volatility in slow-mo. is it over? stuart: nothing like on monday and tuesday. today a very different kettle of fish. we're up to 326 points. high of the day. neil, it is yours. brian: thank you very, very much is this the pause that refreshe. most the foreign markets are back. it is hard as hell. treasury yields are holding back where they thought they would be at 2.80. no run to the exits for stocks. we're trying to break this down, get awe sense where this money goes. copper has been allure. plat tum has been allure. nothing to numbers to speak where all the money went. we get confirm individual

participation in the market is constant. 52% of u.s. families part of this market. that is remarkable -- whole bull market now, we're nine years young next month. we're seeing individual participation in 50, 52% range. i don't think we seen it sustained that long through good and bad times alike. we'll pick apart the numbers. deirdre bolton to pick apart today. >> that is right, neil. it's a new day. before we assume this could be a page turn i want to show you where we stand for the week. if you look past three days alone, the dow, the s&p 500, nasdaq all down more than 4%. but take a look at the dow. you were just talking about these highs, and low lows, even today, stuart varney mentioning them as well, today alone up 350 points. down, close to 130 actually at the open. we're still swinging but if we show you the intraday dow, you will see, its clearly in the

green. i took a look at come component. boeing performing pretty well. walmart performing well. after a choppy three days this could be a page turn. traders over the past few days, this, sr. we are now. let's celebrate a nice little green arrow for a minute. of course traders blaming a lot of volatility trades, products that were based on us basically being in pretty calm lull for the past 8 plus years in this bull market. a lot of traders in the market were betting against volatility. people say this is part of what is unwinding right now. this is part of the reason why we are seeing markets move higher. here is a quick check on volatility index. throughout the week it was up here. we sustain a lot of losses. we are back here. therefore we see markets moving a little bit higher. as for the s&p 500, also in the green. tell you, telecoms, industrials are holding them up. president trump tweeting, we'll pull it up here on the board,

you can read it for yourselves, in the old days when good news was reported, the stock market would go up. today when good news is reported the stock market goes down. big mistake. we have so much, good, great news about the economy. this make as reference to some of the economic data. we were speaking about the fact that there was wage growth with the january jobs report. we haven't seen wage growth in almost a decade. so that began to make a lot of investors anxious. is inflation going to be coming in? does that mean the fed raises rates quicker or more than previously anticipated? as rates go higher we all pay more to borrow money which nobody seems to like. president trump weighing in which is good thing. 1987, president came out and addressed the rose garden which the dow fell 20 points or 20%. so a lot of people waiting for this comment from the president. there it is. neil, back to you. neil: he is wrong about that. the market typically in the past has sold off on good news interpreted as bad news it meant

pickup in interest rates. on that he is wrong. he is free to tweet. meantime, nyse president tom farley telling me, regardless what you think of the streams that a lot of people pounced on today, we're back, we're back, they forget what happened yesterday. what's real? >> yeah i do, i do. the psychological aspect of investing and trading is real. one of the reasons i'm coming on with you, there has been a good deal of anxiety, maybe borderline hysteria over last couple days. the last thing i want to see is see people make decisions about their portfolio, about their retirement. savings because of panic. again, the markets are behaving appropriately. the decisions to buy or sell at

the portfolio should in most cases be made with a many years horizon, not a many days horizon. neil: his way of saying just stay calm. which have "barron's" senior editor jack hough and erin gibbs. we keep with you, up and down, markets, keep calm, good rule of calm. head of new york city would have vested interest in -- what do you make of idea, cooler heads prevail, you will do fine? >> we don't have to look that far back in history, staying within the market within these "flash crashes," even in 2015, when the economy wasn't nearly as good as it is today, if you had gotten out at the bottom of the crash, you would not have done so well getting back in a year later. you would have lost money. this is the worst time to get out. just ride the wave. another thing we keep stressing

to our investors, earnings this year for the s&p 500 are expected to be almost 20% higher. companies will earn 20% more -- neil: wasn't that already reflected in the market, maybe too much so? that the market run ahead of that good news? >> before this crash, it was trading at about 19 times earnings. now it is down to about 17 1/2 is. neil: that is cheap, rush in. >> now it is on sale. now it is more reasonably valued and this really looks like what we call much more rational valuation. neil: what do you think of that argument? >> i think it make as awful lot of sense. my feeling we lived through a period of nine years what i would regard as irrational exuberance. neil: thank you, dr. greenspan. >> i owe that to dr. greenspan. i have a building, there is elevator operator there. i've been waiting a long time. finally elevator operator comes, i know you're waiting a long time but this elevator only goes

up? that is salvation elevator. that is theological argument that has nothing to do with engineering. neil: that is very good point. i look at individual participation thing going on here, jack, what is interesting, what a constant retail participation has been in this market. roughly 50 to 52%, almost from the bull market's inception which struck me as odd but what is really interesting the number of those 75 and older, now that is moving figure through that time period, who are so invested in stock or majority of their portfolio. now that is the highest it has been since 1980s and that's the group we're told should be very conservative at this stage and many are not. what do you make of that? >> the sentiment indicators do look a little bullish and it is reason for concern but let me tell you, put the recent selloff in context. neil: tell me an elevator story.

>> on friday we were saying wage inflation is the bogeyman. even for years we were saying we would like a little more wage inflation. neil: absolutely. >> bonnes did well on monday. we need a new story because that story is not working. neil: 2.9 wage growth which is not exactly double-digit inflation. >> reality if you look at the history, selloff of 10% over time, you don't need a good reason because those can hit for any reason or no reason. talking about downturn of 20% or more that usually comes because of recession. if there is sign recession is imminent i like someone to point it out to me. you talk about earnings. look at sales growth. earnings are helped by tax cuts but revenue show what companies are really doing. most upside surprises in the s&p 500 in data going back to 2008. good numbers. neil: i don't doubt that but one of the things i do see you always hear the same time out of our leadership when market

crashes like this, that is extreme, when market drops like this happen, fundamentals are sound, economy is sound. most of the time, when these things happen it is, and particularly now. but i have a theory that all these other ancillary, exotic investment products are causing problems. alternatives, to the vix, where you can trade on reverse strategy there. and i, i think that that you know, exacerbates these trend to the extremes, taking what would be normal shifts and having everything hit the fan. >> i still feel that is small part of the market. for this more completely reevaluating your asset allocation. a lot of that is done automatically. so when -- neil: but i'm just saying, not to be obnoxious today, this speeds that up. this escalates that to an unemotional level which some people welcome and a push the button level, again, some people like the efficiency, like a

flash event, that is uncontrollable at times? >> but such a small part of the market. you really need much more volume in order to actually move markets. i still don't see the volume. neil: was the volume enough says credit suisse we're getting rid of this thing? it was volume enough where it obviously sucked in a mum -- number of traders. you're ultimately right i don't believe the that it added up to volatility that we didn't need it. you don't agree. >> volatility so fast for any long term investor it will not make-or-break their -- not that they day trading, market down one day and they sell out of the portfolio in the next. if things move faster that is the way of technology. complaining about it is complaining about progress. neil: i live to complain. here is -- we always think we come up with something smarter in every incarnation that will shield us from market forces.

in '87 it was portfolio insurance. i guess after nine or the big falloff in '08, mortgage-backed derivativeses pool those and protect yourself. you can't. i'm wondering whether this will be a little footnote after this, we have another such event? i believe in terrance's point it is not the whole game but an interesting sub story to the game? >> i think it is interesting substory and erin is exactly right. it is tiny portion. market. neil: you want to join her not coming back on the show. >> my feeling it is relatively small portion of the market. very difficult to generalize from it. my own feeling, yes it might accelerate it to some degree but in the end it has only marginal effect. neil: what do you think about that these exotic invests, say what you will of them are just subset characters it whole thing? >> if i'm thinking of volatility coming back, some of these fund are blowing up people betting on

low volatility i'm always thinking about stocks. i'm thinking about goldman sachs right now. you remember the recent numbers, everything is going well but there is no trading because of volatility. volatility is coming back. banks are okay. they are late cycle investments. banks with robust trading desks will do well going forward. for individual investor this was soul-searching moment, if you woke up in the moment the market is down, i need it this money to spend, look this is moment of reprieve you node too go back and make different decisions. neil: even monday morning versus you've been asleep for the a year, you would wake up and be happy. >> totally. you would be thrilled. neil: so, when you talk to any of your clients, readers, those that follow you, what do you tell them today? >> today we're all about, we're still positive in equities. again, there has been a reevaluations. things look a little more

rationally valued. neil: not a lot more rationally. >> not a lot more. a little more. neil: you're not bummed out we didn't formally close the day with a 10% correction, yet? we did intraday a couple times. does that make a difference? >> for me going below 16 times earnings. we never even got close to that that would be a fire-sale. neil: we get a correction that would be a watershed event that would clear way the another leg for this rally. >> four to 5% doesn't make that much of a different. what is it top 20, top 25? neil: right. >> the argument i would make the elevator is not allegationist elevator, at some point it comes down. neil: i see where you're going with this metaphor. >> if you're not getting selloff you want, having a little bit of a selloff, we're having a big ramping up in earnings estimates, but earnings estimates have come up so their price to earnings ratios have

shrunk. credit suisse did that. verizon communications, for example, kohl's, the store chain. neil: goldman, were kind of wormy on this, they said tax cut was add to gdp growth. this sudden jolt would take that away. do you buy that? >> they took big enough, what did they take, four or $5 billion as writeoff last quarter to prepare, to write down some taxes. neil: they were making a statement about the general market here. >> for the general market tax cuts are undoubtedly helpful going forward. they're a big part of that earnings growth. neil: this is what happened in the last few days will have that effect. i don't see that, do you? >> no, certainly not this was really about if bond yields are going up more than we expected. >> i think that's right. >> i think this is about people saying hey i think person getting next to me is going to panel sell, and i will panel sell first. think at that entirely what the

selloff was past few days, can you see individual continuing to buying stocks in numbers they were leading up to this. >> i can see that. i would encourage that i think it makes awful lot of sense even for small investor. neil: there is very little data to indicate now. i like you guys feel to agree with me. make me feel very scaredy-cat with my -- beneficial to the markets, talk that the senate is close to a two-year budget deal. the problem with that is the debt keeps growing. the problem with that is we add a trillion dollars to it at a time when they're issuing more notes and bonds to keep with up with it. they strike a deal, avoid a shutdown but all those other problems remain after this.

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neil: well the house already approved a measure that keeps the government lights on until at least mid-march. but the senate doing something better to keep the lights on and secure a budget that at least goes two years. blake burman with the latest on that battle. reporter: hi, there, neil. the house measure sent over to the senate is pretty much dead on arrival. the senate would have a bill of its own go back to the house. this kind of runs parallel

tracks right now involving the budget caps, the deal potentially being worked out on the hill between chuck schumer and mitch mcconnell, would pass this continuing resolution by tomorrow night, to get past the government funding, government shutdown deadline but lift spending caps for two years. the big question then is, whether or not there are enough votes in the house, as conservatives might not be against this and nancy pelosi already signaled her opposition. in the middle of all of this, you had the president here at the white house saying he would be all for a shutdown if there is not a solution on immigration. today though the white house trying to clarify that somewhat as director of legislative affairs, marc short, who has the pulse of those up on capitol hill, they said they do not feel there is going to be a shutdown. >> he is expecting congress to deliver on the promises we made on the campaign that we would invest in border security. and he is going to hold congress' feet to the fire on that. if we think will not deliver on

border security, he is okay taking that extra step. we're not expecting a shutdown this week. we're expecting a budget cap deal in place. reporter: they expect a budget caps deal in place. got to watch over the course of the afternoon. chuck schumer, mitch mcconnell, when they go to the senate floor exactly what do they announce and especially, neil, whether or not the debt ceiling will be wrapped into that. if it does potentially, that takes one big item off the table but could make this more complicated in the house as well. neil? neil: nothing is ever easy, my friend. thanks very much, blake burman. senate republican conference chairman john thune from south dakota on this what do you think, senator, how doable is this? >> it is doable, neil, but nothing is ever easy. we're trying, as was pointed out negotiate a final deal the senate could dropped. they have to go back to the house but we need the budget cap for military raised. it is national security. i would characterize it as a crisis. we heard consistently from secretary mattis and from the

service chiefs we have our readiness at risk if we don't start making some adjustments and plussing up the amount of resources we're dedicating to the military. unfortunately anytime we do that the democrats hold that hostage to getting dollar for dollar increase in non-defense spending in the budget. and so that is what is being negotiated right now. in addition to some other things might be carried on that bill that would go back to the house. we'll see how it transpires this afternoon. i think the negotiations are coming to a conclusion and i am hopeful we'll at least have a deal that can move through the senate. neil: one thing that worries me, senator, the debt keeps piling up regardless. >> i agree. neil: are you worried about that? >> absolutely, absolutely. why again anytime that the democrats insist upon it -- this is how they grow government. we get money for military but has to be offset by dollar for dollar increase in non-defense discretionary spending. they have no interest dealing with entitlement reform where the real spending is. we have to get our arms around

entitlement programs if we are to make them more sustainable. the other component of that as you know is growing the economy. faster of had growing economy deals with. we have already seen evidence of that this last year. i think tax reform will build on that. you get that growth rate back up to more historicrage an and these deficits look a lot smaller by comparison. neil: looks like we'll have a trillion dollar deficit this year. how do you feel about that? >> i think, we've got to get it under control. we, one of the ways you do that, if you grow at 3% even, which would be below historical norm that would general rate tremendous amount of revenue. he have 1% of increase in gdp it, creates a trillion dollars revenue over next 10 years.

that has to be coupled with spending restraint. we have these requirements for defense but all this additional spending that democrats demand in order to get a deal. they're unwillingness to get into discussion what we will do to reform the entitlement programs which is where all the big share of, the big spike in government spending goes particularly in the out years. neil: do you think it is wise, senator, that the president to encourage a shutdown? it would be worth it to get immigration issues resolved and the wall? i understand his frustration, but that is the leader of our government, our country, the free world, he would feel free to shut the government down, it would be a good things, how do you feel about that? >> he really wants to get a deal on immigration and he really wants to get border security. we all do. neil: i understand that to threaten a shutdown, do you think that is wise? >> it is not something i would support or condone. i don't think a shutdown serves anybody's interests. i think we learned that historically and of course as

recently as couple weeks ago, which is why i think democrats are more inclined to try to get a deal this time around because i think they learned the hard way a few weeks back too, that government shutdowns just don't, they don't serve any purpose. so i know the president is standing firm, wants to get a deal on immigration, we do too, and the leader indicated he will put a bill on the floor next week. hopefully the president's proposal which i think is a good faith proposal on immigration gets a fair hearing and a vote but i don't think shutting down the government makes any sense to accomplish that. >> senator, real quickly, you had expressed some reservation with release of this famous republican memo as it became known, what started entire trump investigation and operatives and possible russian ties. now there is democratic memo might be out sooner than we think or no. you were concerned about the effect this could have. i think i got that right.

are you still now? >> my concern about that, neil, had to do with any classified information that would compromise sources and methods. that is why is was really important, i tried to convey that last week before the republican memo last week, that the intelligence community have the opportunity to vet this and redact things might in any way jeopardize or put at risk -- neil: nothing was redacted. >> i think they did make some redactions. my understanding is i think they will with the democratic memo as well. my view, more transparency is better. let the american people decide but i think you have to listen to the warnings issued by our intelligence commune and those people tasked with protecting us. hopefully i think the administration did that last week before the release of the republican memo. i think they're going through the same process this week with the democrat memo. neil: senator, thank you for taking time. good to see you again. >> neil, you too. neil: senator john thune. you can see a comeback with the dow right now. there are issues behind the scenes that have still not been

resolved. now you heard about this vix indicator, that sort of measures fear. there are since counters to that. one is called pro-shares short term futures etf, i'm not kidding you. one called the velocity shares inverse vix short term exchange traded note. not kidding you about that. here is something very real, those two countervix fund, those two countervix investments, they're met to offset the fear the other one is addressing. here's the problem. no one understands how the hell they work outside of those two when they collapsed in price. a lot, a lot of investors got their heinies burned. what is going on? the story you're not hearing that i think you should, after this. ♪ your lineup. the alerian mlp etf can diversify your equity portfolio

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neil: volatility index, gauge ever fear, seeing volatility not seen in entire market. it dissipate ad bit. it is very volatile. changes by the second. this nonetheless gotten such a creative index people invest in it. there are two alternative indexes, i won't repeat the name because they pop up, because a number of investment houses including credit suisse and some others use this as a way to counter this one. neil, why are you boring me with this information? two reasons, one, i am boring, and secondly i think you should be made aware of this it can, often times, exacerbate trading to the point it gets crazy. it doesn't separate the fact that trends you can't deny. what happens it can, you know, put them on hyperdrive on steroids. trader stephen guilfoyle joins me. he goes by sarge because he

served this country honorably. he deserves a lot of respect because he looks at big picture trend. you like the big picture trend are but you're not unaware how these other factors can magnify it. explain what happened. >> well, every, obviously everybody was shorting risk, volatility, and finding ways to do it i'm not really cool with. i don't like inverse fund. i don't like leveraged fund. i avoid them completely not just for volatility but for any sector or exotic -- neil: why is that? it is said to be a way to hedge that. like program trading insurance was, portfolio insurance was in the '80s. we know what happened in the '87 crash but this is the latest flavor of that, wasn't it? >> i fancy myself a stock-picker. i try to be my etf. in areas where i'm weak if i need exposure to transports in hurry i buy the etn, because i

might not want to be this one airline or two railroads. neil: index of transports. >> i round out my portfolio that way but i truly believe, and some people may disagree, but by leveraging or inversing an index or exotic specialty, you're putting yourself at risk you don't understand. if i don't really understand what this will do to my portfolio then the average kid on the couch will not get that. neil: a lot of people, smart folks at credit suisse -- >> i worked there for 13 years. neil: sure. so, they comb up with a product that gets very popular, everyone wants in on it. it is a way to counterwhat you're seeing with volatility index, is there a way to make money on fear, bottom line? >> you got to remember every dollar made there is a dollar lost. the way markets trade, they are faster than ever before.

i tried to buy a basket of stocks but i tried to do it by hand because i'm a guy. i missed all other stocks i missed them because the market was back 400 points before i got order in. neil: you're a big guy. you're not also ran? >> no i was reacting to it. neil: but all these other guys who have computerized algorithms and trades. i talked to an algorithm expert as night, mind-numbingly smart but mind-numbingly explaining over my head. there are a gazillion algorithms. these other indexes, etfs, whatever you call them, counters to it, a part of them but set in motion real time, rapid time. it will exaggerate moves, won't it? >> yes. the way i feel you combat this

is to go minimal increment per price. penny, nickel. centralize trading for each much these securities, bee it at new york stock exchange, i'm biased, be it nasdaq, whatever, each one has a home. most of trading has to occur there. this way there is a thicker book. neil: you're telling me if you're waiting, you're a big deal, you're waiting to get your order through, i can't imagine where i am. i'm just wondering like what happens? is this a fair process. >> i don't think so, no. i mean, i believe the open outcry was fairest ever because i'm partial to it. neil: it is gone. >> it is gone with you we can still have central increments instead of tiny increements. how about a speed bump? nobody talks about this anymore. let's slow down the process. when i was a kid, you had three minutes to get your price. three minutes. on front page of

"wall street journal" they're talking about the olympics in milliseconds. stock trades are measured in microseconds which is a lot faster than a millisecond. neil: i worry about another "flash crash." people don't mind when it flashes up. mind when it flashes down. don't mind when it doesn't go their way but very much mind when it doesn't go their way, appears things are settling down, appears so far, so good. are you worried about the next time, like opening the pod bay door out, like one of these 2001 developments that could take a market trend and just take it to extremes? >> you know it is out there. you know it is already out there and already hunting us down. you might not see it where it is or where it is come being from just yet. we saw a "flash crash" in 2010. we saw china 2014. we saw other day market in matter of seconds down 800 to down 1500 and back to 1200.

neil: do we have to get used to it, the way of the world? >> get used to volatility. we should have more volatility than we've had in the past 10 years. neil: the lack of volatility. >> more treasurys were for sale. the bond market retake control over interest rates, not the central banks. that will force volatility. neil: are we through the worst of it in your ice. >> what is that, boss? neil: do you think we're through the worst of it right now? >> i feel right now we've got enthrough the worst of it, sxvy, looks like assets quadrupled last 24 hours. as long as that doesn't reverse we're out of woods. are we ever out of the woods? will you get hit by a bus on the way home? we never know. neil: on that upbeat boat, sarge, thank you very much. there is perspective on this i don't want to overstate it. i'm just telling you that there are forces beneath the forces of buy and sell perhaps that put them on autopilot. sometimes you like where

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>> welcome back to "cavuto: coast to coast." steve wynn resigning as namesake of his company wynn resorts. following avalanche of bad pub list after allegations of misconduct. heavy heart that the board of directors, wynn resorts accepted resignation of our founder, ceo and friend steve wynn. they went on to call him an industry giant and visionary. look at the stock reaction today. it is up 8%, wrong chart, up 8% today, on news that jpmorgan waited look, the resignation of wynn reduces regulatory risk out there. the announcement that the company will replace him with company veteran matt maddox made

a lot of people feel better. the if you flip the chart, you can see what happened to the stock since that detailed "wall street journal" investigation into wynn's behavior. that first broke back on january january 26th. since then the stock is down 12%. wynn called these allegations preposterous. not long after they surfaced he stepped down as finance chair of the republican election committee. all the bulk of the company's revenue actually comes from china. wynn macaw, his resort & casino company there. the company's gaming license in the country is set to expire in year 2022. that means it could be difficult to renew. let's go to nicole petallides on floor of new york stock exchange. neil: we won't be nicole. it will be me. >> sorry. a lot of things in my head. five people were talking to me. neil: it is news, young lady, if it breaks, we fix it. we do have the announcement of a two-year budget deal with senator john thune of

white house. let's listen to mitch mcconnell detailing it. it will increase 300 million over two years, that is the length of this measure. let's listen in. >> this bill is the product of extensive negotiations among congressional leaders and white house. no one would suggest it is perfect but we worked hard to find common ground and stay focused on serving the american people. first and foremost this bipartisan agreement will unwind the sequestration cuts that hamstrung our armed forces an jeopardized our national security. secretary mattis said, quote, no enemy in the field has done more harm to the readiness of our military than sequestration. for years my colleagues on the senate armed services committee led by chairman john mccain

have spoken out about these damaging cuts. in the face of continuing and emerging threats these cuts have left us unable to realize the potential of our missile defense capabilities, they whittled down our conventional forces, laying undue burden on forward-deployed personnel and their families. they have shrunk our fleet to its lowest ship count in three decades. we have not asked our men and women in uniform to do less for our country. we forced them to make do with less than they need. this agreement changes that. in addition this bill will provide for our returning heroes. too often underfunded, overcomely indicated bureaucracies fail to deliver the care our veterans deserve. the trump administration and congress thanks to the leadership of chairman isaacson have made important progress for

veterans in the past year. this agreement will expand on those steps. this agreement will also bolster our ongoing national struggle against opioid addiction and substance abuse. it will fund new grants, prevention programs, and law enforcement efforts in vulnerable communities all across our country. it also provides funding for disaster relief efforts. last year powerful storms crippled puerto rico and the u.s. virgin island and damaged main land communities from florida to texas. thanks to the efforts of members such as senator cornyn, cruz, rubio, and others, this bill will get more help on the way. and the agreement will clear the way for a new investment in our nation's infrastructure, a bipartisan priority shared by the president and lawmakers of both parties.

this bill does not conclude the serious work that remains before congress. after we pass it, the appropriations committees will have six weeks to negotiate detailed appropriations and deliver a full funding for the remainder of fiscal year 2018. but this bill represents a significant bipartisan step forward. i would urge every senator to review this legislation and join us in voting to advance it. i particularly want to thank my friend, the democratic leader. i hope we can build on this bipartisan momentum and make 2018 a year of significant achievement for congress, for our constituents, and for the country that we all love. now one final matter. as i have said publicly many times our upcoming debate on daca, border security, and other issues will be a process that is fair to all sides. the bill i move to, which will

not have underlying immigration text, will have an amendment process that will insure a level playing field at the outset. the amendment process will be fair to all side, al allowing sides to alternate proposals for consideration and for votes. while i obviously can not guarranty any outcome, let alone supermajority support, i can insure the process is fair to all sides and that is what i intend to do. >> madam president? >> democratic leader. >> first let me thank the republican leader for his comments and his work these past several months. we have worked well together for the good of the american people. we had serious disagreements but instead of just going to our own separate corners we came

together with an agreement that is very good for the american people and recognizes needs that both sides of the aisle proffered. i'm pleased to announce that we have reached a two-year budget deal, to lift the spending caps for defense and urgent domestic priorities far above current spending levels. there are one or two final details to work out but all the principles of the agreement are in place. the budget deal doesn't have everything democrats want, it doesn't have everything republican wants but it has a great deal of what the american people want. after months of legislative logjams this budget deal is a genuine breakthrough. after months of fiscal brinksmanship this budget deal is the first real sprout of bipartisanship and it should break the long cycle of spending crises that have snarled this

congress and hampered our middle class. this budget deal will benefit our country in some ways. our men and women in uniform represent the very best of america. this budget gives our fighting forces the resources they need to keep our country safe and i want to join the republican leader in saluting senator mccain. we wish he were here because he fought so valiantly and so long for a good agreement for the armed forces. the budget will also benefit many americans here at home. folks caught in the grip of opioid addiction. veterans waiting in line, to get health care. students shouldering, crippling college debt. middle-class families drowning under the cost of child care. rural americans, lacking access to high-speed internet.

hard-working pensioners, watching their retirements slip away. democrats have been fighting for the past year for these americans and their priorities. we have have always said, we need to increase defense spending for our armed forces. but we also need to increase the kinds of programs that the middle class still needs and depends on. it is our job as americans, as senators, to make sure that middle class people can live a life of decency and dignity, so that they can keep in their hearts the american believe that their kid will live a better life than they do. in this budget we have moved for the first time in a long time a good deal forward on those issues. alongside the increase in defense spending the budget deal will lift funding for domestic programs by $131 billion.

it willfully repeal the domestic ski questionster caps securing including $6 billion to fight against the opioid and mental health crises. $5.8 billion for the bipartisan child care development block grant. $4 billion, to rebuild and improve veterans hospitals and clinics. two billion dollars for critical research at the national institutes of health. and $20 billion to augment our existing infrastructure programs, including surface transportation, rural water and wastewater, clean and safe drinking water. rural broadband, so desperately needed in large parts of rural america, and energy infrastructure. and $4 billion for college affordability including programs

that help police officers, teachers, firefighters. the deal also boosts several health care programs that we care a lot about in this country. an increase in funding for community health centers which serve 26.5 million americans is included. my friends, tester, murray, sanders, others have been champion for these community health centers. i want to thank them for the hard work they put to get this done. the children's health insurance program will be extended for an additional four years. credit is due to our ranking member, senator wyden, for his effort for this extension. american families, of children who benefit with chip, will now be able to rest easy for the next decade. seniors, caught in the medicare part-d doughnut hole, will also benefit from this bill. which eases the coverage gap

next year, helping thousand, millions of seniors afford prescription drugs. we have waited long for this. rural hospitals that struggle, seniors, children and safety net health care providers will benefit from a package of health tax extenders as well. on the pension issue, democrats secured a special select committee that must report a legislative fix to the problem by december 2018. millions of pensioners, teamsters, carpenters, miners, bakery workers, and so many more are staring down cuts to their hard-earned pensions. they didn't do anything to cause those cuts. their livelihoods are staked to these pensions. we ought to make sure they get every penny they earned. we democrats would have liked to take up we would have liked to pass the bush lewis act that we

couldn't reach an agreement to do that. now we have the means and motivation to get it done. there are so many senators, led by senator brown who are responsible for this. they worked long and hard on pensions. the budget deal also includes long-awaited disaster relief for texas, louisiana, florida, the western states, puerto rico and the u.s. virgin islands. many of these places are still taking their first steps on the march to recovery. puerto rico and the virgin islands remains damaged and in the dark. this recovery could not have come a moment too soon. senator nelson worked hard for florida and puerto rico relief as did so many others.

i would like to thank senator leahy who worked diligently with his staff and ranking members on these issues as well as senator murray who has been a beacon on health issues where we've made progress today. the budget deal is a win for the american people. it will also do so much good for our military and middle-class americans. finally consigned the arbitrary and pointless sequesters to the ash heap of history. our work here in congress on this budget deal, between the republican leader and icon of the senate and the house was completed without a great deal of help from the white house. well president from threatened shutdowns and stalemates, congressional leaders have done the hard work of finding

compromise and consensus. it has been a painstaking and months long process. it required concessions, sometimes painful by both sides, but at the end of the day i believe we have reached a deal that neither side loves but both side can be proud of. that's compromise. that is governing. that's what we should be doing more of in his body. it is my sincere hope that the republican leader and i will continue to work together in this way to get things done for the american people. we must finish the job. later this week let's pass this budget into law alongside an extension of government funding. i hope the house will follow suit and president trump will sign it. i also hope that speaker ryan will do what senator mcconnell has agreed to do, allow a fair and open process to debate a

dreamers bill on the house floor. this budget deal will be the best that we've done for our economy, our military, our middle class for a long time. i yield the floor. >> all right. that was chuck schumer. you just heard him saying congress had done something very painstaking and all the heavy lifting. i might add, if this is painstaking than introduced me too it diet that lets you eat all the creampuffs you wanted this was not painful. if this was your goal, you will be hard-pressed to find it. this budget calls for $300 billion in additional spending. the sequester caps on god. both parties cam on data both

parties came to that and avoided that. both parties, for the fifth consecutive congress have worked away around it. this time by totally ignoring it. what this plan will include, again you will get funding for defense and nondefense priorities and hurricane, wildlife disaster him about all bets are off. we are going to add about a trillion dollars to our deficit this year on top of our debt which is north of 20 trillion already. telling you i gained only 5 pounds in the last week but a good ben ten so i'm down 5 pounds. i want you to think about that, and be weighing myself with nothing on. got you.

this is ridiculous. >> it's amazing how the republicans have capitulated on any sort of fiscal austerity. this is the government on steroids. mitch mcconnell has embraced it, donald trump has in embraced it. >> tell me how the white house could help her this is such a sweet deal for both parties, they don't have to do a damn thing they can keep spending, keep their priorities, keep punching and we now are looking at more treasury notes and bonds to support a trillion dollars and more spending in a year. >> they really greased the skid skids.

why are the markets all over the place, some people think the trump tax plan will not produce the gdp growth to deal with the deficit and if you have much higher deficit you have much higher interest rate. they have just made the job of the tax cut working much harder. they added so much more to the deficit. that's on top of the fact that we have a $1.3 trillion tax cut which, in at least in the first year will not produce much bread they just made it much harder to meet their bogeys of dealing with that tax-cut so the deficit doesn't implode. these guys need to understand some simple economic -- >> were still up about 200-point so i'm not meaning to preach to republicans or democrats.

there is no resolve here. there is a record amount of money going out but there is no effort to slow the growth. these taps, if you can come to budget agreement, automatic cuts kicked in and you can even do that. >> when you talk to people in the marketplace it will stop the u.s. from being the drunken sailor. market discipline. if we ever run on our currency, if the budget deficit, if the trump tax cuts don't produce the growth, if that deficit remains high on top of this and if you get sharply higher interest rates which causes a big-time recession, that could be the catalyst.

>> was about goldmans.to give it with the tax-cut and take it back. >> that's the fear, there is a debate about whether this will produce the growth thus we have an exploded deficit, we don't have much growth, much higher interest rates and we have a recession. that's the market discipline. >> i don't see that. >> i don't know. i think -- i don't think so but this is pathetic. they are patting themselves on the back to make their kids pay more money back. the millennial's are bad, i imagine the kids younger than the millennial's. >> that's a tip, talk to your kids. tell them they're getting nothing.

both parties punted again. we have a budget deal that will likely be passed but in the process they shredded anything approaching a budget that would have some discipline to it. 300billion extra in two years. military gets what they want and all these other programs get what they want, our kids and what they need, it ate happening. the white house briefing coming up at 130. adam has the latest on capitol hill. >> let's go through what they just outlined about what this spending cap bill will do. it will be attached to continuing resolution and will be sent to the house and there are plenty of fiscally conservative republicans raising opposition to what's being proposed. it will, if it were to become

the law raise the spending cap so we had funding for the next two years. the bill also has funding for veterans, two-year increase in military spending in the first year, up 75 billion. increase of 60 billion in domestic spending. it provides funding for opioid and drug abuse treatment and disaster relief. clears the way for new investment in infrastructure. this is key because the white house while i'm infrastructure plan on monday. then it sets in place the appropriations committee to finalize where the money will be spent amendment will vote on the appropriations bill. getting it passed in the house will be difficult. it is expected to pass the senate. nancy pelosi, in the house of

representatives was threatening this deal is a nonstarter unless it includes some guaranteed from paul ryan for a fair vote, a clean vote on immigration and the dreamer bill. here is what she said. >> if the dream act was brought to the floor or pass immediately with strong bipartisan support. i commend my republic colleagues for their courage in speaking out on this. our dreamers hang in limbo. the republican cowardice must ent. >> as i wrap this up, if

you're trying to keep score, senate has a deal. they will most likely pass it. those in the delta mouse representative spread the question, certainly conservative republicans will say no which increases spending and increases the deficit and the national debt. can the democrats get enough to say we will do this deal with the promise for daca later. that's the unanswered question for the house has same-day authority. once i get it from the senate they can vote on the belt. back to you. >> we are hearing from the left and right that this was brave and gutsy. raven got the is defined by the guys who are fighting for us half a global way, who are step on ied's and are dying for us. this is not. when you say adding the

appetizer, main entrée and dessert and splitting the bill and you don't care because someone else is paying for it, if that's your idea of gutsy even sign me up for that diet because i'll take it to the next level. the reason people are getting sick of this process is because it's a repeated process. now it's locked in for two years of this as an entity. is that such a word? let's hear from our panel. my worry is that if this is deemed to be a tough call them what constitutes an easy one. >> i couldn't agree with you more. >> so what happens. >> this is, what you're saying, this is the other breakdown of the two-party system but no one seems to

have any sense of generational stewardship and everything that charlie and you were saying could not be more accurate. the notion that you will tag my six kids with this astonishing giveaway at a time when it's so clear we have the resources and the economic strength to pull in the spending rains, is sickening. there has to be something we can change because this is not sustainable. >> maybe treasury traders have resigned to this as our equity traders but quincy and looking and wondering, i understand the impetus behind it but let's get over this so we can deal with other issues and deal with immigration down the road, but we always do this.

there's always been another hell to climb so we can get to that. we get there we don't address the underlying problem. we just keep pushing them back. >> it's one band-aid after another. the market has done extremely well but what has underpinned the market is changing and that's the deficit in the bond market without central banks, they are pulling back. you don't notice him coming to the rescue. the bond market will be able to take over. if there's more inflation because of all this yields will climb. that's the way markets work and already you are seeing it happen. you saw happened last week. this is where we are, and again, you have the infrastructure spending coming out. that is not a private public

partnership, the question becomes who is going to pay for that, something is needed in the country, but really the question always is about the market. i think yields are going to have to rise to attract money. >> that is exactly what's happening. a ten year note is 2.82%. it's backed up six basis points so that has happened just since this accord was reached. we will keep an eye on that. i'm not saying that you correlate but i don't see anything else that could affect it. that backup seems to be real. david i'm looking at all this i'm just saying it's the markets way, presumably of saying look, you have no financial backbone. we already knew that. when it dawns on them that more treasury notes and bonds have to be issued to support

all this excess spending, that could be in excess of the trillion dollars. they might be singing a different tune. >> clearly we are seeing interest rates that's a sign of inflation. we are engaging in more deficit spending which will inflate the economy even more. when investors start get negative marks on their portfolios of bonds, they will start pulling money out and interest rates will go up even more. historically you reserve deficit spending to pump prime the debts of the recession and then when your concerned about deflation and right now is when we should be paying down deficits and were not doing it. were not displaying any kind of fiscal restraint whatsoever and to the point that you made at the front of the show, we are kicking the can down the road to our kids and not leaving them with anything. >> i'm wondering if the market today which is well off its

highs, i wonder if this is among the catalysts or simply pass market conditions things change very quickly. i am wondering now, what is the footing like with this market as you see it after the crazy few days we've had. >> it's hard to say in that i do believe in the underlying strength of the american economy. we have had really tremendous changes in the economy and the entrepreneurial spirit out here in places like colorado and across the west is extremely strong. you do have this pro-business administration that's being very helpful to the psyche and everything else, but at some point, it does seem that you need someone who is a thinker, a financial thinker, not a traditional oldman banker as our treasury secretary, not a

president who understands consumer psyche but not really market. summary has to look and say this could go very wrong in a hurry and that's how it feels to me. >> quincy, interest rates had backed up, were looking at a ten year note that backed up a bit. not alarmingly so but the s&p has turned negative, the market which was looking at a gain of and access of a hundred points is now up about 43 points. it's a vast market, i don't over analyze second by second moves. the 4:00 p.m. close is good for me as a statement on the day but what you think about how they will digest all of this. >> is clear, the yield started to move up. also, i think we are in the bottom process. it's not a one-day event. what we will look for is the close. do we see buyers who were desperate to get out, sell

into the close or we can see buyers continuing to come in to the market. the volatility, the quickness of the market reviews said is exacerbated by the algorithms moving very quickly has basically underpinned what we knew would happen. this market needed to pull back. couldn't keep going up every single day and this is what it did. this is a process, we think we are toward the end of the process. we will watch to see if money comes in toward the end of the day, if we see profound to selling at the end of the day it is obviously telling you that it is not washed out yet and there are sellers there who have been waiting. one thing for our listeners, our retail investors, markets go up but they also go down. this is healthy. the big question for us is does the fed come to the rescue. we hope not. the market needs to function the way markets work.

it's very important and a lesson we need to learn. >> i hope they don't intervene because they can mask a lot of problems. david, i hope i'm not screwing up, which would you said. i apologize. >> no problem. david, i am wondering if finally your take on this, do the markets just need an excuse to correct even more than they are? the president was tweeting earlier today that it's a big mistake when there's so much good news about the economy for them to decline. i'm paraphrasing his earlier tweet, but now visit constructive when they do react to good news in a good way. >> i think the first thing to understand is markets are actually structured by human beings and we put carrots and sticks in different places. this market has become, progressively taken the people out of the equation.

when you see the activity that happened on monday which was for a period of time like a mini flash crash, what was happening was we had a a snowball effect that were cutting through what remaining bids were in the market like a knife through butter. well that's okay in terms of instantaneous corrections, it isn't okay if it gets to the point where it actually undermines consumer confidence , investor confidence and ultimately small business confidence. one of the things we've seen in this market is that it has left behind smaller capitalization companies, the dow was outperforming a lot of the microcap stocks and the smaller companies is where jobs are created in capital formation is important. the ipo market has never come back to what they were in the 80s and 90s and we are seeing in this country, despite all the entrepreneurial fervor and interest we are seeing fewer

and fewer companies started in the united states. these things are all interrelated. we have a market structure that is not supporting small business and that is the future. that's what's going to create competitiveness, tax receipts that will fund the treasury and ultimately fund a strong military. we have to kind of rethink markets on a macro level to make sure the carrots in the sticks are in the right place. >> thank you very much. all very wise insight on all the spread the market falloff propelled again by a budget deal that will be two years in length so to dodge a bullet for the time being but it does so without any discipline. more spending, enough to satisfy both sides, both sides bragging how brave and tough this was, i don't know. i've likened it many times to me going on in all pasta diet. it's a delicious diet to go on but it requires not one bit of discipline. not that i've ever done that.

who would ever do that, but i'm telling you, this is enough to make you vomit. more after this.

>> i watch the other networks as were waiting for this white house briefing that will feature james mattis leaving things off on this budget record but when i looked, when

i watched other networks, one network is praising chuck schumer and condemning the president, another network is praising the president and blaming chuck schumer and another network is going after george washington. i'm kidding about that. i always find it fascinating that everyone will see things through their prism and their politics. not red or blue on this. i'm just green, following the money. i don't know how the red side or the blue side could be happy about spending more of the green side. we will have $300 billion in more spending in this two-year budget agreement so they given themselves a hefty little race so republicans will be happy with the fence and the maquettes we happy with non-defense spending but not a lick, even restraining the

growth. they're both busy patting themselves on the back but i'm telling you, the nerdy money guy, they should be ashamed of themselves. in the face of a deficit that will equip the trillion dollars and that both parties fault, it's a joke. the debt is going up. there is no accounting for it, they will have to print more treasury notes and bonds but i know this is everything is worried that they will find good of someday. i'm telling you there is a short leash leash on this and it's taking the dow that was up over 300 points to now that's one that's up 25 points. taken s&p 500 that was racing into negative territory and its backing up all sorts of rates on the notion that just two finances we will need more treasury notes.

we will need more treasury bonds. we will need to do a lot because these guys don't have a hint of discipline. now it's one thing when you go out and waste your money. both parties are wasting hours. so i go off the diet and binge. my cholesterol is up my heart doctor starts lecturing me, neil i didn't say you could eat five prime rib in one sitting and i say oh i thought you did. this is on all of us. we are all getting fat and not so happy that i'm telling you, it's going to lead to our financial slaughter. how's that for a metaphor. anyway, just my fear. i hope i could be wrong but i am going to double up on my heart medication because this makes me nervous. glenn hall, very fit, very with it, very on top of it. i'm worried about this. i might've hyperventilated there a tad, but not too much because there's not a speck of

discipline being shown in this budget record. this gets us over the hump so we can do some constructive things, but they never do. >> while there is some hope for you out there neil. there are enough fiscal conservatives in the house that will have a challenge getting all the votes it needs. >> it will get the votes. it will happen. >> if gotta have the democrats to get over the hurdle and they can't do it alone with the gop, if they have the fiscal hawks stepping up, then you got a whole another set of complexity because nancy pelosi leads the democrats in house is saying she can't support this compromise that came out of the senate unless house speaker paul ryan is willing to promise that he will bring a dhea or immigration bill to the floor. can i have that back in the mix with the senate try to avoid. >> there is that, but i'm wondering, years back we had these caps put in, the sequestration caps, i was liking it, when we talk about

this backup backbone for those who couldn't cut spending. they were incapable of doing it. this is a way to make sure if you can come to an agreement boom, these automatic cuts kick in. they are gone. they've always been gone because every two years every congress seems to slap them down. what happens now. >> it becomes that much easier to continue to work out this kind of compromise where each side gets to spend a little bit more. in this compromise the republicans wanted to put more money in defense of the democrats were unwilling to do so unless more money went into nondefensive you end up with a 300 billion going into increase spending and the sequestration is a thing of the past for the next two years. >> now we talk about likely a trillion dollars in added spending versus money coming in this year. that's a deficit this year. what will happen with that. >> it's exactly as you described. it will have to be funded. it will have to change the

dynamic in terms of the outlook for the markets and it will have to potentially put inflationary concerns back onto the map. we have to factor in all those things and look at it in the context of what has been driving this market up so far and we've seen the market reactions today and also the last couple of days, there is a? in the air about whether this growth can continue. >> well put. former. [inaudible] i do want to let you know, they are going to ask a lot about a memo with the fbi and the democratic one of the republican one, and that's all fair game in a very hectic news environment. that projec particular memo is vital and important and all that. no one is talking about a memo that says we are out of money. we don't have any money. so were going to print more money. no one writes a memo like that. goes something like this. note to self, we are broke. more after this.

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>> all right, here's sarah. >> it will reflect what the president signed into law with the national defense authorization act. the bottom line is thanks to the president trump, we can now have the strongest military we have ever had.

additionally the bill increases the debt ceiling to march 2019 which moves us away from crisis to crisis budgeting. it also ensures funding for our critical priorities including rebuilding america's crumbling infrastructure, tackling the opioid epidemic and taking care of our great veterans. to discuss this agreement in more depth from the military's perspective we have secretary matters here with us today. sector matters will come up to make a brief statement and take a few questions on the importance of funding our armed forces and i will be back up after him to answer questions on news of the day. thank you. >> that afternoon ladies and gentleman. thank you for taking time out of your schedule to be here. i have spent the last and a half on capitol hill reading the members of congress on our 2018 natural defense strategy. i am glad congress recognizes the sobering effect of budget uncertainty on the military and on the men and women who

provide for our nation's defense. two days from now, i will visit our nation's first security force assistance brigade at fort benning. they prepare to the boy do afghanistan. to support the security of our nation they are putting themselves in harm's way, in effect, signing a blank check payable to the american people with their lives. our military has been operating under debilitating continuing resolutions for more than 1000 days during the last decade. during last week state of the union address, president trump said weakness is your surest path to conflict. in a world of change with increasing threats, there is no room for complacency. failure to implement or fund the 2018 national defense strategy will leave us with a force that could dominate the last war yet be irrelevant to tomorrow's security. we need congress to list the defense spending caps and

support a two-year budget agreement for our military. america can afford survival. for too long we have asked our military to carry on with a success at any cast attitude. the fact that our voluntary military has performed so well is a credit to their dedication and professionalism. we expect the men and women of our military to be faithful in their service, even when going in harm's way. we have a duty to remain faithful to them. absent a budget this year, america's military will not be able to provide pay for our troops by the end of the year. we will not be able to recruit the 15000 army soldiers and 4000 air force airmen required to fill critical manning shortfalls. we would not be able to maintain our ships at sea with the proper balance between operations in time for training and maintenance. we would have to ground aircraft due to a lack of maintenance and spare parts,

degrading our pilots proficiency. we would deplete the ammunition training and manpower required to deter war. we would delay contract for vital acquisition programs necessary to modernize our force. i cannot overstate the negative impact towar to our troops and families morale from all this budget uncertainty. today's congressional action will ensure our military can defend our way of life, preserve the promise of prosperity and pass on the freedoms you and i enjoy to the next generation. thank you. i can take a couple questions. >> general, how damaging would a government shutdown be given you have this deal, if there is a decision to shut the government down because for example the wall wasn't funded in this deal, how badly would that be to the military. >> shutting down the government would be very damaging to the military for all the reasons i just cited

about a continuing resolution, but then aggravated by the shutdown itself where we actually send home all nonuniform personnel except those in a few critical areas. it just paralyzes everything that we do if we go into that, other than the ongoing active operations at sea and there the troops will continue to fight, the ships will stay at sea, but the bottom line is trainings delay the impact and it ripples through the force and it doesn't just happen today, it rippled on as people who are not flying are no longer gaining the level of skill that you and i would associate with them even a year from now when they're promoted. >> you mentioned you been spending the last and a half on cena hell. do you have any sense if the house leadership on the republican side is equally receptive and enthusiastic as you are, and also, service secretary, particularly the navy service secretary said the funding problems are not a

direct cause but contributed to the death in the south china sea. can you tell the country if this money is in fact provided, all of the problems associated with training, maintenance that have been plaguing the military will be eliminated? >> i am optimistic that what the house did earlier this week and what the senate did today can come together this week and give us the budget that then enables us to carry out our responsibilities. by hours i mean all the leaders in the department of defense who will address the issues you just brought up. obviously a lot of work goes into the execution and the quality of the training that you can count on us to earn your trust. we will spend the money wisely. >> senator, if i can ask you about the nuclear posture revie review, he calls for smaller yield nuclear weapon to be added to our arsenal.

this is as such thing as a tactical nuke. anytime that's used as a strategical game change. how does this new posture review add to global stability because there are many people who believe if you have a smaller yield nuclear weapon you might be more inclined to use it. >> remember that what we are talking about here is the nuclear deterrent and not nuclear deterrent, we believe that some nations could miscalculate, one in particular, and that nation could assume that if they used, in a conventional fight, small yield bomb that we would not respond unless it's a very large yield bomb. our response is to make a small yield bomb and don't miscalculate, it's a deterrent, deterrents are dynamic, they change from year to year from decade to decade, we have to address deterrent in the current construct so we do this, the idea is to raise

the threshold, don't even think about lowering the threshold to a conventional fight and escalating it to one small yield nuclear weapon, strategically changing the game and then think our choices either surrender or suicide as doctor kissinger put it. >> yes, ma'am. >> can you talk about the military parade the president mentioned and any cost estimates for that. >> and we're all aware in this country of the president's affection and respect for the military. we have been putting together some options, we will send them up to the white house for decision. >> have a question about north korea but this is a follow-up. you just laid out an argument for fully funding the military and why every dollar counts. why divert time, energy, financial resource in the planning of a parade at the president's request.

>> i think what my responsibility is to make certain i lay out the strategy and make the argument for the oversight of congress to make the determination of fully funding this. as far as the parade goes, the president respect for his fondness for the military is reflected in him asking for these options. >> can i ask you whether you think war is nearer or closer with north korea than i was at the time the ministration took office, and you support any kind of meeting or communication between vice president pence and precious. >> vice president pants is quite capable of making the call on that. as far as the situation of korea, it is firmly in the diplomatic lane. we have seen much stronger diplomatic action the last

three united nations security council resolutions, unanimous and how we often do you see france and russia prc, china and the united states, great britain all voting unanimously. i think that makes it very clear this is firmly in the diplomatic lane and we of course backup secretary of state tillerson's foreign-policy efforts as guided by the president as a viable military option. >> thank you very much. >> thank you. due to the timing and tight timeline, we will jump right into questions for today with no further statement. >> nancy pelosi wants to add immigration to this emerging budget deal on the hill. is that something the president would like to see. >> i think we've made clear that the budget deal should be a budget deal and members of congress, like nancy pelosi should not hold our military

hostage over a separate issue. we have laid out what we would like to see in immigration legislation and i think it's something that nancy pelosi should support and hopefully she will come on board and we can get the budget deal done and focus on getting immigration. >> are they committed to this march 5 deadline for daca or will he extend the deadline. >> we are hopeful that we will make a deal with congress and we will see what happens after that, but our goal is to try to get something done. we don't want to keep kicking the can down the road and we would like to see a solution which is why we have laid out a plan that we think addresses everyone's concerns and meets those needs. >> will the president sign the budget agreement that was laid out by the senate. >> work, we applaud the steps forward that they've made but we need to see what is in the final bill but we're certainly happy with the direction that it is moving, particularly

that were moving away from a crisis budgeting that we been on in the past. >> would you like the house to pass the senate deal. >> we would like to move forward but we want to see the final components but yes we are supportive, primarily because it meets several of the things we laid out including ending the crisis budgeting and also helps meet the needs of the military and defense spending as laid out by general mattis. >> could you clarify the security clearance of rob porter and if the president has confidence in him. >> i can give you two statements as has always been our policy when it comes to security clearance. we don't comment on them. i'm not going to change that today. i can tell you rob has been an effective secretary and the president and chief of staff have had full confidence and trust in his abilities and his performance. on more of an update, he has

put out a statement which i can reach you now and i think it will address some of those other questions. these outrageous allegations are simply false. i took the photos given to the media given to the media 15 years ago and the reality behind them is nowhere close as described. i will not engage further with the smear campaign. my commitment to public service speaks for itself, i've always put duty to country first and treated others with respect. i'm grateful for the opportunity to serve in the trump administration and will seek to ensure a smooth transition when i leave the white house. >> there was some conversation a couple weeks ago. >> he is going to be leaving the white house, it won't be immediate, but he is resigning from the white house but will stay on to ensure there is a smooth transition moving forward. >> the white house made several statements praising

him and his service so why would the president expect his resignation if the president thanks he did nothing wrong. >> luck, i think that was a personal decision that rob made and one that he was not pressured to do, but one that he made on his own. >> and we clear up the matter of the security clearance printed here have one or not. >> as i just said, i'm not sure why this is complicated and we've adjusted quite a few times. in many circumstances, as is always the policy at the white house, we don't discuss security clearance one way or another. >> and ask about the democratic memo. we understand chief of staff kelly eliminated this yesterday that this memo is different in terms of the content than the republican memo, general kelly said it's not as clean as the gop memo, republicans who have read the memo are saying it contains a substantial number of references to sources and methods. my question to you is you believe the white house is

bein being, not being sandbagged but being put in a difficult position by the minority forcing you to make actions or hold back the memo so it can draw a contrast. >> what's your treatment. >> we are still going through the process that we went through with the republican memo, we will continue to do that and once it's complete we will have something further to add. as of this point we do not. >> can you clarify, the president yesterday said he would like to shut the government down if he doesn't get funding for the wall or border security. is what he said yesterday no longer operative, he's going to support a spending bill without funding for the lost. >> well, as i said yesterday, the focus for us has always been to get a two-year budget deal. we've laid out the priorities we want to see in any immigration legislation and we expect to see that we do want, we've made no secret the president wants funding for

the wall and he wants border security and we expect to see that reflected in the budget. >> he wanted to shut the government down if he didn't get it. that's no longer his position. >> the position hasn't changed and i address this yesterday. the president is making a point, the only people who have shut the government down is the democrats. we haven't shut the government down. we laid out exactly what we want to happen and we are working toward achieving those goals. >> he said he wanted to shut the government down. he said i want a government shutdown. the point he is making is that if we're going to have that fight it's a fight that the democrats started last time and they lost and we think we would win again. we want a budget deal, we want an immigration plan that doesn't further kicks the problem down the road. >> does he still have confidence in his deputy attorney general when he said he felt medicated by the nunez

memos. what does that mean regarding rosenstein overseeing the russia investigation. >> he feels vindicated because the russia investigation has been a politically motivated witchhunt for the past year end the memo clearly vindicates the president's position that there was clinical bias. >> has he actually read the democratic memo. >> he has and what he had met with the deputy attorney general to discuss the differences yesterday. >> general mattis was saying that the president has great affection for the military, but he has yet to visit iraq and afghanistan. when that be the ultimate way to honor the troops by going there rather than a parade. >> look, think there's a lot of different ways, nothing has been decided or locked in stone. this is in the early discussion phases and it's something that the president is looking at, not just a way that he can but the entire country can come together and show support and honor our

military. >> does the president have any concerns about these domestic violence allegations against rob porter. >> i have not spoken to him about whether or not he has specific concerns. i have not asked those questions. >> seeing the photos of his ex-wife with the black eye. >> i don't know. >> the present weighed in on twitter on the stock market for the first time this week he has done so and he's done so quite a bit over the course of his first year in office. do we expect the president to continue to weigh in on the daily fluctuations of the stock market going forward or will he let the market take its course. >> anti-communist becky late on what we may weigh o weigh in on every single day but the economy is rbc been a big focus for the administration and it's something we will continue to talk about. we have a very strong economy, we feel very confident in the direction that we are moving and certainly the focus on the long-term economic fundamentals that this is ministration has been

advocating for. >> on the immigration deal, with the president be open to being part of an immigration dale, that being funding for that border war with mexico and increase border security and of course. [inaudible] >> we've laid out the four pillars we want to see an immigration legislation. >> the president called this a bombshell. does he believe there was a conspiracy in the fbi to try to undermine his candidacy to help hillary clinton? in unix lane more his thinking about what he's seeing in these text messages. >> i think it further shows there is reason for all of us to have great call for concern in this process and we hope that is thoroughly and fully looked at as we move forward. >> are there more specific changes, personnel changes you that get the fbi. >> not that i'm aware of.

>> a lot of people in the country think that is not how the american military. [inaudible] what you think. >> look, as i've said, we haven't made a final decision. the president simply exploring different ways that he can highlight and show the pride that we have in the military, the people that it served and sacrificed to allow us all of the freedoms that we have, the president is very proud of the united states military and all they do on behalf of all of us, and we are simply exploring options. i think it's way too far speculation to start weighing in on whether or not we think certain things are appropriate when nothing has been decided and it's literally in a brainstorming session. >> is it true that the report that the president gave a directive that this is something that must happen. >> no, the president asked

them to look at different ways and explore and see what the options look like as the secretary said. >> to follow up on these text messages, does the president believe that president obama was involved in the russia investigation against him? >> i'm not aware of that specific concern, but i think there is a lot within those text messages that gives us great cause for concern and we again hope they look at them thoroughly and investigate this process more thoroughly. thank you so much. >> that covered a lot of ground. you first heard from defense secretary james madison was very happy they struck an accord in the senate. it will be a two-year budget agreement that will include money for defense. democrats are happy because it will include money for nondefense and you as a taxpayer should be concerned that your paying out the money that will add up to

$300,000,000,000.2 years in route to deficit this year that could eclipse a trillion dollars. that has led to a backup and interest rates in the stock market is all over the map. the thing to worry about is how it ends today. it's all over the map right now. >> liz, on this first budget accord, the president indicated that he is on board with it, it gets a couple things either way, it's not perfect but both parties can move on to other things. >> i don't know how you move on to other things were the reason why the market sold off is because the tenure kept going up and the next to 2.85 when it should be a safe haven play when the market cracks up you would think the yield would be going down the kept going up. and s&p is out the new report, or something like an increasing number of u.s. corporations that are highly indebted. it's a five percentage point. >> and it doesn't take much for the repricing vicious default scenarios coming through the bond market when

the fed starts raising rates and the soap box bonds worldwide competing for each other for yield. we're talking 2 20 trillion in government printing during the last financial crisis so what's the fallout of that? i think the markets are trying to wrestle with this scenario but they don't quite have a handle on it. >> is equal have a bunch of stories will have to do between now and whenever about bond market vigilantes. couple things i was just reading about a little bit before coming down, for the first time in four years, u.s. japan and the uk will together issue more debt than their central banks will buy. it's a real shift in the environment that we are in. then you go back, you don't have to go back that far, but just on the numbers to early in the clinton administration, late 1993 that over the course of a year end a half or two years ago's from five-point to

up to 8%. that did force the hand of the government. >> there are a lot of people who don't remember rates that high which is more in the historic norm that what we've seen over the past ten years. the argument behind this whole akin forth on the selloff is what is an acceptable backup and rates. the easy money days are gone. we don't know what would be considered hardship. >> that's right. so 2.61 it starts breaking through that on the ten year, that was panic moment. now it's 3%. to his point, when it started going, the bond vigilantes, they got upset about it and worried about it, you had clinton and gore downsizing the size of the u.s. government when the yield start shooting up. is it 3%, is it three and half

percent, when does the market say golly, this is bad. >> that's the only thing that can make the move. charlie mention this earlier, if wishing that these guys that you're going to have, anybody, doesn't matter who they are but whoever's in power back then that will come out and all the sudden have lightning strike in the have fiscal discipline. the only thing that will force their hands neil: remember they struck the deal, clinton tried to get handle on spend he said we're all eisenhower republicans. do you guys think we're out of the woods yet? we have conditions where bond prices move quickly and but stocks as well? we had 450 point spread in the dow. it is getting to be almost commonplace. do you think we'll come down here? liz: federal reserve is out with

the cpi report next week. neil: when will that be? liz: geek moment of the day. it is stuck at 1.8%, core cpi last eight months or so i have to say i i think you guys are absolutely right. wage gains don't increase inflation. demand does. and monetary policy. neil: still low rates, not as low but they are still really, ily low low. liz: historically. neil: is there a fear they will back up even more than we thought? yee. neil: to the president's idea good news is bad news, i don't understand that. but the good news is bad news better it gets more rates back up? >> i think a lot depends on the pace, how fast it goes. if we go from 2.7, to 2.8 and all of is sudden we jump up to

3.3 we could affect the stock market. that is really, really fast move. essentially over two sessions. to say it is all over with, i have no idea. maybe prema turks market may retest some of these lows. we'll see whether or not they hold. we just don't know. neil: real quickly, lizzie, i get concerned about these program trading ability we have right now, are very unemotional and figured on algorithms. there are a ton of different algorithms. -- can't do. >> unbelievable, last year s&p didn't go down 3% at anytime. we have never seen that in the history of the country. i'm always worried that regulators have not caught up to the robots. they could be painting the tape or something we don't know yet. neil: but opening the bomb bay doors, hal time, 2001. movie reference.

dow up 155 points. the 10-year note to lizzie's point is back up a little bit here. for now we can deal with it. for now we can. for now. trish regan, to you. trish: thanks so much, neil. the senate doing seemingly impossible job to two-year budget deal. they initially got a little hesitant. the deal had happened but, you know, look anything can happen these days because we are in the middle of a very wild market. we're seeing all kind of volatility and all kind of swings. right now they seem to like it. we're up 134. up triple digits. all-star lineup. we'll break it