charles: let's check on the market. we went into the green but now we're slipping a bit. maybe rallied too early. the volatility is with us. since christmas it has been positive. a long way to go. neil cavuto is back to take it away from here. neil: i would be remiss not acknowledging my friends connell mcshane, david asman, ably, almost too ably filling in per me while i was gone. thanks, guys. a turnaround in oil price. right now we're down 124 points after what was one of the worst years on record going back to 2018. but there are a lot of folks

chomping on this data here. trying to seize on signs of a china slowdown, how that could work to our improvement. it is kind of twitted analysis here. we'll get to bottom of it. there is a concern about a trade tiff that could last for a while but then you have got to wonder let's say we score a trade deal, but china is too bad shape to turn things around. we have larry glazer and kingsview asset management cio, scott martin. your sense what is driving the market this first full trading day of the year? >> it still feels like terrible psychology, neil. we saw it overnight. the market responds to this data, this news, today, neil, sell first, ask questions later. i do see the rally we're seeing off the lows we saw overnight which is great but volatility still here. the new year, same old markets in my opinion.

market looking at some prospects to being somewhat negative. to your point, yes, we could have a trade deal, get resolved, 30, 60, 90 days hopefully. if damage is done to china already what kind of workout does it have in the market? to me the market need to work itself through the psychological malaise, when we get through that, that will be time, my friends. we can rebuild to higher levels. neil: you and i gotten into this as well with scott and others hinges on improvement in the trade front. the ideal we get a deal on trade but china is too weak or not in the best shape to make good on it. how real is the fear, especially going into a year, where a lot of people are looking into manufacturing data, a sign of much more to come? >> there is no doubt, neil. investors love to turn the page of the calendar in 2018.

also turn page a lot of uncertainty causing market volatility in 2018. moving into 2019. we see the china data overnight. it was a bit of a debbie downer. wasn't what we wanted to see coming into the new year, wasn't optimism we were hoping for. neil, there is hope here. we have a meeting in washington over the shutdown. we have talks going on with china. some of these issues are being addressed. for investors, new year's resolution should be focused on what you can control, not focused on washington. what we control, we see the massive volatility last year, peeks in sentiment beginning of the year to troughs at end of the year. that creates opportunities at the end of the year with tax-loss selling. certain sectors getting hit really, really hard. for investors to go through the rubble, see the disappointment with energy, and there was companies that were thrown out last year that was particularly

pronounced. >> were you worried about in the inflation in not in traditional aggregates that don't show it, smaller anecdotal pieces of estimates do? drugmakers raising prices anywhere from eight to 14%. that will affect dozens of difficult drugs. some widely used, some less so, i'm wondering if that is sort of drip, drip of inflationary pressures the fed pays attention to. what do you think, scott? >> it is interesting, because if you look at the.plot, neil, they talk about so frequently, their broad measure of inflation, cpi, gdp deflate for alphabet soup the data isn't really that hot. gasoline prices multiyear lows. it is interesting how the fed, neil, remained on this hawkish, let's say stance about worrying about inflation when to me, broad-based we're seeing anything but. we're seeing disinflation, god

forbid, deflation down the road if they remain hawkish as far as fed stance is concerned. more data on friday with the employment report. neil: what do you think of that? >> i think scott makes a great point here because if you think about the data it is global data today. the u.s. is 25% of global gdp. so the slowdown we've seen in other countries in particular in china as evidenced by the data overnight but also in europe and other places is is what is affecting us. why our fed could be kinder and except letter in 2019 and they could be a little bit more dovish in 2019. even though we may have some inflationary pictures here global, oil becomes global. it's a global commodity. it helps our inflation picture. i think a little bit of inflation is a good thing. like champagne on new year's eve, too much it you feel after the fact. that is where we are in the middle of year. neil: you know i can't stand champagne. i don't know what it is. >> how about proseco, thank you, happy new year, appreciate it.

>> okay. neil: what is a great deal if china's economy isn't approving deal? glen, that keeps coming up here, we might score a deal sooner than we think and the chinese might not have the wherewithal to make good on it, or bring as much business our way as we thought? >> that might be overstating it a bit, neil. economists we're hearing are expecting china to take stimulus action if it goes too much further than that. when you start to trickle that in you take a little bit of uncertainty off the desk. neil: let's talk a little bit about other issues here. saudi arabia seems to have some success curtailing oil production enough that it is lifting oil prices today. the markets briefly welcomed that news, that we were maybe getting too much after good thing and collapsing energy prices. what is your sense how this is factoring out? >> this is always the question about oil, how long can that

stability last? what we're hearing saudi arabia is taking most of the cuts now to put stability into the price pressure there. how long can they sustain that? these are questions that will drive a lot of other things. again, neil, goes back to also some trade questions as well because commodity demand also big part of the china trade deal. china is the biggest importer of oil for example. neil: when we had a down year last year, all major market averages, two of them escaped going into a bear market, came very, very close, is it a pattern that repeats following year or a one-off? >> i don't think the old patterns exist in this particular moment in time. neil: i hear you. >> what we're expecting there is possibility of a slowdown in the united states economy at some point n many ways markets got out in front of that, anticipating that slowdown. there doesn't have to be absolute recession for there to be a bear market coming. i think maybe signs of volatility mainly driven by the concerns that are still out on the table.

one, being trade deal with china. and the second being, like where does the fed take us in the coming months throughout this year? neil: you know, i'm probably going to sound like a wet blanket at party here. but i do worry about our debt. i worry about the fact that no named candidate, unnamed candidate, looking to achieve the highest office in the land, republicans in power had the run of the table, deficits, debt, got worse, no one really cares. furthermore doesn't pop up on any poll showing a legitimate concern this is getting bad, a lot worse and a lot faster? >> yeah, you're right. that is not one of the topics of conversation we've been having in the past year. we came off a stimulus period. we got tax cuts stimulus going but there is not a whole lot of discussion except for during those moments when there is debate in congress but you know that the u.s. consumer doesn't seem to be applying much concern to that either. neil: i know. >> so far they are driving the economy and keeping things going. neil: all right. i will keep screaming about it

because i think it is going to come back to bite our heinies. thank you as always. >> happy new year. neil: to you as well. that meeting right now with the president and his cabinet is continuing right now. we might get what they call is a pool spray from that, one. treats in life for me. i love sharing that with people, scaring them about it. i will not do it now. i will do it a few minutes from now. i will give you a preview what could come with leaders of both parties who gather at the white house around two or 3:00 p.m., when they're going to discuss border security. this will be held in the situation room. no cameras or anything like that will be allowed. we're told the president will lay it out there, what is happening on the border is the national security issue. well see how that goes. after this. ♪

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neil: all right. we're down about 114 points right now. the president is holding a cabinet meeting as we speak. he was saying apparently we can work with democrats ahead later on 3:00 p.m. meeting with lawmakers from both parties. former republican senator, virginia governor as well, george allen, who says that the president may have to giving is to get back something on a border deal. what would that be, senator? what could it be?

what would bring the two sides together? >> neil, the president made a rookie mistake, last time he was meeting with senator schumer and now speaker, soon to be pelosi saying he would own the government shutdown which is abysmal way to run any organization. so there is a lot of blame to go around here. in my view should with hold pay of members of congress not getting appropriations bills done on time. if they hadn't gotten a paycheck in november and december, they would have gotten a deal. here where they need to go. let's make a deal president said, border security, border control, is promise he made. some of the democrats are hypocrites. they have previously voted for border security. all of sudden they're now against it because president trump is for it. the so-called dreamers, these are people who were brought into the country illegally as children, if they had not committed any crimes and are leading otherwise law-abiding life, they can get a regularized

status. they were close to making deal on that earlier last year. to me that is what newt gingrich and don gram talked about. the structure of a deal to get border controls which are important, a promise kept to the american people by the president and as well as some other beneficial immigration reforms. i think everyone can win that way. neil: do you think that he is more worried about this than he lets on? the democrats want to see him sit and stew, and they're happy about it? >> i think the democrats with that rookie mistake he made by saying he will own it, where wear that mantle proudly. people expect responsible governments. partial shut down is abysmal way

to run any operation a government or any other sort of business. the democrats will get something for it. something not necessarily inconsistent with what republicans want, obviously border security. most americans think we need to control our borders. whether it's a fence or technology and so forth, that's important for our national security and our sovereignty in determining who comes into our country legally. in addition to that, there are however number of young people who are now older who most people say we're not going to deport million or so people from this country. those folks have been educated in our country. they can actually contribute to our workforce, if they're otherwise law-abiding citizens. that is where i see a positive win-win solution out of this. but there needs to be that willingness on the part of democrats to put away their political posturing and their hypocrisy and say let's make a deal with this president or with

other members of the house and the senate. neil: do you think they will? >> i think they ultimately will but i would urge your viewers, the many educated viewers, make sure you let your members of congress, whether you're democrat or republican, say, come on, get together, figure out a way to get this border control done, and whatever other immigration reforms you can agree on, get that done. that will be a positive way to start the new year. neil: governor, what a better way to start my new year with you, very good seeing you. >> i wish you a healthy and winning 2019. neil: thank you, my friend. you as well. the former governor of virginia, senator as well. by the way, while we were talking about where we stand on this whole border wall funding, whether it is ever going to materialize we're getting some blurbs of the cabinet meeting where the president is saying u.s. immigration and border patrol officials will make a plea for a border wall at the meeting with lawmakers.

will include top republican, democrat leaders in house and senate, eight in all. empty says we're all for doing something on so-called dreamer immigrants. these are flashes coming courtesy is of reuters. whether that is making after deal, in other words republicans offer something on dreamers give them status as permanent citizens of the united states who through no fault of their own came into the country as toddlers, infants or younger, should not be penalized. that is very popular with democrats. whether they would cede that and accept that in exchange for some border wall funding something akin to it, is anyone's guess. more after this.

♪ neil: you know this is one of the strangest kind of love-hate relationship. now these two guys, mitt romney, donald trump just seem to love to hate each other. but it all started in the latest phase with the incoming utah senator, former presidential candidate, lambasting the

character of the present white house occupant, yet the president hitting back in a tweet against the incoming senator. to independent women's forum hadley heath manning, "axios" reporter kaitlin owens. kaitlin, i can't figure out the timing of governor romney's remarks here. after all he was entertaining becoming secretary of state. he was passed over for that job by rex tillerson. so, i don't know where he stands on this? >> well, neil, let's start with context, then we can move on to the speculation phase of this. the context is, romney is entering the senate but a lot of the big, chief critics of trump that were in the senate are leaving. bob corker is gone. jeff flake is gone. john mccain passed away. at least the confrontation sets contextually sets him up for the role of trump's chief critic, who will speak what makes a lot

of republicans privately but won't say in public. on other hand fueling speculation romney wants to primary trump, et cetera, et cetera. we don't have any evidence of that. neil: i can't figure it out but i do wonder, hadley, what the fallout will be in the republican party. there are always those in the so-called republican party establishment who have been leery of donald trump. maybe just a reflection of that. what do you think? >> i think trump is in better tradition with those more traditional republicans now when he was running in 2016, asly call newcomer, had little to show for his policy positions. he proven more or less governing as conservative president. for most part have policies line up with the establishment gop. signing off on tax overhaul. using administration to do regulatory reform and pulling united states out of iran deal and clean power plan. these are policies will be a lot of excitement and approval among traditional republicans. those voted for mitt romney in

12 and voted for president in 2016. they supported president in 2016 with a lot of skepticism. those republicans headed into 2020 will have more reason to feel confident in trump policies republicans have concerns about president's style or tweeting it is fair to romney to criticize that aspect of president trump. i hope they see past the and work on policies that fit. neil: kaitlin, this is not first example where the president has been ticked off at someone suddenly out of blue criticizes him. not unprecedented in mitt romney's case. but obviously case of defense secretary james mattis who will stay until fib, the president more or less said after harsh comments, no you're out of here now. the president seems to be shriveling up on friends. i'm wondering if that is a risk, he worries about that or figures

he will be primaried or doesn't worry about that? incumbent presidents are rarely taken out that way, what is your sense? >> i think this to answer your question, the president is not afraid to hit back at critics. he does so almost predictably where it is someone criticizes him publicly we wait for the response whether on twitter or the next press conference, but on the other hand he doesn't have much to worry about with his base. as hadley was saying, there is little that supports his original, that separates his original supporters from trump. as we've seen time and again they're willing to tolerate almost anything from him. his conservative policy wins or his administration conservative policy wins, they have made other republicans more loyal to the president as well. so farce whether he is alone and isolated, that puts him in a vulnerable political position, in terms of a primary, it is extremely unlikely that any republican will be able to

successfully primary the president. neil: but could he be injured in that kind of a set-up, hadley? history is replete with those who were primaried. jimmy carter with edward kennedy. gerald ford with ronald reagan. and they didn't survive the general election? >> you know i think as with everything trump this could split two-ways. any kind of criticism from within the republican party maybe hurts the president with some voters and maybe for independent or swing voters, think, oh look, this party has their own internal divisions, speaking of broader context we'll see a lot of internal division on the left as the democrats try to sort out which of their candidates will be the forerunner, but on the other hand, president trump faces criticism, sometimes makes him stronger in some way because he is is is able to hit back. usually people who swing at the president end up getting hit back far worse. then president trump, president trump's base will rally behind him as he sort of appears to be

the victim when people come on the attack for president trump. he cops back on the attack double speed. neil: but the base only gets you so far, right? >> well, sure, the base is a strong base for president trump. i think so much in terms of 2020 riding on exactly who that democratic challenger will be more so than whether the president faces internal division in the republican. democrats what kind of policy solutions are they going to present when americans really looking at last two years, many of us thinking we're better off? that is ultimately what any incumbent using at as his closing argument, are you better off? barring any major international crisis, a lot of americans will say i'm better off. last year, stock market year aside, look back two years and fundamentals of our economy are stronger and americans are feeling more optimistic.

those are things the president certainly has going in his favor, regardless of any challenges right or left. neil: ladies, thank you both, very, very much. take to you the white house now. the president is meeting with members of his cabinet. trying to ward off or limit damaging effects of this 10-day old government shutdown. blake burman outside of the white house with the latest. i like seeing you there rather than on this set where i'm told an exquisite job. i don't like that. i was going to take the rest of the week off, figured not for my career's survival. reporter: neil, you have a great team out there. it is 35 degrees out hire. it is 72 degrees indoors, if you want me to go back indoors i will do it for you. neil: no, no, my friend. you've been reporting on it, the president is getting anxious about it. he stayed at white house

throughout the holidays. he obviously moved the needle how much he would accept for a wall. called it a wall. so far no takers on the democratic front? >> there was that moment a couple weeks ago, neil, with mick mulvaney, day one as white house acting chief of staff he brought down the threshold what the president would accept. remember there was 5 billion-dollar number. mulvaney suggesting maybe he would take somewhere in the area for the wall of 2.5 billion but the headlines we're getting right now inside the cabinet room suggest that the president might be creeping back up towards the 5 billion-dollar number. one of the headlines from dow jones, president saying $5.6 billion is a small price to pay for security. he is what's going on today as washington kind of collects itself, gets back together to jump-start 2019. president, you're right is kind of happening here at the white house. there will be a very public-facing message from the president are or administration will play on air next half hour

or so that is the cabinet meeting going on. the headlines we're getting from the president, him once again, expressing why in his belief there needs to be a wall. in fact one of the headlines we're getting the president said, quote, we need a physical barrier. everything else is bells and whistles. so the president will be surrounded by his cabinet here. he will say look, why we need a wall, walls work. we've seen it work in israel. this is why i want it. $5.6 billion. let's get that money, we need it. after that, there will be as private of a meeting you can get, president meets with congressional leaders, democrats, republicans in situation room. kind of briefing on border security, the white house is framing it. you have a lot going on, neil, very publicly, behind the scenes. the big question how do you get out of this mess? democrats are saying, no new funding for the wall. the president is continuing to drop the $5 billion number. tomorrow as you know, democrats

control the house. neil: i forgot about that. quickly do we have anything more on the meeting the president wants to have with the fed chief? reporter: it's a great question and kevin hassett telling us last week essentially, there has been some sort of discussions as to the possibility. we don't have a date nailed down, we don't have a time nailed down or even if this is 100% certainty but the fact that the administration is he will be to talk about it, neil, i think suggests this could potentially happen down the line, one of the questions being would it be sort of a public thing to try to reassure the markets, or might this be private, maybe something we would never know about. certainly one of the questions we'll broke -- poke and prod around. neil: just because everyone loves you, doesn't mean everyone has that sentiment.

reporter: did you get my cookies? neil: have a food new year. the dow has to fall 1800 points to officially be in a bear market. that can happen real quickly. will it, after this? my name is . how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath.

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neil: all right. take a look at tech stocks. a lot of them are trying to separate the wheat from the chaff here. in other words, which of former "fang" stocks will do better this year after getting just bludgeoned last year. when push comes to shove though with all the whipsawing we saw in these issues, take apple, for example, it was down all of 6% for the year, even though it rocketed way up, was 40% from its highs during the latter part of the year. having said that, who are the winners in this group and should you both be looking at this group? we have payne capital management president ryan payne. what do you think? >> hard to say. amazon was still up 30% last

year. neil: you're exactly right. >> which is crazy with the big pullback it had. netflix was up 40% even with the big pullback. i would caution valuations are extremely high when talking about amazon and netflix. other side of the spectrum, apple trades 11 times forward earnings, down five or 6% last year, is probably much better buy than higher, loftier valuations seeing on amazon and netflix. >> what about the technology environment this year, what do you think happens? >> i think it will follow suit with the market. at some point when you see a market correction like this, bear market, peak to trough, 20% correction, market returns something like 45% plus over next couple months. i think tech will rebound hard when things turn. neil: what about outside noise

could come from the president, jawboning the federal reserve or meeting the federal reserve chairman, maybe doing so in person? does that rattle you or just par are to the course? >> i think it is par for the course at this point. with president trump we pretty much expect anything, that is somewhat priced in the market at this point. neil: what about the other noise could be out there, or black swan developments you worry about or you think could be an issue this year? >> the problem we're already pricing in a plaque swan event. we have a bear market right now. let's face it the economic data is very, very strong. it is very hard to go into recession with unemployment at 50-year low, 3.7%. might go to 3.6% at the end of the week. in addition we have 3% on gdp so growth is solid. if anything i would think the surprise would have to be a positive here. we're already pricing in like a worst-case scenario. neil: when we have a down year in the market, more often than

not, it is followed by an up year. this has been a very different environment, because over the last decade or so we had one up year after another, certainly coming after the melt down. so all bets are off. where are you in the camp, should it matter? >> i think as long term investor look, we like to say a bear market is a terrible thing to waste. they don't happen that often. you're in a position where evaluations are extremely cheap. forward earnings on the s&p is at 14 times which is below the average historically. we know earnings will be good next year. we know revenue will be good next year. we know dividend are going up. i like to be in the warren buffett camp, take advantage of volatility and other people's fear and take advantage of it from the standpoint it has to be one of the better buying opportunities you will get in your lifetime. neil: we shall see, thank you very, very much. ryan payne, pain capital management. he is the president there. gold is high as investors seek out all alternatives to stocks.

former commissioner of the commodities trading commission, bart chilton is with us now. what do you think of the gold bugs in particular, let us know feelings on gold, that this time is real, that what is happening here is gaining traction? do you agree with that? >> the gold bugs never stop letting people know what they think. it is always too low and always being manipulated and same thing with silver but i think they have a point now is a pretty risk-averse time to get into gold. as you say, it is just a few cents, maybe 60 cents, i saw it hit 1287.10 i think earlier today. it is not that far off that june 15th high you were talking about, neil. so it does seem to me now seems like pretty good time to be in gold given all the market news. if you look around the world, neil, not just in the u.s. but in you look at china, composite, chinese stock index over there,

31% down. that is a combination of the shanghai and the shenzhen. that is the worst in the world but markets all over the world were down. so it is not just unique to the u.s., neil. neil: so i'm wondering though, in improving economic environment for the world, you could make the argument that would presumably benefit gold as well. that has not been the case in the past but is it fair to say if we are too simplistic in our thinking, not you, too simplistic in our thinking, what is bad for stocks will automatically be good for gold? >> oscar wilde famously had that quote, expected unexpected, demonstrates a thoroughly modern intellect. neil: he was a gold bug, memory serves. >> that's exactly right. he probably tweeted it back then. the point, now more than ever things are so different in markets. they're faster. we see "flash crashes" all the

time because of cheetahs, automated traders. more news can come in to impact the market. when i was a regulator, neil, my mantra was never move markets, don't say anything. that has been thrown out the window. the president impacts markets every day it seems. you have to look at all asset classes, gold, bonds, stocks, futures, i used to regulate in a different light these days and you have to be really risk-averse when you do these things? otherwise you take a chance something could go up or down in a quick hurry. neil: what worries me about the environment today, bart, it happens so quickly, the swings are so off the chart huge it is not for the faint of heart. i like to tell people, if you're day-trader that is one thing or in the market for the long haul, saving for kids education, your retirement, you buckle up for the ride, it might be a crazy ride, it all evens out as time

goes on. it does seem particularly crazy. what do you tell with people looking at that, whether happening in the commodities arena or market averages where we have 800 to 1000 point swings? is that just the norm now. >> it is the new normal, neither of us, you, or i are financial advisors and we look at these things all the time, neil and to me, these fast-moving markets and they are faster than they have ever been, we did a study when i was back at the cft, sometimes at opening and closing, there were 400, 500 trades per second in these markets. so these algorithm traders are not bad, bring liquidity to the markets but markets move faster than ever. neil, it is not for faint of heart. looking at longer term sectors. all the sectors were down except for a few. health care was up for the year.

they just announced three dozen health care companies announced they will increase drug prices, hundreds of drug prices just today. so i guess that is how they make some of their profits. by and large, looking at overall sectors, energy took a hit last year. you were talking a moment ago about some "fang" stocks, looking at baguets, etfs, exchange traded funds, exchange traded products, are things neil, to look at where there is less volatility in for example, a tweet from the president whatever it is, gm and mary barra shutting down plants, all of sudden the stock tanks. you don't want that exposure. i don't want exposure something could happen and your enormously adversely impacted. a lot going on in markets, people need to be careful. neil: you spread your bets you're not exposed to one particular moment. bart, thank you very much. happy new year. >> happy new year to you, my friend. neil: so much being intimidated

by the commander-in-chief. drugmakers saying we're going our own way. raising prices on hundreds of different medicines? does that ring a bell? does anyone remember gm? does anyone remember harley? does anyone remember boeing? does anyone remember saying we're going a different route no matter what you say? after this.

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♪ neil: drugmakers are raising their price this is year, a lot of them, dozens of them. some on average of 10% or more. gerri willis has details because it's interesting, gerri, a lot of them we're told by the president no less, don't think of doing it. >> great to see you, neil. drug companies raising prices on hundreds of medicines on more than a dozen drugs. it is not just allergan. more than three dozen drugmakers raising prices on hundreds of medicines. according to analysis by rx savings solution. the average increase, you see it right there, 6.3%. according to "the wall street journal" allergan raised price of 50 drugs by 5.9% and 24 meds by 4.9%. the changes impact half of the company's drug offering always

heimers drug and -- alzheimer's drug and. allergan it says does not see any benefit from higher price increases, rebates and government insurers, and government programs fully offset the list price increases. full list price increase is 3.8%. allergan expects rebates and discounts will be passed on to patients to reduce out-of-pocket expenses for these medicines. some drugmakers raised prices more than 10%. hickma raised prices on ketemine and. 17 pharma raised prices by 133% on zinga. we reached out to hikma could not get a comment. pharmaceutical prices expected to get a lot of attention by democrats when they take the house. the increases affect list prices.

almost no patient pays list prices because they don't take into account insurance or rebates. neil. neil: thank you very much, gerri willis. dr. kevin campbell joins us on all of this. losing our way, health care author. what do you make all of these guys doing this at the same time? >> you know i think they're just taking advantage of the situation that, you know, they're able to do this. we have to have some sort of strict regulation in terms of pricing like they do in other industrialized nations in europe. otherwise they can charge whatever they want and medicare is obligated to pay it. neil: what is so glaring they're all doing it at at the same time. i'm not calling that collusion but certainly interesting timing. or is it unusual? >> no, i think it absolutely is interesting timing in the way that a lot of these ceo's talk to one another. they know what they're doing. they know right now is a good time to try to get away with this, there is so much distraction in washington. until we actually take this on, head on, and really eliminate

what gerri was talking about, pharmacy benefit managers are driving price increases. they drive the rebates. they get paid on both sides. i call them "the sopranos" of pharmaceutical industry. neil: allergan raising prices 10%, 51 products up to nine 1/2, close to 10%, a lot of them at higher end of that range are pricey once or pricier ones. math has severity of the impact. >> absolutely does. what you see, trump put forward a program or proposal in october that has not gone anywhere yet, he said for these drugs that are medicare part-d, given in a doctor's office like some expensive biologics we're going to now incentivize doctors for giving generic equivalents, rather than just giving high-priced drugs. he would also try to set the prices that medicare will pay based on what other industrialized nations are doing

through a international drug pricing panel they have in europe. >> what is the model they use? in the case of hikma pharmaceuticals, morphine pain drug was hiked 10%. another blood pressure medication by 30%. i don't know what time they saw hikes in those medications but those are some big sticker shock increases. >> they are absolutely are. take insulin for example, insulin is not expensive drug unless we continue to only allow name brand insulins. you have three companies make insulin will not allow a generic come to market. they sued to stop a generic. that is up fourfold. type one diabetics without insulin they die. we will not let you become the next shkreli or heather bresch.

neil: thank you very much. the cabinet meeting is is still going on. the president is talking about anything and everything, including the meeting with congressional leaders of both parties, eight in all. democrats and republicans will be in the situation room with the security along the border, the president will use to justify the wall funding he wants to see. meantime he is talking about other outside events including decimating isis. he is is saying according to a dow jones report on this meeting that is still happening as we speak, we'll get a pool spray from it shortly, that everybody gives me credit for decimating isis. not quite sure everyone in the defense establishment feels that isis is entirely decimated. some warning that we might be getting to cavalier thinking it is. we'll have more after this.

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neil: all right, the president commenting out the cabinet meeting. he is going on and on about a lot of different things. referring to the stock market came last month was about a glitch in the market. he thinks things will go up after trade deals. he's also talking a little bit about what he sees the tremendous decrease in drug prices even though the major drug companies have announced across-the-board increases in what will be more than 100 drugs affect good. everything from from morrisey into common aspirin prices.

he also thinks the deal could be had with democrats when it comes to this partial shutdown. let's get the read i'm not and he is seeing what others are missing. chad sub six on capitol hill with more and not. >> will have this meeting of the situation or by the white house. that tells you a lot appear just the fact they are doing and not in public but in the most close place in the white house where no tall signs are allowed to the session with chuck schumer nancy pelosi a couple weeks ago where this was a televised spray that went on for 30 minutes. there was arguing back and forth. this is very different. the other key thing in the next 24 hours about 3:00, 4:00 tomorrow afternoon a bill on the house floor. two bills to reopen the government. one which would fund six of the seven unfinished appropriations

bills. these are senate passed bills that would do a temporary bill for the department of homeland security. this is an effort by house democrats to put pressure on senate republicans to say these are your bills that she read their move through committee or in some cases moved them across the senate floor. why won't you take those pills and reopen those extortions of the federal government that are close. keep in mind this is a tactic by the house minority leader nancy pelosi to apply pressure on senate republicans. also apply pressure on president trump. president trump says they think xi is willing to make a deal. the majority coming in on the first vote in the first vote in congress that they stood up to president trump and they did not vote to fund the wall. neil: thank you very much. in the meantime we been monitoring developments of the cross current on wall street in mainstream. we always like to say we are not

brighter blue. we don't get caught up in the high family don't get caught up for example in the bear market. we do warn you to transmit their watching no matter where the chips may fall. take a look. >> i think will enter a bear market people will remember for a long period of time. it's likely to be one that will make its mark on the charts. >> this is the greatest fake ball in history. >> the president argues to go after in the market will implode. when you think about? >> i think it's right but i think it will implode anyway. >> there is a strong argument now that confirms my feeling that not only were we going to be in a bear market but that we are in a bear market. neil: we get old and bears fair

and ample due. they make sure we hear from everybody. those enthusiastic in the middle of a run-up in those cautious about it and what has been run down. simply to get their views across. democrats to or the republicans, liberals with conservatives. we feel that kind of balance is what you need and then you can decide for yourself to their argument makes sense? or not all one way or another. the one thing i value most that we look at the good, the bad and everything in between and one who's been doing a very nobly and consistently, gary b. smith looks at trends before their obvious to a lot of people and shares those insights with you. very important to have that active whether he's right or whether he's wrong.

>> fortunately he's more right than he is wrong. neil: it's always important to step back after the volatile last couple of months and get your sense of what you see dominating theme wines this new year. >> first of all, thank you for your kind words. i appreciate that. i think you have a tale of two tapes. you have all the short-term worries that which we've talked about. everything from brexit to the shutdown. probably about half a dozen of them right now. all individually. taken as a whole they would he come one big concern and anyone can be disruptive. on the other hand, here's the flipside. we see any bit of good news in any one of them and i think you'll see the market rally.

the markets rallying today. maybe a potential stop to the government shutdown. the bigger macro picture i step back and look at all the exciting things we have. not only is the economy in good shape from the low unemployment, wages rising. things like that. but we also have new technologies. people seem to forget about self driving cars. 5g is going to roll out this year. the tendency right now is to think we've had the good times. it has to be over. it has to be bearish right now instead of saying maybe we have a lot of things that came to a head to worry about. but this is a positive larger bull market. that's where i would stand. traits are interesting because i would echo what the president is saying. the president referred to december as a glitch. he says things will settle one's trade deals land.

you could just as easily argue that even if we get a trade deal with the chinese, but it turns out they are going into a slowdown or worse a recession. then what? >> look, and always make compelling arguments. they've made compelling arguments since 1929. they always sound great. but people don't tend to look at is the good that could have been. the president was pretty much discounted on north korea and yet right now you ask someone about north korea and they say not that much of a threat. trump hasn't backed down. north korea has not launched a missile over anyone yet. things seem to be going good there. china all sounds bad right now. this is an economy slowing down from 10% annual growth to maybe 7% or 8% annual growth. as always the flipside to look

at. again i tend to want at least right now because i'm wanting to look at the good side. turn to when a lot of people ask me about the market and you are my body gary kaltbaum i would say time is your friend. over a long period of time. a lot of people with the same amount of money into the market, they will be rewarded over time. if you were to get whipsawed by these thousand point swings within a day in and out come you're naturally going to be concerned. but if you step back from that, less of a concern. where are you on this? >> 100%. i mass regularly by people, what should i do now? my first question is are you a

traitor. 99% of the time they say no. then i say the answer is nothing. even if i knew that tomorrow we would have a huge bear market, i wouldn't know where to get back in. so i tell people sell now and then when the wi-fi. how the heck do i know. you're an investor. stay in it. is amazon going to be worth more 10 years from now than it is or whatever the replacement of amazon. of course it is. that's the way the economy goes. that's why you have to stay long term. if you need the money coming your son or daughter is going to enter college tomorrow and you need whatever it is, $100,000 for college, yeah, then maybe you want to take some cash. other than not you're absolutely right. you almost have to ignore. neil: a birdie told my kids you run your own. your mother and i are spending everything. >> i understand. neil: very good seeing you, gary

b. smith. just to keep it in the going way back to my days at cnbc, but it's just about balance. any single federal reserve chairman, and a single big event? one or otherwise they are sheer gravitational force of their own and they go up and they go down. over the course of time and sometimes they go out. as many of you might've heard once or twice shows the dow over the course of the last century plus. keeping it where it is across the other end of my wall from my desk come in the chart goes. the closer you get to it you'll have incredible gyrations. could be the 1930s depression. could be the oil crises.

it could be presidential assassination. those are jarring events of close. step back and over time it is the trend that is your friend. no one is smart enough. i don't care who they are coming to tell you an exact moment to get in or out of the market. there're those who will look at the core capitalism is very good for you when your money in the markets in general overtime. over time. a more after this.

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neil: all right, the dow was up 56 points and i loath depend this on any single event. energy shares as well based on a turnaround in energy prices on news that for example saudi arabia is succeeding at cutting it prices. others attributed to the comments were getting out of this that's coming to us from a cabinet meeting. the president for a better part of an hour in the meeting continues to go in which he talked about ongoing promising trade talks with china on the same day we got confirmation that rings could be slipping in china to the manufacturing

sector came out with a report that showed things contract in. that's a big worry. let's go to the coming collapse of china. the selling author gordon chang who's leery of any report we get out of that country. i do want to get your sense of whether that would make even a trade deal tough to benefit from. what's your sense? >> i think it's difficult to have a good trade deal with a weak china. xi jinping the chinese ruler has been talking about self sufficient deed. the idea when you have trade you have to believe in comparative advantage. that's the principle that underlies the global trading system. china doesn't believe in that. one self-sufficiency. on the other hand i don't know if you can have a good trade deal with a strong china either. the chinese system right now makes it extremely difficult to have good trade relations.

right now it's a hard time for us. >> i'm wondering when it comes to china and how we deal with it, the new act in pentagon chief has been repeatedly saying china is its biggest worry. he said china, china, china. that does sort of echo some musings despite his high praise for xi jinping. what you make of that? is the administration pivoting here in a military sense commit economic sense, both? >> where react in a china right now. you have senior chinese officers talk about attacking the u.s. navy in a surprise attack. a rear admiral said we should send to u.s. carriers still 10,000 americans. i don't know what to make of those statements that these are the types of statements i think reflect the upper reaches of the

people's liberation army and people who make these statements never get punished. neil: they were largely just sort of coming in now, dismissed. but not by the powers that be in china. in other words, no punishment for that. >> and that's important for us to focus on. you have an officer corps in china right now going off the rails and if you want an historical analogy, the closest one is 1930s japan where you have the japanese officers take over the political system there. there is a lot of symptoms that show there is distrust among the civilians. they postpone the communist parties. that's a meeting of the central committee. everyone thought he was going to take place in november and december. it didn't. a real indication that xi jinping couldn't it consensus among senior leaders. that not a good time. neil: what about xi jinping, is

he on the box on this? there is no guarantee if things go under your watch. >> you're the chairman of everything which is what his adversaries call him. you're responsible for everything. when you have a good 2017 in china, xi jinping got a lot of credit. 2018 was not nearly as good and clearly what we saw were his adversaries coming out from the sidelines sniping at him. xi jinping about four days ago talked about china facing a 100 year crisis. that's not good. they're trying to blame the united state and so we are the adversary. where the enemy and not going to be reflected in beijing's relations with us. difficult for president trump to navigate back. >> would you anticipate a deal? >> president trump once the deal. we saw that from his saturday tree. they think robert lighthizer view is much better.

it's important for us not to expect good statements from beijing because they violate every trade deal not only with us but everybody else. we need to try to not change china but to keep on coercive measures until the chinese do the right thing. in other words stop stealing intellectual property. neil: gordon, always a pleasure. always learn a lot. >> to you as well. the president saying democrats are using the shut down right now to help themselves. incoming air democratic congressman said he is not supporting nancy pelosi. he's trying to argue that both parties can come around on this. very good to have you. >> good to see you, brother. happy new year. >> to you as well. >> today the president going to have the leadership of the republican national respect to

parties in the house and senate and in the situation room to talk up national security along the border. >> unfortunately today all of this is someone predict a bowl. look at where we were a few weeks ago. the senate passed a budget resolution. the house was on its way to doing so. and then suddenly we got renewed talk of a $5 billion wall. i am of the opinion that at this point the government shutdown is an absolute national disgrace. we are using shutdown is negotiating tools. it's absolutely un-american and that's why i said i'm not going to take one center paid during the course of the shut down. my wife is kind of angry at me about it but we have to do the right thing.

neil: let me get a sense of who your blaming. is it the president because other people watch as well -- >> 100%. i think i have demonstrated time and again that i have zero patience calling out the leadership of my own party demonstrated by the fact that tomorrow i will not be voting for nancy pelosi. and this is the president's action has been embarrassing. the president said on national tv i'd be happy to shut down the government. i'm happy to do so to achieve what i believe is a vanity project at the southern border. on the first post-9/11 combat vet to be elected to any public office in new york city history. national security is of paramount importance. but this worth talking about now is a fifth century solution to a 21st century problem. so let's get back to work.

our number one priority right now is got to be reopening the government and having a sensible debate around comprehensive immigration reform. i look forward to be a part of that. tree into tumor when you go from congressman elected congressmen/ , you're not keen on make a nancy pelosi or -- nancy pelosi the leader as he said. >> i guess he'll have to stay tuned, but with that being said, i'm always on your show not too long ago saying i would not be supporting nancy pelosi and now i'm remaining consistent. but the day after tomorrow i'm going to be consistent about the fact when a comprehensive anticorruption measures put forth in the halls of congress because both sides of the aisle have been completely bought off by this unbelievable system. how will that affect your vote tomorrow then? who would you prefer? >> a little suspense never hurt

anyone. that is really minor right now. we are looking word to getting to work around the issues that we know the american people want. the reason i know that as republicans and democrats have been running a virtually the same thing, draining the swamp. lowering health care prices. the structure projects for the 21st century. let's stop lying to the american people. the first thing we have to do is people who put their lives on the line for the united date who defend our airports right now are not getting paid and it's got to be changed. >> you'll surprise whoever you pick tomorrow. she is due to be voted in as the leader of democrats in the house. is that going to make for a tense relationship? >> absolutely not. we're all adults. >> i should talk to you at all? >> of course you should judge is

going to make me the second member of the bathroom cleaning committee. we have so many crises in america today. so many significant problems and i'm looking forward to not only working with speaker pelosi but also republicans to figure out dynamic solutions for the 21st century. they should not be too hard. right now when a pitiful situation where he can even open up the government because they're playing a game of brinksmanship. neil: i take a year against providing funding for this wall? to make absolutely. i just told you it's a vanity project. it's ridiculous. waste of money. the talk about sensible solutions. there shouldn't be too hard. neil: congressman elect, thank you. the president is hitting back at mitt romney who is heading back out karl rove in the middle of it all macs.

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neil: all right, the president is react and to mitt romney's comments on the "washington post" op-ed saying i win big, he didn't. chief of staff karl rove and the republicans defining the president. always good to see you my friend. as republicans who've lost their seats, but not exclusively on the shut down, the partial shutdown. drugmakers who are taking on the president despite his jawboning to keep prices low, gm knowing for laying off thousands of workers doing so regardless and on and on we go. harley davidson repositioning plants abroad. what's going on here? >> some of this just a normal activity of business commerce. gm shouldn't run its business with regard to what the president wants them to do or

not to do. they ought to run it with an idea towards what their investors, with their shareholders, employees, what's in the best long-term interest of the country. they're not doing this because the president told them not to they are doing it because it's in the best interest of their business long-term to make certain. neil: it's happening again and again. we are going from this ongoing meeting with the cabinet officials at the white house of the president has once again going after his former defense secretary matt is saying that he was not too good in afghanistan. that madness is happy about spending and essentially that is essentially fired matters. how does that make him the president look good saying that stuff. >> it doesn't. and make them more difficult to get somebody, people to step forward to serve as secretary of the defense.

the department of defense worries either fired or had somebody resign to the degree that he crashes and it will create unnecessary problems on capitol hill. republicans are going to ask his prospective nominee and more importantly it's going to discourage good people from stepping forward. regardless of whether you do-gooder too bad the president will trash on the way out. i wish he wouldn't do it. we'll have some long-term consequences this year that will be unpleasant. neil: you know, he doesn't like in second test on these things. he makes it very, very obvious and i wonder if this will come back to bite him in this new year and particularly trying to get things done. difficult enough for of democrats who are taking the bait. it could prove problematic with

republicans who apparently are feeling their oats. >> yeah. look, this is something every white house has to worry about. we have this problem in 2005 were members of the republican leadership were not aboard on the issue of reforming social security. we would've had an even tougher problem had we attacked members of the house were down on it but there was speaker hastert for the whip tom delay. lots of numbers were down on the president's plan. but we kept them close enough it didn't turn into a huge public problem and that's where you want to keep some of these issues. as the president gets closer to his own reelection after party has gone through, let's not kid ourselves. put the senate decide. we had one out of every five times when the white house party holds its owner picks up string to the senate. we had a terrible midterm in

terms of the house of representatives where we lost 40 seats and that means a lot of members and how it's going to be for me in 2020. you want to have those people have some sense of first loyalty to the president and some relationship with the white house to keep them from getting off the reservation. >> i do want to get your thoughts going on right now. the hope that romney will be a team player says that if he thought obama as hard as he fights trump he would be president. there's some bad blood there, but i can understand this back-and-forth between the two because romney himself had entertained becoming trump secretary of state passed over by rex tillerson so it's a love-hate relationship. i don't get it. >> i don't think either man is serving themselves well here. that romney i have enormous respect but i don't understand

why the opening note of service in the senate is a side swipe at the president. neil: he wants to be a republican alternative to the president. >> fine. but the better way to do that is to emphasize what you're for and stake out territory that naturally contrasty with the president. i don't think it's helpful if he wants to start off by taking a two by four to the president. on the other hand, the presidents tweet was relatively restrained. it was wise to have them send out his campaign manager to hit back at romney. neil: i can't figure romney out on this. a lot of the president support when he first announced he was going to run had entertained becoming secretary of state. so they go back and forth at each other and i'm just wondering not so much the president aware that romney is coming from.

>> like you i'm mystified. it's easy to say which are against it is harder but more powerful to say which are for. and the alternative to donald trump, then make this about which are going to do and what you're for and what you're going to emphasize. that's a tougher thing to do but a more powerful thing to do than start off with a paragraph or two with the side swipe to the president. i'm mystified why romney did not do the starting node. this is his introduction as a u.s. senator. this will remain for a long time in the air. let your campaign manager go out and do it. don't make it personal. rise above it. neither man can be changed. those of them have sort of got a carrot and they're not going to change. for romney that means he needs to start off by saying he's going to be different to trump and trump feels obligated to

punch down at the junior senator from utah. i'm mystified. neither man served them so well. neil: i'm curious also your view elizabeth warren the latest, many more to follow. how does a crowded divided democratic field that could go into dozens, how does that sort of help out? how does that help or hurt president trump? >> well, the more divisive the democratic primary and the energy inside the democratic party is to the left, the better to shop for reelection as because even people who don't like his character nonetheless like a lot of his policies and if there is a clear contrast between somebody on the left-wing fringe of the democratic party like an elizabeth warren or bernie sanders in donald jay trump the incumbent president, sometimes you want to take the guy you

can't rather than the problem you think you're going to get. i think he is well served to agree the democratic primary goes to the left. neil: for the president in this trade back-and-forth are you worried or concerned we score a deal with the chinese for example but china is slowing so quickly. i've had experts on the show talking about a recession that we give very little bang for the buck even if we get a deal. >> yeah, what kind of a deal are we speaking? are we trying to get them to abide by the norms regarding free trade or we trying to manage trade that is to say we want to get them to agree to buy more things from us in irvine today. or are we concerned about what we really ought to be concerned about which is theft of intellectual property. i'm afraid the president will settle for a manage trade deal or they say will buy more stuff from you lower terrace to the sale of american goods in china but they keep in place policies

that allow them to steal intellectual property which is how they're building the economy in the 21st century. they are not building it when it comes to 5g and artificial intelligence in quantum computing and electric cars. by and large they're stealing our thoughts and ideas. they did file an excellent brief at the world trade organization in march. it's going to take a year or two to get settled but it's a great place to rally the world around us because were not the only people whose intellectual property is being stolen in the world trade organization could be a place they can declare practices to be an appropriate. virtually every case in 2015 was the last thread that back, the obama administration had 115 action to which they won 113. neil: how do you know these numbers off the top of your

head? >> it's sick. it's an obsession. give me help now. neil: you're the best. thank you very much my friend. the minimum wage going up in no fewer than 20 states all looking that much, much higher wages. now what? after this.

neil: all right, states have been hiking in a lot of states were warning you're going to do this. but it hasn't happened yet. jeff flock has been monitoring this in 20 states now look at these higher minimum wages. good to see you. happy new year. reporter: happy new year to you. counties and cities also are raising it. as you point out, 20 states across the u.s. we've got a map that shows you where the minimum wage has gone up. this is the federal minimum wage remains of $7.25, which people

say hasn't been raised since 2009. the local communities willing to do this either by state legislatures or ballot measures or voters prove it at the ballot or just cost of living increases. biggest increases around the country california and massachusetts both went up 1 dollar to $12. made one up to $11. arkansas and missouri up by 75 cents each. what is the impact as you point out? well, 5000 -- 5 million workers getting an increase in if they work full-time at minimum wage, they'll make an additional 90 to $1300 depending on the state and municipal this year. cost to employers by $.4 billion. some people were worried about that. it's interesting with that amount that we talked about this earlier in the week about the

population shifts tends to be in the u.s. away from high tax states like illinois where i sit right now to low cost states in terms of taxes. but when it comes to minimum wage, some of the fastest-growing states are also increasing their minimum wage and a lot of people think it shouldn't be the federal government doing this. $7.25 in new york is living on the street probably appeared if you're in the middle of north dakota, $7.25 is not so bad. so maybe it should be the states and local municipalities that have controlled this. neil: did in a lot of dems face different rates for different types of workers. they have tiered wages for let's say a teenager working at a local restaurant versus those who work at a major department store or what have you. >> as well as different wages

for a big employer. more than 50 employees, a small business. that actually makes sense. it's a nightmare when you're trying to make a graphic on this and try to explain it. but it actually make sense because every state, every municipality is different and maybe they should be the ones setting the deal instead of declaring a minimum wage for everybody. neil: you are criticizing our graphics folks. reporter: they would do whatever. by the way, my first rave as an employee was when jimmy carter signed a raise in the minimum wage. that was my first race at god. not because of anything i did but minimum wage went up. trent do something similar. absolutely. i most certainly did. especially after that. thank you my friend as always. jeff flock. what a great guy.

including the steel very likely between the united states and china. the only problem is china could be melting away. getting crushed after missing some delivery estimates. cutting the prices of those models and that's not being received well. it's actually a electrified. see what i just stood there. basic cable. you're welcome, america. whoooo.

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comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.

>> on the new york stock exchange let taking the test of right now because they have a record from q4 in terms of production and delivery, but it was enough to appease wall street. 6.5 points for the company. what they did is delivered over 90,000 vehicles, but it just wasn't enough. more specifically the model three did produce 61,000 model three. if we look at total annual -- there it goes, total deliveries. 2018 versus 2017.

but really what is moving the stock is they are reducing the price of their vehicles. $2000. we reached out to the company and tax credits and they responded and i quote, taking steps to partially absorb the federal luck vehicle tax credit and 7500 to 3750. contributing to the decrease air. working on profitability for the model three was becoming a little bit more efficient. for those fans that want to know about the cheaper base model. that was supposed to be $35,000, still hasn't come out. back to you. neil: in the meantime, still waiting to get the economy and how it's doing. unfortunately for us and the

world it's slowing down and that could be problematic whether a trade deal is made or not because he then how much will we gain from it if china slips into something like a slowdown or an outright recession. >> economic numbers continue to trend downwards showing that slowing in the chinese or weakness in the chinese economy. today the manufacturing pmi number came out to low 50 for the first time since may of 2017. that shows manufacturing his contract being. new orders fell for the first time. also the exports shrank for the ninth month in a row. 25% last year. u.s. markets and the fundamental numbers are strong but hourly wages growing up in strong gdp growth. they've tried to spark by cutting tax rates and it has not

had an effect as of yet. president trump talked to him yesterday to congratulate them on their relations. willing to work with president trump to summarize and implement the consensus we reached in a joint effort for u.s.-china relations. we've seen a lot of talk and pressure because the chinese economy in no action yet to lower tariffs and intellectual property or open the chinese market. u.s. markets are starting -- the trump administration. the secretary of defense came in telling his staff according to defense official remember china.

trying to turn around and create a good trade relation with china. neil: edward lorenz, thank you my friend. no one really fighting over the spending involved one way or the other because our debt is growing fast no matter what our priorities. after this.

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neil: any second now we should be able to get the pool feed from the white house. we shall see. the president already making it clear the government could be shut down for a long time. when it came to the markets, we need help from the federal reserve on these markets. the national taxpayer union senior fellow matty did you have letter. -- mattie duppler. he has been of that view for a while now. nothing has developed to disavow of that, right? >> i think you're right, neil. we need movement from either political base that creates pressure on the leaders to make a deal. frankly, i don't see that happening for liberals or conservatives. trump think hes has winning plan on the wall an democrats think they have leverage what they want in the funding fight. this may start to break loose as we move into this next week. of course nancy pelosi is vying to become the next house speaker. she has a hard job of governing trying to get a deal her caucus

will debris to. whether she was the political clout with the new caucus or whether or not they make demands on her leadership. neil: likely will be appointed as their leader, voted as their leader. she has got to assuage members who don't want to give an inch to the president on this wall thing. where is the middle ground? >> there is no middle frowned. that is why we have day actually after government shutdown. democrats have diverse caucus with progressive members and members come from seats that were previously republican in states that president trump won. that doesn't mean there is a lot of daylight to be covered between two parts of the caucus. and nancy pelosi and senator schumer have to go to the white house to make a deal when the president says he doesn't have much room to give either. neil: meanwhile the president does notice these markets. he is not oblivious to them.

married to them when they were going up. not as much as they were going down. blaming federal reserve for a lot of what is going on. a lot that he wants to sit down with jerome powell, when he is fed chairman that is-a no-win situation for powell. what is your sense? >> i think it's a no-win situation for powell. it's a no-win situation for the markets. think about it, central bank is supposed to be a non-partisan independent entity. what can possibly be gained by taking leader of central bank and sitting him down in the a room with the president of the united states who is motivated by politics to have the meeting. i don't think it's a good idea. president trump should separate what he is doing with his policies from the federal bank. president said the glitch that the stock market performed so poorly in december. to mean as glitch is market performs as you anticipated perform in scenario when you

have escalating trade tensions between the two largest economies in the world. that is not too radical to what we see happening on the public policy side. i hope cooler heads prevail this conversation. that the federal bank continues to create, excuse me, take a dovish approach next year and they're certainly on track to do that. neil: we're a minute away from going to the pool feed from the white house with his cabinet. he has acting officials in his cabinet. will this be a problem if isn't solved on a permanent basis. >> you mean acting, chief of staff, secretary of defense, these are senate confirmed positions. question, better to have acting official already in the job and creating, doing the job they need done at that moment or is it better to have someone languishing in senate confirmation? i'm not quite sure. thatthat is a good question fore senate majority leader and his

caucus. there is appetite to get nominations through in the senate. depends whether or not the administration wants to put names forward. there are very capable people serving in those capacities. neil: thank you. now the president. >> thank you. >> thank you very much for coming. we appreciate it. reporter: mr. president, happy new year. ask you a few questions, most notably is there number below five billion you might be willing to accept in order to reopen the government and get this thing moving forward? >> i would rather not say it? could we do it for a little bit less? it is so insignificant compared to what we're talking about. i heard numbers as high as $275 billion we lose on illegal immigration. talking about to complete, a lot has already been done. somebody said we haven't spent it. we don't pay contractors before we finish the job. that is another thing pat and i

instituted. we like people to do it. we pay it when it is finished so they do a good job. this way they don't do a good job we don't pay them. when you guys say we haven't spent the money. we spent the money. we want to finish it up. the 5.6 billion approved by the house is such a small amount compared to the level of the problem. when you see democrats wan to give away 12 billion extra, we're giving away 54 billion in foreign aid. we give moneys to countries and not give money to our own country. another thing i'm complaining about. i'm cutting that back. it is unfair we give money to guatemala, honduras, el salvador, they do nothing for us. when we give money to pakistan, $1.3 billion. i ended that. a lot of people don't know it because they haven't been fair to us. we haven't a great relationship with