again. we have a selloff. back to the 25,000 mark. turkey in the news. china in the news, tesla very much in the news. the dow is down best part of 1%. our time is up. we had good things for three hours. neil, it is yours. neil: you just summed up what i was going to say in the first minute here. you don't mind carrying it for the next couple hours, buddy. thank you very, very, much, stuart. we're on top of all the developments, the selloff as the turkey mess drags on. amidst this investigation into what is going on with elon musk and company here. we'll get into that as well. but we're also getting into the bigger picture after tit-for-tat on trade, beginning with the turks responding to our saying we'll slap tariffs on them. it didn't take long for president erdogan you know what? i can do one better. not just targeting your

electronic goods and to booze and to cars. imagine if you have the booze in the cars. implication, don't even go there. i'm neil cavuto. i'm subbing for myself today. what is cavuto doing? i'll do his show. we have the "wall street journal," borrowed time, phenomenal author, james freeman and. gerri willis, one. finest people on the planet period. and gerri, i want to get your take on this obsession with trade wars that build and build and build. i'm not here to judge their virtue. i am here to say where does it end? it always starts, steel, aluminum in the latest case with turkey, now extended to, as i say booze. >> now it is serious. is that when you're saying? neil: very serious in my eyes. >> i relate to that as well. reality for teartives we're

putting turkey. they are 1% of the world's gdp. who cares. the real people that get hurt are turkish consumers the people who live in the country but overall these are having impacts across the planet. numbers from china, disappointing numbers there. that in part is what is going on, why it's a important. trade wars can be a very big negative. neil: you can help me with this, sergeant, i think gerri stipulated it very well, a lot is china driven. the tum melt here, one of their biggest names could be under duress. charles payne and stuart varney were getting into this but that could have far more longer, sweeping implication. what do you think of the overall macro picture? >> the macro picture is almost outstanding here in the u.s. you saw retail sales, department store sales within the retail sales which were excellent.

neil: that was so weird, yeah. >> although, you still saw -- neil: better than online sales. >> exactly. but you still sell the big selloff in macy's, kohl's, walmart. neil: home depot? >> home depot is fine. we're winning a trade war. that's a problem because now the chinese economy is going off a cliff and that is the edge of global growth. why he sue caterpillar suffering this morning. 3m suffering this morning. the big industrial names depend on growth will suffer the most. semiconductors are suffering. they're exposed to chinese revenue after having a nice run yesterday. neil: when you look at this, james, i understand quite readily that turkey is very, very different. i know you have written about citigroup and others that were exposed to crises in the past. i'm not even saying it is in

that category or league, i am aware banks with exposure, even goldman sachs is watching out for those exposed entities which are exposed. which is a weird way of saying everyone is potentially exposed what do you think? >> i'm not sure that you're far off comparing this to argentina 2001. what has some investors worried they don't see good policy anytime soon in turkey and i don't think they have intractable, unmanageable problems but just a lot of bad decisions have gotten them to this point but as far as contagion, that was the big word 10 years ago during the financial crisis, i wouldn't worry too much about that. this may sound kind of funny, but one emerging markets investor i was talking to today saying europe's problems are so big that some turkey exposure for some of their banks relatively is not that big a deal compared to their other long-term structural problems. neil: no, i think you're right in the big picture of things

here. sarge, it is interesting, when you look back, go back in history, these become obsessive moments especially when they occur in the summer. we remember the bhat crisis in thailand in '97, ruble crisis in '98, peso crisis decade before that in the 90's. i'm not saying they are short-lived but a month or so later they -- >> you can wait them out. what we're surfing in the marketplace is currency shock. it is due to turkey. failure so far of "brexit" negotiations. those are pushing certain currencies lower. emerging market and euro, turkey, brittish pound going wrong way. only one moving with us is the yen. so we have this problem with the currency markets. now you know it is not simmic watch gold futures. gold futures are behaving like a commodity. they're not behaving like a safe haven. when we have strong move with the bonds then we have issue. neil: they're not doing that? >> not at all.

headed south like every other commodity on dollar strength. neil: that is the story for gold for years, right? what is going on there? >> what we need to do is have the president talk the dollar down a couple times. that would be helpful. neil: his tough stance, gerri, whether you like the guy or dislike the guy, he is getting his way on these issues and forcing concessions, that is what hopes, and that's a the picture here. we climbed a wall of worry on stocks today and recent days notwithstanding obviously as sarge pointed out the outset here it doesn't take long before it could mushroom. so what do you think? >> it absolutely could mushroom. i'm sure you know we're on the threshold of having the longest running bull market ever. neil: next wednesday what are you wearing that day? >> probably red. neil: thank you. >> i believe there is some

positive fundamentals for this country. consumers are on fire. retail sales numbers. who is doing it? it is consumers. the jock market doing very well. only overhang here really is debt, right? we're closing in on i believe $13 trillion worth of debt for consumers that is a big scary number for consumers. even with the consumer doing well but ultimately this could, china particularly could rebound negatively for this country because -- neil: what if china were to really tank? you know, what we've seen here at tencent is a sign of things to come, then what? i mean we're merrily going along because we have the earnings, we have economic numbers, we're putting up good data, then what? >> we're certainly less exposed to trade than a lot of other countries. if i could add one more about it of great news on the u.s. economy, productivity, the one sort of nit this wonderful picture, wages not rising. rising productivity suggest more wage increases to come.

neil: not that we've been talking about the wage side. i don't know how you feel on this, but i mean 2.8% to 9%, i can remember we were worried in the high single digits this is the low single digits. is that so bad if you're getting improved productivity with it? >> productivity is not so bad but catching up to important numbers in the past but the wage number would be a problem if not for the tax cuts. if you live in red state you seen dramatic increw crease in disposable income. household debt is 83% ever disposable income. few years ago it was 116%. this is the lowest ebb of debt versus income for the family since 2002. >> look at the overall debt, we're back to the highs, that is concerning for some folks. >> if the fiscal picture force as back step in our economy, then you're right, we have an issue. neil: you mentioned something about the issue of propensity of people to still buy stuff.

i know a lot of effects for farmers have not kicked in but people, i'm still alarmed by the number of people tell me, well, our government will have to pay a lot when it comes to these tariffs. i always stress governments don't pay that, you do. >> that's right. neil: i wonder if it comes to that, with hasn't, i talk to a lot of purchasing managers they're not passing along anything just yet in the belief this will be short-lived. whatever short-lived is, it won't drag on but eventually they have to if it's a trend. >> that is the question where does this lead? i think investors have largely give the president of the benefit of the doubt because they like the trade, or sorry, the tax cuts and deregulation. neil: always worked out for him so who are we to argue. >> there is a sense he will work this out. it will be "the art of the deal," but maybe this is a reminder, you look at turkey, that these things can get pretty nasty. turkey for its part, i think it's going to be difficult to swallow what they really do

need, they can solve a lot of their problems just by pegging their currency to the u.s. dollar. given this environment maybe that is the last thing erdogan wants to do. neil: release the pastor. they're not going to do that. >> release the pastor, peg to the u.s. dollar, allow interest rates to rise. >> just a question because you guys are so senator about this, doesn't what is going on in turkey mean bad things for other emerging economies who have also then on a ton of debt because interest rates have been so low so long? does the problem, does it go beyond turkey and to china and lots of other economies? >> i believe that is somewhat exaggerated. i think turkey from a current account perspective is much worse shape than a lot of other emerging economies. other nations like south africa, mexico, indonesia, that have been hurt during the whole currency move probably don't deserve being hurt and those currencies are probably at buy points. neil: we lived through these

moments, if you bought in the middle of the peso crisis, in the middle of the bhat crisis, in the middle of the ruble crisis just a year later you would be richly rewarded. >> you would be a braver man than most of us because most of us if we went that route hedged that. neil: i'm a monday morning quarterback. >> fortunately along with the different debt loads you don't have in all of these country this is stubborn leadership. we're watching the erdogan-trump clash. not just erdogan against trump. it is erdogan against his consumers, against global investors. this country is moving -- neil: this guy when he was last here, his security people were beating up people? shouldn't that telegraph this was not going to be cozy? >> his son-in-law is running their bank. come on. >> not inspiring confidence. this is years in the making. neil: very close to a dictator. >> he is is a dictator. the other economies that i just mentioned are not. they actually elected leaders. neil: he was reelected.

but changed things after he because like hugo chavez. >> sacked half the military, didn't he. neil: they're alive to tell it. guys, thank you very much. meantime it is uncanny, it happened again. anyone who aligns himself with the president or the president with them, they do okay. if you call the president unhinged and you're a republican, oh, boy, after this. my father passed this truck down to me,

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which could save you hundreds of dollars a year. plus, get $150 dollars when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today. neil: forget about turkey, a lot of investors are worried about that politically are a turkey if you challenge the president of the united states or worse say he is unhinged? tim pawlenty might be finding out the hard way, losing a bid to recapture the office he once had in minnesota, losing to a republican challenger. it will not be that he returns to that office he held. keep in mind, this is the same guy who was briefly considered as a running mate for mitt romney. that was then. this is now. the reality of the trump effect. now to former bush 43 best-selling author and deputy chief of staff for, jr., karl rove. karl, what do we make of that? >> well it's a little bit even more complicated than you might

think. we had two people here, tim pawlenty, a former governor, jeff johnson a former county commissioner and republican candidate for governor last time around and both of them had problems with trump. tim pawlenty withdrawn his support after the "access hollywood" tape came out. he found it disgusting. neil: i remember that. >> you may remember, maybe you don't, jeff jackson said, quote, given a choice between a jackass and a dishonest, corrupt politician i will take the jackass any day, which he said during the course of the campaign he voted for donald trump. two men had their own problems with trump, but one said, i may have not thought well of him, but i at least voted for him. neil: it is interesting too, i am thinking for a lot of republican candidates, who cleared a hurdle getting nominated for respective positions, how do i use or play the trump card going forward,

what do you think? >> it will be a real balancing act for some of them. we have three examples of this. jeff johnson, who previously distanced himself from trump, in a state where trump came awfully close to winning, still reasonably popular in parts of the state today. my sense looking at his statements following his primary victory, his basic thought is, i will focused on issues that concern minnesota and let national politics take care of itself. we have two other examples, kris kobach won narrowly the nomination for governor in kansas, who got a last-minute endorsement from trump, is he going to be able to or want to extract himself from that endorsement? we have florida, where we have a primary coming up on the 28th of the month. the president intervened on behalf of congressman ron desantis. in the case of kobach, and desantis if desantis wins the florida primariry, this will be a test of president's endorsement power in general election, not just a primary.

there is qualitative difference between a candidate gets endorsement from trump in primary for governor than one who doesn't. neil: you know, i talked to a number of pollsters and all of them say, right now it's a battle royale to see if the democrats can seize the house. some of them have pointed to murky numbers that are very analogous what we had back in 2016. in other words the trump supporters understated that would be more beneficial to republicans that we know or appreciate. what do you think about it? >> that is one thing that is right. it could diminish the size of how big the democrats pickup is. another thing it will diminish the advantage of the democrat is, a concept we teach in political science, called surge and decline. typically when a president comes in, he brings a lot of people in on his coattails in marginal districts who get washed out in the first med term, but president trump came in not with

bringing in people on his coattails. republicans lost seats in the house of representatives. there is no class of people out there who came in on his coattails who are highly vulnerable. we got of course in the 50 most competitive districts, republican districts, incumbents are running in 36 of them. we've been looking at special elections where democrats running ahead of themselves by average five points. median is 45.9 but there is a power to incumbency. in the 36 districts with republican incumbents, republicans are likely to fare better than we might expect looking back at the special elections. neil: markets notwithstanding today, karl or recently with volatility of trade or chinese technology concern that is in trouble, normally, normally a good economy is a good thing to have for the party in power but not necessarily midterm election. in 2014 when barack obama was riding a good economy, of course there was the health care issue, democrats still lost seats in the midterm. i know that ended up being a

much bigger than we appreciated, certainly i appreciated at the time. i'm wondering if the same thing plays out here? republicans hoping for the backdrop of a good economy, up until recently, strong markets. it might not pan out. it's a different anomaly in a midterm. what do you think? >> it never pans out by itself and for the republicans to take advantage of the economy they have to, in my opinion do three things. one is they have to talk about it. starting from the top. the president has the biggest megaphone in the country. rather than talking about omarosa or lebron james, him talking about the economy would be important. neil: he does sort of, to be clear, he does talk about the economy. you're quite right but he adds in this other nonsense. >> right. get rid of the other nonsense. be disciplined in final stages of 2016 campaign. can't simply be look how good things are. here are the concrete things we need to do to keep this going and spread it more broadly. those things can't simply be, we

have to have tax cuts 2.0. it has to be things people get a job, train for a job, spread prosperity broader, help small business people. finally the republicans need to contrast themselves with the democrats on economic issues. there will be a piece tomorrow in the "wall street journal," i think you will like it in which i address this issue directly, that is the republicans have to take on the so-called democrat agenda, the democratic socialist agenda and be very clear about its ramifications for the economy and our deficit f they do those three things they can take the economic issue to their advantage. remember it is the best issue for the president. if you do approve, disapprove, in the "fox news poll" in july, 46 approve, 28% strongly approve. 451% disapprove, 41% strongly disapprove but the president is right side up on economy. do you approve of the job on the economy. play to your strengths but do it smartly. neil: i look forward to that but i was thinking on stephen

colbert last night bernie sanders saying most are socialist-minded, he didn't just say democrats, most americans are socialist-minded. >> no they are not. watch for the column tomorrow, i give you numbers from polling in swing congressional districts, you will be surprised how strongly people react against free health care, free jobs, free college, all of this kind of free stuff. the people in swing districts will settle the house of representatives don't like that at all. neil: so i take it you're not a big, big fan of senator sanders but we'll see. >> i'm a big fan. i want him to have greater strength inside the democratic party. neil: karl, look forward to the column in the "wall street journal." meantime, charlie gasparino breaking some news on tesla. now some people are breaking some chops who runs tesla. what exactly is he doing and saying? after this.

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neil: so i'm watching my tv earlier, just a couple hours ago, not even and i'm hearing this news on tesla about a potential board revolt and i said, i bet this is charlie gasparino's story, because i was watching fox. of course it was a charlie gasparino story. he breaking more news than i run buffets. he is back with us to find out what is going on with tesla. they have a bit of a palace revolt. >> they have some of that. they also have the sec breathing down their throat. neil: over what. >> the se c-ramped an investigation, not just looking under the hood, it i official and formal. neil: was it triggered by the tweet? >> yes it is formal involving subpoenas to the company from the san francisco office. here is the issue. the issues iris, this is were the sec is between a rock and hard place. tesla is in process of going private, i confirmed that today, based on everything we know they

weren't in the official process when he put out that tweet that said, i'm doing this and funding is secure. based on everything we know, even from his own tweets, you talked to people at tesla, at the commission, they will tell you this, that statement he made based on what he has put out since is probably false. they did not have funding secured. the question and the dilemma that the sec faces on this, i don't think they will wrap this investigation up tomorrow although they believe from what i understand they have very extremely strong case here, is that, you know, elon musk unlike a lot of ceo's elon musk is existential to tesla. if he goes, he is the brains behind it, the motivating force. if you do something to hamper his, ban him from the securities business, potentialities if you get dinged for putting out materially false statement, get bad from the securities business, can't be owner,

director, executive at the company or something far worse, that will have real impact on company. neil: what if it is false if it turns out no funding from the saudi sovereign? >> do you have funding secured for a privatization. his own statements say that remember he put out blog posts. i felt like based on my conversations with saudis that they're interested and that is, i mean that is not funding secured. neil: but he is not a dumb man. so the reason, what if you, some people have this no unspoken thought thing, like president of the united states. he tweet as lot. might regret later. i'm not here to disparage him certainly or elon musk. >> right. neil: but elon musk is saying stream of consciousness tweeted out, confident that he could get the funding. >> confident, that is not funding secured. neil: he didn't say that. yeah. >> he is different than the president. the president theoretically to pardon himself on mueller thing.

ceo of a publicly-traded company. there are a lot of rules. sec, securities & exchange commission, the bedrock of its creation back in 1930s, joe kennedy was first commissioner or chairman, bedrock was disclosure, making sure proper, accurate disclosure, ceo's can't lie or mislead investors. looks like what he said was wrong. whether he lied or was intentionally to mislead i can't tell you. neil: can you prove that, though? >> did he have funding secured? neil: i'm not a lawyer. i just want to know the fine tuned points, if it turns out you didn't have funding and that was idiotic to you to even imply that you're in a big amount of trouble. >> the sec is now weighing this, if they take him out, does that prevent him going private? that could be good for investors going private. talking about doing it at $420 a share. that is good for investors and

they're scared to death blowing up a company that will cost jobs. neil: what happened that day he tweeted? the stock went up? >> oh, yeah. it has come back down. neil: for all this stuff? >> including his subsequent comments on his blog which basically says the funding is not secured. he feels confident it would be if it happened. neil: he talking about clearing this or talking about it with the board, right? >> there has been reports on that. i have not independently confirmed -- neil: how big of a deal is this for him, leaving the stock out for a second? >> it is not good. listen, i only, i hedge here because the sec is so loathe to take out a company that costs jobs. remember arthur andersen. it was not just the feds but justice department and sec went after the company, put a lot of people out of business. you remember drexel, put drexel out of business? neil: yes. >> that hurt the stock market and the bond market. companies couldn't get financing

or refinancing if they were below investment grade. there is material impact when you put companies out of business. tesla employs a lot of people. neil: do they feel if they take him out you could take this company out? >> you could. that is what they're wrestling with this. maybe split the difference. slap on the wrist. neil: is he an american citizen? >> that's a great question. i don't know. i don't think it matters. neil: the only reason i say, it is an iconic american name now. he leads in this technology. >> because he went public in the u.s. markets. neil: i understood, they have to weigh that as well, this iconic american name in electric car, utility. >> absolutely. here is what else they have to weigh. whether they create precedent, allowing a ceo to get away with it. if the sec does nothing, they can screw up on a lot of stuff, they have to make sure investors received accurate information and when that information is not

accurate, that they come down on the issuer of that information hard, to set a precedent you don't do it again. what do the saudis say on this? >> saudis have been silent. neil: they have? they want to build this electric car army? >> there are questions whether they will secure at all. you know, listen i'm not saying he won't get funding. he probably will. you know at some point. the question is -- neil: if you had to weigh the odds of it going private right now? >> i think there is 60% chance it will. neil: okay. >> because i think there is enough juice here, he has enough of a cult following that people will throw money at this. he is not, he is obviously a brilliant guy. some of his products are really good. the question, is it worth $420 a share? that is a whole other thing. that is leading up to the funding secured thing -- neil: explain the $420 a share. >> that is the price he wants to take it out at private.

neil: that is the 70 billion-dollars. >> the question, is it worth that. remember the lead-up to the funding secured tweet was his battle with the shorts who were saying nah, you have a lot of problems here. brakes might not work. the production plans are not up to date. so i'm just saying this is a very, the sec is facing a madoff decision. during the madoff embroglio, backed away despite growing evidence he was running a fraud. the precedent of madoff, they allowed the guy to go, bernie madoff. he created nasdaq. a pillar of the investment community. so they kind of looked the other way. do you look the other way because this guy is a ceo of a big company? doesn't mean you have to put him in jail but do you not regulate him and his behavior the way you

would do anybody else because of his impact on the company and the economy and jobs and i think that is, that is an issue that the sec is grappling with. from what i understand right now, this is a real dilemma for them. again they're looking at this hard. there's no doubt. it is pretty clear from the people i talk to that say, you know the notion of funding secured they believe really wasn't there. neil: yeah. >> so but they have, there is an issue here. why do you whack him? >> i'm leery of whole tweeting thing. >> my wife says stay off twitter, not argue with people. it is kind of like -- neil: you enjoy it. >> i do, but you get, you know, you can get in trouble over some innocuous, seemingly innocuous, i can't imagine he thought he was committing securities fraud when he put that out there i don't think he did. he didn't realize you're the ceo

you put out a statement, it's material, you're talking for the company and he should learn that. i guess he learned that now. really is incredible. people say he is really smart. he wouldn't do this smart people done some dumb things. sam waxel, sold the shares that got martha stewart in trouble. he went to jail for five years. he got inside information. he did something insane. sold his stock. neil: very high i.q., eq. and you do stupid things. >> yes. remember, smart people do dumb things sometimes. neil: watch what you tweet. >> a lot of things you have to watch. ceo of a company. neil: what i meant to say. thank you, charlie gasparino. a lot more coming up. look at that we're down 200 points. all over the map here. the fact of the matter is, the pressures are building on what to make of the trade back and forth. as charles payne was reporting though, the disappointment over psychology concern of china has

a lot to do with this as well. be that as it may there is some pressure building on some stars or worrisome developments that are not aligning to the market's liking. but all of that could change. remember i said with you will at crises on the bhat in 199s, russian ruble, a lot were resolved in a month. we were in grip of things during that period. it all went away. what is that line, history does rhyme when you're buying and selling. more after this. you wouldn't accept an incomplete job from any one else. why accept it from an allergy pill? flonase relieves sneezing, itchy, watery eyes and a runny nose, plus nasal congestion, which most pills don't. it's more complete allergy relief. flonase.

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neil: all right, we're not saying what's going on now with the dow down under 200 points has anything to do with china per se or maybe a little bit of turkey thrown in here but when you take, you know, a powerhouse like tencent, the technology concern in asia, that is for, wont of a better term, i would say google alphabet for them. it it that big. it is that much of a proud honor

name. when it is in duress or reporting disappointing numbers and tumbles and loses a third of its value as it did today and questions where the chinese economy and is going, markets already entrenched in bear market territory, you have to ask what is signaling that or trickinger at? trade war, is that added pressure at a time they can least absorb it? let's talk to greg valliere. is any of this driven between the trade friction between our countries? >> the market selloff, i think it is turkey more than anything else. when you look at china, all of sudden their markets are sinking, their currency sinking and layoffs and more importantly internal dissent in china. the chinese government doesn't like internal dissent. i'm getting to think china is getting closer to crying uncle. neil: now crying uncle is all about the timing which you start

crying, right? there are a lot of people seem to think if they cry uncle before november, potentially good for republicans if i can be so crass and political, if they wait awhile, not good for republicans. what do you think? >> i think the chinese may send a signal they're willing to resume negotiations but as you know getting the details ironed out could take months and months. i think trump might like a little cooling-off period as well, because of vulnerabilities with the midwest in farmers. i could see a cooling-off period for next two or three months. we're right back in the thick of it again by the end of the year. neil: the overall environment has been good. earnings are out. you know, greg, better than most, eight out of 10 companies reporting beat estimates very handily, whether we're talking revenues or earnings. we're running at a a percent clip last year, over last year,

better than most thought, isn't that the wind at republicans back, isn't that what they are liking to remind folks? >> yeah. i would add to that, neil a frosting on the cake, the drop in interest rates in the last week or two. investors like a safe haven and things like the turkish lira you go to the safe haven. the economic scenario is still quite good for the president. neil: quick word on that i notice the same phenomenon that yield curve is really flat. >> yeah. i still don't think a recession is anywhere close tock imminent. with unemployment below 4%, maybe we get a recession, but no time soon. neil: hope you're right, my friend. always good chatting. greg valliere. it has been a while. happy to chat again. referring the yield curve, difference between shorter term rates which the fed has control.

longer-term rates, flight to quality, rate comes down, you're almost even. sometimes that portends some worrisome things. not all the time. edward lawrence in washington, d.c., with news about china. what is going on, edward? reporter: you were talking about china, the blame game is starting in china. there is a report in chinese media that higher-ups in china are starting to blame the ministry of commerce, they're lacking depth and veterans in trade. therefore giving bad advice specifically on the trade front, going into the trade war as china calls it, we call a trade dispute. that is coming out this morning. sort of a crack in the armor. today on nafta, we might have good news on nafta. we'll have to wait to see what happens in meetings later this afternoon. the mexican delegation will be here to talk with u.s. trade representative robert lighthizer in a matter of hours. this marks four consecutive weeks that the mexicans have come to the united states to, washington to work out a revised

nafta. everyone says we're very close to a deal. last week the mechanic can economy -- -- mexican my minister said the is up set clause was not addressed. that is where the u.s. wants to see nafta end after five years that is one of the issues last they are going to address. mexican delegation, start with easy issues, get that out of the way, get on to more complex issues. u.s. president donald trump tasked the u.s. trade representative robert lighthizer, making revised deal on nafta. the president tweeting a little more than an hour ago saying quote, our country was built on tariffs and tariffs are now leading us to a great new trade deals. as opposed to horrible and unfair trade deals that i inherited as your president. other countries should not be allowed to come and steal the wealth of our great usa. no longer. trade sources tell me once a deal with nafta with the mexican delegation is wrapped up, they will present that deal to the canadians to see if they would

like to sign on or not, be left out out of the cold. the president said had in the past he is happy with with lateral deals. neil: a deal good to be true, 30 movies, every month, what could go wrong? apparently everything. new deal on the table. ceo on the hot seat with me after this. about potential investment opportunities in real time. fidelity. open an account today.

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neil: whatever fixes you have arranged here you're still bleeding a lot of cash at the rate of 20 million, maybe more a month? >> not even right now. our burn -- neil: that would mean the burn rate would put you out in three months if you don't -- >> burn rate is down to like approximately 12 million a month. we did that over the last three weeks where we started adjusting new plan in place. obviously wall street wanted to see us to a path to profitability and we're well on our way. neil: you know, i don't know -- cultural phenomenon, movie pass had a very interesting concept, all the movies you want, really 30, for 9.95 a month that didn't crutch or make numerical sense. they began changing things. altering things. customers got ticked off. fast forward to today when the stock tumbled from millions of dollars bled out to now a nickel

a share with with restock splits and all the rest. come out with plan, 9.95, 10 bucks a month for three movies. that won't include 3d this time. maybe the fact that is still substantially cheaper than you would say to see even one of those movies, this might be a trend they could follow. the problem a lot of competitors popped up since. fox news 24/7 headlines reporter, carley shimkus and entertainment journalist kim serafin. what do we make of second shot, third shot, fifth shot of the apple here? what do you make of that? >> i think moviepass has a real interesting business model. i can understand why that stock is going down because those unfamiliar how it works the customer pays moviepass $10 a month but movie pastel has to pay the movie theater, the whole price of the ticket.

moviepass could lose $20 per customer if the customer sees three movies a month. moviepass has to make money other ways. i thought it was interesting to what you spoke to the ceo. they bought a movie studio. they might try to make movies in the future. neil: they are definitely going the netflix route. kim, the only question i have about that. these are smart guys, one a veteran of netflix, red hat, some of these others, there is some pedigree there but i think it's a tough business and you've got to be able to keep those customers. a lot of them are wandering away. technical snafus keeping them. membership was canceled and uncans he had. investors look at that say, this is why you're a nickel a share. >> yeah but you know what, the people want the subscription service. there have been competitors now. amc has something, cinemark has something, alamo draft house has

something. people want a subscription service. neil: will people pay for that service? >> i don't know. this new thing that was a great interview that you did. now three movies a month. i think the ceo said majority of their customers, 85% of people who have moviepass only use it three times a month or even less. it was the extra 15% of people who were power users. that is what is causing the problems. now that you have reined those people in, you have the majority of people who use it three types a month, those people will use it, maybe even once a month. i know in l.a., going to see a movie is twice of that in new york or any major markets. you're paying $18 or more. neil: considerable savings to you. they have to make money. they're still bleeding cash. maybe not as much as they were. they have to start getting return on investment. their subscribers, three million strong they have, that is tempting even to competitors, isn't it? >> i think that moviepass gives you the most bang for your buck even when looking at other competitors like amc's movie

package. it feels like there is a really big cult following with this where there are facebook groups devoted to moviepass people like to stay home and watch movies on the couch. why it has 3 million subscribers and newer company and netflix has something like 120 million? neil: kim, to your point there might be something to the strategy, whether this is the one, there might be something to it? >> first of all, people, if there is a food -- good movie people will see it. whether you had moviepass you want see see black panther. neil: fair enough. >> there are restrictions on moviepass. you can't see the 3d movies, or opening right away. there are restrictions. people want flexibility when they want to seeing. neil: we shall see. more after this. feedback that helps you drive safer.

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neil: all right. turkey concerns, tariff concerns, even when it comes to better than expected earnings, concerns that well, that's got to be a one-time event, we will run out of steam. even when you got the likes of macy's following up on home depot with better than expected numbers, it's not enough to breathe life into this market, down about 209 points. then there's the tit for tat and growing angst with what's happening in turkey and china. blake is following up everything at the white house. reporter: this all seemingly

revolves around the american pastor, andrew brunson, who has been held inside turkey since 2016 on terrorism related charges that the pastor and u.s. government denied, the trump administration has been trying to secure his release. early today, in a turkish courtroom, an appeal went against brunson so he still remains inside that country. the white house at this hour is not really commenting on this. they are staying quite mum, only to say at this point that quote, diplomacy continues. the diplomacy at best, though, is very rocky because the tariffs back and forth continue now with that country, you will remember last week president trump increased tariff levels on steel and aluminum. today, turkey fired back on a range of products, everything from rice to paper to beauty products. two of the headlines coming out of this, alcohol and vehicles, because the alcohol tariff was up to 140%, vehicles up to 120% though for the most part, this is just headline inducing

because when you dig into the numbers here, u.s. exports of alcohol to turkey last year, just $20 million. u.s. exports of autos to turkey last year, just $61 million. turkish trade minister, though, saying the following just a little while ago about all of this. quote, trade wars help no one, but turkey will do what is necessary to protect our industries and economy from assault. by the way, qatar has announced it's just come in with a $15 billion investment to turkey to try to stabilize that country. neil? neil: thank you very much, blake. to the new york stock exchange and nicole petallides. nicole: blake talked about that qatar investment of $15 billion which may or may not seem like a lot but it brought the market up off the lows. the other thing the people were watching was the 2800 level on the s&p 500 being crucial. as a support level we got down

to 28.02 and bounced back. we have had strength in the u.s. dollar, we have had selling in oil which broke below $65 and you have china tariffs and of course, turkey front and center. these are the things people are digesting and earnings as well, which then brings me to some of these retailers. let's first start with macy's which had a profit, but the sales declined, all due to the fact they said the growth margins were shrinking in the fall season. that's what they see. so that's why we are seeing that 14%. we will watch for some of the other ones to report earnings tomorrow, walmart, and nordstrom and for the most part, some of the year-to-date numbers are up, macy's, home depot, target. how much is amazon up? 64%. definitely leads the group.

neil: thank you very much, nicole petallides. you always hear this talk about contagion. we can throw these words around. in other words, it spreads beyond the country affected. so if it's turkey, it's just a matter before it's the entire region and developing nations, whathave you, much as we saw with the valuation of the currency there that affected pretty much all of southeast asia, as much as it affected the north american markets and that led to mexico at the time, the peso devaluation, that it spreads, it goes beyond that region. go to 1998 and the russian ruble. it starts there and expands because everyone it turns out has some exposure to this. the "wall street journal," very good read in history, to go back and read and compare and contrast. greg, what about that contagion fear, kind of rhyming with some of the others. what do you think? >> there's going to be less

contagion this time around because things have changed in the world in the last 20 years partly because of lessons learned from the prior crises. talking about the asia crisis, one of the reasons why it spread from thailand to other countries is they had exchange rates fixed against the dollar, kind of like a dam breaking when speculation became big enough. almost no major emerging markets other than china have fixed exchange rates now so in some sense, they're not fighting this losing battle against speculators. the special aspect with respect to turkey and to some extent, argentina, they have been running exceptionally irresponsible monetary policy for a number of years and that's going to knock down the currency. they are kind of losing control of that. you look around the world, there aren't many countries that look like that. you don't see that kind of dynamic in mexico or eastern europe. that's why i think we are dealing with sort of a less frightening sort of crisis today. neil: i certainly hope you are right. one thing i do remember, totally different, the financial meltdown a little more than a

decade ago, was that it cascaded because of the sell-off in the markets themselves and we later discovered that was the capital they needed and it was melting away in the meltdown. even if they had no exposure to these mortgage-backed securities, it went on and on, and then everyone fell down. is there any risk of that? in other words, emotions overcome to the point that they igno ignore rational thinking? >> i don't think so. in 2008 the issue was every bank, american, european, you name it, held a lot of these u.s. mortgages and they were very shaky. we didn't know it at the time. we now know it. we know it now. so when the housing bubble burst, it began to impair the loan book and therefore the capital of a lot of banks. people legitimately ran from those banks because they were shaky. of course, once things really got going, that spread to

everybody. today, don't really have that analogy, in the sense that big western banks don't have a ton of exposure to turkey, don't have large concentrations of emerging market debt the way, for example, american banks did toward mexico in the early 1980s. there are some issues in europe, spanish banks, for example, but once again, part of the prophylactic response to the last few crises is to have fewer exposures than you think about. neil: brilliant reference. is there a sense you have, though, a lot of these institutions, financial or otherwise, that have exposure to turkey, it might be limited to your point, but i'm surprised how many -- you wouldn't think what are they doing in turkey in the first place or why are they playing this market in the first place. is it that they all spread their bets on everything? >> well, some of the risk has been offloaded from banks over to the bond market for one thing. for another, i would say one of the big risks out there is that the turkish banks themselves,

turkish corporates like banks and corporates in other emerging markets hasn't been heavy in dollars. there's been a large increase in borrowing from foreign banks in dollars. that worked fine as long as dollar interest rates are low and the dollar's not going up against your own currency. precisely the opposite is happening now. u.s. interest rates are going up, the dollar is going up, putting a severe squeeze on any country that did take the basically big bet on borrowing dollars, and turkey is exhibit number one. i do worry there might be exposures to other banks and foreign corporates elsewhere. it's riddled throughout the u.s. financial system, maybe not in big money center banks but other places we haven't seen yet. that's kind of the scary thing about crises, you know, that i have seen probably too many already in my career, is that it's kind of like you know the old warren buffett line, not until a tide goes out do you see who's been swimming naked.

only once you see severe stresses build up do you realize where some of these linkages are. i'm not seeing them right now, but i have been seeing too many crises to express high conviction that we will never see those stresses. neil: real quick, one thing that worries me, as a consequence of all this, you mention high interest rates but of late, given some of the panic globally, longer term interest rates in this country have been going down as people have found, you know, flight to quality to invest in bonds and that's flattened the so-called yield curve which can sometimes portend to trouble down the road. does that worry you? >> it does a little bit. i think the bond market is basically telling you we don't think interest rates ought to be that high over the long term because the economy doesn't have that much underlying vigor. it's kind of a warning flag, i think, to central banks, don't overdo it with your efforts to contain inflation and slow things down. i don't think the fed is going to do that. right now we still have long-term rates above short-term rates, and there's other factors at work here. the bank of japan and european

central bank are still buying long-term bonds, exercising kind of an artificial depressant on long-term rates. for sure it's worth watching. neil: always good chatting. thank you very much. by the way, a lot of this could have been eased if we simply saw the turks consider the release of pastor andrew brunson. he has been detained, we say as a political prisoner, they say a legitimate prisoner for doing some bad things over there. a lot of people seem to think had he been released, we could have eased this crisis. a lot to read now for former secretary of state under bush 43. obviously they are denying that at the behest of president erdogan. he's holding and hanging tough. what do you make of that? >> you know, by the way, i agree with your prior speaker about the dollar badly affecting turkey. i think turkey is a unique case and this particular conflict with turkey is also unique. at the end of the day, president

erdogan, with whom i have sat, needs to ask himself what does it mean to be a reliable ally, and you certainly don't take hostages as citizens from another allied country and that's the way i viewed what has happened with this person. he thinks he can get a swap with an interfaith leader that took refuge in the united states. i don't think -- i think he just needs to know that will never happen. but at the end of the day, it's part of a larger nested set of problems. erdogan has decided he's going to buy s-400 antimissile systems from russia and again, we are sworn to defend turkey under article v. i think he needs to ask himself does a reliable ally buy from an adversary here and that puts him in conflict with the f-35 purchase in the united states of 100 f-35s. they are incompatible, those two systems. the congress has decided they want to try to cut off the f-35 purchase. i think that's a bad choice. i think the better choice is a win/win and i do believe

currently, secretary pompeo is pushing that right now, the idea that we get the turkish to buy more of the patriot batteries, not this russian battery. and the other thing that i come back to, and it goes to the economy in turkey, is they need to say to themselves does a reliable ally step away from trade in the united states dollar, the international standard. they are talking about now trading lira with rubles for russia for this and other purchases and at the end of the day, that's like trading soap bubbles for clouds. they both change their value, their shape. it's not -- it's really not fruitful. neil: it's easy to be monday morning quarterback but didn't we get some hint of what we're dealing with in erdogan, at least two occasions. last time he was here in this count country, his security were be h beating folks up outside the compound. that's a clue that this is not a stable, reliable or certainly

playing to political norms guy. and we have gotten this relationship going and you always want to talk to leaders of any country to move the ball forward, but that he was a nutcase. >> yeah. so it's interesting the perspective you have and it's not wrong. for 65 years, turkey has been a reliable ally and you know, historically, they have had ups and downs and have had the military intercede to stabilize things, but have been a very reliable ally and are in a pivotal spot between the middle east and europe. what you see with erdogan is he's a very emotional guy. he's a guy who is an islamist by his own declaration. he's also a guy that seems sort of whimsically preoccupied with the empire. you have to take a deep breath and ask what does it mean to be a nato ally. we do about $17 billion in trade with turkey. surely they will never get from russia and iran what they get

from the rest of the west. i think a deep think would put him in a position where he tipped a little more closely toward reliable ally and maybe even increasingly secular leader and away from this idea that somehow this emotional strain is going to get him somewhere valuable in the long term. i don't think russia or iran are going to in any way counterbalance the relationship that he historically and that country has historically had with the united states and the west. neil: we shall see. always a pleasure. thank you very much. you are one of two guests i know can bring in the ottoman empire. proves your gravitas. when we come back, let it be known if you want to win a primary, you better, if you are republican, be aligned with donald trump. we pick out the races.

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neil: what did tim pawlenty, as we look at the sell-off the day after the big primaries in the midwest, not only the midwest, connecticut was one of them, could it be the famous comment of the former minnesota governor about then candidate donald trump being unhinged? it came back to bite him because even though he was favored to win the nomination to get his old job back, he lost.

it wasn't even close, by nine points. what's the read on that and those who are loyal to donald trump or like donald trump or donald trump likes them versus those who are not? the club for growth president, david mcintosh, what do you think? >> i think president trump is a huge factor in these republican primaries. republican voters want to see senators and congressmen who will be loyal to the trump agenda. they were mad when republicans failed to repeal obamacare. they were upset when the house and senate gave the president a terrible omnibus funding bill and they want to see that change. so someone like pawlenty, who they know really well but they see as not being loyal to the president or potentially not loyal, they are not going to go with him. they went with the outsider and said we will take a chance, but we want a republican congress that will help the president. neil: now, not that you are advising the president or advising republicans, where would he be most beneficial in the fall, if you are trying to

get the big gun out to help you? where would you want him? >> yeah, what you see time and time again is the rural vote is very strongly for the president. somewhat the suburban. so you want him out there activating that base in the midwest and in the south that is the rural trump voter. we're a little worried those folks may decide well, he's not on the ballot so i will stay home this time. neil: right. right. >> if the president is out there, i think he will energize them and bring them to the polls. right now we saw a huge shift a couple weeks ago in the generic ballot. it went from 7% favorable to the democrats to 3% to 4%. that's a big shift. with that 3% to 4%, republicans can keep the house and pick up maybe three, four seats in the senate. neil: that could also mean, though, that's been volatile. i want to ask you, if you had to

handicap what could happen, it's hard to say, we don't know for example on the trade thing how that could work out but i wanted to ask on the trade thing, regardless of what the president's posture, i have serious concerns it could create more problems than it's worth, but if it's still unresolved by election day, then what? >> that's an issue that is sort of lagging indicator, if you will. the harm from the tariffs will come after the election, and the benefits of the tax cuts are kicking in now. we saw it in the last quarter. so i don't think the political effect will be that bad. for the president, what that gives him is a few more months to get a deal where he can get closer to that 0/0 goal and that then takes away the harm of the tariffs if we can get rid of them and get back to a better trade agreement. and he's got some time politically to do that, because the bad impact on the economy comes next year. neil: david, great chatting. thank you. >> good to talk to you.

neil: all right. the tax cuts or the tapes? the tax cuts are reverberating through the economy and doing a lot of good. the tapes and charges that, well, a lot of folks are raising, including omarosa, michael cohen before her, what they glean from taping the president even before he was president, in the case of michael cohen, which boomeranges more, especially when the president talks about it?

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neil: all right. markets today, we should stress for the most part, it's been a boffo earnings season. i think we are more than 80% through this process. i could be wrong. charlie knows far more than i and will probably correct me on that. i do know that that number is still south, about 8 of those companies who have reported. that's what the president should be pounding and only that,

charlie says. >> republicans hoping for the backdrop of a good economy, you know, up until recently, strong markets. might not pan out. it's a different anomaly in the midterm. what do you think? >> it never pans out by itself. for republicans to take advantage of the economy, they got to, in my opinion, do three things. they have to talk about it and starting from the top. the president has the biggest megaphone in the country. rather than talking about omarosa or lebron james, him talking about the economy would be important. neil: to be fair to the president, he does talk about the economy, talked about record low unemployment rates for every group in this country but then he will come out and put out a tweet, omarosa, calling her a dog and this other stuff that gets in the way of that. or does it? does it sort of water down the message? fred barnes, annika green.

fred, that's the concern, the president steps on his own good economic message. what do you think? >> well, he does. the omarosa thing is his fault. a more experienced politician, which include many who trump doesn't like, would not have fallen for flattery from her when they were on the television show "the apprentice" together, would not have brought her into the white house and given her what sounded like free rein, and now she's betrayed him. it was really his lack of political experience that let this happen. neil: you know, it is what it is. obviously there's a chill in the relationship. she was taping stuff. we know everything that happened. there's a great temptation, especially with some of the charges she's made to say what he said but i don't know, i don't find it presidential. everyone is saying the same thing about his tweeting. he's still president, still got fairly respectable poll numbers even with that, but it just, it just gets in the way, to me.

what do you think? >> i don't think it's helpful and it's not that if he talks about the economy, that somehow that message would get out. every president has the same struggle. i worked with karl and he would remember president bush was constantly trying to get the message out and it falls on deaf ears a lot of the time. but when a reality star like omarosa who worked for a former reality star, as president trump was, and they have been in business for so many years, start feuding in public and she writes a book called "unhinged" that takes over the conversation regardless of what the president can do in the communication side. neil: i think you're right. it wouldn't have mattered if it was omarosa or anyone else. that alone is enough to keep that story going. now, the president, erin, as talks in almost every speech, even when it seems out of place, has spoken about it so he gets the message out when he can. but this other stuff comes up as well and he feeds the beast. you think it would be any

different if he didn't? in other words, to the point it would still be news whether he was commenting on it or not? >> it would certainly be news, but the fact he's tweeting about it is making it worse. i have to take issue with what fred said. it's not just about political experience. any one of us could tame ourselves and keep ourselves from tweeting about some of this stuff. he himself calls himself a very stable genius but he doesn't seem that stable or all that smart if he can't keep himself from doing this. neil: i call myself a stable genius. >> we all should be. i think we are more stable and smarter because we can keep ourselves from doing this and having the news chase what we say like this. you can see it in the polls. the polls are slipping away. more and more seats are starting to tilt to democrats. they are campaigning on the chaos out of the white house and some of the corruption, and it's working for them. neil: well, a little too early to tell. i know what you are saying. fred, play that out. pollsters i talked to were

saying it's being underrepresented, underappreciated how the economy and the markets of late, notwithstanding, are helping keep the republicans in charge. they aren't going to lose the house. what do you think? >> well, i think they have a pretty good chance of losing the house, not the senate. look, if they come out with the senate and not the house, i think that will be a pretty good outcome for them given everything we know. tru trump, it's amazing he's at 50% in some polls but there are things that he does that make him vulnerable to attacks by democrats, and his best response is to talk about all the things he's achieved, all the conservative judges, the economy, and some of the other things, the great tax cut. i mean, there's a lot to talk about. and look, he can tweet that stuff, too. but he doesn't.

neil: every now and then he does but you're right. the one thing i wonder about there, given the economy, given the markets, i always tell people whether you like it or not, that alone should have the president ten points higher in approval polls. the only thing keeping him down is his personal baggage and this tweet stuff. i'm wondering from your viewpoint whether -- say he has a tough drubbing in november, think he changes it? >> i think what we are seeing here is that trump always doubles down on his brand and it is his brand to fight back against people who attack him. we saw it in the debates where he was criticized for being potentially unpresidential. he wasn't president yet. remember he interrupted hillary clinton and just said wrong. no presidential candidate has done something like that, so he's continuing that type of behavior. neil: that also in some cases is part of his appeal, right? >> right. for supporters, yes. neil: if you take it to extremes, there are problems, right? >> i think so.

i'm always going to err on the side of let's be presidential. if i'm advising somebody, i will always be more traditional in terms of what is the presidential brand but trump has been very clear, he brings the trump brand and that means if someone insults him, including a former staffer, he will call her a dog on twitter, i guess. neil: you know, we are left with a situation here where the economy is pretty sound, it's picking up the tempo that it had from barack obama. i'm wondering in your eyes whether that's enough to close the deal for him, or whether this stuff ultimately matters more, because in 2014 the midterm economy was humming, barack obama wasn't on the ballot, democrats lost a lot of seats. is that the fate that awaits republicans? >> look, think about that governor's race in virginia a year ago when those polls were really tight. then there were a lot of republicans who crossed to vote for northam because they wanted

to send a message to president trump. i think you may actually see that in some of the statewide races and senate races. i think it's possible democrats could win the senate by just one seat. you look at arizona, nevada, those could flip. i'm hearing this from republicans all over tennessee that they actually want to vote for brunderson, the democrat, because they don't like marcia blackburn. i think it's too soon to say democrats won't win the senate. neil: wow. okay. it was just a guess. that's all we have. nothing wrong with guessing. >> i do it all the time. neil: i have done it for a living for decades. thank you all very much. we are down about 230 points. i don't know whether anything these guys said had to do with that. i do know tweeting can come back to boomerang on a president or a billionaire talking about going private. what donald trump and elon musk have in common. if you're turning 65, you're probably learning

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neil: a lot of music, some of the other hours on this fine network have music as well. i'm an opera guy. i'm a gregorian chant guy. this is a tragedy, i don't know if you are familiar with this particular opera. my point is, it talks about the death of a loved one, and in this case, i'm relating it to the death of stocks on a day people can't figure out what's going on. i wanted to make this sort of reference to sort of put this market in perspective and not just use modern rock songs because some kids like it or there's a plea to speak to younger audiences. you see, i'm trying to get mine

to be much older. my base is 90 and above. i think if i do this right, i can secure that. all right. just that musical sideline there. wait for the other goodies i have planned. we have colin and dennis on their musical choices. all right. you guys get roped into this nonsense. very good to see both of you. >> wow. neil: there we go. >> mariano rivera had metallica and you give us this. neil: anything i can do. >> sadly, i'm getting close to your 90-year-old group. neil: welcome. you are my base. thank you very much. you know, in all seriousness, i'm wondering if people are getting fearful again, is it just turkey. why are we selling off? it begs the question, is it just turkey? what's going on? >> no, it's not just turkey,

neil. this began a week and a half ago. as my old friend dom said, this is one of the wisest statements ever made about the emerging markets. emerging markets are markets from which you cannot emerge in an emergency. that's what ends up happening. we have problems with argentina last week, problems with china, problems in the currency markets in russia. this is not just turkey. turkey has taken the lead and is obviously on the front pages, but this is more than just turkey. this is a contagion that i fear can spread. we have a president who tweets indiscriminately and badly at times, and you know, takes both friends and enemies, in terms of enemies, even worse, and i think that's causing a great concern. this is more than just turkey. this is a lot of things coming to fruition at one time. i'm rather fearful. neil: what do you think? >> even today we see it with the chinese technology company which seems to be one of the reasons the market really is selling off as much as it is.

i think there is kind of this interesting kind of fine line that we are walking here in the united states between, you know, being a safe haven for people to invest in and from just being part of the mix where we are, you know, down in a broad-based selloff. it does speak to kind of what dennis is getting at, the role that u.s. foreign policy, also monetary policy but certainly u.s. foreign policy is playing in all of these things, whether it's turkey, whether it's european union, canada, mexico, probably most importantly, china, as the united states tries to put pressure on all of these countries. we don't know where their breaking point is or when their breaking point will come or how much pain they, especially china, are willing to endure before they wave some sort of white flag. could be next month, could be next week, could be next year, could be much longer than that. we just don't know. in between then, now and whenever then is, there's a lot of pain to go through, it would seem. at least a lot of uncertainty. neil: what you were just saying, this notion that even though

many are going to use the standard percentages you hear about when it comes to world gdp and every other number, i heard turkey's under 1% when it comes to what we trade back and forth with them, it's barely 2%, so in the scheme of things, even those exposed to them, it's just a rounding error on a rounding error. so you argue that it's bigger than we are appreciating or being told. why? >> well, because psychology plays so much of a role in the world of investment. yes, indeed, turkey is a very, very small portion of global gdp and it is indeed a rounding error. but add into that problems with argentina, add into that problems with china, suddenly the rounding errors become unrounded. suddenly the rounding errors become rather large and disconcerting. so the first concern is always psychology and that i think is what's changing here, the psychology changes as the markets -- when you have a down day of 200, 250, 300 points, the investor psychology begins to change and suddenly businessmen

turn back, businesswomen turn back and say you know what, i don't think i'm going to go with the expansionary programs i thought about putting in place and there becomes a snowballing effect. once the psychology changes, but psychology moves first. >> the other term, neil, kind of along the same lines, is ego. because when you are dealing with these big political egos, not only donald trump here in the united states but erdogan in turkey, there would seem to be a way out of this mess if you are just thinking rationally about it. start with releasing this pastor, for example. but there's a lot of kind of ego that is kind of playing into the fact that the turkey mess, for lack of a better term, could drag on a lot longer than it should. so yeah, the numbers, the fundamentals might not say it but dennis talks about the psychology and i would say also the ego, political egos also play a big role in this. neil: i do know this about dennis. he's been a lot more right than a lot of folks we have on this air. thank you both very, very much. you added to the tragic opera

theme. thank you. meantime, tesla right now, careful what you tweet. for elon musk it's coming back to bite him. reporter: one person familiar with members of tesla's board tells me there is growing friction between them and their ceo, elon musk. at the center of the controversy, the tesla ceo's twitter habits that is putting the company under a microscope with the s.e.c. charlie gasparino saying the s.e.c. san francisco office has launched a formal investigation, issuing the company subpoenas over tesla's plans to go private and that is spooking some of the board. reports swirling that at least three board members have lawyered up, hiring outside counsel to advise them. one person familiar with all of this tells me that some of them feel that elon musk's tweeting has put them in a personally liable situation. the s.e.c. is looking into whether musk may have misled investors when he tweeted funding was secured, also

tweeting he had secured goldman sachs and silver lake financial advisers which had been reported was not a done deal at the time of the tweet. one source also tells me the board sent a clear message to the ceo, stop tweeting and to keep plans that are still in progress about them going private, private, and off of twitter. neil? neil: thank you very much. i heard the stop tweeting, i thought you were talking about the president of the united states. you are talking about the other guy. thank you very much. one of my favorite guests on this show, there's a reason why this guy got a pulitzer prize. it might be for writing like this, talking about in broad terms the benefits of tax cuts in which he wrote higher family incomes mean better quality of life and more spending for millions of people, which in turn creates more new jobs and opportunities for millions of others. that is the economic circle of virtue. the democrats oppose it and promise to repeal. talk about being on the wrong side of history. on the right side of this desk,

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a plan like this helps pay some of what medicare doesn't. so you could end up paying less. and these are the only plans of their kind endorsed by aarp. selected for meeting their high standards of quality and service. call unitedhealthcare insurance company now to request this free decision guide, and learn more. like, medicare supplement plan, give you the freedom to go with any doctor who accepts medicare patients. it's nice to have a choice. and your coverage goes with you, anywhere you travel in the country. we have grandkids out of state. they love our long visits. not sure about their parents, though. call unitedhealthcare and ask for your free decision guide today. neil: all right. we have "new york post" columnist michael goodwin joining us. whether you are left or right, republican or democrat, he can get the big picture right, the

feel of the real issues without getting weighed down with tax revenues, yield this, whatever. your basic point -- always good to see you, my friend -- is if you were going to be, you know, pushing the democratic view and you are against these tax cuts and are framing it in a way you are preaching to the wrong choir here, like the state of new york, for example, where people are benefiting from it. >> right. thank you, neil. look, in new york state overall, more than 80% of taxpayers will get a tax cut because of the new federal tax law, and yet the governor of new york, andrew cuomo, has been out there calling the tax law a missile, a dagger, aimed at the heart of new york. how do you explain that? more than 80% of your constituents are getting a tax cut and you say it's no good. i mean, that just defies common sense. neil: part of it is, i'm thinking, you hear from a lot of people who live in a high tax

state, particularly, that you are going to be kind of gouged. what do you say? >> look, 20% will pay the same or more, and most of those, almost all of them, it is because of the limit of state and local tax deductions at $10,000 now. as some people have pointed out, the alternative minimum tax effectively wiped out a lot of those deductions anyway because some of those same people were subject to it. that also has been changed dramatically under the new law. so i think that we may see in the end of the day a lot more than 80% will actually pay less, and if the state had followed the federal government and followed really what is the international trend now of trying to attract businesses by cutting taxes and regulations -- neil: that's what's going on in texas. >> yeah, then 100% would have had a tax cut. but the state went the other way

and said we will attack the trump administration. we will try to roll back this -- neil: that's the problem. you and i could argue about that. i have serious problems with some aspects of the tax program, whathave you. i understand how it had to be cobbled together, how you had to phase out certain tax rates because of budgetary reasons, getting through the senate, all that. having said that, it's a very tough argument for democrats to make, we will rescind it all, start from scratch. tell that to a lot of people, whether it's a little or a lot more take-home pay, that ain't going to fly. >> well, you also have to credit the economic boom, which is a big part of it. certainly a lot of the run-up in the stock market was predicated on the belief this would happen. it has happened. we have seen corporate profits rising, incomes rising, now you are seeing, i mean, the unemployment rate, again, in new york city, more than four million jobs, a record. unemployment rate in the city of

4.3%, a historic low. this is a shared prosperity now and so to argue against that i think is political suicide in most precincts of the country. neil: yet presumably among the leading names for the democratic presidential nomination, bernie sanders, let's not go there. he says most people are socialists, they like socialism. elizabeth warren kind of agrees with that. is it your sense that they are in a vacuum or that they are hitting a nerve, that people are getting ticked off, they don't like -- i tend to think by playing the class worker game, it's never worked. >> well, if people like socialism, look tat venezuela, right? why are people trying to get out of that country? a lot of this is just anti-trump. i think a lot of the democratic message is fundamentally we hate donald trump, whatever he's for, we are against. neil: for bill clinton to do

what he did, he cut taxes, did raise the top rate but cut most business-related taxes. i don't know if a democrat like that could succeed in his party today. >> i agree. i think the democratic party has made a sharp left turn. there's a battle within the party to see who is going to control it but even those who are considered moderates are certainly trending left. again, andrew cuomo in new york is facing a challenger, cynthia nixon, from the far left, one of those progressive leaders now in this movement. neil: that's the loud, angry part of the party. >> it's driving him to the left even though he's trying to resist by trying to be a bit more centrist than her, but only a bit. it's having a big impact on the entire party. neil: quickly, donald trump and all the personal tweeting and other baggage weren't there, how well do you think he would be doing? >> look, i think sometimes it serves him well because i think it does allow him to get his message out clearly.

on the other hand, there are times i think it gets in the way of his policy. i think it's the policy that will get you elected, not the tweets, but the policy. so when the tweets interfere with the public's ability to understand the policy, then i think you have hurt yourself. neil: this is why you have a pulitzer prize. good work. lot more coming up. stay with us.

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neil: all right. down about 237 points and a little bit of change. people rushing into bonds, flattening the yield curve, not trying to outnerd each other, whatever is causing it is flattening it. that can be a problem down the road. we'll see. so is trish regan. trish: thank you very much. the dow is down 238 points, down pretty significantly but we're off the lows of the session. there is tension as you know between the united states and turkey. that is starting to escalate. we're having live report from the white house seconds away. i'm trish regan. welcome, everyone, to "the intelligence report. ♪ trish: turkey firing back today, blaming the united states for the economic mess they are in right now and they just slapped u.s. imports with a hefty tariff and that has some investor getting a little worried. i said it, and i