committee speaks volumes. ashley: we're grateful to nancy pelosi. stuart: pushback against the far left. that is a fact. our time is up. we hope everyone has a wonderful weekend. neil, it is yours. neil: she will probably end up on house financial services when all said and done. and she will report to maxine waters. i don't know if they're out of the proverbial woods there. stuart, have a good weekend. thank you very, very much. we're following that drama on capitol hill who gets assigned to what committee and when. the subcommittees are important. the government shutdown approaching a record, if it continues past midnight tonight, it will be officially longer than the one that lasted 21 days back in 1995 when bill clinton and newt gingrich were going at it. both parties has men and women going at it. neither sideshowing signs of budging. we'll get a read on that. with the president hosting a

roundtable on border security. all of this ohio curing -- -- occurring, 800,000 federal workers and contractors who are not getting paid. the reverberations are fast and furious. republicans are saying go slow on this national emergency thinking, mr. president. be careful what you wish for if you do. to former federal prosecutor steven deroy and financial analyst, alan nubbing nan. we're down about 61 points. we had a very robust week. we put together five winning days in a row, something we haven't seen since october. so what is winning out? >> merry new year cheer, welcome to 2019. the markets rebounded half of their losses in half of the sessions. up moves in the extreme lows. there is a lot of positives.

presidents don't make markets. presidents don't make markets. i think markets are overdone to the downside. you're seeing people looking at some value. we're important halfway level of the selloff from the september s&p highs down to the december lows. neil: steven, maybe you can help me with this, we're getting anecdotal evidence, widens with the shutdown, miami international airport they had to close down a terminal, security screeners were calling in sick at twice the normal rate. this is something you wonder about, you wonder how it plays out the longer it drags on. what do you think? >> i agree it has been a real problem for federal workers. i lived through the original long shutdown in the '90s and it was tough for the lower level workers who had cash flow problems. some people can say, well i will take money out of savings, they will reimburse me, give me my back pay later on eventually, when the whole thing gets resolved. but for lower level workers

working from paycheck to paycheck, go for 21 days or a month without any pay, that can be a real problem for them. they have got rent. they have got mortgage. they have got bills to pay. it is not a trivial thing. neil: alan, to that point, i think it was mark zandi at moody's tried to put pen to paper and tried to get an idea how much it could crunch the economy in the first quarter. it will take a couple tenths of gdp. so maybe in the low twos. i don't know how he comes to that but i'm wondering is it the same effect you see with hurricanes and the like, whatever you take out of one quarter you win back with the other when things are back to normal so markets don't fret about it or what? >> sometimes. some people will not be reimbursed for the missed income. neil: right. >> there are going to be contractors that never get paid back. i'm a price guy. markets are not concerned. the markets are focused on earnings next week. we'll get back to fundamentals.

and the good news i keep talking about being your resident optimist, there are no rate hikes in the pipeline if you look at futures markets for all of 2019. rates going down. rates are going down on 10-year note. neil: latter part of the year fed funds futures are not showing a hike? >> no hikes here. neil: interesting. >> if you look at 10-year note, the 10-year note was 3.25. everybody was losing their mind. we bottomed out 2.50. we dropped 3/4 of a percent a huge drop in couple months. that is positive. the dollar is down with no rate hikes in the future. neil: you were an optimist. this episode, alan, like mary tyler moore episode, you got spunk, i hate spunk. reality what democrats and president is doing here and what he says democrats are forcing him to do, something of this length is rare, back in the what you were experiencing in the 90 as. it happens a lot, there has to

be a better way to do business? >> some reformers who talk about having a two-year budget. so that you don't have to have this, titanic struggle and faceoff every particular year. and then there are others who would say if you just a default of a continuing resolution which keeps funding at current level unless something is affirmatively done, then that of course would, avoid the briggs manship every year -- brinksmanship every year. until and when that structural reform occurs, that you will see this with a divided government. we have a polarized nation, if you have divided government, branches controlled by difficult parties, there is specter, the prospect of this at least this kind of temporary shut down if they can't come to terms. neil: gentlemen, i want to thank you both. have a happy new year. rawls enjoy having you. as they're speaking house approved a appropriations bill to fund the interior department.

of course you heard a great deal about garbage a lot of stuff accumulating in nation's parks. this was voted on 240-179. all democrats voted for it. 10 republicans voted against it. 12 republicans voted for it. a separate measure to keep transportation and housing departments operating. meantime we have georgia republican congressman jody hice with us. the congressman joined half a dozen, a dozen republicans looking at ways to find funding for the wall the president and good number of them want, that is to get it from the drug lords themselves, captured funds or their monies are appropriated by the united states government. that is essentially what you're trying to do, right, congressman? >> that's correct, neil. thank you for having me. look, one of the walls we're facing if you will in the midst of this argument the democrats saying this is too expensive for taxpayers. this idea has come from

representative sensenbrenner. all right, let's go to the drug cartels. heroin, for instance, about 90% of the heroin coming into this country is coming across our southern border. the drug cartels are enormously involved as we all know with this. let's go after them and property and money seized from those drug cartels can actually itself go to build the wall. neil: how does it normally work though, congressman? you get these monies, where do they normally go? >> they go to variety of different places, neil. i can't tell you exactly precisely where all these funds go. we're saying let's use the funds to stop the influx of heroin, drugs and horrible things coming across our borders, let's use our funds to build the wall. by so doing, we take a lot of the argument off the table from the democrats. neil: any democratic support for this? >> i don't know yet. that has just come off the table. i hope we'll be able to get

some. we'll certainly talk across the aisle. i think it's a very reasonable offer. and something that based on their own arguments, ought to take a major argument and opposition view off the table. neil: you know, congressman, the president yesterday tried to say that he never meant that mexico will write out a check for the wall that we wanted to build but he certainly said enough during the campaign that mexico is going to pay for this. were you surprised by that statement? >> well, i mean you always have to wonder what a person has in their mind when they make statements like that, but listen what we're offering right now is an example of mexico paying for it. there is "el chapo" actor, there is a lot of ideas that would enable mexico in essence to pay for this. so there is very many options that the president and -- neil: wouldn't be the government of mexico paying for it? it would be drug lords captured -- >> in this case it would be the

drug lords. but you know the issue is, neil, we have to have democrats come to the table. right now for instance i referred to puerto rico pelosi and company, they're going to puerto rico this afternoon for a virtual vacation. broadaway play "hamilton" is opening tonight. they're going with donors on some sort of a retreat. while our president has been on the border. republicans are at the table trying to negotiate. they're going on virtual vacation. neil: several of them, congressman, i don't know what the truth is, they say they're going there to reassure puerto rican government officials they will not allow the president to take funds for emergency relief and that sort of thing, fema, what have you. >> they're going to a broadway play as well. the fact is, we have issues right here in our country. we have a constitutional duty to -- neil: i understand. would you be against capping those funds. i understand, sir, just to be clear, you would be against tapping those funds from other areas like emergency relief, aid and all of that to pay for this

wall? >> no, look if the democrats continue to refuse to negotiate and zero dollars that they are saying that is not negotiating. they are refusing to negotiate. so they're putting the president in a no other situation but to declare a state of emergency and if that is what he has to do, i will support him in that. neil: sir, thank you very, very much. >> thank you, neil. neil: working double and triple overtime. you have an interesting idea. you had to take some drug monies put them to this purpose. that might be a middle ground support that could grow. we'll be exploring that. alexandria ocasio-cortez is sort of like the gift that keeps on giving for republicans but when joe lieberman called her out, that got her attention. after this. hey, who are you?

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neil: i find it interesting alan knuckman confirming. i didn't know these reports see them myself, fed funds futures it are pricing in, at least those that invest in them, pricing no rate hikes for the first half of the year or maybe throughout the year. markets an investors can be wrong and they redo their bet, hedge their bets, what would that mean then, what would impact be if jerome powell is sending a signal to investors

where they think he doesn't touch rates this year? to john layfield. john, what do you think? >> i think it is very good for the economy. the fed had to prove they were independent. a lot of people thought they were in president trump's back pocket and trump would tell them what to do. i think they proved they're independent, once they proved they're independent they can go the way they think best. it uprears the fed is not wanting to raise rates next year which is very good for the economy. neil: what is interesting too, john, he might have been right, look, federal reserve is overdoing it. they overplayed their hand. some of the market pros, yourself included, have been saying for a while now, you're botching this, you're potentially botching this recovery? >> i think the president was right on this. look, obviously the president wants low interest rates. easier to have booming stock market and economy t creates some bubbles out there which happened in 2018 and 2000. the fed missed 2000 and 2018.

i think they are missing it this time. they stamped their feet. showed they are independent, raised rates but i think they're coming into agreement what the president thought all along, there is no inflation out there and there is no reason to raise rates if there is no inflation. with. we don't have zero cushion. we have a little bit of cushion if we have a systemic problem in the system. neil: you know what i always worried about, you and i got into this throughout the years and throughout the meltdown, post-melt down period, last few months of the bush administration and obama administration, rates were forced down to zero and the rate hikes were not necessarily seen since, alice rivlin meant to address a inflationary bogeyman, more to the point, readjusting things back to historic norms. that is what worry ad lot of folks, just getting back to normal acceptable range for federal funds, we were just building, arrows for the quiver.

now i'm wondering if that was the box, that we were remain? that we might not be justified to respond to this with inflation but we're still going to have to keep upping them without inflation to get back to norms? >> that is the wrong reason to raise them. thomas hoenig, former kansas city fed chief brought this up many times, if you have a systemic problem, a rise in oil prices, a war that creates some type of asset bubble, you don't have inflation, you could potentially raise rates into inflationary environment if they're at zero but just to raise them to get ammo for your gun is the wrong reason to raise them. i think that ask one of the reasons the fed has been raising them. i think around 2015 we could have raised rates at that point when the economy surged. which missed that window. now they're raising rates to get to normalized rate. that is the wrong reason to raise it. you need a reason to adjust to inflation. neil: i don't know, without weighing in what you think of

the government shutdown, whether it is wise or not, we're now seeing how it spread its tentacles into other areas, beyond 800,000 workers affected, "washington post" pegged 100,000 government contractors could be affected. they're not federal workers per se. how this affects the fda, approval of various drugs, fha-backed loans, countless closings across the country, home closings that are delayed that with will have effect on gdp. mark zandi at moody's, saying it could slice a couple of tenths of points off the gdp. are you concerned about that in. >> i'm not concerned about the overall economy or gdp. your analogy earlier in the show about hurricanes is very apt. you get the gdp. you miss it right now, but you get later. there is a delayed effect. there is a huge problem, i have a problem with 800,000 people not getting the paycheck, it is bad for the country.

as far as the country overall this is not necessarily a big event. even if it goes on for a while we'll see the funds come back into the economy later. neil: always buddy. good catching up with you. happy new year. >> happy new year, sir. neil: john layfield. we dramatically pare ad lot of earlier losses. this stalled what had been a five-day rally the likes which we had not seen, i think you have to go back to last october. so it is still possible we could have an up day. if you have six up days in a row, that would be early october i'm told but i don't know that for sure but bottom line markets generally prefer it when things go up than when they go down. although you can make a lot of money when things go down. now the bet on amazon what a certain divorce, what could be priciest yet will have on shareholders, after this. oh, don't worry. voya helps them to and through retirement...

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♪ neil: all right. they didn't have a prenup.

that is what we're learning about jeff bezos and his wife of 25 years now breaking up. it could be like dividing an empire because it is an empire, arguably the world's richest couple. not arguably, they are. what happens now? hillary vaughn how this could affect amazon's ownership structure itself. hillary? reporter: neil, some analysts i talked to responding to this news saying investor concerns should be really short term and at the most they think this could be perhaps a a pr distraction for amazon but not anything that will ultimately impact the company but others do disagree saying they think this divorce is a huge liability and the future leadership of amazon hangs in the balance. regardless there, is lot in the air. behaves soes -- bezos did not have a prenup. right now bezos is worth $137 billion.

owns 16% control of amazon, giving him effective ownership and control of his own company. but that could change if he has to pay out a massive billion dollar some soon to be ex-wife, mckenzie bezos. he may have to sell or pledge some shares as part of the divorce settlement, changing ownership dynamic. mckenzie bezos could be entitled to $66 billion. they don't think the outcome, bezos will be forced to give up control of his company. there are other companies on the line. bezos owns "the washington post." he has the space company blue origin and has significant holdings in airbnb, twitter, next door and a handful of other companies but the biggest concern i heard from analysts that if this divorce and negotiations turn sour at any point, become as much longer, drawn-out process, they think that could be a problem. but as of now, jeff bezos and statement he released on twitter says he has an amicable

relationship with mckenzie and they're still friends. neil. neil: hillary, thank you very, very much, hillary vaughn on this ongoing saga here. there is the saga of davos, who is going and who is not going. i think it went south when charlie gasparino stopped going. now the president of the united states, after this. and neither will i. i treat my mbc with everyday verzenio, the only one of its kind that can be taken every day. verzenio is the only cdk4 & 6 inhibitor approved with hormonal therapy that can be taken every day for post menopausal women with hr+, her2 negative mbc. verzenio plus an ai helped women have significantly more time without disease progression, and more than half of women saw their tumors shrink vs an ai. diarrhea is common, may be severe, or cause dehydration or infection. before taking verzenio, tell your doctor if you have fever, chills, or other signs of infection.

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neil: everybody is getting ready just in case. the pentagon is preparing options as the administration weighs a emergency declaration. you might have heard senators such as marco rubio and chuck grassley are very leery of that. that it's a slippery slope. that you might be careful what you wish for. regardless, the president is looking to end the shutdown by going ahead to declare the emergency. then what happens? blake burman with the latest from the white house. hey, blake. reporter: neil, the president made it clear if things don't go further between him and

negotiators, democrats specifically, he could declare the national emergency. the president says he has been told by his lawyers he can do so, the government has money to do it as well. when you look at the actual money where it could actually come from? fox is told that the white house asked the army corps of engineers whether it could use roughly $14 billion worth of funds tapped for disaster relief in 2018. that is one pot of about 14 billion. there is also potentially the military construction budget for fiscal year 2019. that is at about $10 billion or so. then there is also unused money, military construction budget, that is at about 13 billion. so when you add that up, 10 billion, 13, 14, billion, talking somewhere north of $35 billion potentially, that the president and that the administration could use for his worder wall. however as you just said there are many who are leery about going down that path. for example, a democratic

congressman who represents west point said earlier today that the money should be used for things like barracks instead. watch here. >> what we're not for is destroying the construction projects at west point that i represent, taking the barracks away from next generation of military leaders by raiding military construction budget to build a vanity project that no expert says it is necessary. reporter: others say there is stalemate. go ahead and do it. lindsey graham, one of the president's closest allies on capitol hill, who was somewhat against it just yesterday, then also came out with the tweet saying democrats are not backing down. go for it, mr. president. see what he does here in the coming days. neil. neil: my friend blake burman from the white house. to charlie gasparino on the fast-moving story and so-called emergency declaration that could be close. what are they saying? >> i'm talking to sources close

to the white house. what they're saying is likelihood president trump will hit button on the emergency declaration. and one of the main reasons why, we're getting data from inside the white house they are projecting if this impasse doesn't end soon, there will be a real economic impact. that gdp will likely slow. when will this happen? we don't know. people are talking to me about weeks. but it is, that is in washington terms that is somewhat imminent. if this thing doesn't end soon. there will be a real economic impact, generally if the gdp, if gdp goes down over donald trump's wall, there is a feeling in the administration -- neil: mark zandi's ad moody's put 8 plus billion, couple of tenths of points off gdp. >> their internal data is showing same thing. that had has the administration worried. likelihood we could see next week that president trump hitting the button on the emergency declaration and

letting courts decide. neil: he would have cover. shutdown ends. a judge plight slap it down very likely. >> but he can blame the judge. this thing based on, listen i'm telling you what sources are telling me now. as you know all this stuff changes. the president could have a huge change of heart. say, no emergency declaration. i will fight this out. or he may cut a deal. but as of right now, i am telling you two things, number of one, their internal data is not good. it shows there is an imminent impact on the economy if this thing does not end very soon. that could be weeks away where you see real economic slowdown, decline in growth. number two, likelihood, what people saying inside of the white house, that data has administration officials worried enough and president he is likely to hit the button on that, on that emergency declaration and it occurs next week. all this occurs as you know, world davos -- the world economic forum.

there is kind of split in the administration who is going and who is not from the economic team. from what i understand. mnuchin, treasury secretary steve mnuchin, is still going. i hear larry kudlow. neil: any of those contingent on the shutdown stopping? >> if changes -- neil: could the president change his mind. >> the president might go. next week is the martin luther king holiday. the president, generally he is, you know, he may stay home for that, just from, that is one of the things i've heard. and you know, you may see him be part of a celebration for that. and then retire mar-a-lago at end of the week next week. that is what -- neil: what did you make of the president yesterday saying that he never said mexico was going to write a check and pay for this when in fact he said 212 times? >> some of this is -- neil: we ran the bites again and again. >> you know i try, i read the newspaper every day and you know, i see these stories about trump is the worst liar in the world. i try not to indulge in that because we all know that president obama had one of the

biggest fibs of all time, if you want your insurance you can keep it, right? but this lends clearly to the narrative that he is a complete bs artist. i can just remember when -- neil: he constantly said that they were going to pay for the wall, constantly. >> there was one rally i remember him saying guess what? we'll build what? the whole crowd, said, a wall. and who is going to pay for that wall? mexico. neil: we ran some of these clips yesterday on my fox news show. you know i heard from people that, never-trumper, at it again. you doctored those tapes. doctored the tapes. >> there is contingency among the trump crowd that really, sort of travels in weird conspiracy theories. i'm telling you, i told you the whole thing, yes they believe you doctored it, no doubt about that. there is a whole thing about joe biden being a pedophile flying around the internet. i got one of the most disgusting

photos of joe biden where his hand was on baby in inappropriate way. it was photo manipulated. these people believe this stuff. neil: these people are alive and well. when you say, left and right to use their own words. let people be the judge. >> but listen, he, whether you believe in conspiracies or not he did say what he said. neil: he said what he said. he said what he said. thank you very much much, buddy. congressman john garamendi joins us from california. democrat. sir, good to have you, what do you think of reporting of our own charlie gasparino, that the president is set to declare an emergency, move on? >> following on with the previous conversation, mexico is not going to pay for it. the way it is headed right now the victims of various disasters, whether they are in florida or texas or california or puerto rico, those people will wind up paying for this, that the disaster relief we

appropriated would not available to them but rather go into building this wall. that is just unbelievable but very, very much like trump. beyond that there is no need for a, an emergency declaration. what we need to do is for the senate and the president to adopt the legislation that we just completed this week that would open up all of the government except for, including the department of homeland security, but the homeland security would then have to come back by february 8th with some plan about the wall. neil: that was the original plan, right? >> that was. neil: that was the measure going to the senate. mitch mcconnell scrapped the vote because he said the president would never sign it. so what kind of appetite is there for that? >> well there is certainly an appetite in the house of representatives. we passed the legislation. it is done and over on the senate side. neil: could i ask you, kong, i didn't mean to jump on you there. >> sure. neil: do you buy this plan being

proposed by a number of republican congressman, i think all republicans, i could be wrong where they're saying they would use the monies taken from drug lords and, and federal seizures of drug property and funds, and use that for a wall? >> i have no idea how much money that is. i would suppose that it is probably less than 100 million. maybe it is more. but, how much of a wall would that do? neil: they say it is in the billions. i have not been able to confirm that that is what they say. >> well, let's have a look at it but, appropriate point here it is congress that is allocating, appropriating the money. that is the constitutional requirement. the constitution, really doesn't allow the president to appropriate money. that is our task. in this case, the president is by all accounts in the process of appropriating money that has already been allocated for these programs. number that was used earlier,

that $35 billion of unspent money that money actually has been dedicated to specific projects. those projects, the contracts have not yet been let. neil: taken already appropriated funds and used them. in fact the bets example of -- t example of that, both parties raided social security trust fund for variety of persons with ious. >> that is quite different. the trust fund is annual ongoing appropriation for which the congress does not act. the specific 30 billion noted a few moments ago, those are actual projects, barracks at west point are but one example. the flood control projects, the rebuilding following devastating hurricanes and fires those have been laid out. those congress said, these are the projects we want to fund. the money has been provided for them. however the contracts to actually do the construction

have not yet been signed and therefore could be reappropriated. neil: monies were appropriated for obamacare first starting, they would take appropriations part of medicare, medicaid, and put it into this. all i'm saying -- >> as provided by law. as provided by law. neil: that was a new thing put up as that law, before it was law being cooked up. not unprecedented for washington, not justifying it i think it is sloppy accounting justifying taking from peter to give to paul, right? >> well depends how you are in the process of doing it. the medicaid, the program you just said was specifically authorized by law. in this particular case the president claims that he does have the power to move these appropriations from one particular use, whether it is disaster relief in the case of the army corporation of engineers civil works, or the army's military construction. those are projects that are specifically authorized by

congress. and the president is apparently claiming that he can take that money and spend it on a border wall. i'm saying what about the people that need that money to recover from these disasters? neil: got it. congressman, we'll watch it closely. happy new year to you. >> thank you. look forward to our next conversation. neil: so do i. netflix shares are jumping. ubs upgrade, that is all it takes, a brokerage house says, all right, they're spending a lot of money to buy a lot of content but they will make a lot of money hand over fist with that content. investors are of loving it. after this. ♪

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>> a 70% tax on high income people is done for political reasons. neil: is is the congresswoman the future of the party in your view? >> no. with all respect i certainly hope she is not the future. and i don't believe she is. neil: apparently alexandria ocasio-cortez caught that exchange, responding saying this is a new party. she is the future of that party. i didn't understand her response enough to say though that, she watched it on fox business, which a lot of people on her staff reminded. you don't get it, congresswoman. you might demand it. so she has.

independent women's forum, hadley heath manning. what joe lieberman is saying she is not the future of the party. raising taxes are not the future of the party. he might quibble with the 70% figure, she has hadley, i talked to the budget committee chief taking over in the house, congressman yarmuth, wants to raise corporate taxes bring them up to 2%, is open to a tax on wealthy, maybe not 70%. but you are definitely hearing talk of raising revenue from the democratic party? >> there is no doubt that is the direction they want to go. look at the resistance they put forward when it came to the tax cuts and jobs act at end of 2017. they were clearly not in favor of reducing taxes, wanting to increase taxes particularly on high earners. as the congressman said, maybe not necessarily to raise revenue. but certainly to send a political message that they believe in, charging the rich their quote, unquote, fair share. that is talking point on the

left. i will disagree with joe lieberman here, that i do believe congresswoman ocasio-cortez in a lot of ways represents the future of democratic party when it comes to their brand. she is spokeswoman that is likeable but may be wrong on a lot of ideas. neil: i told him as the interview continued, that is the message, populist appeal, progreg serves message and that incoming committee women and men that the tax cut was way too much and you have to dial it back. >> not only seeing democrats ways to soak the rich and raise revenues, and they have a lot of ideas, especially ocasio-cortez, how to spend the money. the green new deal. her support for socialized medicine. neil: right. >> these are ideas that we ought to look at as a country, have debate over ideas. i will come that i think it is good for the democrat and

republican party focus on ideas. neil: i'm sorry, i you know what i welcome from here, not endorsing 70% top rate, approaching that, at least she realize some of the goals they have, aggressive as they are, you can argue them, she realizes you have to pay for them. slapping a 70% tax on the wealthy isn't going to do it, but at least she realizes existing system, pie-in-the-sky, assuming you can put it on a credit card, i will give her that. people who dismiss her and her argument do so at their peril. >> absolutely. you know, she is focused, as i was saying on ideas on some policy suggestions even if they're wrong. better to have the debate about the ideas than to be constantly attacking president trump. neil: absolutely. >> or relitigating some of the differences that the party members have when it comes to personality or getting, at each other's throats on personal level, much manufacturer productive for members to be talking about ideas, even if they're bad ideas, at least we're having the discussion.

neil: well-put. hadley, great seeing you. >> thank you. neil: market is down about 50 points right now. by watt i, gm stock is among those on fire. gm ceo mary barra with gerri willis today. >> that's right, neil. we have mary barra in the flesh. she joining us for quick conversation. thank you so much for coming on. we appreciate night thank you for the opportunity. >> talk about your stock, up eight, 9%. last good look i got. what is going on here? you basically raised guidance for gm results. why and what do you see going forward? >> one thing we finished '18 very strong. i'm proud of the whole team. it came from other areas. we focused on revenue rand cost. we care that with we'll be able to achieve in '19. general motors we think we're positioned because of actions we've taken over the last several years. to make sure we're competing in

markets and relevant to the customer, whether in the united states, south america and china or other markets we compete in. >> we talk about a lot on our network and i know others have the transformation of gm, closure of several months. is that one of the reasons you're able to bump up guidance and what is that going to mean to gm going forward? >> when we look at, this is transformation, because this industry is undergoing tremendous change. so when you look how quickly customers especially in the united states have moved from sedans to crossovers, we needed to make adjustments. we're focused on team members impacted by the decisions. there are 2700 people impacted by announcements in the united states. excuse me, 2800. we have 27 potential job openings for them. we already have 1500 that volunteered to go to a new position. 700 of them are already on their way. about 1200 are available, their retirement eligible. so our plan right now to really work to make sure each team member, especially those part of

the hourly team have, no what is going to happen and have options. when we take steps like this. it is because we need the company to be strong because we employ 100,000 people in this country alone. and having a strong general motors that can invest in the future, not going to be here for a few years but several decades is our focus. these are tough decisions. we focus on our people. we focus on the impact, impacted communities. we'll continue to do that. we will work with the stakeholders, local governments, the state government, and the federal government to make sure we're doing the right thing. >> you have taken a lot of criticism for closure of some of these plants but as you're saying you're trying to position these people in other plants. i want to talk to you about what is happening on the innovation end. >> yes. >> big conversation about cadillac today. the tip of the spear in your ev strategy. explain. >> cadillac has a tremendous reputation with an iconic grand and we're working hard to rebuild cadillac in the united

states. it is an exceptionally strong-growing brand in china. in the end we're really focused how do we grow the brand? by technology and innovation t makes perfect sense for cadillac to be our lead for our next generation all-new ev architecture. it will be our lead. it won't just be electrification but tremendous technology on the cadillac that we'll be announcing along with other vehicles a commitment to cadillac is strong. we'll lead through technology and innovation. >> will this allow you to compete directly head-to-head with tesla in your view? >> absolutely. i think we compete today with the chevrolet bolt. we have an ev that is affordable, attainable, that has outstanding range. this takes it to the next level and competes in the luxury category. >> how important is china as a market going forward? >> we believe long term china has huge potential. we think the market will be in about 27 million unit range. just to compare that we think the united states will be in the

low 17 million range. there is already a large market. we think there is tremendous growth in the chinese market. that the next few years that could be a 30 million unit market. it is important because general motors has 20-year history. there we built strong brands. they love the american brands, our chevrolet, our buick and our cadillac brands as also we have two domestic brands we're in partnership with. so it's a strong franchise for us and we're going to, you know, look to see, understand there is issues now. we're very encouraged by the trade talks that are going on. both sides have said they're progressing well. so i think that's a good thing, i think it's a good thing for both countries and for the american public. >> one quick final question. we talked about china. let's talk about the u.s. how do you see the health of the u.s. consumer right now? >> we seeing the u.s. consumer being very healthy. it's a strong economy right now. if we can have '19 we settle in

the low 17s, that is large market. that is huge opportunity. we're seeing strength of the customer right now. you see that us being able to have very disciplined incentives and also seeing our average transaction prices grow. >> mary barra, thank you so much for being with us today. really appreciate your time. neil, i will throw it back to you, my friend. neil: thank you. thank you, mary barra. meantime gm stock up 10% on all these developments and much better than expected news forecast outlined by the company's ceo. otherwise stocks well off the lows but still down. this could interrupt what had been five days up days for this market. something we haven't seen since last fall. we're not that far from positive territory. we spent a great deal of yesterday in positive territory so you never know. more after this. ♪ alerts -- wouldn't you like one from the market

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and unprecedented. we will keep an eye on that. expect more of this type of thing as this lingers and it could linger on. only hours away from breaking a record that goes back to 1995, and no less than the "wall street journal" in a major editorial today saying this sets bad precedent if, in the process of getting that border wall funding, the president declares an emergency, one of those be careful what you wish for, mr. president, because the next party that comes in could equally claim something just as stubborn, they argue to justify expenditures on their behalf. the "wall street journal" editorial board assistant editor james freeman with us. james, where is this going, first off? >> well, i would hope it was going toward the way the system ought to work, which is the president has priorities, congress has priorities, they come to an agreement, he gets his wall, democrats get some of the immigration reform changes they have been seeking, maybe more legal immigration. that seems like it's kind of the obvious compromise but as you

mentioned, it seems like we're heading maybe more toward an emergency declaration. neil: whatever you think of the wisdom of it, it ends the shutdown, right? he can then point a finger at a judge who would no doubt slap it down or some judge would, and say i did my best, i did everything i possibly could? >> yeah, it does give him a political out here, if he thinks he's not going to win this stare-down with nancy pelosi and chuck schumer. i'm not sure he loses in court. there is delegated authority as we pointed out by congress -- neil: but multiple courts, right, before likely ending up in the supreme court. >> yeah, and probably when a president tests the emergency authority in this way, on an issue that many people don't really see as a military emergency which is the authority he would probably be using, i think it's bound to either spark changes in the law that might limit the president's power in

the future, or might encourage other presidents to declare emergencies that most people wouldn't necessarily buy into. neil: marco rubio said a democratic president might advocate for climate change. let me ask about how the president would appropriate the funds. he would have to take it from somewhere else, presumably defense. >> right. so there's a military construction budget and there's about $10 billion in there. it's one of those appropriations bills that was passed earlier in the year before the shutdown fight. so the money is there. i think he's got at least an argument under the law what is the military for but to protect the territory of the united states and its people. neil: he has argued the situation is deteriorating and the irony, maybe give the administration credit on this front, the situation at the border has improved insofar as people crossing over illegally is way down. the numbers are way down. so it works both ways. >> yeah. i think it's bound to be a long

legal fight and that's maybe the point, if you're thinking he wants an out here to show his constituents that he did everything he could to fight for the wall. i certainly hope it doesn't get to that. i think if he's looking for the political out, it's kind of letting the democrats off the hook, too, because there are a lot of things they have told their voters and especially the people who write checks for them, many of them in silicon valley, about changes they want in u.s. immigration law. for example, that allow more skilled engineers to come to the united states. the president is saying let's work on that. if they turn down all of the potential deals here in order to get the symbolic victory of stopping his wall, i think it's going to be politically dangerous for them as well. neil: let's get a read on the number of republicans who are buckling under the pressure. i'm already talking about a couple senators, chuck grassley, marco rubio aren't keen on this emergency measure even though they support the president on the concept of the wall. some retired generals who are

also saying that. but in the house, they have tried to find a way to open up other departments, everything from interior to transportation, to keep the function going, the functions going there. but is that a sign that the president's put out a brush fire in his own ranks? >> i don't know. you look at mitch mcconnell as being pretty strong saying i'm not bringing something to the floor that the president is not willing to sign. so i would say there's pressure on both sides. i think maybe the coverage is more on the republican side, but as we saw a year ago, roughly, when the democrats abandoned their shutdown, they get a lot of phone calls, too, from a lot of -- neil: absolutely. we know the longer something drags on, the riskier it is for both parties. >> yes. neil: going to break a record today. thank you, james freeman.

what are you hearing on the emergency front that it's just a matter of time before the president declares it and it's going to happen? >> well, so the other day we heard president trump leaning into the idea that he could declare a national emergency. he keeps saying it's his absolute right. but the alternative side to this is there's not a lot of groundswell support coming from republicans on capitol hill. we heard senator thune say it's not necessarily the best idea along with representative burnberry and senator grassley and there's not necessarily that capitol hill support there. but on the other hand, even if the trump administration and the white house declare a national emergency, there's a whole host of legal issues that could emerge on capitol hill over whether the president can lawfully take funding from the pentagon, for example, and reroute it. so that's something to watch moving forward, is the legal battle there. neil: you know, whatever happens here, i think they will resolve it. this might be ironically the way they do, or at least the president does, is sort of punt this, the emergency is declared,

a judge deals with it, another court deals with it, it goes to the supreme court, i don't know. but the well has already been poisoned. if there was any hope of serious immigration reform, that's off at least for this particular congressional term, maybe for awhile beyond. and the other things they had common ground on, infrastructure and all that, it all might go too, right? >> we saw yesterday senator graham was working to create some sort of daca exchange, like the democrats and republicans had agreed to previously. we saw that fall apart the other day and vice president mike pence putting cold water on that. so compromising looks like it's out of the realm of possibility at this point except for the fact that as axios has reported several times, the president often makes outrageous threats or seemingly outrageous threats like declaring a national emergency that doesn't have a lot of support, then backtracks just to compromise. that's kind of his, right, the art of the deal. we'll see if that has any ground game here, but again, right now

compromise doesn't look like it's on the table. neil: what's been the reaction real quickly, shannon, from republicans? i know democrats have been saying the president said i never said mexico will write a check to pay for the wall. when we heard that comment yesterday, we had it already because it had happened and he had used it so often, no fewer than 212 times during the campaign up until now, that mexico was in fact, going to pay for this wall one way or the other. >> well, yeah, exactly. the first lesson anybody learns in crisis coms is to acknowledge something has happened or that maybe you haven't been able to deliver on your campaign promise or whatever it is that you're talking about, so we have even seen the president backtrack a little on that -- neil: he must know we have access to something called videotape, right, that we can play that back and it would be one thing if he said i was hoping they would, it doesn't look the way things stand now that they will, but you know, he just said no, that was never

anything i said and it was wild. >> right. on the other hand, we also in addition to videotape, we can go to the campaign website and see that he said he wants a one-time payment of $5 billion to $10 billion from mexico and we're just seeing time and time again that the narrative coming from the white house on immigration and the border wall tends to stretch the truth a little bit. neil: all over the map. when he did refer to the fact the trade deal with the mexicans, that it's still not yet ratified will pay for that, where did he get that and where and how will those funds be raised and allocated for this purpose? >> well, it's unclear where he got that from at that point. i haven't been able to report on that. but we have seen in the past as folks have been deriding him for saying things like that, pointing out that congress hasn't passed the new deal to replace nafta yet and that it wouldn't necessarily actually go towards paying towards the wall, whatever comes from the usmca, so we have seen him tweet about it and take that back a little bit recently in the last couple days.

neil: shannon, thank you very much. always appreciate it. all right. when it comes to these issues of the right or the left, my point is my opinion means nothing here. what we try to do in both cases is use the words that have been spoken by the people involved, in this case the president of the united states when it comes to the border wall and who would pay for it, and just letting those words speak for themselves. the same applies maybe to a lesser extent because they haven't been so out there on this idea of the crisis at the border, when little more than a few months ago, nancy pelosi and chuck schumer were worried about that and all of a sudden, now saying there is no crisis. see, here's the thing with videotape. we can access it. i don't know how to access it, but i have a staff that does, and we quickly seized on 212 examples. we couldn't play all 212. so we played about half a dozen. later on, i will play the other 206. more after this. i am a family man.

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brothers and sisters, there's plenty of money in the world. there's plenty of money in this city. it's just in the wrong hands. neil: except if you're amazon and want to open up a major facility in new york. but outside of that. welcome back, everybody. i'm neil cavuto. these things just leap as obvious at the front page. mayor de blasio, continuing what's starting to be a big theme among democrats that it's time to rectify some class issues here and they're not going to pony up, then he's not going to give up and he's going to try to rectify the societal ills. to deirdre bolton and the upside of inequality author, ed conner. the message seems to be consistent now. in a week we have seen congresswoman ocasio-cortez hiking taxes on people like you to 70%, the budget committee chief taking over in the house,

talk about raising corporate taxes to 28%, that variations of this class warfare theme are alive and well. >> it's not surprising we are going to get close to an $800 billion deficit this year so there's going to be a lot of pressure to increase taxes. it's easy to say -- neil: one thing if it went to deficit relief, though. >> yeah. even if you did the 10% on everybody earning over $10 million, even if it had no effect on growth, only raises about $30 billion a year. neil: joe lieberman pointed that out. >> if you extend it to everybody in the top bracket which would be an absolute growth killer by i think almost any serious economist's admission, when you factor in the congressional budget office's effect on growth, it only raises about $150 billion a year. so it's a long way between there and the $800 billion we are going to need. neil: where is this going? it's setting up a theme for 2020, isn't it? >> it is setting up a theme. a lot of people say that the "new york post" calls mayor de blasio mayor robin hood, that he

would like to be on the national platform because the national democratic party seems to be going more and more left, he wants to be able to have some very specific talking points if he does in fact make -- put in a bid. neil: doesn't his city make concessions to amazon to come in? >> that's what his critics, there was -- there are tons of people who say how can you be so hypocritical as to say that the money's in the wrong hands and then give amazon, a company that is one of our most profitable, trillion dollar market cap plus or minus given the day, a $3 billion tax incentive here in long island city. he's trying to i guess appeal to people that he says have been unfairly served by a broader agenda as part of that speech yesterday, he really criticized a lot of republican administrations, sort of going back to reagan right up through president trump. neil: i think he's even indirectly going after the clinton administration. i don't think bill clinton could be nominated in this party. >> a lot of things he's trying to do are almost bernie sanders-esque. he's talking about seizing

buildings from landlords who don't treat their tenants properly, setting up nonprofits. he's talking about providing a pension system for new york city workers who don't have it. he's talking about expanding pre-k to more children city-wide, which are all of course worthy goals. i think then the conversation as always gets back to who pays for it and how. we know mayor bloomberg, you know, we can't have the upper middle class and rich families leave the city, because then i lose tax revenue and everybody suffers. neil: why couldn't we just expand the tax base? half the people in this country are not paying any income taxes, federal income taxes. i'm not denying the fact many are retired, many are former military, so i'm not dismissing that or calling it an awful phenomenon. what i am saying is wasn't that long ago, during the eisenhower years, 90% were paying some form of federal income tax and now it's under 50% and much of that burden borne by the wealthy.

that's a zero sum game, isn't it? >> i think it's very difficult politically because i don't think you have support from the democrats or the republicans. you saw the last republican proposal which reduced middle class taxes, the median income earner in the united states consumes more government services this year than they pay in taxes this year which means they contribute nothing to their social security, nothing to their medicare. they don't pay for the social security or medicare of current retirees and contribute nothing to the poor. neil: in percentage terms, lower and middle income people got the biggest tax cut, in aggregate terms, you give a 1% cut to someone earning $1 million it's a bigger amount so we play fast and loose with the data. >> i think they boxed themselves in a corner with what they have done. now that we have a large deficit we will see pressure for higher taxes and everyone is going to say don't tax me, tax the other guy behind the tree. neil: know what i worry about, neither party will use whatever

revenue they get through whatever means to pay down the deficit. the irony that might be used as an excuse but the excuse is it will just lead to more spending. >> it's a worry. standard charter published a report yesterday saying as far as the world's most powerful economy, in 2020 at least according to their research, we lose that title to china. standard charter says we are never getting it back. then it becomes india. by 2023, asia is going to be 35% of the world's economy which they predict at that time is the u.s. plus europe. i actually do think it's worth getting our financial house in order and not having a credit downgrade, for example. neil: is that a real threat, the credit downgrade? >> if you look at the markets, the markets don't think it's a real threat. you look at the futures market for bonds, they expect no change in the interest rate next year. if you really thought it was a threat, to the creditworthiness of the united states, you would start to see those things in the market and you don't see that today. if you look at household net worth, it's never been higher

and is growing faster than the debt has grown. the truth is america is stronger financially than it's ever been. neil: you think the president will be re-elected? >> i think there's a high probability the president is reelected. i grew up in detroit with a lot of blue collar buddies who worked in the auto industry. they are adamant supporters of president trump. i think he will be very hard to beat in pennsylvania, ohio -- neil: supporter of and friend to mitt romney, what did you think of his op-ed? >> he criticized the president in a vacuum. i think you have to criticize one real world alternative to another. i think the alternative to president trump is president elizabeth warren and democratic control of potentially, definitely the house and probably the senate. if you prefer that alternative, i think his criticism weakens the president. it doesn't rein in his counterproductive behavior which is i think what mitt might hope that it does. i think it weakens it which strengthens the other real world alternative and i don't think that's what the republicans need

from mitt today. neil: 92% of them, pretty high number, like the president. of republicans. >> of republicans. the party. and i think as we have been following this shutdown, we are now the longest one, so i think with what is it, 800,000 people not getting paid today, we are going to see how this plays out but the federal workers who, i have been listening to first-person accounts, some people are in really dire straits right now. neil: air traffic controllers are the first group to say you know what, mr. president, we're suing you. they filed a lawsuit against this government shutdown, pointing the finger and the lawyers' fingers at him. more after this. well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light.

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when i say mexico's going to pay for the wall, that's what i said. mexico's going to pay -- i didn't say they're going to write me a check for $20 billion or $10 billion. if congress approves this incredible trade bill that we made with mexico and canada, by the way, but with mexico in this case, they're paying for the wall many, many times over.

neil: that was thoroughly confusing. i don't know what the difference is between paying for something and writing a check for something, but he had consistently throughout the campaign, that is the president, long before he was president and after president, 212 times, we're told, saying that mexico was in fact going to pay for this wall. take a look. >> we will build the wall and mexico will pay for the wall. >> and mexico will pay for the wall. >> i will have mexico pay for that wall. mark my words. >> we will build a wall and who is going to pay for the wall? neil: all right. a number of people have said well, he said they wouldn't write a check for it. okay. i don't know if you put it on a debit card or american express or mexican express, i don't know. you know they're going to pay for it, right? they're going to pay for it.

that's sticking in the craw of a lot of people saying the president isn't helping his cause by reversing or ignoring the stance that he campaigned on and that's fine. it's fine to campaign on that and say that or think that, but then to do a 180 on that and does it hurt his credibility at a time he sorely needs to rally a nation around the cause he says is vital to their security. meanwhile, a double-down on the fight, this at a time when they are trying to strike a comprehensive deal to avoid this back and forth that's led to potentially one of the longest government shutdowns, the longest if it drags past midnight tonight. tim phillips is americans for prosperity president and joins us right now. tim, good to have you. i guess what's surprising more than the president's comments, not so much that he wouldn't be the first politician to say well, this is what i meant to say, but that he didn't say it. he might make perfect sense to argue mexico's still going to end up paying for this based on this trade deal, i don't know

how that would work, but do you worry that that sends mixed messages to folks? >> no. i think that most americans and the world are looking at the policies that come out of washington more than the rhetoric from either side or from any political leader. they want to see what results are going to come forward. you know, i know right now some folks are saying there's no way you're going to get a bipartisan compromise on immigration, but just a few months ago, the political pundits were saying there was no way the president and democrats, republicans, could work together on criminal justice reform. they did, and just after christmas, the president signed into law the most far-reaching criminal justice reform in a generation. so we do think that provides a road map -- neil: you're right. but is it less likely if the president declares an emergency, i know it might take the monkey off both parties' backs here by leaving it in the hands of courts that will debate this all the way up to the supreme court for all i know, but that step

might discourage, maybe just wipe out any chance of a comprehensive immigration package. >> we have always believed that on an issue like immigration, that it takes the administration working with congress, that unilateral action is not the way to go. we thought that during the obama years, when obama took some steps unilaterally by executive action that were not well-advised. we think on an issue this big, for it to be lasting, a lasting result, you do need the traditional approach that the constitution lays out for congress working with the president. so we're urging that. we think there's a reasonable compromise with providing the needed security for the border the president and many are right, it needs to be enhanced and needs to be stronger, at the same time pairing that with legal certainty for dreamers. we think there's a deal there to be had. the american people, at least on those two provisions, support it. we think it's doable and

criminal justice reform, the success they had just a few weeks ago, heck, really only about three weeks ago, shows it can be done. that's what we're urging. neil: oh, no, there's more agreement and we have learned from their vacillating positions on this, there's much more agreement on these core issues than either party lets on. >> absolutely. neil: thank you very, very much, tim. you heard mary barra, the head of gm, talking about trade talks that she thinks will help gm and this country. after this. i wanted more from my copd medicine... ...that's why i've got the power of 1-2-3 medicines with trelegy. the only fda-approved 3-in-1 copd treatment. ♪ trelegy. the power of 1-2-3 ♪ trelegy 1-2-3 trelegy with trelegy and the power of 1-2-3, i'm breathing better. trelegy works 3 ways to... ...open airways,... ...keep them open... ...and reduce inflammation... ...for 24 hours of better breathing. trelegy won't replace a rescue inhaler for sudden breathing problems.

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we believe over the long term, china has huge potential. we think it's a market that will be probably in about the 27 million unit range and just to compare that, we think the united states will be in the low 17 million range. it's already a large market. we think there's tremendous growth in the chinese market that in the next few years, could be a 30 million unit market. neil: mary barra on the floor of the new york stock exchange

essentially saying i'm optimistic that you get a trade deal, good things are going to start happening. remember, china is going to be sending a number of its representatives to the united states i believe by the end of the month to what they hope will be the early wrapping up of the potential deal. of course, hope springs eternal. edward lawrence on some of those negotiations and where they stand now. hey, edward. reporter: hey, neil. enter the government shutdown, now on monday the u.s. trade representative's office will be impacted by the government shutdown but not the negotiations with china. i'm told there may be an official statement later this afternoon on this. related to china, other trade officials in the administration are saying that chinese were notified that the trade deal, the negotiations would continue and not be affected at all. in fact, this trade negotiation has been deemed essential and the trade officials from the administration say that the negotiating team will continue to negotiate towards a deal. right now on the calendar, the chinese have the vice premier coming to the united states here in d.c. on january 22nd. that is a top negotiator for china.

that date is not set in stone, but it is on their calendar right now. federal reserve chairman jerome powell says a deal with china would be good for our economy. >> if this leads us to a fairer, its process leads us to a fairer, more open, lower tariff environment for trade, that will be good for the global economy, good for our economy. reporter: the chinese are now using language like equal and reciprocal trade. they are talking a good deal but right now, showing no movement towards actually making those structural changes but a significant change in tone. u.s. trade representative's office has negotiations with the eu and japan going on. those could be affected with the government shutdown. we have to wait and see exactly how long this lasts. back to you. neil: thank you very, very much. so there is hope they get a deal or at least the construct of a deal by the end of the month, when this official comes to this country. that's how things are going. a delegation of ours goes to china, just got back early this week, then a delegation from china comes to the united

states, to washington, going back and forth, back and forth. i don't know what's happening behind the scenes. optimism that something will be done. but what if something is not done? to scott martin, who says no deal, no rally. scott, is it that basic? >> it is that dire and we had a preview of coming attractions i think to that movie which was december, december for the stock market, when yes, we had other worries about the federal reserve, government shutdown, maybe the mueller report mixed in, but china was part of that and certainly stocks, your favorite s&p 500 names, whether it's apple or some of its other counterparts really emphasized a deal with china or at least better negotiations there, because let's face it, friends, a lot of the growth that these companies are going to see in sales around the world comes from emerging markets, comes from asia. that's where china is, last time i checked. so it's better to play nice with them than maybe fight with them overall. neil: what is your sense of how the federal reserve handles this? i didn't realize until a guest

told me this earlier that based on fed futures fund contracts, not a single hike is anticipated this year. not a single one. what do you think? >> that is the consensus, which was starkly different, as you mentioned, just some weeks ago. tell you what's interesting. mentioning the fed and fed chairman, our friend jay powell yesterday in his talk, he talked about no impact yet so far from the tariffs to the american consumer or the global economy. i thought i heard wrong. i thought thank goodness we have dvr, i can rewind the tape and see if that's really what he said. i couldn't belief it because that really to me is something myopic in his view because there has been impact. alone from consumer spending numbers already maybe feeling the pinch in their lower 401(k) balances, certainly numbers from apple, caterpillar and others. maybe as this drags on, the fed should take that much-needed pause the market has been

telling them to do. neil: while i've got you, does this shutdown enter into your thinking on the markets or anything? it's dragging on, it looks like it could drag on awhile unless the president declares an emergency, takes that off the table, you would think. what do you think? >> i think it portends more trouble say in d.c. for the year with respect to other policies, maybe. the market so far, if you were an alien and came down to earth, not that we are inviting them down here, but if you did come down and say how's the market been doing since the shutdown, the market is actually up and bond prices are flat. so far, the market doesn't seem to care but we need to get some more of trump's policies in place here in 2019, economic policies, certainly, maybe more tax cuts and so forth, infrastructure spending, something that's been planned. if that doesn't occur, via the shutdown, or that drags on, that's something that could impact stocks long term. neil: mark zandi of moody's tried to put pen to paper and get the economic impact of this shutdown and says it will knock

$8.7 billion of first quarter gdp. that would bring us into the low 2s from the mid 2s. what do you think of that? >> that's not pretty. i think those numbers are okay. i think they are a little robust. it's probably a little less of an impact. but here's the good news of that. we have seen this in the past. when that does happen to take off maybe a little bit of gdp in one quarter, it usually trickles into the next quarter. so it's not like it's production or wealth lost, it's just production or such postponed. neil: as for the interest rate situation, the rates over which the federal reserve has no control, where do you see them going? >> nowhere. i tell you, neil, the ten-year note which is the benchmark rate now around 2.70 or so give or take a day or basis point, seems like it wants to stay here. you mentioned the fed fund futures that are pricing no rate hikes. i think rates are really comfortable right about here, as is the market. neil: thank you very, very much. always good talking to you, my friend. >> see you. neil: in the meantime, we are looking at the dow, down about 89 points. we had five up days in a row,

something we hadn't seen since last october. they were hoping for a sixth day. we are still looking at a positive january effect, in other words, the first trading days of january and the month itself, so goes the rest of the year. that's not always been borne out. someone was telling me 7 out of 10 times but 7 out of 10 times is a pretty good average. more after this. [ phone rings ] hey maya. what's up? hey! so listen, i was taking another look at your overall financial strategy. you still thinking about opening your own shop? every day. i think there are some ways to help keep you on track. and closer to home. i'm all ears. how did edward jones grow to a trillion dollars in assets under care? thanks. by thinking about your goals as much as you do. some things are good to know. like, where to find the cheapest gas in town. something else that's good to know? if you have

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neil: attaching government funding, in other words, keeping the government doors open even though three quarters of the government is open, was the way to go about it, because that just built intransigence on both sides. 800,000 people are not going to get their salaries, they will live from week to week. i really feel for these people. but i don't know whether congress will act on anything. neil: so does this whole shutdown over this wall thing just get in the way of that? is it not important? how do you describe it? >> some of these questions to being a real serious political problem for both parties when the citizens all of a sudden, and lots of them, have real worries about their personal finances. neil: and by the way, mr.

donohue of the chamber of commerce is among the first to say you know what, this is hurting a lot of our members' bottom line and we're not happy with this and they better resolve this, because this shutdown could shut down their businesses and cause havoc for the u.s. economy. all of this coming as mark zandi and a host of others are trying to put pen to paper as i have been saying. the moody's chief number cruncher now among those saying this is going to cost the economy enough that it's going to shave some off of that gdp for the first quarter, and maybe more than just a little bit. let's get the read from charlie gasparino on the economic impact. what do you think? >> we got an exclusive update on what the white house believes is the impact and why you may see president trump call for an emergency and do the wall funding out of i guess the defense budget. what the white house believes is that the impact of the government shutdown will show up in jobs and output numbers as early as next week.

initial read was that it wasn't imminent, it was maybe weeks away but what i'm hearing from my white house sources is that's not the case. the impact on output which is essentially gdp and jobs, essentially employment, as you know, is going to be -- could be affected as early as next week if we don't get a resolution to this. now, neil, that is the impetus why i think you hear president trump right now talking about declaring a national emergency and just funding the damn thing out of his own pockets, out of the government's own pocket, let the courts decide whether that's right or not but ending the impasse because it is going to have an impact on jobs and output and that's imminent. now, one other thing that's kind of interesting here. amid the government shutdown, we have the world economic summit and what we are getting from the white house now is that because of this shutdown and even if it is resolved next week, lot of people think that emergency could be declared next week,

ending the whole thing, the white house is likely to put out a scaled-back delegation to the davos economic summit as early as today. i'm hearing it's imminent but who knows, maybe it occurs over the weekend. what we are hearing from them is that treasury secretary steve mnuchin definitely as of now is going. that's as of now. obviously things could change. wilbur ross, commerce secretary, he's going. larry kudlow, senior economic adviser to president trump, is not going, from what we understand. there may be one or two people going. so the initial list, the way i read it, was eight to ten people. it's scaled down to maybe two, three, four or five. so that's another sort of less pressing impact of the shutdown, obviously the bigger problem is people losing -- people not getting paid, the economy slowing, the trump administration worried about how that impacts their bottom line. back to you. neil: all right. great report. good update. thank you very, very much. the administration is concerned

about this and democratic or republican president, whether it's deemed their fault or not, history proves that the better part of valor is to just get the thing settled and all these presidents have seen a number of days of shutdowns over the course of their presidencies. doug knows the impact. what do you think the impact is here? >> i think this one's been a bit different and the reason the shutdown has continued is because there's political value on both sides and that's why it's happening. for example, among republicans, the democrats win the house, the democrats shut down the government. the democrats say oh, it's donald trump's fault but the fact is the government wasn't shut down until you got here. so that's the political message and legacy for this democratic congress and it's bothering some people, cher and other supporters, the democrat party are getting nervous about it. then there's the fact that really searingly burns the message donald trump wants to make that i tried for the wall,

i promised the wall, i'm making it very clear and very painfully clear i tried to fulfill my promise. that's leadership. that's kennedy's profile in courage. you support something that isn't even popular. so because of those political advantages, i think that's helped prolong this crisis. neil: you know, the president declaring an emergency, if i can be so crassly political, grants you some cover, right? all of a sudden, the government shutdown presumably would end, it's thrown into the court's hands and that would probably go from one court to another all the way, for all i know, to the supreme court, and he could argue i fought the good fight. >> absolutely. it plays into his hands again because courts will probably stop it and he will say see, you know, these courts, these crazy leftist courts, what can i do about it. that's why you elected me to change the judicial system so it's working well for him. democrats are hopeful because it's now reached the point where

with their media allies, they can make the case this hurts america and it will start to work for them. so i think that's why it's been prolonged. both sides see a possible advantage. neil: this seems to be a more 21st century phenomenon here. i don't know what was done back before the '80s or whathave you, but this seems like a routine now, that markets get used to it, taxpayers get used to it. what do you think? >> yes, i suppose that that's true. you make a good point. if it happens enough, they get inured to it. but the media tends to be supportive of the democrats and so i think this will start to turn their way. i have seen a democratic congressman on tv all day yesterday saying my district borders mexico and we have a lower murder rate than washington, d.c., which is a city run by democrats but they don't say that his particular congressional district has a

border wall and geographical barriers that should make it safe. neil: very interesting point. i didn't think of that. i always learn something from you, doug. thank you very much, my friend. happy new year. >> happy new year to you, neil. neil: whatever the problems, as doug was saying, in this country, they are a lot worse if you think about other countries. france is bracing apparently for the bigger, more violent so-called yellow vest demonstrations. this would be the seventh week in a row, i believe, they have had these demonstrations. that's a case of people over there that are sick and tired of paying for a lot of things that right now have lifted their taxes to the point, what they pay for that and what they pay for gas is now the highest in the western world. they've had enough. germans also concerned about their economy, shrinking into a recession. the united kingdom concerned about brexit going nowhere. and their economy going nowhere. it's a good thing we're live tomorrow on fox news as we look at these cross currents from around the world. we'll connect, you decide.

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neil: have a big brexit vote coming next week and all the concern about european economy slowing down. former imf official is warning that brexit could hurt here as well. we shouldn't be dismissive of it. what are you looking for next week, desmond? it is going to go down?

>> it's a lot occurring next week that we'll have the votes in britain on the brexit bill that theresa may has been promossing and there is fear she will lose that by a very large margin. if that happens, it is just going to really increase political uncertainty. we're going to be uncertain how this process is going to end and it looks like she is playing this right down to the may, march 29th deadline so i'm expecting a lot of uncertainty in the uk. but as you said in the introduction, there is a whole lot of stuff going on in three of the other major european countries. neil: they can't challenge theresa may for a year now after this last vote so what would this mean for her? >> well, it is a very big setback. it is going to be very difficult for her to get her plan through, that she could get a lot of defections.

that her government could fall. there could be a vote of no confidence. what you could also get, you could get support both from the conservatives and the labour party members, some of them at least, to go for a second reverend dunn. so we're already in a area now where there is just wide possibilities and nobody really knows how this thing is going to play out. my fear is that if you have got a lot of uncertainty, that is not going to be good for the uk economy. it is also very unlikely to be good for the pound. neil: at the same time, we're hearing of another weekend of planned protests, these yellow vest protests in france. more softening data we got out of germany. italy is always a budgetary mess. what is going on with europe? >> well, that you have really got political backlash across europe. it is the same sort of thing, moving towards more populist

kind of governments all over the place and that is really not good for the economy. in france macron had to back off a lot of reforms he can't put much quicker, that is undermining confidence. germany looks like merkel is flailing. that is not good for confidence. you have also got the idea of possibly a trade war with germany, you no, from the united states. all of this leads to great softening in the european economy. and that's not good particularly at a time the ecb ended its program of buying bonds. and many of the countries have got very high debt levels. i'm particularly concerned how the italian situation will play out with their debt level. my expectation we're headed for another round of the sovereign

debt crisis in italy. neil: lovely. always the italians, desmond, always the italians. very good seeing you. >> very good seeing you. neil: i beat charles payne to the punch with that one. charles: thank you, very much, neil. i'm charles payne. this is "making money." keep in mind we have a five-day winning streak. this is when we start to see wall street give what we call cp mode or the cp effect this hour. also remember this hour president trump will hold a roundtable on border security as he continues to consider a national emergency to build the wall but will he just face years of court battles? wall street betting big on netflix this year. will the stock beat expectation and will the communications sector displace the tech sector and lead the market in 2019? my panel weighs. all that and a whole lot more on