>> basically they believe this could be a whole lot more, private litigation could be a whole lot more serious than the sec fine. stuart: the stock was up a couple bucks. charlie's report came out. it's down. neil, it's yours. stuart: wow, that is big news. thank you very, very much, stuart. we'll follow that. president is meeting with the cabinet. we'll get results of pool spray. they feed it out and you will see what the president is thinking and saying about matters pressing to his administration and those in attendance, including every single member of his cabinet. so we're on that. we're on reaction to the walmart earnings. out today. to the upside by virtually every single measure. guidance, earnings. tax cut is a big driver for that.

larry kudlow, the white house economics advisors says there is a reason for that. >> take-home pay is growing better than 3% per year on a 12 month basis. any political scientist will tell you that is a big predictor. it is even more important than the gdp numbers. i think the president is upbeat, optimistic, has every reason to be so. neil: we should explain there are historical anomalies to that, notwithstanding larry kudlow's brill lance. take-home pay increased 14% year-over-year in 2014. that they lost seats. certainly nice for the people enjoying that improvement of take-home pay but it is not a barn-burner self-assuring thing it will pan out into more votes in a midterm election. it is nice but for the party in power not always a winner.

democrats found out the hard way in 2014. get the read on all of that, ubs investors jim lecant. we have macro strategist -- big picture, i apologize lenore hawkins. "daily caller" found digs editor-in-chief. chris bedford. i want to get your thoughts, essentially what larry kudlow is saying, hoping what the republicans have been preaching this is the wind at all of our political backs here. improving economy. better than expected news out of retailers, walmart including today, this is going to drive up the numbers for us this fall. do you buy it? >> there is some truth to what he says but it is not really the whole picture. we just got the bureau of labor statistics report, on real weekly earnings. 80% plus population, non-sue advisory staff category, they

saw the real average weekly earnings decline .1% over last year. that is not more money in your pocket from pay. what they benefit from is the improvement in take-home because the taxes. we do see consumer sentiment is much stronger. you have better sentiment but take-home pay is not so great. feeling better, you will to shopping. where will you go shopping at walmart, costco, tj maxx. neil: what do you think of that argument, better things look for shoppers, the better things look for party in power who wants the shopper? tim? >> well, i think it speaks very well. look at walmart's numbers. that showed a very, very nice increase. it goes to what's going on in the economy. people feel better. whether it's businesses, business confidence still running at near all-time high or consumers. and absolutely if you're spending more money, it shows you're more confident. it is not just the economy. it is the market. people are seeing their 401(k)

balances go up. they feel a little bit more flush. we've seen wages go up on nominal basis if not real, but we've seen take-home pay go up because of the tax cuts. there are a lot of positive things going on economically. sure you can quibble with the housing numbers, you can quibble with this part of the economy or that part of the economy but the reality is we're operating on a much higher level than we were. it is showing up in the retail sales number. what is interesting about the retail sales numbers is that people started spending money before their wages were actually going up which again, shows confidence. so i think we're doing pretty well. and it should show up in the election numbers. neil: that's what a lot of republicans are hoping. chris bedford, i use the 2014 example, real wage growth at that year-over-year, not to the degree we're seeing now, i want to help preface that. it didn't help democrats in the midterm. there was carryover with the controversy with the obamacare

and health care law and frustrations. frustrations with the president personally, not on some, not all voters, i want to say that the ongoing noise on trade and everything else, how do you think it all sorts out? >> you're right to point this out. this will not help as much in general election than a midterm election. the people that vote in midterms elections, bases of party, activists, people more involved day-to-day. conservatives and liberals. the liberals are completely on fire. they will not give credit to president trump no matter the take-home pay. conservatives are motivated by immigration, hot-button issues that the senate and house pushing off, house, senate leadership saying we don't want any tough votes on this. now the people also often don't give their vote out for a good report card. they don't say thank you but they do protect what they have. the democrats continue to say we'll reverse this tax law adding seven or eight point to

americaning earnings. if they say they're going to reverse that, that might be an issue republicans can play up if you like the money in your pocket, vote republican or you will lose it. neil: we shall see. let me ask you, lenore what happens on the trade front too. we got some promising signs, with the walmart news came out for example, that china was interested in sending a representative to washington to talk trade. now they might not be the highest level officials but it is the first time anyone talked to anyone since the spring. so i'm wondering what you make of that europeans markets hearing that rebounded. i'm wondering if that is factoring into this rally, what do you any. >> definitely. that is not good for anyone, for there to be this big trade war and we've got a really critical game of chicken going on right now. china's economy by a lot of measures is not doing so great, well, chinese leadership, that guy has the job for life, versus a republican -- neil: you're right about that. >> republicans facing upcoming

midterms elections and they can't to to election with this being a mess because democrats will make hay out of headlines of an ongoing battle. neil: jim, the thought that the talks are going to resume doesn't mean they will come to a deal. these are not the highest level talks but again talk and i'm wondering what would be deemed success for this, for just the markets? you know, would it be just get this off the table as a problem, even though it might not be ideal but it is better than what we have, just to remove this uncertainty, what do you think? >> well, a deal is going to get done and the reason a deal is going to get done because it is in everybody's best interests to get a deal done. in fact behind the scenes in china there is a lot of reports out that the hard-line is not happy with the way xi xinping is negotiating this thing and they're losing some business out to vietnam. there is a deal that is going to get done and the markets are going to like it. how long does that take and does it start to impact our economy?

we saw a big increase in the number of companies that talked about concerns over the trade wars in their earnings reports and could that show up in growth numbers? it could. by the end of this year we could see a temporary blip in u.s. growth because of just uncertainty and concerns and unwillingness to push forward business plans because we don't know what the playing ground is going to look like. but, by the first quarter, i do think a deal will get done and our economy will continue to grow. it is kind of a a barry bonds economyit may be on artificial stimulus but it is hitting a lot of home runs. neil: i see what you're doing there. crest, we're in and out of session highs, up 401 points right now. boeing and caterpillar, think about it, big players in the global trade arena, they're up respectively up a little more than 2% so that doesn't hurt matters any. obviously walmart is contributing a good chunk of that as well but there is optimism that a trade deal can

be struck. how important is it? i know that with these trade deals smart guys like you pick them apart, what do we get out of it, what the chinese get out of it, but i don't think they have to be off the charts great as long as there is something, and that alone could do the trick what do you think? >> if you try to do the big, massive deals, these things, comprehensive immigration reform, comprehensive trade reform, basically washington, d.c. talk never going to happen in our lifetime because you will not get everyone in the table to that. neil: that is almost as good as the bear by bonds analogy. >> we're on a roll today. neil: we're on a roll. >> china is a threat to america. neil: no doubt. lenore, say the talks fall apart, once again the acrimony and charges back and forth ensue and we don't get anything before the midterms, not that that should be the golden, deadline of the schedule, what do you think? >> i think these elections will be very different than what we've been seeing in the past.

recent pugh research report, americans used to be more centrist. you were willing to reach across the aisle. you were willing to work with the other side you got elected. more and more republicans are for the right and democrats are further left, the guy in the middle really willing to work with the other side that person has much tougher time to get elected. we're seeing that pan out when we look at these trade wars. neil: well-put. guys you all brought your "a" games today. congratulations. there is no prize, just the fact you brought your "a" games. thanks. we're up 406 points. the president is no doubt aware of this as he meets with his cabinet members. he is at the white house. cameras and folks and reporters are still in the room there, monitoring all that. when they get out, they provide the tape, start playing it back. we'll play it back for you. playing back what is a big market theme. he broke the story. keeps breaking updates to this story. one of the world's richest men,

elon musk is in a world of potential hurt right now. the sec is investigating his tweets and right now the wagons are circling around his company and all of a sudden we're looking at a company with some of the most fanciest and beautiful vehicles on the planet being the target of a lot worse after this.

neil: all right. this is the biggest gain we've seen in the dow now about four months i'm told, 418-point gain. walmart started this, greasing the skids that the chinese are willing to talk to us before the end of the month. it might be low level representatives whatever you want to call it but they are at least talking and there is optimism and this was echoed long before the walmart news that something can be cobbled together. i have charlie gasparino here, i do want to talk to charlie about tesla and get his thoughts on the markets and all this optimism. what is going on? >> we have good economy and corporate tax cuts and one big blemish on the trump economic plan and i think it's a big blemish and is trade. if he goes into a trade war, corporate earnings will get impacted no doubt about it. we're already seeing some of it hurt the economy. neil: may be a great deal -- >> if you resolve that is a huge weight off the, off the markets. they will respond postively. now obviously we --

neil: someone this morning, subbing on maria's show, at least another 8% pickup in the market. >> it has to be, really? >> at least short term. if you take that out, there's a good chance of the gdp numbers, rag alize it this way, gdp numbers will say strong. we can pay down the debt if the gdp is 3% and interest rates remain low. you factor all that in. neil: switching now to the story you broke and keep breaking more stuff. >> yesterday we broke that the sec launched a formal investigation into tesla and elon musk's tweet he had funding secured. whether he really did or not there is obviously great skepticism. it is still unclear whether he has any funding at all. we shall see. mr. musk says he has done nothing wrong. that is his side of the story. here is what we know from inside the tesla camp. they have lawyered up like never

before. they have three outside law firms, cahill gordon, paul weiss, latham, watkins, representing the various facets of company, from the company, to the board to the independent directors bringing it private. they have a lot of lawyers. un. the lawyers, one of main worries in addition to the sec is the private litigation and they're starting to think about much potential liability exists in the private litigation if investors sue claiming they lost money based on musk's tweet which isn't accurate, if it is deemed to be not accurate by regulators that is where the liability comes in. listen the sec can fine you millions of dollars where the private litigation comes in, if you look at the history of these corporate scandals in the past, not comparing what elon musk did to enron but i'm using it as a comparison, if you look when corporate companies had problems, enron, worldcom, the private litigation dwarfed

anything the sec -- talking billions versus millions. neil: you don't even have to get to that level. the potential liabilities related to civil acts -- >> could be huge. here is where it could multiply even more. say in a sec settlement, say he settles. sec puts its foot down we need admission of guilt. in old days, neither admit or deny wrongdoing. that helped you with private litigation. now the sec is forcing some companies and some individuals to admit they did wrongdoing whatever they did. if musk reaching a settlement, i'm saying if, we're knot there yet. we're just at the investigative stage but if he has to admit some level of wrongdoing that will ramp up the litigation even more and that is one of the things that the lawyers inside, inside the company are really worried about because if you look at this tweet, i don't know how you get your hands around it being accurate in any way.

neil: i'm not a lawyer. we had someone on who was, what you desperately need someone from saudi arabia, sovereign funds of funds, to say yeah, we contacted him, very confident we can get financing and he is off the hook. i think i'm over simplifying that but what do you make of that? >> well, the problem is his own statement. that could be true. neil: right. >> but if he is is saying funding secured, that's what he tweeted, look what he put on his blog -- neil: what if they put it out there, we pretty much assured him we could get the money together? i don't know what, he made it sound definitive, it's done. >> he made it sound and his blog post he dug himself in a hole where he said the saudi arabians said they want to do it. neil: what are you cynically vouching for? >> they still have to go through due diligence. he actually said that, if that the is case they can really do it. the weird thing we have seen no

word that there is -- >> that was explained to me. that could end it. because it could give credence. >> barring due diligence. remember what he said in the second tweet or the second blog. they expressed great optimism they do to it based on due diligence and dotting the is, read his blog himself, that would have been a more appropriate thing to tweet out the first time. neil: i think all stream of consciousness. >> ceo's -- neil: should never have stream -- >> by the way you hurt people when you do that. people trade on that. neil: don't tweet. >> that's what my wife keeps telling me. look at me. did you see the last mediaite. neil: what did you do now. >> i tweeted out a sweaty picture of myself and to some troll wrote a investigative report on that stuff. neil: i sent the picture. >> all these media watchdogs, they cover the media more than

they cover news. they cover i'm posting sweaty, posting sweaty pictures is a big story. neil: whatever you're into. thank you, charlie, very much. breaking news, left and right, still finding time to work out. in the meantime stocks are surging, really if you think about it, what charlie is saying, leave aside the trade thing, focus what happened on the retail front. people are still buying. people are still shopping and that is powerful, powerful in this recovery. it is the recovery, after this. i want to keep you know, stacking up the memories and the miles and the years. he's gonna get mine but i'm gonna get a new one! oh yeah! he's gonna get mine but i'm gonna get a new one! when it's time for your old chevy truck to become their new chevy truck, there's truck month. get 10 or 14 percent below msrp on 2018 silverado pickups when you finance with gm financial. plus, during truck month make no monthly payments for 90 days.

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>> welcome back to "cavuto: coast to coast." i'm nicole petallides live on the floor of the new york stock exchange. we have retail in focus. look what has been running the dow today, and that is walmart

up about 10% adding about 50 dow points on a day where the dow is up 417 points, folks. so we are seeing walmart. the story there at walmart is they had sales that grew at the fastest pace in over a decade. the e-commerce sales rose 40% for the full year. pretty amazing as walmart continues to compete in the e-commerce realm and continuing to expand with flipkart in india and here at home with walmart.com taking on in groceries and also in apparel and everything else. now here is a look at some of the others. look at jcpenney which is a little bit different than rest of retailers which came out with great quarters. we heard from home depot with beautiful numbers. jcpenney down 25%. so a big loss. disappointing forecast, down 25%, hits a new low. we'll watch for nordstrom today after the bell. that will be another one. neil as i toss it back to you, the big picture on retail, much

of our economy is that the economy is doing better. consumer confidence is there. people are making more money as employment is obviously at these low levels and that latest retail sales number really showed the strength and growth of the consumer is healthy. we'll watch for the fed to raise rates in september. neil: that is the other thing, right? nicole, thank you, very, very much. let's take a look as nicole is reporting, wild run-up, depends on the day, like the weather, whatever you want you can get it at a given moment. the given moment is confluence of constructive events including what is happening on the retail front, including jcpenney notwithstanding what is happening on the trade front. the possibility chinese officials come here, start talking turkey, not turkey the country. getting what something done on trade. turkey no progress, that is another disaster but markets don't seem to care on that. we have rebecca heinrichs.

always good, rebecca, having you. what do you make of, always depends on the day, the time, the catalyst for markets, optimism, what is said and done the fundamentals for this market and this economy are sound. people are shopping. when they're not busy buying stuff generally you have problems. we dent have problems there. >> you said it best that there is a confluence of things happening and it is complex. certainly consumer confidence is high. what i've been watching with tariffs going back and forth, potential trade war brewing, i would want the president to address the american people and let them know that consumers are going to feel the pinch at some point. he has yet to really do that they don't seem to be feeling that, that the point consumers dreading going to anticipate in the markets. it is encouraging the chinese will resume talks. it will not be at cabinet level,

maybe at the lower level, maybe that will get things going better. but what the chinese, the chinese don't see things, they don't liking for mutual benefit dealing with the united states. they look for a zero-sum game. that is always the concern when you're dealing with the chinese. neil: depends on the drama and event, and with the administration getting off omarosa, i believe you have a point, if you will indulge me, focus instead on punishing those saying all the things about the president on security related issues. john brennan gets his security clearance yanked. it was not more of a market-moving event. i wonder what that could mean. what do you think? >> i don't know if there is a connection there. i mean i think that, i've been watching the security clearance sort of controversy, a month ago when the administration announced they would be reviewing some of these particular individuals. seems to me they're taking each of these individuals on a

case-by-case basis. in the case of john brennan, this is a guy, you know, first amendment, you've got to the right to express yourself, he is a private citizen and you can do that but he was former cia director. he called the president treasonous. when the president of the united states loses confidence in your ability to have judgment and especially when you're saying things like that, the president of the united states has to trust that we can trust you with our national secrets. if you lose trust in certain individual you're certainly not entitled to keep your security clearance. neil: you know what interests mow more about the whole dust-up over brennan was the fact, that lo and behold, editorial in today's "new york times" which he says unequivocally, there was collusion going on. he has hinted, charged, stammered over that in the past. not playing politics with this, to be so matter of fact about it, fuels this argument he might be taking advantage of stuff he was privy to or he is just out

to get the president. the president was perfectly in his right to strip the security away. >> it is hard to tell. that is part of a problem like him still retaining the secure clearance, he is making accusations, hard for the person reading newspaper, listening to him on tv, are you speaking as somebody who knows because you've seen intelligence or are you speculating like the rest of us based on bits and piecings what we're hearing coming out of the congressional investigation. because those lines are blurred, it makes sense he shouldn't abuse the clout and reputation he has as somebody in the know if he doesn't really know. clearly it is bothering the president. it is doing some great harm to some of his agenda trying to do, having the constant russia investigation go on. in this case brennan is not helping the situation, so it cost him his clearance. >> i wonder if other proverbial shoes drop? >> maybe. i don't, i don't like the idea of having clearances pulled

because of just the heated political environment that we're in, but you do have an enormous responsibility. if you have been cleared to have a security clearance, that means that you have demonstrated great judgment comparatively and sound judgment, great trust, patriotism, all of these things and non-partisanship. doesn't mean you don't have your own personal positions on different things that you're putting country before partisanship. when you're out there constantly using the hyper -- hyperbole, partisan rhetoric, i'm looking at clapper, clapper lied to congress. brennan lied to the public. there are other things that would cause the president to mistrust them. neil: i always learn a lot. it takes a lot for me to learn something. rebecca, good seeing you again. thank you very much. >> thank you. neil: neil. neil: we're getting details on the upcoming talks with the chinese at least when it will happen, august 22nd,

23rd. the day they kick off in washington. vice finance minister, there may be a delegation of others. the fact that they are meeting, the fact that they are talking the fact that the first time since the spring are batting things around has buyers buying. more after this. you wouldn't accept an incomplete job

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neil: all right. be there or be square. we're learning as the markets are up 400 points that china trade meeting where their vice minister of finance, i was right guessing that, the other stuff i don't know, they will be here talking trade next wednesday and thursday in washington but there is another trade group coming together, that could come together even before that powwow, it involves mexico and involves nafta and does not involve canada. ed lawrence with the details on all that. hey, ed. reporter: it has been exactly

one year ago today that the revised nafta renegotiations started. we're very close to a deal with mexico, not talking with canada at the moment here. this morning the u.s. trade representative robert lighthizer arrived at the same time as the mexican delegation. the mexican economy minister coming in, he expects a lot of work to be done today, something their secretary of foreign affairs echoed at this point. for a second time this week, white house advisor jared kushner also joined the talks. he did not stop and do an interview though. >> how are they going? >> well. reporter: my sources are saying that the administration wants to finish the deal with the mexicans. at least the mexican part of nafta. it will be presented to the canadians to sign on or not. albright stone bridge group economist antonio mema, who worked on the original deal back in the '90s.

he says the deal must be upgraded but without a sunset clause. >> sunset clause you don't know if after five years nafta will be enforced. if you're an investor in the hydrocarbon sector or infrastructure, you have a lot of sum capital and long-term returns. if you can not plan for more than five years, chances are you won't make that investment. reporter: and is up set clause is one of those sticking points they're trying to work out. they're hoping to get to it this week. the mexican delegation says they're very close, almost finished with the rules of origin on a car. the mexican delegation believes they can work around a percentage after car made by a worker making $16 an hour. that was a sticking point. there will be one session this afternoon and also meet again tomorrow. they are working very fast to get this deal done about it end of august. neil. neil: edward lawrence, thank you very much. edward in washington. in new york it was big news the

governor there who we're told is entertaining a run for president. he might have have had a banana peel moment. was this it? >> we'll not make america great again. it was never that great. [shouting] we have not reached greatness. we will reach greatness when every american is fully engaged. we will reach greatness when discrimination and stereotyping against women, 51% of our population is gone. neil: all right. we wanted to play that entire bite here, not take it out of context. nevertheless the impact of that is reverberating. the governor came out tweeting a follow-up to that, what you say would be great again would not be great at all. we will not go back to discrimination, segregation, section i, isolationism, racism or the kkk.

that is what he was trying to get that. that was not a great period of time for all of that stuff. how is it going down here? republican city council minority whip, borelli and antjuan seawright. his sentiments, have they helped or hurt his presidential prospects? >> let me say a few things. america is great, that we are good. the fact that joe and i can sit here, walk out of here, love and hug each other that is what makes america greats. neil: i negative seen that. >> context matters and words matter true, what the governor was trying to say america is still young on journey toward a perfect union. we're far from perfect. we have a long way to go. things are not as good as he can be. neil: why didn't he just say that? >> i think he did clean it up yesterday. but you know, it is a shiny object. the right and media will run

with it -- neil: cynthia nixon running for democratic nomination. she will run with it. >> this is shiny object, i get it. i'm so glad he and his office cleaned it up put it in context. neil: it was honest mistake. >> it was honest mistake. >> he needs a cuomo is whisperer. in political gaffs, there is insulting the local baseball team and the united states. neil: he said he didn't mean that part, the america never great. i got impression that was not part of the speech. >> shows you what he is trying to do. you mentioned cynthia nixon dinged him on this, dinged him so perfectly. he is a guy who doesn't know what a progressive sounds like. he thinks by being opposite all things trump, if trump is making america great, we'll say america is not so great, hopefully some progressives knock over. it is insulting to think about how even andrew cuomo was in one generation had a governor, came as poor immigrants, one generation their son became a

governor. grandchildren another governor, famous celebrity journalist he is, he is embodiment what makes america growth. >> joe, but in context, in context matters. for the same people who are doing toe touches and victory laps about trump saying make america great again, if we're not already great, can you tell me the difference? >> there is a ocean of difference between saying make america great again and -- >> when did the drop-off happen when we were not great? >> about the decline, palatable decline under a past president versus saying we can make america great because it was never that great. there is huge difference there. that to me reeks of obama moment. neil: let me ask you this, i was trying to look into this say, all right, no one could stumble upon something so stupid unless, unless, and i give the governor, he is a very smart guy, unless it was all calculated. unless he figures a lot of my core constituents, a lot of them are not really enthralled with

what is going on, still feeling disenfranchised. barack obama was extremely effective to reaching out to those beyond the traditional white base of voters and cobbled together two back-to-back victory. >> that is why i said earlier, neil, and joe, is the fact that if we're honest with ourselves, the american experiment for some doesn't look like what it looks like for others. the truth of the matter we have a long ways to go to journey on more perfect union. neil: pardon me. it is choking me up. might have been by design? hey, you're right. we missed out on this great america. >> i honestly think he did not take the time to slow down and clarify what he meant in the speech and again shiny object moment. joe and his crew decided to take off and run down the field with it. neil: it wasn't just joe. >> i was throwing daggers in there, it wasn't just me. you're absolutely right this is by design although the words didn't come out the way he wanted it. the democratic party is in a

strange position right now. they have could convince the world the sky is yellow. things are going pretty well under this president. they have to make the effective case america is not that great. america is not doing well. we could do better. it is just very difficult to do. >> joe, ask people in flint, michigan, how great america is when they do not have clean running water. ask farmers hurt to death by the president's tariffs. ask americans who look like me on the verge ever not being able to exercise their right to vote because this president believes in voter suppression tactics. i can go on and on things that do not make america great. >> we can go on and -- >> ask workers in south atlanta laid off because of these tariffs. neil: guys, you express ad lot of opinions there all that stuff, i don't think, it might be a a be bit after leap donald trump is for voter suppression. >> pass laws and legislation limit the right to vote to

expand those opportunities that classic voter suppression. neil: should have talked to antwan to get arguments out there. >> needs to take more of antwan's advice, pay him double, andrew cuomo. neil: thank you all, very much. i'm beginning to think, guys, i don't run with it, i could be very law, this was more calculated than we know. who knows. >> only cuomo and god would know the answer to that question. neil: we don't know. we do not know, do we? courtesy of jack dorsey making some news, he is rethinking the core of his platform, that would include for conservatives and liberals allowed to exchange information or not. both side say what do you mean by that? where are you going by that? this cabinet thing, is it still going on right now? it is over. it went on a long, long time. we'll go through it. watch it very closely. we're here to serve you america. more after this. with drivewise.

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neil: a lot of people still trying to figure out what is going on with twitter right now, ceo jack dorsey is quote-unquote, experimenting with features that change the core of how twitter works. i have no idea what this means. i bet shanna glenser does. tech analyst extraordinaire. what is he up to here? >> what he is trying to do, what he is saying some of the

policies he put in place to discourage bad behavior are not having the desired effect. he is trying to change the like button on twitter or the number of, showing prominently the number of followers someone has. so getting to the core of what makes twitter work and having it show and basically show you different information you might see right now because of it. neil: he is also battling whether he is fair. in other words whether he is fair to both sides and you can never win in that argument sometimes but how is that going? >> two weeks ago, there was, you know, there were some issues with their algorithm, it seemed affecting more on one side than the other. so this is a move he trying to make so that the policies, these kind of subjective policies or policies being enforced subjectively aren't what he is relying on to be seen as fair. as the product work as different way perhaps that will help in the fairness battle or

perception. neil: all right. thank you very much. i didn't mean to cut it short. we're getting tape from the white house, meeting with the cabinet. let's dip into this. >> lowest levels in recorded history and we're creating manufacturing jobs at the fastest pace in memory. nobody has any numbers where it is anywhere close what we're doing. remember during the campaign everybody said it was impossible to create-ing jobs. so the past administration, i won't say who, but i think you know, made the statement we'll not have any manufacturing jobs and we're doing them by the hundreds much thousands. companies are moving back into the united states. that means jobs, that means production, that means taxes and, really things are great. larry kudlow, a man i respected for many years, that beautiful voice, i heard it some years, talking about financial and he

came into my office and made a statement that was something that was very beautiful and i would like to maybe ask him to say a little bit what he told me last night. larry? >> yes, sir. thank you. appreciate it. hi, everybody. so look, very simple thought. most good things are but i'm looking at the media, watching various tv and other outlets talk about stuff that baffles me, that is outside of my lane. here is the key point i made to the president yesterday, i will make it to you today, i hope we all keep making it, by far, by far, the single biggest event, be it political or otherwise, this year is an economic boom

that most people thought would be impossible to generate. not a rise, not a blip, a genuine economic boom, and everybody wrote us off, going back to the campaign. as it was put into place last year, now evolved to this year and the numbers are coming in, they just keep coming in which is one of the reasons i tried to get ahold of the president on this we have 3.1% gdp in the first half of the year. 4.1 in the second quarter. the atlanta fed is predicting 4.3 in the third quarter. i think it's a very realistic estimate. here's the point. anybody who does political forecasting using the economy always focuses on a number, hang with me, real disposable income.

just think of it after-tax pay, take-home pay ronald reagan used to say. so that measure is growing at 3.1% the last 12 months. when we came into office, it was less than 1% on a 12-month basis. it has jumped. so people say, only a few are benefiting, not true. this is a measure of the entire economy. everyone's wages and salaries adjusted for taxes, adjusted for inflation is growing at 3%. that's a tremendous number. and there are no signs it is abating. confidence, confidence numbers, large businesses, small businesses, and consumer confidence numbers are at or near record highs and from the latest surveys are continuing to rise. there is no let-up in the increase and confidence is

everything. confidence is everything. i can run down the litany, i will not take up your time. i'm just saying really wonderful part of the story, for me, i get off on this stuff i understand that, very important for the country, americans, workforce, retail sales, industrial production, low inflation, a rock-steady dollar, trillions of dollars of capital from all over the world are coming, is coming into the united states because our economy, our investors, our workforce, are crushing it right now, we are crushing it. and people say this is not sustainable, it is a one quarter blip it is just nonsense. any business economist worth his or her salt will look at these trends we're going for a while. we have low inventories, we have rising business investment, productivity is showing, the first lift in years. the last number was 1.3% for the year. we haven't seen that in a long time. businesses are investing. capital goods is booming.

it is a complete turn around. like if you give americans some freedom to run, they will run. all right? and president's policy, low tax rates, roll back regulations, open up energy, trade reforms to help the american workforce and the employers, across the board we're not punishing success. we're rewarding success. we're not against businesses. we're for businesses. we have a president who in my words, just telling folks to take a rip at the ball and they're doing it and again people may disagree with me but i'm saying, we are just in the early stages. we're in the early innings here. we never had capital boom, we're now starting. we've never seen income numbers like this again, after afterter, after inflation.

normal people run the economy, entrepreneurs, that is the beauty. when you change that switch as president trump changed that switch, that a handful of us thought that might happen but i would not say it is widespread. i will end sir, i appreciate the time very much, the single biggest is an economic boom that is durable and lasting and that most people thought was impossible and they were wrong. and you were right, sir. >> thank you very much. i should end on that. it's always a mistake. i ask you one question. china. as you know, china was for many years, as long as anybody up here including me can remember, china was on a one-way road to becoming the biggest economy and all of that. we were just going to be left behind. i would like you to say how are

we doing versus china, and how is china doing. we want them to do well, frankly. president xi is a friend of mine. i want them to do well. but how are we doing versus china, how is china doing? >> numbers on china spanning a good six months now, nine months, their economy is just heading south. retail sales, business investment is collapsing in china, according to the numbers. industrial production has fallen and now is plateauing at a low level. people are selling the currency. there may be some manipulation but mostly i think investors are moving out of china because they don't like the economy and are coming to the usa because they like our economy. i'm not a china expert, although i am boning up as fast as i can. i would say right now their

economy looks terrible. >> okay. thank you very much. >> thank you, sir. >> i would like to ask ryan zinke, secretary who i actually watched this morning, he was giving a rundown on the horrible fires that are taking place mostly in california, and i thought what he said was so true and actually rather incredible. people don't hear it, they don't hear it like it is. there are things you can do about those fires before they start, and you wouldn't have nearly the damage and the problems. we are spending a fortune in california because of poor maintenance and because frankly, they are sending a lot of water out to the pacific to protect the smelt and by the way, it's not working. the smelt is not doing well. but we are sending millions and millions of gallons right out into the pacific ocean. beautiful, clean water coming up from the north or coming down from the north, and i thought ryan was great this morning so before we start on a couple of

other things we will be discussing today, including very importantly, schools and education, i would ask you to give maybe a little recap of what you said this morning on television. >> thank you, mr. president. first, our firefighters, 30,000 of them, are doing spectacular things. they have had six deaths related and we forget that firefighters, while they are on the front lines, their homes and families are in jeopardy, and our hearts and prayers need to be with our front line firefighters that are out there every day. it is a matter of gross mismanagement. there is no question. the density of our forest is historical. if you don't believe me, believe your own eyes. go out and take a look at our forest. take a drive out there and look at the dead and dying timber. it's been in gross mismanagement for decades but we are burning our forests, destroying our habitat and destroying our

communities and neighborhoods by these catastrophic fires of 200,000, 300,000 acres. thus far, there's 5.7 million acres of our public lands that have been destroyed at a cost of about $3 billion this fiscal year. americans deserve to go out and recreate rather than evacuate, so we went out, secretary purdue and i went out to california. we are committed to reestablishing sound science, best practices for the greatest good for all of us. but sound, active management, mr. president, is the path that you have laid, it's clear. this is unacceptable that year after year, we are watching our forests burn, our habitat destroyed and our communities devastated, and it is absolutely preventible, and public lands are for everybody to enjoy and not just held hostage by these special interest groups. thank you, mr. president.

>> ryan was saying it's not a global warming thing. it's a management situation. and one of the elements that he talked about was the fact that we have fallen trees and instead of removing those fallen trees, which get to be extremely combustible, instead of removing them, gently removing them, beautifully removing them, we leave them to burn and actually, in many cases, catch fire much easier than a healthy tree, a healthy growing tree. could you just discuss that for a second? >> well, mr. president, we import lumber in this country, yet there are billions of board feet that are on the forest floor rotting. rotting. and whether you're a global warmist advocate or denier, it doesn't make a difference when you have rotting timber, when housing prices are going up, when a lot of americans are right at the border of affording a house, yet we are wasting billions of board feet for not

being able to bring them to a local lumber mill. it is unconscionable we would do that to our citizens. mr. president, we are actively engaged. we assigned secretary purdue and i, we went out to california, we are joined at the hip to make sure we actively manage our forests, remove the dead and dying timber, replant diversity of species and on the salvage operations, 5.7 million acres, a lot of that can be salvaged if we get to it in the first year. we are going to do it, mr. president. >> just to add, just to conclude, especially when canada is charging us a lot of money to bring their timber down into our country, so ridiculous. here we have it. we're not even talking about cutting down trees. which in certain areas, we can't do. we are talking about lying on the floor, creating a tremendous hazard and a tremendous fire hazard, and death trap.

so i thought they were great points. thank you very much, ryan. appreciate it. we are also working to reduce violent crime and to help our great law enforcement, including the very brave men and women of i.c.e. who have been absolutely abused. they are tremendous people. they are brave, they are strong, they are tough and they're good. they're good people. you think you are going to send just regular people in to take care of ms-13 and these gangs? not going to happen. i just want to thank i.c.e. and everybody in law enforcement for the incredible job they've done and are doing. our families prepare and they are in the process of preparing for the new school year. my administration is working closely with state and local authorities to protect our schools and to protect our children. our hearts continue to grieve for the victims of the horrific shootings at marjory stoneman douglas high school in parkland, florida, that we all know too

well about, what they went through. incredible people. and santa fe high school in texas, same thing. in march i established a federal commission on school safety to address the tragedy of violence in our classrooms. since that time, the commission has held nearly a dozen public meetings and listening sessions with educators, administrators, law enforcement, state and local leaders, survivors and families general. we have signed two critical forms and reforms into law. one is stop school violence act. it's a very important thing. people said we probably wouldn't be able to get it through. we got it through. it provides grants to schools to approve safety and the fix niks act which strengthens gun

safety. nobody reported about it because it was probably too good to report about. it strengthens background checks for firearm purposes. today education secretary betsy devos and others and various commission leaders will provide an update on their work, we will have a lot of people in this room involved, even people that aren't involved that much with education but they are very smart people sitting around this wonderful desk or table. secretary nielsen, sessions, lot of other people are joining, lot of other people asked if they could join, ben carson is one. lo lot of people asked me if they could join. they consider the schools to be so important in education and now so important in safety. we want to harden our schools against attack, improving communications between law enforcement, school officials, mental health professionals and counselors, training school

personnel so they better protect our students, including allowing qualified personnel to be armed. as you know, in florida, they went in with a bill that didn't have that and they came out with a bill where the legislature wanted it, so that's up to the community, not up to the federal government. that's up to the community. improving our early warning system to make sure schools, families and law enforcement can identify red flags and respond quickly. we want a very rapid response. some of the response has been incredible and some of the response has not been good, obviously. you saw that very, very well. frankly, you reported it very well. we want to strengthen our mental health laws and procedures. so pooshtimportant, i think it' probably the most underrated element of what we're doing but it might be the most important. mental health. the laws and procedures. keeping guns, we want to keep them out of the hands of those who pose a threat to themselves and to more importantly,

frankly, others. we want to foster a culture that celebrates life and forms real and meaningful human connections so that we can see not only in terms of education, but we can see if something's going wrong with somebody, we can do something about it. in florida, there were a lot of red flags. i guess they said there were 28 to 38 red flags, where everybody knew this was a sick person, and nobody did anything about it. that's what you end up with. so i look forward to today's discussion and we will make our schools not only very safe. i think they're already safe. we will have the finest school system anywhere. so want to thank you, thank you all for being here. betsy, maybe we could start with you and we will go over your little section, then we will hear from attorney general sessions and a couple of others. if you would like, you can stay or if you would like, you can also leave.

don't forget, freedom of the press. >> thank you, mr. president. mr. president, after the tragedy in parkland, florida, you took swift action. no parent should fear for their child's life when they go to school, and no student, no teacher should ever have to worry about their safety at school. you convened students, families and educators to have an honest dialogue. you asked congress to pass the stop school violence act. you called governors, states and local leaders to action. you asked me to travel to parkland to visit with students and teachers and mr. president, you traveled to texas in may to meet with parents, families and survivors of the shooting of the santa fe high school. we suffered too many heartbreaking reminders that our nation must come together to address the underlying issues that foster a culture of violence. you rightly insisted from day one that we wouldn't keep our children safe by looking only at any one particular piece of the much larger problem.

when you asked me to chair the federal commission on school safety, you directed us to explore a range of issues, including mental health treatment, social and emotional learning, the difference that armed school resource officers make on a daily basis, the impact of violent entertainment on the development of young children, the gaps or failures among local officials when they are aware of a troubled minor and fail to act, along with a number of other issues. we set out to gain input from students, parents, teachers, school safety personnel, administrators, law enforcement officials, state and local leaders, mental health professionals, school counselors, anyone and everyone who is focused on identifying and elevating solutions. i invite my colleagues to look at the slides included in your books which are small insight into the commission's information-gathering process. i was very pleased to work with attorney general sessions, secretary azar and secretary nielsen to do exactly that, to learn from those closest to

students. our aim isn't to impose a one-sided fits-all solution for everyone, everywhere. the primary responsibility for the physical security of schools and the safety of their students naturally rests with state and local communities. it's clear from our work thus far that many schools and communities take this responsibility very seriously. many have employed solutions that uniquely meet their needs and requirements. it's also clear that keeping kids safe at school is not a one-time check the box exercise. a safety plan you implement once and call it good. it requires a posture of perpetual preparedness. what's necessary and right for a school is very different for what's necessary and right for a school in chicago. let me briefly tell you about the meetings the department of education has specifically led. in may i met with survivors and family members affected by past shootings, individuals from columbine, virginia tech, sandy

hook and also parkland. in addition, we have heard from authors of reports written in the aftermath of those shootings. later in may, we visited an elementary school in maryland. the district uses a flexible framework of positive behavior interventions and support, modeling one way schools can help create a strong school climate. this approach brings to mind the first lady's strong leadership on wellbeing and social and emotional learning through her be best initiative. here at the white house in june we met to come up with threads schools can use to combat negative media. a key takeaway, culture and climate really matters in schools. i was struck and impressed by the obvious passion of a superintendent from iowa. it takes strong leadership to create a positive culture and that flows from empowered educators who know their

students well. each of my fellow commissioners have led other field and commission meetings during the course of our work, so now i would like to ask secretary azar to talk about the work of hhs. >> thank you, betsy. mr. president, thank you for the opportunity to be on the school safety commission and i would like to thank secretary devos for her tremendous, tireless leadership of the commission and fellow commissioners, the attorney general and secretary nielsen. we at hhs focused on a really critical role of mental health, mental health is so central to these issues of school violence and safety. that's been our area of focus. i think it's very important to remember, though, that we not stigmatize those with mental illness. the most crimes of violence are not committed by those with serious mental illness. those with serious mental illness are actually more likely than others to be victims of crimes of violence, and those who are receiving treatment for serious mental illness are no

greater threat than any other individual from committing a crime of violence. it's just important to remember as we talk about these important issues. there are really three key mental health issues we have identified from our work on the commission. access, privacy and civil commitment. access. how do we expand access to mental health services overall, for children and others. second, how do we integrate that mental health service into our schools, delivering that service where the kids feel most comfortable and where they can get best and how the stigma can be the least. how do we look at the appropriate use of different psycho tropic medicines, appropriate and inappropriate use, study that carefully. our privacy rules in the federal government, where do the privacy rules get in the way of kids getting care, where do they get in the way of teachers and administrators reporting children who need help, where do they get in the way of family members getting the care that their other family members need.

then finally, understanding how civil commitment may help address serious mental illness. we studied these issues in our meetings that we hosted here in washington as well as an excellent field visit we took to a middle school in wisconsin. on access, we learned how integrating services in the schools is ideal and really decreased stigma and meet the kids where they are. we learned that one in five youth suffer from some form of mental disorder, but half of them are not getting treatment for it. we learned that school-based care leads to improved grades, better attendance, health and mental health care and outcomes. we learned that medications are overutilized and underutilized depending on the circumstance, and we learned that we need much more research on these medications and their use in a youth population. we learned how misunderstood the rules are and how often overcouns overcounseled and

overinterpreted the rules are. we learned of the barriers to families getting care for their kids and family members treatment that they need. we also see how we saw very importantly how the issue comes up in the issue of opioids and substance abuse disorder, how it's preventing families members from getting other family members treatment. that will be in the report, better training as well as changes to our rules to help schools, families and health care providers. we got to see great work in local communities. this middle school we went to at adams county in wisconsin was just tremendous. integrated mental health services in the schools. they train their teachers to recognize mental health issues and they just built a supportive, happy environment that any one of us could be delighted to send our children into, in an area that frankly suffers from tremendous poverty, yet they still were able to deliver that. this is done through funding by hhs, the substance abuse mental health services agency in close partnership with the governor of the state of wisconsin.

it showed that it can be done. it can be solved. 75% of serious mental illness starts by the age of 25, so got to get these kids in middle school, in senior high and in college. we look forward to highlighting areas that we can improve our delivery through the work of the commission and our report. we are just grateful to the president for his leadership to help our children have a safe, healthy, happy school environment. thank you, sir. >> thank you very much. i appreciate it. i do want you to bring up something that you and i have been working on very hard and that's prescription drug prices. so as everybody knows, pfizer last week raised substantially the price of their drugs and i wasn't happy about it. novartis also and others. we made some phone calls and they brought it back down to what the price was. i think you will see a reduction in drug price. that's the first time that's ever happened, i believe ever. but i was not happy about it, and it wasn't right. we are working on very much

getting rid of the middleman. could you talk about how we are reducing drug prices and how it's starting to really take effect, and maybe talk about the fact that we appreciate very much what pfizer and novartis and the others did. we really do. we appreciate it. >> that's correct. so just for the media and others, i have said that i never once had a discussion with president trump where we have not discussed drug pricing, and we continue batting 1,000 here today. he is adamant about bringing drug prices down, and it has come through the hundred days of work we have gone through since the president released his blueprint on reducing drug prices and putting american patients first. as the president said, there have been some really significant moves because the drug companies and others in the system see the writing on the wall. the system is going to change, prices will come down, and they are skating to where the puck is going to be. we have had 15 companies make significant announcements around drug pricing. pfizer reversed its price

increases. merck will be decreasing prices. we have had several other companies who told regulators they were going to increase prices and have now walked back and said they will not follow through on those increases. we have seen over a dozen companies say they will have no further price increases for the rest of the year. we will be coming out with a report on the hundred day progress we have made so far next week, and that will have even more information for you about the historic changes we are already experiencing in the drug pricing market. we have done some transformative things under the president's leadership already. for the first time in history, the president is introducing a regime to import drugs from other developed countries that do not violate intellectual property rights in the united states. these are products that are not under patent protection but where the company, the single company, holds that drug in the u.s. and has increased price. we will let competition come in to ensure patient access and competition here in the united states for the first time in history. this president has done that. in addition, for the first time

in history, president trump is bringing negotiation and discounts to our medicare part b drug program. that is the drug program where doctors administer the drugs. for all of its history we simply pay sticker price for drugs, no discounting, no rebates, no control. for the first time ever, we are unleashing our medicare advantage plans to negotiate discounting on $12 billion of drugs and every penny we save is going to be money that the patients save, because we are mandating that over 50% of all savings be passed back to the patient from the work of these insurance companies negotiating against the drug companies. so everybody is seeing the changes coming. we had historic rates this last month, the highest level of generic drug approval ever in history. we are increasing competition. we are increasing the approval of new branded drugs, bringing new therapies to market. so it's not going to change overnight. this is a $400 billion segment of the economy.

we are not driving for any kind of cheap gimmicks or quick solutions. we are doing things the right way. we are structurally rebuilding this entire segment of the economy to lead to enduring lower prices that are sustainable and support innovation. >> thank you very much. as you know, the pharmaceutical industry has said for many years to have the most powerful lobby. the good news is i don't need their money so we are doing the right thing. frankly, i think the drug companies actually in the long run, i really believe this, i think they will benefit also. but the middleman is not going to be benefiting. somebody, some very rich people out there that do nothing make a lot of money. very rich people. i don't know who they are, i don't want to know who they are. but they don't like me too much right now, i would say. wouldn't you say? so congratulations. thank you. in terms of prescription drugs and drugs, nothing like this has ever happened before in our country. i will say that the democrats

heard about it, they are very happy about it, or so they tell me. i'm sure they won't tell you, but they can't believe what's happening. so -- because they want to see that, too. they want to see drug prices come down. nobody has ever seen where they raise the prices 10% and the following day, they announced they were just kidding but that's what happened. so thank you very much, secretary. fantastic job. you are doing a fantastic job. jeff? >> thank you. you directed how to reduce opioids by 30%. we believe that is achievable. we believe there's at least that much abuse in opioid prescriptions and d.e.a. just announced today reducing the number that lawfully can be produced. we have indicted 170 physicians who have been prescribing unlawfully people who are addicted to drugs. betsy devos has done a great job leading our commission. i have attended five of the

meetings. we have learned a great deal. she is going to lead us to have a report before deadline, in advance of it, and i think it will definitely help make schools safer. i would also say that in addition to those meetings, i met with some 18 law officers, many of whom, some at columbine, aurora and parkland, who were there when it happened. they believe that we need to do a better job of sharing information to identify the red flags that you mentioned earlier. the juvenile courts are totally secret. secrecy rules. schools have secrecy rules. medical professions have secrecy rules. we think we can do a better job of identifying children at risk, children who are suffering, children who may be at risk for suicide, if not violence, too, and then create an environment

where the teachers and administrators know what's lawful for them to share and not be sued for it. i do think we can make progress in that regard. you also asked us to fix the nicks system. we have legislate to help that. we are pressing that every day so more jurisdictions are coming into the system and reporting all their convictions. we need to continue to press mental health adjudication. those need to be in the system, too, to protect people who are mentally unstable from purchasing a gun, who are declared unfit. and we have got two different grant programs, $50 million and $25 million, that will help hire school resource officers who are trained and also to train teachers, professional

administrators to carry guns. just in addition attended a school in arkansas. they have been allowing their administrators to have guns for years. parents, teachers, people who graduated from the school all favored that, would not want to change it. it's just another example that we don't need to micromanage our schools on how they protect the safety of their children. >> thank you very much. i would also like to ask you to bring a major lawsuit against the drug companies on opioid. some states have done it but i would like a lawsuit to be brought against these companies that are really sending opioids at a level that it shouldn't be happening. so highly addictive. people go into the hospital with a broken arm, they come out a drug addict. they get the arm fixed but they are now a drug addict. i would like us to look at some of the litigation that's already been started with companies rather than just joining them, i would like to bring a federal

lawsuit against those companies. i would also like to have you take a look at the fentanyl that's coming out of china and mexico and whatever you can do from a legal standpoint, whether it's litigation, lawsuits, or people in companies but in china, you have some pretty big companies sending that garbage and killing our people. it's almost a form of warfare and i would like to do whatever you can do legally to stop it, from china and from mexico. and if you could look into that, i would appreciate it. >> we absolutely will. we are returning indictments now against distributors from china and we have identified certain companies that are moving drugs from china. fentanyl in particular. we have confronted china about it. secretary pompeo, you personally raised it with them. >> i have. >> we have not achieved as much advantage as we would like. most of it is going to mexico and then crossing the border, unlawfully, from mexico. we are going to work on that. you have made clear you want us

to sue and use legal process against drug companies that are abusing the law for some time now, how we have joined with the states and we are looking at various different legal avenues to go after abusive companies. >> good. good. i would be very, very firm on that. because what's happening with drugs in this country and throughout the world, but in our country, it's a disgrace and we can stop it. we can certainly make a big dent. thank you very much. >> we have never seen the depths we are seeing today. it's unprecedented in american history. >> right. thank you very much. secretary nielsen? >> i would like to add my voice to the other commission members. we have all been working hard and we thank you, sir, for your leadership. this is clearly an example where lives take on our ability to take action. i believe we will do just that. i look forward for us to be able to share that with you.

most of dhs is involved in this because we do so much on preparedness and working with state and local communities. we are bringing all of our best practices to bear to really tailor a solution and offer them up to the communities. as betsy devos said, there is not one size that fits all so we need to work individually with the communities and find what it is that they need. we are looking at training exercises, exercises as we all know play a very important part of a community's ability to be prepared. practice does not make perfect but it does make automatic and that muscle memory is the difference between saving a life and waiting to figure out what it is that you should do in the event of a disaster. we were going to have another meeting, i will be joined by my commissioners, to look at best practices, to look at active shooter. we are having some practitioners come. we do this school-based approach. secretary devos has a great slide of all the many, many states we have interacted with. we are trying to get that input from across the nation.

thank you for your leadership. i think you will be very pleased with what we are able to come up with working with our community. >> could you say something that despite the horrible immigration laws we have to live with, with catch and release and all of that horror show, it's a horror show, it's a disgrace, frankly, we will get it changed, but having a lot of problem with the other party, because they don't want to change for i guess political reasons. it can't be common sense. could you say how we are doing in terms of we are breaking records at the border. law enforcement records. could you maybe just give a little update on that? despite the horrible laws, we are doing very well. please. >> we are. in three different ways, in conjunction with our partners at the department of justice continually the headlines show we interdict more and more drugs at the border each month, and that is great. every time we have a new record, a couple weeks later, we surpass it with the amount of drugs we are able to interdict. they are raising a particular type of technology, not

intrusive inspection. we are also doing much more on interdicting border crossers, who cross illegally. you have seen the numbers in july go down substantially from the time before. what's still difficult, though, are the populations that we are not able to prosecute given a variety of current court cases. so we continue to work with congress. there has to be consequences. nothing changes throughout the legal system, this is true in any part of the world, if there's no consequences for breaking the law, unfortunately people will continue to do so. we are working with countries to the south of us to help them understand other options for migration, to protect their communities at the beginning of that journey so they don't pay smugglers. there's a whole variety of cabinet members who are working on this. we are having a lot of success against that type of crime and criminal as well. it's good news. we are doing everything we can within executive power but we have to get congress to act. >> setting records at the

borders with terrible laws. so we had the right laws, we could really be doing something special. and there are consequences. when people come up, i will say it, when people come up, it's very tough. it's very tough for them. it's very sad. but we can't handle it, the country can't handle it. we are one country. we cannot handle what's happening. nobody could. and we don't want to have to be able to handle it, frankly. it's not fair. it's not fair to our taxpayers, to our workers, so we are very, very tough at the border. we are setting records despite horrible, horrible immigration laws that the democrats do not want to fix, and i think that's going to hurt them very badly at the polls come november. that's my opinion. so i want to thank you very much. i would like to ask, mike, if you could talk a little about north korea, where we are. >> yes, sir, mr. president. so now many months with no additional missile tests, many months with no additional nuclear testing from the north koreans. we are continuing to engage in

conversation with them about a path forward to a brighter future for the north koreans. we have 55 sets of remains have been returned. the department of justice working on the next work that will hopefully lead to the return of not dozens, but hundreds of remains of our soldiers that were killed in north korea. so we are continuing to make progress and hoping that we can make a big step here before too long. >> the relationship seems very good. i think it's probably hurt a little bit by china, because china isn't happy with what i'm doing on trade, but we have no other choice as a country. and they understand that. i think we are probably being hurt a little bit with respect to north korea having to do with china. but really, we have no choice on that. we had to do something. the money that was being drained out of our country and going to china, we rebuilt china. we rebuilt. $500 billion a year, for years and years and years. we had to do something about that. they understand that.

in fact, i think they are in a state of shock that they have been able to get away with it for so long, so many decades. so we just have to do something and we did it. could i ask secretary mnuchin, turkey, they have not proven to be a good friend. they have a great christian pastor there, he's a very innocent man. i would like to know unrelated to the pastor, i just think it's a terrible thing they are holding him. we got somebody after him. he needed help getting somebody out of some place, they came out, they want to hold our wonderful pastor, not fair. not right. but unrelated to that, how are you doing with sanctions on turkey and as you know, we doubled up the tariffs on steel and aluminum. aluminum will happen very shortly. how are you doing with sanctions? >> sir, we are doing well. as you know, we are very clear with our counterparts there, secretary pompeo and myself, on

the release of the pastor. we have put sanctions on several of their cabinet members, working with you we have more that we are planning to do if they don't release him quickly. i would also just comment on the rollout of the iran nuclear sanctions. it's going extremely well. we are working closely with secretary pompeo. strongest sanctions in preventing things there. and continue to be very focused on implementing the tax cuts and jobs act. just rolled out the pass-through regs. lowest rates we'll have for small business in pass-throughs since the 1930s and a big part of what larry kudlow talked about in terms of the economic growth. >> good. thank you. great job. thank you very much. secretary welke, we got choice pass for our vets so the vets don't have to wait in line for six weeks and end up with a simple condition that's terminal because they can't get to a doctor. i'm very proud of choice. we are proud of a lot of other things we've done for the vets,

but could you give us a little, how are you doing with choice? you have had it for a couple of months. how is that moving along? >> it's moving along well, but i would start with something else. we are experiencing, with the economic boom, lowering rates of vets in choice. probably the best trend we have seen in many, many years. >> that's great. that's great. >> that is a boon for our warriors across the country. in terms of the mission act, director mulvaney and i will be talking about it tomorrow. we've had the opportunity to do what has not been done in many years, and that is widen the aperture when it comes to the health choices available to veterans across the country. no longer in states like montana, will they have to travel 400 or 500 miles round trip. they can do this at home. we are making advances with

mission in the area of telehealth, which is a way to impact the mental health issues that many of our veterans face. for the first time, we have comprehensive and strategic way forward in making the lives of our veterans better and it's a wonderful thing. thank you very much. >> congratulations. >> thanks. >> congratulations. you are going to be there for a long time and you will do a fantastic job. it's the first time a secretary has really had a chance to do a fantastic job because without choice, i think it would have been impossible. so we have choice now. our vets are taken care of and just make sure they go see the right doctor, right? when they need it. sometimes they won't need it, because you have plenty of great doctors at the v.a. if i could ask secretary acosta a little about your association, health care plan, which has been now completed and is in service.

how are you doing with it? >> thank you, mr. president. just in the past week, there were newspaper articles, a number throughout the country have reported they have started these plans. they are in the process of offering it to their small businesses. you are seeing chambers in nevada, in texas. we are talking to some in iowa, up in the minnesota area as well. associations here in washington that represent businesses across the country are looking at them. just today, at the department is an association representing members of the gig economy looking to start these up. so for a rule that is just weeks old, we are already seeing implementation and we are seeing quite a bit of excitement. u.s. chamber had a call with the member chambers of congress, and initially they weren't going to do the call because it's august and things are very quiet, but they decided to do the call anyhow. and they had a near record

number of local chambers call in on to the call to learn how they can go about doing this. so there's quite a bit of energy and excitement. >> that's good news. i appreciate that. also, secretary, you are moving very nicely in your health care plan, too. one of the big things is the individual mandate is gone. we got rid of that. that was from obamacare. that was by far the most unpopular thing in obamacare. we actually got rid of obamacare except for one vote, but we essentially, so we are doing it piecemeal. it's going to be gone pretty soon. fantastic job. i heard great things about the health care plan and a lot of people are signing up. lot of associations are signing up far ahead of what we even projected. >> that's correct. yes. >> maybe i could just, i will finish off with secretary purdue. the farmers. we love the farmers. you know, our farmers are brave and they are great patriots. as you know, china sort of

attacked our farmers by trying not to buy from our farmers. they know the farmers like trump and i like them. and they are, i hear, despite everything, they are starting to really do well. they got out there like they are, they are incredible patriots but they are incredible entrepreneurs and they are selling the corn and they are selling the soybean and they are selling everything at levels that are pretty good levels. you know, our farmers have been hurt for 15 and 20 years. lot of bad things were happening. i talk about soybeans where, prior to my election, if you go five years back, soybean prices were cut by 50%. so this was happening long before us. markets are closed, canada charges us for dairy products, 275% tariffs of 275% which makes it ridiculous and impossible. but we are taking care of that situation pretty easily.

but i would like to just ask how are the farmers doing? i'm hearing it's starting to really pick up. >> they embody the american values and spirit of entrepreneurship, risk taking, hard work and those american values. we talked about it before. you called them patriots, and they are. obviously there are some price constraints right now but they believe what you are doing in china, as you tried to indicate to them, will lead to a better and brighter future when we get these trade relationships reestablished and we believe that will be soon. i applaud what the ambassador is doing, conversations we are having on various fronts, and we think we have the attention and leverage of the international community regarding the abuse that american farmers have taken in many places, both tariffs and non-tariff measures, in eu, china and many other places. we think these will be rectified very soon. >> the word abuse is a good word

because this country was abused by other countries, both friend and foe. you know, our allies frankly did better than many of our enemies when it came to trade. a terrible thing happened for many years, and we are changing that around. in fact, what i will do, i will speak to one more because i would like to have bob give us an update quickly on where we are with nafta and the various trade deals. i can say this. we are doing very well. i'm in no rush. we want to make the right deal. nafta has been a disaster for our country. mexico and canada were, if you think about making or you think about deficits, we had a deficit of $135 billion a year on nafta. you look at new england, you look at different places where factories are still empty. they still haven't recovered. but now companies are moving back. so we are either going to do a good nafta, a fair nafta for us, or we aren't doing nafta at all.

where are we? >> first of all, mr. president, i would just underline what you say. we have an $800 million trade deficit. it is not sustainable over a long period of time. i appreciate the opportunity to go out and negotiate these deals one at a time. in terms of nafta, right now we are meeting with the mexicans literally as we sit here, and i'm hopeful that in the next several days, we will have a breakthrough. there are still some difficulties to work on, as there always are at the end. i know -- >> by the way, if we don't, that's okay. if you don't have a breakthrough as you call it, don't do the deal. because it's a lousy situation for the united states. we have much better alternatives than that. you understand. >> yes. >> so if you can't make the right deal, don't make it, all right? you know that. i only tell him that every day. >> yes, sir. i will attest to the fact he tells me that every day.

but i think in this particular case, we will get a good agreement. i think there's a possibility, im hopeful with mexico that once we get mexico, canada will come along. i feel reasonably good about that. as you say, there are still some things that have to go through. we have made headway on a number of other areas we've had, as i told you, some 15 or 20 other small issues in agriculture and other areas. every time we're at bat, it's not a home run we are hitting. single after single. there are several, i won't go through now, there are several in play that will make a real difference to specific people and sectors in agriculture but in other areas. korea, as you know, that agreement is finished. i think that's a step in the right direction. then we have europe, where you started an initiative that larry kudlow and i are working on, and that is a major initiative,

something we are in the process of putting together, the kind of team we need to negotiate on tariffs, but on barriers and hopefully open up a lot of new opportunities for american products. >> i think i can say we are talking to china. they very much want to talk. they are just not able to give us a deal that's acceptable so we're not going to do any deal until we get one that's fair to our country. eu, we are doing very well. they didn't want us to put tariffs on their cars, and they therefore decided they were extremely happy with the deal they had. in fact, they told me, we would rather not negotiate. we are very, very happy with the deal we have. well, they made $151 billion last year. they should be happy. but i said but i'm not happy. so we were ready to do tariffs on their cars, but they came, they saw us a week ago, as you know, most of you were here, and i think we are doing well with respect to the eu, we are

negotiating something that hopefully will be fair to them and to us and to everybody. a big difference from what it is now. right now it's impossible. they have barriers where we can't get anything through. as far as mexico and canada, mexico bob told you about, we are not negotiating with canada right now. their tariffs are too high, their barriers are too strong so we are not even talking to them right now. we will see how that works out. it will only work out to our favor. thank you very much, everybody. thank you. thank you. >> let's go. make your way out. we're finished. let's go. we're finished. keep going, quickly.

neil: all right. i would like to -- when the camera crew leaves, they just go all right, the media's gone. i don't know. i love staying for the whole thing because it is rare you can see something like that. there's a lot of sucking up and all that other nonsense but you get some news items in there, some interesting chunks of information. to me, at least, when there was fwhak a that back and forth with the attorney general, jeff sessions, the president ordered him to sue pharmaceutical companies that manufacture opioids in an effort to stem this epidemic but keep in mind, that can be a bit of a dicey venture, what you constitute as opioids as opposed to painkillers which should be separated from those that are taken advantage of. nevertheless, it was

interesting, that process is already, you know, ensuing right now and the attorney general assured the president pharmaceutical companies that do manufacture and dump the so-called opioids on the market are being targeted to try to deal with this opioid epidemic that is at a record 70,000 plus americans losing their lives over the last year. now, we should also say, as that was going on, you could see the president was echoing that he is making progress on trade, optimistic the chinese are coming back for talks, optimistic the mexicans are moving ahead with a deal that might be a nafta just between the mexicans and the united states but not with canada. so the bloom remains far, far off the rose with prime minister trudeau who had a chilly relationship with the president, including, if we are to take the president at face value, they have not even discussed or updated those talks. we could have a nafta deal minus one key principal player, canada. we should also let you know as

that was going on, the market remained strong. it is up better than 400 points, in and out of session highs. walmart is a very, very big catalyst to this. i know you heard a lot about the better than expected earnings in sales, how it is telegraphing that things will pick up and we see things picking up next year as well. that's a big deal, my friends. i do want to let you know about that because i will mention this and after the break i want to talk to scott if we can, guys. it's important and i wanted to pass along, walmart is the largest single structure retailer on the planet so 115 million americans shop there every week. 115 million americans. and when they go there, they are going there again and again and buying and buying more stuff. now, what does that mean to you? well, look at the latest report. it's not a political comment, just about the strength of the consumer because that's really the underpinning of this economy. they are shopping in levels and numbers we have not seen and we

were not expecting to see. this is the strongest reading we have been getting in ten years. what's more, same store sales in the latest period for walmart were running at better than a 4% clip. that was double what it was thought to be. and you hear a lot about similar news out of home depot, out of macy's. in the case of macy's, that stock had been running up ahead of all this. i hasten to add, that is the backdrop the president likes to brag about and talk about. you saw secretary mnuchin, treasury secretary, sort of tip around that. you also saw larry kudlow at the beginning of the remarks tip around that. but that is really the wind at the back of this administration in these trade talks. what they are saying again and again is that's the underpinning for getting tough with the europeans, tough with the chinese, tough with the mexicans, tough with the canadians, and that is why markets are going up. they trust this president. whatever other drama is going on, man, oh, man, there's plenty of other drama here and i'm not

here to play politics with it. we understand you guys probably get tired of it. it's not a red or blue thing. to me, it's a green thing. that's a fundamental development because nothing supports an economy like people shopping in that economy, and if they are really, really into that, if they are really optimistic and confident in our future to continue shopping and doing so on a large basis with walmart, we have seen it with amazon and with home depot, you don't necessarily have to be the sharpest tool in the shed, which i'm not, to know quickly that that is what gives retailers great hope. that is what gives market technicians great hope. added to that today, optimism that the chinese might come back to the table and talk. doesn't mean they will have a deal, but next week, that they will be back in washington, trying to cobble together a deal. you can understand why benefiting those who would be most affected by having that deal, including boeing, and including, yeah, sisco and including caterpillar. they are very diverse and

different companies but they have this much in common. the winds that were going against them are now going with them and supporting sales. you are supporting that economy, whether you are republican or democrat, whether you are conservative or liberal, you are going out to the store, you are buying things at levels and amounts you have not done so in ten years. we can play politics all we want. just look at the numbers, crunch the numbers. that is why we are up. that is why we're up a lot. that is why the markets are hoping all this other stuff, this separate drama, that will pass. they hope. they are looking at the green. more after this. oh, i think they're here. i think our guests are here. i apologize. we have larry back with us. gentlemen, i'm very sorry for that. my confusion. no one else but i will blame my producer. you might want to take note, pack up and say bye-bye. scott, i was talking about the retailing. to me that's the most

fascinating thing that's been going on here. the retail thing says consumers are optimistic, and they are proving it by going to the store again and again and again. what do you think? >> well, it's 100% true. because we moved this economy from an euyore economy from winnie the pooh. he's changed the psychology and the reason why, there are a lot of retailers and consumers who said to themselves, that's a good idea, i would have done that. he's not re-inventing the wheel. he's talking to the average person on the street and everybody is now slowly but surely coming around to the fact, that's good for the economy, that's a great idea, why haven't we done that before. these aren't new ideas. he's just actually putting them in place and that gives everybody confidence, from the ceo to the guy that was shopping on walmart the last three months. that's the really big deal here. it's psychological. that's why there's 50 books written on how to tame inflation and only one written on what to do to get yourself out of deflation because deflation is a

psychological issue. the president has been able to conquer that. >> you know, one of the things that could get in the way of that, fair and balanced, is the fact gasoline prices have ticked up a little bit. they bounce around and it takes away whatever those consumers, those shoppers, are getting with the tax cuts, depending on the group and the sector and the demographics. some get more than others. are you worried about that? >> i am worried about that, neil. i get more worried as time moves on, because the reality is we haven't invested in new oil to the extent we need to invest in new oil. so that's going to be problematic. upcoming we have the iranian sanctions that may take some oil off the market, which could make it even more expensive. so the last thing we need is high-priced gasoline so really, in a sense that would deflate some of that economic prosperity you are talking about. neil: switch around to some market read. is it your sense, we don't need a big deal on trade with china

or big deal on trade with the mexicans. i know the president sort of posits i don't get something i like, i won't do it, but that anything would be greeted -- i'm only looking at this through the markets -- as a win and it will take uncertainty away and they will continue to be off to the races. is that factored in? >> some of it is factored in but you mentioned the right answer there, and that's just certainty. right? they just want some certainty. what are the outfield walls going to look like, how far do i have to hit it to get a double. that's all the ceos want and all the average american wants, just some certainty because this is going to go on longer than a day, and a day less than forever. the volatility is in between. we just don't know what the world looks like until we get some certainty. it's all about the certainty. until that, it will be a little volatile. the shorter we get something, the better it is for him, the longer that that takes, the worse it is for him. neil: it's also a matter of time, whether you are talking iran or everything else, talking trade or everything else. some of this is outside your

field, i grant you. but if we don't have some sort of closure on some of these issues soon, leave alone the midterm elections, what do you think happens? the president gets what he wants but it's significantly delayed, it's not going to happen within the next few weeks or months. >> well, it's really critical for voters, for citizens, to understand what's really going on, and the more we can focus and i think frankly, i will compliment you, you do a great job of explaining things. but are enough people listening to you? i think the whole notion of how energy affects the economy and how many people are trying to stop the flow of energy, because they don't believe in the current kind of energy, they want to stop the flow of energy, whether that's getting in front of pipelines or getting in front of other new investments. we need those. it's a way of life. we live a high energy life and so i think we need to work on what energy mechanisms can we

accelerate such as alternative fuels. i don't want to go down that path today, but we need alternative fuels to gasoline to try to make the energy more affordable for longer times, but people need to understand why it's happening and what it's all about, and you don't have to bring in the politics of it. the politics of it are the death of energy. neil: very good point. i try to avoid politics of it because people say oh, this or that. i really don't care. i follow the money. one of the things, scott, you could argue is that consumers buy or do anything pretty much based on the confidence. i talked to one couple, i was mentioning earlier, they were not big fans of this president but their son who graduated from college recently has a very, very good job prospect, first time they have seen that. they are very optimistic. they still don't flip over this president but they do flip over the economy he oversees. i don't know how that translates to voting in november. there's no way of knowing. but i do know that when people feel that confident and feel

that optimistic, they tend, to your point, to go out and buy. now, the question i have for you regarding this market, it's kind of like the question i had for macy's investors who were pouncing on that better than expected news but the stock still sold off. i know it ran up a lot ahead of that news so you could be buying on the rumor, selling on . >> you're right. the retailers had a december run-up and they have sold off but the difference between those and walmart or bigger example of amazon, who are the customers of walmart, right? it is all of us. it is everybody. and then that is also online and also bricks and mortar. so they have such a broad reach and their markets are so big that, you're not going to see something not go to walmart because we have problem with chinese tariffs, right? the market is so big and their customers are so vast -- neil: if you're remotely uncertain you will hold back, right? >> yes, you're right, because the psychology is number one thing all together.

we can aller to get about politics and psychology and everything else. psychology is number one and pocketbook is number two. now that the psychology is done we did a good job now you have to look at pocketbooks. if you were better off than you were four years ago, you heard that before, that will make a big difference when it comes to elections. neil: you guys are both great. sorry confusing when i would get to you, that is on me. i want to thank you for your perspective. markets are the darnedest things. people are betting with money, by the way often times it is your money, where they think this economy is going. they make wrong hunches, wrong bets. in the fall of '87, a lot were buying willy-nilly. they made wrong hunches that brought us october 1987. so they can be wrong. can what they're doing, why you see 29 of 30 dow stocks are up, because the backdrop from walmart and consumer and they

are putting down their own money. when they see consumers plunging down their money, for the most part they're willing to plunge down still money and stocks in which they're investing. it gives and gives and gives. all right. to trish regan who will give more in the next hour. trish: you've been given a lot, sir. neil: indeed. that's what we do. trish: in the morning. in the afternoon. we watch you at 4:00 on fox news. thanks very much, neil. neil: thanks, trish. trish: we have a big rally on our hands, up 416 points, how do you like that, on the dow? investors are really feeling confident and feeling really good. they believe president trump will be able to negotiate, a good, a fair trade deal with china. news today, that trade talks with china will resume at the end of this month. i am trish regan. welcome, everyone, to "the intelligence report." ♪