liz: materials, industrials taking hits. stuart: that is what happened. you get immediate reaction from the white house announcement and the market is turned all around. we're down almost 300 points. we're out of time. charles payne is it ising in for neil and has loss of time. charles: lots of time. i'm charles payne in for neil cavuto. as stuart said, trade concerns are worrying market. investors rattled by a possible trade war with china. s&p 500 on track for the third down day in a row. boeing shaving off most of the points, up with hundred on the dow. president trump is set to talk about his tough trade talk ironically at a boeing plant in st. louis. he is standing by his stance here, tweeting, quote, we can not keep a blind eye to unfair trade practices in our country. to republican pennsylvania congressman tom marino who supports the president.

thank you very much. just to gift audience some background here, last august u.s. trade representative robert lighthizer started a section 301 action, unfair trade practices. no one took him seriously. no one took the president seriously. now everyone is listening seriesly. president trump plans on leveling the playing field yet wall street doesn't like of it. what do you make of it? >> it is too bad wall street doesn't like it because this was a promise the president made during his election. i was out there during the beginning, uncertain circumstances i do believe we need tariffs. we go after china with tariffs. as far as our friend, canada, mexico, japan, no, i don't think we need them there but what we need, this is the guy to do it, president trump, is to talk about a fair trade deal. charles: right. to that point, this goes far beyond the steel and aluminum.

we're talking, when it comes to china rapid theft of intellectual property to the tune of perhaps $600 billion annually. it involves counterfeiting, piracy, trade secrets. again, what do you make of the lack of public support at least from even members in your open party to the fact that we are being ripped off every single day, and we still consider it free trade when it is not? >> well, i don't think they're really grasping the situation here. i have enough economicses in my back ground to make me dangerous from college and law school but this is a no-brainer. how long we have, about half a trillion dollar trade deficit now. so china does nothing but steal particularly our intellectual property. we have the genius here, steal it, and flood the market with. they subsidize everything. they're a dictatorship. they have slave labor. certainly we can't compete with

them on so-called hourly rate or a wage but we can compete with them on quality, and we hit them hard. we hit them very hard on tariffs. china needs our products more than we need their products. >> to your point, last year china sold us $505 billion in goods and services. if they don't want to sell it to us, i don't think there is alternative buyer out there. still though, this is the moment of truth perhaps in my mind at least. we're not going to make a stand, then we probably come from a weaker position. every subsequent year here on out as china grows economically. so what will the messaging be? because you know, again if we're going to, headlines are trade war that means there will be casualties and there will be collateral damage. how does the republican party under president trump message this to the american public that it might get tough a little bit? >> we make it clear to our allies we're not going to

instill tariffs on them. we make it, our leadership, guys like me out in the district, make it clear that this is going to create more jobs and more production in the u.s.? how long -- i have a chart i show what china does to us. that in of itself, that in of itself persuades people, yes, you're right. people can say trade war. you want to call it a trade war? it is a trade war with china. it's a tariff war. but with our allies, i think they're going to sit down and talk to us on a level playing field to make things a little more fair for the u.s. charles: yeah. i agree. i happen to think that if we don't push this back now, the reap boeing by the way is stock that hit the most, over next they're expected to sell one trillion dollars in airplanes to china. despite that we still want to make sure the rest of american companies are not getting the short end of the stick. we thank you very much. we always appreciate it. >> you're very welcome. >> trade issues in the for front

of the pennsylvania race which is still too close to call. fox business's connell mcshane is there with the latest. connell? reporter: charles, it is too close to call. it has been a crazy race, the democrat, we can say with confidence, conor lamb, 33 years old ran more successfully in the district president won so easily than hillary clinton in the presidential race in 2016, to the point you were talking about up with of the ways he did this supporting president on steel and aluminum tariffs which are popular in part of the world. in this race we might be head the to realm of recounts and lawsuits. we're talking about what we're hearing today. first to basics of last night. 33-year-old conor lamb came out to meet his supporters, he made basically a calculated risk, looking at votes he had, absent tee ballots already in, those still outstanding, before 1:00 in the morning he said this.

>> took a little longer than we thought but we did it. we went everywhere. we talked to everyone. we invited everyone in. reporter: yep, invited everybody in. so he claimed victory. now, again we're at a point it is still, so close that we are not comfortable calling this race yet. there is a what's next aspect to this we can go through today. if this were a statewide race we would be talking about an automatic recount ticking in but republican rick saccone is not conceding. it is not a statewide race. you have certain requirements for a recount we have reason to believe the republican party is thinking about. here are the requirements. you have to request one within five days. then you have to get three voters signatures in each precinct. now with saccone not conceding yet we heard reports out of the washington, our colleague peter doocy, some republican lawyers are heading into court today, they heard reports we haven't confirmed them of reports with problems in the voting machines

in allegheny county. if you look at allegheny county on the map, this is in the suburbs of pittsburgh and conor lamb did very very well there. it was one of the counties that put him over the top. we know that conor lamb performed much better than hillary clinton did. maybe this is the way a democratic candidate can win republican district. we'll see. one final point to make this raise so crazy, this district is going away, they're redrawing the congressional maps. so the candidates have to pig which race they would run in the fall, be it different district. they have to file for that race by next week. 20th of march and they might not know who won this one. crazy politics in pennsylvania. charles: connell mcshane, thanks for bringing it up as least as much as possible. we appreciate it, thanks. the president did win the district by 20 points. the media framing this as a loss for him. in fact that was going to be the overarching message no matter

outcome. "usa today" congressional reporter eliza collins and ballottopia editor-at-large scott rasmussen. eliza, whether we saw polls would be tight, and razor thin march begin whoever came out -- margin, oh arching mainstream media message would be this is loss for donald trump? >> democrats message is certainly that. they are saying we have enthusiasm, anti-trump sentiment and going forward with that, i was on the ground last week, i think there is something else at play which is important to note and it is candidates themselves. conor lamb was centrist democrat. he really ran to the district. he was progun, anti-abortion though he said he would not vote to restrict that he was prolabor. he did not criticize donald trump. all that being said you can not ignore the fact that trump won the district by 20 points. he went and campaigned down there. right now looks like conor lamb,

though narrowly is going to win. certainly not helpful to president trump but his approval rating in this district is higher than it is nationally. recent poll had him about 10 points higher. not fair to say that is the only thing at play though that certainly can not be ignored. charles: also, can't be ignored by the republican party is that 79% of the dems who voted in 2006 turned out while only 53% of the republicans turned out that enthusiasm gap is something we see throughout the rest of the year. >> absolutely. we saw it actually in texas last week in the primaries. there were a lot of democratic enthusiasm. in texas it didn't matter all that much, there were limits to it. you see the democrats are ready to come out and vote against donald trump. important to keep this in perspective. not that donald trump is historically unpopular or historically unique motivating the opposition party. this is what happens in midterm election. i think it is fair to say that democrats are in better shape

today than perhaps they expected to be. it is nice that they won that race. there is a good chance they will win control of congress this fall. still a long way to go until november. to know how big that wave might be. charles: eliza, what is the chances of every democrat running as a progun, anti-abortion, anti-pelosi pro-tariffs candidate? >> probably pretty slim. tough realize there is the democratic base which is pulling the party to the left. same way the republican base is pulling the party to the right. so this was very unique situation. this was not a traditional primary although there was a competition between multiple candidates that were chosen. conor lamb came out but it will be really difficult for the base to reckon with someone who is progun and anti-abortion. so the democrat party will certainly have to have the conversation going forward if they want to win in districts like this where trump did carry it by 20 points. charles: scott, what about the republican party and their

vetting of these candidates? really, what is the process here? feels like they have had some relatively flawed candidates in some races that should have been slam dungs for them? >> you mean you think it's a mistake to bring right to work nominee into a heavy union district or somebody who is lackluster at campaigning, doesn't want to raise a lot of money? yes there is a problem but there is no single process. in alabama the process was by voters n this case it was by a local committee. i think the problem right now is that republicans are still split on whether they, there are a lot of republicans who disapprove the president but really happy he is there instead of hillary clinton. they don't know what to do. the democratic divide we'll learn a lot more about that next week in illinois 3. there is a conor lamb type congressman in illinois 3, but there is an effort to purge him from the party by the bit progs. if the democrats move further to the left the base wins the battle, the republicans have a

better chance hanging on is there was a little controversy with this one, not too dissimilar from alabama and i don't know how much that played a role but can the democrats really grab on to this and say, hey, this is absolute proof we will take the house in the midterms? >> well they are grabbing on to that. i don't know if they can completely do that because of course there is all kinds of things at play here. conor lamb was very interesting candidate. rick saccone was not a good fund-raiser. it is important to note, republicans keep talking about how flawed of a candidate he was. this is not a roy moore. he did not excite his base. had trouble fund-raiserring. he had long resume'. a air force veteran. state representative, and worked in counterintelligence. it is disingenuous for republicans to throw him under the bus even though he had a hard tame raising money. charles: the republicans can

take consolation that a conservative won? >> they certainly are. that is the message this morning charles: thank you both very much. the dow hit session lows. we'll get into details why the market is falling apart. meanwhile tillerson is out. is the shake-up over? talk about more could be leaving in the white house shake-up after this. ♪ whoooo.

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charles: fall i don't have from rex's departure as lawmakers look to add quickly to replacing him. fbn's adam shapiro with the latest. reporter: they do expect to get the confirmations for both of the nominees, mike pompeo, the current cia director to become the next secretary of state, then gina haspel to be the next cia director. there will be uphill battle on this look at video of mike pompeii i don't. there was a lot of college statements on this mitch mcconnell said that the president called on a tough-minded leader to challenge our diplomatic corps through the days ahead. one of the challenges may be sooner than anticipated, rand paul the senator, says he will not support this nomination, not mike pompeo or gina haspel, he is concerned not

only about pompeo's support for issues with iran and iraq and has pell's involvement what has been called by some people enhanced interrogation. others, torture. take a listen to rand paul. >> my announcement today i will oppose pompeo's nomination and haspel's nomination. people complain sometime about the filibuster. they complain about trying to obstruct. i think the debate over whether or not america is a country that is in fav of torture or not is an important one. reporter: you should know the senate select committee on intelligence will have its hearing. they have not set the date on gina haspel. senate foreign relations committee will set the hearing on pompeo. that will happen in april on haspel, john mccain issued a statement the torture of u.s. detainees in custody in the last decade was one of the

starringest chapters in american history. most haspel needs to explain her involvement in the program during the confirmation process. then there is the math. look what is happening in the senate, thad cochran, mississippi will retire april 1st. that is down to 50. rand paul will not support the nomination. democrats are opposed, bob menendez is upset about the enhanced interrogation or torture. that took place number of years ago. that will be uphill battle in many respects. charles: thanks, adam shapiro. rex tillerson, geir i cohn are the latest former business executives to leave the administration, amid talk that larry kudlow will be headed to the white house. "wall street journal" editorial board, dan henninger that the white house can not be run like a business. president trump is running it as a business, as a businessman with tough negotiations but i think there is distinctdation

between the globalist elitist voices they had their chance and think he is moving back toward that sort of economic nationalism that won him the election, dan. >> well there may be something to that, charles. i would not too quickly dismiss gary cohn's tenure at the white house, former president of goldman sachs. let's look at the record for the first year. they passed an enormous tax cut reducing the corporate tax rate by 40%. biggest tax cut since 1986. in addition we know gary cohn as director of economic advice for president was driving force behind all the deregulation that took place across almost every major american industry. the result i think is clear. incredible economic growth that we're experiencing this year. rise in the stock market. charles: sure. >> gary cohn had a lot to do with that. charles: not dismissing the accomplishments but saying they weren't enough to keep him around for the next phase of the trump agenda, if you will.

those things are low-hanging fruit, everyone saw eye-to-eye, moving along, apparently gary cohn wanted a larger role. he wanted to be in the cabinet. from the comments that president trump has made with respect to rex tillerson, i don't know how much pushback he is looking from main street, these big corporate bigwigs anymore? >> well, i think president trump's operating procedure is management, habits had to have been like chalk on a blackboard to someone like rex tillerson who was running exxon. trump's modus operandi, decision first, details later. i think there is something to be said to that up to a point, charles. a lot of this criticism of the businessmen that we're hearing right now is that they don't understand politics. they don't understand how things are done in washington. really, washington is in fact the swamp. we're talking about federal bureaucracies that simply don't want to move. i agree that donald trump is pa change agent.

i don't particular i efficient one. the idea that washington could not benefit from the some efficient practices businesses engage in right now to me is absurd. take software. most of these bureaucracies are so far behind the curve, like the faa, implementing software it is ridiculous to say that politics should be the deciding force. charles: from idealogical point i think there was always access between wall street and washington, d.c. people from goldman sachs always go to d.c. and vice versa and it feels to me this was more about, what we're seeing now more about the heartland which has been underrepresented by both sides of the aisle. now having a voice, a voice that is resonating within the white house, with the commander-in-chief and that the decision-make something based on what benefits them first and foremost, not the stock market. >> charles, i think to some extent the dichotomy between the

heartland and washington is a false one. i think the more accurate distinction to make is between the private sector, which indeed is the heartland, and the public sector. the public sector is the democrats, that is washington. that's the bureaucracies. the idea that everybody out in the rest of the country works to feed the bureaucracies in washington. i think what trump represents, what people like gary cohn representative sent, return to the dominance of the private sector. that is extremely heavy lift for them to make. and so if trump is going to bring in someone like larry kudlow who doesn't exactly have a business background, media background, nonetheless, larry kudlow is sort of person understands that the private sector shoulding leading, not have the country dominated by washington. charles: one area that they differ on last couple days is tariffs. >> yeah. charles: again, i think you've got a wall street type of thinking and a main street type of thinking. main street america, at least from what i can tell, the

questions that i ask, we're willing to a take a short-term hit whether we pay more for imported televisions or whatever, to re-establish manufacturing, still making other capabilities in our backyards that will give us jobs and national security. wall street of course is saying hey, it is going to hurt the market. that may be the only area where thrill will be friction possibly. >> speaking of friction i think the rubber will hit the record, assuming some of these tariffs are enacted, we assume they will, as the bush 2003 steel tariffs caused some people on main street and the heartland to start losing their jobs. i'm looking at steel fabricating companies. not so much the steel-producing companies. if there are job losses in those industries and those companies, you could see kind of a wedge being driven between some of the trump base, between people who are literally benefiting and those being hurt by it. if he goes through with really large tariffs against china they're talking about, perhaps

$60 billion, i think we'll find out real fast whether the heartland is in support of that idea or has questions about it. charles: in other words, put their money, quote, unquote, money losses where their mouth is? >> their jobs. charles: we'll see. dan, pleasure as always. >> thanks a lot, charles,. charles: 10 years since bear stearns bailouts. could history be on the verge of repeating itself? more fallout on today's selloff. tonight on "making money" i hash it all out for you 6:00 p.m. eastern here on fox business. ♪ i'm just surprised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement. stay at la quinta. where we're changing with stylish make-overs. then at your next meeting, set your seat height to its maximum level. bravo, tall meeting man. start winning today.

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charles: stocks are down big today on trade worries but look how far they have come in the last 10 years since bear stearns bailout. the question some are asking, could that ever happen again? to fox business's deirdre bolton and charlie gasparino. deirdre, the big banks are bigger than they were before the bailout. so it is not inconceivable, is it? >> it is not inconceivable, but

even most of the people involved in the deal-making 10 years ago say it is unlikely. we have the new fed chair, jerome powell, he was asked in november, are the banks too big to fail? he said no. the consensus seems to be a bank would be allowed to fail in this day and age. according to dodd-frank it is illegal. there is an order, for the government to be involved and there is an order of liquidation which would happen, essentially, let's say let the shareholders cry and then there would be a liquidation of assets. charles: do you believe it, charlie? >> i will do a little humble boast i broke most -- charles: that is unusual. >> this one is real for a change. i broke most of the stories about the financial crisis at cnbc. charles: you had a best-selling book. >> the sellout and bear. what is interesting about bear, it was never really catalyst of the financial crisis. it was one of the casualties of financial crisis. the real cause of the financial

crisis was something known as moral hazard. what is moral hazard? when you subsidize risk, like the fed subsidizes risk, whenever wall street got in trouble or bail out long-term capital, you create a situation there is no consequence to your risk. bear stearns, the way it went under, it didn't really go under, it was got bailed out, forced merger with jpmorgan and subsidized risk. it led everybody to believe they with turn around and bail out lehman brothers. when it did not bail out lehman brothers, that is when the whole financial system imploded. then they had to bail out everybody. you had a situation where the government has set the stage purely from a policy standpoint for another massive bailout and another financial contagion. we have not dealt with the root cause of what caused the financial crisis which is the notion whenever wall street gets in trouble -- charles: they won't bail us out,

wink, wink. >> baloney. by the way they have to. you have less amount of banks, more -- charles: less amount of big banks, right? >> listen, every english teacher in the world will be screaming right now. fewer big banks, much more concentration of assets in these fewer big banks. that is a recipe for disaster. you have glass-steagall where you still subsidize the risk. >> i was going to say i think taxpayers may have a different reaction. first of all, i don't think the exact scenario will repeat itself. a different sort of catalyst. >> but the same scenario. >> remember all the protesters, aig getting $182 billion bailout, hey i would love it with my business -- >> they will let the world go into great depression? i don't think so. i don't think they have the cajones so to speak to allow a great depression. charles: if that was the case, they would be admitting they did

something wrong in the aftermath. >> they did. charles: the average person out there knows all the things they did, really curtailed main street lending. another as far as, deirdre is the stress test. i thought these were a farce. one thing you can't game, yelling fire in crowded theater versus a real fire in a crowded theater. crazy assumption that banks will control it, orderly function, if there is a run on the banks in our country, they don't have the cash! >> the argument since dodd-frank, all of these sort of stopgap measures, circuit breakers if you like, put in including orderly liquidation authority. to your point, the people really in the mix, great to have all the theories, great to have all the rules, yes, if all heck breaks loose people will sell what they can sell is exactly the pattern. >> pull money out. disintermediation of assets from the banks. not necessarily deposits but

from big hedge funds. here is the thing, when they say orderly liquidation, that is essentially a government bailout. orderly liquidating who knows. charles: we'll see. semantics of it all but it is hard to believe, again we talked about the relationship between washington, d.c., and wall street they would not bail them out no matter how much people screamed at top of their lungs. >> charles, if the market really believed they wouldn't bail them out jpmorgan wouldn't be able to borrow at very low rates because people would think that is an enterprise wouldn't have back up from the government if they got in trouble. that is the whole thing. these banks borrow, at very low rates, primarily because people believe there is a backstop. charles: guys, thank you both, very, very much. we have breaking news for you, the elizabeth holmes charged with massive fraud by the sec she was youngests quote, unquote self-made billionaire in history. now they say she was making false statements about her

company as technology, business, financial performance. she is being strip of the control of the company. she isrded to return millions of shares to the company. this is worse for a one-time rising business superstar. walmart taking a shot at amazon by offering home delivery for groceries but can it really compete? we'll ask former walmart ceo bill simmons shortly. today, we're out here with some surprising facts about type 2 diabetes. so you have type 2 diabetes, right? yeah. yes i do. okay so you diet, you exercise, you manage your a1c? that's the plan. what about your heart? what do you mean my heart? the truth is, type 2 diabetes can make you twice as likely to die from a cardiovascular event, like a heart attack or stroke.

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charles: walmart announcing plans to offer grocery delivery at 100 cities by the end of the year. to former walmart ceo and president bill simon, whether walmart can actually compete with amazon. thanks for joining us, sir. walmart has really come back a couple of times in this sort of battle against amazon but more recently lower sales on online division sent the stock tumbling and people say that is it. is this one of the solutions?

>> i think walmart is doing a great job executing the strategy they designed several years ago. they put a lot of time, money energy and developing online business and they're headed in the right direction. whether that works or not remains to be seen and has come at really steep cost. 2014, 15, their operating income was 28 billion. last report a month ago, operating income was down to 20 billion. $8 billion to drive that. we'll see if it works. charles: they made the acquisition of jet.com which most folks applauded but didn't think it was enough. can they do it all organically or with respect to acquisition jump-start themselves into this battle? >> they have been aggressive. they bought self online retailers and integrated them really well. to get the scale and amazon magic. the magic that says you don't have to make any money, just as long as you're growing your top

line everything's okay. if that rubs off on walmart i think they will be fine. if it doesn't it will be challenging. charles: amazon doesn't have to make money. the only place they make money is the cloud business. wall street loves it, and afford them amazing market valuation. it stopped doing that with walmart a long time ago. what about the omni channel platform? seems like more recently a lot of retailers successfully integrate that, whether you pick up at the store after you ordered online at work, maybe start delivering more products even beyond groceries which we know have razor-thin margins to begin with? is that the ultimate solution? >> that is one approach. costco for example, they decided they will be a heck of a good retailer and deliver on their core promise and they're doing a really good job having pretty good results of that. others integrated e commerce and physical stores through omni

channel offerings and done a good job. that hasn't really worked in a lot of cases from financessal perspective. it is challenging. amazon set the bar. others are trying to chase it. they don't have the magic fairy dust that they don't have to make money and they're punished for it. charles: i remember reading that sam walton said costco was the one he couldn't take down. the closing of sam's stores revealed that. they have found unique niche in the brick and mortar retailing where they escape the amazon effect. what about walmart, getting back to its knitting being a great retailer that draws people into the stores? >> there are a lot of good examples of people who just executed their business model really well. costco's one of them. thinking restaurants, darden and olive garden is good example of really, really executing well. dollar general is doing pretty good. the dollar segment is buoyant.

there is a lot of market share in brick-and-mortar retail. wal-mart made the decision to go in a different direction several years ago. they are committed to it. they redesigned the board to deal with it. we'll see if it works out. they're executing, doing what they said they would, doing a good job of it. charles: unfortunately, i'm not sure how patient the board will be with the sinking stock price but feels like the bar is set substantially higher for them for quarterly results from online. i see other retailers doing 20% year-over-year being rewarded. that will not be good enough for walmart. >> i think walmart set the expectation really, the street set the expectation that walmart would have amazon-like numbers. the minute they didn't they got punished for it. that came as well with declining gross margin and lower operating income and a little bit of reality set in. doesn't mean they can't do it. it means it will be difficult and will be expensive. charles: bill, i want to ask you about this morning, retail sales

numbers were out. they missed consensus but within the number i saw bright spots. building and is plies were huge. clothing inflationary pressure on apparel were up higher. you mentioned darden restaurants. are there some signs consume remembers stepping up to the plate and feeling a little bit more confident with their spending? >> i think so. you are starting to see that. consumer confidence up, consumer spending is up. there is so much noise politically and economically in global affairs i think there is still a little bit of fear and trepidation in the market but you're starting to see people as the money hits their wallet from the tax cuts and paychecks getting a little more aggressive what they are spending. i'm pretty -- some catastrophickic evented we'll have good year in restaurants this year. charles: bill simon, appreciate your expertise.

>> yes, sir. charles: trump and california taking shot as jerry brown and this feud, it is escalating. after this. >> the governor is doing a terrible job running the state of california.

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charles: well the census bureau predict people over 65 years old will outnumber children by 2035. what does this mean for our growing entitlements? gerri willis has the details. >> charles, that's right, it is not good. the nation's entitlement programs especially social security will be hurt by this because social security is already in trouble. consider these numbers. social security's total income minus interest already exceeds its total cost every year as it has since 2010. by 2021 the government will have to try on interest income and trust fund reserves from general fund of treasury to offset social security annual deficits. that strategy continues to work until 2034, when the fund goes bust. benefits are paid 100% through tax income receipts. expectations they would be sufficient to cover only 3/4 of the estimated need, think about that. obviously something needs to be done. retirement experts don't expect anything anytime soon from congress which is focused like a laser on midterms and general election. i called doug holtz-eakin from

the american action forum. he says this the numbers point how we need to find a solution. that is a stark reminder that the u.s. needs two things, productivity growth and entitlement reform. no amount of productivity growth can make entitlement stable we just need reform. amen, and amen. charles? charles: gerri willis, thank you very much. president trump slamming california's governor jerry brown at the border wall event. take a listen. >> i think jerry brown has done a poor job running california. they have highest taxes in the united states. the place is totally out of control. you have sanctuary cities where you have criminals living in the sanctuary cities. people will start to move pretty soon. if you don't have safety, meaning if you don't have this kind of wall, the drugs are pouring through in california. can't do it. charles: to former i.c.e. acting director john sandwig whether this battle will get worse before it gets better.

i'm guessing worse but what are your thoughts? >> definitely getting worse. of the unfortunately the federal government and states are both at loggerheads but reality neither side will not win. federal government will do a lot in the states, continue to endorsement. the states can do a lot to stop the federal government so the states can not stop the federal government. this political posturing is escalating but the real losers will be the american public. charles: what do you make of though we've seen belligerent state and cities, oakland's mayor, for instance, the harsh attitude and words towards the executive branch, commander-in-chief, not only do not help the situation, but seems to me would encourage more illegal immigration and even more criminal activity? >> listen, i don't think the words of the oakland mayor are great. i think they jeopardize officer safety. i understand why the oakland mayor did it. the states and localities are getting pushed into corner.

i don't think either side is right. both are taking extreme positions. the guys that benefit are the bad guys. sanctuary cities it makes easier for dangerous criminals to be at large. the administration's rhetoric that all 11.5 million are criminals. i think we can get the bad guys off the streets. i think we can all agree on that. charles: is there something else we can agree? i'm not sure, jeff sessions is focused on folks committing criminal acts. a lot of people say if you come into the country illegally that is criminal act. i don't think the administration is talking about rounding up everybody to try to get them out of the country. there are problems, ms-13 issues. there are other problems. the sad part community mortgage often than not are the legal immigrants who came into the country or even illegals who committed no other crimes who have been here. there has to be compassion

toward them. that would mean being tough on the people destroying their own communities? >> charlie, i could not agree with you more but i think the problem is this though. the state of rhetoric out of washington, everybody is fair game, all 11.5 are equal and being deported. that is no what you see i.c.e. do. they are not a army of hate as lieutenant governor called them. most i.c.e. agents are focused on getting bad guys off the streets. you create a chilling effect, i met with a lot of police chiefs be if the rhetoric is you report a crime, you're undocumented you're likely to get arrested. what that does, chill the reporting of crimes. look, i think the rhetoric doesn't do us any good. i think actions of state and local politicians in california are definitely extreme. you know, it's a shame because the politicians are getting what they want. they're appealing to the bases but we're the ones who lose. charles: no doubt about that. you know, this is not just a i.c.e. problem. it is all law enforcement, beginning with the border patrol agents, i.c.e. and local law enforcement, which around the

country, here in new york, people are shocked, long island being infested with the kind of activities, gang activities in our schools that you have never would have imagined. i could not believe it the first time i saw the statistics. what do you think, john, can there be resolution? or does this thing ultimately have to go to the supreme court where perhaps the supremacy clause is enacted, no nullification, but you get a harsh reaction but takes three or four years from now? >> the problem is that, charlie, exactly. even a resolution will be three or four years from now. there will be new issues and new lines drawn in the sand by california and other states. i.c.e. is the most politicized law enforcement agency there is. it is a shame. honestly we're the ones who suffer. i think what we need to do, tone down the rhetoric, let i.c.e. do its job. let i.c.e. cooperate with state and local police departments to find the gang members. look, police chiefs work for the mayors. when the rhetoric is such, perception in the immigrant

communities, that everybody gets deported mayors have to tell the police chiefs not to work with i.c.e. this needs to be depoliticized and get our law enforcement to work together to make our country safer. charles: mayors have to relook the oaths that they take which supersede politics and their own ideology on both sides. thank you very much, john. >> pleasure. charles: go to our own blake burman who is reporting that larry kudlow has been offered the job to replace -- i'm sorry? we'll going to him more. larry kudlow, you're looking at him right there, should be the next nec head. we'll have much more right after this.

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right, right. how 'bout a plan that works for 5 kids, 2 dogs and jake over here? that would be great. that would be great. that okay with you, jake? get a portfolio that works for you now and as your needs change from td ameritrade investment management. . charles: breaking news, larry kudlow has been offered the job to relace gary cohn. blake burman is live at the white house. blake? reporter: i remember being on air with you in the 6:00 hour a few hours after gary cohn officially announced resignation at the white house, the very first name i was given, which is what i told you on air is larry kudlow was viewed as the strong contender out the gate to replace gary cohn, and larry kudlow has been offered the job and expected to be the next nec chair. president spoke glowingly of kudlow yesterday on the south lawn as he was leaving for his departure out to california

saying this is somebody he has known for a long time, somebody he believes is very talented. keep in mind, that kudlow, during the campaign was one of the president's closest advisers on the economy, specifically he helped craft the tax plan that the president presented on the campaign, and during the transition before gary cohn was eventually tapped as the first nec head, kudlow could step in the role. he did not. gary cohn stayed in the position for 14, 15 months or so, and now it will be larry kudlow expected to step in as the next nec head, to be the president's top adviser here at the white house. charles, the white house said gary cohn was going to stay on board for a couple few weeks while the transition took place, he officially announced his resignation last tuesday, so it's been about eight days now. the timetable for cohn to

officially exit the white house remains unclear, but when he does, it will be larry kudlow, we're told, within the last few minutes here. this is not a position that needs to be confirmed by the senate. so this is something when kudlow comes to washington should happen immediately or close to immediately. charles? . charles: kudlow comes to washington, has an interesting ring to it. you were spot-on, you knew right away. thanks, blake, appreciate it. reporter: you got it. charles: concerns are weighing in on the market, investors rattled about a real possible trade war with china, not talking about steel and aluminum but something much deeper, nicole petallides has the latest from the new york stock exchange. nicole, what are they saying down there? reporter: hey, charles, the traders like market volatility because they truly believe that when it sells off, they buy on the dips, they don't keep them down, there is a lot of optimism on wall street, big picture. when you see the stock market down 1%, it's enough to give

you a few jitters. today's headline as you noted is worries about the trade war in particular with china and imposing tariffs up to $60 billion on chinese imports. chinese imports and that certainly is weighing and concerning investors overall. so the dow is down since march 9th, since that close, for the week is down 2.2%, s&p down 2.2% and the nasdaq down three quarters of 1%. want to take a look at boeing, boeing, a great performer or the last 52 weeks, this year a winner, it is under pressure. down 2.6% currently, and the big picture is about the trade war worrying on this one as well. losing altitude on that one, back to you. charles: nicole petallides, thank you very much, appreciate it. with more reaction to larry kudlow tapped white house economic adviser, gaby morange

yellow is with us along with senior fellow for fiscal policy, maddie doppler. larry kudlow didn't like the tariff initially, but warmed up with it being a negotiating tool, is he the right fit, downing, knowing the way president trump operates one year in office? >> right, very encouraging to see kudlow's name appear as the next for the position. there was a deep bench, very strong advocate for tax reform. larry kudlow as well, you have an ally in the white house who not only has been rock solid on pro-growth tax policy but an avowed free trader and decades of doing so. moving forward as we talk about what happens next in the trade policy, having someone in the president's ear who has a long history being advocate for free trade. we will see movement toward policy that protects american workers and allows us to be a

competitive country in the global marketplace. charles: gaby, he presumably will be taking the job as we are on the verge of being really tough for china. robert lighthizer presented 30 billion in tariffs, president trump said 60 billion. he's not messing around? >> no, larry kudlow avowed free trader and opposed the steel and aluminum tariffs at the get-go but also been very harsh on china and encouraged the manager to take a hard line in order to contain this trade deficit or reduce it in some cases. he's pushed the president to consider tariffs that would curb back the deficit that would address china's intellectual property stuff, address trade abuses, this is something larry kudlow and the president agree on. the areas where they differ, where the president said yesterday he welcomes divergent opinions, he wants somebody going to be a counterweight in

instances, somebody going to push back and offer different perspective. and i think somebody who he respects, that's somebody like larry kudlow. he didn't have that relationship with gary cohn, there was a lot of tension in the past few months, that's one of the reasons why this ultimate selection was made. charles: mattie, to that point, with rex tillerson, i guess after being the ceo of the most powerful corporation in the world didn't feel like a team player. it's different to say boss, i don't like this, i don't like that, when he calls the play and you're in the huddle, you run the play. he never seemed to be behind president trump, and that shaked the president somewhat. >> it probably did, but looking at the headlines written about the palace intrigue with the white house, those will come and go, what we have now is a legacy that will be built on some of the policies that have been enacted by this administration, which will long outlive the administration, long after donald trump returns to the private business he was

running before the white house, we'll be seeing the benefits of tax reform. hopefully see the benefits of positive trade policy especially now with larry kudlow in the president's ear, we will continue to discuss benefits for the tax reform plan that will continue in the next coming decades, rather than personnel changes at the white house. charles: speaking of tax policy, there's a big question we could be on the verge of second tax reform coming. congressman kevin brady with an update this morning. let's take a listen. >> when we'll get concrete proposals to discuss. >> the answer is this year, the focus is i'm doing what i was set out to do. grow jobs, raise paychecks and bring jobs back from overseas. that is always our top priority. as far as fine tuning and making corrections, that's routine in a tax reform of this size, and so right now we're listening to stakeholders, local businesses and others about some of the fine-tuning

they'd like to see done. charles: gaby, what do you make of it, the tax laws have spoken to themselves, no one will lose the crumbs, maybe phase two could be sold right now? >> i think a lot of americans are hoping that republicans will make these individual tax cuts permanent, and that seems to be what kevin brady is talking about doing, and also eliminating the loopholes that were left behind from the tax cuts and jobs act there. are some questions about revenue, if they choose to advance a second phase to this tax reform proposal, and i'm curious to see how that would be addressed, but, look, to mattie's point earlier, there is sort of an economic cushion with the tax reform bill and the popularity it's gained since getting through congress, but there's also a lot of chaos going on inside the white house, and a lot of staff departures that really overshadow a lot of the

benefits that we're seeing on the economic side. charles: i want to point out also, you just reminded me that budget deficit was significantly higher than anticipated. it was just announced earlier this week, and want to ask you quickly since you have your ears in d.c. any, possibility of second go at this with the removal the tax breaks for the fat cats that was promised to mainstream america? >> would be very difficult for congressional republicans to put that on the table knowing they're going need bipartisan support for something like this. charles: mattie, where do we go with respect to more fine-tuning with the tax cuts? >> a lot from the left going to come from tax reform. we've seen withholding tables change, so americans are seeing more in their paychecks, now the business changes in the tax code start to take effect. businesses that had money overseas will start investing in america. we will see wages rise as a result and more economic growth. some of the deficit concerns,

because we'll see economic growth will be alleviated and provide the template for members of congress moving forward who would to take another stab at reform. they've got the template why pro-growth reform is important. not let all of the dramatics take too much attention out of the fact the tax reform is working and the economy will continue to improve. >> the magic of supply side going to work there. ladies, thank you very much, appreciate it. >> thank you. >> thank you. charles: republicans want to quickly move on mike pompeo and gina haspel's confirmation. to walid phares on how the now team will face obstacles. china and north korea, most particularly, walid. we know that rex tillerson had different ideas whether t's north korea, iran or even moving the capital to jerusalem, but feels like mike pompeo is certainly on board? >> absolutely, there's a large policy difference, it's an experience difference, it's normal that someone was in the

congress for many years sitting on committees was the director of the cia and known in his ideas will have a different output inside the state department. but having said that, when mr. tillerson came in, he was appointed, he basically did not have a team in foreign policy. he had excellent knowledge and teams in international economy, but when it comes to the state department. this is an ancient institution, it is very sophisticated. so the only condition for a new secretary to be able to change the foreign policy of the united states to address those north korea, iran, israeli conflict, you need to have people, that's the challenge mr. pompeo will have to have. charles: doesn't it help when you have the president and the confidence and the respect from the commander in chief as well? >> absolutely. this is 50% on day one. if you have the support of the white house, chief executive, obviously, you can do much

more. i'll take you back basically to the years of the bush administration. both the secretary of state and the white house were in line. yet the bureaucracy of the state department had different views, it did not change between clinton and obama. you have to have both, you have to have the support of the president but your own vision which is very important and also the team with whom you're going to be working with. charles: we know when pompeo was -- came out of kansas with a tough national security background, when he went into congress, people gave him high marks for tenure at the cia. what does it mean with respect to how tough will we be, the potential talks between kim jong-un and president trump. how hard of a line will the administration take now? >> well, one thing to the advantage of mr. pompeo, he knows the stuff, for many, many years. if somebody at the state department wants to explain what the iran deal, is he knows

exactly what it. is he will not rely only on the input, he will have his own input. i expect on korea, he and the president will be hand in hand gathering allies. on iran, both of them, the white house and state department, though they will be tough, they need to have actual plan. so the action is going to be in the region. what kind of coalition we have with us? the president already has arab coalition. will he address the europeans? it will be more crafting, it will be different, and tougher if this is the term we need to describe it with. charles: thank you very much, walid. >> thank you, charles. charles: stocks are continuing to sink. we're off a little from the lows of the day. but certainly a tough session on a combination of tariff trade. all the worries that are starting to come to a boil there. still too close to call in pennsylvania, and the big question is how much of a referendum is this on president trump?

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comcast business outmaneuver. . charles: well, it's still too close to call in pennsylvania. democrat conor lamb holding a razor thin lead over republican rick saccone. coming as democrats are distancing themselves from hillary clinton. so are liberals starting to embrace a different kind of

candidate? to daily caller editor in chief chris bedford and patrice wuka. let me start with you, obviously conor lamb ran as anti-pelosi. pro-guns, antiabortion, pro tariffs, if you didn't know better, you would think he's a republican candidate. >> he was a trump candidate. he supports lots of issues that unfortunately for the democrat, many in the base totally disagree with. when you consider a lot of democrats are trying to figure out how to appease those who are far left and reach out to those in the center who voted for president trump, this is more than anomaly than anything else. charles: chris, this might be an anomaly, how does this guy usurp president trump's message and his accomplishments. how does he get the steelworker vote when president trump is out there fighting for steelworkers? >> well, you had to hit a lot

the places where donald trump hit with pennsylvania voters. the reason they went by 20 points for donald trump. he was a marine corps veteran. he didn't attack the 2nd amendment rights, talked about ways to figure out the coal problem. if you look into his coal record, he says i'm pro coal but nothing we can do to save the jobs. if you look at abortion record, i'm against abortion but voted for late-term abortion. talking about working class issues that the people care about and dodging the more socially awkward questions for them and the issues and try to push them away, and that's not really what the dnc has been doing. the dccc has not been funding candidates and the base is so viciously against it. i'd be amazed to see if they follow the playbook for the country. charles: what does it mean for the midterms? what can we glean from it? is this a strange anomaly that can't be replicated anywhere

else? >> i think in the short-term, they'll try to fund raise candidates off of this and push to embrace middle america and the values that americans care about. i don't think you're going to see the sweeping change and see more of the lands. you'll see those who are ultraleft and pushing progressive ideals that are -- that would be not embracing of things like free trade, things that are actually going to help real americans. charles: lamb got 70% of the democratic turnout from the presidential elections, christopher, whereas saccone only got 52%. the enthusiasm gap, whatever drives that, we know midterm elections are notorious for the incumbents losing. how does the republican party address that? >> one of the massive problems. democrats don't have any problem at all getting voters out.

i was talking to a republican in connecticut, he was seeing local races around connecticut. republicans losing to democrats who hasn't campaigned because people were so juiced up. the democratic base was. republicans have to do a lot to counter that. they pushed tax reform, pushed -- attacked the democrats, and one of the thing they ought to consider, while the mainstream media is excited about the gun control era. democrats are seriously coming for your guns, that plays extremely well and excites a group of voters that are often republican voters, single issue voters, if they feel like that's happening, will come out for the g.o.p. >> patrice, your thoughts? >> i agree with that, i would underscore the impact of tax reform and tax cuts on everyday paychecks. that is something republicans are pushing hard and does earn brownie points. beyond gun control, democrats

don't have a positive vision and message. when you have people like hillary clinton who is calling middle america backwards and pessimistic, they have to show that is different from what she's saying, and unfortunately i don't hear anything other than anti-guns. charles: thank you, both very, very much. want to get back to the breaking news. larry kudlow has been offered the job to replace gary cohn. charlie gasparino has an update. more after this. [ phone rings ]

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should point out larry works there, so i'm sure -- charles: blake burman, the night that cohn resigned said on my show at 6:00 p.m. that night that kudlow was involved. >> everybody knew he was involved, and the president made no secret about it. what i did was basically started reporting how kudlow and the president over the weekend and through monday, i reported monday night were in contact, so it looked like he was inching to him. here's where i guess i made my value added. on that story, plus on the fact that when i said some of this is to give the president cover on certain things. larry kudlow would probably be announced when, if particularly today, if the republican lost that pennsylvania race which is a lot of people say may be foreshadowing bigger losses and losing the house in the future, and if the markets traded off on some of that or protectionist news, and that's what happened.

it's interesting here, i think is disclosed off the bat, larry is my friend, talking to him recently. he knows where i stand on this. i think he's making a huge mistake going into the administration, he could be using protectionist cover for trump to use the crazy trade stuff he flirts with. i know larry believes that trump is moderating on trade, that's what he's telling people, that the president is using the threat of tariffs as negotiating ploy, he's not going to do it. at the end of the day, it's marginal stuff. charles: but larry doesn't think china is playing fair with us --. >> take china out of it because some of the tariffs are mostly broader based. he thinks this is negotiating play. trump thinks that larry is warming up to tariffs and thinks it's a good idea to be doing tit for tat. take china out because they're a bad player. here's the thing, because the tariffs are more broad-based -- charles: i'm not talking about the tariffs, the steel and aluminum stuff is old news, the

section 301 investigation. $60 billion. >> that's something else. that is -- nobody is saying that we should not protect ourselves from china hijacking our technology. any free trader that is so libertee, that is so out of their mind. larry kudlow and most people like me worry about this president is does he have protectionism so baked into his fundamental thinking that he's using larry kudlow, a guy that we all admire and fighting a good fight on free trade and free markets, is he using him as a cover? that's one thing i would worry about if i was larry. larry is also saying he looks at this as a one-year assignment and he's out. a lot of damage can be done to your rep in a year, if trump goes off the deep end on tariffs and protectionism and all that. peter navarro, he's been warned, people have warned him about this, they said, listen,

larry, be real clear here, trump makes you feel like he's your best friend when he wants you to do something, you are walking into a administration which a year ago, peter navarro, the protectionist was on his way out. he and wilbur ross, part of the protectionist wing with lighthizer, you are walking into that lion's den, you want to do that? or sit at your desk. charles: is the country better off for larry kudlow to accept the job. ultimately, you think it's a moderating voice, you would think the country would be better off for it? >> depends if trump listens to him. if trump is using him as a cover to be a protectionist, i would say larry, like leave tomorrow, don't take this job. charles: you just said to yourself, it's possible for people in the administration to get back on the right side and even argue their point because if navarro was on the way out a year ago and able to reverse that, he was able to sell his

message to president trump. >> the only problem with the theory, i want to say -- listen, i want my friend to be successful. charles: i think trump wants people in the white house to sell him. they've got to close him on the ideas. >> he's a circular thinker, not a linear thinker and not a deep thinker. i worry about the unformulated economic impulses and larry is used to basically sell some of that stuff. and i will say, this ask yourself this, gary cohn would have left later in the year, he did not have to leave now. why did he leave now? donald trump put a gun to his head and said accept tariffs or else. charles: there were stories that cohn wanted to be in the cabinet, he was sittinga at the table he was given a litmus test and shown the door when he didn't. larry is going to be part of that. see how long he lasts. charles: ten years after the collapse of bear stearns there

is debate with the implications and wisdom of big bank bailouts, proponents point to the government recovering all money in fact, they say heck, they made a profit. but others point to unintended consequences like the big banks getting larger thus posing the same risk or more and the new rules ostensibly only curbing lending to main street america. today half of mortgages are made by nonbank companies and community banks slow growth to avoid financial scrutiny that would only hurt bottom line. according to research note by then fed governor jerome powell, charters for community banks dropped to zero. moreover with 10 billion being the max assets before facing expensive compliance. most of the banks stopped growing, feuer loans and fewer opportunities for mainstream america. as long as there's a chance of big banks that they can

privatize their huge profits on the risky bets but share the huge losses with taxpayers, in my mind, nothing really has changed. fraction fox news contributor john layfield. john, has anything changed with respect to the risks big banks pose? >> no, it hasn't. dodd-frank did nothing to address the derivatives that made itself manifest in a market tied to high yield and mortgage-backed securities. dodd-frank, they were there before the financial crisis. they were the ones who didn't see it coming. barney frank famously said roll the dice and you put the guys who didn't see it in charge of fixing what they couldn't see to begin with. of course it didn't do anything, it did exactly what you talked about, took credit out of the market and did nothing to fix a problem that was there before. charles: now we have, john, we have legislation making the rounds that upon chip away at dodd-frank and the irony is you have democrats who are

cosponsoring these bills, maybe they'll find a way to bring the pendulum back and find a smart middle ground? >> i think we have to. i think banks have been crippled by lending. took a ton of credit, 40% of credit out of the market because of dodd-frank. banks were simply scared to price loans according to risk. so they quit loaning money completely which significantly hurt the economy. something has to be done with dodd-frank. and it's a good thing that president trump was elected not just because president trump was elected but senator warren is not in power. because if senator warren was in power, that's one of the reasons the banks rallied initially, you would have a ton of regulation put on the big banks. charles: the cfpb sounds good on paper, they created a monster, john, and hard to untangle. they only answer to the federal reserve which funds them and maybe designed this way specifically. what help has it done for the average consumer? >> i don't think it's done much at all. look, understand, it's easy if

you're a prosecutor and you see somebody's car is in somebody else's driveway, they stole a car, that's easy to prosecute. you are talking about derivatives of derivatives. some of the smartest guys in the world, created the instruments, never should be allowed to be on margin. once they are created, you don't have prosecutors that are -- sad to say -- smart enough to deal with this to put regulations on it. >> you think the atmosphere is too sanguine with too big to fail? they have the stress tests which i think are a farce. are we getting too comfortable with the notion that history won't repeat itself? >> i don't think so, charles, and i certainly don't hope so. look, we've had a financial crisis in our country basically every 25 years of some kind or another. they rarely repeat themselves as in what exactly happened before or back in history. so i don't think we're going to see a credit cries wits banks again. most likely. i think the biggest thing which

is the easiest foreseeable financial crisis in the history of the world is america's debt. it may not manifest itself for 15 or 20 years but going to manifest itself, it's absolutely unsustainable. that is the biggest crisis america will face. that looks to be 15 or 20 years off you. >> saw the budget deficit come in. january we were up 49 billion in surplus. we'll quick before i let you go, i want your take on the market action, we've been trapped in 2,000 point trading range for some time on the dow and headlines have driven the action more so than the fundamentals. where do we go from here? >> i think the market is going to be up this year. obviously, i don't think it's -- not obviously, but i think it's not going to be up as much as last year. the biggest thing on the horizon is inflation, you've had a lot of companies say inflation hurt the earnings and the fed does in response, and the unknown, the black swan is the trade wars that could result out of the tariffs that are being imposed. charles: john layfield, thank

you very much as usual, buddy, you are one of the best and i appreciate you taking the time. >> love you, charles, thank you. charles: same here. the sell-off continuing as president trump touts tax reform in missouri, but could a second round of tax cuts be closer than anyone thinks? we'll discuss it right after this. whoooo. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor.

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. charles: president trump traveling to st. louis today to tour boeing plant and tout tax reform as boeing is dragging the dow down on talk the president's tariffs could hit the country, china particularly hard. jeff flock is in missouri with the details. reporter: i get to that concern in just a moment, charles, here at boeing's facility in st. louis where the president will be, he's on his way as you point out. i tell you, there probably hasn't been a company that has done better than boeing under the trump presidency. i don't know if you were picking boeing stock in january of 2017, but you should have

been if you weren't. if you look the day that president trump took office, take a look at the stock chart now, january 20th of 2017, boeing stock was $159.53. it is now with, today's pullback as nicole pointed out earlier, still over $320 a share, you more than doubled your money. the ceo will be here as well as ceo's of eight other missouri companies as they explain what they've done with the money they've gotten because of tax reform. the president eager to point that out. boeing benefitted from defense contracts, more money in the budget for the f/a-18 super hornets, the money the president was keen on getting more money in the government for, and been successful. they are assembled not far from where i stand this morning. the only caveat is, well, potential trade war out there, if you're looking at companies

that could be the subject in the cross hairs of a trade war like levis in the u.s., kentucky bourbon popular overseas, only made in the u.s., boeing is also, 80% of commercial planes get sent o'er seas to be mixed in the crosshairs as well. a lot of other companies in the world make airplanes. charles: to your point, jeff, in november, boeing announced 300 paying order worth 37 billion in china and by their own estimates they'll sell 1.1 trillion with, a t, airplanes to china in the next decade. >> sweating that out. charles: one competitor and they've been outhustling them. they've got a superior product. we'll see how far this goes. obviously a nail biter and got the dow off 200 points today. great stuff, jeff, appreciate it as usual. reporter: good to see you, charles. charles: the media blasting president trump's push for a border wall as being absurd to

the weekly standard's grant wishard on this. i think the california attorney general called it medieval. but grant, walls do work, don't they? >> i think they do. i just finished half of a big bike trip along the u.s.-mexico border, i saw a lot of the border wall for myself, and i think it does work. charles: so we know there's an embed to opposition, even when he does things that the meade yald normally like and clear. but how much of their opposition to this do you think is making it harder to make this come to fruition, because it's not just the border wall, it's attached to the budget which is attached to so many things, the lives of every american. >> right, and i can't say whether or not building the border wall is a good idea. but i do know that it's caught up in an enormous partisan mess

and from my experience on the border, things actually look much simpler down there. the border is very normalized, and in a lot of ways just business as usual. charles: business as usual means the same inflows of illegals, or -- >> well, the wall is just very normalized and on the one hand, it's necessary. on the other it does need to be improved, but the section in between tijuana and san diego, that trump visited, for example, the wall that was built in the 1990s really regulated the border and made both of those cities a booming economic cooperation. the border patrol agents that i talked to at the san ysidro crossing said their crossing was worth one million dollars a minute. charles: economic gains for both sides or just overall? >> just in terms of the trade that's going across that border, it's worth a million dollars a minute. charles: so maybe that might be

a new angle for the administration to start selling. you know, i've heard this from other folks as well, and by the way, that's not even a great wall, per se. we know people who have been there and how easy it was to cut holes in it. imagine if it was fortified and smartner design, how much more with security, by the way, security is the platform for prosperity. you can't have it without it. >> yeah, i really think so. the wall there does work, certainly be improved. i think it's been cut up and you know, mutilated in certain ways, 550 times this past year, 700 people cross that section every day, it's working, but it could be working better. charles: in the meantime, the outrage by the mainstream media, will they ever consider what you saw firsthand? do you think they'd ever put that in the mix with a fair and balanced reporting?

>> i don't think so. you know this issue is really caught up in partisan politics, but a really interesting conversation i had down on the border is that someone in mexico explained to me that this is a cultural misunderstanding, that there's a lot of misunderstanding in south mexico about what the best way to cross the border is. i would support building a better wall to dissuade people from crossing the border illegally. it's not in their best self interest. there are better ways to work in the united states and earn a million dollars. charles: we appreciate your firsthandog this, thank you. >> thank you. charles: should investors be worried about a so-called trade war? the white house confirming it's seeking $100 billion reduction in u.s. trade deficit with china. much more on this tonight, 6:00 p.m. eastern on "making money."

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the human race won't survive the next thousand years. charles: renowned physicist stephen hawking passing away at 76. he was famous for theories on black holes and expanding universe. he warned humans have 200 years to escape earth. artificial intelligence, there are a lot of threats that could cause theoretical physicist dr. michael gellen is here to remember stephen hawking and his predictions. sir, thanks a lot, obviously. the accolades have not stopped coming in for dr. hawking and what he meant for mankind and understanding for the universe around us, what are your thoughts? >> well, he was one for the ages, charles, for sure.

i first had the pleasure of meeting him in the mid 1980s. i was teaching physics at harvard at the time and he showed up to give a speech. at that time he was already wheelchair bound, when he was in his early 20s, he was diagnosed with lou gehrig's disease, but could still speak. when i say speak, i use that term loosely, he could mumble. the speech was him mumbling a string of sentences and waiting for his young assistant who is standing next to his wheelchair to translate to the audience, and that went on for more than an hour. the place was packed. he wasn't a public figure back then but something of a celebrity within scientific circles because of his really kind of back then zany ideas about black holes and the origins of the universe, but i will never forget that moment when i first met him. he was special in so many ways, not only obviously a very intelligent man but had a great sense of humor.

intelligence is associated with a sense of humor and dr. hawking certainly had that combination. charles: his book, a brief history of time sold 10 million copies. i bought a copy. i still don't know what i read, but it was very intriguing and certainly i think for the world brought us closer to wanting to know, which i think is really critical in this day and age. >> you know, i laugh because i can't tell you how many people have told me. that i think it's probably the most best selling nonread book in the world. people have it on the coffee table to show how intelligent they are. it is dense though hawking intended it for the public. he was lofty minded but even his attempt. interesting, the man who went to co-author his books, is a friend of mine. i have a lot of memories associated with stephen hawking, scientific contributions and ernest attempts to dedicate the beauty

and science to the average man and woman. charles: of course he was not without controversy, perhaps the last one was the notion that mankind has a way to escape earth which is interesting in a sense most in the scientific community only see the good, for futurists from day one have always said, hey, the advent of robots will free mankind up for greater pursuits like using the larger portions of our brain and being good to the planet, but he saw something a little bit more sinister. >> yeah, he did, and he's not the only one. elon musk, and i just finished writing a manuscript of a book coming out in mid-october, trying foresee what's going on with all the new technology, but you know, charles, i wonder because you're right, and i think with all due respect, to think stephen went off a little bit of the deep end towards the end when he was predicting we only have 100 years to live, the human species will disappear because of all the

things you're mentioning and felt we needed to colonize space in order to survive. i wonder now whether he wasn't sensing his own impending doom. friends close to him said within the last year, you know, he was really slowing down, really beginning to deteriorate, and i'm wondering if he didn't allow that to affect, but listen, he was only given till age 25 to live by the doctors and lived to be 76 years old. he beat the odis and suspect we're going to be able to beat the odds as a human species as well. charles: again, we lost a giant and appreciate you weighing in on this, and look forward to reading your book that you're working on as well. thank you very much. >> my pleasure, charles, thank you. charles: we'll have more right after this.

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charles: trade tensions weighing on wall street once again. investors rattled by a possible trade showdown with china. s&p five hupp on track for the third down day in a row. boeing, big drag on everything. it is at the center of all this, our number one exporter out there. president trump will be talking tax reform at a boeing plant today in st. louis, missouri this afternoon. will he make announcement on larry kudlow? blake burman is reporting that the job is offered to kudlow to replace gary cohn. fox business will have this live for you. we'll look at a near collapse of bear stearns t was 10 years ago,

to see if there could be other financials crises. the market up 200 from the low point. president trump says this is the bet time ever for fundamentals. that is helping the market. now here is trish regan. >> thanks, charles. i guess you can call it the kudlow effect. we're down only 130 amid news that larry kudlow has been offered gary cohn's job at the white house. the dow was down 300 points as president trump blasted unfair trade pack tests. the news came out that larry kudlow is in. now the market is off 113. we'll see how it shakes out the next hour. i'm trish regan. welcome to "the intelligence report." the president tweeted, we can not keep a blind eye to the rampant unfair trade practices to our country. investors continue t