follow that one not as much of a populous issue in spain as it is in italy but nevertheless enough to get the markets spooked. charles: dow jones industrial average down to 385 points i hand it to neil cavuto. neil: all right thank you very very much we're following all of this charles including what's going on in italy and the confusion as to its attempts to form a 65th government since world war ii no country has had more and of course that country is a long way from settling its problems this is not just greece and between that and what's going on in spain those are two big economies that are in a world of hurt here and that is meaning a world of hurt for the euro against session lows for the dow down almost 400 points anything financially related since they have exposure to that neck of the woods which by the way is all of europe they're feeling the pinch right now and the fact of the matter is that even with the losses today, we are still looking at gains on the month. that's because everything here is fine, as we move over 408

points on the dow so what's going on here? what does this mean let's ask market watchers jack mcintyre. is this an overreaction what do you think? >> so, okay so i think it's an overreaction in what's going on with the u.s. equities but not when you look at europe because i still think we have a fundamental problem when you have too much debt not enough growth that's a toxic combination. europe hasn't made any structural headway over the last number of years, so i think it's kind of catching up to the markets right now and with the dollar strengthening u.s. equity is sort of kind of having a harder time ignoring that. neil: and also you've got to think too what's going on with china right now, mark that we're getting tougher on them right now regarding a trade policy here. it looked like overtures were being made as recently as over the weekend now a little bit less, we're looking seriously at these 25% tariffs on a lot of foreign goods that come into this country and we could be expanding that list to better

than $15 billion worth of chinese goods what's going on? >> well certainly there's that and that hasn't been resolved and so it remains an uncertainty that the market doesn't like but remember too this is happening in the context of a de synchronization if you will of global growth. that was the whole mind set coming out late 2016 coming throughout 2017 which led to risk assets is the fact that we had this synchronized global growth story line where it was accelerating and now we're see ing decelerating growth across a large number of markets including china, including japan that reported first economic contractions in the first quarter since 2015 including europe which is slowing still above trend growth but slowing, and now you layer in these other concerns, geopolitical or trade, and that's helping to again take a bid out of the equity market that from a fundamental u.s. standpoint, still looks prime to continue to advance. neil: you know, i'm always wondering where one trade settlement or the looks of a trade settlement away from a

reversal of something like this, jack and that of course has been our past history, so i wonder if a chinese deal was to be had or we gotta nounsed that the white house that the june 12 talks are firmly back on, whether a lot of this evaporates or no, what do you think? >> well, okay so it certainly would be a net positive, but i suspect that there would be a lot more downside if trade tensions with china get worse, if there's not a summit deal versus upside potential but clearly it would be a positive just not as much, it would be a bigger risk if this stuff doesn't happen or deteriorate. neil: i note it's all 30 of the dow stocks are down say right now coca cola a little bit but that is again a global exposure issue isn't it? i mean so when you look at that, jack, how worried are you that this has a pervasive effect and feeds on itself? >> yeah, so i think one of the key sort of fundamental premesis

for bulls are that we're going to go back to the synchronized global growth and the global economy is still on solid footing if there's signs that's cracking, then yeah, i think there's going to be a little bit more risk from anything that's sort of related to trade flows, i'm still a little bit more bias towards thinking that the global economy is still going to do fairly well, but you know, certainly the price actions going to get us a little bit nervous and one other point i'd make is i think it ties into how does it impact fed policy because if it actually slows the rate of hikes then i think actually risk assets, equities will do much better in that kind of environment. neil: you know speaking of that environment, mark that's a lot of people look at whatever europe's problems particularly in spain and italy they are to our advantage you wouldn't know it today but that we might attract a lot of that nervous capital here for some of the reasons that, you know, jack outlined and for others just being a safe haven what do you think? >> well no doubt. i mean you could see that in the

bid coming to treasury prices here today and a little bit on friday as well. we had a 311 print on the 10 year treasury not too long ago and suddenly we're below 290 so you're seeing their evidence but also seeing it in the dollar and the dollar is doing the feds work for it because the dollar has rallied massively here and continues to get a bid today particularly against the euro across is going to continue to weigh on inflation and that's the one element that the fed has been waiting for in terms of turning more aggressive with regard to rate hike policy and in the absence thereof or to whatever pressure the strength of the dollar is going to weigh on the inflation it will continue to affect the pace of rate hikes which again ultimately will feedback into risk assets catching a bid by way of saying well the fed won't give in our way, macro economic fundamentals remain solid why shouldn't equities move higher? neil: it was down 425 points on the dow right now jack there is an argument to all of this that

what ales the euro will help the dollar the euro is at the lowest point its been against the dollar this year the flight to quality will to an earlier point help us going forward, but normally, it's a rising tide that benefits all markets. you can't be the lone market standing out to the exclusion of others, right? >> yeah, that's correct so because the global economy, risk assets do a lot better when it's broad based global growth as opposed to just the u.s. growing and you're right to that degree, it's going to result in the dollar appreciating and then that actually is going to have a negative feedback cycle and certainly put pressure on the external parts of the u.s. economy. i would just make one quick point here though, that i know you get a lot of people on your show talking up equities, but remember it's always good to have something defensive in the portfolio and i reiterate the value that treasuries offer and the role that they serve, so i think it's a great opportunity to always have a little bit of high quality duration in your

portfolio and treasuries relative to german or other markets look very attractive right now. neil: you're talking about a 10 year note or where are you on the duration chain here? >> yeah, long end of the curve. that's more influenced by inflation i don't think inflation will get out of hand so actually tens look cheap relative to 30s given how flat and narrow that spread is. neil: indeed gentlemen i want to thank you both and to that point we just showed a 10 year note is about 2.83% but the argument goes something like this, if stocks are swooning 2.83% guaranteed by uncle sam looks okay, and how long that lasts is anyone's guess. there are some other wrinkles to all of this including signs that a summit could be back on and could change with the north koreans and that the meeting could be on for june 12. ahead of that word that the president is going to meet with japan's prime minister on june 7 so maybe that could be setting the stage for something we shall see to a former state department

deputy spokesman adam arelli. very good to have you, sir. what do you make of these cross currents we're getting this kim jong-un i hope i'm pronouncing it correctly the vice chair of north korea long time spy chief seems like a version of their cia guy he's come into town but he's a pretty ruthless character so the fact that he's coming means what? >> well first of all they're all ruthless characters. neil: you're right about that. >> that's number one, number two, this is not a prediction game, because if you're going to make prediction chances are at one point you're going to be wrong. i think the most certain things we can say is that there are a couple of things that are already clear. number one, and just judging from what's happened already and remember we're at the beginning of the process but a couple of things are already clear. number one, china and south korea are playing pivotal roles in this process. the leader of north korea went to china and south korea each

twice in the last month. they're what got us to this point, and as this process plays out, we are not going to be able to get to yes either on an original meeting or a final deal without china and south korea. that's number one. neil: but we're toughening our stance online, with china does that complicate it? >> yeah of course. hugely. neil: what are we doing? >> i guess people smarter than me figure there's a good reason for it. neil: there's no one smarter than you. >> well please, anyway, number two this process is playing out in the media, right? they're using the media as part of the negotiating process. neil: whose using the media? >> both sides and it's a two edge sword. the media can hurt as much as help. if you read the art of the deal donald trump says the media is part of his negotiating process but we're not dealing with some two-bit business executive. kim jong-un is a tyrant who has killed hundreds of thousands of his people by famine and execution.

he killed, he executed his uncle with an anti-aircraft gun for pete's sake. neil: he's the only within we can negotiate with. >> if we think this guy is intimidated by the media? neil: why did he want to come back to the table? >> i think two things as i said before. i think it's china and south korea brought him back. look right after that letter, president moon asked for a meeting with kim jong-un, the president of south korea, they met again in the demilitarized zone and everything was back on so that's why i say south korea is playing a very important role neil: let me ask you about the second meeting the north korean leader had with the chinese leader it was that is down, that had donald trump thinking something was said there to derail this. >> uh-huh. neil: do you believe that? >> um, part of what bothered the united states was that we weren't told about it, and we didn't get a proper read out of it and we thought we were getting double dealt with but

this brings me to my third point is this is a marathon it's not a sprint. it's going to take a long time. there are going to be lots of twists and turns. neil: but if it comes to pass they are only going to meet for one day. >> but my point is the meeting is just sort of starting gun. the goal is that -- neil: that was over a period of days right? >> and right they've did already agreed on a number of sort of things but we're trying to denuclearize the korean peninsula, north and south korea that's going to take a long time to negotiate and this meeting is just the starting gun and we can't even get the meeting so what does that say about the process? you've got to have discipline, you've got to have focus and stamina and my concern is that with all of the other things on the president's plate, china trade, immigration, iran, the mueller investigation, the congressional investigations, does he have the bandwidth to see this through? and does he have, is he willing

to spend the time and invest the political capital to make the compromises that are necessary for an agreement? if he's that sensitive about one meeting between the north korean leader and china it doesn't argue well for the long-haul. neil: so you're not optimistic with any result of the meeting whether it comes to pass or not? >> i'd just say this is very complicated and it takes a long time and complexity and long term thinking are not necessarily our greatest strengths. neil: ambassador thank you very very much. well it must have been something the ambassador was saying because we sold off even more we're down 442 points a lot again has to deal with what's going on in europe, we're to the point what's happening to rattle spain and italy as far as investments are concerned and the euro to the greater concern now, at lows the lowest its been since the dollar and then of course, to the ambassador's points what's royaling folks about the progress of these talks regarding north korea and more to the point, china trade talks that sound a little bit increasingly ominous here

overtures over the weekend we were covering them live saturday but apparently those overtures have gone and right now they're looking at tough on getting china. that is a financial term which means gone to hell in a hand basket. we'll have more after this. >> [laughter]

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neil: we're just getting word that as expected a little late but it did it approved the monsa nto merger i always call it bayer, but who am i to argue it's german. in the meantime, starbucks is closing a better than 8,000 stores this afternoon, it's all for this racial bias training, christina christina partsinevelos is outside of starbucks in manhattan there are a few in this city by the way she can detail what they're looking forward to. christina? >> just a few i guess like you said in just a few hours they're shutting down not just for three hours of training but for the rest of the evening, so many starbucks locations that are company-owned like this one you'll see a sign on the door this one is closing at 2:00 p.m. they're training staff throughout the next three hours, after 2:00 regarding racial bias training and this comes after an event in philadelphia where two african american men were seated

there, waiting for a third party , they were questioned as to why they were there they asked why don't you buy any items on the menu and they said no and they also wanted to use the washroom, weren't allowed and an employee called the police on these african american men so this is what stemmed this entire racial bias training across the country, it's estimated to cost roughly 12 million to about $15 million, drop in the bucket when you consider the fact that in the third quarter of last year the company made $1 billion or over 1 billion in profit. this is happening today, employees will be getting pre- recorded videos you've got the ceo on, the chairman, howard schultz, and you've got a cameo appearance from rapper who will also be speaking to these employees, we went inside spoke to them asked them about the training someone said they just hope it doesn't last until 7:00 p.m. it's estimated to last about three hours. we're at this location because corporate starbucks is expected to come by so hopefully we can ask questions regarding this

situation but it's not the first time starbucks has taken a stance about race. in 2015 the chairman howard schultz suggested that baristas write on the cups race together to raise the conversation about race so a lot of this stems around this and last week neil i was talking to you on a starbucks location because they've now changed their bathroom policy as well they want to be inclusive include everybody so now the bathrooms are open to the public. a guy just walked in you do have to ask for the code but you can use it again happening at 8,000 starbucks locations, the franchise ones in malls and target locations and airports, those are still open. neil? neil: so christina if you use the restroom and you don't buy anything can you just lounge around at that starbucks if you wanted to? already used the restroom just sort of hang out? >> yes, you can, 100% and that was part of the new inclusive policy. you don't have to be a customer in order to sit in this location however you can't engage in any illegal activity, you can't do

drugs, you can't sleep and that's a big thing for a lot of people because a lot of our viewers have taken to twitter saying that these starbucks locations will become homeless shelters, they will become drug havens, but starbucks responded saying no that's not the case we're training our employees to deal with any type of disruptive behavior. we just want to include everybody even those that are non-customers. neil: all right christina thank you very very much that's a good read on this from of course the martin luther king, the daughter what do you think of this what they're trying to do here? >> fascinating report from christina, especially about opening them to the public as a place you can use a restroom, sit around for a while and you don't have to purchase anything. that may not have been the best solution because you can have it overcrowded and then your customers can't come in and it'll affect the economy and their pocketbook and what starbucks contributes in the area of jobs and all that kind of thing so it can really have a

different kind of impact on the economy from the perspective of just that. i think that it's very important though as they are working on inclusion and all of that i've got a letter an open letter today along with brent mosel from for america and civil rights for the unborn and saying well, if you really want to deal with the question of race, don't forget now that you are allowing your employees they want to contribute to planned parenthood and you're matching those dollars and helping to kill little babies so if you really want to stop racism you need to deal with that aspect of race itch as well and really come together as a community of one race, one blood, as you've heard me say so many times, but it's just a real interesting kind of a way that they're trying to help the whole overall problem but then there's an elephant in the room and they don't want to see that. neil: too it cuts along racial lines i hate to say when white people were told about this

overwhelmingly they thought it was stupid i'm paraphrasing here african americans minorities in general eight out of 10 that it was a good idea. what did you make of that? >> well african americans because of the race issue we've been prosecuted so long a lot of victim it station in the african american race and neil you already know i'm part nigeria, part irish and part native american through the dna tests that i've taken so i'm one blood and one race so i tend not to necessarily think only of the victim of my african american heritage, but the overall picture and that's what my uncle said we must learn. martin luther king jr. we must learn to live togethers as brothers and sisters together so we're going to be able to be brothers and sisters we're going to have to see each other in that manner but i sometimes think that the african american community doesn't think fiscally , doesn't think money, because if everybody makes that for a new community lounge refuge, let me rest, get in the

bathroom, wash up, and do all that kind of thing in the bathroom, then the customers are not going to necessarily be able to get in and buy their cup of coffee, so some of the starbucks may find some challenges with their year-end dollar amounts so i don't know if everybodies thinking about that, neil. neil: you know, my good friend charles payne here was telling me over the weekend, why not just return to being good human beings regardless of race, if someone wants to use the restroom you let them. it's not a big deal it doesn't have to become a racial matter. >> but they'll open it up. neil: well yeah but when i hear some of the things they're planning like howard schultz reaffirming on tape that starbucks is a safe place to gather from your home and your workplace, that they're featur ing recorded footage and video of like-minded people talking about how we can all get along and then the chicago-born rapper common in a segment here, it almost seems to border on pat

ronizeing and i hope that wasn't starbucks intent but for anyone just stepping back from this you'd say you know, maybe the strategy should be treat your customers and non-customers alike, like people and human beings. >> i believe that's their goal. neil: do that and don't do all this other nonsense. >> which my mom said don't even go to a neighbor's house or dinner without taking something. i was taught when you go into a store make sure you buy something, so that's what i'm saying if your intent is to go in use the restroom, sit around and not buy something that was not the intent of these people who were prosecuted though. as a matter of fact though it seems as though they were just waiting for someone else to come and have coffee and talk, so that was totally wrong but it's kind of morphed into another kind of a look now that it may not be as successful. neil: but that goes to the story of, a store manager in

philadelphia in that case over reacted by having these folks arrested and all but i don't know there's got to be just a high priority on patience and understanding and like your uncle and dad used to say treating human beings like human ning beings. >> real quick neil did you hear about some lady in the park and the family was grilling in the park and this lady called the police to have them arrested and said oh, you can't use charcoal grills here but everybody else was using charcoal grills so they were barbecuing while black or waiting at starbucks to get a cup of coffee with friends and talk while black, so we don't want that going on. that is racism but we need to be one blood, neil. neil: i hear you, it's always a pleasure, alveda. thank you very much. thank you for the opportunity. neil: we're down off the worst levels of the day but again lower the dollar right now is the currency of choice the euro is not, in fact the euro versus the dollar the lowest its been all this year spain and italy in a heap of trouble and right now,

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neil: all right, right now the dow down about 428 points there are a lot of catalysts for this and we sort of pick your excuse not the least of which is going on in italy and spain as those governments begin to unravel the fear that the commitment to the european union begins to unravel the euro unravels now at all times lows this year versus the dollar, and add to that angst about china and trade that we're going to indeed follow-up on those 25% trade tariffs that were threatened last week apparently set to be implemented some time next week anyway a lot of selling going on let's get the read from deirdre bolton and last but not least wall street journal associate editor, what's

going on john which is leading which? >> well it's probably all the things you're saying are contributing to what's going on with the dow but in europe this dust-up in italy, euro skeptics that are trying to form a government the president hasn't sanctioned that yet. you may go to another round of elections and if that happens it's very important that you see even more euro skepticism in italy express itself. what happens to the euro is the big question. >> and the prior finance minister talks about the euro currency as a german cage, and because he's kind of a quiet, shy, retiring guy says well, you know, afterworld war two in germany because they got slapped they have now enforced their dominance in an economic sense so all of this rhetoric is very nationali'm stic. it's brexit but the italian version. >> but a lot of it is the government rather than the population i think maybe there is something to that as to us getting ahead of ourselves talking about italy especially

with regards to it leaving the euro. they've done polls recently of how the italian people feel about leaving the single currency and numbers never drop below 58% most recent number was 59% so most of the people almost 60% of the people in italy want to stay in the single currency and in the european union. neil: but it's sort of an oxymoron they don't like being answerable to the germans? >> well to deirdre's point history was yesterday, so the memory of world war ii and what happened is sort of a dominant germany but also a lot with italy. this is kind of history sort of playing out. they don't like the fact the euro or the central government the central financial bank defines their budget for them and says you've got to be fiscal ly responsible and the italians have got to be aware of getting what they ask for if they were to in some way dis engage with the euro. i don't think it's the betting but let's say it were to happen

this would be one of the econom ies in europe not doing as well as the others. lots of debt, more than 2 trillion euros in debt. how would that ultimately be metabolized by an economy not growing fast enough. neil: it's the third biggest economy in europe but now the fear seems to be and you touched on where the president of the country says all right to all of you popular, on your appeal i'd prefer the guy whose the official whose pro sticking with the club and he can, you know, form some sort of a government in the interim and that -- >> no that doesn't fit well even the people who may have been on the fence or calm about things in a democratic system if i say okay this is the party this five-star party is the one with the most votes and most seats but then as president i'd say i just don't like that party i'm going to appoint my own people and this kind of flame throwing against germany and whether or not people want to leave the euro. neil: but money though flamethrowers, they're out there >> there are tons and whether

or not they're right about the stability of europe i know this significanted finance minister said in the 1990s when italy designed to join the euro all italians lost their purchasing power. neil: didn't that happen in greece when they joined they ruled the day? >> neil i think at that point that you just made a ton of flamethrowers out there is also informing what's going on in the markets and what's going on politically so you've got euro kept ic and right wing party in italy on the rise, you had the same thing in pole and, hungary, austria's manifested this, france and even germany has had this denmark, so i think the markets are looking at this saying oh,, you know, this is more of what we've been seeing and it's a little bit unnerving. >> it creates an interesting dynamic for our market for the u.s. market focused on stocks a lot today to be down but if you look at our bond market what's happening in the european debt today with money coming out of italian treasuries for example, with the italian 10 year now passing going in yield at least higher than the u.s. 10 year treasury note for the first time

since i think last summer you have money coming into the u.s. and yields falling down, so the ramifications of that at least in the next few weeks with treasuries linked to mortgages, now mortgage rates which everybody assumed would keep going straight up and won't they'll stop a little bit maybe go down a little bit so how does that impact our markets our economy. >> and we confirm our market right now if you look at the. >> steve: 500. >> and also to get back to something john said too italy has a lot of debt and whose on the hook mostly german banks and french banks that's the three legged stool of the economy of europe. neil: spain and italy can't cut it and they're not part of the euro. >> look at how the european union is trying to digest brexit and how difficult that has been. imagine that times three. i would, imagine that complexity times three. neil: so as the euro if it were

an investment, period, to reflect its solidarity and there's no solidarity, then it's a lousy investment. >> well that's the interesting binary aspect of this right? if you're betting on the euro you're betting on political stability or political in stability. you're not really sure but in the interim what you might see the central bank doing is delays any tightening, continuing its easing policy because it wants to keep the economy in europe strong. neil: but didn't we win by default? >> we've already won. neil: the united states has an investment alternative. >> yeah, the dollar is up big, right? neil: you could argue that we're hurting ourselves here on the chinese trade tensions right? we're going to go -- >> everybody kind of assumes after everything we saw with mnuchin and the chinese vice premier that the trade war was to you secretary mnuchin's words on hold. well after today, the announcement that came out of the white house i guess it's not on hold any more or i don't -- and neil this is an important

point. neil: but why did the president follow-up with the tough talk on tariffs and everything. >> well why has he gone back and forth on this, you tell me, but this is informing also what's going on in europe, because not only are we sort of in a trade war with china, but we're sort of hammering the bell with europe as well, saying we've got unfair trade wars. >> that's the car and the car parts thing. >> that's true the trump adminitration already said something has to happen here so europe is looking saying are we going to be getting soon the same treatment china is the markets are reflecting that. neil: if they're reflecting that then some of them are actually cheering the president on because they think china's an unfair trader too some of them. >> well and part of what we heard today was that the u.s. will continue to limit chinese investments so not even the tariffs but just limit chinese investment in the u.s. which a lot of people say is a more moss queue lar even though it's a quieter tool a more muscular one that affects more companies i see this given sarah sanders white house press secretary saying all systems go

more or less for singapore the fact that the u.s. for better or worse is gutsy enough to enforce the stray tariffs on china right this minute. neil: that is assuming there's a logic to this is it an impulsive thing on the president's part of part of a grand strategy. >> are you looking at me to answer that question? >> so we are, it is a mess. with had this -- neil: that's not what i said i said i think it's impulsive but you came up with that. >> as a result of you're saying it's impulsivities kind of a mess that you have this decision on zte for example, to really hammer down, you had congress behind you the commerce department behind you and yet suddenly there's a reversal on that for unclear reasons and now , -- neil: you don't maybe see the other shoe that's going to drop or it all makes sense. >> we don't perhaps and you have a whole group of trade negotiators to see things, well, differently. >> on the same side.

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with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. neil: all right, the president is now accusing angry democrats of continuing to look at this russia probe to meddle into the mid-term elections and my next guest isn't so sure of that congressman chris stuart says the only one who really knows if russia meddled in the elections period is vladimir putin, so congressman, you take issue with your colleagues on this senate intelligence committee that see it as close to irrefutable with the russians were involved we just don't know the degree to which they were involved? >> yeah, and that's an important distinction. look i've always said before the election that russians are going to try to meddle. i don't think there's any question about that i've never disputed that. the only thing that i wonder is

did they involve themselves to help president trump or to hurt hillary clinton, two sides of the same coin and again it's very very difficult for us to actually determine that because by hurting hillary clinton of course they're helping donald trump and it really is an important distinction though no question they attempted to meddle. the question was were they just trying to discordant break down the foundation of democracy faith in our system or actually trying to help president trump and that's the thing we just don't know for certain. neil: understood i want to clarify that does put you at adds with the bipartisan findings of the senate intelligence committee that seemed to argue that vladimir putin was more interested in see ing donald trump elected than hillary clinton. not that he could have influenced the election or turned the voting tide but that was his goal. you're not so sure the proof is there or the data? >> i don't i'm not sure that it is at all and by the way the one finding that the committee the house republican intelligence committee was very clear on and

that was we said that the cia analyst, the process they went through was not up to their normal standards and this is such an important issue. oh, my gosh, i think this is one of the most important determinations the cia or the intelligence community will have in a generation, did a foreign government actually interfere and help elect the president? that is an incredibly important question, and that being so important, we expected their trade craft to be up to standard , in fact it should be perfect trade craft and we found there were deficiencies and we just don't understand that. i don't understand on such an important question why it would have been rushed why it did go through normal review why you didn't bring in other agencies and other opinions before they came to this conclusion. neil: you know, while i have you congressman, mitt romney is making news obviously running for senator in your beautiful state and he says well the president has exceeded expectations quoting here, sir " i don't think that i would point to the president as a role model for my grandkids on the basis of his personal style.

he has departed in some cases from the truth and has attacked in a way that i think is not entirely appropriate. " what do you make of that? >> well i don't know that i would disagree with that. the president says some things that i'm uncomfortable with. generally his tweets and other things he communicates in a way that we're not used to and makes some of us uncomfortable but you have to be able to look at what he's donald the thins he's accomplished and if you wanted someone to come into washington and shake the tree a little bit this president has been willing to do that and in meaningful ways and with positive outcomes for the american people and that's why i think you have to, many people are kind of looking past his personal attributes that make them uncomfortable or they think is, you know, not as mr. romney says not what they'd want to teach their grandchildren. i wish that wasn't the case but that's just fact but look at what he's done for the american people. that i think is a thing that people are going to measure him

by, and when you look at that, there's an awful lot that we've been able to accomplish together neil: so none of the personal stuff matters, you have your doubts about some of that personal stuff that mitt romney does but in the end he has exceeded expect takes and in the end done more than maybe some of his critics, and that's good enough? >> well yeah but look that's not terribly unusual. look at jfk for example, and the things we know about him and the mistresses he had and the things he was involved with look at bill clinton for example, and the accusations against him, how he treated women, some of the things that the people around him excused and tried to hide and look that isn't terribly unusual. it's not what we want in our presidents but it unfortunately is the reality of some of the people that find thyself in this office but at the end of this day the american people look and say i may hate that but there's another standard that i think many people ask and that is is he trying to help and secure

america's future and make us a leader in the world again and is he making it harder or easier for american working families. when you use that measure again this president has had some remarkable, you know the narrative has always been it's a failed president from day one and least effective congress and the reality is just the opposite is true. neil: congressman thank you for taking the time. good seeing you again. >> thank you, sir. neil: all right the dow down about 400 points all of this political broadsiding notwithstanding we'll have more after this. ♪

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you can see the 10 year bond yield up 2.83% lowest levels since early april. neil? neil: all right, thank you very much nicole. in the meantime, you probably heard by now that solo was so-so pulling in just $103 million domestically over the holiday weekend that would be good for almost any movie considering this is part of the star wars franchise for disney it was not good add all, editorial analyst on what this means what do you think, kim? >> you know as you mentioned it's great news for any other film for especially for memorial day weekend it did well but for star wars this is the most under performing star wars film ever so that's definitely a big deal. there's a lot of high expectations the predictions had been up to maybe 150 million so definitely much lower than expected so it was a personal best for ron howard and there's a lot of drama with this star wars one-off film with directors changing mid-way through production, chris miller, they

left mid-way through, ron howard came in did about 70% of the film so there had been some drama around this so that was in a lot of people's minds but also you just had star wars in december. you just had the last jedi so its only been a five-month period since the last jedi was in theatres and i think maybe what analysts are saying is that there could be that kind of star wars potentially as why this didn't do as well as expected. neil: you know you mentioned that there's also confusion with sequels and all that, but i don't see this movie but that doesn't get in the way of my being a qualified expert, so i have another theory that apparently there weren't a lot of things here and sometimes the super hero or whatever you want to call them movies that's the key ingredient too soon to tell if that's the case and again i didn't see it so no proof of that. >> right it definitely is a -- neil: the star wars franchise doesn't laugh at itself.

>> it's definitely different than marvel movies. you and i have talked about this before that sometimes those marvel movies that have those jokes and humor tend to do well. i mean look at go back and look at thor in november that did huge and then black panther and then avengers infinity war which is the fastest film to cross the billion dollar mark and it's still in theatres now still people are flocking to see that movie so people do like a little of that humor but star wars is a different entity so i think people weren't expecting the humor to come into a star wars film that's not really what the brand is but i don't think that's what played into it but again the first two directors chris filler, they came from the lego movie world, so i think people maybe were expecting they had stayed maybe there would have been a little more humor but again ron howard is fantastic and it was a personal best for him and i don't think it was the humor issue. if anything it was a short period of time between the last star wars in theatres just in

december, crossed the billion dollars and people weren't ready for another star wars film so soon. neil: i agree i don't think it was humorous show at all i have no idea what i'm talking about but kim thank you very very much always good seeing you. >> [laughter] great thank you so much. neil: it is the world we live in right, over $100 million over the weekend and that's deemed disappointment but that is the world in which we live and all these movies come out with super high expectations and budgets to boot. a little more after this. and the wolf huffed and puffed... like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. . starting within 5 minutes.

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. neil: all right. stocks continuing to plummet at the corner of wall and broadat the same minute starbucks racial bias training starts. that is chump change to what has been a trillion dollar hit for stocks right i now. a lot of that coming from concerns in europe, italy is falling out of bed, spain's falling out of bed, doesn't appear to be a safe haven for a lot of the money, saved ten-year treasury approaching the lowest yield in better than a month and a half. s&p financial sector on pace for one of the biggest losses we've seen in a couple of months. le's get the read from all of this, with "wall street journal" global economics editor jon hilsenrath. jon, how serious is this, or a pile-on and everything is sold

in the process? >> couple of things happening today. one is worry of problems emerging in europe all over again. over the weekend, we had in italy, the blocking of two skeptic -- euro skeptic parties. the five star movement in the league looking to form a government in italy and they were blocked by the president of the country. you know, what we're looking at in italy is potentially new elections that could lead to it leaving the euro currency area, and it sent a jolt to markets. when this happens, investors flock into u.s. treasuries as a safe haven and flock out of risky assets, that's what we're getting today. other thing going on in china, the u.s., the trump administration announced this morning, that it could be moving forward with tariffs, which just a week ago, they signaled that they were pulling back from. so turmoil worries about the

global economic front, that's really behind what's going on in markets right now. neil: jon, i could be wrong on this, but i think that spain and italy, that is sort of a subplot to what's going on with china, it looked going into the weekend, we were going to avoid slapping the 25% tariffs on imports. now i don't know what happened and what the president saw happen that got his goat, but he is going to go forward with this unless he sees some sort of concessions. that could change, but he's going to follow up on that and also look at intellectual property and all that stuff. could this get really nasty. that is a far more substantive worry for the markets than this tit-for-tat in europe. >> and that happened just this morning. neil: absolutely. >> it is piling on. this administration is very hard to read on trade, in part because there's so many divisions within the president's own trade team. you know, on the one hand he

has treasury secretary steven mnuchin who wants to deal with the chinese, who wants to damp down the disruptions in part because he wants the stock market to keep going higher. on the other hand, you have some very aggressive trade hawks in the administration like lighthizer and navarro who want to be tough with china. looks like the hawks won out just in the last couple of days, but who knows when that pendulum swings back again? neil: yeah, jon, and i know i'll get the wrath of never-trumpers as i encounter, i'm confused, if there's a method to the madness, in other words, a method to the president's strategy, there might be an escape mate but what if the impulse is just that, he works on hunches and impulsiveness and sticking people to the table, other times chase people from the table. the idea there is a grand chess

game going on, i'm not so sure do you think? >> it is a combination of two. he is an impulsive leader, but on the other hand, he is of the view that the impulsiveness keeps negotiators on the other side of the table off balance and gives him an advantage. i'm no expert on trade negotiations, so i can't say if that's the case, but that might be the method behind the madness, so to speak, that he wants to keep the chinese off-balance. i don't know if that helps him get a better deal in the end or not, but seems to be what we're getting right now out of this administration. neil: to what end, though? you always have to ask to what end? jon, thank you very much, thank you for stopping by. >> thank you. >> the confusion over china and what is going to happen there and a lot of confusion on north korea whether the deal is back on or not as the vice chair of north korea that effectively they're a spy agency and responsible for a lot of ruthless things in the past.

he's coming here to talk to u.s. counterparts about preplanning for such a summit. blake burman at the white house with all of the developments. reporter: neil, the last segment dove tails into this, this is an on-again/off-again situation. the white house as it relates to north korea is bullish, in the last couple of days. yesterday they used the word expected, that's the way they described the summit and press secretary sarah sanders described this as expected summit coming up. here was the president on twitter earlier this morning, started off his day by writing -- the vice chairman of north korea heading now to new york, solid response to my letter, thank you. as for kim yong chul, ran through his credentials here, is the right hand to kim

jong-un. he is headed to new york and the white house says will be meeting with the secretary of state mike pompeo. we expect that at some point in the upcoming days. there are a whole lot of moving pieces here, you've got kim jong-un's right hand coming stateside, this would be the highest profile u.s.-north korea meeting in the u.s. in 18 years. and in singapore, logistics teams from the u.s. are on the ground trying to plan that out and at the dmz, united states delegation as well meeting with north korean counterparts. june 12 remains the target date here, neil. but kellyanne conway, earlier today, as we have heard so often, left open the possibility that that could slide. >> and the president sent over two delegations to, one for logistics and one for diplomatic purposes that are on the ground, make the logistic preparations for june 12. as the president said, if it

doesn't happen june 12, it could happen thereafter. reporter: could happen june 12, could happen thereafter. speaking of thereafter, on june 15 as you were discussing, the white house, the trump administration is planning to slap these new $50 billion worth of tariffs on the chinese for certain products, which they say they will spell out at that time for intellectual property them. one of the questions, neil, you've got the president hoping that the chinese would do more and seems to be upset with president xi jinping for potentially not doing more in recent weeks, and then the whole tariffs issue. june 12, june 13, is there a direct line there? the feeling i get from folks at the white house, publicly, neil, they are not going to say there is a correlation, if there is any sort of correlation at all. neil? neil: wow. blake, thank you very much. blake burman, at the white house. the read on all of this from capri cafaro, former ohio

state senator and stacy, i'm confused here, and not so much convinced that the sell-off, the 437 points goes to italy and confusion as much as china and the tough reasons to extract concessions for them, those could be off-putting. what do you make of it? >> well, i'm glad he's doing this. we have everyone second-guessing president trump, but on all of these things over time, he's been proven right. so i know there's a -- it's uncertain, and when you say you're going to have the meeting with a world leader and then you say okay, we're not having the meeting and they're going back and forth, we can't expect these kinds of negotiations between them, a leader like a dictator like kim jong-un and our president to go the same way as if we were talking to french leaders or, you know, leaders in great britain. it's a whole different scenario. there is market volatility. but i'm trusting the process, and i'm looking for president trump to deliver on what he's promised. neil: all right, hope springs

eternal on that front. but looking at the cast of characters, you know, capri, that he has to deal with, we can't choose leaders or those whom we're negotiating. these are nefarious characters and this latest vice chair coming from north korea has killed a lot of people on his own right and behind a lot of bloodshed in his own right. the guy who leads the country is a fairly nasty character. that is what we got. you know? >> that's why the folks can't be trusted and we have to be very careful in our diplomatic machinations with anyone in north korea or any dictatorial regime. we haven't seen a lot of diplomatic talks in this direct one-to-one principled manner. in the past. so this is unchartered territory in the last 20+ years for the leader of the united states and the leader of north

korea to have potential dialogue. neil, your point in regards to market volatility. uncertainty at the end of the day, may have a benefit whether it is back and forth in regards to north korea and the united states having a summit, or the back and forth having to do with china and sanctions, but in the interim, it is going to take a toll on the markets, and we're obviously seeing that. i, for one, happen to be -- i subscribe to the conspiracy theory that the june 15 date for the sanctions with china is directly linked to the north korea issues, trying to have, i think -- that's an overlying issue, trying to get china to get to the table to be of greater assistance as we deal with north korea, they have to be an integral part of anything that happens there on the peninsula. neil: you agree with that, stacy, prying china to get ground and traction with north korea? >> well, i mean, in a limited amount of time, the way i see it, the announcement from the

white house this morning about the tariffs there's twofold, obviously he can use that as a pressure point with the north korean dictator, and getting china involved in that negotiation helps the united states. it smooth the process, but there's also the issue of the intellectual property theft and the unfair business practices that china uses with us. we need to stop that, and the letter from the president this morning outlines exactly how he plans to do that, and i'm happy to see him take that stand on behalf of businesses and created here in the united states. neil: guys, thank you, both very, very much. we shall see. there might be pieces moving behind the scenes that we don't appreciate. sometimes it looks like a jon lovitz thing. fell on deaf ears with anyone, i don't know, younger than 50. the 10-year treasury note seeing the yield drop prohibitively. that is where it is going, the dow down about 445 points. we'll have more after this.

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. neil: all right, good luck adding that starbucks latte. for the next three hours at a minimum, i think all of the 8,000 starbucks stores are closed on the anti-bias

training day. kristina partsinevelos is outside one of those starbucks in manhattan. so it's begun? reporter: yes, neil, it's the company owned locations, so 8,000 company-owned locations. there's plus 5,000 that are owned by franchises, those will remain open. the franchise locations in airports and target locations. but this is estimated to cost around $12 million. employees roughly 175,000 employees are going to sit together with a manager from corporate and they're going to go through a work book, they're going to talk about racial bias, they're going to talk about unconscious and conscious bias because of an incident in philadelphia. i've been talking to a lot of customers, there's a sign on the door saying this location behind me is going to close at 2:00 p.m. i found scott here, pulled him off the street. what do you think about the fact that starbucks is closing down across the country, regarding racial-bias training? >> i think it's a really good proactive move on their part to take the bull by the horns and

tackle the problem. identify the problem, and they went a long way towards solving it. it creates goodwill for them. reporter: you think this is going to change anything, though? >> i think, you know, there are two ways to answer that question. first of all, i think with public perception, i think it does hopefully go a long way towards addressing the issue, but the underlying issue, that depends upon the people who are taking the training. reporter: exactly. thank you very much, like scott mentioned, this is the first public company to do this across the united states. walmart does have a racial-bias training, that is internal, nothing public like the sort. so as i mentioned, like you mentioned. 8,000 stores across the united states will be closing down for racial-bias training, neil? neil: kristina, thank you very, very much. repeal the tax hike they want to impose in seattle. this as silicon valley preps for similar tax hikes. this is going nationwide

regardless of the company's point of view. to americans for tax reform president grover norquist. this is catching fire here, what do you think happens? >> well, seattle said they wanted to have a $500 tax on every job that a large company has in seattle. obviously, if you're starbucks or apple or any number of companies, you're very concerned that this will hit you in other cities as well. there will be an initiative now to repeal that, which would be on the ballot in november. hopefully they'll also do an initiative to permanently ban it. that takes 20,000 signatures, 17,000 signatures in two weeks in order to repeal this tax on jobs. seattle sent out a big notice, don't hire here, don't bring jobs here, don't bring taxes to seattle. oddest thing. neil: they lowered it to 250 per worker. point is still taken that it's

going to do more harm than good. the companies are reassessing beam in the area, if others follow suit, wait a minute, government, it's up to you to handle a problem you made worse. the homeless problem is pretty bad in seattle, and these local jurisdictions are saying, well, that's the fault of the companies that price a lot of people out of the real estate market and respective communities. what do you think? >> look, if your concern is that real estate prices are going up because people move there and you're concerned about inequality because there are good jobs moving to your city. a tax on jobs will drive the jobs away and reduce the value of everybody's property. so a tax on jobs is a good way to keep property values down, which hurts everybody who has a home, and drives people out. they're talking in cupertino in california, silicon valley, a head tax attacking apple. how would you like to tell apple, you know what? when you hire new people, don't

put them in silicon valley. put them in arizona, nevada, texas, no income tax. what other states will do to combat this threat is statewide bans on any city or county or town putting in a head tax, so you can safely move to texas and arizona and other states because they will ban this. they won't ban it in washington state where they're putting carbon tax on the ballot. seattle is raising property taxes. this is just out of control in both seattle and washington state. california they just raised a gas tax. the people in california put that on the ballot to repeal it this november. tax revolt has been brought back by the incompetence of some cities like seattle where, they're not doing anything to solve problems but just spend money. it's not just the head tax, they want property taxes. neil: what is interesting and kind of curious in all of this is a lot of the companies they're targeting are run by

self-proclaimed and proud for being liberal. whether you are talking jeff bezos at amazon, starbucks and others and on and on and tim cook at apple when. they're told that you have to then put up money yourself for the problems you care about. they draw the line at their own company's commitment. whatever you feel about government and corporate responsibility, they do draw the pragmatic line there, don't they? >> do you remember in the 80s they said a conservative was a liberal mugged by reality. when somebody got mugged, it made them tougher on crime. when you've been mugged by local government. move your business to our city, to our state and as soon as you are there and build the building, thank you apple for building the coliseum and campus there. then now we've got you, now we start hitting you with taxes. companies are going to start looking for states to make sure that that never happens before you step foot in a city. make sure that city can't change the rules on you.

neil: yeah, and by the way, it's not just in a city in new jersey, of course, the whole state has given up on the idea of a tax on millionaires. even though democrats have a full run of the table, right now there was party revolt saying we're chasing good money after bad, folks are leaving, it ain't going to happen. >> no state is a complete failure. some serve as bad examples. >> good way of putting it. grover, thank you. downdown 423 points. we'll have more after this. i'm gonna regret that. with new car replacement, if your brand new car gets totaled, liberty mutual will pay the entire value plus depreciation. liberty stands with you. liberty mutual insurance. ♪ with expedia you could book a flight, hotel, car and activity all in one place. ♪

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down or negotiate a settlement. neil: all right, that was former independent counsel ken starr talking on cavuto live on fox news, if you missed it, i feel bad for you. i can only present it to you, if you miss it, you have to go our website. point of ken starr's musings here is he knows firsthand how investigations can veer from their original intent. he famous for looking into bill clinton first on real estate transactions and the like, of course, that went over a relationship with an intern in a blue dress. that was then. what about the way this is veering right now in his view that rudy giuliani is playing it pretty well right now, the way he's orchestrating this investigation to his liking. regardless of point of view, go to former prosecutor, quinnipiac law professor. what ken starr is saying is commending rudy giuliani for keeping the mueller folks on their toes and getting concessions, potentially when

it comes to any testimony that might be coming from the president of the united states, and no one's agreed to that yet, but if it is, it will be limitations much like bill clinton and it won't be the end of the world for donald trump. what do you say to that? >> i think he's right. regardless how you feel about rudy giuliani and sometimes unorthodox style and sometimes clunky style when it comes to the quality of communication between him and the white house, the strategy he's pursuing is textbook. all rudy is saying is look, he wants to muddy the waters as much as humanly possible. neil: to what end? . >> to what end? i can guarantee you there is a conversation that's been had or will be had between mueller and his team. and should we move forward against the president or not? and the real answer to that is, do you think we can get a conviction. not what can you charge him. no one wants to charge the president of the united states unless you know you're going to get a conviction, which is the nixon case, not the clinton case. clinton never went to bed really worrying he was going to be prosecuted criminally. nixon did. that's the pressure point that

a sitting president can't get off of. neil: there's always the risk of agreeing to be questioned by the prosecutor and ken starr saying questioning of bill clinton over that relationship with monica lewinsky, when he did and indeed they even though the president argued, you know, sexual relations are a different definition in his eye versus most people's eyes, something for which he wasn't prepared and didn't comport himself well, and there is that risk, that it could veer the territory or this president could be caught offguard, so best not to talk to ken -- i'm sorry, to the prosecutor mueller. >> yeah, and i don't know that trump is ever going to talk to mueller. i'm not convinced. neil: what if he's subpoenaed to talk to him? >> subpoenaed, a whole new path. neil: there was the threat of subpoena with ken starr, didn't come to that, but the president did agree to talk to him. >> that's right. i don't know if it will ever come. if it does, it will be a case of first impression, really, but let's say it doesn't come

to that. i don't think rudy giuliani puts the president in a room with mueller until he's almost convinced that mueller is saying to himself, i'm never going to get a conviction here. so whatever comes of this, it might be interesting, but it's not going to lead to an indictment and prosecution of donald trump. and again, that is -- i don't care what guests have you on the show, as a prosecutor, as the attorney or defense attorney for trump, and go to -- look at attorneys for hillary, for bill, he was all about muddying the waters so there was never really a chance you're going to put 12 people in a jury box and get all 12 to unanimously agree okay, he's guilty. that's what they want to do here. keep the pressure and the likelihood of that ever happening down here. neil: but they throw it out there as a potential impeachment, right? depending on the charges. that's what they told bill clinton and very little to rest on just lying about, sexual relationship with an intern. it was not enough to get him thrown out of office. so how does that go? >> on the impeachment side? neil: yeah. >> if it comes to that, let's

say you never get to real prosecution of the president on a criminal side, again the midterm elections are going to be huge, right? if the democrats get a majority, i don't care what happens, he's getting impeached. neil: really? >> absolutely. >> no matter what happens with the report. >> impeachment is indictment. he never gets removed if there is not a high likelihood of criminal conviction, he just won't. you won't have the votes in the senate. if they get a majority in the house, donald trump gets impeached. that is where i'm betting my money. neil: stopped in the senate with bill clinton, stopped before any of this got rolling with richard nixon, he resigned but we're getting ahead of ourselves. the likelihood of any of that is unlikely. so then we go back to what would be in a report that targets people if the president isn't a target, the people around him. what would carry great weight in the fall presumably when this comes out. >> this is how it can drag on a long time. president doesn't get indicted,

they don't move against him to subpoena him. just hypothetical, they indict his son-in-law and already have indictments around -- against people who are close to him. those trials carry out, and if you're the prosecutor, you're going to see if one of the people breaks and drop a dime on the president and tell them something they don't already know. neil: so in that scenario. >> like organized crime. neil: right could drag on for years. >> we don't have enough to move against the president, but we have enough to move against these people and the prospect that the trials or prosecutions can lead back to the president. ask youed me before, i think this goes on for a while. neil: incredible. john, thank you very, very much. follows this very well. john pavia. trade talks tomorrow with top eu official, reports that wilbur ross might not be the guy to handle it, and might be losing favor with low less than the president of the united states. after this. as a control enthusiast,

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. neil: sure. blame it on the italians, always the italians, isn't it? italy falls out of bed and everyone is thumping on us, including that former brit, ashley webster. ashley, so this is all my people's fault, is that what you're saying? . >> you sneeze twice and you got another italian government. that's the way it goes, neil. how many have we had since world war ii? 63? looks like another one. financial markets are royaled by what is going on in your home country, neil. the problem is that the anti-establishment populist groups did, between them, try to form a government in italy but was unable by some remarkable turn of events. person they wanted to be their finance minister was actually rejected by the president of italy who says no and the finance minister is very much a

euro skeptic and the president of italy says don't like you, i'm going to put in my own guy and see if he can form a government. donald trump wins the election, don't like you, try it again. that's what's going on in italy. right now we have the ex-imf official carlo carterel li, he is known as mr. scissors because he likes to cop public spending which won't go down because he likes to spend public money. bottom line is they could be going to the polls in early september, if that happens, neil, the five star movement in the league, the northern league of milan, they could pick up more votes which would spell more trouble for the eurozone because they are very skeptical about the whole thing and say bring back the lira. forget the euro. so all of this is making the bond yields as you can imagine in italy going up. the 10 year above 3% in italy. i will point out, let's not get

too panicking, during the financial crisis when it bit in europe, the 10-year yield on the italian yield got up to 7%. there's no doubt people be getting skittish, is this another eurozone debt crisis? we have to wait and see. never a dull moment in italian politics, cavuto. you know that. neil: how cheap of you. so let me understand, ashley, that now we have a character in italy, carlo the scissors carterelli. i should mention the prime minister in spain, his party is hit with a dozen charges of corruption. he will have a vote of confidence by friday. there he is. his picture. he's smiling there, he's not smiling now, i can guarantee. that he can be removed and what happens then? a center-right kind of guys, you could have the socialists and the liberals coming in.

not really a populist situation in spain, but all of this put in the bin and mixed up means things are whacky in europe and you have to keep an eye on it. neil: i like how you included spain in the mix of people who are unstable here. >> italy is unstable. neil: multicultural. that's ashley being multicultural. thank you, my friend. always the best. to charlie gasparino on all of this. >> i tong point out, i think i grew up with a guy called carlo the scissors. i think he's from the bronx. neil: mentioned there, but it's true, you have the president of italy saying this guy might be popular but i don't like him because he advocates getting out of the euro and i don't want to do that and has all sorts of connotations. this is one of the reasons for the sell-off. that and china trade. >> couple things, i remember the last time we had sell-off in the debt market, spain,

italy, some of the lower echelon members of the eu after greece. neil: right. >> a lot of u.s. hedge funds took it on the chin. mutual funds and hedge funds, this is you, the average investor, they were reaching for yield over the last couple of years, particularly as stocks were so high. bond yields were low before the fed started raising rates, though they're raising them marginally. what happens when you reach for yield, you risk investments and buying a lot of the eurozone crap, excuse the language. what's going to happen, if you're out there, you should be watching mutual fund returns. call your broker, call fidelity, vanguard and see how exposed some of your diversified portfolios are to this stuff. average person will be taking a hit. neil: what do you make of all the exposure of our banks? financials were one of the worst performing sectors. >> same thing. reaching for yield, banks make some investments. they can put money in sovereign debt and you go countries like

italy. i wonder why italy didn't implode sooner. may not implode here. neil: no. >> i have family, there particularly in southern italy. southern italy is a massive welfare state. much of the productivity occurs up north, transferred south, and the country as a whole is basically a pretty big welfare state that is almost unsustainable. you throw on top of that what they've been experiencing lately, which is massive amounts of immigration from northern africa and elsewhere, from very poor people, people that need services and you have an economy that's pretty unstable. so i don't know it's getting out of the euro does it for them, but this is an economy that is highly indebted, hasn't produced much gdp growth for many years, and it's on top of that, it's a welfare state. you put all that together and you got a combination, a combustible combination of social unrest, working class

and middle-class people in peal are sick and tired of the massive immigration. that's why you see people voting for these far right parties that we never have. neil: irks them when they see the past the country say no, no, you might like these people, i don't. >> here's one thing donald trump should make when he frames immigration debate, it's anything on in italy and everyplace else. the immigration debate is about economics, you cannot have open borders and a welfare state. the u.s. welfare state model is unsustainable, when you bring in tons of poor people that tap into it. the italian welfare state and across europe, unsustainable. when you bring massive amounts of poor people that tap into, that it's a real problem. you need population growth to get productivity growth. there's the sort of dilemma. that, but you cannot -- if you are just getting population growth from massive amounts of people that are just so poor, they need to tap into welfare

state, it will cancel out each other. neil: and then the european union itself, it's a club that is not making sense. >> it's not homogenous. italy is different than spain and germany and germany bails everybody out. so these countries are going to have to come to terms with their welfare states and their immigration policies, and you know, it's going hurt the u.s. here's the weird thing, we're all exposed to this debt. if they do default or put someone in there that suggests a default, we're going to feel it. the market is off today, how much? almost 500 points, 440. neil: very good food, italy. >> the best. the best i've had in my life was at my aunt's house in a little town called larreto, southern italy. she made it on sheets. neil: that's the way to do it. >> she made this great sauce. it was off the charts.

neil: talented group of people. >> yeah. and by the way, these are very productive people. neil: absolutely. >> if you change the economy and give incentives. neil: olive garden. >> look what happened to me. look how productive i am. neil: but you're here, not there. >> that's the difference. neil: now a little conundrum. >> delicious. neil: we have a lot more coming up on hawaii, the volcano still a problem, and on the weather, that's a bigger problem. we can have you decide, after this.

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. neil: all right, the volcano that will not end, falling lava a big problem there. jeff paul with the latest. hey, jeff? reporter: hi, neil, the kilauea volcano showing no signs of slowing down on the big island of hawaii. the lava extending deeper and the flows growing rider and speeding up at times with hardly any notice. take a look at the chopper video that we got our hands on. you can see that lava pools are starting to form. geologists estimate the fountains of lava are shooting up and reaching heights of 200 feet. learning of at least 10 additional homes that were destroyed in leilani estates, one of the hardest hit

subdivisions, civil defense officials are warning those who have stayed behind in the situation that this is only going to get worse. >> what i actually saw was ocean of lava, instead of rivers and lakes. this was an ocean, with waves in it and wave after wave came in. reporter: neil, to say there are eight fissures actively erupting and pumping out lava. hawaii's county mayor giving a blunt warning to those who haven't left to get out now. at the summit of the volcano, an explosion early this morning that sent a plume of ash 15,000 feet into the air. neil? neil: all right, thank you, very, very much, jeff paul with the latest from this volcano ravaging the big island. doesn't seem to go. by the way, hurricane season technically kicks off on friday, we will have an introduction through alberto, the first major storm in 2018.

the meteorologists say brace yourself for more of these. what are we looking at, joseph? reporter: let's see how we got here. the whole pattern, believe it or not, trace it back to two winters ago. remember the heavy rains in california, and from right there, we knew it would be a big wildfire season. last february we said that. when the spring pattern set up into early summer, look at this. this looks very different from previous hurricane seasons. we had ten years no major hits, we said we're going to have a major hit this year or two, said it on this show last year in may, this would be the year the hurricane drought ended. when that happens, neil, it fore told the winter we had, believe it or not. if you took the hurricane seasons last year, very different from this year, i'll get to that in a moment. what happened is it fore told the winter that we'd start fast, end with the march and april we have and suddenly snap to summer with a hot summer

centered in texas. to the hurricane season. very different hurricane season this year. we anticipate another big wildfire season this year. why? because california was wet in march and april. that is signaling something going on in the pacific. a transition from a la nina to an el nino in the pacific, that instantly raised our eyebrows as a-ha. unlike last year, big powerful storms developing across, developing quickly. those storms are much weaker, unfortunately when you get close to the united states and adjacent atlantic ocean, gulf, the water is very warm. what we expect is this is flowing from all the way from last year. one thing telling you another thing. we expect weaker storms in the islands and to the south, but as they get closer to the united states coastline, we

have to be very, very wary of intensification close to the coast. problem with them getting blocked from going out to sea and impacting the u.s. coast. remember what we said about the hot summer. centered in texas. a hot dry summer this year. if we get the hurricane season and the summer to turn out this way, it's hinting what the winter is going to be like next year. we're moving along from one thing to another, and believe it or not, the story you see today started to be written over a year ago with what was going on in the hemispheric pattern and just moving from one thing to another. neil: so we get more serious storms, i mean, how does that plan? how many would be of the category of 3 or better? >> our weather model forecast is only with two or three this year. the problem we have, and our ace index is below normal. the problem we have is we believe and you could go to our site and see it. we believe a lot of the

intensity is going to be north of 25 north, north of 30 north. so if you're in puerto rico, i can't rule out a big hurricane in puerto rico, but the chance of a big hurricane, a category 2 or 3 hurricane against the averages seems to be higher on the united states coastline than it is in the islands this year, and that's because we have very warm water. the atlantic north of 30 north but all through the tropices is remarkable. how cold the water is from africa all the way into the islands and southeast gulf of mexico, looks like 20, 25 years ago and indeed we may be in the end game of this warm cycle of the atlantic ocean we've been in over the last 20 to 25 years. neil: joseph, thank you very much. joe bastardi following the latest on that. abc has gone ahead and canceled "roseanne" situation comedy following a backlash over a tweet which she compared former barack obama adviser

valerie jarrett to the muslim brotherhood and planet of the apes for having a baby. stars of the show were apoplectic to put it mildly and cancelling abc had this to say through the entertainment president channing on the subject -- that's it. she's done. more after this.

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neil: it was nice while it lasted for roseanne, after abc canceled the comedy after a racist tweet, she admitted this. comparing valerie jarrett, former advisor to barack obama a april. they said it was repug nan, inconsistent with our values. we decided to cancel the show. this was one of popular shows, staggered everyone given its success, given conservative values promoted, the fact that the main player was avid backer of donald trump. and that stood out as did the audiences for this show but it is gone. one tweet like that did it. she apologized. did no good. she took herself off twitter. did no good. she is gone. the show is gone and therein lie as lesson, be careful what you say or tweet. you can be history just like

that. the dow down 421 1/2 points right now. trish regan to take you through the next busy hour. that didn't last long, did it. >> no, it sure didn't. we're watching the stock. abc owned by disney which is trading lower. more on this coming up. neil: all righty. trish: we have dow up pretty significantly here, 425 points as investors react to deepening political crisis in europe. global selloff being fueled by the prospect of fresh elections in italy, another election, that could turn into a referendum on the entire european union. there is a lot of talk about whether or not a european debt crisis is back. i'm trish regan. welcome back, everyone, to "the intelligence report." ♪