5:00 a.m. eastern. cheryl: we would be happy to have you join us at 5:00 in the morning. connell: is there a cot in the corner? cheryl: sure. we got coffee everywhere. connell: thanks for joining us. appreciate it. "bulls & bears" starts right now. david: new details emerging from washington on day one of high level trade talks. both sides are reportedly close to reaching a deal now with just a week until the new tariffs are scheduled to kick in on chinese goods. we've got the very latest from washington. hi, everybody. this is "bulls & bears." i'm david asman. joining me today, liz peek, zachary carabel, michael block and jonas max farris. first, straight to hillary vaughn. we had mnuchin, cudlekudlow, lighthizer, all the big guns. was there any progress? reporter: the chinese foreign ministry confirming to fox business' edward lawrence today that both sides have reached

agreement on major issues. reuters reporting six memoranda of understanding are being drafted that address a number of issues for those reportedly including agreements for agriculture, convincing china to buy more u.s. corn, more soybeans and other goods, also opening up market access for other u.s. companies like car manufacturers and u.s. banks. there is also a memorandum focusing on technology, limiting forced technology transfers and stopping intellectual property theft and also ending cybertheft. there's an agreement that would also try to stabilize chinese currency but the "new york times" reports that officials have realized the chinese delegation has been repackaging old promises and then trying to sell those off as concessions to please the president, and that has china hard liners like navarro and lighthizer pretty ticked off. they are more hawkish about the language and the details that are in these memorandums of

understanding, looking for new and substantive commitments. the white house has been saying all along they want to walk out of these talks with structural changes to the chinese/u.s. trade relationships. they're not looking for lip service, not looking for a short-term fix. secretary of state mike pompeo telling fox business's maria bartiromo this morning they are not interested in any type of agreement without enforcement. >> i think real progress, as you said, not just on the trade issues which matter, that is the goods exchange, but on intellectual property protection, forced technology transfer and importantly, enforcement around those, it's one thing to write something on a piece of paper. it's another thing to have enforcement mechanisms. i know our trade team is hard at work making sure the american people get that. reporter: president xi jinping and president trump will need to meet face-to-face to sign off on any deal and the chinese say they have march 26th through the 29th marked off on their calendar for that meeting to happen. but we still haven't received

word that that is, in fact, the date that this is all going down. david? >> hillary, liz peek here. question for you. are there any definite speed bumps that were talked about today? in other words, those are a lot of the issues that have been really meddlesome in trying to hammer out a deal. what is the deal stopper at this point? do you see, is there talk of any particular issue being really problematic? reporter: i think it's in general -- reports are the chinese delegation has really been angling to just get an extension, to make sure that this march 1st deadline doesn't in fact pass without some type of agreement being reached, and that is having an impact on really what the chinese are willing to give up and concede and what the u.s. is willing to accept in return. there are questions about are the chinese really ready to make a real meaningful deal. they have made empty promises in the past to prior administrations where promising

president obama on two different occasions that they were going to stop ip theft and forced technology transfers that never were enforced, never went anywhere. so really, the details, the devil is in the details like it's always said, so making sure that the chinese delegation is giving actual commitments and not just lip service i think is really what's stopping -- or is the biggest roadblock between the negotiations right now. >> this is jonas. the enforcement thing you just brought up, i'm a little confused, because when china will tell, say, google you have to transfer or whatever, that's almost like how they make us do user agreements we don't want to do. i see the government being weak on that area. with ip theft, they are already copying things they, i assume, are not supposed to. what is the current mechanism, how are they talking about changing that? why aren't they already stopping that before any of this started and are there any new plans, maybe permanent tariffs?

otherwise, how are we going to make it work? reporter: i think that's really up in the air right now and that's the big question. but there also is the question here of are negotiations leading to a point where tariffs completely go away, or are negotiations leading to a point where tariffs are just not going to increase beyond where they're at now. so what china is willing to concede is going to really determine if tariffs go away or if they just aren't increased. but the specifics and the details of, you know, whether it's a memorandum of understanding regarding the technology issues, i think are a big concern. but you also have companies, tech companies that are willing to hand the technology over because china is a massive economy for them to enter into. so it's interesting to see the difference between where the white house stands on this but then you also have tech companies that clearly don't have too much of an issue handing this over in order to get access to the marketplace

there. >> hillary, it seems from the outside or from those of us watching from the outside that the imperative to actually do a deal before march 1st or before the next round of what were supposed to be automatic tariffs increasing, the imperative is to not have that happen for both the chinese and the united states and for the trump administration are very, very powerful right now, which means the likelihood of this being much more optics than reality, i.e., not real structural reform, the chinese agree to buy x because that then, you know, looks good domestically in the united states. the idea that there's going to be massive structural reform no matter what the spin seems increasingly unlikely. is that the sense you're getting from those who really thought we are finally going to hold the chinese and make them do all these things that people have said we are going to make them do for years but right now, doesn't seem to be the appetite for that kind of confrontation? reporter: i think there is some general frustration that the president kind of showed his

hand, his willingness to call the march 1st deadline not a magical date and that there is some wiggle room there, you know. when you're going into a negotiation and you're the person sitting across from the chinese delegation, you want it to seem like that deadline doesn't have any wiggle room, that the president isn't willing to budge so that you are forcing the chinese to really negotiate and come to the table and give as much as they can to make that not happen. i think there definitely is a frustration around those public comments. but again, at the end of the day, the president is the one who has to sign off on this deal and meet president xi face-to-face, stow he o he is k the head negotiator here. if he wants to negotiate it out and send messages publicly and on twitter, that's his prerogative. >> is there a structural issue here where, you know, reforms don't happen overnight. we are asking china to change its ways. it's not going to happen by march 26th or 29th. is there a lot of discussion here that perhaps as part of

this deal, it's going to be a situation where the u.s. says okay, well, in return for you enforcing intellectual property protection, over time, we are going to reduce these restrictions, reduce these tariffs over time. is that a big part of the discussion now? is that viable? is that really the only way to get china going? that's really wihat i'm turning over in my head. reporter: we have heard publicly from lighthizer and also pompeo this morning saying there needs to be enforcement mechanisms. part of that is maybe a phasing back of the tariffs for in exchange actual action by china, if you do this, we will bring this down a few percentage points and if you do this, vice versa. so that may be one way to get china to actually do what they have said they were going to do to pass the administration but make those empty promises actually a reality. that could be part of the negotiations that are happening today to kind of hold china to task to make sure something

meaningful comes out of this. but you really have the white house saying they're not accepting anything that doesn't drastically change the structure of the trade relationship between the u.s. and china. so that may mean that tariffs stay in place until other measures are taken that make sense to even out the trade balance deficit between the two countries and make the president comfortable giving some of those tariffs or drawing down some of those tariffs. david: there was a great "wall street journal" article today about how right before the vice premier came here, vice premier of china came here for these talks, there's this communist party newspaper that they have that came out and republished on the front page big letters and everything, the speech by president xi about how they weren't going to give an inch on legal reform, on political and legal reforms, the kind michael was talking about that they're not going to do overnight. so there are all these mixed

messages. i throw this out to everybody. i think it's going to be very difficult by whether it's march 1st or june 1st to have real genuine political reform when in fact, president xi is saying no can do. >> i for one think this entire thing has been completely misguided. one, setting a deadline with 10% tariffs, even if they were 20%. if your goal is to coerce the chinese system to change radically, the amount of tariffs we currently have on chinese goods doesn't come close to exerting enough pain to do that. if you want to -- david: you don't think it's hurting the country? >> it would be like saying to the united states change your entire system with a little bit of pain, stopping a democracy becomes some sort of differing system. if that was the goal, you would have to prepare the american people for much more economic hardship. >> i would disagree with you. i think there are very important reforms that we're looking for but only in their trade relations with us and with other big trading partners. we are not talking about them

becoming a non-communist country. we are talking about them saying to local partners okay, you don't have to give up 50% of your ip or business and all of your ip to your local partner. that's a very different thing. david: you have president xi telling the communist party through the communist party newspaper we're not going to do this. >> that was back in august. david: that was published this week. >> trump is the best president you could have in this kind of negotiation. he's the least likely to care about political reforms, how they run their country. he's just trying to make fair deals for american businesses primarily. other presidents have brought that up before. that was always an issue where not only do we want you to play fair economically, we don't like your democracy or what you call democracy. so in some ways, the only problem is trump wasn't doing this 15 years ago before this country got so big that everybody has to do deals there and is willing to take these deals and this extortion and transfer of ip, and it's hard to beat that. yeah, you can't beat that with a

10% tariff anymore because we're not dealing with a 20-year-old china. >> let's not forget china wants to do deals as well. there's a whole chinese elite and chinese business leaders chomping at the bit to get into the united states. as someone who traffics in the private equity and strategic alliances with u.s. companies, a big part of what i do these days, there's a lot of chinese interest in investing in the u.s. we can talk about keeping these punitive levels and pressure on the chinese to do right on reform, but there's also this carrot, if you will, of being able to have these investment opportunities in the united states. real estate, private equity, you name it. it's all out there. david: let's face it, it's very difficult when one of your largest trading partners is a communist country. it's just a very difficult situation that -- hillary, thank you so much. we appreciate the update. very good stuff. >> and your largest creditor. david: your largest creditor as well, that's right. meanwhile, alexandria ocasio-cortez mocking the billboard that criticized her for her role in driving amazon's headquarters out of new york.

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ordering custom ink t-shirts has been a really smart decision for our business. - [narrator] custom ink has hundreds of products and free shipping. upload your logo or start your design today at customink.com. david: congresswoman alexandria ocasio-cortez is now firing back at her critics who put up this billboard in times square accusing her of costing new york thousands of jobs and economic opportunity by driving away amazon's second headquarters. aoc tweeting out today few things effectively communicate the power we built in fighting dark money and anti-worker policies like billionaire funded groups blowing tons of cash on whack billboards. this one is funded by the

mercers. p.s., fact that it's in times square tells you this isn't for or by new yorkers. now, they are putting up two new billboards. hey, aoc, sorry your whack tweet but while the congresswoman accuses her critics of being out of touch, a poll showed that nearly 60% of new yorkers approved of amazon's plans. so who is really out of touch? what do you think? >> tell you what, what this reminds me of, i remember seeing a parade by one of the unions a few years ago and they were pretty much yelling on the sidewalk, this is a blue state and i'm thinking oh, does that mean i have to leave? what does this all mean here? you know, to say that -- i didn't realize there weren't diverse opinions here. while i appreciate the congresswoman's opinions, i think it's way off. she's calling the mercers anti-progressive. maybe it's more like anti-luddite and anti-doing things that are actually to be proactive rather than sitting and complaining about it and pushing things away that could be helpful and working with ways to be helpful.

that's what i don't get here. it's misguided. i'm not exactly a mercer advocate or anything like that, if you know me, but to me, this is just completely misguided and it's like you want to defeat this sort of thinking, give her enough rope, shine a light, let her keep talking. go ahead. >> just for the record, alexandria ocasio-cortez is such catnip right now for media attention. she is to the left or to the media world on the left what donald trump was to the right a few years ago. while she, you know, attracts attention, it bears remembering she's a junior congresswoman from new york city. she is not in the leadership. she is not -- david: she serves on pretty powerful committees. >> but she's not the head of a committee. she is a vote. i'm not saying that is an insignificant thing. she has a lot of twitter followers so she gets to shape the dialogue. there were a lot of grassroots opposition to amazon which i'm on record, i think was a mistake. i think it will be bad for

amazon and bad for the city. but it certainly wasn't just her. there was a whole progressive movement behind this that is a problem, irrespective of whether or not we pay attention to her. a problem in the sense of it's a zero sum attitude toward economic development. the jobs are not going to come from nowhere. >> but here's the thing. she is not willing to take responsibility for something that has really damaged new york city and it's time that she's owning up to the fact that this was bad politics, bad policy and it's bad for new yorkers. if she can't stand a billboard coming back at her, then get out of the kitchen, girl, because guess what? she has sought this limelight, she's won the limelight through being telegenic and being throughout with good social media presence. >> first of all, let's not -- i wish it was just telegenic. first of all, she just won this twitter war. let's stop pretending this company -- >> i'm not saying otherwise. >> she called this billboard whack and people are going to believe that because basically

this group was paid for by billionaires who founded it. they're right and what they are saying is right but this is where the right has to be careful here. you can't prove to people, her fans, from the top down, like some trickle-down thing, that high minimum wages are bad, that all these policies are bad for you, the worker. the employer can't tell you that. the workers have to think that. she exposed this and unfortunately, is going to win people on to her side from this battle. this entity will probably have to change their name. she's a very dangerous fighter. that's why i think trump doesn't engage her directly. she's much smarter at this than warren and bernie, who she used to work for. she wins these twitter battles. she's not right economically, she's not helping the people, but she's making better points, she is stronger, she's commanding the media presence. it's not just because she looks good. this is not -- david: one thing i would say, point out, is all the polls that were done right up until a couple of weeks ago showed that

new yorkers wanted amazon to be here. they realized not only it would be good for the community but it's good for state tax revenues, too. just the income that the state would make on the 25,000 workers adds up to $5 billion over ten years. governor cuomo knows that and i think the people of new york do as well. >> again -- >> a few weeks from now these numbers are going to start changing. she will start winning. that's like saying the republican party 20 years ago more of them were for immigration. those numbers have changed because of strong politicians changing what people think about certain issues, free trade, whatever it is. that's what she can do about socialism on the left. she's that powerful. >> i would agree. you make really good points about this is a potent social media presence that can translate into influence with some degree of political power. as we saw from donald trump. we talked about this with amazon a few weeks ago. amazon also just packed up and left. there was enough support within those communities that if they had really been committed to

engaging and the fact is bezos as we talked about with his own issues with the "enquirer" is not somebody who particularly wants to engage adversaries. he either wants open arms or says we will go somewhere else. there was enough support there that had he engaged, it's likely the outcome would have been different. it's not just like amazon was, you know, defeated tail between their legs. it's much more that they said we are -- >> i want to come back to the fact this is the first time that this young woman who kind of shoots from the hip and has soared to everyone's consciousness overnight has come up against a real issue where she's in the wrong place. according to most of the people whose lives might have been impacted and also by fellow democrats. so the fact that, you know, she's having a twitter battle, i totally disagree with you. take her on. if she's wrong about something, are we supposed to ignore that and be cowed by nine million twitter followers? i don't think so. >> you sound exactly like what people said about donald trump at the early stages. >> look how well he did. >> he was saying crazy things

and he was wrong, he was saying he will pay off the debt in eight years. we know that was not true. the fact is people started to believe in the message and he got elected and the other person he was against was very weak. this woman is doing that. she's not making sense from an economic point of view. that's not the point. >> how do you think you should counter her? just ignore her? i think it's important to engage with her. david: by the way, you are looking at one of the other newest billboards that says hey, aoc, this billboard cost about $4,000 but you just cost new york 25,000 jobs and $4 billion in annual lost wages. ouch. i think this is going to have an impact. >> that's the point here. that's the point here. we are in a situation now where no one won. new york city lost. we don't know what would have happened with this and we are never going to find out unless, again, i actually appreciate that congresswoman ocasio-cortez has a different voice. i can respect that. but how about if she was

actually extending the olive branch, reaching out to companies like this who can be potential employers and say hey, here's how you can help the community, here's how you can invest in schools, invest in the community, preserve the community, work with us. david: she would have to believe in capitalism. and she's a socialist. that's the bottom line here. >> she wants a better life. call it what you want. socialism, capitalism, blend the two. she needs to label everything. that's her thing for right now. it's going to get old just like the other side gets old saying no to everything. that's it. david: i don't know how you blend two polar opposites. that's the problem. got to move on, gang. a shocking reversal and huge blow for tesla. why consumer reports is no longer recommending the model 3. ouch. that's next. (nationwide jingle) you see brad, songs are really about big life moments. baby shower here. big. life. moment. what is in here? ohh! oh, i hope it's a life insurance policy. what? it's a sensible gift. protection for you and your family, nationwide has all the tools to help you find

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david: tesla shares falling almost 4% after consumer reports says it's no longer going to recommend the model 3 due to reliability issues. this is a stunning reversal given the fact consumer reports

ranked the model 3 at the top of its consumer satisfaction list just last january and recommended it last may as well. a tesla spokesperson says the automaker already has made quote, significant improvements to correct issues. let's bring in the car coach for details. so how big a hit was this for the company? >> it was a big hit. remember, he sort of lived off the fact that consumer reports gave tesla all this credibility for the model s which used to be on the recommended list. it is no longer. the model x no longer made the list. now the model 3 hasn't made it. remember, just last year they had a problem with their braking being a longer distance than was considered acceptable by the department of transportation so that hurt them as well. i still, after seeing vehicles coming right off the line today, they still have paint problems and electrical problems and fit problems. aaa announced two weeks ago the cold weather from this polar

vortex makes the battery life drop by 41%. that's true with any plug-in electric car. that's all negatives on his part. i'm sure he will come up with some amazing story that he's going to bring a car to the moon and it will boost the stock again. >> the whole game was reliability, would range rover even exist? it seems like there's other things that go into it. pardon me if i'm wrong. isn't tesla still number one in customer satisfaction? is that more important than the actual dollars and cents of owning one and the reliability compared to toyota or something? >> well, the key word i think you used is the cult. so you are correct. it is a cult of people that follow it and every time i talk about tesla on national television, they all come out and attack. but the fact is those people that actually purchase a car like this expect to get their money's worth. when you aren't, whether it be a rebate from a deposit, a maintenance problem or a problem when the car is delivered, you

want to get that taken care of. if you bought any other product that's at the top of the consumer reports rankings, subaru, genesis, audi, bmw, they will take their of cacare of th customers. tesla is not doing that. along with a lot of other issues they're having. >> we have all the free real estate now in long island city with a bunch of warehouses, so they can have that if need be. it does seem to me a lot of people have understood for years that tesla servicing and the functionality of these versus the hope and the dream is a little like smartphones 2007-2008. they are willing to put up with an inordinate amount of hassle to be a part of what they feel is an exciting new wave of how one drives and what one drives. i wonder, given that the stock

price today really was a lot less volatile than tesla stock is even on a normal day, whether or not this really isn't going to be such a big deal in terms of actual sales versus what it would be if this was -- >> there's a lot of competition now. remember, you have jaguar, hyund hyundai's suv of the year for north america, it's got an electric vehicle. you are starting to see a lot of competition. plus you have amazon investing in an electric truck company. if amazon is investing in them, you know they will come on strong after the marketplace. you have to start looking at the competition and the fact that elon musk thinks he will do really well in china, but if you look at his 10k report, he's still missing a whole bunch of permissions in order to be able to build there legally in the country of china. you can't just start building a plant when you don't have all the approvals in place. it would be my suggestion just from a common sense standpoint. >> lauren, from looking at elon musk, all joking aside, he says he can secure -- funding secured

to buy out the company but how about securing funding for fixing operations in the u.s. before he even thinks of china? it's just a simple matter of can he fix the operations in the u.s., correct these problems, and build his cult of happy buyers? you just mentioned a few names. you didn't mention mercedes, bmw, audi, everyone else, you name it. you have well pocketed great operators in this industry who could eat their lunch and all these guys who love their teslas can say never mind, i'm going over to mercedes here. >> it's possible. i think it's possible. i drove the audi, it was a fabulous car. i have driven all the different brands. mercedes, bmw. everybody is offering an electric vehicle because they have to. in order to sell vehicles in the state of california. if you sell more than 2,000 vehicles in that state, you must offer a plug-in hybrid. they are all offering it. when you kind of open the marketplace up like this, even though we have to look at the total amount of sales, it's less

than 2% is electric vehicles. although there's a lot of hype around it, he does have a lot of competition. those people that are true tesla fans will not leave tesla, no matter what. they have to really have a horrible experience for them to leave. and many people even had accidents with auto pilot still go back to that brand. he does have a great loyalty which i have to give him credit for, but overall, when you look at the competition, you have to realize that either he's going to have to sell this brand off because he's lost his $7500 tax credit and it will continue to be cut in half. by the end of this year, he won't have the tax credit available. so it's going to certainly lessen those people that were interested in buying that car and they are going to look at other options. my guess is that at some point he will either sell the brand off or he will have to do something. right now it's very hard to raise money when you look at some of these financial reports. they're not -- david: lauren fix, great to see you. please come back and see us. >> thank you. david: could you be getting more

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david: we might be getting more money back from the irs this year after all, after critics pounced on news last week that refunds were down, pooh-poohing the president's tax cuts. morgan stanley pointing out the latest data show that refunds are tracking slightly higher than during the same time last year. when all is said and done, could the president's plan actually lead to lower taxes and bigger refunds? what do you think? >> here's the thing. we know that the plan is going to cut taxes for about 80% of americans. the fact that refunds early on didn't reflect that is apparently due to some technical glitches about where various credits are applied, et cetera, and the withholding tables having changed. at the end of the day, my guess is refunds will be up because people will, in fact, pay less

taxes. >> one thing we are seeing is those december retail sales numbers aside, the american consumer and home buyer seems to be in good shape. the data is starting to perk up a little. i will say it's far too early but it merits watching here. are retail sales going to go better, will durable goods do better, let's watch the housing numbers as we go into the spring. home builders have been a great, great sector so far year-to-date. they have come back from the dead. no one expected it. if this trend continues, you are going to see it take effect with that. >> i know it wasn't my best class when i was getting an mba, sorry, but i would like to s see -- who measures the tax policy by the refund? that's got nothing to do with the tax code, what your rate is. you get back because you overpaid. the bottom line is the tax code was simplified. there's a higher standard

deduction. that makes it easier for the vast majority of americans to do their taxes. the same critics are saying bankrupting the country with the rising deficit which is partially true, obviously there's tax cuts or that wouldn't be the case. you can't be critical of both things. you got to lower taxes. that's why there's a rising deficit. enjoy it. it's good for the economy right now. we got to figure out how to pay for it in the long run. >> the other part of this is it may be a modest tax cut to a lot of americans but there should be an emphasis on modest. the dramatic part of the tax code as we all know was lowering the corporate tax rate. that was the real, as well as jonas is right, some simplification of how one claims deductions, but it's not as if people are going to see massive changes. if that's what they are expecting they will be disappointed. if the critics were expecting nothing, they too will be disappointed. >> to jonas' point, it's a wacky way to look at whether or not a tax cut bill has been effective. the truth is, anything that makes it look bad is fodder for the left because they hate the

tax cut, they hate the fact that middle class americans are doing better because of donald trump so this is just part of -- >> i don't know if they hate that middle class americans are doing better. >> come on. don't be silly. all these campaigns are out there, every single person who has jumped into the race wants to make the class middle class americans are under siege, it's terrible times for the middle class. the fact is that's not true. david: as a point of order, the tax policy center, not a conservative group, the brookings institution is involved with that, the average american -- the average reduction for americans is going to be $1,610 on their taxes. so yes, the emphasis was on the corporate taxes but it does affect average americans as well. >> average but not -- david: average, it's true. of course, everybody says let's focus on the rich people. frankly, the top 50% of americans are the ones who pay the taxes. tfk it of course it will be focused there. >> let's not forget tax rates never went higher because obama didn't go back to what they were under clinton. it's one of the reason we are running deficits now.

to say they didn't get a huge tax cut, because they got a tax cut in 2000 under bush. it never went away. rates are already low. the average middle class family pays a single digit federal tax rate. there's not a whole lot to cut there. the move towards simplicity, i don't want to -- that is a move in itself. even if the rates didn't change, it's good if people understand how taxes work and it's easy to file. that in itself stops stuff like well, my tax refund is slower. like that kind of logic exists because taxes are so complicated. the public doesn't even understand that the payroll tax, half comes out of your employer. it's all done as a mystery. david: i know exactly what you're saying but i have to admit even though i know all the facts you are talking about, when i get that refund i think oh, boy, it's found money. i know you're right. >> look, it's my money. david: right. thanks, gang. president trump says he can help u.s. tech companies speed up work on their 5g networks. gene munster will tell us what needs to be done right now,

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david: because of the way the government auctions off our wireless spectrum, u.s. consumers pay a lot more for wireless data than anybody else in the world, and the president wants to change that. he also wants to use these changes in parcelling out

spectrum in a way that's going to help us lead the way in 5g technology. the president tweeted out earlier today, i want 5g and even 6g technology in the u.s. as soon as possible. it is far more powerful, faster and smarter than the current standard. luke ventures managing partner gene munster joins us now. gene, as simply as possible, because this isn't very easy but make it simple. can the president combine lower internet costs while putting us in the lead for 5g? >> unlikely to provide lower internet costs. it is likely to help accelerate the rollout of 5g. if i can quickly talk about that. there's this auction process that you talked about, it's complicated today. the government runs that auction process. what that means is this is the tower companies and the carriers getting spectrum to provide this service. so there's a way that the government can make that easier that will help get these licenses, which help kind of

roll out. there's also a hardware piece to this which the government maybe can help facilitate and fast-track, maybe even give financial incentives to the tower companies to build 5g. but as far as the ability to actually lower internet cost, the way that that could happen is this. right now, your cable company really has you and it is difficult for your cable or dsl provider, for you to find another way to get internet. it's this duopoly type of approach. there's a lot of control around pricing. but 5g is fast, it's wicked fast. it's somewhere between 10 and 100 times faster than current 4g and would be faster than your home network today. where the opportunity to lower pricing comes from just simply more competition from these carriers, like for example, verizon and at & t will be offering you broadband wireless service and you get rid of that router at home and -- david: i love that. >> that sounds exciting. we have to move to an asian country to experience it, i guess. i'm glad the president is bringing this up.

what i don't understand is we have the same problem with broadband with copper wire. same basic problem. we are paying the sixth highest rate, i believe, in the world but have like the 44th or so fastest internet. i mean, some of this has to be, i mean, i know the government in europe forces the monopolies to sell the bandwidth through their pipes to other competitors. the ftc here takes a low level regulatory attitude towards it. how much is it like the health care problem where americans consume more bandwidth? like do we like sit there falling asleep with our hand in the doritos watching 4k shows? they don't do that on europe and it has to cost more here or be slower? is france beating us in something we invented with al gore? >> i think the simple answer is the consumption patterns are pretty similar. it's not a bunch of americans bingeing on 4k technology. i think just the pricing structure that's been set up has been more -- a little bit more egregious here in the u.s. so it's not about an infrastructure problem. it's about just competition and

back to effectively how these markets are created, the competitive markets are created. that's what actually causes the difference in the pricing. it's not some sort of logistical. another important part regarding the pricing and what we pay for internet. back to this idea about using 5g for your home is that that really, that just takes out all that old infrastructure, all that goes away and everything goes to the tower, and so that is a step function difference. any legacy costs that are associated with that, those go away and you have an opportunity to have a lower cost solution here with 5g. >> you know, this morning, maria bartiromo spoke with at & t ceo randall stephenson about this topic. let's hear what he had to say on the future of 5g. >> this will make autonomous driving possible, virtual reality, augmented reality. it's going to change your industry dramatically. because once you get to a world of 5g, you can begin to conceive of a world without screens

because these become your screen. your ability to enjoy content and consume content without screens is a very different place than anything we have conceived of before. so it's going to change a lot of industries over the next five to ten years. >> i just want my netflix to stop freezing up. david: if you could respond to that little clip. >> i had a little glitch on the russian doll, the main character keeps dying. it's strange. david: gene, how do you have computers without screens? quickly. >> computers without screens come from augmented reality. you have some form of a wearable and that's just a whole other opportunity around 5g is what was just played out in that clip. david: gene munster, we have to have you back. this is too much to handle in one segment. thank you for being here. we appreciate it. what does california want to put a tax on now? you are not going to believe this. it's been tried before, didn't work. they will try. we'll tell you what it is, coming next. all money managers might seem the same,

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[♪] david: here we go again. lawmakers in california and connecticut want to tax soda to make people more healthy. but the tax generated in minnesota is dubbed a failure impacting people's wallets but not their diets. >> they need revenue. so we have seen one blue state after another implement this kind of tax. there is no question it hurts most of low-income americans to can't drive outside the city limits. but in philadelphia it had to do with with obesity because they also taxed diet soda.

>> the same argument that's raised about why you tax cigarettes. you are not going to change people's behavior in 12-18 months. there is a public health argument. it didn't work in new york and it hasn't worked elsewhere, but that doesn't might's arbitrary. >> how about cheese burgers or donuts? it did work with cigarettes but you have to have a high tax to make it work. >> when you are for a tax like this, you are for a medicare tax. these people with their big gulps have to start footing their own tax bill. who do you want to pay for the big gulp diabetes nation?

david: gang, that does it for bulls and bears. liz and jonas will be on with maria early in the morning. [♪] >> we won't fall into those same pitfalls. they made commitments on cyber and others that they haven't honored. they are in washington continuing to work. it's one thing to write something on a piece of paper and another to have support mechanisms. liz: president trump and his administration on the world stage. news coming in on the u.s.-china trade deal. and the showdown in venezuela on the president's radar screen.