart: also with us in new york to my immediate left, scott martin. let's bring him in right now. apple giving a stock, a stock grant to employees. not an option, a grant. do you think that's better than the check? >> well, given how the performance of the stock has been, yeah. can you believe a better place to put your money than the tech stocks we talk about every day? i think this is a new york times year. stuart: it is. >> i'm guessing they're saying apple to your point brings back 74% of their cash. apple stiffing america and 6%

of the cash. that's the thing you're going to hear, liz. the fact that somehow, some of the mainstream media is still finding a way to make this bad news. i was reading about it last night. it's incredible. >> they make it sound like it's a slightly -- a bit of a scam, you know? windfall. ashley: apple is going to spend a ton of money anyway so really only invest 38 billion over five years. stuart: here's the new york times. front page. apple after tax cut windfall will bring billions back to the u.s. first sentence. apple, which have long deferred paying taxes on its foreign earnings and have become synonymous with hoarding money overseas unveil plans on wednesday that will bring back the vast majority of the 252 billion in cash. liz: and 20,000 jobs is nothing to sneeze at. even president obama admitted after his $800 billion stimulus plan that there were not -- that did not create shovel-ready jobs immediately. so this is companies now stepping in; right?

stuart: and more. liz: haven't seen that in eight years. stuart: and there's more to come. i'm convinced there's more to come. how are we going to open this market 24 minutes away? we're going to be flat to slightly higher. i'm going to call it dead flat. but, look, scott we're in the middle of earnings. we're just starting earnings season. and on this program, we've forecast that profits will go up 14% now compared to a year ago. you in line with that? >> i think it may be too low. i mean, i think you start factoring these tax cuts, stuart. i think you start factoring the fact that look at some of the data that's coming in on q4. we had a great holiday shopping season. great consumer spending confidence. 14% could be low. and let's talk about the s&p. everybody says, oh, my gosh, the s&p is overvalued. it's really not. if you look at it historically, foreign earnings ratios, which may be a buzz-worthy thing. but still, let's talk about how much earnings are worth in the future. the value of those earnings growing at that 14 plus% rate, puts the s&p, in my opinion,

3200 by the end of the year. stuart: you're saying going to go to 3,200 by the end of the year? >> yeah. stuart: that's up 14, 15% from where it's right now? ashley: it's at 2800 right now. s&p. stuart: you say it's going to go to 32. liz: you're talking about earnings growth of 15%, you know, overall. if that matches in the dow, you're talking dow nearing 30,000 by the end of the year. i don't want to sound all rainbows and sunshine but with the double-digit earnings growth projection, you have to start look at what the dow is going to be going forward. >> s&p earnings in the first quarter, my favorite economists are saying up 20%. not just because of the tax cuts but also the weak dollar. that's a very big thing to the american companies, translating foreign earnings back into the bottom line. i think you could see big surprises in the first quarte q. stuart: here's what i'm picking up. the market still has a ways to go this year. and profits are going to be up big time. am i okay with that? >> i think so. stuart: okay. let's move on. politics.

possible government shut down tomorrow night at midnight. if they do shut down, do you think there's going to be any impact on the stock market or on the president's growth agenda? >> well, look, we had a huge run yesterday and that's when the shut down looked even more imminent than it had been before. people have gone back and looked at the prior impacts of the shutdowns, and it has had no impact on the economy or the stock market. so i don't think it's going to be a big deal unless, of course, it lasts for a extended period of time. stuart: the impact is not on the market, not on the economy, it's on politics. >> yeah. and i think so and goes to could be big. stuart: who gets the blame. >> yeah. stuart: my position is if the democrats could get the blame, if they shut down the government on behalf of illegal immigrants, i think they get the blame for that. >> i do because they know that there's a compromise out there. and they have walked away from a compromise. and i think that's the telling thing. the white house has made it clear they want the dreamers to be protected. americans want this to

happen. so it should happen. stuart: hold on. hold on. wait for it. wait for it. we've got breaking news, and it's about amazon. ashley: and their much-touted headquarters 2. where are they going to locat l. stuart: where? ashley: they've narrowed it down from 238. they've got 238 proposals. they are now down to 20. here we go very quickly. atlanta, austin, boston, chicago, columnist, ohio, dallas, denver, indianapolis, l.a. miami, montgomery county, maryland, nashville, tennessee, newark, jeff is still in the running. new york city, northern virginia, philadelphia, pittsburgh, rally, north carolina, toronto, the one loan canadian city in there and washington, d.c. stuart: you know what they're doing? they are saying okay, you 20 what i haven't have you got? . stuart: what else have you got for me? up the ante. give me more. liz: newark was going to give them 2 billion. ashley: 5 billion. ashley: oh, the city. liz: 5 billion total in jersey. >> it's going to be 100 by the time they narrow it down to

two or three. ashley: 50,000 high-paying jobs. that's a lot of enticement right there. that's a lot of thank you. stuart: more banks reporting profits this morning. morgan stanley, bbt, bank of new york, i see five of them on the screen. three of them are up. two of them are down. none of them by much. except for morgan stanley. they've got a nice earnings report and they're up 1.56%. got it. look at alcoa. oh, dear they are down this morning. they kicked off he didn't season yesterday. not a good report. they lost money again. more than expected. that stock is down nearly 7% this morning. that's alcoa. now this. president trump releasing his fake news -- don't you love it? the top two do have a financial theme. number one was paul kruge man. he predicted on election night that the markets will never recover after election won. oh, dear. abc brian ross false reports

on the russia investigation. that sent the markets into a tailspin. in other words, fake news has a direct economic impact. you might want to check your wallet too. counterfeit cash spotted in 11 states. what gives the funny money away? how do you spot it? well, we'll tell you. i promise we'll tell you. and president trump's chief of staff john kelly says mexico's government will not directly pay for the wall. president trump's already tweeting about that one. we'll see what he's saying next.

. stuart: ibm has been doing very well recently and in premarket trading has hit $170 a share. they report their full results after the close of trading today. remember, they've got a block chain hookup. they're doing well. don't forget ge, we had breakup buzz this week. they're at $17.39 a share this morning. virtually flat. actually, up 3 cents. white house chief of staff

john kelly says mexico would not pay for president trump's proposed wall directly. roll tape. >> mexico's not going to pay. >> we have some ideas on how things like visa fees renegotiation on nafta and what that would mean to our economy. so in one way or another, it's possible that we could get the revenue from mexico but not directly from their governmen g. stuart: okay. here's what president trump tweeted about the wall just very recently. the wall will be paid for directly or indirectly or through longer term reimbursement by mexico, which has a ridiculous 71 billion-dollar trade surplus with the u.s. the 21 billion-dollar wall is peanuts compared to what mexico makes from the u.s. nafta is a bad joke. congressman louie is with us now. congressman, i sense a little softening on the wall whether it's paid for indirectly and whether or not it's an actual structure that runs along the

entire border. you happy with that? >> i don't really care how it's paid for directly or indirectly. but, you know, the president suffers from a great advantage that i've had most of my life and it's low expectations. it amazes me how people constantly underestimate the president and are left in shock. but from the out house to the white house or, in other words, from msnbc to fox. [laughter] people are constantly shocked that that the president came out ahead and was able to accomplish what he said he was going to do. so i still -- he's made a believer out of me. i think we're going to see mexico pay. it may be indirectly, but it's going to be to mexico's advantage to have a wall anywhere we need it. we cut off the tens of billions of dollars going through the drug cartels.

stuart: you just -- >> and the corruption and that allows mexico to become a top ten economy. that's a good neighbor. stuart: now, you just gave out that you want a wall whatsoever it's being built. so you're not pushing a wall the entire border. >> we don't need 2100 miles, no. stuart: you would be comfortable with that. >> as long as we get it where we need it. but like big ben national park, you don't need a wall through big been. stuart: but it's a compromise. >> exactly. stuart: are you prepared to compromise on the issue of dreamers staying? i mean, where is the compromise here? >> i never wavered on that, stuart. the answer is that let's get the border secure, and then we can work out about the people that are here illegally. but until the border is secure, even if we put it in the same bill, then some kind of legalization and secure border, we're back to 1986.

we'll get the amnesty, and we won't get the border security, and we'll have to keep doing this on a regular basis until there are too many people that don't understand how you preserve a republic as franklin said, you know, if we can keep it, well, we won't keep it if we do that. stuart: last question. would you accept a compromise, which you built the wall or a structure, whatever you want to call it, end chain migration, end the lottery system, give more money to the military. in return, you allow a chunk of the dreamers to stay. now, that's a compromise where you have to give and the democrats have to give. but would you accept it? >> it's the same thing we did in '86, and we can't be that insane to keep doing the same thing expecting a difficult result. let's secure the border, and then we'll work things out about those that are here. that's the way it really needs to be, stuart,. stuart: all right, louie. >> there's just no way around it. stuart: we hear you. >> it's like the way it needs to be. stuart: and as always, thank you for being on the show. you're a favorite guest.

>> thank you. stuart: thank you, sir. check those futures. now it's dead flat to slightly lower for the dow industrials. yeah, we're off just two points at the opening bell, which is 11 minutes away. the ratings are in last weekend's nfl games. 23million fewer viewers tuned in this year compared to last year. that is a 16% drop. big drop. more varney after this

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. stuart: whoa. a ratings nose dive for the nfl. how much were the divisional playoffs down? ashley: well, year over year from last year, down 23 million viewers across the playoffs. that's down about 16%. also hitting a ten-year low. now, the saints, vikings game was a great game. amazing finish. that pulled in 6.5 million viewers compare that to the packers, back at 48 million. of course, the cowboys, packers had the biggest fan base in the nfl. but they are most definitely down across the board. not only in the playoffs but in the regular season as well. that trend seems to continue in the playoffs. why? . stuart: why? ashley: it's politics. >> it's politics. stuart: you think it's politics? ashley: it's politics.

stuart: really? ashley: yeah,. stuart: no other reasons involved at all? >> well, i think the play of the game is worse this year. you look at it versus the college games, which are actually doing pretty well, just the game play is not as good. and full disclosure, i am a fan of the future nfc championship team the vikings. i'm not sure they're going to beat the jaguars in the super bowl in a couple of weeks because the jaguars are going to beat the patriots. but a lot of these small-market teams that are left in the playoffs are not rating. stuart: what are you smoking? >> the vikings are going to win the nfc. stuart: man said he's going to win the premier league. all right. moving on. moving on. talk about walking away from something. a 24-year low for movie theater attendance. that was what? 2017, i guess. why? liz: worse in a generation. i think sequel fatigue. i think people are tired of seeing sequels upon sequels upon sequels and the streaming at home is offering fresh, new content that you just get from

your home. ticket prices going up. also the cost for popcorn and the like going up. people say what you know? why not just stay home. wait for the movie to come to our couch. ashley: plus, the general public behaves like they are sitting at the couch. people talk. i don't want to deal with it. >> it's disruptive and more reason to like stocks like netflix, which we own because of the fact of streaming benefits and amazon and some of those other platforms that we own that are creating original content. like you mention, liz, it's better than what you're seeing in the theaters. liz: we're starting to sound like the bitter boomers. stuart: the bitter boomers. ashley: and you started going to the theaters more. stuart: well, i'm old. you get a discount. ashley: oh, now. that's why. stuart: quiet on the set. okay. look at this. we're going to open ever so slightly lower on that market this morning. please remember we closed yesterday well above 26,000 in a whopping great rally. hardly a retreat if you go down four points this morning. we will be back

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we are going to open pretty close to ma mark this morning. the futures market is telling us we might be down a few points. we will see in 5 seconds. this is going to be another big day, thursday january 18th, 2018, bang, we are up. right there from the get-go we are up 20 points, 21 points. lost a little bit of that lead as more stocks of dow 30 start to open up. 26,100, firmly above that level. very modest gain in the opening for the dow jones average. any moment now it will turn negative, holding 5, 6, 7 points up. s&p 500, attracts 500 different stocks, down a tinny fraction, 2800. nasdaq composite is down .09, down a tinny fraction. we have opened a tinny fraction

lower on all three of major indicators, apple, all-time high. it's only up 1 cent, 179, .12, that's all-time high. lots of big banks reported profits this morning. morgan stanley did very well, bb&t, the stock is also higher, bank of new york, they are down 4%. big losers, key corp. and bank of new york and melon who is with me on yet another historic day, ashley, liz, scott martin and brian brendberg. first of all, i will start with you, brian, do you any any end to stock market party? >> why would you, apple is putting $350 billion into the economy, we are five years, why would this market go down? stuart: i tell you why that because t gone so fast and some

pullback is inevitable. >> i don't think any -- aside from something we can't predict. stuart: raging pull. any sign that the party may be ending. >> there's not, but that squares me that there's no sign. you don't see anything bad out there on the horizon, sorry, that's your nickname, that's the time, though, you have to be worried, stuart, you think about times when the dow had struggles, it's when everything looked so good. if there's any sort of crek, we have talked about this over and over again, if you have cash on the sidelines and 401(k), if you see pullback, you to hold your nose and buy it. >> okay. there has been some criticism of apple's big plans. pay repatriation tax doesn't mean that all of the $252 billion over there will all

come back over here. how do you respond to this cold water? >> the fact that we are having this conversation is ludicrous. when a company is going to put $350 billion in the economy in eight years, that's end of story, why are we having the conversation. >> you know what's funny, stuart, where is the money from microsoft and other tech companies, poll, it takes some time. left media, it takes time in the board room to get approval to get this stuff moving. it's not like we have tax package two weeks ago and millions of dollars are going flow back, it's going to take a month or two. let's be patient. liz: apple made interesting disclosure. it's a broad spectrum. they said -- something like half a million software development jobs are unfilled, they are empty, vacant in this country and that's going to triple by the year 2020. that's what apple said in the release. stuart: half a million? >> half a million software developer jobs are unfilled. those jobs are outstanding, they

said numbers will nearly trip until a few year's time, that's where the push is onto fill the jobs. stuart: scott. >> if you're looking for a job and in you're in kenneling or going to the fall, software and services is where you want to be, there's jobs waiting for you. stuart: that's been that way for 20 years. >> they are growing. stuart: we have breaking news this morning from amazon, they've narrowed the list of candidates for where they are going to have the new second headquarters. the stock go down actually. >> 15,000 high-paying jobs at second headquarter, amazon 238 applications, they are down to 20, there's atlanta, austin, boston, chicago, nashville, you name it, miami, all the big metropolitan areas, only one outsider, the u.s. in toronto, canada still in the running. liz: wouldn't it be funny if it went to toronto, stuck it to

donald trump, versus northern virginia, dc. stuart: they have the narrowed the list for 20 candidates, what they are trying to do is get more money out of is -- the states. scott, do you own any stocks? >> broad-base exposure to financial sector. >> are you going stay in it? >> we are. they borrow money short and lend them long. you can buzz me for that. thank you, i got that. credit card is up in the borrowing side. stuart: show me the big board, please. town a tinny fraction. down .14, the dow has gained 700 points in last three dadeing

sessions, when you only get a pullback about less than half a point that's not a pullback at all. that means the rally, it certainly looks like -- 26,113. that's where we are now. look at ford motor company, down big yesterday, they have a weak profit outlook, they are down a bit today, $12 a share. the daughter of media mogul renewing report to merge the company, both cbs and viacom up. new ad measurement tools, advertisers will be able to know which ads are watching in ruku streaming devices. the market kind of likes it. a bunch of streaming news. mogul rights that is to nba league pass, verizon, nba, they will team up to make original programming. yahoo, they will stream sunday's

nfl championship games. scott, all the streaming. >> it's all about streaming. you know what i love about the story, it's what amazon and facebook did, they are starting to stream sports materials along the creation of content, they are broadening their base, that's what's good about streaming stuff. like you said, some people are cutting the cord on comcast, grow to yahoo or facebook to catch sports events. stuart: chipotle, they have quietly raised prices in all of their restaurants nationwide. i'm surprised that they have the price in power to do that. liz: food truck is down because of the food borne illnesses, multiple instances last year, raising 5 to 7%. burrito chicken, whatever, 30 cents more, quite the -- stuart:

ibm, a company that fascinates me. it's old tech, down in the dumps, started to come back, they had an upgrade, i think, from investment firm, they have linked themselves to shipping giant, look at them go this morning, up 2 bucks at 1.71. brian, seems like everybody does well, if it hits your wagon the block chain. >> they are being more public about it. block chain and bitcoin, bitcoin is the problem right now. nobody wants to touch that, but block chain technology is more fundamental, i think ibm will be well positioned for that this is a good move for them. stuart: here is my point, where the future may be. bitcoin, forget it. goldman sachs wants to become

part of crypto currency after receiving requests from clients. liz: watch this, goldman sachs dropped below morgan stanley in market value. so goldman sachs is feeling the a world of hurt on trading desk right now. ashley: goldman sachs said there's no doubt, that's the future, a digital ledger essentially that can keep track in digital world, bitcoin, crypto currencies, forget about it. they see do potential for them and clients in block chain. stuart: way up there and now 188, now it's 177, announced changes to news feed that may, repeat, may hit ad revenue. scott, you've always been a big supporter for facebook, you're telling everybody to buy the thing? >> still doing it. what happened last week was a gift in my opinion. the mobile ad revenue is amazing. if you look at what mark

zuckerberg is doing, they are making changes and reactions quickly to what's going on in facebook to make things better. that to me is something different than what we have seen in tech companies in five or six years, they are reacting, they will make the product better, they are going to make it more efficient. >> 940 eastern time, that's the time we say good-bye to scott and brian. >> go vikings. [laughter] stuart: whatever. check the big board. virtually no change here. as i said, we have gone up 700 points in three trading sessions and this thursday morning we are down 3, hardly selloff. fake news can have real economic consequences, abc brian ross, makes false report on the russia investigation, that sent the market into a free fall, that report scored mr. ross one of the top spots on president trump's fake news awards. we will rap -- wrap it all for you after this.

note 123450 sphoo

stuart: well, we started out this morning with all-time record high, we have retreated a little. now dawn 25 points, just below 26,100, please take a look at wal-mart. that's a new record high for that stock. $104 a share on wal-mart. it is a dow stock. boeing's rival air bus is one what we might call a lifeline for that a380 jumbo jet. they are bringing it right back, why? >> if the deal went through the, jumbo jet stays alive, otherwise will go like boeing, boeing has been pushing the 777, the dream liner, this is the super jumbo, double-decker, 544 seats, they get this deal air bus of up to

36 super jumbos, a380, the deal is worth $366 million. it's higher by 1% and then there's boeing, boeing pulled back and boeing dropping today. boeing has been a behemoth for the dow jones. stuart: the president's fake news awards for 2017, number one new york times, claimed on the day of president trump's victory that the market would never, ever recover. number two on the list, the market swoon after abc news brian ross false report of russia investigation. roll tape. this is an extraordinary volatile market, moments ago we were down 340, now we are down

260 points. 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. bottom line is that fake news can have serious economic consequences, i think the dow jones dropped 350 points on fake news there. andy puzder is there, america first policy, i repeat that, fake news can have serious economic consequences. >> right, it's probably intended to. the left-leaning media and democrats would do anything they could to cover up tremendous economic surge we are going through under president trump, the stock market is one of the obvious sign that is the economy is doing well. stuart: i'm astonished as how little reporting this exploding market and this growing economy gets in the mainstream media, it's not there. >> you know what, i can't wait

to see what happens when fourth-quarter gdp is released. stuart: very strong number. the new york fed says 3.9%. that's not a bunch of conservative economists. they are saying 3.9. i don't think it's even a big risk to see 3 and a half. stuart: i'm dying, if that comes in at 3.9-4%, that would be wonderful. president trump is going to play some defense in pennsylvania ahead of special election, he's work to go get more republicans in power, he is campaigning today, isn't he? >> he really is, although they are not setting it up that way, they are setting it up that he will be talking about the benefits of the tax bill and the -- stuart: that's campaigning. >> saccon will be there. i don't know if he'll be mentioned, you never know with president trump. he needs to get out there more and let people know the benefits

of this tax bill and so do employers. employers they gave employees raises, they are going the keep a bigger percentage not only of raises but prior check ifs they didn't get raises. employers need to let their employees know that this is because of the tax cuts, because they've been told that they wouldn't get any benefit, some of these employees, employee who is got raises and who will get tax cut, benefited from business tax cut and the individual tax cut. and they've been told they wouldn't benefit from either by the democrats and the press. employers need to tell them and employers need to tell them. stuart statute you don't think it's being sold aggressively yet? >> i don't think it's being sold aggressively yet. really, there's no risks, paychecks are going up. the average workers that makes $50,000 will make $100 a month that. can pay for gas bill, cell phone bill and utility bills, this is meaningful to people. four out of five people, workers

in america live paycheck to paycheck, this means -- forget what nancy pelosi says about chump change. there's no risk in telling people out there that this is going to come. stuart: mick mulvaney told us yesterday that 90% of workers will see increase in paycheck in february when tax rates are adjusted. >> what's the risk? >> i'm going the play devil's advocate? >> that's okay, i'm a lawyer. stuart: a recovering one. some people say that's peanuts. they will say that. >> 100 bucks to somebody whose gross income is $50,000 a year, that's not peanuts and i think the people that are saying that are just showing coastal cultural elitism. nancy pelosi is never going to need extra 100 bucks. this woman is very, very wealthy. i made very little money for

many years as i was trying to get through school and had family, 100 bucks meant a lot back then. the tax cuts are not just for the rich. these aren't just for the rich. stuart: do you miss politics? >> well, no. i get to play a politician on tv. [laughter] stuart: you're staying in holiday express. [laughter] andy puzder, thank you so much for joining us. >> great to be here. stuart: check dow 30, where are we now? that's not a selloff, dow is 3 points down. even split, winners and losers among dow 30 stocks. more fake news, cnn's chief medical correspondent gupta diagnosing president trump with heart disease without ever examining the president, more varney after this how do you win at business? stay at la quinta. where we're changing with stylish make-overs.

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stuart: all right, the market maybe dead flat but that's not stopping a half dozen dow stocks touching historic highs, look at them. apple, wal-mart, visa, record highs today. home depot, united health, 3m, record highs today. record highs, six of them, six dow stocks. politics, time running out to avoid a government shutdown,

joining us ohio congressman. sir, you're on the budget committee, you're a key guy here. give us the odds here, what's the odds of a shutdown tomorrow night? >> good morning, stuart, t great to be with you again after a while, but those -- i hate to pick odds because every time i say we are not going to shut down the government, i've said that time and time again, we will come up with a solution, at the end, i'm frustrated too. i want to see -- stuart: you think we are going to get a short-term deal that'll fund us for a month or whatever it is and avoid a shutdown, that's what you think is going to happen? >> yeah, it's the way washington works, it's the frustration for me because i don't think we should do this. we have a military we have to fund, a lot of things. some things added to it like chip and a few others, but, look, a short kick the can down the road because we don't seem to compromise and move the ball forward with the american

people, that's the just rating thing for american and frustrating thing for american people as well. stuart: how long would cr last for, continuing resolution, is it a couple of weeks? >> 28 days, three weeks, somewhere in the ballpark. stuart: we are back again in 28 days to where we are now, aren't we in. >> well, stuart, i think i was on your show two weeks before christmas and said i didn't support the two-week extension, we will be back before christmas and in january and my prediction came true. stuart: the president will go to pennsylvania, do you think he will pound tax cuts an growing economy? >> i think he should. companies are growing, they are giving bonuses out. this is a good thing for middle america. i was with a bunch of blue-collar union workers two days ago talking to them, they want to see that back in their paycheck, it's their money and by the way i heard the earlier guest on your show, look, a lot of people are living paycheck to paycheck and, i think, there's

something out there, 60% of americans have less than a thousand dollars in the bank, you believe believe a hundred dollars is a lot of money to them. stuart: you to sell it, pound it aggressively. i've had my say, thanks for coming back on the show, we missed you, we will see you again real soon. >> thank you, stuart, see you soon. stuart: nancy pelosi calls the bonuses companies are giving out are crumbs, constituents of apple are getting stock grant. my take at the top of the hour. you will also hear my take on paul, global economists who said the market will never recover from trump's election, we are getting warmed up. stay right there. well, a 103 yeah, 103. well, let me ask you guys. how long did it take you two to save that? a long time. then it's a fortune. well, i'm sure you talk to people all the time

who think $100k is just pocket change. right now we're just talking to you. i told you we had a fortune. yes, you did. getting closer to your investment goals starts with a conversation. schedule a complimentary goal planning session today. . . . .

stuart: well, the tax deal gave business just about everything it wanted. so is business using the extra

money responsibly? capitalism is on time. does capitalism work for everyone? yes. and the news from apple is a final fine -- fine example of doing the right thing. 10 billion invested here for new data centers. 38 billion for the united states treasury. all of this and more to come because trump and the republicans cut taxes. forgive me, but i have to bring up nancy pelosi's statements about the tax cuts. first she said it was a armageddon. that 80 million americans will face a tax increase. i will let that stand. no comment required. when business is passing along only pathetic crumbs, comment is required. nancy pelosi represents apple employees. 350 billion invested in america, that thousand new jobs, is that

crumbs? nonsense. let's put the burden on ms. pelosi. she and her husband own two vineyards. not clearthey get a special deal for wineries in the tax plan but they will get a much lower profit tax rate. money will come at them. will they pass along some crumbs to their workers? let's see. meanwhile, we're waiting for all the other shoes to fall. there is 2.8 trillion in corporate profits parked overseas. a big chunk of that will come back. in short, capitalism is passing the test. corporate america got a big break and corporate america is passing it along to employees, to shareholders and customers. it is not crumbs. it is a win for america. second hour of, was saying round, second hour of "varney & company" is about to begin. ashley: ding ding. ♪ stuart: here it is, the latest

read on mortgage rates. don't tell me, 4%? ashley: very good. 4.04% to be exact. for the 30-year freddie mac. that is up from 3.99% last week. we kind of expected the rates to go up. the 10-year yield on treasury are on the way up. still 4.04% for a 30-year fixed loan, pretty darn good. stuart: we haven't said it for a long time but i think we should. i bought my first house in san francisco in 1970s, paid 12 1/2%. ashley: 1980. 18 1/2%. >> liz sy is laughing. markets are down overall. see the big techs. apple at an all-time high. it retreated a little bit from that high. facebook is up. microsoft up 17 cents but at $90 a share. also check walmart, visa, home depot, you unitedhealth,

3m, all dow stocks all of them today, this morning, hit all-time record highs again. morgan stanley, look at it go. it's a 10-year high put out very nice earnings report. the market likes it. 55 bucks a share on morgan stanley. alcoa, oh, not good, down 7.8%. they lost money again. that is the bottom line here. a 2 bucks a share. down -- 52 bucks a share. down $4. top of the hour apple makes a huge investment in employees and in america. joining us lawrence jones, host of the blaze. that is not crumbs the give-back. i said at top of the hour, capitalism is working. what say you. >> it is working. officers i have to apologize you to last time i was on the show in person i was upset about supporting tax reform bill because i didn't think it went far enough. i thought it, didn't go far enough. stuart: apology accepted.

>> it would be a little bit more. i didn't think it would be that much beneficial but it is killing it. it is, these employers are putting their money where their mouth is. they're investing back into america. i'm sorry nancy pelosi is wrong. when you have people living paycheck to paycheck anything helps. that thousand dollars will go a long way for people that don't have money to take care of their kids on a day-to-day basis. stuart: just getting rolling. microsoft has 100 billion overseas. liz: this runs up against the democrat narrative that tax cuts were only for the rich. how do you fix income inequality? get people a job. best thing for poor people is to work. poor people want to work. people in lower income brackets want to work. they want jobs. >> quality jobs fixes all things. >> companies like walmart, democrats have been asking for wal-mart for years to increase minimum wage. didn't take government to do it. walmart did it by themselves.

government is fostering a environment that is business-friendly in return they will take care of their employees. stuart: lawrence jones is a happy camper this morning? >> i'm happy today. stuart: stay right there. we need some of that good stuff. i want to bring in gary kaltbaum, kaltbaum capital management, again, same point. i say business is coming through as we hoped it would. what say you? >> look, all government can do is set the conditions for businesses to thrive and for a very long time we haven't had it, and now we're getting it. within a month, we're only a month into this, we're seeing what is the possibilities. this apple thing, we're talking about it, we're talking numbers. it is gargantuan, not just because of apple, but who will follow. there will be a ton more. there will be more bonuses. there will be moressing of benefits. there will be more money coming into this country. that is all we can ask for. you know, i am more than

surprised. i thought the corporate side of the tax bill is fantastic. it is not just an home run. it is aance absolute grand slam at this point in time. we're just at the beginning. stuart: okay, we'll take that, gary. hold yourself back, lad. you tell us about general electric. i think it is at another six-year low. it is down to 17 bucks a share. would you touch ge with a 10-foot pole, gary? >> not at this point because they keep surprising negatively and i have just been speaking to my radio listeners, what did immelt do, why was this only reported after the fact? it is amazing to watch. i would stay away. i think there is going to be a big breakup to happen. we don't know in what shape or form at this point in time and they have already lowered the dividend. they may have to do that again as we move forward. i always compare ge to 3m, they're both kind of conglomerates. 3m soared. they kept earnings consistent.

ge going the opposite way. i want to invest in greatness, not what we're seeing in this company right now. stuart: would you invest in ibm? this is turn around company. i saw them drop to 150 a share, they're at 169, 170. they have become kind of a black chain company. i know you have strong feelings about bitcoin blockchain but would you buy ibm at 170? >> i have to wait for earnings. the answer is no and the simple reason why this company has not had sales growth for three or four years. last quarter they used a 12% tax rate which makes things look better. i think they have taken a lot of advantage of buybacks in the past but look, anything's possible now with a weaker dollar, multinationals do better. i want to see reaction to the number first before i think about it, it is big lagging dow stock over the last few years. stuart: real fast, i got 20 seconds for you, this market

will take off some more on the upside this year in this market, yes? >> i believe in the end we'll be much higher. i believe during the middle, somewhere in here we got to have a correction. the bulls are smiling too much and the bears are very depressed. sometimes that will change during the year. i expect a decent correction first. stuart: we'll be here to cover it. gary kaltbaum, thank thank you,. see you real soon. now this. white house chief of staff john kelly speaking about the president's tweets. roll tape. >> i was not put in this job to change the way the president of the united states does business. i was put in the job to make sure the staff process better informs him on a range of issues. he often times asks me, i'm thinking of reinforcing whatever message on that given period of time, with a tweet, what do you think? absolutely. sometimes he doesn't ask me that. he doesn't have to ask me that. stuart: okay, doesn't have to ask me that, okay. lawrence, do you think the president should rein himself in

on tweets and wild statements? >> i go back and forth on it. i understand the entertainment aspect of donald trump. that is how he speaks to the people. sometimes the president steps on his his own message. that is problematic. i would prefer he talk about unemployment for black americans being at 45-year low, lowest it has been tracked instead of liberals talking about raisist comments he said before they perceive as racist. when you have the narrative being about what he said versus what he is actual doing policywise i think that can be problematic but again that is the way to connect with his voters and his base so you don't want to step on it too much. stuart: in a presidential election do you think president trump, say in 2020, do you think president trump could get 30% of the black vote? >> with black unemployment being this low, i think he has a really good shot but key is going to be the white house allowing the president to get on

the road and talk about that with black voters. nobody else can communicate like donald trump. he has to go to the people, ask them for his vote personally, show the accomplishment he has done not just for all americans but black americans specifically. what he said, what does you have to lose? i think he proves you had nothing to lose by voting for him. stuart: stay there, lawrence. good stuff. appreciate it. it's a bad situation for the situation, jersey shore star mike sorrentino agreed to plead guilty in tax fraud case. he have and his brothers were accused of not paying all taxes own on mike's 8.9 million in earnings from 2010 to 12. i didn't mow he made that much. the situation is facing 15 years behind bars. president trump's fake news awards. paul krugman after the markets

would never recover after election night and abc's brian ross for false reporting. 're allverhe fake news as you eect. house budget chair diane blac wl tell us how close they areo a comprise. you are watching the second hour of "varney & company". mike and i are both veterans, both served in the navy. i do outrank my husband, not just being in the military, but at home. she thinks she's the boss. she only had me by one grade. we bought our first home together in 2010. his family had used another insurance product but i was like well i've had usaa for a while, why don't we call and check the rates? it was an instant savings and i should've changed a long time ago. there's no point in looking elsewhere really. we're the tenneys and we're usaa members for life. usaa. get your insurance quote today.

stuart: now we're suddenly down 53 points. why would that be? i'll tell you why. because there is one dow stock in particular that is really selling off big time and that is boeing. look at it now. it is down 2 1/2%. down $8 at 342. as i said boeing is a dow stock. when it false as sharply as this, that accounts for much of the overall loss on the dow industrials. there you have it. the grocery store chain

kroger actively recruiting management people. it will invest $500 million in workers over the next three years. how about that? kroger is a grocery store chain. ashley: big chain. stuart: you don't hear of them putting a lot of money in. kroger is doing that. several companies are, i don't understand this companies are apologizing to china. what for? liz: they listed taiwan as their web sites as independent country. china got very upset. retaliated. demanded apologies. one company, marriott, chinese police showed up at their door over in china saying you're violating our policies here. we're talking quantas, looking at companies apologizing to china on the screen. other companies still list taiwan and hong kong on their websites, talking uber, amazon. the other thing that is happening, president trump may reveal before his state of the union address a big retaliatory fine against china for stealing

accusing them of stealing our intellectual property. you have to move intellectual property there, allegation china steals it it could be tariffs, trade action. people talking about a new trade war with china before the state of the union address. stuart: to coin a phrase, that would set the cat among the pigeons. let's move on. president trump unveiled the fake news awards, top two, numbers one and two. they were financially related. "new york times"'s paul krugman snacked number one spot. abc's brian ross took number two. we have michael goodwin, "new york post" columnist and pulitzer prize winner. he is sticking it to the media. >> president trump is a blunt instrument. i wish it weren't necessary but in these cases paul krugman is a opinion columnist. his opinion was pubs are evil

and therefore the markets will never recover. stuart: he made a forecast. this is it. on election night it, really looks likes president trump and markets are plunging. if the question is when markets recover, first pass answer, never. how wrong can you be. >> that is absolutely wrong. this is brian ross thing they want the story so badly, they have written a conclusion. all they needed was a fact. ross thought he had a fact. jumps on it about russia but it is wrong. it moves the market. stuart: moved the dow 300 points. >> but i think all this begins with bias. it begins with and ignore rans about trump, about people who supported trump, about the impact of trump. i mean these are all pro-obama people, pro-hillary clinton people. they could not stand to see somebody different, donald trump in the white house. so they attacked with you will their weapons and they were wrong. stuart: they're pejorative constantly. i give you what i think is example of that.

cnn's sanjay gupta, he said this after the president's health report was released. roll that tape. >> a fuse years ago dating back to 2009 he started to have, president trump had these tests are actually looking for the presence of calcium in the blood vessels that lead to the heart. those are coronary blood vessels. steadily, up until just this past week when he had it performed again those numbers have gone up. when they get to a certain range, number in the 130s, that means he has heart disease. no question by all standards, all metrics, any doctor, cardiologist would look at it, the president has heart disease. it is controllable. stuart: don't we all have heart disease a fraction away from perfect? >> again this is all about the bias. this is all about we have to find something wrong. never before has a doctor, after an exam of a president given so much information. the cognitive tests the president wanted was all because psychiatrists are out there,

michael wolff's book, he is unfit, he is mentally unstable. so that is disproven. but it doesn't matter. they will find something else to say because their aim is to destroy him. it is not, it is not to report on the president. it is to destroy the president. stuart, we have never seen anything like this in the history of american journalism. stuart: i think it is a disgrace to journalism. >> absolutely. stuart: especially when it is not doing what it is supposed to do. >> the president giving fake news awards. i wish it weren't necessary. what else is he supposed to do in this environment. stuart: quite right. propaganda, basically. michael goodwin, thanks for joining us. see you soon, i promise. >> my pleasure. stuart: president trump out on the campaign trail basically. he is in pennsylvania. i say he is there to support a republican candidate. i think he should be pounding the table and selling tax cuts. i hope he does it. we'll be back. ♪

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stuart: chipotle quietly raised prices in all the restaurants nationwide. doesn't help the stock. it is down a fraction. president trump in pennsylvania later on today. i will say he is on the campaign ail. he is there to support a stggling candidate forhe house. am i right, jeff, he is supporting a republican candidate? reporter: two prongs, stuart, fair to say. one to push his economic successes. one to support rick saccone. i'm on the the streets of corop. i'm going to pennsylvania to give my total support to rick

saccone to run for special election. the president says he is a great guy. we neat more republicans to continue our successful agenda. rick is a huge supporter, saying i was donald trump before donald trump was donald trump. republicans have not done good in the governor's race in virginia and alabama, where a long-time republican in the state legislature just went for a democrat went by about 10 points as a matter of fact. i should give you a sense what the president has done here in pennsylvania. if you look at a map, he won pretty much every county in southwest pennsylvania accept pittsburgh which is allegheny county. what james carville said about pennsylvania. on the left-hand side you have got pittsburgh. on the right-hand side you have got philadelphia. in the middle you got alabama.

stuart: good one. that is a good one. jeff, thanks very much. i'm sure you will be on fox business all day long on the frigid streets. thanks very much indeed. lawrence jones is with us. i say the president should pound the table for tax cots and what it does for america. i think he will. >> all republicans including the president, need to stop talking about everything else exempt money if they want to win. i'm not saying other issues don't mat per you you have to tell them about something tangible. if you convince them, there is not convincing. look at the pay stubs. when they see that, that is how you win. all this other stuff is noise. stuart: that is how he helps rick saccone is. if the man is in trouble in pennsylvania -- >> if you continue this path we're going as a country, you have to keep republicans in control.

stuart: there is risk. if mr. saccone loses receiving backing and from mr. trump. >> correct. we know what happened in alabama as well. the president risked political capital. he doesn't want to risk too much political capital but we need that seat. stuart: lawrence, by the way, tomorrow on this program, "varney & company," rick saccone for whom the president is campaigning today, he will on this program. there will be more "varney" after this. ♪

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♪ stuart: yes, yes. ashley: revolution. stuart: revolution. revolution. stuart: you see you want a revolution. that was back in the day. check the big board, we're down 76 points on the dow industrials. we're still above 26,000. how about that? one of the reasons for the dow's decline is boeing. it is down today. it is a dow stock. facebook on the upside. amazon on the downside. microsoft on the upside. alphabet down, apple up. not that much movement. ibm up again. it is linking itself to blockchain. it has an upgrade from one much the analysts. it hit 171 earlier. back off of 169 now. our next guest launched a great america great again etf. it is only has stocks friendly to republicans.

it outperformed the s&p. some of the companies in the etf we showed them on the screen moments ago. they include caterpillar, chevron, boeing, home depot, halliburton, among many others. we have the executive director at point bridge capital and he runs the etf i know i read your stuff. you are bullish. you're saying right now we go up 10% on the s&p by the end of the year, is that correct? >> actually i'm bullish into the summer. i think we could do 10% into the first half of this year because of tax cuts and economic policies president trump has been pushing. stuart: do you think the tax cuts and these policies of growth, they're strong enough to give us another 10% on top of what, the 30, 35% we've already had for the s&p? >> i do. although, you know the elections in november are going to be key. i think we could see a pause this summer and volatility to the downside, people are

focusing whether or not the republicans hold the house or the senate. stuart: how will you structure your fund if you think there might be a pull back in the summer? what would you do now. >> one of the things we've done is, this fund is really an alternative for the esg or socially responsible investing fund out there. most of those are left-wing, policy type fund. conservatives and republicans really haven't had an option out there. so at point bridge capital we first created first ever republican stock etf. these companies are in the s&p 500. we looked at political contributions of the pacs and employees. we took the top 150 republican-supporting companies that will support the president's promise and put those in an etf, ticker obviously maga. that is really what this is. this is alternative to that. we're calling it politically responsible investing so republicans an conserve activities have an option. stuart: i honestly didn't know you were so closely linked with the president's economic agenda

and republican policies. didn't know that congratulations. you have obviously done very well. question, now will you add apple to the list of companies you will buy? >> no, not currently. they are one of the top democrat donors. in fact over 90% of their political contributions go to democrats. their pac is highly democrat. they were highly supportive of hillary clinton. so they're supporting, ironic they're doing the right thing which is bringing money back from overseas and creating jobs but those were all done because of president trump and the republican tax cuts. would have never happen had their candidates they support had been put into power. so it is interesting that they have done what they have done but if they change and start contributing to republicans, money matters in politics. so if they change and start contributing to republicans then we'll change. stuart: let me ask you about the other big-name technology companies. we follow them very closely because they have done so well. i mean the microsofts, googles, facebook, alphabet, and of course apple, would you buy, put

any of them, any of those big five into your fund? >> only if they changed their political giving. right now they are all heavy, heavy democrat supporters. you know you saw that tim cook at apple came out against president trump's daca policy that he wants. you know, that has nothing to do with apple. so those companies are really not contributing to the interests of their shareholders because these stocks are going up because of the tax cuts. so it is kind of interesting they're against their own shareholders in their political giving, i think really for social reasons. stuart: hal, thank you very much for joining thus morning. very interesting fund. i didn't realize you were so political but we kind of like that. >> thank you. people can learn about this at invest politically.com. and look at what we have. stuart: you got it, hal lambert, thank you we appreciate it. >> thank you. stuart: there is this possible government shutdown. freedom caucus chair mark meadows says he thinks the chances of a shutdown are low,

because, quote, nobody wants one. all right. just take a look at this for a minute. during the last government shut down, october 2013, the market barely moved. i mean, it lasted 16 days. that was the shutdown. that's it. the dow was actually up 1%, virtually no movement elsewhere over 16-day government shutdown. look who is here. congressman diane black, republican, tennessee. heads the house budget committee. diane you will probably disagree with me here, i will say this i say shut the government down, the national interest demands an answer quickly to the immigration problem and an answer quickly to spending more on the military. shut it down. bang heads together, get it done. i know you don't agree with you,. >> stuart, i don't agree, with on banging head and getting it done i do agree with you there and i believe we should have had this already done at this point in time but i don't believe it

is in the best interests especially with the optimistic move, with all the people getting more money in their pockets which they deserve, their taxpayer dollars. we fought hard for tennesseans for that. i don't believe that is in the best interest. we're very close to having a daca agreement. stuart: you are? really? >> yes, i believe that we really are. stuart: conventional wisdom has it is falling to piece. >> well, i know that out there in the public that when they look at us, sometimes i look at us think, wow, can't they ever get anything done in a timely manner? but just the fact there is a lot of work being done behind the scenes where you're not seeing it out in the media which is probably good, i believe daca will come hire in the short term. we want to define what short term means to congress, right? we have some good things going on and i don't think we ought to step on that. >> what we would like to see, gem renace was on the show about

an hour ago, we'll probably get a cr, a continuing resolution, things stay until where they are until the end of january or beginning of february, then they go back all over again. we'll get a short-term deal, is that what is going to happen? >> i think that will be what happens. it is a short term deal. what concerns me we look at military. i know we have got to take care of our military. it was not done under the previous administration. as a matter of fact the military has been really decimated. when we look at men and women that serve our country, we have to give them what they need. first of all to keep them safe. then also to keep our country safe. and so that is still a point of contention about upping money for military. you have to fund the military and so our men and women are kept safe. stuart: you are leaving congress, aren't you? >> i am not leaving congress. i did relinquish my chairmanship

on the budget committee. i'm still on the budget committee. look, i won't be able to keep quiet. i will keep on putting my two cents in. i believe the budget is the main role what we have to do here in congress to get our country in order. stuart: i'm so sorry that i ever said anything like that at all. i'm very sorry, diane. >> not a problem. stuart: come back and see us. >> we corrected it. stuart: see you soon. thank you. same topic, look at the president's tweet this morning. a government shutdown will be devastating to our military, something the dems care very little about. general jack keane is back with us. fox news strategic analyst. make the case because you have often made this case on this program, that we really do need to peeve up the military. spell it out again please, sir. >> even a government shutdown, that is so embarrassing to the united states on the world stage. we look weak and incompetent. even if they get the so-called continuing resolution like your

previous guest just described there is no help there. that keeps us, the united states military, at the 2017 levels, which produced what? 50% of our airplanes are not flying. only half of the our pilots are getting flying hours they need. there for mishaps are going up. ships banged into each other because sailors are overstressed at sea, they are not getting training they need. five of 58 army brigades are ready for combat. that is -- continuing resolution as the name implies, continues low level of funding for the military. we're already four months into the fiscal year which began on 1 october. we have not made one iota, not one positive change as a result of the president being in office for 12 months in terms of the additional money for the military. not a single dollar.

stuart: therefore, shut it down, make everybody aware we need the money for the military. shut it down, bang heads together and make progress. where am i going wrong? >> banging the head together without shutting government down is a disgrace. i disagree with you there. we have to wake up. all the congressman are saying same things. but nothing is happening. we are not funding it. the president signed authorization bill, stuart, of $700 billion. but none of that money has been appropriated. the congress has not approved the appropriation bill which really writes the checks. that still has to be done. we have got to stop these continuing resolutions and fund a military budget. stuart: keep pounding the table, general. because clearly we need it. thanks very much, general keane, always a pleasure. thank you, sir. >> good talking to you, stuart. stuart: yes, sir. totally different subject now. remember the winkelvoss twins, the bitcoin people basically this they own 120,000 bitcoins

we're told. they lost $600 million in a couple days. bitcoin's recent drop is due in part to fears that south koreans will crack down on cryptocurrency trading. where is it now? it struggled back to $12,000 per coin. got it. check this one out too. tea drinkers reportedly more creative. the caffeine and tannin in tea improves mental speed, accuracy and focus. for viewers at home, the three of us drink tea on the set. ashley: yes we do. stuart: in stereo. ashley: we're very bright. [laughter]. stuart: you can try. president trump has his eyes on the midterms. out on the campaign trail today in pennsylvania backing up a republican candidate there. more "varney" after this. ♪

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stuart: we are down 50 points on the dow industrials, still well above 26,000. but still down. why? boeing a big drag on the dow. after rival airbus announced an order from i am her rats air for the a 380 jumbo jets. dow is still the leader boeing is still the leader with 16% rise. that is dragging the dow down with it. congressman trey gowdy says this about the russia probe, roll tape. >> there is no evidence of collusion between donald trump and the russians, between the trump campaign and the russians. even between frankly, between hangers on and wannabes on the

campaign. stuart: katrina pierson, former trump campaign national spokesperson joins us now. katrina, this is never going to go away. what are you going to do about it? >> actually, stuart, i do think it is going to go away, because there is no evidence of collusion between the trump campaign and russia and there is evidence of collusion with the clinton campaign and russia. so the real question here is, now that we have this mueller investigation, that was essentially a signal to investigate this connection combined with hillary clinton's supporters and dnc donors, all the evidence circles right back to them. so what is the doj going to do now? they should be ending this traitorous witch-hunt against a sitting president of the united states and assembling a new counsel to follow the evidence. stuart: but you know that most people are not following the ins and outs of the mueller investigation and the fbi.

we're all really lost about who met who and said what. one thing i do know the establishment media will never ever let this go. they will always maintain rightly or wrongly, there was a deal between president trump and russians to mess around with hillary's campaign. they will always come back at that. >> strangely enough, i have a little bit of faith in the house intelligence committee as this thing begins to wrap up. they do have information since the courts ruled in their favor for fusion gps to turn over their records. we already know there have been report that's were paid to contribute to this dossier. i think once that information comes out at the end of this testimony, i really don't think they will have a choice but to cover this information. i do think moving forward the doj will have to get involved. stuart: how long will this take? we've been messing around with this for 14, 15 months, whatever it is. it never seems to end. you're telling me at some point the house intelligence committee will come up with something

concrete. when is that going to be? >> i think they're wrapping up to the investigation, if you listen to recent reports it could be end of this month or beginning of next month. i am confident with the information has been uncovered, like i said the courts recently ruled in favor to have the documents released. we're seeing the doj and the fbi release more documents. i do think we'll get to the bottom of this. then shift the investigation where it needs to go and then, every single individual, entity and rogue government agent that participated should be fully prosecuted to the fullest extent of the law. stuart: if they did something wrong. >> absolutely. stuart: katrina, thank you so much for joining us. i'm very sorry it was so short. it is full news day. you know how it is. >> thank you, stuart. stuart: good stuff. how about this for fake news? economist paul krugman on election night said the markets will never recover. did he get that wrong or not? that comment scored mr. krugman's top spot on the president's list of fake news

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stuart: president trump, well, shortly he is going to be on his way to pennsylvania making a big speech there.

i think this is a perfect opportunity for the president to pound the table for his tax cuts and the resulting economic growth that we see in america. pound that table, mr. president. let's see if he is going to do it. assistant secretary of the treasury tony sayegh is with us now. do you know what he is going to say and will he pound the table for tax cuts? >> stuart, great to be with you, and i can tell you that the president could not be more excited to take promotion of benefits of tax cut and tax reform to pittsburgh today. we're seeing the clear benefits in the last month it has been signed, overwhelming the country with announcements you've been covering. two million workers receive ad direct benefit as a result of tax cuts an bonuses raise in pay, that has nothing to do with the actual tax cut they ultimately get next year. starting with holdings, see it in the paychecks by february. so the president is very excited about this we'll be doing this many times. you can rest assured about that. stuart: that is interesting the he will be doing this many times, not just the speech today

in pennsylvania but you have a schedule coming up with a lot more speeches? >> we're fully committed to promoting the benefits of tax cuts and tax reform across the entire country for american workers and families. we're seeing since one month tax reform is passed the american people are starting to understand the benefits apply to them, despite a lot of misinformation coming out throughout the entire fall from mostly the left. we saw that in one poll, a "new york times" poll in fact a tax reform and tax cuts gained a net of 18 points in favorability. so we're seeing very quickly that once people understand how this impacts them postively they support tax reform. stuart: it doesn't look like the government is going to shut down tomorrow night at midnight. what we're being told, very likely going to be one of the these continuing resolutions, a short-term agreement carry you through until february for example, do you see it that way? >> we certainly support extending a short-term cr, so we continue the negotiations and iron out some of the details.

but the president does not want to continue to see this washington business as usual approach of short-term gap, short-term gap stop, we need longer term solution. he wants a 10-year budget deal. yes, hopefully we'll -- stuart: real fast, tony you work at the treasury. any impact from all of this on getting the tax code up to speed and on the books? >> we don't anticipate there being any issue at all, stuart, to be candid but that being said, uncertainty does not help, it does not help the economy, does not help business, does not help the market. so we in washington really need to learn to plan appropriately like companies and families have to do for the long-term when it comes to the fist can books. that is what the president is pushing for. stuart: tony thanks very much for joining us this morning, we appreciate it. >> good to be with you. stuart: we limited loss on the dow. we're only down 80 points. we had been down a little bit more than that. much of that loss attributed to boeing by the way. there will be more "varney"

after this.

stuart: in the winter is new york times columnist, nobel prize winner paul krugman. he is number one on the president's fake news awards list. why? because on election night he said. it really does now look like donald trump, and markets are plunging. of the question is when markets will recover, the first answer is never. the reality is after he wrote that the historic trump rally began. it carried the dow from 18,000 all the way up to 26,000 where

it is now. what krugman did was to allow his ideology, his politics to get in the way of his financial judgment. he detests our president and detests free market economics, he spent his entire time in the media attacking conservatives, attacking anyone who doesn't hold trump in contempt. that is why he issued such a lousy and totally wrong stock market forecast. he wanted to go down, he wants the president to fail. well done, mister president. your fake news award was dead right. the third hour of "varney and company" is about to begin. i got numbers on oil, how much is still in storage, down 6.8 million barrels, we use a lot of it, a surprise draw from the distillate, 4 million barrels, we got the price very little changed, $60 a barrel on

oil. happening this our donald trump meeting with senior military leaders at the pentagon, is expected to make a statement before he heads into the meeting, you will see it live here any moment. take the big board, we are down 70, 80 points as we speak and it is an even split, winners and losers among the dow 30. here's a look at the market since the election. the dow is up 42%, s&p 30%, nasdaq composite 40%. mister krugman was dead wrong. john layfield, and the chief global strategist, first to you. obviously krugman could not have been more wrong but i think he let his ideology run his head. >> a cheap shot by the president, he is an economist and economists are always wrong. >> that is a fair point for the president to make, he got it totally wrong, he was a

columnist for the new york times, still is. >> pre-2000, national trade, and his nobel prize, since 2000. stuart: you are wrong yet again. he got a nobel prize because he consistently wrote nasty articles about george w. bush and those folks in norway and sweden who give this prize are on the left, constantly on the left, they love him for his politics, not his brilliant economics. >> any straley an economist, krugman -- stuart: hayek got the prize in the 1950s when they felt differently in norway and sweden. >> i am not so sure they did. they give it to economist and some conservatives. there is a wide group of that. stuart: you can stay. >> krugman is dead wrong. >> some culpability for this,

so little fact checking in the media now people can say what they want, no culpability, good for the president. stuart: back to you in a second, john, is this market going -- down 80 points, does it keep going up? >> how fast it keeps going up is a debate, nothing went right in the first six month of the year. the only worry is there is not a geopolitical event, india, pakistan, inflation, china exported, deflation for so long, they are exporting inflation, you see oil prices and copper prices, the only worry. stuart: you don't have any worries. >> food is going -- stuart: you are on tape. look at apple. they have pledged $350 billion to be invested in america, creating 20,000 jobs, $38 billion worth of taxes into the

united states treasury. i say it is great for america. i know you will disagree with me. >> the biggest sham in memory, 350 billion, $250 billion was repatriation. that money never left the country, it was always here. they didn't have 500 bills in the bank of dublin, it was not only that accelerated balance sheet of the parent but subsidiary, all they did was make some accounting issues on the balance sheet so it has always been here. that does not subjected to taxation. maybe they will buy something else but the money never left the country. stuart: you don't think $350 billion into the american economy and 5 years -- >> $250 billion was here all along. stuart: $38 billion in taxes to the treasury. >> that is significant but what do they do with the rest of the money? this monstrosity at corporate headquarters is already built and over ten years. stuart: the president emerged

from his motorcade, the limousine, walking towards the pentagon. >> all the generals were here to support our country's military. of the country shutdown which could very will be, the budget should be handled a lot differently than it has been handled over the last period of time, many years but if for any reason it shuts down the worst thing is what happens to our military, we are rebuilding our military, bringing it to a level it has never been at and the worst thing is for our military, we don't want that to happen. i'm here to support our military, our military has to be the best in the world by far and as you know it has been depleted over the last long period of time. when we finish it won't be anything like it. we need that now more than any time in the past so i am here for the military, here to support our great great and

powerful military and we are going to keep it that way but make it much better and that is what we are doing. it also means jobs. with respect to jobs you see what happened yesterday. it was just announced they are giving each employee a lot of money so our tax cuts and tax reform has turned out to be far greater than anybody anticipated and i'm sure democrats would like to blunt that by shutting down government but the group that loses big would be the military and we are never letting our military lose at any point, we are going to fund the military, have a military like we never had before because we never needed our military more than now. thank you very much. >> the president repeated several times he is at the pentagon, go into the meeting now, he is there to support the military. general keen on this program 15

minutes ago said even if you got a continuing resolution to keep the government open the military still doesn't get any extra money that it needs. >> nine years of continuing resolutions. what are we paying congress to do, at least pass a budget and if you have a shutdown soldiers and families don't get their paychecks. >> he is going to support the military. the president is in that meeting with his generals in the pentagon. moving back to your money, ibm will report profits after the bell today, the big news has been it is getting into block chain. that is why the stock has gone from the 140s, 150 to 170. is that going to help the stocks getting into block chain? >> it is, they are ahead of the curve on block chain, behind the curve on the cloud. the stock has been a priestly

but down $20 in 2013, this is not a good company, this is a hail mary they are pulling right here, something they have to do. stuart: you wouldn't buy it? would you? >> i love ibm. it is a total dead head. ibm don't call block chain distribute in technology, donated to lenox foundation, going up and -- stuart: for once i agree with you and you are wrong but we will leave it at that. look at ge, we keep saying this, near a 6 year low, has been near a 6 year low for a long time. john is still with us. the plane leaves for bermuda. with you by ge at 17? >> at 18. repatriation and unfunded pension liability, $30 billion in unfunded pension liabilities, that changes their balance sheet, doesn't change

underlying fundamentals of the company but it is a chance to reset. stuart: $17 a share. >> ceo comes in and trashes the stock, when it retires they are worth a lot more, this is ceos enriching themselves but i will buy for that reason. stuart: amazon announcing it narrowed down the list of candidates for its headquarters. narrowed it down to 20 metro areas, they are on-screen right now. it is complicated but there they are, including new york, los angeles, dallas, chicago, boston and toronto. amazon stock, no impact whatsoever on the stock from narrowing down the choices, just a ted below $1300 per share. now this current governor andrew cuomo opposing nearly $1 billion in tax increases to make up for the loss of salt

deductions. we will deal with that and now to the ice raids, northern california police reportedly say they will not help immigration officials who plan to arrest 1500 illegals in the bay area. the judge coming up on that. paul ryan holds his weekly news conference in 20 minutes, he will likely address the possible government shutdown and we will be joined by bret baer, jampacked our head, the third hour of varney just getting rolling. ♪

stuart: do you remember dennis kucinich? he asked bashar al-assad to pray for world peace. he is running for governor in

ohio. current governor john kasich is term limited out, served from 1997 to 2013. he also ran for president in 2004 and 2008. andrew cuomo proposing nearly $1 billion in tax increases to make up for salt deductions. former clinton pollster, are you on your way to miami. stuart: i blue state folks going to get the message you can't keep raising taxes? >> he is trying to minimize in an election year, the loss of the salt revenue will be huge and new york state is hurting and the governor in an election year does not want to be

cutting programs. stuart: why don't they cut taxes? why don't they learn the lesson? all you democrats why don't you learn the lesson? if you want economic growth and desperately need economic growth, you lower taxes and cut regulation. you never learn. stuart: in the clinton administration, did lower the capital gains, 97, it was done and benefits were clear. it isn't the same party, that is why i am barely holding onto the democratic party as i take my slow vote to miami. stuart: republican senator john johnson, i'm sorry, ron johnson, claims obamacare fueled the opioid epidemic, more people were able to get government-funded medicaid coverage committee easier access to prescription painkillers and some of those pills were sold illegally.

he is blaming obamacare. >> that is a bit of a tortured explanation. there are abuses in medicaid, abuses and prescriptions that are now policies that are now getting fixed but to blame president obama through medicaid and obamacare for the opioid crisis seems a bit of a stretch and unnecessary. stuart: he is doing exactly what senators on the left to do, impute all kinds of evil to the sitting president, donald trump, on the grounds that that is a good way of getting at it. >> i have advocated a global vaccination for pds, trump derangement syndrome and frankly my friends on the left and those on the right should lower their voices, cut it out and try to solve problems rather than these lurid attacks. stuart: headline in the times,

hard turn left is warming up for the 2020 race. >> i read that. six us senators are competing to be more left. goodness gracious, last we need. stuart: i know you're still a democrat but i will buy you a plane ticket back from miami because we like you so much. >> i will come back and get myself back down there. stuart: walmart trying to help the opioid fight, offering free at-home disposal kits to help customers get rid of leftover pills. it is called dispose are x. patients don't want them anymore, they can use this kit to turn them into harmless biodegradable gel, you just add water, that is what you do. half-dozen dow stocks at historic all-time highs, apple, walmart, visa, record highs,

home depot, united health, all down stocks, all of them hit all-time highs, home depot and 3m retreating a little. salt say, that is the man's nickname, coming to new york, the butcher became an internet sensation, that is all you have to do and you are an internet sensation. the 13th will even serve your dinner with salt sprinkled, is it nice to give him a commercial just like that. picture showing new york city when it was still covered in farmland. the brennan farmhouse at 84th and broadway in 1879. on the right of your screen the most recent picture of the same spot on google maps, you get a lot of that including 10 minutes from now, speaker ryan's weekly news conference, we will be back.

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stuart: scientists discover the world's longest underwater cave in mexico, more than 200 miles wrong. on average it is 12 miles underground. the first ever crystal blue lagoon in america being opened today in pascoe county, florida, near tampa, 7 acres, artificial lakes surrounded by sand and palm trees, they got water slides, cry the cabanas, the developer plans to build more lagoons in florida, texas and nevada. we do commercials for everybody, give it away. three fishermen had to jump into water to judge a speeding water boat. $400,000. the motorboat crashed into their small fishing boats, happened in oregon, the men claim the other driver was distracted by a cell phone and the driver of the motorboat says he couldn't see where he

was going because, wait for it, he was sitting down. and this one, one man claimed he was kicked off british airways because he wore too many close to me what ten should, eight peers of pants and tried to board the flight to england. he says he didn't want to pay the $125 baggage fee. there will be no hilarity any minute from now when speaker ryan takes the podium on the government shutdown, we want to see if he will pound the table in defense of tax cuts. keep it fresh and lively, mister speaker. down 87, we will be back.

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you will know it first. the big board shows a drop of 87 points on the dow industrials, we have an even split between winners and losers among the dow 30 but we are holding above 26,000. look is here. the ultimate mega bear on this entire planet, shafer asset management's ceo. i not going to be real nasty. you have been totally wrong and if i followed your advice i would have missed out on a whopping big gain. what do you say for yourself? >> i have been wrong on the equity side. >> that is what counts on this program. >> that is true but let me say something. the market is now at extremes of weighted areas in internals, we talk about correlation, i will keep it simple. the spread between the 10 year yield and the two year yield continues to collapse since last time i was here to 2007 levels. the same with 30 versus 10.

that is a very negative sign. also with commitment of traders report that comes out every friday, smart money is heavily along the 10 year treasury. i can't figure out why. they are heavily short the euro. i have an answer for this. they are heavily short crude oil, at extremes on the relative strength of the s&p index. put it together, what is happening? what is happening. stuart: we have a whopping great rally in the stock market. >> we are on the tail end of it right here. the dollar is weak and right now. stuart: where do we go down? >> january, february, a drop in the market which we will probably get here, people by that dip, try to move up into april or may and it will be down. even the stock that you own, where the stock prices are way

out of line. this has 2 up. stuart: i don't care. i'm interested in your forecast which so far you have gotten wrong. in january and february, we will buy the dip, it will go back up again. >> the banks will be the ones. that is all i get? stuart: when you are right -- you are all right. this is a headline and a half. the trump paradox, the president is unpopular but successful, that is basically the gist of dan henninger's column, the editorial page editor.

i'm reading the subheadline, this era's most disliked president has produced a successful first year in office. you got that right. >> here is a president whose approval ratings sit under 40% as it has all year long, widely disliked, probably lost the virginia election fred gillespie because so many women came out to vote not against ed gillespie but against donald trump who read them the wrong way and yet he had a solid first year. stuart: a wonderful year but carry this forward if he remains as unpopular politically as he is, the republicans lose the house, maybe the senate in november. >> it is the most remarkable development, democrats are going to run every candidate at every level of government on one issue, against trump. they have nothing else going for them. their substance is 0. the democratic national committee, trump's first year is all about the 1%.

that is ludicrous. and everything at trump's personality and just might work for them. stuart: it just might work. it is a very limited timeframe the president has left to reverse his unpopularity. he is going to bank on results of the tax-cut on the growing economy, reversal and personal popularity. >> the news is so strong, what is going on in the stock market, the president insists whether it is tweets or conversations, shooting himself in the foot, we are in the media business, with these tweets and so forth simply overwhelm the rest of the trump message which is a good message and you can't keep doing that because the margin erodes the number of people who will support him and decide they are either not going to support in

september and as i put it in the column there's a lot of people in wealthier suburbs who voted for trump but a lot of the women are turning against him. i think their husbands are not going to bother to try to talk them out of voting for a democrat in november because it is too hard to make the case week in and week out. stuart: speaker ryan talking about tax reform, see if he pound the table. >> apple announced $2500 bonuses for its employees have the largest investment any company has made in response to tax reform. this is not just the biggest of companies as well, i was in north prairie, wisconsin, last friday, i visited 0 zone, it makes refrigerator display cases, we talked how tax reform will help them expand and hire more people. these decisions are taking place across the country. this is such a change in the past year. now the conversation is about

growing and expanding. workers are coming home and telling their families they get a raise or bonus or better benefits. i mentioned yesterday in belvedere, my son's basketball game, told me he was going to get $4000 more as a result of the bonus in the tax-cut, tax reform is working at helping to improve people's lives which is exactly why we did it. next, i talked about how critical it is that we fully fund our military. it is the responsibly of our government. this is an urgent responsibility as the military faces a serious deterioration of its readiness, democrats don't seem to share the urgency at all. they hold military funding hostage over unrelated issues and deadlines that don't exist. they are threatening to shut

down the issues. our men and women in uniform, needs these resources to do their jobs and do it safely. don't take my word for it, here's what senator schumer said in 2013, we believe strongly in immigration reform, we can say we are shutting down the government until you pass immigration reform. it would be governmental chaos. this strategy is governmental chaos, i cannot agree more. we should not be playing these games was the most responsible thing we can do is avoid that chaos and pass the continuing resolution we are bringing to the floor. address the real deadlines, the real deadlines by continuing funding for the military, extend the children's health insurance program and instead of men and women in uniform

being treated like bargaining chips, the resources that they need. continuing resolutions are not ideal. that is why the house pass all 12 of the appropriation bills ahead of schedule be for the fiscal year. the only reason any one is necessary, the only reason we have to pass it today is because democrats refused to close on a spending agreement taking it hostage for immigration deal. the most responsible thing we can do for our military in the country is to keep the government open, pay our troops, put aside the games, move forward and continue to negotiate with each other in good faith. questions? >> explain why your side can't pass this bill with only republicans? >> we are doing fine. >> this bill will pass? >> members understand why on

earth would we want a government shutdown, heard the military and by the way the sequester starts kicking in in due time, that is not in anyone's interest, why we would want to feed the idea we should use our troops as bargaining chips in an unrelated deal. it is unconscionable the democrats will walk away from funding our military for something that is not a deadline. let me tell you one thing. look at the states are going to be shutting down chip in days. alabama, connecticut, kentucky, louisiana, oregon, virginia, washington state, these are states that are running out of chip money and i can't imagine why somebody would vote against doing that. >> why do you keep talking about the democrats? if you don't have confidence on your side of the are you can carry this with republican votes? >> i didn't say that. democrats could join us in passing this bill and i feel we are in a good place. >> it needs to be renewed right

away, the president signaled this morning what should be included in the spending bill. how do you negotiate with democrats and your own members if you are not sure where he stands? >> he fully supports passing this legislation, i just talked to him in our to have a go after my csi s speech. i spoke with the president, he fully supports passing what we are bringing before them. >> i was going to ask the same thing. >> let me go to the podium and. >> chip should be part of a long-term solution, not a 30 day or short-term extension. is that cause you problems? >> no it is not causing problems at all. chip funding is unique in how it works because some states are doing fine, have more money and some states don't and these short-term patches don't fix these problems so you have states that are legitimately running out of money and short-term passes -- it is another tranche of states that will run out of money. we figured out on a bipartisan basis how to renew and extend

the chip program as a bipartisan program, he does understand chip. >> rob would be on chip. the senate majority leader said he has concerns the president hasn't indicated yet what he is willing to support on a deal for dreamers. are you confident you are clear the president would or would not support? >> the president wantss a balanced deal, he wants maneuverability, he said this at the white house event you talked about, he wants to have security come a balanced deal, the purpose of getting daca right is to fix it once and for all and not create a new daca problem we have to address 5 and 10 years down the road so the president is giving legislators room to negotiate but he wants a balanced deal, the president made it clear the deal he was presented with is not a balanced deal and doesn't support that. what i have in making clears we are not going to bring a bill through here that the president

won't support. what would be the deck of passing something that doesn't go into law, we want to pass something that goes into law. again, what does this have to do with the military? what does this have to do with preventing the children's health insurance program from shutting down in all these states in a few days. what does that have to do with making sure men and women putting their lives on the line need what we can give them, what does this have to do with funding for our troops? it has nothing to do with funding for our troops and we should not use them as bargaining chips. >> i got to go back. stuart: we are going to break in. i want to turn to my good friend here, dan shafer, the man who has been wrong but i turn to you nonetheless. mister speaker just said these tax cuts are working, the economy is growing and corporate profits are going up. that doesn't fit with your

scenario of a correction coming in january or february. >> the market predicted this by the yield curve flattening is going to kill the banks, earnings coming are trading profits way down and look at that coin's volatility, this is the volatility we will experience because of what is going on in washington, they are fighting and fighting and that broke up the ancient greek society and if they don't get over this we have a big problem. at the political level, the high level, they were in fighting against each other and it became a major problem and i'm seeing this here. this is history being made the way these guys are arguing with each other and the stuff coming out and the markets will be affected. stuart: you may have moved the market. look what you did. >> i have one more. in 1973-74, when the market dropped 50% january to december the following year, january 11th, political issues

with president nixon caused the drop. stuart: maybe you did move the market because we are down 140 points dropping below 26,000. you are all right. dan henegar with us listening to the speaker's backwards and forwards with the media. what did you make of it? >> we may have had good luck in ancient greece but we didn't have a modern media in ancient greece. what you just watched with speaker ryan is the whole game between now and midnight friday is to see who gets the blame for the shutdown, right? historically republicans have always whenever the government shuts down the media reflexively says it is the republicans fault one way or another and speaker ryan is trying to tee it up in a way that the blame gets shifted over to the democrats and the issue he is putting forward his funding for the military. most people think we should have adequate funding for the military so that is the issue he is writing this on.

stuart: thank you very much for joining us, big day, appreciate you being here. oakland, california, the mayor in that city reportedly says police there will not help immigration officials. they plan to arrest 1500 illegal immigrants in the bay area. here's what nancy pelosi had to say about that. the trump administration's deeply shameful plan to conduct immigration raids in california are an act of pure malice. hard-working immigrants will be targeted and their families torn apart simply for being californians. judge andrew napolitano is here. what is your reaction to what nancy pelosi had to say? not the mayor of oakland, nancy pelosi. judge napolitano: i have no comparison for the ancient greeks on this one. look, the immigration rates are pursuant to federal law which she as well as donald trump has taken an oath to uphold.

the president has the discretion to decide when, where and how to enforce the law and if they have discovered a large group of undocumented aliens in oakland, california, and decided it is time to move in, they can do so. whether or not the state helps them is another issue. certainly we can discuss that. they -- she is saying she wouldn't do this if she were president. guess what, she is not. stuart: what is the legal standing of california as a sanctuary state or oakland as a sanctuary city i believe it is, what is there legal standing when the feds come in and say we are arresting these people? judge napolitano: there is no legal definition of a sanctuary city. it is a media definition and my understanding of it is one where local and state authorities will not go out of their way to help the feds when

the feds are enforcing the law with which locals disagree. can the feds force the locals to work in tandem with the feds? answer, no. can locals refuse to cooperate with the feds? answer, yes. can the locals hide or harbor undocumented immigrants? answer, no. that would be a felony. that is the law, pretty clear it is not even disputed. stuart: it seems to me the west coast of the united states of america is in revolt and appears frankly to be setting up an alternate government. i know i am going too far but you get the point. judge napolitano: there's quite a bit of grumbling for an effort to secede not from the union but from the state of california and to form a new state, a 51st state called new california. that only happened once in our history and it was during the civil war when what is now west

virginia seceded from virginia through violence and the existence of purported to be another country, the confederate states of america. i don't see it happening but if nancy pelosi is suggesting that the president has targeted california because it voted against him, there is no basis for that though there is a reason to believe that is implicit in her suggestion because she says he is picking on california. stuart: the only way out of this, i only have 30 seconds, is for congress to stop appropriating money for california, oregon or wherever else, cut off the funds unless they stop being a sanctuary city or state. that is the only way. judge napolitano: the only legal way but i suggest the inverse of that, not stop the funding but offer the funding with condition of cooperating with ice. there is no way they can turn out that cash no matter what

condition is and they will be locked into a contractual relationship where they will have to cooperate. stuart: i know you are down there in dc on special report. appreciate it, special report's bret baer did sit down with general kelly last night and it looks like the president might be open to some degree of compromise on the wall. bret baer joined us next. ♪ shake your love ♪ shake your love ♪ shake your love ♪ feel a cold coming on? zicam cold remedy nasal swabs shorten colds with a snap, and reduce symptom severity by 45%. shorten your cold with a snap, with zicam.

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stuart: topping the list of the president's fake news award, nobel prize winner new york times columnist paul krugman was never 2, abc's brian ross, both of the stories they got wrong involved the market, real consequences. joining us now, the hill media reporter, when krugman made the forecast the market was going to crash he was dead wrong. the other guy, brian ross, made the false report by russia, the dow dropped 300 points. my question is should the president be going right at them with fake news awards? >> one of the most popular game

to play washington? attacking an unpopular institution. the democrats use to attack congress, republicans controlled under barack obama because their priorities were in the teens. go after the irs, unpopular institutions. what is the most unpopular institution in washington right now outside of steve bannon and the dallas cowboys? the media at this point. their approval ratings are in the 20s. stuart: below the approval ratings of congress? >> among republicans if you look at a dog people, trump supporters do not trust the media. that is an outstanding number, 46% according to a political bowl in november said the media actually fabricate stories about this administration, not just republicans but everybody. they make stuff up. that is a big problem, you take that institution. stuart: media controls communication in this country and putting on a contempt of trump line consistently and that is rubbing off on voters.

>> it is not because they can't control thought. the hill before the election compiled 59 newspaper endorsements throughout the country, 57 of them went to hillary clinton, two went to donald trump, that got hillary clinton a concession speech. the impact is not like it used to be. stuart: will that continue to the midterm elections? the president's unpopularity will be superseded by what people really think. >> ultimately people vote with their checkbooks and what is in their bank accounts and if you look at jobs, economy and the isis caliphate is 90% destroyed i hope people consider that instead of looking at the character of the president and say my life is better as a result, it will be a mixed bag. stuart: you are the media reporter, do you approve the president of the united states going after the media? >> he is exercising his first amendment right. he overplayed his hand

sometimes, yesterday cnn won four awards, abc washington post new york times, newsweek all the click. what didn't win was buzz feed and they put out about the a. i thought they would get a mention. cbs didn't win an award, nbc did not win. stuart: you are all right, thanks very much. white house chief of staff john kelly talking to bret baer about whether mexico will pay for the wall. roll tape. >> mexico is not going to pay. we have some ideas how things like visa fees, renegotiation on nafta, what that would mean to the economy. in one way or another it is possible we could get the revenue from mexico but not directly from their government. stuart: the president tweeting about the wall saying the wall is the wall, it has never changed or evolved, parts will be of necessity, see-through.

it was never intended to be built in areas where there is natural protection like mountains, wastelands or tough rivers or water. bret baer is with us. sounds to me like the president may be open to some compromise on the wall. did you get that impression from general kelly? >> differently, from general kelly 100%. you heard this from the dhs secretary on capitol hill, secretary nielsen. the president is reiterating that the word is at the white house he was very upset and fuming with how chief of staff kelly said this about the president devolving and helped him evolve and he wasn't pleased with how it was said and won't be concrete for 2000 miles and there is a distinction without a difference here. stuart: i have to ask you about

a government shutdown, paul ryan just said congress needs to pass a continuing resolution. it sure looks like it will be not a final last-minute deal. is that the way it looks to you? >> it goes a few weeks. maybe three days in the offing because people are so upset what this does to the us military. stuart: who gets the blame if it gets shut down. >> historically republicans. and and the president wants to turn the tables, the demands for kirstjen nielsen of the democrats presenting this going forward. stuart: hard to see how they avoid blame if they stand on their principle, to shut the government down because they

are protecting illegal immigrants, difficult position to take and avoid blame for shutting the government. >> if they had every republican vote for continuing resolution they wouldn't have a problem at least in the house and in the senate they need democrats to get to 60. stuart: just packed stuart: you're pretty good, baier. >> thank you. stuart: we appreciate you being here. thank you very much. before we close out our program the market is down now 123 points. it started to slide earlier, when i think it was boeing, was it? ashley: boeing is about a third. also the energy sector down as well. stuart: is oil down? ashley: oil is down a little bit but the oil companies are selling off a bit. stuart: we have a drop of 125 points on the dow industrials.

over the last three trading sessions the dow was up over 700 points. we're down a mere 125. hardly a selloff, right, liz? liz: i'm sanguine about it. buying the dip. stuart: sanguine, surprised you didn't get a buzzer for word like that. we're getting soft. stuart. take it, sir. neil: stuart, thank you. he could not make similar guaranties or promises in the united states senate. that is the bugaboo in this battle. you need nine democrat votes from there to make this a done deal. no indications it is at least there in the senate. the markets seem to be handicapping we will have bumps along the way. looking increasingly likely, at least a limited time the government lights would go out. the president indicating that, would not be good idea. >> so our tax cuts and our