have to have physical borders. stuart: thank you, appreciate it. it has been quite a show and my time is up. all three hours of it. what a great pleasure to be with you all from the white house. again, my time is up and, neil cavuto, sir, it is yours. neil: outstanding job, my friend. i thought it looked like that. the president wants to address spending and try to cut the deficit down to size, good luck on that front. the president is speaking now addressing questions concerning saudi arabia. he will be laying out for his cabinet secretaries to the point he raised with stuart, he does want to move on this very quickly by having each cabinet secretary find 5% to trim in their respective budgets. let's go to the president. >> so i'm for all industries. there is nothing i don't like. i want it all working. that is why we're doing so well. reporter: giving cover to the saudis? >> not at all.

i want to find out what is happening. secretary of state pompeo will be back late tonight, early tomorrow morning. he went to turkey, all over. he spent a lot of time with the crown prince. he will have a full report. i'm not giving cover at all, with that being said, saudi arabia has been a very important ally for ours in the middle east. we're stopping iran, we're stopping iran. we made a big step when we took away the ridiculous deal made by the previous administration, the iran deal is $150 billion. 1.8 billion in cash, what was that all about? they are an ally. we have other very good allies in the middle east. but if you look at saudi arabia they're an ally. they are a tremendous purchaser of not only military equipment but other things. when i went there, they committed to purchase $450 billion worth of things and 1$010 billion worth of military.

those are the biggest countries in the history of this country or the biggest in the world. there has never been a order of $450 billion. you were there when the saudi arabia made the commitment. they're an important ally. i want to find out what happened, where is the fault, we will know that by the end. week. mike pompeo is coming back. we'll have a long talk. reporter: we talk about a man who lived across the virginia and why not send the fbi to figure that out. >> weighs not a -- do you know whether we sent the fbi? i will not tell you. why would i tell you? go ahead. >> you asked for audio, video intelligence -- >> we asked forfeit it exists. reporter: but you haven't got it. >> we asked forfeit it exists? reporter: are you surprised they haven't turned it over?

>> no. it probably does exist. i will have a full report from mike when he comes back. that is one of the first questions that i ask. reporter: mr. president, there is talk after the midterms about spending being reined in up on the hill. i'm curious, is there any programs you would like to see -- >> tell you i'm having a cabinet meeting it a little while. we'll ask every secretary to cut 5% for next year. and last year, first year, i had to do something with the military. military was falling apart. it was depleted. it was in very bad shape. that is why we went for two years, 700 billion. $716 billion. and that took place over a period of two years. we have repurchased and purchased jets, missiles, rockets, all forms of military equipment, ships, submarines. we have rebuilt and are in the process of rebuilding our military to a level that has never been before. i had to do that in order to get the 700 and $716 billion, that

those numbers have never been heard of before, i had to give the democrats, i call it waste money. things that i would never have approved but we had to do that in order to get the votes because we don't have enough republican votes to do this without them. so when you look at the border, how bad it is, that is because the democrats want it to be bad because they don't give us the votes. that is why i hope we do very well in the midterm. we'll be asking for a 5% cut from every secretary today. we're going to see you at the cabinet meeting because you're coming in for couple minutes. we can discuss that at length. i just want to talk to these great folks, wish them best wishes. they have done a fantastic job. we really appreciate it. thank you. great job. thank you very much. we'll see you in a couple minutes. >> president always tend to make news in these exchange with reporters. white house says he did what my colleague an friend stuart varney with my friend moments ago, what struck me on saudi situation, talking about this tape the turks have apparently

had in their possession, audio and videotapes purporting to show the killing of this "washington post" columnist, jamal khashoggi. now the president says if it exists. he has not seen it. so he is not privy to it. so, you do begin to wonder then, the turks insist it exists, they would have shared it with intelligence authorities. no indication that is the case. the president again saying, if it exists we'll see but again he is holding out any decision on this until he speaks to his secretary of state mike pompeo. another development where he made news, this idea that he wants each cabinet level department to cut 5% of their budgets. i wonder if that includes defense? 35, 36 billion would be entailed cutting there, almost exact amount he was able to secure in additional funding for defense when he had that 1 trillion-dollar package of additional spending that he didn't like. whether everyone is beholden to

that, i assume at face value they are, everyone is being called to find 5% to cut in their respective budgets. this is interesting because as i, mentioned earlier, told stouter varney, that after the midterms he is very, very keen on addressing federal spending and will, you know, sort of double up on those efforts after the midterms. if he is facing a potentially democratic house that could prove easier said than done. i want a read on all this, markets so far are liking some of these developments or at least promise of these developments. "wall street journal's" james freeman. we have, excuse me, swan street strategies partner, erin pike, "daily caller" editorial director vince coglianese. vince, what do you make first on saudi thing, if you will indulge me, not being privy or seeing this alleged tape the turks insist shows video and has audio of khashoggi getting interrogated and then killed?

>> i think the president throughout this process has been both reserving judgment and showing a clear interest in getting to the bottom of what actually happened. the clear signal, sending secretary of state overseas to begin having conversations to figure out what indeed happened. if i'm reading through the president's response throughout this, which i am, the theory he is trying to think clearly what is in america's best interests? if at the end of this we find out this columnist was indeed killed bit saudis in istanbul, the president has to make a decision. what is the response to it? how does he sanction saudi arabia, if at all, how does that serve american interests? at the core of every decision the president seems to have made throughout his administration that is always one thesis, how does this serve america. that is the thing animated responses throughout all of this. neil: he also said, james freeman, be careful what you wish for, if you punish the saudis for an act which i still

have no proof, he hasn't gotten any of this turkish video and audiotape and by the way we're told the saudis have not been provided that as well. we're trusting that the turks have this they have just not shared it with anybody, so we'll see, but what the president is saying, even if it does, you know, show what some say it will, it is not enough to cancel 110 billion-dollar defense contract, not enough to jeopardize our overall relations. how will that go down? a lot of republican senators saying, yeah it is worth reassessing things? >> i think he is making a fair point it is premature to say what the sanctions would be before we figure out who did what to whom and when, so forth but this argument, if it is we're not going to respond because they buy a lot of our weapons, i don't think that is the best argument. i think probably a better argument for the president is, this is a rough neighborhood in the middle east with very few

democracies. we end up doing business with people as we do in other parts of the world who are not like us, who don't have our democratic tradition, and where do you strike the balance? it is particularly interesting in the saudi case because we've seen encouraging signs of more openness and a crown prince who wants to become a more, wants saudi arabia to be a more moderate society but then a story like this obviously going completely the other way. so once we know what happened i don't think it is going to be compelling to say we, we overlooked things when people buy lots of our weapons. neil: i'm glad you mentioned this. i don't know what the true case what happened to the columnist, but if everyone gloms on to the same sort of argument, no fans of the turks or saudis, be very careful, this type of data proof, exists, video, audio, otherwise. what the white house is saying, what some market pros are saying. i want to address some other news here, once again the

president has been, you know, jawboning about the federal reserve. before talking to stuart varney he made, very, very clear with trish regan that he is not keen on how aggression sift federal reserve has been. and, larry kudlow sort of doubled up on that. i want you to listen to this. >> my biggest threat is the fed because the fed is raising rates too fast and its independent, so i don't speak to them but i'm not happy with what he is doing because it is going too fast. because you looked at last inflation numbers, they're very low. >> he knows a lot about interest rates and he is issuing a warning. now let me add to that, as he himself said actually yesterday i believe on fox business, he said he is not interfearing with their independence. he is not going over there to tell them to change their perhaps or their strategy. he is giving his view. neil: what do you think of that, erin, he is giving his view? he is not interfering, giving

his view he is interfering, isn't it? >> he gives his view on a lot of things. i don't really believe the federal reserve will be deterred by what president trump says. he sounds off on all kind of things. is it get policy for him to continue to spout off? no, but this is what president trump is doing. this is not the first time. he certainly complained about the fed in the past. he has been admonished by other leaders in recent past about this but again, i don't he will be deterred by anything he says. neil: you might be right on that. vince, you know this issue of taking on the federal reserve might have more immediate financial importance to the markets than almost anything else. i'm including saudi arabia. i'm including stalled talks with the chinese. martin feldstein, former economic visor was on with maria bartiromo today, there are trigger points which the markets can no longer ignore rates going up. i want you to respond to this.

>> at what point does the yield on the 10-year become a real problem? >> it becomes a real problem when it gets to four plus or five and i think that will happen. right now it's a little over three. it has doubled, doubled in the last two years. so, and it is moving up. neil: in other words, that would be the next psychological level. what do you make of that? >> yeah, i mean rate hikes last week spooked the markets to begin with. i think it is pretty wise to think the markets will be spooked in general by rates driven up by the fed. not hard to see why the president is upset with this. because of a big announcement this morning. office of management and budget announced they cut regulations, saved the economy $23 billion. they're proud of that. they're proud of tax cuts putting more money in peoples paychex but if you raise rates, ultimately what ends up happening, consumers absorb that. the cost of to borrow money on average consumer on credit card wherever they do it, is lot more

expensive, erasing gains the president worked so hard to make sure american consumers has. i see why he is upset about this. this makes a lot of sense with the environment inflation being low as it is. only way you drive up inflation, pumping up the economy. fed controls that. they're not doing that right now. neil: james freeman, we get a sense of the fed thinking, late september meeting at 2:00 p.m. eastern time today or thereabouts. that was the another quarter-point hike they telegraphed that many think are coming? do you think many are coming? that was before last week's big hit? >> that's right. this reading will be from before the volatility, we don't know if they changed their mind. people are looking how much they see hiking into the future. i think this, these recent rate hikes, getting back to what you might call normal interest rates are very heavy or healthy i should say and you know, you talk about the impact on consumers. you have to remember it is about

time after the last decade for savers to get compensated when people rent their money. this is healthy. as martin feldstein was saying on maria, the current level of rates is not incompatable. as you get higher, yes, it does become a challenge and also i think the president is mindful of the spend issue. if we go to four or 5% rate on the 10-year it, becomes very difficult to finance this 21 trillion in debt. neil: he better means what he says, erin. republicans are in charge, fiscal hawks, they have been anything but. so what happens here? >> it is a great question. but look, neil, i think we'll see a very different economic picture in 2019 anyway. we've been warned again and again, some recession at some point is coming, despite the united states was just named the most competitive economy in the world again. but you know, i just got my economist last night, the cover is, the recession coming in

2019. neil: then it is not coming. it is not coming. >> i feel better. neil: james freeman writes an article, i have many an economist cover story, you zig while they zag, whatever, no offense to the fine publication. seriously i joke, but actually i don't. it was very good having all of you here. we have a lot more what happens to the federal reserve or anything. boy, the remarks out of the president, we'll replay them in the next segment here where he actually requested that audio and video that the turks purportedly have showing the interrogation and the killing of jamal khashoggi, "the washington post" columnist, but he has not seen it. others we're told have not seen it. you don't know who to believe because this is turkish president erdogan. the saudis are say we haven't seen it. depends who you talk to. i don't want to say some people could be playing games here. if the president hasn't seen it, he is holding back, before we

decide to cancel the contracts and the like, we better be darned sure we got this right, we'll explore that, after this.

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neil: count the president not quite a believer that saudi arabia was behind the attack on journalist or alleged attack on jamal khashoggi. he said something fascinating to me. that he had not seen the alleged audio or videotape the turks say. remember this embassy, the saudi embassy at istanbul, turkey. they say there is tape to prove that khashoggi was indeed interrogated and ultimately murdered and then later hacked and his body taken out of the embassy. but the president was saying today, just moments ago, if there is such a tape, he has not seen it. this is also what the saudis have been saying, understand, this is coming exclusively from the turks. no friends of the saudis, trying to endear themselves through president erdogan through president trump. there could be all sorts of reasons and doubts and skepticism. not here to get into that. just that the president has not seen this thing. take a look. reporter: you asked for this audio, video intelligence that the turks --

>> we have asked forfeit it exists. we have asked for it. reporter: have you got it? >> we asked forfeit it exists. reporter: are you surprised. neil: if it exists. was he being coy there? was he trying to get more information? former deputy secretary of defense jed babin. what do you think? >> this is situation precisely the opposite where you want to give people the benefit of the doubt. we have to give nobody the benefit of the doubt here. we have to be suspicious of the everything that the turks say and do and be suspicious what the saudis are doing apparently covering up what is a very violent act. nobody can be believed, if anybody has solid proof if there is such a tape we should have it. if there is -- neil: does it strike you as odd, that stuff is leaked out or run on arab media and it hasn't here. it strikes me as unusual. you know better than i. >> well i'm not sure about that but the basic point here, yeah, things like that usually leak if it is in someone's interest to

leak them. don't forget, the saudis and the tushes have much, much greater control over their bureaucracies and military, much greater control god knows over their media we ever could want to have. so the base point here again, who do you trust? absolutely nobody. neil: all right. so when they're scouring the embassy right now andth going through and checking everything, are turks doing that, are saudis doing that? there are separate reports running in english versions of saudi media i had seen, they can identify blood and special, instruments to do that. do we know what has come of that? because barring a video or audiotape that is the next thing to latch on to? >> well there again, everybody has a different statement and everybody has a different story. neil: right. >> so the saudis saying, yeah, there was no evidence there. we took a look. the turks come in and say well, we went in and they went in nine hours yesterday and they

investigated, things are painted over. neil: trust the turks? >> right. saudis painted things over. they hid the evidence. so, again i don't believe any of these jokers. if we ever get to the bottom of this, which i'm really not sure we will, it will be a good thing because we need to straighten out our relationship with saudi arabia. turkey is an enemy at this point. i frankly don't think there is any real prospect of recovering that relationship. neil: i like what you said, i don't truth either of these guys. jed, very good talking to you. you add a voice of reason to the craziness going on there. jed babin, former bush 41 undersecretary of defense. as jed pointed out characters involved here, if you don't like the saudis, you remember the turks, remember president erdogan, came to this country and his own security force was acting like thugs, beating people ran across embassy grounds, going after protesters, that is the guy whose information is una sailable.

be very careful, don't jump to conclusions. a lot of people looking at investments in that region, you have plenty reason to doubt or concern of renaissance open-minded government in saudi arabia. many reasons why they imprisoned some officials including fellow saudi did i princes and kings in their own country this could be a sometime to cement that and torpedo that relationship but we need proof. we need proof. fair and balanced. someone's lying. after this. why bother mastering something?

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>> we need saudi arabia in terms of our fight against all of the terrorism, everything that is happening in iran and other places. we'll get down to the bottom of it. i hope that the king and crown prince didn't know about it. that is a big factor in my eyes. i hope they haven't.

mike pompeo just left. he went to turkey. he is coming back late tonight. i'm seeing him either tonight or tomorrow. neil: president saying hopes king salman and his son the saudi crown prince, mohammed bin salman didn't know anything else about this incident we're talking about. we're talking about capture and presumably the killing of jamal khashoggi. there is no real proof that exists of that. we're told the turkish, video, audiotape, the maybe the president or white house hasn't seen it. maybe someone has seen it. to my knowledge no one has. makes you wonder why the white house hasn't gotten it, or authorities have gotten it, maybe this is head fake. mitch mcconnell is saying the entire khashoggi incident will really challenge the u.s. relationship with saudi arabia, but it is too early to predict what the consequences will be. a lot hinges, whether irrevokably tied to the saudis. most people seem to think it can and will and their past

behavior, certainly the crown prince's past behavior would not make a surprising development. whoever you are, we need proof, that is what president saying, a lot of people are saying before we cut economic ties. charlie on that notion, charlie gasparino, we got a lot of financial ties, right? >> right. neil: what happens? >> lots. not just the government itself, all our major businesses banks, private equity fund. larry fink runs blackrock, runs $7 trillion of money. a lot of it, he has done a lot of business in the middle east. that is the biggest money management company in the world. here is the thing. yesterday we reported got from inside the white house, confident about it, pompeo as early as yesterday would provide some meat on the bones on this thing. exactly what went down, at least some semblance of what went down where we can draw a conclusion about the royal family's involvement. neil: pompeo, if anyone would have seen such a thing while he

was in town it would have been -- >> remember pompeo is, was in saudi arabia. going to turkey now. from what we understand, where the incident, where journalist khashoggi was obviously murdered, what we are getting now from the white us is that if he does a statement, it is up to him this is all a moving target, could come thursday that would be tomorrow. we could see then what, get some sort of an indication of what went down and what the royal family's involvement, if any involvement is or how tank jenks al it was -- tangential it was. neil: right. >> was it associated with the current crown prince, mas, mbs i'm sorry. was it totally rogue? were they on order with him? neil: say he goes, there are many in the royal family. he seems to be the most, u know,

evolutionary figure. >> theoretically. neil: theoretically. he might not solve the problem if you don't like the way the kingdom acts if you get rid of him. >> pie point, if you do something about this, this brazen, he is on camera, different country, you're killing him in that other country, if you do that, you can't get caught. you know, it strikes me as such a dumb thing to do. he is on camera. turkey is no friend. you're on their soil. it is your consulate. it is on your soil. there are cameras, there are cameras, spy cameras on that -- neil: doesn't that tell you something? you and i can remember the old "colombo" series. he saw this, he did this, this guy has a checkered past, he is a hypocrite and jails his own brothers and cousinses. >> which one? neil: the crown prince. >> okay. neil: not surprising given his past but it would be very surprising, media savvy as he is -- >> just savvy. he might be arrogant and savvy.

he may think he can get away with anything. he is rich enough he can do whatever he wants. if that is the case, then from just a policy standpoint, tell you guys on wall street are thinking this, even though tons of money over there, do you want to get in bed with someone this brazen, irrat lick and thought -- erratic, thoughtless. we grew up in new york. john gotti killed paul cast -- cast castellano. in a steakhouse. took years to nail him in the middle the night. neil: all the top things he has done. imprison fellow princes in hotel lobby for months. >> it was a shakedown. neil: it was a shakedown. they all had to give money, tamal and all the others. you could make sense that it -- would be idiotic thing. part of you should think -- >> maybe it is not him?

neil: hold off. >> that is my point. if he did it. if -- neil: i mentioned colombo example, younger people don't know what i'm talking about. >> my mom loved peter faulk. i had to watch "colombo ." remember he had the one eye? neil: wild. if we follow up, if we get prove that the kingdom was behind it, crown prince was behind it, then what? >> from a public policy standpoint, do we want to get in bed with people this stupid? that is not a guy you want. i mean -- neil: that should not always be the barometer here, right? >> we have to do business with them. there has to be somebody else smarter than him, doing something this brazen this, erratic. it's a really dumb thing. john gotti killed a guy in the middle of the night. it took 10 years and they were flipping guys -- neil: can't choose leaders we want based on who -- >> we have a lot of stroke, you

know. trump runs around every day saying how much stroke we have the chinese. how much they need us than we need them. maybe we can exert our influence saying there is better crown prince. maybe someone is worse. i don't know. listen -- neil: looking at things through the prism of a bad "godfather" movie. >> i'm seeing a things, a journalist went into a consulate to get his paperwork -- neil: never came out. >> for his marriage apparently and never came out and, you know, this whole thing about the beheading that came out in this tape and everything, that has been rumored for a while. we never reported it, it was bouncing around the ether. it was on social media and stuff. i heard it tangentially. neil: a lot of things reporting to be reliable information but has not been verified. i have to check, what has been verified, who is verifying who is sharing stuff. >> of course. neil: they might be lying. the president might be misrepresenting things a little bit i have not seen a tape.

>> he wasn't beheaded but where is he? i think that takes precedent. you know, this conference is coming up. looks like it will be mnuchin talking to, i don't know who is going. neil: international house of pancakes. you're the best, buddy. thank you, very, very much. charlie gasparino. there is a lot we don't know. we're not apologists for anybody. i'm doing that "columbia bow," before everyone kilometers -- gloms on to stuff, think about what everyone is saying and at least posit say something else, after this. tions. is our money in the right place? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients.

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and something goes wrong and republicans lose the house whatever, won't be on him, paraphrasing, maybe federal reserve, historic common theme this happens to parties in power, whatever the case, go to "national review" contributing editor deroy murdoch and democratic strategist, antjuan seawright. begin and end with you, it won't be on the president, if they lose it is not about him, it is about other stuff. what do you think? >> that is just donald trump being typical donald trump, shifting the blame where he can. look, we all know that the republicans across the country have been campaigning on all the quote, unquote, accomplishments we've seen under this president. but what reality tells us is that the american people are not happy. that is why you see places where trump won in 2016, perhaps going to flip in the midterms and that is why you see democrats being able to go on the offense on issues like health care, protecting social security, protecting medicare and riley an economy that works for everyone.

when the president says don't blame him, he is really saying to the republican party, okay, you're out here on your own. neil: i will say, that the economy is stronger now than when he assumed office, right? it was doing well but doing better now. you have to acknowledge that, right? >> i do acknowledge that, you have to assume, you're assuming that the economy will be the number one issues on voters mind. neil: i didn't say that. but i think in a midterm you are right not as of an issue. we could be wrong, both of us, but, deroy, a lot of folks saying maybe democrats, not antwan themselves are getting ahead of themselves. this could be more of a contest and the house could be safer than we're told, what do you think? >> i think it is early for democrats to drop a balloons, blow confetti in the air. he said americans are not happy. look at figures on consumer confidence, if not highest ever, the highest since 2000 if i'm not wrong. neil: but he does raise a good point, deroy, you expect that to translate into better numbers.

they might. they have tighten up in some key areas, but what do you make of that? >> would really help if the media would focus on all of this good news. we heard yesterday that we had 7.1 million, 7.1 million job openings, that is million more job openings than people looking for work. guess how many seconds abc, cb is, nbc spreading that, telling that news to the american people, zero seconds. they don't want to talk about. they want to talk about stormy daniels all the side issues. neil: stormy daniels, wasn't media called her horseface. >> speaking of women, female adult unemployment is lowest point since 1953 under dwight eisenhower. you know it. but american people need to know this. >> neil, neil -- >> republicans need to talk about this. neil: i understand, buddy. but i am saying there is something at that to what both of you say, the underlying, sometimes get different kind of impression in midterm election i agree with that. what i'm wondering maybe this

obsession the democrats have take down donald trump, you can do it this year in the midterms, send a signal, what if it is really not about you will at stuff he says and embarrassing comments he makes, what if in the end it comes down to people, maybe more than their purporting to show talking to pollsters much is the case in 2016, and they turn out and do just the opposite what you think they will? >> neil, that is why i have said consistently that number one issue, voters come to the polls in midterms quality of life issues. not about the noise, not what trump tweets, not what he says, all the things, somehow this narrative that democrats only want to resist is somehow the agenda for the democrats and i'm here to tell you on behalf of the democrats that is surely not true. we've been talking about quality of life issues and where the gop has failed the american people and where democrats can put forth a policy prescription that works for everyone in country. neil: wait a minute, you say democrats are not a party of

resistance, not a single democrat, for good reason, not a single one that support a lot of legal things? same politics you alleged that republicans are doing with barack obama. >> neil, what i said was, that is not our agenda. of course we have to push back and remind people -- neil: pushback is all i can see of agenda. >> that is not true. i laid out a policy agenda. neil: you did. deroy what do you think of that, how republicans counter that? >> i think best thing republican candidates and strategists activists volunteers can do ask a simple very, are you better off now than two years ago. >> no. >> look at fact unemployment -- neil: no one knew who you were antwan, two years ago. >> now 3.9. economy growing what it was two years ago under obama. people are better off now than two years ago i think republican hold the senate and hold the house. neil: antwan, say it doesn't happen the way you want it to happen they do lose the house, still keep the senate, how, play out the next two years.

>> i think that you will see democrats, if we win the house and they keep the senate i think you will see a real policy agenda from house democrats that will really speaks to the heart -- neil: you see things getting done. deroy, do you? is that the scenario where democrats take the house, republicans control senate, white house, what do you think? >> no. i think they will focus on impeachment that will be the main thing they're involved in. >> that is not true. >> sorts of endless investigations. whatever policy they have will be democratic socialism, medicare for all, abolish i.c.e. job for everybody. >> talking points. >> they're not talking points. tom perez the head of the democratic national committee pointed to this young lady, perez in queens, said she is the future of democratic party. embracing socialism. >> a young hard-working candidates knocked doors did what she did to get through the primary? yeah -- >> actually socialist. horrible. neil: you guys have to run. i got your megajackpot tickets.

run, go, go,. >> with you, neil. neil: thank you, guys, very much. we have a lot more coming up including that megajackpot. narrowing in on $900 million. you have to be in it to win it. after this.

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neil: it's a big one. mega millions, second largest u.s. lottery size ever. it could eclipse the old one so many people are getting into it. kristina partsinevelos at one of manhattan's busiest lotto stores. >> i have never seen some people buy lotto tickets. it is a little quiet. they're lining up to buy mega millions and powerball. the first three stations in front of me yesterday sold 20,000 tickets. so people here are buying, if you think hey, i don't want to go to a shop where everybody is buying, this is one of the top sellers in new york state. they actually did have a megawinner, $50 million back in 2015. there are constant winners here. they are selling tickets for a massive, massive jackpot. just about an hour ago they boosted up megamillions to $900 million. powerball being drawn tonight at $345 million.

i've been talking to people, wondering how much do they want to spend on ticket? we have gary evans, you're about to leave, i grabbed him. how much have you spent so far on lottery tickets? >> $100. >> $100. all at this location? >> here and 52nd and fifth avenue. reporter: everybody loves to draigh dream and think about what they do with the money. what would you do with the money? >> i would invite everyone to my salon at 52nd and fifth avenue, get their hair done free. reporter: for free? >> for free. reporter: anything else? you wouldn't quit their job? people would usually quit their jobs? >> i would keep cutting hair and changing pipe's lives. reporter: thank you. i'm at one of the top sellers in new york city but new york state. a big, big draw. over $1.2 billion. make it rain, neil i think i have to go buy a ticket. i really don't play the lottery but maybe today is the day? neil: someone will win it. someone always wins it. thank you, kristina, thank you

very much. there is school of thought a people participate, a lot of people like that gentleman forked over 100 bucks for tickets, spent even a lot more than that, a lot of professionals, pour that into strategy and financial plan? my next guest probably among them. jack mcintyre, brandywine global portfolio manager. a lot of people, buy a single ticket, take your lumps, a lot of people go deep into their wallet to take chances. you don't like that approach, right? >> i don't because, you know, investing in the lottery is not, shouldn't be a retirement plan. it is, fun, throw a couple bucks at it. hey, what if i win type dreams but not a valid financial plan. neil: you know, you said if people look a lot of that money, the ones spending 50, $100 or more, committed that to a regular investment plan, they would be a lot better off. how does that work for folks,

find idea of investing and scariness of the markets very intimidating? >> it is but that i diffentiates an individual investor versus institutional investor. institutional investor has a allocation framework and able to stick with it. you allocate bonds cashes, real estate. as prices move, over time you're not going out there to try to time the market which we know historically is very, very tough to do. so individual investors the, again that one person that wins will be automatically an institutional investor but the rest of us, we've got to think and we should think like an institutional investor, come up with a framework how you want to allocate your money over the next 10, 15, 20 years. neil: i'm always amazed jack, maybe you and i are old enough to remember some of these lotto winners, not big prizes up for

grabs, who squandered it all between friends and extravagant purchases. i always tell people if you spend more than you have no matter how much you have you will go broke and a lot of them do. what do you advise winners do, not necessarily where you stand to get a half a billion dollars, what do you tell them? >> right. there is probably three things that come to mind. one is, hey, don't answer the phone because your whacky second cousin from albuquerque will be calling you. but number two, hire a financial planner, a certified financial planner, somebody rhett puttable. number three which i alluded to, come up with a investment strategy. begins and ends with asset allocation and stick with that i will not throw out numbers but depends where you are in the life cycle. have a gameplan and discipline to stick with it. it is not rocket science. neil: this market, it is gyrating a little bit but what do you think? >> so i'm, part of my asset

allocation. i like to shift money out of the u.s. right now. i think u.s. equities have a great run. i think there are more attractive undervalued equity markets. same thing for bond. i think dollar, u.s. dollars a year from now will be lower. you can make money by having money overseas right now. again as part of an asset allocation. neil: jack, thank you. jack mcintyre. for all potential lottery winners out there, when he talks about grabbing a financial planner, as luck would have it i'm a financial planner. okay, we'll have more after this welcome to the place where people go to learn about

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neil: we're monitoring the white house very closely. the president asking each and every one of his cabinet secretaries to slice 5% out of their respective budgets and to do it soon. blake burman at the white house with the very latest on that. is this as i would suspect including defense? reporter: he was just asked that in the pool spray that members of the media were brought in, and i was getting a readout from the actual reporter who asked that question. it appears as if, i say appears, because we got to check the tape here, that the president mentioned that defense would be separate. do not feel as if defense would be a part of this. remember, the last budget that the president approved, $1.3 trillion, the president has consistently talked about $700

billion and $716 billion for defense on the one side. the other side of that, about $600 billion or so, is the side he thinks there is too much spending. when the president was talking about this just a little while ago, he decried that very portion of the budget. >> in order to get to $700 billion and $716 billion, those numbers have never been heard of before, i had to give the democrats, i call it waste money. things that i would never have approved, but we had to do that in order to get the votes, because we don't have enough republican votes to do this without them. reporter: president trump told stuart varney earlier today he does plan on cutting spending and it will not be as hard as some think. but you just heard the president there in the back end of that sound bite mention that there is a reality up on capitol hill and while the president doesn't think it will be hard to cut spending, the budget chief dove into the number-crunching reality with stuart as well.

>> because of the rules of the senate which require 60 votes for every single spending bill in the senate, by definition, unless one party has 60 votes which very rarely happens, every spending bill must be bipartisan. congress spends the money. that's the way the constitution is set up. reporter: congress spends the money. that's the way the constitution is set up. so while the president is asking now his cabinet secretaries to make this 5% spending cut, at the end of the day it's going to be up to the folks, democrats and republicans up on capitol hill, to decide what money goes where. something that the president could eventually sign and one thing we know, getting back to your initial question, the president wants defense spending and we believe the comments he's about to make lead us to believe there would not be a cut for defense spending. neil? neil: so you do that and you won't be without human services and you could extend social security and medicare, this might be an attempt to rein in

spending. it's a good first start but in the scheme of things, it might not do much to slice the deficit. reporter: remember, there was this ambitious budget the president rolled out in the beginning portion of 2017. he wanted like a 21% cut to the department of agriculture, for example, or 28% cut to the state department. didn't happen. because capitol hill. so you know, no matter what the president says here, no matter what the r & b chief wants, mulvaney, it's up to the folks on capitol hill. neil: i want to go to "wall street journal" associate editor john bussey on this. you know this far better than i. leaving defense out of it, looking at 5% cuts and assuming that will extend to some of these other areas, we are still talking something in the vicinity of $250 billion to $300 billion in savings and i might be generous here. that's less than half the

deficit we are running this year. >> yeah. the deficit's rising. that's something that the president's trying to contend with here. why is it rising? in part because of the very large tax cuts given to companies. so the government's not getting that revenue any longer or it's getting revenue but not as much revenue from companies. deficit's rising. he's going after areas here that are not the big ticket items. defense is a big ticket item, social security's a big ticket item, medicare's a big ticket item. those are entitlement programs. you have to be asking yourself, is this the beginning of a discussion where the president's going to say down the road hey, deficits are up, been handed this problem by democrats even though some of this is a result of the tax cut, we've got to address social security and medicare. neil: do you think he would take that leadership role here? mitch mcconnell and others were warning him, it could come back and hurt us, that's why he signed that big old package before, because he wanted a

guarantee for defense and all that and thought he would deal with this at another time. if he goes out on a limb here and democrats take the house, i think you could play this out. >> yeah, pretty troubling and pretty difficult game for any party to play politically. i think it's part of the discussion that's informing this kind of latest tussle with the fed over raising rates. the fed's raising rates because it's playing long ball. it's worried about the next recession and having a cushion to deal with that, maybe things getting overheated in the economy. the president, like any president would, is playing short ball. he's thinking november 6th, the midterms, he's thinking 2020 which is right around the corner. re-election prospects. he's also probably thinking about this, about what he's talking about today, cutting costs because the deficit's rising. when interest rates go up, guess what happens to the federal government's ability to pay for that deficit? it rises as well. so he doesn't want rates to go up for a lot of different reasons. neil: might he be factoring that

in and making it more likely as a result. john, always good. thank you very much. we will go to the white house right now. the president is outlining his plan. >> -- gathered around our table. i'm going to ask each of you to come back with a 5% budget cut from your various departments, whether it's a secretary, administrator, whatever. i'm going to ask everybody to come back with a 5% cut for our next meeting. i think you'll all be able to do it. there may be a special exemption, perhaps, i don't know who that exemption would be. if you can do more than five, some of you will say hey, i can do much more than five, you know, i've heard about the penny plan for years, one penny every year, one penny every year, after four or five years, the country's in good shape. i'm saying let's not do the penny plan.

let's do the five penny plan. i think you can do it. i would like to have everyone sitting around the table, your incredible domains you preside over so brilliantly, in some cases, some cases, very well, some cases brilliantly, i would like you to come back with a 5% cut. get riffed the fat. get rid of the waste. i'm sure you can do it. i'm sure everybody at this table can do it. it will have a huge impact. the last budget, we had to go because of the military, we had to fix our military. our military's in the process of being fixed. planes are being played, boats are being made, ships are being made, missiles, rockets, everything. our nuclear is being brought to a level nobody else could even imagine. pray god we don't have to use it, but there will be nothing like we have and there is nothing like what we have. that's why i did that.

i made the deals with the devil in order to get that done because we had to improve our military. our military was depleted. it was in bad shape. great people in the military hadn't received a wage increase in more than ten years. now they're getting an increase. first time in more than ten years. so i wanted to do that and in order to get that done, because the democrats won't vote for the military, they don't like the military, they don't like law enforcement, they don't like borders. we see what's happening with the border when people are coming up with caravans and we have to stop them, even though the laws are terrible. the laws are terrible. our laws are terrible. they are a laughingstock all over the world. we're supposed to stop people with laws that aren't very good. but we're doing better than anybody else could possibly even think of. but i would like you all to come back with a 5% cut and i think if you can do more than that, we

will be very happy. there are some people sitting at this table, i'm not going to point you out, but there are some people that can really do substantially more than that, because now that we have our military taken care of, we have our law enforcement taken care of, we can do things that we really weren't in a position to do when i first came. so we'll see you at the next meeting. i'll see you many times before, i'm sure i will speak to all of you during this term, but that's a very, very important request that i'm making of everybody sitting around this table. tremendous amounts of money, and it's something that we can do. i believe we can actually do it easily. so rather than go by the penny plan, we will call it the nickel plan. at least it will be a one-year nickel plan. we may do another nickel plan next year, too. thank you all very much. to the press, thank you very much. appreciate it. [ inaudible question ] >> we know what the new budget is for the defense department. it will probably be $700 billion.

716, 700, that's a very substantial number but it's very important. to us, without defense, if you know it was at 520 a very short while ago and the reason i brought it up to 700 and 716 was to build new ships. they're building new incredible submarines, the finest in the world, most powerful in the world, anywhere, ever. we're doing things that we have never done on this scale. so that included a lot of rebuilding of our military. despite that, i'm going to keep that at $700 billion defense. okay? [ inaudible question ] >> no. they're just great, very talented people. they're not investigating themselves. these are all talented people. they have been here long enough to be able to do this. it's a great group around this

table. it's a great group. they'll be able to do it. when you add this and couple this with what larry kudlow said about how well they're doing, where is larry? >> here he is. >> larry has to be very happy. you didn't even expect this, right? did you expect this, larry? >> it's actually happening bigger and faster than i thought. >> this is part of it. this is all part of it. i just couldn't do it last year because of the fact we had to do our military. our military was in really bad shape. you had planes that couldn't fly. you had -- you had military that was really in a ridiculous situation. so that's what we had to do. so what they're doing is they're doing it themselves. any other questions? [ inaudible question ] >> i told them they're not ready yet. we have rebuilt china, just so you understand.

our country has rebuilt china with their hard work and genius also, but how our country has allowed itself to lose $500 billion a year, and much more than that, is ridiculous. is ridiculous. so it's hard for them to do a deal because they've had it so good for so long. it's a very hard thing for them to do. we have a very good relationship with china. we have, i have a great relationship with president xi, and i think you'll see something happen that's going to be good for both countries. okay? thank you all very much. i appreciate it. neil: 5%, see what you can do. the president recommending, urging his various cabinet secretaries to see if they can cut 5% in excess spending, thought that is doable, and get back to him on that, that he might revisit this again. but he's keeping the defense department out of that, by and

large. just a 5% cut there would trim $35 billion. i have been going through the various departments, my math could be wrong, poliindulge me, between the state department, treasury, defense, department of justice, interior, agriculture, commerce, labor, health and human services, that's a biggy, housing and urban development also a biggy, and you extrapolate it, education and energy and transportation, 5% cuts in their spending, you wouldn't even go halfway to reaching or wiping out the better than $780 billion deficit we are potentially looking at for this year. now, that's why it's such a herculean effort but it is a start. whether there are going to be exceptions or whatever, who knows. let's get the read from former u.s. controller under bill clinton, david walker. david, what do you make of what the president wants to do here? >> well, there's no question that we need to cut spending. spending is out of control.

that's the major part of our problem. let's look at the math. cutting 5% of discretionary spending excluding defense is less than 1% of the federal budget. let's understand what the disease is. the disease is mandatory spending. that's social security, medicare, medicaid, interest on the federal debt. the fastest growing expense in the federal budget is interest. within ten years, we could be paying more for interest than on national defense. that's how bad the situation is. so while spending reductions are appropriate, you can't exempt the defense department and you shouldn't. it's a bloated bureaucracy full of waste. and secondly, you must not exclude the $2.2 trillion, the 65% of the budget, that is mandatory spending. if we don't do that, we won't restore fiscal sanity in this

country. neil: the president, we could grow our way out of a lot of our troubles and i'm wondering about that. how much of a factor do you think, just strong economic growth, say we get up to 4% steady, not just one quarter, but steady annual 4% growth, how much could that help this picture? because i guess a way of avoiding cutting but what are your thoughts? >> there's no question we need more economic growth. the recent tax reform and tax cuts helped improve our competitive posture, increase economic growth and reduce unemployment. those are all positive things. but the percentage of revenue that we are getting as a percentage of the economy has gone down, and it is below historical levels. so we do need additional growth but we're not going to grow our way out of this problem. the reason that we're not is because spending is growing much faster than the economy and mandatory spending is even

growing faster than total spending. as i said before, the fastest growing expense is interest and what do we get for interest? nothing. neil: you're right. your thoughts, we talk about it, the third rail, we know what happens to those who tried to even control the growth of such spending, they're not richly rewarded for it. that's probably an understatement. can you ever see the parties getting together, sensing the urgency of this, or do they just pass? >> bottom line is there is no party of fiscal responsibility in america today, and there are too few people who are fiscally responsible. the biggest deficit we have is a leadership deficit. the president has to lead no matter who that person is and what political party they are. the people have to end up demanding action because here's what's happening. we're mortgaging the future of our kids and grandkids. it's irresponsible, unethical

and immoral. now we are going to have a situation where we are a reserved currency. that reserved currency status could be threatened if people lose confidence in our ability to put our own finances in order. let's hope that never happens. but we have been taking advantage of our reserve currency status for too long and we are not exempt from the laws of prudent finance. neil: david walker, thank you very, very much. good catching up with you. we have been crunching the numbers here a little bit more on some of these respective agencies, including the trade office, the economic adviser's office, the sba, homeland security, veterans affairs, education, energy, and i was a little too aggressive with my math. actually, the savings from this, if you accept the fact we're not going to do much of any cutting in the defense budget, the largest expenditure of all, this would boil down to about $200 billion to $220 billion. we are running about a $780

billion deficit this year. it will be over $1 trillion next year. $1.1 trillion the year after that. $1.3 trillion the year after that. this, my friends, is a good start. what's that expression, but a spit in the ocean. more after this.

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reporter: are you surprised they haven't turned it over? >> no. i'm not sure yet that it exists. probably does, possibly does. i'll have a full report on that from mike when he comes back. neil: all right. that seemed to be a significant development. the president has not seen this purported tape that shows the interrogation of this "washington post" journalist, jamal khashoggi but the turks say that it exists and that it shows in gruesome detail every step of the way he was interrogated, tortured, then cut to pieces. but the president hasn't seen it, lot of other people haven't

seen it. people are e-mailing me saying neil, tape is out there, no one's denying it. then we need proof. i mean, it is a consensus out there but when i searched around, i am not all together savvy on the internet so you may be right. it's taken as a consensus it's out there and other people beside the turks have seen it. they haven't come forward to report it, explain it and tell in detail what they've seen. turkish authorities have in grisly detail but i don't think turkish authorities, president erdogan and his rocky relationship with the saudi royals, i probably would want a second confirmation. anyway, the president saying the tapes, if they're out there, if they exist, he hasn't seen them. let's get the read from the former aide on this, nile gardner. this comes at a time a number of people are sending regrets to the royal kingdom, the latest christine lagarde from the international monetary fund, a

who's who of people who are supposed to show who are not going to show now. what do you think? >> well, that's right. i think the saudi investment conference outlook isn't particularly rosy at this time. with christine lagarde's withdrawal, it's just the latest from major financial institutions, also a lot of investment banks, financial firms have withdrawn from this conference. it isn't clear whether steve mnuchin, treasury secretary, will attend or not. i think that decision will be made later this week by the white house. certainly, this is a very bad time in terms of the image of saudi arabia on the world stage. although it has to be said we don't have, as you pointed out earlier, all of the facts here. we don't have the audio evidence yet released by turkey, and i think -- neil: i'm sorry, who does? i get disputing reports about others who might have seen this

or what but everything is traceable to turkey. they have it. they say they have it. apparently they're not sharing it. but maybe you can enlighten us. >> that's a very good point, neil. according to press reports in london indicate that basically, government-backed newspapers in turkey are the ones who have spoken about this audio tape released. turkey is not a free country, by any stretch of the imagination in terms of its media. hundreds of journalists are actually locked up inside turkey so it's government-backed media in turkey who have made this announcement, but we haven't actually seen this audiotape released yet. i think certainly the trump administration is calling for all of the evidence to be released before they make any determination about action taken against saudi arabia. neil: a lot of people are saying there is enough to the crown prince's past and imprisoning

his cousins and extracting money from them, he's not exactly father o'malley here. but having said that, is it an opportunity for the u.s., regardless of this, to reassess a kingdom that flouts normal procedure? you had a lot of reasons prior to this alleged incident to say, you know, we're tied too close at the hip with this guy. >> my sense is that if it is demonstrated that saudi arabia had a role in the assassination of mr. khashoggi, then i think you are going to see very strong condemnation from the united states. you could see potentially targeted u.s. sanctions against specific individuals within the saudi government. what i don't expect you are going to see, i think, is a wholesale, you know, downgrade in terms of the u.s./saudi

relationship because that relationship is incredibly important for the united states at this time in terms of confronting the iranian threat. i think that's a top priority in the middle east for the trump white house at this time. i don't think you are going to see a complete change in the u.s./saudi relationship. however, i think the united states is going to call for specific individuals to be held to account if indeed, saudi arabia is behind this killing as turkey alleges, but also, i think that there's going to be a bigger focus without a doubt from the u.s. and the entire world upon human rights issues inside saudi arabia itself. this could perhaps be a turning point i think in terms of international scrutiny with regard to the behavior of the saudi regime and its own human rights record. neil: all right. thank you, my friend. good catching up with you. former aide to the great maggie thatcher. if we do punish the saudis, oil

would be the first to show it. defense stocks would be the first to show it. and things could get bad and worse. without the defense budget situation which appears less of a case today because their contracts would be in jeopardy. if you expect gas prices to rocket on all this, much like oil price, it hasn't happened. other factors are driving this that go way beyond these threats. to gasbuddy.com head, patrick dahon on what this could mean at the pump. what do you think? >> well, there's so much here at stake. president trump has already tweeted opec and saudi arabia asking for lower oil prices. i'm sure there's sensitivity as we get closer to the midterm elections, and previously gas prices were running in some of the highest rates of the year, so where does this all piece into the puzzle? the saudis, obviously the world's biggest oil exporter, and there's a very delicate relationship here. obviously president trump previously promised severe punishment and that drew the ire of saudi arabia right off the

bat. if saudi arabia were to weaponize the price of oil, you know, we could be talking about oil prices just through the roof ahead of the midterm elections or perhaps in the months following. it's really not a win for saudi arabia to do that, of course higher oil prices will simply convince more motorists to look at fuel-efficient vehicles. but it's not out of the question yet. neil: if they were to make good on something like that, wouldn't they confirm our worst suspicions about them? >> oh, certainly. it would confront the worst possibility for the price of oil which could easily go to triple digits or $200 a barrel. neil: that could lead to global recession which could drag saudi arabia down with it, right? >> exactly. you could see a global meltdown if they were to choose to use oil as a weapon. it would end up hurting them in the long run. higher oil prices certainly hurt opec as well. $150 oil in 2008, look at the way oil prices moved in 2009.

you are also talking about an ipo for saudi aramco so that's thrown in here as well. things seem to have taken a little bit of a down tone in the last few days. like i said, this is a volatile situation. neil: yeah. i just want to get your thoughts on a very interesting column i believe in "usa today" written by emma ashford from the cato institute. she bemoans the fact we havek kowtowed to the saudis for way too long. it has become increasingly regressive. dissidents have been kidnapped abroad, returned to riyadh, human rights activists have been jailed, unlike past decades, u.s. leaders today don't have to tolerate this behavior. less friendly relationship with saudi arabia won't harm our interests in the middle east. it's time to start turning a blind eye to the worst excesses of the saudi leadership and she's speaking apart from this.

what du make of that? >> well, there's a lot to be said. obviously the relationship spans, for decades, and certainly in the last couple of years, you know, we have seen a reluctance for saudi arabia to come to the aid of u.s. motorists who have been hit with higher gas and oil prices. so it's very interesting, but you know, at the end of the day, you look at what the saudis are doing right now and they really need oil exports, they rely on them as well. so i don't expect them to make a mistake that would put their future in jeopardy as well and certainly the era of what the new kingdom is looking like under the new prince. neil: this thing, that's what makes me wonder if this whole thing was stupid. it's a tin ear to just the image that it scombroeprojected or ma arrogance. >> that's right, maybe there was some level of arrogance they

could get away with this but the u.s. strengthened its position. we are still relying on saudi arabia in terms of a global oil exporter but here's the u.s. producing 11 million barrels of oil per day now amongst the world's largest, if not the largest oil producer. again, the saudis could still make it very nightmarish at the pump should they choose to do that. neil: very good point. always good chatting. thank you very, very much. >> my pleasure. neil: i think one oil analyst put it very nicely. he said this is no longer your dad's potential oil crisis. if it comes back to another '70s type experience, the fact of the matter is, we are in the driver's seat. more after this.

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it compares with your plan. with most humana plans, you get coverage for prescription drugs, doctor and hospital visits, and more. all for zero dollar monthly plan premium in most areas. most humana medicare advantage plans even include dental and vision coverage. and, most humana medicare advantage plans include the silver sneakers fitness program at a local fitness center. so call or go online to find out if your doctor is part of humana's large network of doctors and hospitals. and see if a humana medicare advantage plan is the right plan for you. pick up the phone, and call the number on your screen. the call is free. and licensed humana sales agents are standing by. so call now. neil: you know, there are boffo earnings reports and then there's netflix, surprising everyone with other numbers a lot of folks tend to look at differently when it comes to

technology. it's not just whether the earnings meet or revenues meet but things like how much of a product they're selling or in the case of netflix, how many subscribers they're adding. suffice it to say netflix's stock up appreciably in a relatively soft market. let's go to charlie gasparino and deirdre bolton. charlie, you have more news? >> i know it's a good day for netflix but i will give you the bear case on this which is increasingly what i'm hearing from traders and investors and it's simply this. when you really pare down the numbers, netflix likely hit a ceiling on the number of subscribers. they have 45% penetration rate in the u.s. how much more that's going to go is really a question mark, given competition from others, amazon and possibly more, as the media landscape changes. here's some stuff to kind of look at when you bear down and really look at the numbers. cash flow at netflix continues to decline. they finance a lot of their

expansion with debt and yes, investors keep pouring money into this but there is no sign that this company's going to be profitable. i know you can give us the amazon take on this, but you know, how many amazons are there out there, and one other thing. one of the reasons why the fed is increasing interest rates is to get rid of asset bubbles. one of the potential asset bubbles out there are companies like netflix. so this is just something that investors, as the rosy scenario gets pumped out by the media, investors should keep aware. i'm not saying sell. i'm just saying consider this side of the story. back to you. neil: it is interesting, deirdre, when we look at netflix it's much like apple. lot of people say it's not just whether they meet their numbers or how many ipads or iphones they sell and all of that. they have a different sort of beast here. ibm was the same way. their earnings beat revenue did not and there's the guidance issue. one reason why that stock, ibm,

is going the other way. we treat this group differently, don't we? >> well, we do treat it differently and i think the stocks that stand out on the upside are the ones that really are, people consider unique a proposition. charlie of course talking about that with netflix and a lot of people do think that. i know netflix is burning cash at a record rate, like $860 million and if you look at the stock, investors love it anyway. with ibm, frankly, we just expected more. this was the first quarter, i think for three quarters they had actually exceeded targets as far as revenue growth goes, and so this one as a miss is felt even that much more because there were a lot of people saying okay, they are diversifying, they are getting more into cloud, they are getting more into even the beginnings of ai in certain areas, and that's all positive. so the fact that after three consecutive quarters of revenue growth, there was a miss, i think that's why the stock is being punished, particularly

today, taking about 50 points off the dow. so i do think netflix at least as far as people i talked to is still considered a unique proposition, much as amazon is, but it is true that they are blowing through cash at a record pace. neil? neil: we are all in an environment, guys, i think the president himself mentioned it in his multiple interviews here that interest rates are going up. he doesn't like the fact they're going up. but that will change the math on a lot of these companies, right? how big an issue is that? >> i think for netflix, it's definitely an issue, if you start looking at the balance sheet. it borrows heavily to finance expansion. it is not making money. i mean, when you put those two things together, you wonder just, you know, how does that, i mean, how long do investors give this company that much leeway to borrow as much as it does, to burn through that much cash and to not make money. you got to look also at what netflix is.

listen, i speak to a lot of people in l.a. because i have friends in the movie business. netflix is a full employment agency for hollywood. for every b-rated movie producer. that said, how much of its content is really consumed? a lot of it's not. at some point, reality will meet up with expectation. you know, amazon delivered i think it's fair to say on reality, for the most part. that's why it's a great company and a great stock. netflix is going to have to deliver on reality and they're not there yet. they're going to have to deliver it in a rising interest rate environment which no matter how much -- i mean, i think powell is intent on raising rates more and unwinding the balance sheet because he knows that the problem with not doing it is that you create asset bubbles like maybe what you have with netflix. neil: there have been a lot of doubters all the way up, right? >> certainly. i think you can make a bull case, you can make a bear case for that particular stock, as

you can with anything. i'm actually very interested, we are a couple minutes away from those fed minutes which we'll see at least a little bit more in talking about asset bubbles and what the fed was thinking way back in september. i will tell you, as much as ibm is weighing down the dow, financials are really supporting it. there is a push and pull feeling that obviously we have been covering all day, where you have actually goldman sachs and some of the other financials lifting. we will see if that changes in about 20 minutes. >> that's on higher interest rates, i would assume. neil: we are looking at a lot of these reports and again, there's video and audio that purports to show the interrogation and presumed killing of jamal khashoggi, this "washington post" journalist, and they all go on various arab sources that are coming out. i have been reading the english versions of them and they include middle east eye,

al-jazee al-jazeera, and it would roughly be translated as middle east gazette, i would guess, if the translator is getting that to me correctly. all of these sites that detail the brutal killing of khashoggi, that's how they are all described, are quoting turkish authorities and only turkish authorities. i might note that in the case of the middle east eye, this turkish [ inaudible ] made no reports of erdogan wounding up those protesting his government. so i'm not minimizing the fact so many sources are citing attacks that appear to be pretty brutal on jamal khashoggi. i am saying that they all come back to quoting unnamed turkish authorities. one of them does, in fact, quote one turkish authority but they're all turks. and they all have a dim view of saudis. they all have an acrimonious relationship with the royal

kingdom. that might be well and good and proper and deserving given the royal crown prince's fiascos of late, including rounding up his own cousins and brothers and looting them, essentially, before releasing them after imprisoning them. perfectly sound reason there. but they are all quoting the same folks. they all purport to say and quote a video and audio that outside of turks, no one else has seen. more after this.

neil: i wore this silly thing today. what was i thinking? all right. this comes every now and then, it gets a lot of attention. that's why we will leave this show a little early and go right to my buddy charles payne. these are the minutes from the late september meeting that predates the market selloff last week. that was the meeting where they raised rates yet again, brought up to around the 2.25 neck of the woods and continued a steady stream of rate hikes the fed seemed to telegraph would continue, with maybe one more this year, maybe up to two or three more next year. but of anything that has happened since changed that, it's hard to say. we will later what their thinking was a little more tlan than a couple of weeks ago. it was a very different world

then. to the panel. scott martin, what will you look for in that report? it seems dated now but it's relevant now. >> it is relevant, indeed. but you know, neil, i'm looking for consistency. i think that's one thing the market is going to take well here. the market's digesting as we talked over the last couple of weeks this higher rate environment, this fed that is being pragmatic and paying attention to the data and says lay, we will do one more hike in december, yes, we are planning for more in 2019 but we are going to be data-dependent and market-dependent, as long as they stay on that message the market itself should be comfortable. neil: patrice, the president is critical of the federal reserve. i think not so much for the rate increases but the number of them and the almost inexorable nonstop pace of it. what did you make of that? >> the president is not shy when he's concerned about something, and he certainly is not shy here, even though it's a little bit different from past

presidents. you know, i think he's considering the fact that interest rates have not really risen very fast, unemployment is historically low and now you are starting to see some -- i think squishiness in markets like the home building, the home market. september home building came in lower than expected and then last week, i think we saw mortgage rates come in even lower than this time last year. as americans are thinking of holding back on buying, that has a stimulating effect across different parts of the economy. i think he's worried that this roaring economy can be slowed down by a speed bump of federal reserve interest rates. neil: we were just showing some of those that echo patrice's point, scott. even some auto suppliers, the housing issues, i believe they are already in a bear market. correct me if i'm wrong. i'm wondering whether the market just can't get a grip on this, either, and that, you know, it's saying at least in some of these interest rate sensitive areas,

there's going to be legal hell . >> i think the market is trying to figure out what patrice noted there. she uses a very good technical term, squishy. that's really -- she's right -- that really is what housing is today. look at some of the financials, we have got lending demand that's down. you've got this kind of little bit of unease it feels like in the real estate market that's for many of us, when you look at our homes, gosh, that's our biggest asset on our balance sleet. to her point, yes, if you start to feel like you can't get out of your home or are not going to be able to sell it for the price you thought you could sell it for six, 12 months ago, yeah, that will put a crimp on holiday season spending. neil: one of the things the president has done repeatedly is to say if anything goes south here, don't point the finger at me. the federal reserve is overdoing it. the federal reserve sometimes has overshot things going up and down on rates. but he's trying to put it out there quite understandably for the midterms. i have created this economic

juggernaut, this economy that's the envy of the world, i'm the one who is redoing trade deals to the benefit of americans. that's what i'm responsible for. none of this other nonsense. what do you think? >> well, i think he's really playing it out there for 2020. we only have, what, three weeks left before the midterms so even if the rate, even if the fed rates, hiked its rate, you're not going to see instant impact that will probably hit the midterm. but he's thinking about 2020 and thinking about the fed being active over the next year plus, and that i think could have a real, you know, a real impact on how the market continues to do going into 2020. neil: scott, when you look at the -- i don't know, we are trying to stabilize today, lot of people read it was a week ago today we started that two-day slide where we lost almost 14 willed poin1400 points on the dow. is your sense normalcy is returning or are we just in for another month of a rocky

october? >> it's a question as to what is normal. to your point, my friend, october normal is volatility, actually. you look back in history. maybe this is okay, right? tell you what happened when you talked about that 1400 point drop. you saw interest rates start ticking up. investors were selling everything, institutions were selling everything. they were selling bonds, they were selling stocks. what we have seen since then, thankfully, is rates have calmed down. they have backed off the 3.25% highs on the ten-year note. if they settle here, equities can find a bottom as well. neil: how much do the midterms play into this, patrice? you touched on we are a few weeks away. the markets generally are factoring in a democratic house. they could be wrong. they were factoring in a hillary clinton presidency so what do they know. i'm just wondering, is it your sense that an aberrant development changes everything and maybe this stuff republicans thought wouldn't get done, does get done and stuff the democrats thought could get undone, doesn't get undone? >> i think the markets certainly

have their eyes on the midterms. i think generally, people are expecting that, you know, democrats will keep -- will take the house and republicans will keep the senate. but it would be in that scenario, we understand some of the deregulatory efforts, some of the tax cuts could be at risk or at least the extension making them permanent, the tax cuts could be at risk. we'll have to see. i think the markets are not going to be so volatile in three weeks that they come crashing down and we lose thousands of points, but i could be wrong. i think folks are still taking a long-term look at what has already been accomplished by the trump administration and a lot of those on the corporate side are permanent which is a really good thing. neil: you know, scott, any worries you have on the saudi front? >> yeah, i do. it's destabilizing for a number of reasons, both economically and geopolitically and i think it's something that unfortunately, because of where we are in the process, figuring out what the heck happened, we have some time to work through before we figure out how this

thing is going to pan out. neil: look forward to seeing you tonight on "bulls and bears" at 5:00 p.m. eastern time on this network. patrice, always great seeing you. the dow down right now and fed minutes are coming. why bother mastering something? because when you want to create an entirely new feeling, the difference between excellence and mastery, is all the difference in the world. . . - i get headaches.

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but no way i'm gonna keep taking extra strength products. no way. it's vanquish for me. a special formula goes right to the pressure that causes the pain. no need for extra strength products. defeat headache pain. vanquish it. >> before i get over to my friend chars payne, word out that mitch mcconnell, senate majority leader, republican cost review the effort to repeal obamacare depending on the

congressional election results. he is very confident the senate stays in republican hands, very dicey on house side, they will revisit again. i think they have revisited no fewer than four times here. nevertheless, maybe the fifth will be the charm. the dow right now down about 33 points. very volatile day heading into the fed minutes. going back to the late september meeting before everything started to hit the fan, certainly last week and all the developments in saudi arabia since. that will be interesting to see their thinking before all of that. charles payne to take you through all the developments and much, much more on his hit show. hey, charles. charles: thank you, neil. everyone was on pins and need dells. we were down 300 points and came all the way back. we're going back and forth. hi, i'm charles payne, and this is "making money." we're three minutes away from the release of the federal reserve minutes. there is a lot of anxiety in

there. we want to find out what the fed is thinking. where the path will go. we saw the dot plot. what does it mean? this is after president trump told fox business's trish regan that the federal reserve is the his biggest threat. jennifer schoenberg hears the report. >> interest rate hikes based on strong economy and inflation near target. charles, that was the main takeaway from internal discussions amongst fed members in their policy meeting three weeks ago before the market turmoil. while officials appear to stick to the path for gradual rate hikes a number of participants expressed the need they thought it would be temporarily appropriate to raise the federal funds rate above the longer term level of 3% that previously been projected. so there is clearly a group within the testimony omc that believes we should have rates in th