stuart: breaking news. president trump will travel to our southern border on thursday, according to the tweet from sarah huckabee sanders. she says the president, will quote, meet with those on the front line for national security and humanitarian crisis. i don't think that affected the market but we are up nearly 200 points. that is what i will give you, neil. it's yours. neil: i'm greatful for that, stuart, thank you very, very much. we're following market in and out of session highs. a lot could be optimism about trade. we're monitor that. much i was grasping at other potential straws. service sector growth slowest pace we've seen going back since july. still sign of an expanding services sector economy. we're seeing a bit after slowdown in manufacturing economy. both continue to expand, i should macen to add. this latest one seems to buoy the argument, pace of increases, slowing a tad, federal reserve would be less inclined to raise interest rates, oring a

aggressively. that is a leap. we'll try to touch on that with famed billionaire investor carl icahn. we i will be with us as our guest during this show. forbs media chairman steve forbes will be here. what do you think? >> we have heard it before. in addition to china buying more stuff from us, is access to the chinese market. not just promise of access, but in the past, when they allowed access they horribled our companies with regulations and capital requirements and the like so what the chinese have to come up with, and i think they will, is this time if you're allowed in china you will not be horribled unnecessarily or unfairly as been the case in the past. that's the key. that's the key negotiating item. neil: how do you do the ronald reagan thing, trust but verify? how do you monitor that to make sure they're delivering the goods because they have hoodwinked republican and

democratic presidents alike over these many decades? how do we know they will stick to whatever they are on the verge of announcing? >> this time we're taking it seriously. in the past we did not do surveys and following through on information about unfair practices. i hope this time too, we enlist the europeans and others who trade in china who also have these problems. so if you take the thing seriously and bring enforcement actions when you see something not being done right, bringing them to court or the wto or trade organization, or putting on sanctions on those particular individuals and companies, that would be very different from what we've done in the past. in the past we said, please behave yourself and then we didn't follow through on enforcement. neil: a lot of times we did appeal to the world trade organization. i know during the obama years and even some cases the bush years we won there quite often. now, what happened? did they not follow up on the rulings that were made against them the chinese or what?

>> we did win 85% of the cases we brought before the world trade organization. so it's a good mechanism for us but again the cases were sporadic. there was nothing systemic about it. and so you bring a case. you would win it but wouldn't bring other cases that you should have been bringing. the wto enforcement in this high-tech age need to be updated. back in the 1990s, we had a previous trade organization. it needed to be updated. that is how we got the wto we may need an update today in the digital age of enforcement so china can't play the game of starting shell companies. you hit one company. then five others come up elsewhere. neil: so if you had, i'm sorry, if you had to monitor china right now, the bigger worry seems to be not so much the little trade deal with them, but whether china is weakening to the degree it won't be worth much on paper because they won't be able to deliver the goods or buy more of our goods because they're falling into something, maybe as bad as recession. what do you think?

>> they're you'ver ising equivalent of a recession right now. i think that will put pressure on president xi to go back to the kind of free market reforms china did engage in the 1990s and early 2000s and backtracked on especially after the 2018 financial crisis. i think china will make internal changes not because they are reading adam smith but realizing they don't deliver the goods. that will undermine the political legitimacy of the regime. we know what that means in china. neil: steve always a pleasure, thank you very much. happy new year. >> you too, thank you. neil: to the former ambassador to china under president obama max baucus. he is arguing that the chinese are in a lot better shape than the world seems to be thinking. i think ambassador, that is one of the reasons why you don't automatically expect the chinese to willy-nilly bend because they have to, right? >> frankly, i think the trade

dispute is hurting both our countries. it is hurting china more than it is the united states however i think the chinese can with stand pain more easily and endure pain more than can americans. given all that, i think there is decent chance we'll have some kind of a trade agreement. it will be moderate. it will be a little bit of window-dressing, both sides can declare victory and we'll go on. they cannot address the deep underlying problems we have with our two countries that is the problem we face this year and next year. neil: ambassador, i know when you were dealing with the chinese, we won quite a few arguments with the wto, did they make good on punishment or reprimands, the wto would mete out? for example, it would take our side on numerous occasions? >> well, frankly, wto is dated. wto was put together many years

ago, basically, you know, 15, 20 years ago and it does not deal with a lot of the tech problems that we're facing equity caps, forced technology transfer, et cetera. wto is more of a trade, as tariffs and non-tariff barriers are -- neil: does it have enforcement mechanism, ambassador? that is what i always wonder about it. whatever happened in the past under your old boss, president obama or either bush presidencies or bill clinton, it just seems to find a way around what even intertracks trade bodies tell them to do? >> correct. frankly there isn't any direct enforcement mechanism. that is in the wto rules against them, let's say china, the united states can take retaliatory action but it gets back to and fro.

wto cannot impose fines. is there is a violation but offended country can immediately take action and that gets complicated. neil: if we score a agreement or trade arrangement, ambassador what would have to change in your eyes from prior commitments we've gotten. wonder what you would want to see to see if this is seminal shift in behavior? >> this is not easy. because china historically is very patient. they tend to wait us out. they tend to play us. they tend to say they're going to reach some kind of an agreement, sounds good. we americans see what will happen and it doesn't. so we have a very hard time enforcing. one difficult too, getting other countries to join in with us in coordinated concerted effort with respect to china. we have to draw, brighter line with china, be more specific. say okay, you promise you will

do this. now before we agree to anything here, you got to give us the parameters. give us the specifics. give us a timeline here. we're not going to agree to anything until we have the specifics, until we have the timeline, something we haven't done in the past. neil: there were rumors going on today, ambassador, maybe you heard the same, the president and his chinese counterpart might announce a trade deal in davos. what do you think of that? >> i see that president trump will meet the vice president of china davos on the sideline of the my guess is that will kind of help -- it will grease the skids toward a more, more direct agreement that i think will be reached sometime next couple months. so that is a good sign that trump is meeting him. that's good. neil: if i could get into tacky political question with you, you're a pretty good read on your party, where things stand, joe biden is apparently weighing a presidential run, but already

sent out feelers he thinks he is the only one who could win? he has sort of background, experience, could close the deal. do you agree with that? >> you know, frankly i think there is a lot to that. he has experience. he is smart. he is tough. he relates to the common man, common woman. he is very, very good. i think that he is, almost therefore the opposite of trump who is just so mercurial and so impulsive, deals so much in the moment. i think joe would be good. he is older, that leaves a question. if he runs he will have to have a running mate somebody younger, a woman, somebody that shows he really is in touch with the younger movement. younger people in america. neil: so not a former senator who was a trade ambassador as his running mate, right? >> [laughter]. no, no.

he needs, he needs somebody who is really very active politically. neil: i got you. >> frankly i, frankly i like joe biden a lot. it is up to him obviously whether he runs or not but frankly if he does, i'm a joe biden man. think he would be a very good president. neil: it will veck crowded field though, isn't it? >> it could be. it is crowded right now. when things get started there will be several who will drop off. a lot will drop like flies i think after several months. neil: we forget that. sometimes you have to have a very crowded contest, but within months, not so crowded. we'll watch it closely. ambassador, thank you very, happy new year. >> thank you very much. happy new year. neil: a lot of issues are going along for the ride, including financials. a lot of those exposed to a deal with china if that were materialize, the bowings, caterpillars, et cetera. so hope springs eternal. more after this.

neil: 17 days in, are you ready for a record? only days from one that would bring the 1995 record that bedeviled republicans and democrats when bill clinton was president and republicans forced the issue under newt gingrich.

we're getting close. to get a sense where we stand, go to edward lawrence live with the very latest. because at the very least this will go at least through tomorrow, right? reporter: exactly, yeah. democrats will not be back until wednesday to start voting on bills in congress. minutes ago, actually, the press secretary sarah sanders tweeted out the president will go to the border on thursday to see the situation first-hand. we're in the midst of the third longest shutdown in u.s. history. the second longest shutdown, we'll tie that tomorrow. that was in 1978. republicans and democrats remain far apart on issues of border security. the president now saying that he want as steel barrier on the border because it is less obtrusive. he believes democrats would go for that. now they want it, $5.7 billion is what he wants. a little bit more because steel is a little bit more expensive. white us says the president is serious making a deal. the ball remains in the democrat as court.

the democrats want to open up government first, then talk about border security. some senators are questioning why senate majority leader mitch mcconnell is not taking the lead to work out these issues. >> the person who is missing from these negotiations is mitch mcconnell, the majority leader. look, the majority leader had us go out of session just before christmas when the entire senate unanimously voted for a package of that would have kept the government open. he is now saying i'm out of this until the president says what he will clearly stand for. reporter: democrats like senator chris coons says they're for border security. the shutdown does affect paychecks for federal workers out of money. talking about some 800,000 federal workers. new mortgages may not be processed because they require irs verification of past income. the irs is unfunded right now through the treasury. there could be delays in refund checks, food stamp program could be disrupted because the department of agriculture running the program will be out of money after january.

3 billion in emergency funds will not cover all of the february obligations. also the tsa not being paid. seeing another day of callout en masse. the tsa releasing a statement a little while ago they appreciate the workers staying on task. they said 2.2 million people traveled through tsa lines yesterday. 99.8% of them went through in 30 minutes or less. they're saying they are sticking, and able to handle this, even though they're also unfunded at moment. this week, nancy pelosi the house speaker says she will start adding bills through congress that fund the individual departments one at a time, first with treasury. we'll have to see if that get as different outcome. back to you, neil. neil: edward, thank you very, very much the president already wiggled a little bit on the price how much he would commit. whether the wall is sort of conventional sense after wall of cement. he says steel, steel slats, combination therein. we have indiana republican congressman jim banks with us

right now. congressman, thanks for taking the time. does it make a difference to you what this structure ultimately is made of? >> neil, great to be with you. at the end of the day my constituents expect us to build a wall that works that accomplishes the tasks this president campaigned on two years ago, that almost every member of the republican conference and congress today campaigned on, two election cycles in a row. doesn't matter if it is concrete or steel. i say that as congressman who represents one of the top steel-producing districts. i like steel, but my constituents don't care what material we're using. they just want it to work. neil: we were showing a clip before, congressman, of democratic senator chris coons talking to i believe brian kilmeade this morning and one of the things he said me, struck me interesting, was intrigued by the steel thing, slat thing, combination of both things, that make up of it is an issue for

democrats and i began to think, which is always dangerous early in the morning, maybe there is that middle ground here. how the structure looks what it is made of, matters more than your full low republicans typically argue against democrats. is that the case? >> the president has shown time and time again he is willing to compromise what the wall will look like, what the material is being used. at the end of the day the president is fulfilling a significant campaign promise, he and some of us, many others like i made as well to secure the border. house democrats like nancy pelosi refuse to come to the table to negotiate to compromise. that is sew frustrating about this process. i spent last couple years, freshman, negotiating and vote on bills not fully to my liking. not what i voted for, especially spending deals. we had to negotiate with senate

democrats to get 60 votes in the senate to move anything forward. that is what compromise looks likes. we did it the last two years. there is no reason why we can't do it again. we need nancy pelosi and house democrats to come to the table, be willing to negotiate on some of the subjects like these and bet this done, reopen the government. put government employees back to work. in this -- end the shutdown as soon as we can. neil: you, maybe not but some of your colleagues seem to get a little bit nervous, partial shutdown, whatever we want to call it is beginning to reverberate. people can't get passports renewed or fha-backed loans closed on in time, a host of other things spreading further and further and further. democrats are all too happy to point out that is because republicans won't budge on this issue. you say? >> neil, my constituents see it exactly the opposite. if you look at volume of phone calls that are coming into my office, from my constituents in northeast indiana, it is the

opposite message. secure the border. do what you said you were going to do. support this president. don't, don't fall for any deal or come, fall short of any supporting any deal that doesn't do exactly that. that is what i'm committed to. that is what the president is committed to. and i join president trump in making securing our border a very top priority. neil: but do you worry, whatever the principle stand you argue for, sir, democrats in the future could just as easily argue for one of their own to keep government closed until they get what they want? it's a slippery slope? >> i suppose it is but that is how this legislative process works. it takes, it takes the congress passing a bill, sending it to the president's desk of the president making a decision whether to sign it or veto it. that is what negotiation is all about. it is not always pretty and that is how the process is supposed to work but it is not working

now. neil: good to see you. >> thank you. neil: she is getting a lot of buzz as she arrives on the washington scene. alexandria ocasio-cortez says a top 70% tax rate isn't a bad idea. the nation did fine when that was the rate, actually much higher rate when dwight eisenhower was president. we can afford to go back there again. reaction from a billionaire businessman who has a different thought on that, after this. looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

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>> people are going to have to start paying their fair share in taxes. you look at our tax rates back in the '60s. when you have a progressive tax rate system your tax rate, you know, let's say, from zero to $75,000 may be 10% or 15% et cetera. once you get to like the tippy-tops, on your 10 millionth dollar, sometimes you see tax rates as high as 60 or 70%. neil: all right.

the idea that the progressive tax code is not progressive enough. of course she is a bit of a champion trying to boost it for the upper income to make it fair so people pay their fair share. what is lost in this argument, whether our on the right or left, republican, democrat, liberal or conservative, fewer people are paying taxes net-net. the share of those paying any sort of federal income tax is half the american population right now, eligible tax paying population. there are a variety of reasons for that. there are those who still pay, fica, for example and other medicare related taxes but as far as straight income taxes and getting phased out, what have you, fewer than half are paying any federal income tax at all. the issue of fairness can be read, do you address that or correct that by hiking taxes on the well to do unless everybody, first has some skin in the game? let's explore this with billionaire investor john paul dajoria what he makes of this

particular tax pitch. i know you can afford to pay whatever the tax rate is. i understand that you mentioned as much in prior visits, but i worry longer term for our country that that math is not sustainable, no matter how much you tax the wealthy. >> correct. neil: fewer and fewer individuals are putting money into the system. i'm not saying they should pay top rate or your rate, everybody, but everybody should have some skin in the game and everybody doesn't? >> definitely. love you out there, but the young lady is young. she doesn't understand. let's give her a little bit more time there in office. what she doesn't understand is, it is what is the problem, not what is the more taxes going to solve? what is more spending going to solve. what is the problem? the problem the money is not allocated properly there to begin with. a lot of money is wasted. the second part of it is, isn't it the american dream to make more and more? now we're finding out that more

of those of us making more and more, spending a lot more, i'm talking about in millions of dollars to help other people out? you start taxing people 60, 70%, it is happened in france years ago. happened in england years ago. happened in our country years ago and it just didn't work. didn't work at all. she has to focus what is really the situation. where should we not be spending money when we are spending it. where should we not spending money. not raise taxes, how to appropriate it a little better off. you also have another whole group of people, i happen to be member of the giving pledge. we spend tens of millions of dollars taxes every year, but we pledged to give back 50% of our wealth while we're alive, after we die, we put it towards the utes of the people better than the government. we think we're sharper than the government doing things like that. neil: one of the things that is

interesting about what she is proposing, it isn't new or different, but isn't trying to take people like john paul dejoria, slap them at first dollar 70%. she used 10 million example, whatever, or over gets taxed at higher rate, a graduated level gets taxed at graduated figures. what do you think of that? one way many liberals are trying to ease this potential crunch? you're not going to be taxed at this rate. this will be essentially a surtax on really wealthy? >> well, they have got to look at is differently. you said a while ago, everyone paying fair share. when i was in junior high school, i had a full-time job. they would take out of my paycheck a little bit of money for social security, a little for this, a little for that. it wasn't that much, they took it out. i felt like hey, i'm on american citizen contributing to this

country. it made me feel good. if people give a little bit, a skin towards the gain as opposed to give me what you can, it is someone else's country they're making all the money. but they're contributing all the money. would be nice if you're together, i like your idea. everybody puts in even a little bit, we're doing something for the country. not just complaining about those where the american dream came true for them. the american dream came through but they also worked for it. neil: bernie sanders and others in the party were arguing things were working fine in the eisenhower administration when the rate was over 90% for the top rate. then john kennedy was pushing for 70 to 72% top rate. that eventually took effect sadly after he died but it did take effect. years later ronald reagan bring it down to the 28%. it has bumped up around that level, close to 40% where we are today. i'm just wondering what you make of that? that in the old days, people in

the top tiers such as yourself were paying a lot more or were they dodging that? finding a way to shield that? >> they were dodging it. it was really playing out write well. 70% but nobody paid it. there were some writeoffs, so many places to put money, so many ways to do thing, nobody ever paid it. so part of the deal was every time they lowered taxes they lowered the amount of deductions you could take. number of places you kind of hide money, not pay taxes on it. that happened ever since they have been lowering it. i think today, percentagewise, people are paying a lot more in taxes percentage wise than in the 1950s, during the eisenhower era because there were so many deductions everybody could take. neil: might have been a profound guy. yourself you could easily double price of some of your very hotsy-totsy shampoos and less people will pay for the price.

the same thing analogous to hiking a top tax rate. if there is wider pool of tax participants around to feed this government, that depends, obviously on revenue, but we're quick to raise the price tag, in other words, what you pay, then we are to address what you're paying for? >> exactly. i think there should be more of what are you paying for? because some things people are paying for, they don't want to pay for. we elect people to represent us in the congress and senate. we hope they will do a good job. we don't get regular reports? where did you spend the money. what did you vote on? some will do that, very, very few. next time at election time, did we reelect you, what did you do, what did you not do? there should be more transparency in government see what they're spending and where they're spending it. people don't know that. the majority of people don't know it. i don't know it. neil: do you ever get annoyed by those who say well, you know,

you've gotten your wealth nefariously then? the implication very successful guys like yourself there, is something sneaky about it? you know what i mean? sort of like, very quiet load of prejudice that builds up, those who are successful did so by ill-gotten means? >> i was in a courtroom and had an attorney picking out a jury that asked the jury that, it was civil type of a trial, that asked the jury, how many people here think that if you made it in life you did something dishonest to be really wealthy? several people raised their hand. they dismissed them. they raised their hand. their feeling if you made it you did something dishonest. it is not the american dream. people have to remember, america still works. american dream still works. everyone loves to be part of the american dream. it is i was homeless twice, i did it. if i did it others can do it. i'm a simple person. i did it the american way.

others can do it also. watch good fortune, the documentary. it will show you how, even if you're homeless. neil: very inspiring kind of a story. it shows what is possible in this country. it is always good seeing you, john paul, happy new year. >> pleasure, peace, love, happiness to you out there, my friend. neil: a big theme whether you're on the moderate side or liberal side of democratic party, class warfare is a live and well. rich gotten rich and we haveeven the score. joe biden more moderate of some other democratic candidates sniffing around a white house run, he is of the opinion we have unfair tax code. "daily caller" editorial director vince coglianese. joe biden comments are not in your face as some of these others looking to launching campaigns to correct the disparity what they call disparity. elizabeth warren comes to mind but a help. of others who want to right that

wrong. how popular is that do you think in the democratic party and whoever is nominated, joe biden, whomever, has to espouse that? >> no, they have absolutely to espouse that. they have to be aggressive and forceful for a bus hungry to go after president trump. they're offended they lost in the first place, with hillary clinton. they are looking to rally with a candidate that can take the gloves off, joe biden doesn't fit that. think back to 2015 he was hemming and hawing if he would run for president. finally he gives this speech. he announces he is not running. during the speech he brushed back hillary clinton. he said republicans are not our enemies. we should work with them. that is not the type of language democrats are excited for right now. neil: i'm wondering leaving aside his age, closer i get to any of these ages that is issue for me, with either candidate i might point out or party. leaving that aside, he was vice president of the united

states. he was a long-serving senator but run for president on twice on his own before and didn't exactly light up the charts. so is he one of those who looks good from afar, but once in the race far from food, what do you think? >> i think so. he is much more traditional politician about the way we measure gaps. a lot written about president trump. he defies gravity for all these questions. i don't think joe biden defies graphty quite as much. his feet are firmly planted on ground. when he commits gaffs people notice. democrats are not excited to have him. his age is fine. we've seen plenty of people perform in their 70s in politics. as he is is, older white man that is problem for democratic party is totally consumed by identity politics. they are looking for a candidate much more progressive. a they want a minority or woman. i don't think he fits the bill. neil: that would include someone

espouses higher taxes on the wealthy, right? i assume that is a given? >> that's right. if any candidate who sort of occupies the space of being tough and singularly focuses on sort of those types of things, going after billionaires, i.e., president trump, will i think be rewarded in a primary with much more attention and popularity versus what joe biden is attempting to do to bridge all the coalitions. wants to be joe of all trades but master of none. neil: interesting. vince, good seeing you again my friend, i appreciate night thank you. neil: dow up 194 points. a lot has to do with growing excitement a deal could be in the works. a lot of our trade negotiators are in china. rumor ahead of davos the president could announce a big deal maybe with his chinese counterpart right there in davos as we understand it xi xinping is not slated to be in davos. a lot of this is rumor chasing all the rest but the prospects of a deal and then obviously good economic news or news that

isn't so bad that the fed will get involved and all of sudden stop doing what it is doing, it is combining to gift market a nice one-two punch in a good way. after this. ♪ this is stonington, maine, a town where almost half the population is self-employed. lobster fisherman is the lifeblood of this town. by 2030, half of america may take after stonington, self-employed and without employer benefits. we haven't had any sort of benefit plans and we're trying to figure that out now. if i had had a little advice back then, i'd be in a different boat today, for sure. plan your financial life with prudential. bring your challenges.

neil: well the doles, they never went away. i think a lot of people forgetting that through the market selloff. not these will necessarily disappear or punctuate whatever is going on but eli lilly buying loxo oncology for $8 billion. that area of the oncology market, new promising cancer treatments, therapies, fusions and the like, go way beyond cancer or neurological diseases like multiple sclerosis and so many others. these are promising technologies

and the players out there, there are not that many of them. so they want to combine resources to take advantage of that. why the entire sector is jumping like crazy here. on the idea this will be, forget about a trigger event, triggers has been pulled, but we'll seep, many more in the field do the same. deirdre bolton from the new york stock exchange. market watcher, jonathan hoenig. deirdre, promising technologies, everyone hopes for eventual cure for cancer but reality when it comes to a lot of cancers, the longevity improvements made for even some more serious ones. is this a step in that direction but go ahead. >> they are certainly steps in the right direction. there has been so much research, so much development, so much progress with some of these oncology treatments so much more with they're doing with positive genetic treatments that can help people with cancer, the more this comes to be a very hot,

continues to be very hot m&a area for this year. we may see biotech, these positive targets really pick up the pace and provide a lot of positive catalysts for this year, much as tech has been the last few years. if you look at trading, eli lilly, this is rare as you know more than anybody, the acquirer, the stock is moving. look at health care as a group, it is the third strongest group in the overall markets. not surprisingly the target company, a loxo, that is up something like 65 1/2%. eli lilly paying significant premium, up almost, 70%. loxo is worth more than you judged by the premium than it was ever as an independent company. that shows you how much eli lilly wanted company. pricewaterhousecoopers one of the consulting firms says there is more like this to come. alluded to the fact with cancer treatments, when patients are paying for drugs, the

pharmaceutical companies are reaping anywhere between 60, to 80% premium and these pharmaceutical companies don't actually have to pay a sales force. a high cost sales force the same extent they do with other kinds of treatments, neil. neil: analogy of built-in babe ruth. you just bought babe ruth. jonathan, when you look at the sector, do you like it or all of sudden change valuation, far from encouraging deals it might inhibit them? >> no, neil. deirdre is right on the money. this is quietly one of the strongest performing sectors in 2018. everything fell apart in the fourth quarter. up until this point it was big cat pharmaceutical stocks. it survived as a big cap pharmaceutical you have to be involved in m&a. all the top 10 pharmaceutical companies globally are products of m&a. bristol-myers acquire celgene.

takida acquire shire. these companies are really miracle workers. they are inventing medicines that will prolong lives what had previously been fatal diseases. the fact they're paying such an extraordinary premium, to deirdre's point, even the acquirer is going up this bodes well for the sector. neil: interesting to do this now, or this environment, deirdre, you could make the argument, yes on paper this makes good for to us buy this company. but, man it's a crazy market. fast conditions. we could wait it out but they didn't. we see this late i a lot. i find that very telling. >> indeed what we know as far as demographics go, the two biggest groups are baby boomers and millenials. so unfortunately as we all age, we all deal with health issues. it would seem if this market for cancer treatments is only going to get bigger. the fact as jonathan just

mentioned, the technology is actually now so different. i mean it is amazing. university of pennsylvania is just one place where there is now this sort of positive genetic editing towards really reducing risks of cancer for a lot of people predisposed to it. sometimes i feel like the medical field, when it is really progressing make a lot of other fields look lazy, neil. neil: that is actually a very good point. jonathan, when you look at the sector quite right to say what will you look for. >> uncertainties marketwide they need to accelerate their own growth, its about the pipeline for these companies. look at eli lilly. some pretty bad news about cialis which was a big seller. they're looking for next hot drug. cancer is unfortunately a growth business. this is a strong move. i expect it to continue to be a

strong sector. the only question mark, one is potential for antitrust concerns, that often takes precedence when we talk about m&as. also the question what will be next for obama care and health care writ large in this country? that will be decided in 2020, perhaps even earlier. that will affect a lot of pharmaceutical stocks as well. neil: well-put. jonathan, thank you, deirdre. very, very much to deirdre's point, both stocks are raising up. acquirer and acquiree. eli little by no matter how much it could be forking over is money well pent. i will ask carl icahn coming up. so you only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

neil: president will go to the border on thursday we're told. to see for himself what can and should be done. to make it more secure. former bush 43 deputy chief of staff, best-selling author, karl rove. you were among those quickly said when the president brought out last week, you know, some of the these guards and the like who work the border, that was an important moment to signify what they were sacrificing in terms of missed pay all of that, to push for this. president doubling down on that strategy. do you think it will work?

>> well, look, we've got to divide this into two things. we've got eight government agencies with about 380,000 furloughed employees. we have 400 some odd thousand schemed essential personnel come on the payroll. when you have 300,000 plus federal employees not getting paid this coming friday, that will start wearing. particularly in places that have nothing so every to do with homeland security. they work for the treasury department processing irs refunds. they work at the ag department working ag extension work. work at commerce department with trade promotion. work at interior department in our national parks. agricultural department in the national forests. the president is in a boxed canyon. he is in several boxed canyons. he needs to get out of some of them, getting these bills unconnected to homeland security signed into law in my opinion. neil: but that would mean he would be doing all of the

conceding here. that is why some republicans are wincing at that, it ticks off his base. would it? >> look, it didn't, i heard this the other day from senior white house official who said, told me, if we don't get $5 billion we'll be in trouble. last year the administration got $1,571,000,000 for the wall and didn't even let the contracts for all of that before the end of the fiscal year on september 30th last year. they ended up just recently doing most all of the money in contracts. so they didn't suffer badly last year. i don't think they will suffer badly this year. a, don't get all of the $5 billion, b, allow the government to move forward. nobody, nobody who causes a shutdown wins, ted cruz and republicans did not win when they did it in 2013. republicans and president trump are not going to win this pr battle this time around. the president ought to try and cut a deal in which each side

gets something that it wants and everybody walks away satisfied with what they got and dissatisfied what they gave up. and as a result everybody will be end up a political winwer the american people with that kind of arrangement. neil: we shall see, karl rove, thank you very much, my friend. >> appreciate it. neil: to carl icahn after this, arguably one of the most celebrated investors on wall street and excellent spotter of value. where does he see it in this market? back today, but still beaten down from where it used to be. what is he doing? what is he buying? what is he thinking? carl icahn, next.

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when it might be time to buy or sell?

with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. neil: we are getting word the president is giving prime time address to the nation on the federal shut down this week. we don't know the date it is going to travel to the border to make his case for a while on thursday. day 17 of the impasse where there is a quarter to eight government not functioning and that affects everything state department visas and passports to fha backed loans not getting paid. the president wants to put a stamp on this and why it taken a very topline position he is when democrats have not been budging on their own right.

much more optimism built around growing prospects for a deal with china that could come to fruition soon. people have been fooled on this before. one fellow has a very clear eyed view of the chinese in more than two years ago has been worried about a chinese slowdown were a lot of people rolled their eyes. but he was right. he was right then and he was right to be concerned about it right now. the hedge fund investor carl icahn joins us on the phone. welcome and happy new year to year. >> happy new year to you. neil: on china when you had expressed concern for which you thought to be a slowdown or potential problems there, you had gotten rid of a lot of apple stock at the time on fears that anyone in that neck of the woods could be vulnerable.

you still feel that way? >> well, i feel strongly about china. i think it's mandatory that we do a deal with china and work it out. i think donald trump understands , hopefully he understands how important it is. i feel china's extremely important to our economy. we get cheap goods from china. we sort of obsessive bit about the deficit with them, which i can understand because i think that china keeps us from having inflation or partially keeps us from having inflation. that's what i said a few years ago. i still believe that. neil: so i'm just wondering, with a reduced square trade deal with the chinese in their slowdown is much worse. typically their numbers seem inflated. i don't know how you feel.

the problem would be rescored trade deal but with a company that might not be able to help us out on the trade front, mr. president. why? >> could be. figuring out what the stock market is going to do is almost futile. too many variables. we probably have the best record and i don't try to analyze what the stock market is going to do in the next six months or even the next year. you have to look at it and study it quite a bit. i can't really tell you what happened. the big picture thing i can talk about it, but i'm not an expert on china and i don't know what happened. they do have the ability with cheap labor to produce a lot of

good and that helps us and i think we use those goods and it's really part of our products. i'm not really saying that we should give into them. the intellectual property has to be worked out in other things have to certainly be worked out. we should be trying to do that. we should just lay down and do what they want to hear that they're very important to the whole economy as far as i'm concerned. neil: did you talk to the president much? maybe a year and a half ago the advisers you'd written a letter to say this experience has taught me anything that while their many politicians, washington to disassociate yourself from any talk that you are somehow advising the president. does that mean you don't even talk to him or what? >> let me put it this way. i haven't seen donald since the

anon duration. we do talk -- maybe a few times. interestingly, i think that he's done a good job -- i do want to pat myself on the back, but i don't get into politics to begin with. this was unusual for me, but i felt this country was really badly in trouble over regulations. the regulations were strangulated business. i've also felt corporate taxes were too high and we should be doing repatriation. all the things i was talking about in peacetime -- he's done a lot about that. i think that's very good. but i do really differ in his

views concerning china. so we have differences. we talk once in a while. you know, i'd certainly consider them a friend. i think he's done a good job in many areas -- [inaudible] neil: you were among the first to say don't dismiss this guy when he was running for president. a lot of good ideas and found ideas are the regulations and the regulations in the race with me. early in the campaign your privacy and about that. the latest drama seems to be and what the federal reserve is going to do or not do. whether you paul, you know, an investment out of anyone of your your other very successful investment, but are you worried as the president has been that the fed risks overdoing it and that it might already be too late. but it already has overdone it.

>> with what? >> with raising rates. >> yeah, i think there's a deeper problem in this whole situation if you look at the whole picture. the problem really is that there's too much debt in the world today. you just can't keep doing it. $250 trillion across the globe. you just can't continue to live without. i don't think. and they're certainly too much debt in our country in the real problem i think we have -- one of the real problems that would say because there are rather problems, but one of the things you could do in this country and it would be easy to do and we should really move en masse is to do something that corporate governance. i've been saying that for 30

years. the truth is that you don't have product to redeem. why, why, why. it's going to lead to some populist movement. you really don't have -- it's much more similar for feudalism than democracy. they would use metaphors for it. you put a motor on just how. and the mercenaries that's what they do.

and so you have those mercenaries in this sort of live off of and help them and do what they want and those are the investment bankers. so he has this whole group around him and he's even -- if you had a democracy, even political democracy where i really have too much to do to get involved in washington, but you can't remove this guy. it's very difficult to do it. there's a few activists like myself. barbarians breech the gate. you do very, very well of course then you scored $750 million profit vip of rail fund and so

many others here what i want to know is at what point do you say i've done well enough to change things. and to what level that's what you told "the wall street journal." so what is the icahn role when it comes to going after company. >> are not trained to be sanctimonious at all. if you look at these companies and shake them up and do something about them come you make them more productive over the years. again, i'm not really looking to post, but i don't think -- the proof of the pudding in my

record ruse that i'm right and if you did something about this corporate structure that we have at the protection we have -- now, i want to make it very clear. very many very well companies in this country are companies that you really don't need anything to do to fix them. neil: you do demand that they move quickly. >> you're making a good point here. and this is the trouble with that of his son. another problem. there's activism because it time constrained. you know, we've seen business from 1985 in just last year. we had nothing in it and said that 3.5 billion in that company

because interest rates went down. we can talk about that a little later. what i'm saying to you is if you look at our record and you bought iep, year annualized return from 2000 has been 16% if you reinvest dividends. and you made 16% annualized. and if you compare that to the s&p, it would be worth $250. 5% annual rate. we made a 16% annual rate. i think buffet is a great investor. not to boast that i'm a great investment people and i'm making the point that the reason i've done so well and made him talking against myself is that because i'm a genius of stocks.

there's others i can look at and say these are cheap, what's wrong with this company with the change going on. but you know what's wrong? the ceo are not the best of that company and we should do something with them. make them change their mind and do something. but why am i saying that? it is because that's what this country needs. we have good shake up the system that exists between investment bankers, high-priced lawyers, high-priced investment bankers in the ceo to correct them now. the lawyers are very smart guys. i'm not against the lawyers doing their job. the investment bankers do what they do. the ceos aren't as smart. the guys that ran the fraternity

in college, they're good guys. but they're not as smart generally with many, many exceptions. >> the ones who have run-ins with you because they don't do what you want them to do? >> no, just simply what i find with many exceptions i find the investment bankers that they hire are brighter than the ceos themselves. but that's generally speaking. neil: will take a very quick break here. i want to address you with what is going on. the macro picture in this country. talk about the net level with interest rates to rise. i want to get your sense of what that could mean that if you want to offer any general advice to investors here, there, everywhere. we've seen the markets are evidence of that.

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neil: back with investor manager. you know they've called in so many things. millionaire coral icahn who over the years has been worried about the disproportionate influence like the federal reserve can have on economies and markets the world over. markets moving on raphael bostick is saying right now it looks solid to him says inflation is a sliver below the 2% target. back with carl icahn right now. all these federal reserve guys in the middle of this unwinding of interest rates extremely low close to a decade. an interview referring to by

definition. you can't just keep renting out in a society. sooner or later they have to come home to roost. are we at that phase right now? >> yeah, look. i don't know if it's right now, but in my own portfolios what i've always done is keep them attached. so i'm not really play in the market. sometimes more hedge, sometimes less. and unless you're not have been completely hedged. neil: you are buffering yourself from just in case. >> it doesn't really matter too much to me what the market does. in other words, for example, the oil company, you know, as an activist wanted them to do a deal and what have you. what i did throughout that is so the index against it so it didn't matter what oil prices did. that's what i do and now i've

done it at a high%, almost 100% hedged. but i don't know what the markets going to do. nobody does. neil: but there's a lot of people noticing all these thousand point swing saying something is going on here that's not typical. >> i agree. sooner or later there's going to be a day and i'm 90% sure when we do hit a wall because the federal reserve just keeps giving his son money. you can't keep doing that. what you just said about the fed is not just the interest rates, but they have to unwind their balance sheet. or at least not keep pouring the

money in. and then you look at that and you look at the debt in this country. 85, 90% of the country keeps talking about consumer wealth. so sooner or later they're going to stop hiring them pay it back. sooner or later if we don't do something pretty drastic, were going to hit a wall. they had a wall with a 20% move. there's going to be more of the wal hit i think. neil: is that issue as bad as it was a decade ago? >> it is worse i think. i've been telling you $250 trillion a decade ago i'm not an economist, gear up to $250 trillion. >> either the corporate balance

sheets are better. you're not buying that. >> book, the corporations have made another mistake to some extent. an activist buyback in certain cases like apple. but we don't say that about every company. instead of using money to build product to the win out in broad stock back in some places at the wrong time. corporate debt is pretty high and that's coming due. you don't have the forest impression that all these guys have so much money now. i don't think many of them do. looking at some of the economy, you can argue either way. that doesn't mean this can't run 15% backup.

i really spend more time thinking about what companies to look at and much more time than deciding what the markets going to do because the pundits will tell you what the markets are going to do. twenty-five cents or whatever it is a coca-cola or something. neil: i think they're all on cnbc. but anyway. what you think of the tax cut. if we had not had the tax cut, democrats will say and it's a waste of the rich and didn't do anything. a number of democrats leading an effort to up the top rate. other web to 70%. would you think of all of that? i think that part of the wealth gap is part of a shame to have

been. you have this gap that to some extent is ridiculous. look, the excuse i can say about myself, a guy like me as we risk around capitol. look around you at these guys that just take these huge, unbelievable fees that i don't even mind if they take the money if they're doing well. when they're not doing while they still take millions and millions. if i were an average person i think that's a real problem. when you talk about corporate taxes, i think donald trump had to do that to make us competitive and try to stimulate our companies to spend more money and productivity, which doesn't seem to be working out well. but at least you had to do that. neil: if you did not do that, my argument has always been if he did not do that, we would not have seen the improvement in the economy certainly up until recently the market stuff we did. i could be wrong. >> no, i agree with that.

you hadn't done that and you hadn't cut the regulations you did, and not one the reasons to the extent, talking to me on tv a lot. i backed him because i was really so upset with what the regulations were. in a funny way, the one thing i do agree with the democrats, i'm really not a political guy, but the one thing it's ironic i certainly don't agree with any socialistic movement because it needed the nature of man is he needs to really get this done. i don't agree with the government or anything like that. i read some articles about how companies hire. the circle sort of turns around that way. neil: you and bernie sanders can

sound -- [inaudible] neil: you mention the economic condition under donald trump and you sense a devil of a time breaking past the 40s and his approval surveys that even without improvement, a lot of people say it's him. it's his personality, whatever. what you think it is? >> i really think that is basis certainly for him. what he's doing, you know, the market in a strangely doesn't really really affect his base tremendously. his base, i mean, a lot of this country is poor. i don't think new york state and california realize the problems you have across the country. you know, it is not the market, although it helps without question the reason that is going to keep an approval rating with his base. there are people without

question that just don't like him. as simple as that. neil: what you think it is? >> well, i think -- you know, it's hard for me to say. again, i haven't seen donald since the inauguration. i'm not here to get into -- >> when's the last time you talked to him? >> i do want to go into it, but interestingly i'm not a political guy. but i think by a liar she's helped the economy and he's done some real good things. as i said to you, i'm certainly opposed to china, but let's hope that works out and i think it will. so who would you have is the president if not donald at this

point? i don't think any president would've gotten regulations regulations remove the way he did come under would have gotten a tax cut from the corporate level. neil: because the media is not fair to him doesn't give him any credit. >> well, if you look at the media, i think the media -- let me put it this way. i'm not here to argue for donald or against donald. i'm not a political guy. but i will say this. the media outside your network, the media just as the bad things. neil: i think we should cover both.

[inaudible] one thing we have to do and i said that for 25 years. corporate governance to make corporations accountable and if you do, just look at my record. if you put the right guys at these companies, i think it would solve many problems come apart at the ready, wealth gap, all of that would be partially, not 100% solved. neil: do your job. it's always good talking to you. happy new year and continued success. >> okay, good luck on the new show it whatever. happy new year. neil: i love that. whatever paradigm of the heck you're doing, kid.

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neil: people noticing these plant in something is going on that's not typical. >> you know, i agree. sooner or later there is going to be a day of a 998% sure of is for redo hit a wall. the federal reserve just keeps giving his son money. you can't keep doing that because you have the world economy and the father runs out of money. >> then what if you do. they're all her turn as that a

lot of people get into soybeans and agricultural items and the prospects and the hope of a deal with china lifting a lot of views. ceo terry duffy with us right now. what do you think about a debt, a lot of problems come a lot of volatility. maybe for stocks a lot of. >> first of all, happy new year to you. thank you for having me. thank you. i think karl is onto karl is on to something that i've been saying for a while there is a lot of dead is a lot of debt people have not been paying attention to for quite a long time. the $1.4 trillion in credit card debt on top of the markets. there will be a day people need to figure out how we're going to address this. carl is definitely onto something but it's been going on for so many years that nobody's been paying attention to it.

>> i guess what gets the attention his for years you accurately point out we been able to absorb it or deal with it because interest rates are so low. that can be good for a lot of commodities and things under your purview. but do you worry eventually it is all investment vehicles. i'm not there to predict that. the recent uptake we've seen associated with trade goods farmers have become much more efficient. they're creating much more product, not nearly the amount and we've created a lot of product at a lot of product that all of a sudden one of our biggest customers goes away. you'll have depressed prices in the nougat volatility in the market place.

people are attracted to this from an investment vehicle. what's important is the world getting bigger. >> including the chinese. it's a three-way tie gold in and out of six-month high. as the bills such as the global economy given up for dead when you think of this? i think we'll always have ebbs and flows in the economy and today is no different. over the last 10, 12 years the crisis of the way. it doesn't surprise me. on the trade issue for a long time there's nothing wrong with having trade deficits with other countries around the world it gives you a seat at the table on a whole host of other issues.

would hope the president would focus on intellectual property with china india without and maybe do with the trade issue separately. there's a couple different ways to address this, but i definitely don't think the world economy instead. neil: the approaches taken even if it scores a victory, it might not be what he wants. >> it could be the case. it could be good for the united states at the president can get something done on one of the two issues that doesn't necessarily have to be trade. >> thank you very much. always good seeing you. what's been helping as you don't always see them moving in tandem here. we're also getting more up to miss him based on the president talking more about a trade deal, one with china. we've heard that before so i don't want to get ahead of

ourselves. the president is considering a primetime address to the nation tomorrow night. peer two days ahead of his quarter. the ongoing government shutdown on the verge. a little more after that. nah. not gonna happen.

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train to all right, we're told the president wants to address the nation sometime on this government shut down, what the concerns are for the board are going physically to the border on a as this ongoing government shutdown, partial shutdown. six days 17. the latest now from capitol hill. hey, christine appeared inaccurate. the third-largest or longish at down with neither side so we

know now democrats have put forward the idea that they want to pass individual spending bills. you want to focus on the irs because they want to get tax refund. they do rely on tax refunds and the democrats believe it's better to do this than have any delay in the refunds. however the white house the white house as does know we want to focus on border security. we don't want a piece by piece situation where we reopen certain agencies. we did have over the weekend another meeting amongst rational leaders and the white house that they couldn't agree to order funding, which is what the president wants. two senators now, chris van hollen as well as senator ben cardin but don't want to vote on anything unless it pertains to the government shutdown. like you mentioned, the president will be headed to mcallen texas on thursday. the president has said he is relatively flexible.

doesn't have to be concrete. democrats believe it's immoral and ineffective. congress out of session until tomorrow. neil: there will be at least a deal at 18. thank you very much. charlie gasparino will be here commenting on that shutdown and the wall that the president wants to get ill, but first the phone numbers he wants to see improved. carl icahn has some ideas. what is charlie think? after this. which i used to offer health insurance to my employees. what's in your wallet?

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neil: already, the president delivering a primetime address tomorrow night. the devil will be getting the networks to approve that in a political speech and push for the wall and while funding on the middle of this ongoing shut down. scheduled with ibm tomorrow. charlie gasparino with us right now. he is upping the ante. the shutdown continues anon anon. >> it comes as he is likely -- i say likely because of the conversations i hear going on. he is likely to get at least a moderate democrat to throw his hat in the ring. they can tell you about joe biden, former vice president is over the last year since january he's been having pretty serious

discussions with wall street executives part of his inner circle fund raising. bob also be in there. the banks reaching out to people at the banks, too. basically discussing money raising to run for president against trump. he prefaced his desire to run the initial sessions with these wall street guys on the fact that i'm not going to go in there if trump drops out, like he had made a threat and he wasn't going to run. i'm not going to go in there. they're both about the same age. the age factor would be negated. and trump would be 72, 73. so he has a shot at it. according to the wall street executives i speak with, he will get the money. he's not going to be --

neil: are they telling you he would chase away these other signs? >> is the most formidable of funny of them. he's the one that is most moderate. wall street guys like moderation. they don't like alexandria ocasio-cortez 70% tax bracket and elizabeth warren, so they think he's the guy that can bridge the gap between wall street democrats, more moderate democrat. blue-collar voters with strong. if you'll notice in the state, i'm not saying he's the perfect candidate because as you know joe biden -- neil: and is run twice. >> you've had his moments over the years. if you notice her democrats really did well in the midterms come a day one with a lot of moderate blue-collar type democrats in pennsylvania. you can see how he can put together a coalition to do it. the tram forces will attack them with everything, all these crazy

remarks. there is a false narrative they are putting out there to negate the trumps sexism in some of the stuff he's done with women that joe biden is some sort of a serial groper. you think those are russian bought to put up a false narrative that this guy is bad when it comes to women and it negates the access hollywood in some of his other doings. [inaudible] >> none of the stuff that's real. it is obviously fake news. >> something going on in some of these swing states that donald trump would have a tough time now. if you look at the midterms, based on my moderate person in their, within, like an obama moderate as progressive as he was, if it wasn't elizabeth

warren, ocasio-cortez, terrorists who came out today and said i think she criticized judge are going into the knights of columbus. this is spooky stuff coming out of the left. if you had something like that it could resonate. i'm not saying he's going to do it. the last time joe biden didn't run was obviously because of his son. his son was dying of cancer. he also gave him some confidence to go for it on his deathbed apparently. neil: you know, there might be something for any candidate, i'm worried about something like this that could be a very big worry no matter who's running. i am wondering how that issue, the volatility that could bring in the likelihood of going two years without any of this coming to rear its ugly head. would be tough for the incumbent. what you make of that? >> with then, two years -- donald trump has to worry about

robert mueller. he has to worry about his unfavorables. he's done almost nothing to expand his days. maybe that's good if you're about to get impeached, but maybe not good if you want to get reelected as president. the midterms hurt. they lost a lot of seats in areas that he won. i mean, it's finding out that if he ran, democrats run illegitimately normal candidate. neil: you know, you know what. nothing like what trump has said. baby donald trump has taken the bar so it doesn't matter all the crazy stuff. neil: in other words is not a given. anything can happen. >> you've been talking about this and we've been reporting it since the beginning of the year.

>> he is certainly the name recognition, stature. >> either way, people like them. as they do you. funny joke. neil: will have a lot more after this. the dow up right now 150 points.

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neil: the president planning a prime time address to the nation. issues is national security, what is happening at the border. why he thinks it is a good fight

to be had. matters more than partial government shut down that is days away from break all records dating back to 1995. when bill clinton and newt gingrich were at it. that could be happening again. charles payne is in next. charles: thank you, neil. i'm charles payne this is "making money." markets so far starting the week in the green wrapping up the santa claus rally which has been very strong. many on wall street are saying time to buy the dips. should you? i have a great panel weighing in on that. u.s. and china kicking off two days of trade. officials on both sides expressing optimism finally making a deal. will the next 48 hours change the world as we know it. later in the show, jay powell helping markets with his patience pledge but can they truly engineer a soft landing without crashing us into a