it erodes that desire to buy the dip. stuart: when are you going to buy the dip? liz: maybe next week. >> can i get some salsa with it stuart: liz, ash, great stuff thanks very much indeed. my time is up. neil it's yours. neil: thank you very very much stuart a lot of people still talking about your chat with larry kudlow particularly the end where the economic advisor hinted that a trade coalition of the willing to take on china is imminent. i think that i've got that right , stuart? we'll follow that very closely because this could be one thing that sort of unravels this selling spree, the notion that there are similarly-minded countries like our own who have had it with the chinese cheating on trade because whatever your views of the president's response of this fighting tariff for tariff and escalating no one denies that the chinese rigged their economy and currency, even their economic numbers making it very very difficult for the u.s. and other firms to compete. what is lost in this argument is the other countries that want to

compete. they also have to kind of sell themselves and expose themselves to get end roads in china and they're the ones not happy and they're the ones if you read the financial times today are saying you know what, we kind of like what the president is doing here but what the president wants to see out of them and it seemed like something that larry kudlow was hinting at is if you really believe that could you please say that because we're looking like wild pirates here and we don't want that so the next thing that could happen here not as if it's calming and intentions between our two countries but getting other countries on board who feel a similar way to our approach with this, and not that this is the approach to go but that maybe maybe this is a sign that has there's more buy support among european support, among other asian countries and mr. custody low mentioned the japanese you might be off to the races and change the dynamics of this so let's get to market watchers on what these trades are doing right now. rich, it's fair to say right now

that this is a trade war. you can find any other way to fi nesse it but i don't see any other way around it. >> well the market is certainly looking at it that way although i think the market is also assuming that there's a great deal of bluffing, typical trump- style negotiateing ploys here. i think if it were a real trade war we would see down by four figures, you know, which isn't a lot. neil: well, you know -- >> you could loss 5-10% in a heart beat if something really bad happened. neil: one of the things i was noticing is when we got the chinese response not saying they were adding more tariffs to the tariffs the president was adding they were more or less saying the hell with this we're taking our meeting marbels and going home almost. the chinese commerce ministry official saying we're ready to strike back, this is very unreasonable. this is extremely wrong.

our response will not exclude any options, so it's everything but coming to blows but clearly threatening blows. what can they do? >> okay, so what you said earlier about getting everybody to sort of, you know, gang together and attack china collectively, remember if china makes, if china rolls here and gives us what we want they set a precedent and then the country is rolling in saying well if the u.s. got it that easy then we'll go in so i think -- neil: you hint on a very profound point there i don't want to jump on you because that is the one thing holding the chinese back whatever they do for the united states by definition they would have to do for others and that scares the you know what out of them. >> that's right and let's not kid ourselves. as much as china needs us more than we need them, we really need china, we've got a lot of very cheap stuff that goes around our economy that enables the average american that goes to home depot, lowe's, buys anything on amazon a majority of these goods are coming from china, i'm buying fixtures in my

house that cost 50 to $100 which years ago before china game into the game, would have been 6,000 dollars, so keep that in mind is the fact that this negotiation is going on so publicly it's not like a normal negotiation has an end and one person with the other person loses or whatever it's an ongoing increase of volatility and discomfort and less trust in the president's effective that i think is going to have longer term ramifications for the marketplace. neil: i don't want to play politics, i hear what you're saying, but i just want to step back and get an idea what you think of the president's strategy which is be unpredictable, i could see all of that but is this impulsive by half? in other words is he kind of crazy the way he's going about this because first of all you lay out the idea you're going to go after aluminum and steel- related products and that covered when all was said and done really about half a dozen major items and then he comes out with a list of about a hundred more items and then a

list that now encompasses more than a thousand items and then adds a half a billion to that additional items that go way way beyond into the area of intellectual property which is hard to quantify and the chinese respond to every step except the one hours ago, last night, late last night, so i think the chinese seem to be saying we're arguing with a crazy man. now there might be something to that, but what do you think of the approach the administration is taking because the commerce ministry official seems to be saying i don't know what we're dealing with here. >> well, i think at the heart of any great negotiator is that little bit of craziness. so i think that he's acting in pure trumpian style here. neil: so you think this is all a strategy? >> yeah, yeah. i think that he is hard wired to fight. he's hard wired to counter punch all that kind of stuff and he

wants to show that he's strong particularly to his base and this makes him look strong at least in his eyes, but i'll tell you what, jarod is right. china has more to lose in a trade war economically but i think trump has more to lose politically if he lets this get out of hand and that's because -- neil: see i wouldn't think that, i think it is out of hand. >> he can shutdown the media, trump can't do that he's got the 2018 elections the chinese are targeting trying to put pain on the farm states, a lot of races that could be effected by that on a small margin and then you got 2020 so at the end of the day i hold this belief that trump's greatest fear is being perceived as a loser and if he sees the economy going down and he sees that as hurting his reputation i think he will pull back. neil: well i think he's concerned enough to say he did on the plane coming back from west virginia, not the stormy

daniels, but the other acknowledgment that there's going to be pain, that's the first time he acknowledged that but also prefaced it to say in the long run it'll be worth it and i'm paraphrasing it but even here might be fearing that it could go too far because certainly larry kudlow didn't have a heads up on these additional tariffs he was considering late last night and so he's going like a cowboy on this, i don't know if there's anything wrong with that but that i think, you know, he's sensing given what's happened in the futures markets and everywhere else that the pain is real. it's already happening. >> it is. >> well he's hearing about it from manufacturing companies too like harley-davidson. neil: you're right but go ahead. >> the biggest flaw to this approach is this. we discount consumer confidence a lot. we talk about it we just kind of like oh, that's a consumer confidence number and lump it in with the other data but in my mind and i've been around this game for 24 years now, confidence is everything.

you break down american confidence whether it be the consumer, washington, whoever, i don't care if he believes there's a pot of gold at the end of the ratio, if we don't believe that and have confidence right now then this thing can't keep going so that's the delicate line that i think is breaking down and i'll tell you when these markets move three, four, five deviations in volatility from where they were, that is a sign that things are way out of whack and people are very uncomfortable. the conservations have changed from just buy everything to do we really want to be in here and that's a big shift from where we were just a month or two months ago. neil: whether you like the president or not he is undoing his own market rally, it's his sentiment and approach that for the time being is killing this market rally he used to brag about gentlemen thank you both very very much, a read from former obama economic advisor austin gouslby, austin always good to have you. you were with both obama, bush before him, clinton before him,

there's a long history of american presidents, demonstratesing and rep can alike trying to reign in the chinese, trying to stop them from rigging their markets, whatever you want to call it, this approach is very very different, others say extremely risky, what do you think about it? >> well i agree it's extremely risky. i think you see the impulse control problems that the president has, everyone can see them. i think that at the tail end of the obama administration they started a bilateral negotiation with the chinese trying to reduce the subsidies to state car owned enterprises, trying to reduce the amount of stealing intellectual property. they probably got about 90% of that donald to hand it to the trump adminitration which the trump people just blew up, i think they've made three bad negotiating mistakes along the way here and now, the market is going to be the one who bears

the brunt of the problems. neil: you know, the one thing and you've dealt with china certainly a lot more than i have , but when i was covering them in my young reporter days, up to the economic juggernaught they are today i never believed the off the chart s figures they shared on the world in growth in one quarter that would be 13 or 14%. you know, the out landish stuff you get at them i'd say that's impossible so i talked to economists and the like that would say well, you know, they do exaggerate or you can't trust everything, but they are an economic power, they are masking more influence status what have you to the point they are today so i buy that and i understand that, but shouldn't that remind us of going into any discussions , trade talks with them at all, that they can't be trusted? what do you say. >> well, in a way, i mean, i think you're talking about totally different groups of people. the people that add up the gdp

numbers. neil: gdp is just part of it. >> i think for sure, you're right, that when you negotiate on international trade this is the ultimate reagan trust but verify situation for sure. the problems that as i see it are number one, the u.s. through the trans pacific partnership was building a coalition of countries in asia that was going to be a counterpunch, a foil as it were, to the growth of chinese power. neil: and he abandoned that. >> trump throws that away. neil: i'm glad you mentioned that austin because when larry kudlow was talking to stuart varney in the last hour, kudlow dropped a bomb shell at the end of the chat saying a trade coalition of the willing to take on china is imminent. i'm paraphrasing. >> well that's what they should have done. neil: you just read my mind. the president abandoned that. >> and i agree with that. neil: what would have happened?

>> well, i don't know. clearly we would have been in a better position to start with but now on the second, they want to build a coalition of the willing to go after chinese violations of intellectual property. neil: do you think they'll do that though? we should be afraid of them for some reason. >> but the problem is this. we just finished almost starting a trade war with our european allies on steel and aluminum. we're irritated the canadians and the mexicans. we've gone after japan and korea all of our natural allies in this are half mad at us to begin with. and you saw the chinese today say they're going to the european union to ask for support to oppose what the u.s. is doing. we somehow took our allies and turned them against us on a -- neil: but were some of those allies, the south koreans among them, i'm not saying the method of the madness whether it's unexpected results, some of those allies have made

concessions to us to get us off their back, so you could argue that this very , you think the approach they're taking or this president is taking is crazy pretty much, right? >> is crazy because we got a tiny concession from stock-based by agitating about the korea free-trade agreement but now the far bigger fish to fry is about china and the koreans are mad at us because we just jerked their chain around on the korean free-trade agreement why did we do that first if you wanted to build a coalition against the willing of just china. neil: what's wrong with shaking things up saying we're not going to do things business as usual? >> what's wrong when you're cold about lighting the back half of your house or fine? there are many things wrong with that. neil: but the other half of the house is fine. the other half of the house is just fine. >> i'm telling you what's wrong with it. neil: all right all right so you're not necessarily in the president's reelection committee just yet. >> [laughter] that's true. neil: okay, fine.

austan, always good seeing you my friend. >> talk to you later. neil: bo, now the read from cheryl sandberg on the whole facebook crisis what she's saying might be a little too little too late. ♪ when heartburn hits... fight back fast with tums smoothies. it starts dissolving the instant it touches your tongue... and neutralizes stomach acid at the source. ♪ tum tum tum tum... smoothies... only from tums

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>> the data had been deleted, that's why. >> did you that doesn't mean you don't tell the users hey, this was stolen from you. >> yes and we should have done that, we should have done that as well. >> because it feels like facebook was trying to get away with it. >> i don't think that's true. >> do you think there could be other breaches like the one we saw in cambridge analytica, where tens of millions of people 's data was accessed improperly? >> we're doing an investigation and we'll do audits and yes we think it's possible that's why we're doing the audit. neil: that was an awesome interview because the exchange went into the practices of facebook and how far this goes, beyond just some people's data getting out in the wrong hands and in the political hands to just this routine concern that it happens, well, routinely. so what do you make of that to fox business gerri willis and

deirdre deirdre bolton on what happens now. gerri what do you think? gerri: you know the sad part of this today for cheryl sandberg, who has been glenda the good witch of facebook she comes off badly. it's 87 million not 50 million. our lawyers said it was okay. i don't really care about you but legally we weren't exposed. neil: everything they say then has to be changed, someone has to clarify something. >> yeah, and so the fact that she's having a hard time and then next week she's not the one going in front of the senate judiciary committee it's zuckerberg whose not warm and fuzzy in any way. they're in real trouble here. neil: you've been reporting deirdre that zuckerberg said we're probably going to need regulation well be careful what you acknowledge because you'll get it. i was talking to a republican mantegna who said he was trying to specify what he was urging even more so where is this going >> it is going towards regulation. we don't know what form. i think the smartest way to go

would be what we talked about with steve jobs saying eight years ago, ask your customers at every juncture if they want to share that information and ask them at every single crossroads until they are sick of answering that question. neil: but do people do that? do you ever get those acknowledgment forms from apple? >> of course you're like sure, sure. there's my mortgage, yeah. neil: give away my first born. >> fine but then at least it's on the user and honestly the company is off the hook. neil: didn't zuckerberg say in one of those interviews that have gotten worse and worse by the way that you do check the stuff off and you did do that. >> well 5,000 years ago not at every juncture. gerri: either way what's coming and what she referenced in this interview today they will have to make good with these new european regulations which require exactly what deirdre is saying, that you have to say i am opting in for you to serve up my information to everybody in their mother to your advantage, consumers will have to do that. these new european regulations coming over and let me tell you,

these american companies will have to live by that because the own us is going to be on them to prove that you said a-okay, i'm on board with that. i think it's going to be -- neil: i don't think they ever do what they say here, be very sin nable. gerri: but the fees and fines for not going on with this regulatory theory. neil: this actually has something to do with it because you have tariffs and government involvement that lifts the price of goods in this country and you have the government for the right or wrong reasons getting involved in the technology industry which is a market leader and with the best or potentially the worst of intentions will muck it up. that's my theory. gerri: can't disagree. >> i do think shareholder value is going to be destroyed with facebook. neil: but will there be a facebook effect? >> i think facebook is really in the cross hairs in a different way. yes, i know that twitter was always sort of like wow, you knew who i was when you invited me into your home.

i think facebook feels different for people then twitter, google will have to answer some of the same questions and i know that the ceo from both twitter and google were invited to d.c. and invited to testify as well on these privacy issues. i think facebook has just a longer road ahead and i also think getting back to something you were both saying pharmac z to mark z to go in front of congress and have all optics he has a very hard week. neil: i've always said that he doesn't have a lot of common sense but brilliant guy. >> and do you remember when the auto execs went into congress asking for a bail out and went in a private jet? there's all sorts of ways he can flip up -- neil: do you get a sense that i always thought people were looking for an excuse to sell facebook, it run up far and fast et cetera but they're now picking apart the whole facebook

foundation deirdre and i were talking about this that it appeals to older internet users now, if we can use that young kids aren't into it, and it reinforces a notion that in this internet age it's actually antiquated. i don't know if i necessarily agree with that because i have no idea what's right but i don't hear young people singing facebook's praises. gerri: that's one of their big problems they're doing well overseas but yes they're kind of stuck with boomers at this point , instagram -- >> they've been smart. they bought instagram and what's app so -- neil: something you were trying to figure out of a pit with her boomer comment. >> but let me add something. neil: boomers who are still bitter when they join us later on not at all impressed with your comment there. >> i'm sure they're not. neil: you're a hater. gerri: but can i just make one point? there's pushback on this idea.

there was anthropology a list report this week saying these companies we were talking about all these companies are too big to fail that we can't afford to let them go down in flames because they're so important to the broader economy. they're so important to markets. neil: we've seen that before in technology. >> did we fail? neil: i doubt it. >> but if it did the impact from the markets would be horrendous. neil: you remember prodigy and infoseek all these before google gerri: but tech companies fail all this time but companies of this size, scale, this amount of momentum? don't see it. neil: obviously you didn't cover the death of the roman empire. thank you very very much. they're the best, young rebelious kids here. later on breakout the prune juice because the boomers are coming and they've heard this conservation. it's not going well and we're down 428 points, really just since gerri started talking.

gerri: [laughter] neil: more after this.

neil: all right look at stocks we are at about session lows right now even though this was looking like we could be facing an more accelerates the more i wonder about that after last week being an up week here, and interrupting three days in a row up days here. the big catalyst seems to be as we were telling you all this week, the more likely tariffs an out right trade war look the worse stocks look the less likely that looks the better stocks look. i wish i could characterize it a different way, but it is uncanny so every time the president does something to accelerate this, or deem in the eyes of the market accelerate this including late last night threatening still more tariffs and then of course early this morning the chinese responding with a what the heck? now i don't know what chinese or mandarin is for what the heck but it was not greeted favorably so this means that the talks for

the time being if you get the chinese ministry's take of that, larry kudlow was just telling stuart varney they are talking hind the scenes and kudlow was saying a trade coalition could be forming here those countries sympathetic to what we're doing here and support what we're doing here of course they're not rushing out right now for the moment all 30 dow stocks are down. that can change, often does, but for the time being, it ain't happening. meanwhile, the president is saying that he is willing to put up to 4000 national guard troops along the guarder. now, of course you've heard from oregon's governor and others saying we're not hot to trot to release our state guards to do this, so there could be a legal fight there, the federation for american immigration reform president dan stein. dan where does this legally stand? i know where you want to see things go but legally if a governor resists being called on by the president of the united

states to bring guardsmen and women down to the border can they do that? >> well, under federal law the president has the authority to get them generally working cooperatively with governors and that's the assumption with federal law. this is historically precedented that you have oregon probably california now refusing to use state resources to defend our nation's borders when there's a crisis. president obama did it. neil: i'm sorry there how did they get these governors to go along with it i don't know whether everybody went along back then in those cases either because this is about happening in almost every past administration. they're more resistant here and it's falling along political lines with barack obama it didn't. >> well the things being created between oregon, new york , california and others on a range of immigration issues turned into out right civil disobedience we haven't seen

this kind of non-cooperation with the federal supremacy clause if you will when the president declares a national security emergency and come an deers the national guard which are under the governor's authority, that's something that could, you know, under federal law gives the president that authority but apparently these governors feel they have the right to basically deny that request but more importantly this is an extension of the pushback on the sanctuary cities issue, state level cooperation, driver's licenses a whole range of issues that are now as jamie dimon said yesterday tearing our country apart. neil: i think that i heard the democratic governor of oregon, i'm paraphrasing here so if you'll indulge me dan and say this is just an excuse for the president to push that wall of his, is it? >> well you have to look at this against the backdrop of a congress that has been unwilling to give president trump virtual ly anything he campaigned on including in this omnibus bill they wouldn't give a border crossing fee to help

finance infrastructure improvements, and now they're pushing back on the idea he can reprogram military funding to build the wall. they don't want to bring e- verify so employers verify a worker's authorization to work in this country they won't bring that to the fleur and the goodlatte bill in the house, pushing a bunch of stuff the president says he didn't want and didn't campaign on and he offered a 2 million person amnesty still couldn't get the major proposals he pushed as part of his campaign so this ongoing unwillingness to give president trump even the resources he needs for fundamental national security issues. i mean, it is correct that the national guard cannot overturn some of the loopholes legally in our immigration law, but the national guard can do important things in terms of providing infrastructure particularly the lean to that we saw in the w administration. if you can detain people, everybody, coming across-the-boarder and then have hearings and then the appeals within 72 hours, people will

stop coming. neil: can i ask you then would you be and you're in the front battle line for this. if you had your choice, between more guardsmen, policing the border and a wall at the border, where would you be? >> well our choice would be for congress to honor the president 's request for funding. neil: i understand that. but if that doesn't happen? >> well the national guard can't actually administer and enforce a immigration law but they can free up border patrol agents so they're not sitting at a desk or doing other things and help make the border patrol more effective and that's been done in previous administrations and neil, of you build enough detention space so that everybody is detained the aliens stop coming and then congress says well why do we need all this detention space and if you don't have enough detention space people get let go and disa per and never show up so it's a catch 22. neil: you raise a good point. if you're going to build all the detention space just build a wall. dan stein thank you very very

much. thank you. neil: we're down about 430 points here a lot of folks say what's the big fuss because these tariffs haven't taken effect. i know i sound like a broken record i don't mean to make a crisis but today in trading of futures and the very products that the chinese are targeting like soybeans and corn and wheat and cotton, even aluminum, the direct effect in the futures market is happening as we speak, and in most cases, in most cases the price of those largely agricultural items have been tumbling and that's why armers are more upset and now the flip side is that you and i could benefit in the interim by cheaper food-related prices in the interim, but it's happening now, before tariffs will even take effect, after this. &%c1 &%f0

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neil: all right, before we get to the trade war that charlie gasparino and i were discussing during the break here, pig farmers, they're getting very

very worried about this. the pork and pork prices are caught up in all of this and one thing i loved about jeff flock's reports from all angles and he's at a pig farm and we will go shortly is a lot of people say wait for the tariffs, because in futures trading they're already trading on it and already suffer ing aren't they? >> not only that, neil, you talk about the trade war you're going to talk about this is a trade war for the pork farmers of america there's already a trade war because in response to the steel and aluminum tariffs, china slaps a 25% tariff on stuff like imported pork, so you already, and rick dean has been not only has he raised pigs on this farm for 40 years, your father raised pigs on this farm, your grandfather and before them as well, you already have a tariff now on you from china. you're already in a war. >> you don't want to make it a war. we're in negotiations time with

china. hopefully, i mean, if the rhetoric has gotten pretty heated here in the last few days hopefully it prevails and we'll be able to work our way through this. one important point we need to bring out is wherever these tariffs go on that raises the price of food for our consumer overseas, and they're going to back off. >> what it does also is brings the price for u.s. hogs down. take a look neil at the three-month. you talked about the futures markets this is the three-month hogs at the cme, where we were yesterday. if you look at how much that price has dropped off a third of the value of your pigs, so these guys what you're looking at right now here on this farm in farmer city, illinois, getting ready to go-to-market. if you got a third less for these pigs, what's that do to your operation? >> oh, that's where our profitability is. it would put us in the red no doubt about that.

>> and take a look at this real quick. i'll leave you with a quote in terms of what the impact of this can be. this is the illinois farm bureau if we even blink we lose these markets. it's not something you get back right away. other countries rush in and get that self space. there are competitors if they don't buy pigs from the u.s. , they'll buy them from somewhere and guys like rick, i don't know what they'll do but you don't want to create jobs, a person wants to create jobs, it's great to create jobs but you don't want to create jobs one place and take them away from somewhere else or maybe you do, i don't know. neil: you know on that point, jeff those supporting the administration on this have been saying well, consumers then would pay less for these pork- related products so win win for them but only for so long. >> in the short-term you're absolutely right. and rick will agree with me on this. prices of hogs could come down. >> have. >> well the price of hogs have

come down but the price for consumers, pork is going to come down too potentially right? >> potentially it will yeah. >> in the short-term. in the short-term. >> and then what? >> whenever we become un profitable for a period of time we're not going to do this any more and the price of food will go back up. >> so you know, this stuff was easy to do, neil, it's complicated. neil: you're exactly right my friend. it's what makes you one of the best. jeff flock front lines in all of this and what jeff is saying there i'm telling you it makes a lot of sense because we think about wait until the tariffs take effect. it could be 60 days, 180 days after the cooling off period whatever they say. this is happening now in real-time. these futures trades now and this is what the farmers and related to those in the soybean industry, wheat, cotton, et cetera, the market sets their prices for the time being, so you can argue until the cows come home, or pigs, that this is something that is short-lived but it is what it is. this is what they pay in the

moment because they are to those futures markets and the futures markets are tanking for most of the products we're talking about here and that's why a lot of people beyond this apartment community are worried including the hot shot ceo's with whom charlie gasparino socializes he's here what are they telling us? charlie: i got this from two major ceo's from major companies i was told not to use their names because they regularly speak with the president and they essentially don't want a war with the president. neil: you're afraid of him aren't you? nobody wants to criticize you to your face. >> they do it all the time on twitter and they have the word deplorable next to it, but in any event what these aids said is that about a month ago, they went directly to trump and they warned him about the perils of airtight for that, that was the

words they used, and said that if you go there which the likes like you are, you risk both the stock market and the economic recovery. they told him point blank, it's l be much more calming for the markets and the economy if you do some sort of a comprehensive plan. interestingly enough trump pushed back and he believed the tit for that tariff and they haven't enacted it yet but at least the threats was a negotiating employ he's going to bring china to the table. neil: apparently unbeknownst the to many in the administration including larry kudlow so he's going rogue against himself. charlie: yeah, they told him don't do that. neil: he's the one who upped the ante. charlie: see said i think this is the way you mesh with china. neil: it might work. even john kelly. charlie: right but he basically

ignored their warnings and now it's starting to pick up steam. i will say this about kudlow and this is interesting and i've not confirmed this with larry but larry has told people, i know, who have told me directly because that was a direct conservation between kudlow and the person i spoke with that he knew what he was getting into in terms of the china tariffs thing walking in, that before he took the job, he told people, he goes listen, trump is going to threaten or maybe use tariffs against china. there's no doubt. he believed it would be marginal and a negotiating ploy is the way it was described to me but you never know with donald trump he's a economic blank slate in a lot of ways. he never sort of articulated macroeconomic policy in the past he never really had a firm set of economic ideals in the past. he was never like a guy that pounded the table for tax cuts. matter of fact he believed in raising taxes so i don't know why larry would believe that --

neil: well maybe he thought, he's a start guy you and i have known him for years. maybe this is a one off that this thing will have the desired effect because the chinese will capitulate on something the president will dial it back and i don't have to start with my position on tariffs any more but he might be going past that? charlie: i think you're right and the ceo's i spoke to, i can't use their names i wish i could, it was just the conditions of my interview, these are major players. neil: they're worried. charlie: they would not have made that call to him. neil: what do you think with charles payne says that everyone is feeling this way it was an interesting point then maybe they're wrong. charlie: about what? neil: that if everyone is freaking out about this, there might be some wisdom to the president's approach on this. charlie: well i don't know. i will say this, that my sources who are major money managers would say they don't totally believe trump is going to press

the nuclear button on a trade war. the market is getting, they think that he's just doing it because they don't believe him. neil: all right, good job. do you know what i have here? charlie: what? neil: jerome powell's remarks. charlie: oh, can i see it? can i see it? please it's like gold. neil: oh, my god. charlie: that's ratings gold. neil: do you want me to share it with you america? more after this. we're voya! we stay with you to and through retirement. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement.

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president trump: you know this is going to be my remarks it would have taken about two minutes. >> [laughter] president trump: that would have been a little boring, little boring. >> [applause] president trump: now i'm reading off the first paragraph that says this is boring, come on. we have to say, tell it like it is. neil: i know you feel, mr. president, this is the script my staff gave me. boring, boring, but i'm not going to use the word, welcome back everybody, i'm neil cavuto you're watching coast to coast and we have one of my favorite guests, tony perkins, making sense of the president right now with rattling markets for the time being, you know, the establishment media which i

think the president enjoyed which i think maybe mr. perkins enjoys. how do you think he's doing? >> i think he's doing well and he rattles a lot of things. what we've seen is it's kind of like that rollercoaster we were talking about during the break, we're up and down, but there's a confidence that comes from this president because he is un orthodox and he's not bound -- neil: do you ever ear because he might be just crazy? >> no because i know him. and i've spent time with him. neil: he seems so impulsive. >> there is an element of that, but that's how he's been successful in life, and his life , if you look at it from a business standpoint has some ups and downs in it, but what we need in our government today is someone who will tell it like it is and change things up and not really just what we see in washington for so many years is that change jerseys but we run the same plays.

we're getting a different result neil: what if we don't. what if the chinese up the ante to the extreme that we do have a massive global trade war, the likes of which could lead to a worldwide depression? what do you think? >> that's always a possibility but look at what he's done on some of the other foreign policy issues outside of trade let's look he's actually brought north korea to the table to sit down and talk about something that's a threat, a nuclear weapons in the hands of north korea. he's bringing kim jung-un to the table. that's not happened. he's moved the embassy in israel to jerusalem so from those successes he's building an element of confidence that people say it's a little uneasy, but okay, so we're over, we're a little over the white line and then we're back over the yellow line but we're still rolling. neil: i don't want to pretend to

be the pope or to judge other people like the pope says who i am i to judge but i'm always amazed with the religious community especiallily in light of the stormy daniels and pay- off to women, but what to you make of that? >> neil it's a very good question and one that many people wrestle with but let me set the stage here. this is not about looking at this in the vacuum of today. it's actually going back to two years ago when we came down to a choice between hillary clinton and donald trump and most of us we're not with donald trump in the primary because of the very reasons you just laid out but when it came down to a choice between those two and he wrapped himself in a conserve con t live platform, he embraced it. neil: but you into you weren't getting an altar boy. >> well everybody knew that. neil: and you're okay with that? >> well would i have preferred another candidate?

that's why i was working for one of the others trying to help them but when it came down to a real choice between him and hillary clinton who was going to continue and expound upon the policies of barack obama, he said okay, we know his past, it's not something he's going to agree with, he's going to advance these agenda items that we care deeply about, and we're 16 months later after his administration. neil: you can look past all this other stuff? >> as long as it's in the past. if it's present, then it's a different issue. if it was under bill clinton in the oval office today, as long as it's past it is past. neil: tony perkins always good see you. a little bit more after this the dow down 300 and actually wrote the market back. more after this.

neil: welcome back, everybody. at the top of the hour, we pared some of the losses. it was a lot, lot worse. nevertheless, we're down about 300 points. the markets are seizing on these trade tariffs where the president upped the ante last night, the chinese responded. simply hinting they're walking away from the table. we don't know if they have formally done so. add to that a very disappointing employment report. some are thinking the plus side of that report is that the federal reserve is less likely to aggressively hike rates this year. now, i've got here, right here, the embargoed remarks of jerome powell. okay, they're not really. [laughter] but if they were, they'd be

embargoed. anyway, we're focusing on that because whether he has to aggressively follow up and respond to a what janet yellen said a few days ago about things moving at a good clip. he might clarify that, and this report might support the argument he doesn't need to aggressively move on rates in the middle of a trade war, and that's what it's looking like, my friends. to hillary vaughn with the latest from the white house. >> reporter: hey, neil. president trump is doubling down on his decision to put tariffs against chinese goods, now proposing $100 billion in tariffs on chinese imports. this after china threatened $3 billion in tariffs against u.s. imports, marley targeting -- particularly targeting manufacturers and farmers. the president calls this unfair retaliation, and he says he's ready to take action. but the president's top economic adviser, larry kudlow, said on fbn earlier today that nothing is set in stone. >> this process, it may include tariffs at the end of the day.

i say "may." it may also not, it may be solved by negotiation. i can't promise that oren even forecast that -- or even forecast that. >> reporter: but the threat is drawing concern from capitol hill to main street. senator ben sasse calling the move in a statement, quote, nuts, saying it is, quote, the dumbest possible way to get even with china. we also heard matthew shea, president of the national retail federation, say, quote, this is what a trade war looks like and what we have warned against from the start. kudlow telling reporters today it is time for china to act like a first world country, president trump echoing that on twitter tweeting, quote: >> r eporter: now, neil, the message

from the white house is that this trade deficit has been festering for decades. president trump saying that past presidents -- clinton, bush, obama -- all looked the other way. he says he can't do that because it is his job to fix this. neil? neil: all right. well, none of those former presidents made any progress on this, so maybe, maybe he's right. we'll see. hillary vaughn, thank you very, very much. by the way, we were showing larry kudlow, is it me or do all the pictures we use make him look like dr. evil? [laughter] is that fair? can we show the one we keep using, ralph? i'm just looking. okay, gonna destroy the word. [laughter] all right, reaction from cr-tv host deneen borelli, ben kissell and my buddy, connell mcshane. the dr. evil analogy notwithstanding, the chinese are apoplectic and all but saying, you know what? forget about adding sanctions, tariffs of our own, we're quitting these talks for the time being. >> yeah. there have been a few important things said today, that was the

takeaway from the chinese. the kudlow comments as well which you already picked up on saying, hey, give us 24, 48 hours, we'll put together this coalition of the willing, a lot of people argue should have been the first move. neil: he didn't know about these latest ones. >> that whole thing last night was so random, because the first $50-60 billion took the trade representative a long time to come up with, product by product, 1300 products. so for the president to add on the $100 billion, you know that was off the top of his head. he thinks that's the way you negotiate. my question would be is that the way you negotiate with the chinese. sometimes that's a little different game than a real estate deal in new york or even a political deal here. neil: yeah. what do you think, ben? >> i think this is going to affect farmers, and it's also going to affect individuals' lives in their living rooms if you look at what's going to happen with televisions. over 40% of the tvs are brought over from china. you know, when you get upset

that your team lost the super bowl and you destroy your television and you have to go buy a new one, it's going to be an extra $140. neil: you're assuming that the tariffs go into effect. >> oh, absolutely. neil: you don't think that cooler heads will prevail? >> doesn't seem like they want to. also we have a situation where donald trump's trying to tout the tax consistents and tell -- cuts, meanwhile they're going to be paying more when hay go to the -- when they go to the store. >> this is certainly the war of the words. this is a proposal. nothing has been put into place as yet -- neil: but markets do trade on things that are going on right now. >> yeah. neil: agricultural items from pork, cotton, wheat, soybeans, and there are apparently lots of categories of soybeans, who knew? [laughter] they're all down in price. so that's happening in realtime. they're not waiting for the tariffs -- >> by the way, the tariffs have been put in place, the small, the $3 billion on both side -- neil: that's exactly right. >> reacting to what's going on in the news --

neil: does that worry you? the administration -- maybe it does appreciate it. >> i'm sorry? neil: does any of this worry you? >> it's not -- come on. neil: okay. i was just saying what you would say. >> just like you have the actual words -- neil: oh, you don't believe me? >> i don't. [laughter] neil: fine. >> but getting back on point, no other president has taken on china. china has been gaming the system for many, many years, and we are clearly on the losing end here. so something does need to be done. no one wants a trade war, absolutely not. but the president is taking a stand. i think he's showing leadership in doing so by standing up to china to make them come to the table and do something. neil: you know, ben, there is something the that. right now who's your role model, it would be karl marx -- >> yes, absolutely. [laughter] neil: i'm sorry kidding. -- i'm kidding. they've all tried various ways to get the chinese to change their cheating ways. i think even you would acknowledge the chinese do rig things.

so what, what is wrong with this president trying a different approach? >> when it comes to the theft of intellectual property, that issue has to be addressed. there's bipartisan concern regarding that issue. but when you look at the proof here, the proof is in the pudding. george w. bush tried to do sanctions -- tariffs, rather. it simply did not work. neil: but we never went far enough because we were so afraid of all the debt they held and they would screw us on that. >> we need china right now more than we have before, and i just don't think this is the right time for it. >> yeah, so i started to say earlier in dealing with the chinese, it is a little bit different. we may have talked about in the other day, but some of it, to me, is cultural in how you deal with the chinese in negotiation. will this work? it might. but the president is used to making threats, sometimes used to bluffing to get someone to come to the table. in chinese culture, anybody who's done business there this whole concept of saving face is tremendously important to them. so if you're using insults, for

example, if they feel like they're being slighted, for example, that doesn't necessarily help them come to the table, it makes them shut down. and by what they said last night, that's exactly what they're doing. that doesn't mean at some point they won't turn it around, but to me, that's what's happening. >> this is a huge problem. you can't ignore a problem, just assume it's going to go away. we're $375 billion u.s. trade deficit behind china, you mentioned intellectual property theft, upwards of $600 billion that the u.s. has lost because they've taken the trade secrets. for u.s. companies who do business in china, they have to provide their technology, their trade secrets. what about the counterfeit -- neil: but i know we have a trade deficit with china, and it's a big one. it's the biggest one. but we have a trade deficit with everybody. so where do we draw the linesome. >> and other countries have trade problems with china, so so that's why this whole coalition of the willing thing -- neil: they secretly are the ones who are apparently telling larry

kudlow, take it at face value, hey, you have a beef here. >> other countries have an issue with china as well, and they are coming to the table -- neil: i haven't seen that -- >> not yet. [inaudible conversations] >> let's just go back to larry kudlow a month ago, with two months ago, he was totally against these tariffs. so now i suppose he's just doing as he's told from donald trump -- neil: well, he also doesn't think they'll will -- they'll will have to be necessary. >> it's like playing a basketball, one team has four quarters, the other team has sixteen quarters. >> he's not worried about the midterms. >> the timing, i just don't understand. neil: here's what i worry about, that it gets out of hand on both sides. and most trade wars that start with a few goods, and this one now is close to 3,000 different goods, it's hard to dial that back. >> this haven't been many, right? neil: you're right. >> if you read about the whole smoot-holly thing, it was about

the election, apparently, of 1928. neil: a little hurtful. [laughter] >> tried to protect farmers, seriously, they had this whole big talk about it. by the time it was passed in 1930, it became much more than that. by the time the early '30s came around, other countries were responding, some countries including canada -- neil: you're afraid it's accelerating. >> of course. that's the concern. because on a numbers basis, right, there's much more benefit from the taxes we're cutting, like $800 billion coming from the economy. but the concern is how long does this go on for and what does it turn into. neil: do you think there's a silver lining in all of this? i was mentioning these commodity prices that are tumbling, largely agricultural. and it might be short-lived, but the other take i had from a guest, i think yesterday, was for consumers, well, that means you're going to pay less for bacon, italian sausage. yeah. these are the issues that matter to me. and that consumers might

actually welcome this despite how it's hurting farmers. now, a farmer pointed out to jeff flock, well, enjoy it while you can, because it's going to put me out of business, but what do you think of that? >> and, again, we don't know where this is going to end up. you mentioned how the market is responding. of course the market is responding to what's going on in the news, it's the headlines. neil: right. >> we have earnings season coming up, so so maybe that will be another dynamic once that beginnings. neil: but do you think the president foresaw the selloff that this would cause? >> but anytime the president says something, the market reacts, right? neil: i understand that. but i don't think he saw this. >> probably not. >> kind of interesting what he said to our friends on the radio this morning, he did say -- i guess, obviously, it's happened already -- hey, we might take a hit here, acknowledging the fact that the markets could go down more in the short term. neil: that's right. >> short term. neil: it would be long term good for us. >> i think the main focus has to be on the working class americans who really put trust in donald trump. i was talking to someone who

works, they make bolts and nuts, and this man was -- he voted for donald trump -- legitimately concerned it's going to put his business out of business. neil: and he makes bolts and nuts? he's not affected -- >> the steel -- neil: absolutely. just thought he was lying to you. >> no. no one lies to me. neil: was he encouraged about the sausage and pork belly front? [laughter] that prices are declining? that was a weird take on in this whole consumers could benefit. it's weird. >> right. >> you know, raise to beastie rates. neil: you never know. let me switch gears a little bit and get your take on the employment report too, because in the middle of this signs of a slowdown potentially are, 103,000 new jobs, still at 4.1%. these things are very volatile, i understand, but the sentiment seems to be building that the tax consistents that people -- tax cuts that people were supposedly going to be spending, they're not. do you buy that? and does that worry you? >> perhaps the tax cuts have not hit everyone who will be affected at some point.

a lot of the companies, well over 400 companies, have come to the table and made announcements that they have provided bonuses and increased wages for their employees. so perhaps they have not been affected by it just yet, but some people have. from the people i've talked to, they have been, you know, very thrilled about the fact that they've gotten a bonus -- neil: well, ben has spent all of his. >> a lot of folks are so deep in debt, they just have to go back and pay off that debt -- neil: well, there's nothing wrong with that, cleaning up their balance sheets. >> i just finally paid off my student loans this past weekend, $17,000 out of my pocket. neil: thank you, president trump. did you send him a thank you note? >> not. i think a -- no. i think a lot of folks are in debt, and it's not being reinvested into the economy. >> a little early. it comes back to the timing, because some people argue, hey, if the economy is as strong as we like to think it is, maybe now is the time you do have the ability to implement these tariffs and it doesn't hurt as

much. but if this is a sign things are maybe slowing a bit, i think that plays into these negotiationings as well. but it's early. -- negotiationings as well. neil: you pay more for some of these items. >> right. a lot more than this, hopefully. >> time will tell. neil: there we go. one of the favorite expressions -- have is and i'm having sausage and peppers this weekend. neil: you are not. >> i am. i'm italian. [laughter] neil: tassels on 'em. [laughter] all right, what were you saying? >> i was just going to say time is all si gyp ping has as well -- xi jinping has as a well. neil: we have a dow down 396 points. interest rates holding their pone to, gold holding their own, so i don't know where the money is running to. it's just not at the corner of wall and broad. more after this. ♪ ♪ how do you win at business?

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states -- and they're not all on the border -- bonn's governor against it, california's governor not responding to it. that would represent kind of a first where governors who normally nod and accept whatever a president wants to do when it comes to sending troops at the border, this president running into lots of resistance here. so where is all of this going? to daily caller editorial director vince kohl phase and retired navy captain, chuck nash. captain nash, is this the making of a crisis here or what? >> well, it could be depending on how much the governors really want to dig in their heels and fight this president. but it certainly would be, you know, quite a, quite a thing, and it's something that they would have to answer for politically within their own states. i don't know, it remains to be seen. i think this is a negotiation matter, and they're just trying to throw a little face out there in the face of all this daca

talk. neil: vince, what do you think? >> i think it's demagoguery on the part of these governors, especially in oregon. this is simply because they don't like president trump. this is ridiculous because, again, when president obama makes a request for this, everyone jumps. i mean, president trump has some options here. he could federalize the national guard and take it out of the hands of the governors to make a decision like that. but it shouldn't have to come to that. these governors should respect their citizens and the sovereignty of the united states and do their part to help protect the worder. neil: captain, understanding the chain of events here, i'm not sure what precipitated what, but one of the issues was this so-called caravan coming from honduras. you could make the argument that is no longer a reason to send the troops. the president, i think, and his people have said the caravan really had nothing to do with that, but the timing is what has got the oregon governor saying, no, i'm not going along. what is it with the timing that bugs her? >> i think the number's like 37%

increase in attempted illegal border crossings just in the last month and triple-digit increase over the last year. so this is cleary a problem. it hasn't been addressed, and the border wall is a frustration for the president because he looks at it as, look, if you're in a leaking boat, you can bail and bail and bail, but until you fix the leak, you're not going to solve the problem, and you're just going to drown tired. so you got to seal the border, you've got to control the flow, the illegal flow into the country. and as vince points out, there are several ways to do this. with the active -- with the national guard. you can stay active duty them which means the governor controls it and the state pays for it. under title 32 of u.s. code, you can activate them and the feds pay for it, but the governors still maintain control, and it's in a combined task force command structure. or title x which is where the president and the pentagon call the states and say, hey, we're activating these guys, and i can deploy them worldwide under

presidential authority. neil: you know, vince, if i can look at the political side of this, i think the president is very worried that if there are any issues that matter to his base, it's the wall. building the wall, whether the mexicans do it, we do it, and it's not getting done. i know he's committed funds, gotten funds from that $1.3 trillion spending badge, but it's not nearly enough, and he's worried his base is getting ticked off. what do you think? >> he should be concerned about that, not just about the political implications, but the need for the security of the border. it really comes down to it doesn't matter if you think a wall's the right way to do it, the truth is the border's porous in a way that is hurting the country. the president points out over and over there are drugs coming into the country. the majority of the heroin that flows into the united states comes from mexico. we have an opioid crisis that's killing literally the equivalent of a vietnam war worth of americans every single year in the united states. so with those numbers in mind, there's a whole bunch of reasons

to make sure the border is secure other than just insuring that illegal immigrants don't get across it. i think he's got a lot of people to answer to including the people who elected him and want to see him get something done. neil: i'm also wondering along that theme if the president is trying out a different approach. if they're not going to let me get moving on this wall, i'm going to have more guardsmen, troops down where i want that wall, and that might be the best i can do for the time being. >> yeah. and, you know, neil, if you build a wall, yeah, there's a maintenance cost to upkeep and everything, but if you use manpower, that's the most expensive way to do anything. neil: right. >> so you start putting troops down there, now all of a sudden you look at the employment situation in this country. it's not like there are a lot of people idle around that have time to go spend at the guard and the reserve. you start activating the state guard and reserve, you're taking people away from their families and businesses that right now are looking for skilled labor. and some of the best and brightest we have are these gartsdzmen and reservists who are dedicating their time to do

what they can while still staying at home, and they're subject to recall and being sent to active duty anywhere in the world. so we have to protect them as well as the overall country, and i think a border protection system that includes a physical barrier, the israelis have proved this, it works, lots of countries have done it. it's time to step up and just bite the bullet and do it. neil: all right. gentlemen, thank you both. no word exactly when these guardsmen arrive. they might come in waves here, but it is causing a big brouhaha and almost think other day this would been front page, lead broadcast attention. but with the trade war and the markets and everything else, kind of getting lost in the sauce. speaking of the markets, we are down about 400 points here. waiting for a speech from the federal reserve chairman, jerome powell, of course, remarking on an economy be that was humming along just find until we got this employment report that was deemed disappointing, created about half of the jobs we

thought we'd see. what they're waiting to hear is whether that is slow enough to slow down these rate increases, and i have the embargoed remarks, and you will not believe what he's about to say, america. you can only find out here after this. ♪ ♪ as a control enthusiast,

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-or paying any upcharges. what can i say? control suits me. go national. go like a pro. neil: all right, down 362 points here, virtually every major are dow component, all 30 of them, are down today. you know, a lot of people read into this around this time of day we start seeing a comeback or the markets trying to claw back. not all the time. a lot of this is affected by issues that would be directly affected by a trade war with the chinese. so if you're boeing or caterpillar, you do a lot of business over there and you're fearful that the chinese will respond by sort of chintzing on you. you're in the selloff. sure enough, boeing and

caterpillar, goldman sachs would feel it, these are the same issues that were rebounding when it looked like this trade war wasn't erupting into anything. no way of knowing, but all of this on the same day we got an employment report out that showed some unexpected weakness. only 103,000 jobs created, less than what was thought. 4.1%, that's going to weigh, no doubt, on the federal reserve and its interest rate decisions. and that has jerome powell at his speech in chicago being closely scrutinized. adam shapiro with more on that. >> reporter: and the chairman's going to begin speaking to the economic club of chicago, but he's going to talk about those key issues such as inflation. he's going to say, quote: monthly inflation readings have been firmer over the past several months, and the 12-month change should move notably this spring as last spring's soft readings drop out of the 12-month calculation. now, in regards to labor participation and the shortage of prime-aged working men and women, people 25-54, he says,

quote: we now stand at the low end of participation for both men and women in this age group just above italy but well below germany, france and spain. he goes on in participation to talk about the long-term factors which are weigh on growth. quote: some of the factors weighing on longer-term growth are likely to be persistent particularly the slowing in growth of the work force. others are hard to predict such as productivity. in the speech he says that there are issues that the fed can't control but, for instance, congress or even private companies could do to help such as policies which would include business investment, research and development, education and infrastructure spending. finally, on monetary policy, he says that they have to be careful not to raise rates too slow lu by also raising rates too quickly would increase the risk that inflation would remain persistently below our 2% objective. our path of gradual rate increases is intended to balance these two risks. one last thing, the fed admits it was a bit surprised -- that's the word they used, a bit

surprised -- that inflation, at least wages didn't go up and inflation didn't go up in 2017. they thought it would. back to you. neil: all right, buddy. thank you very much. to jeffrey cleveland now, follows autoof this very closely -- all of this very closely. >> hi, neil. neil: you're looking at this, and i'm wondering whether this seems to signal on the part of the federal reserve that this aggressive tightening that a lot of people feared isn't going to materialize. i mean, we'll still see it, maybe not as much of it. >> well, neil, the first thing is the economy, particularly the labor market, is in fantastic shape. you have to ignore today's numbers, just one month. you look at the three month average, you have 202,000 jobs added. that is a great rate of job growth. that is certainly enough to push the unemployment rate below 4% sometime this summer, i think, neil. the law -- the u6 measure of unemployment ticked down today. it's now 8%. matching the cycle low.

i think it will go lower as well. so great -- the news in the labor market is really good. i don't think this changes anything for the fed, actually. i think three to four rate hikes is not what i would consider aggressive, neil. you look at financial conditions which is the broader way of gauging the impact of the fed on the financial markets and the economy. financial conditions, indices such as the st. louis fed, stress index or even the goldman sachs financial conditions index, and financial conditions are still very easy despite the fact that we've had six rate hikes and maybe two or three more expected over the course of the year. neil: yeah. we would still be, to your point, historically low. but having said that, does this trade, you know, tit for tat, potential war change the equation for you? because it seems to be accelerating. what are your thoughts? >> you know, as a macroeconomist the political side of this

equation is always difficult to handicap. i do think -- my bias is that a trade war, that analogy is a bad one. we're not going to get into a trade war. and i think it will have a minimal impact on the outlook. so i think, you know, equity investors today, i think you should ignore the headlines on trade -- neil: but what if we do get into a trade war? >> if we do, we have an excellent, you know, an acceleration in the sort of the tit for tat, as you say. this would be bad for the outlook, that would change, you know, the trajectory of growth. right now we're thinking that the u.s. economy is growing in the high twos, 2.7, 2.8%. that would shave something off there. but it couldn't be enough, i don't think, even to upend this expansion, send us into a recession. so i think we're overemphasizing this, and the headlines that keep coming out and what's not being followed by investors or is just this stellar expansion that continues. we have of 90 consecutive months now, neil, of job growth.

that is by far the longest expansion on record. it continues, and it's continually adding 200,000 jobs per month, which is excellent. neil: you're right. the macro favors what are expected to be strong earnings, the latest read anywhere from 16-18% earnings growth quarter over quarter, but i guess i'm just trying to get the full picture. do you see anything that could get in the way of that or reverse or slow that? >> i think one risk is that the global economy has been a great tailwind for the u.s. economy particularly in the last 6-9 months. i question whether, for example, the european data, neil, looks better than anytime in the past ten years. can they continue -- can we continue to see that sort of momentum. my hunch is that we'll see a little bit of a slowdown there, and that could bleed over into expectations for u.s. growth and

u.s. global earnings. but even then what i see here is a few more years of expansion, no recession, unemployment rate dipping below 4% in the u.s. this is all a great story for equities and for risk assets, you know, corporate bonds, for example, generally. neil: all right. knock on whatever. jeffrey cleveland, thank you very, very much. >> good to see you. neil: as jeff was speaking, jerome powell has taken the microphone in chicago. apparently, he's going to be saying growth has ticked up enough to justify some rate hikes. of course, the devil is in the details. everyone expects rate hikes. the thinking was maybe two more tops this year, three tops from that. if it goes beyond that, then they get worried, so they're monitoring him, the world monitoring this trade war -- whatever they want to call it -- and we're monitoring all of that with our boomers. yep, the prune juice gang is here in a minute. ♪ ♪

neil: all right, i'm back for my boomr segment. session lows, getting back to them again, and jerome powell, the federal reserve chairman, is speaking right now talking about further gradual rate increases. didn't see how gradual, two, three or more. i think more than three would alarm this crowd, but we shall see. lizzie macdonald, charlie brady, charlie gasparino and -- [inaudible] >> china! [laughter] neil: now, with this gang, i have to speak extra loud because they cannot hear me. [laughter] so, lizzie, the first thing -- >> we're boomers. neil: right, we're boomers. hey, i'm a boomer, we're all boomers. so the first thing the president has got to make clear to these markets is that this doesn't erupt into a trade war, because i think all the employment stuff and everything else is taking a backseat to this trade drama. what do you think? >> you know, you're right. and this is sort of like -- watching this unfold, it's astonishing.

it's sort of like ad hoc and on the fly policy with tweets that are unsafe at any speed no matter how you look at it. neil: so you don't -- you think there's a method to what the president -- >> i don't think they have the exact plan ready to launch. [laughter] i mean, i know they know -- [laughter] i know what their fears are and the concerns are about the theft of intellectual property and the trade deficit and so forth. i just -- pat toomey said it well, he said he doesn't think that the use of tariffs is the right tool. neil: you're talking about the republican senator from pennsylvania. >> correct, thank you. to go after the trade, the -- >> what i find astonishing is when trump, i mean, we reported this in the last hour. trump gets two major ceos -- i was given this information on the basis i would not reveal the names -- you would say those are major, okay? they both called him up and said, listen, do not do a tit for tat trade war. we understand that the chinese rip us off, we understand, you know, you have good motives.

but you do a tit for tat trade war, it's going to up wind all thes positive stuff with the economy, it's going to hurt the markets. do a comprehensive thing so the markets say at least we're thinking about it. he was like, no, this is the way i'm going to negotiate. he really blew them off. and it was good advice. and it's so obvious because we have a pretty good jobs number -- very good, actually, if you think about it -- neil: in other words, it's like a goldilocks number -- >> think about it, it's a decent number. and, you know, because of of this trade garbage, the market's off. >> but the thing that gets me, i mean, at least we're at the right country. we're hitting china, not our european allies. and i really appreciate i think that that's right. and i think he's really frustrated. because he doesn't know what to do. but there's a positive step and, again, we were talking before follow what we did in the wake of a sputnik. sputnik we spent probably in today's dollars hundreds of billions -- >> by the way, that's even before -- >> yes. i'm the senior boomer here.

i'm the senior, i was a kid. >> what's the point? >> in the '50s -- >> yeah, yeah. >> -- or whenever. we should be spending billions of dollars on cyber education and things like this. >> [inaudible] >> what? >> who should be spending that money? >> america. instead of, you know, other things. neil: but how does a war with china potentially help that? >> a war with china doesn't. it hurts it. neil: oh, okay. so you wouldn't be going after china. >> i would be going after china, but i would be going after china in a way that we don't have to worry about china. neil: so you don't like the approach he's taking. >> no, i don't, but he's got the right country. neil: charlie, one of the things that has been raised here is that other presidents of either party have tried to get them to be fair, and i think we can all agree they're not. >> right. >> we don't have free trade. neil: so he's, you know, calling their bluff. >> but what's rallying the markets right now -- neil: nothing's rallying the

markets -- >> rattling. neil: oh, rattling. huh? >> -- the uncertainty of it all. and markets hate uncertainty more than anything, even bad news. and you touched on it at the top of the show, you said the president risks undoing his own rally -- neil: how real do you think that is? despite the stormy daniels comment yesterday, one thing that stuck in my mind was the notion that, yeah, there's going to be some pain. it's the first time he's acknowledged that. and not just for the market, but for consumers. >> yeah. neil: we're going to feel that. >> right. >> and the bottom line is china is in this for the long term, right? xi is now effectively ruler for life, donald trump is ruler until 2020 -- >> 2018 -- >> well, 2020. how is this going to play out? neil: the president still says he needs us more than we need him. >> right. and effectively all of the u.s. exports into china would be taxed if china goes that route. that's a big deal. but the chinese premier is

already saying last week they will ease market access, they will back off on, you know, stop forcing intellectual property sharing to avoid a trade war. neil: will that be enough if they make good of it? >> here's the point, hang on. remember when daniel patrick moynihan said, listen, we overestimated the strength of the soviet union, and when they collapsed, it ripped the lid off the problems. china has tremendous poverty, they have a debt bomb, and they have health crises in china. but they do -- [inaudible conversations] neil: you're in the crowd that says they'll bend first. >> they will. but they are also in it for the long -- neil: okay, charlie, who bends first? >> ultimately, i think we'll have to bend first. neil: really? [inaudible conversations] >> i think that there's a compromise. and it's pretty simple. the united states dollar is the world's reserve currency. that's great. that's wonderful. it gives us lots of special

privileges. but there's also something horrible about it. it's overvalued. neil: right. >> we -- it's much more, it's dramatically overvalued relative to the yuan. >> because we run deficits. >> exactly right, charlie, we run deficits -- neil: which we didn't run when sputnik was going. >> right. [laughter] no, we did not. and what we could do is force china to dramatically revalue their yuan which i think they want to do anyway. this should not be happening. neil: no. >> they do. neil: even if they make concessions, here's what i wonder, how do you do the ronald reagan thing, trust but verify? >> trust but verify in this one is not weapons. you trust by just looking at your bloomberg screen. if you see the yuan -- neil: you realize they're a competitor to us. >> what's that? neil: bloomberg competes with us. >> oh, i'm sorry. mean, you look at the newspaper or -- you look at a fox news feed -- neil: or fox business. do you know where you are right

now? >> i'm so sorry. [laughter] >> you know, neil -- neil: i'm kidding. >> china has opened up to us, okay? they have opened up to us increasingly -- neil: but it's been glacial. >> you know why? we want to do business there. i'm telling you, every american company wants to do business there because it's a burgeoning middle class. it is a market that -- neil: that's true. >> -- is up for grabs, and if we don't do business there, our economy is going to get hit. [inaudible conversations] neil: they've been embarrassed. the one thing about a trade war, you realize that the dirty little secrets each side exposes on the other. >> exactly. neil and do the chinese don't play clean or fair. >> no, they don't -- [inaudible conversations] neil: right. >> make pork products -- neil: steve, any final comment? [laughter] >> my final comment is to look for a one/win situation -- neil: do you think we're going to have one? >> i think it's possible. and i really do.

china's now trading oil in yuan. they want their yuan to be more important. let them have it. neil: let them have it. >> let them revalue their yuan. call them a currency manipulator. let the yuan go to .20 -- >> keep our own hogs here. neil: all right. guys, thank you. [laughter] that says it all. [laughter] a much younger reporter will be coming up, that's all i'm going to say. i can't tell you what he's going to say. [laughter] >> can't get any older. neil: that's right. popeye is now working for bloomberg. we'll have more after this. mobie dog grooming palace. laura can clean up a retriever that rolled in foxtails, but she's not much on "articles of organization." articles of what? so, she turned to legalzoom. they helped me out. she means we helped with her llc, trademark, and a lot of other legal stuff that's a part of running a business. so laura can get back to the dogs.

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neil: all right, i don't know whether our bitter boomers are doing this, but we're down more than session lows, down about 530 points and risking what will be a down week for what had been an otherwise -- well, to put it mildly -- volatile market. amazon technology playing into all of that. christina on all the details you're not hearing on that aspect of tech that maybe you should. christina? >> reporter: right. appleson, according to "the wall street journal," is looking to get into your wallet. they're reporting that amazon is looking to take its virtual assistant alexa and enter person-to-person payments. neil, do you remember the $20 that you owe me? so if you have alexa, you could

potentially in the future say, hey, alexa, pay christina $20. and then, bam, $20 is in my account. obviously, it needs to get more data like your bank account information, but amazon is working on that. it means collecting more data on its customers. and if you're thinking even long term, imagine having alexa if in your vehicle, going to the gas station saying, hey, alexa, pay for gas. and it does it automatically which means voice commands could potentially be the next wave of commerce. and amazon is also even, according to the report, working with jpmorgan chase on building a checking account type product. so this could be the next sector for amazon. and, obviously, that means collecting more data on consumers. and it's not the only news that came out for amazon today. amazon key, that's the app that amazon only had in certain areas, is going nationwide so that you can unlock smart locks from wherever you are. you just open the app and then you click unlock, and that means

a delivery person, a dog walker, maybe somebody that's going to clean your house, they can immediately enter the home, and all you have to do is click yes. and, of course, what you're seeing on your screen right now is that you too can also watch video of who is standing in front of your house. so definitely interesting information, but that means more data going to big companies, big tech companies. neil: i think that's kind of creepy. i mean, what's to stop my teenage sons from saying, pay jeremy, pay bradley, you know? >> reporter: well, the only thing is alexa right now is monitoring and listen to you, so it can actually learn what your voice sounds like -- neil: i don't believe it. >> reporter: it's happening. it's happening already. neil: you just said i owed you $20, and that was a lie. you're trying to get -- >> reporter: you're making me seem bad on national tv right now, but it's true, it is a lie. neil: i'm to worried about this, and you kids with this technology, you're taking it too far. >> reporter: you kids, okay. neil: great stuff. >> reporter: thank you. neil: talk about, what a week to

start, right? jerome powell, let's just say he is not. whatever he's saying is adding to some of in this angst here, and apparently he's telegraphing more hikes. he hasn't said how many more, but he's talking about a gang busters economy despite this employment report that seems to call that into question. the federal reserve head all but saying none of this is deterring me, so keep those rate hikes coming and, apparently, keep the selling going. more after this. . . .

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neil: we are down at session lows. might be comments we're getting from treasury secretary steve mnuchin apparently appearing on cnbc, and talking about amazon, the practice of not collecting taxes from third party sellers is worrisome, among. factors whipsawing stocks. ashley webster. ashley: fed chair. we're moments away from hearing from the federal reserve. jerome powell is set to take questions about the health of the u.s. economy following a speech he is giving in chicago. you can bet he will be asked about the disappointing jobs report and escalating threats between u.s. and china. president trump says he is considering more tariffs. china says it is ready for a white. i'm ashley webster in for trish regan. welcome to the teleagainst report. stocks selling