banks. and as you consider the prospect of if we do see a full business cycle, what tools in that toolkit are you interested in using again? and then what tools do you not have in that toolkit that you hope to have? >> as this audience will know well, the tools that we did use in the last financial crisis, obvious, were rates, the federal funds rate, which we cut close to zero, effectively to zero. and then we also used fairly aggressively forward guidance indicating to the market -- and this was at a time when the market was predicting liftoff and rate increases that were higher than the committee thought were appropriate. committed through semi-commitments to hold rates low for a long time. so that worked. and also large scale asset purchases of longer term securities which are a way of lowering long-term interest rates to support economic growth. so i guess we need to stop

calling them unconventional tools at some point. those are the two new tools we used during the financial crisis. i'm sure we would use them again as needed and as appropriate. we don't see that now. we look carefully at negative interest rates. i don't think that's something -- i know it's something we didn't see as an ideal tool in our institutional context, and i think, you know, different, different central banks around the world did different things, and we can observe how those things work, but i don't think we regard that as a first order tool or something we'd be likely to use. there are other things we need to look at, and i would say yield curve control is sort of short-term yield curve control is something that is something worth looking at. it's not at all something -- we haven't looked at it, but it'll be something that we look at when the time comes. and the last thing i'll say is, you know, i think our toolkit, we'll use it aggressively to the

extent we need to to achieve our mandate. >> so one of the questions i got from someone today who was, who knew i was going to be asking you questions -- [laughter] was is there the an unintended consequence of in a sort of high -- reasonable growth, low unemployment, near the target rate inflation rate, is there an unintendedden consequence of easing into that the environment? does it actually signal a risk-off environment to participants or consumers, etc., and does it actually almost become a self-fulfilling prophesy? >> i don't think we see that in the data. i mean, in theory that's possible. i don't think we see it in the data. i do look at this as akin to the two instances in the 1990s when the fed cut and then cut again and then cut a third time. in those cases, that happened to be the right thing that they, they thought that was the right thing to do. so provide some support for the

economy, and the economy took that accommodation onboard and gathered steam again. and the expansion continued. so that's the spirit in which we're doing this. i don't see any evidence that monetary policy is reducing consumer confidence or business confidence which seems to be focused more on other issues. >> how does the dynamics over the years especially following the gfc was policy coordination amongst the global central banks, the doj, the ecb, the bank of england, the fed, even to some extent the pboc. and what are your thoughts on policy coordination going forward? what systems are in place? >> we -- in a crisis situation, there needs to be, obviously, a lot of deep knowledge about what's going on in economies around the world and coordination where it's appropriate. so i think of the swap lines,

the dollar swap lines were clearly a key in keeping dollar funding markets working. you k i peacetime, in times like today where we're knot in crisis we -- not in crisis, we do keep in very close touch with central banks around the world, and i think that's a very healthy thing. i mean, coordination -- the first step is transparency. we all try to be very transparent so that our mes are well understood. coordination, i think, really a arises in the state of crisis, and so we don't actively coordinate now, but we try to explain ourselves to the public and, hence, to each other. >> all right. one of the -- so the negative of having an electronic device that people can upload questions is that there's a question that's getting uploaded about how moryoly and climate change inform one another. maybe i'll read, maybe i'll realize the -- read the question

directly. but any question -- any thoughts on that? >> sure. so climate change is a v important issue in my way of thinking for countries and governments to deal with around the world. as i s, it's an absolute first order issue as far as i'm concerned. less obvious is that, that it's first order business for central banks. i think the main respondent for climate change -- responsibility for climate change now, dealing with climate change resides with legislatures and particular agencies that are focused on the economy. however, i think we are learning that financial markets and financial institutions that are important, you know, transmission into the economy of policies of various sorts, and central banks around the world are starting to think more about how and whether central banks should play a direct role in climate change.

i'd say we're not there yet, we're not really -- we're not in a place where i think we would conduct monetary policy in order to deal with climate change type issues. but that's, there's a lot of forward thinking analysis going on. of course, bank supervision, we already supervise financial institutions in areas that are subject to severe weather which is possibly related to climate change. we require them to have plans to deal with severe weather redundancies and, you know, resilience to what can happen in, for example, a hurricane. so in that sense, it's already kind of indodge now to our supervision work. but i think it's important work, and we're going to be following carefully developments around the world on that. >> so a lot of questions about the repo market, as you're probably not surprised to hear. and essentially, the question that is percolating through this

room and the financial markets is what is the repo market telling us, why are the banks in what we're seeing in terms of the spikes in the repo market, the need to do some intervention from the federal reserve in -- reserve? and is the fed almost coming back into qe, or would you describe this intervention as something different? >> let's start there. this is not qe. [laughter] in no sense is this qe. this is nothing like it at all. so -- i'll come back to that point, but i really wanted to make sure -- >> no, that's -- [laughter] that's why id asked. [laughter] >> so if you go back, the can't of reserves in the banking system peaked at about $2.8 trillion in 2014 when we finished doing quantitative

easing. and due to incases in other reserves and also just to -- the increases in nonreserve liabilities really declined and declined and declined while we held a balance sheet constant reserves were constantly is shrinking when, under chair yellen, we began actually shrinking the balance sheet, letting assets run off very, very gradually. that went on. and then in march of this year we tapered that. and, i guess, in july of this this year we stopped. and i think through all of that we were moving quite gradually, and we were carefully talking to the banks and doing surveys and trying to assess what would be their lowest comfortable level of reserves. add all that up and then put a big buffer on top of it. and i think doing that work, checking it twice led us -- and also watching the markets led us to think we were still probably away from the minimum level of reserves. and let me define what that is. we've committed to a system of ample reserves, and that means

that we'll be able to conduct monetary policy, keep the federal funds rate in its range without resorting to open market operations all the time. so i think it very much looked like we were still a bit perhaps above that until september when we found thate probably weren't. >> yeah. >> and so we found that out, and so there are a number of explanation. it can be that reserves are just kind of less flexible, that the quantity of reserves are less fluid, less flexible in the markets than we'd anticipate. in any case, there are a number of possible explanations, and and i think a plan to, a plan to get us to our goal is going to need to take all of those onboard over time. so we're working on just such a plan. as i mentioned, we'll announce it soon when it's ready. not ready yet, but we're very much making great progress on that. and the idea will be to add enough reserves back in so that reserves will, of course, move up and down during the course of

the year, and they'll also go up over time as the balance sheet expands. but reserves moveround quite a bit during the course of the year. they have to be at a level so that their lowest level during the year will not be below the level that's needed to allow us to operate in an ample reserve regime. and we think that level might be at or maybe a bit above where we were in early september of this year. we think that. all of this is, though, up -- uncertain. we'll be adding reserves back in when we announce our plan to get back to something like that level. of course, we'll continue to use open market operations to the extent we need to for as long as we need to. the main thing is this is very important for the football markets, and we will -- financial markets, and we will do what we have to do to secure the transmission of monetary policy. it doesn't have much implications for the economy, for financial conditions or for the people we serve. >> wonderful. and i think that they're taking cards, is that right?

yep? okay. if folks have cards -- >> but not qe. did i mention that? [laughter] >> you did mention that. >> all right. >> so i will ask you the same question i asked you a year ago which is your thoughts on the yield curve. so now we were starting to see the curve flatten a year ago. today it is an inverted curve, and what are your thoughts at this point on what the yield curve is telling us? >> you know, so the yield curve is one of a number of, large number of financial conditions that we actively monitor. it's not -- there is no single financial condition that really dominates all the others, but that's one that we certainly do monitor. can and i guess we know -- we kind of know what short rates are doing. short rates are really reflecting what they think the fed's going to do. the question is is what are longer rates saying. and they're saying a lot of

different things. there's a term premium there which is about risk on, risk off. it moves up and down in different states of sentiment, market sentiment. there's also some sort of an assessment though in there about what the neutral rate is in the longer run. so we look carefully at that and try to see -- if bewe think policy is above the market assessment of neutral rate, then policy is tight. so we have to sort of assess that. so, you know, when the curve is inverted, you know, we focus very carefully on that the, and it's not something that you need to deal with immediately, but it is something that it's uncomfortable to be in that state of affairs for an extended period of time, of course. but again, that's one of many concerns. i hope that's what i said last year, by the way. [laughter] >> all right. so the fed has consistently characterized inflation as too low. given that core cpi is at the highest level since 2008 and the

fed's preferred measure, course pce, the six month annualized rate is above 2%, do you anticipate changing your assessment of inflation? >> i would like to change my assessment of inflation. i would like to see it movie metrically around -- symmetrically around 2%. it still hasn't done that. we've seen it -- take core pce which is a better indicator of future inflation than really pce, although regular pce is, of course, our goal. you take core inflation, it's moved up and just kind of touched 2% and then moved back down to well below 2% the first quarter of this year. it's now moving back up. i guess the real question is why we care. socialessentially, it tends to e centered a little below two-tenths of a percent. not that two or three-tenths makes a big difference, the issue is broader context.

we want inflation expectations to be centered right at 2%, and we really want to hammer that point and make sure that they are because we look around the world, and we see disinflationary forces. in japan and western europe, where you see inflation moving down, expectations move down, inflation moves down, and it's been very, very hard for economies to get off that road once they're on it. so we don't want to get on that road. we don't think we're going to be exempt to these disinflation anywhere pressures over time. we've got an aging population as others do, some of the same characteristics to our economy. so for that reason, we want to keep inflation at 2%. and it's not -- it's the not as easy to explain that to the general public who don't really care whether inflation is 1 is.7 or 2%. but in our case we think to serve them better, we need to anchor inflation at 2% so that it doesn't begin that inexorable

slide down. >> so when you come into the office every day or as you travel through your day-to-day life, i am curious what your dashboard looks like. what are you looking at on your dashbod to give you an indication of where your ship is, where your plane is heading? so you're looking at -- you mentioned industrial production, you've mentioned productivity, inflation. are there external factors like rest of world growth indicators? what are the things that are your touchstones that are most important on your dashboard? >> you know, it's -- there's a lot of things on my dashboard, i would say. we -- i try to do a deep dive on the economy mostly every weekend. i'll spend a whole day doing, you know, reading everything that i haven't been able to read during the week about what's

going on in the u.s. economy, and that means reading the data releases and the analysis of the data releases by many of you here in this room and also around the world, also globally. following data and following markets and that kind of thing. so that's the kind of thing you can do on a long, quiet day when you don't have meetingsings all day long. so that's a big part of out. i also -- of it. i also think right now the broader sort of geopolitical risks are important right now, and, you know, you have to be watching those carefully and trying to assess the implication of those. i watch markets very carefully, you know? i have a screen in my office where i have -- i don't sit there watching it all day, but you check in several times a day to look at what's happening in all the various markets that we all probably follow. so there, it's essentially i look at everything in a way. and as i imagine many of us do. >> so the fed's role is not a social welfare role, but many

would argue that the falling unemployment rate, the reengagement of many people within the labor market who are out on the edges, that a what we're seeing over the last couple of years has been extremely positive for the u.s. economy and the u.s. population. is that something that is taken into consideration, that if we can continue to run the economy a little bit hot, that it could be quite a positive? >> i would -- so i would say that i see that aspect of the current situation as a very positive one. i question the concept of running the economy hot. i think we've learned that the unemployment rate can just be lower than we anticipated, even at 5 or 6 or 10 years ago. it's significantly lower, and yet we don't see wages rising in

a way that is out of keeping with productivity and inflation. and we don't see -- we do see businesses saying that they see workers as scarce. we see worker saying that they believe jobs are plentiful. those are good things. with we see prime age of labor force participation going up. we see, we see -- we talk to people in those low and moderate income communities at fed listens events, and they say this is the best economy they've seen in their lifetimes. so so i would say say i put a very high prior the city on wanting to continue that the, i really do. but i do balk at the idea that we're running the economy hot. this feels very sustainable. there's no aspect of the economy that is just booming. it's just -- you've got a solid consumer sector where people are, wages are going up, and they're going up right abo at the level of productivity plus inflation. job creation is healthy. there's no one sector that is, you know, like a housing bubble.

there's nothing like that. there's no financial low. so it's a fairly sustainable economy. there are concerns around, you know, business investment and manufacturing and trade, of course. but, yeah, i would say we don't get to see the 11th year of an expansion very often, and there is a lot to like about it particularly for people at the lower end of the wage scale who are getting now the highest wage increases, and it would be great to see it continue. >> right. so one of the -- if we look at the markets, we see that the purchasing of insurance to hedge inflation risk is at all-time lower os ebbs -- or extremely benign. but at the same time, we're in the midst of starting to increase tariffs on china. we're seeing several rounds that are going to come through. as that starts to show up in the cpi prints, etc., how does the fed respond to those? >> you know, i think the basic a approach to that for me would be

an increase in tariffs is if it nows through to the consumer is perhaps -- flows through to consumer is perhaps a one-time increase in prices which is different from inflation. as long as one-time increases in prices d't carry through into inflation expectations, then you don't actually are have an increase in inflation. now, it's clear if you look back in the history of the '70s with the oil crisis, some of those shocks can get -- they can affect if they're sustained and repeated, they actually can get into people's inflation expectations. we're a long way from that though. if you look around the world, disinflationary pressures everywhere you look in advanced economies. it feels like the problem of this era is to keep inflation from moving down and try to keep it at 2%. now, of course, if that changes, then we'll know it pretty quickly, and we'll know what to do. >> great. well, chair powell, thank you very much. we really appreciate it. >> thank you.

[applause] liz: whoa, breaking news, folks, from that speech and the q&a we have gotten multiple headlines that are hitting the tape and moving the markets right now. let's start with what federal reserve chairman jerome powell just insisted during the question and answer session at the national association for business economics' annual meeting. he said that what he announced in his preamble speech before that crowd that he would restart the treasury purchases known during the financial crisis as qe or stimulative quantitative easing are not qe. and i quote chairman powell: in no sense is this qe. okay. i'm telling you, the markets saw that that as qe when he first announced it, but we're till down about a 157 points. but the question is did he revive the markets when he declared during the speech that the fed is contemplating regrowing the balance sheet by

purchasing treasury bills? well, the markets -- which have been likened to a big voting machine -- voted almost immediately that, yeah, it sure looks and sounds like qe. and almost immediately we had gone from a triple-digit loss to a double-digit loss on the dow. right now we are up off the floor. we had been down more than 300 points earlier today and bathed in red for the open on that tit for tat posturing on the u.s./china trade war as both sides meet for the second straight day. but again, now that we're down just about a 156 points on the dow, you can see that the markets are absorbing what jay powell said as an indication that he may begin to reflate the balance sheet which is something that they did during the financial crisis to stabilize and stimulate the economy. let me get to our floor show. and i want to let our guys know, our floor show traders, this is also hitting the tape and part of the reason that we went from down about 90 points at the low

of the session -- at the high of the session, rather, a loss of 90 points back down to what we see right now is that it hit the tape that the united states is going to impose some visa, i guess, what would you call it? some visa restrictions. the state department said it will impose visa restrictions on chinese government is and communist party officials. yeah. so suddenly the tensions of trade are hitting everything. but we've also got the fed here. i want to start with sarge. what do you see, how do you interpret what jay powell just said that we're going to regrow the balance sheet, but it's not qe? >> well, this is what i've been speaking of in many of my recent interviews. i've been calling it polo. aye been referring to it as permanent open market operations. it's just to handle the overnight money markets. but they probably need to grow the balance sheet a little bit just for the economy's sake as

well i do like he mentioned a lower trajectory for the fed funds rate. i do think we need to repair the yield curve. he seemed to admit that he doesn't really have a handle on how loose or tight labor markets are, which i thought was quite honest. we know that productivity has slowed, the usm, the employment part of both ism reports was kind of weak. we saw the small business report this morning which was weak especially for future employment. so there are questions there. i don't like that he mentioned data dependency as reliable, as the way the fed has always operated, because you know i don't like that. i think they need to be awe ahead of the curve. i think we need to watch thursday's cpi, honestly. core cpi is running a little bit hot. liz: okay. phil flynn, you need to cut through this and tell me, am i crazy or did jay powell just announce a new still thattive version -- stimulative version of quantitative easing?

>> you know, i don't think he did, you know, to be honest with you. i think it's a little hyperbole. even though the markets initially took it as that. we saw gold rally which, of course, would be in qe. but interestingly enough, you know, normally when you get a shot of stimulus from the federal reserve, you would expect the stock market to go up, not down, right? so if you're going to get more stimulus, that should be good for the stock market. it went the other way -- liz: well, maybe, again -- >> of course, chinese -- liz: yeah. cross-currents with the china news. let me restate it. the u.s. state department says visa restrictions will now be slapped ared on chinese government and communist party officials, quote, believed responsible for detention and abuse of the muslim minorities in that country. >> right. which is a gutsy move by the trump administration. there's been a lot of to outrage about the way the chinese have treated these people. they've put them in labor camps, and a lot of these companies that they're going after have actually used surveillance against these communities, you

know, to put them in jail. so i think it's a gutsy play ahead of the trade talks. it does put the trade talks at risk, but let's face it, i mean, donald trump does not do things quietly. he made the right move here. he's putting the spotlight back on human rights which is where it should be, and i think it's a gutsy call, and i think it's the right call. liz: i'd be remiss if i didn't remind our viewers that it was president trump who wanted to ban immigrants from certain muslim nations though. this might be perplexing for some of our viewers here, alan knuckman. either way, it just appears that we are ramping up the tension once again just as a very large contingent of trade representatives from china arrive here and begin to speak with robert lighthizer, our trade representative. that, i think, has a lot to do with the fact that the market couldn't hold gains it saw and interpreted from what jay powell said two different summits, but what are you seeing on the floor? what kind of trades?

>> well, we saw the market open lower, and it's been hanging around lower levels all day. i we want to put into perspective we're still only 3% from the all-time highs in our major markets. now, there are a lot of crosswinds, a lot of things to pay attention to, but first off, let's remember the fed has a lot of tools to stimulate. they're going to do what a they need to do to get the results they want. they've done very well over the last decade, and i look for that to continue. now, let's talk about what's out this. we've got earnings season starting, then we've got brexit at the end of the month, we also have the possibility that the tariffs could ramp up here at the end of the month. so there are a lot of factors to flow through right now, but i still like the way the market reacted last week where it tested some 30-day lows and then bounced back. let's see if it can continue. like i said, i'm still optimistic and, yes, we're fighting through some of these battles, but i do love the resiliency of the overall market. liz: indeed.

let's not overstate that these losses today, it's a small fraction -- under 1% at the moment -- but, sarge, i do want to point out that this morning people woke up here, again, with the trade talks restarting with the with the chinese, and found that the u.s. government has blacklisted eight different china tech companies. eight of them. that brought the market down about 300 points for the dow jones industrials. a lot of worry. in fact, i believe the semiconductors were a terrible performer and noted at the moment that the semis just immediately tanked. and, you know, because they have such a big exposure to china. they get a lot of their revenue from china and so, therefore, it was a real problem here to see that . then now we see the restriction placed on some of the visas, and let's remember too because the news flow was so quick, folks, that china -- in response to the u.s. blacklisting eight chinese tech companies -- had come out just a few hours later, again,

all of this today, saying, quote, stay tuned for retaliation. so, sarge -- [laughter] it's like a tennis match only the ball's on fire. >> all right. this is what you do, folks. this is what i do, okay? i don't care if you copy me or not, you decide if you want to. my bond allocation twice as high as it has ever been in my life, all right? aye reduced my equity portion to below 45%. so i'm not telling you the end of the world is coming, i'm telling you i'm building a fortress around wealth preservation right now. i'm protecting myself. most of my book -- my larger positions are all in dividend payers right now. not necessarily the utilities, but the ones that we'll say expose me to growth going forward. stock like you want to go with seagate technology, cisco, wells fargo, cvs, merck, pepsi, telephone and verizon. you have sarge's picks right there. liz: all right, we'll take 'em.

and you have been saying for a cash.e of weeks now going to gentlemen, thank you, because we have a lot of abrupt moves in the markets right now due to differing headlines, cross-currents, interor national, diplomatic -- international and, of course, market-related federal reserve comments. with the closing bell ringing in exactly 30 minutes, we're sweating it out here. the dow is down 153 points. and, yes, while the federal e serve chair and the china trade war are sending shock waves, china could be ahead of the united states when it comes to one very important financial instrument of the future. what the digital china coin, and is the federal reserve falling way behind? we take that up next with the ceo of ripple. it's a fox business exclusive when "the claman countdown" comes right back. ♪ ♪

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liz: the people's bank of china is ce to releasing a national digital currency and a government-run network to go with it. according to the people's bank of china, the so-called china coin will enable cross-border money movement, will increase investment flows to the country and maybe even bypass sanctions. so where is the federal reserve and the u.s. government in the national crypto race, and what would it mean for the private cryptocurrency tokens here in

the u.s.? earlier today i sat down with the ceo ofet ripple whose xrp. >> cryptocurrency is one of the most widely traded. listen to what he said. how do you view i the news that china has completed this prototype of a china coin that's yuan backed and is about to inleash some type of digital the network? >> i think it should be a call to action for the u.s. i think the u.s. has been actively looking at this, but we haven't seen leadership. if you go back to the internet 25 years ago, the fact that the u.s. was a leader in the foundational technologies that make the internet what it is today has been fabulous for the united states from a gdp point of view and from a geopolitical point of view. these are new, profound technologies, and the u.s. needs to be a leader in the space, and we need to pay attention to the fact that china has really leaned in here. liz: are we? because if we look at our federal reserve chief, he has

expressed skepticism about cryptocurrency, president trump has expressed he doesn't much like the situation either because perhaps they don't quite undetand it, or they feel that it's the wild west. china and the people's bank of china have harnessed this and are ready to put it out there. there is concern that this could put the u.s. dollar into jeopardy? >> well, what i would say to president trump and chairman powell is we shouldn't paint all crypto with one broad brush. what i think you see in their comments is the kind of very general view that can crypto be used for illicit purposes, can it be used for p anonymous transactions. the u.s. should not take a blind eye and not recognize it. the reason why i think china is leaning in is they see that future. liz: but china says they could use their china coin to surpass or do a work-around the sanctions that the u.s. has put into place on certain countries. >> i think you're right that part of the opportunity they see is how can they dislodge the

u.s. dollar. what ripple's trying to do isn't at all to compete with the u.s. dollar or really any fiat currency, we're simply trying to use the open source technology to reduce the friction of these payments. liz: when you're talking about the government, french hill, a republican from arkansas, and bill foster, the democrat from illinois, both wrote a letter to the federal reserve saying you guys better get on the ball here. this is important because we could lose our status eventually or at least put the greenback in jeopardy. >> right. and i think you are seeing some members of congress on both sides of the aisle -- luckily, this is a great bipartisan issue -- they see that the u.s. has been a leader in many technical revolutions, there's no reason why we shouldn't be here. and there are issues at stake the including as we're describing here kind of where does the u.s. dollar sit in the hierarchy of global currencies. liz: well, are we behind if the

people's bank of china, according to coin desk, has something like 50 patents filed for this kind of thing? >> yeah. i don't know yet if we're behind. i think there's a risk of falling behind. the good news is in a self-congratulatory way, we do have companies doing things around crypto. ripple has been a leader in this space, and i think there's an opportunity to get behind some of these efforts domestically and really support them. liz: which brings me to facebook and the libra project. facebook is not just dipping its toe, but putting up billboards, in essence, saying we're here, we're doing this. granted, paypal pulled out just last week, but you also have some skepticism around libra. how do you see facebook's efforts? >> i think on one hand it's a very positive thing to see a major company like facebook see, hey, there's potential uses for their consumers. i think right now the facebook effort, the libra is a white paper. we haven't get gotten to the point where it's a project

that's going to be launched anytimen soon. i think they've said sometime the second half of 2020. i also think the way facebook engaged governments and the regulatory community probably didn't set it up for optimal success. liz: i'm hearing you say this thing isn't going to happen for a long time, if at all? >> i think that's right. and i think that's, actually, unfortunate. i think had a different company other than facebook taken the lead position and said, hey, here's a real opportunity and facebook joined, maybe we'd be in a different place. liz: but you're saying, if i'm hearing you correctly, that facebook's reputation recently with the privacy breaches and things like that has really hurt its effort? >> well, at the core of any financial transaction, any financial currency whether it's the u.s. dollar or anything, it's about trust. liz: boy, it's been a wild 2019 for crypto. crypto came roaring back, many of these coins. xrp, in which you have a 55% stake, correct? >> yeah. liz: xrp is the only, i guess, cryptocurrency that hasn't seen

a year the date jump. i know you bristle when people talk about the value of it because you look at it differently, but why do you think that is? why has xrp lagged? >> i don't try to think about it in terms of three days, three weeks or three months. i think of it over the long term. in part, the u.s. government has provided clarity about bitcoin, about ether, but they've remained silent about the third, you know, most valued digital asset in xrp. liz: why? >> you know, i think regulators have a hard problem. these are new technologies, and, you know, i think there's work to be done therement and i think our -- there. and i think our track record shows that. we're very transparent about what we do with the xrp we own. in fact, we've tried to challenge the whole crypto community to be more transparent. unfortunately, we don't know who owns the vast majority of ether, what different companies are doing. ripple's trying to lead by example because we believe the whole crypto community should be

more transparent if we want this to be a major industry going forward. liz: we don't know if the so-called creator of bitcoin even exists, is it a man, a woman, a person? have you met this person? >> i don't even know. maybe you're -- [laughter] liz: i could be. i mean, is that just a concept that's made up? >> well, i think it's clear that someone published a paper or some group of people published a paper that was the bitcoin white paper, and nakamoto is the moniker assigned to that. is that a person, a group of people, i don't know. someone obviously knows, and there are various theories about what group of people. i happen to believe it's probably two or three people, and maybe one day we'll know the truth. liz: for its part, bitcoin is down a couple bucks here, it's at $8173. we showed you ripple. by the way, ripple just released a billion xrp from its escrow wallet. why? brad answered that and so much

more in the next part of my exclusive interview on the new and improved foxbusiness.com web site. go there, and you will see the additional exclusive parts of that interview. now, as cryptos fight the fht for survival and growth, another mega-name disrupter looks to claw its way back into investors' good graces. with the closing bell ringing in 18 minutes and the dow down 256, up next, charlie breaks it on the major repairs being made to help the start-up reclaim its former star status. and, please, download, listen and rate my new podcast everyone talks to liz available on all podcast platforms. "the claman countdown" coming right back. don't go away, it's a big market day. ♪ i knew about the tremors.

but when i started seeing things, i didn't know what was happening... so i kept it in. he started believing things that weren't true. i knew something was wrong... but i didn't say a word.

during the course of their disease around 50% of people with parkinson's but now, doctors are prescribing nuplazid. the only fda approved medicine... proven to significantly reduce hallucinations and delusions related to parkinson's. don't take nuplazid if you are allergic to its ingredients. nuplazid can increase the risk of death in elderly people with dementia-related psychosis and is not for treating symptoms unrelated to parkinson's disease. nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. tell your doctor about any changes in medicines you're taking. the most common side effects are swelling of the arms and legs and confusion. we spoke up and it made all the difference. ask your parkinson's specialist about nuplazid. liz: markets are firmly off session , and when i say highs, i mean a loss of about 60 points. that was the high of the

session. we are down for the dow 252 points. s&p lower by 37, the nasdaq down 108. you've got the federal reserve pressed to do what i give this to one of my producers, melanie, qe faux, as in fake. [laughter] well, jay powell, the federal reserve chair, said we will -- you've got to know french, charlie -- like qe iv. jay powell said, yes, we will start doing our still rahtive bond-buying purchases, but don't call it qe, it's not that. the dow did move off its lows, but now we're right back down not at the lows, but still pretty low at the moment. why? because we now have breaking in the last 46 minutes the threat of the u.s. restricting all kinds of things, not just visas on chinese leaders, but on capital flows into china. what does that mean? that means that chinese stocks that trade here, they're known as american depository receipts

or adrs -- ali baba, baidu, jd.com -- that maybe we might see federal retirement funds prevented from investing in chinese companies. bloomberg reports the focus would be on u.s. investments in government pension funds specifically. we are watching this very closely. in the meantime, soft bank has lost billions in wework, yet the investment company may soon throw even more money at the controversial office space leasing company, and soft bank's not alone. really, charlie? >> i think we're going to know pretty soon, i'd say within weeks, maybe even days, who knows? this stuff kind of moves fast when wework is going out of business -- i shouldn't say -- liz: it's still around. >> file for restructuring, you know, chapter chapter 11. people are talking, i haven't heard the word chapter 5, which is liquidation, but possibly chapter 11 and restructure

massively and under bankruptcy protection because of, you know, whatever is on its books that caused the ipo to fail is not very good, you know? the numbers, essentially, don't work in a lot of ways with this company. but if that -- to preclude that, i think, is what's going on right now. here's what we know. they're scrambling to raise money, meaning wework. liz: but, folks, that's crazy. they had billions in investment, and that guy on the screen, adam newman -- >> right. he's still there, and he's worth billions still so he can, theoretically, put up class -- collateral, is what i'm told. soft bank, if this is key, this could pave the way for that raising of that money, is alerting wall street that it's the still standing behind its investment which means it's also saying that we may put equity into this company again. so if soft bank puts some equity in, the theory is, you know, wework could turn to a consortium of banks led by the

usual players, goldman and jpmorgan, whoever, that those banks will basically lend it money, that it'll get a bank consortium to lend it money. but the first part has to be soft bank, and what soft bank is telling investors -- excuse me, the wall street banks, that it is stand thing behind its investment. tests the largest investor in this. -- it's the largest investor in this. and one thing that's missing, i thought i told them to put this in there, soft bank is taking it on the chin in this investment. it's already losing billions. so if it throws more money, you know, there's going to be a thinking that it's throwing good money at bad. las vegas liz i was just going to say, and by all means, double down. >> right, right. that's a great point, liz. my sources are telling me at the banks that soft bank is alerting them, the major banks out there, that it's going to stand behind its investment. that likely means it's going to put some cash into this, and and that will help the banks come together and probably do a massive loan to this company.

liz: which u.s. bank was going to be the main underwriter right now? >> there were two, i think. i think you could equally say goldman sachs and jpmorgan. many newman had a very close relationship with jamie dimon -- liz: had or has? >> i hear they're -- reason, listen, he stepped away. the ceo -- thepany's run by two other executives, but, you know, jamie's still there. if you look at the timeline, apparently newman stepped down after speak, after, you know, being around the jpmorgan offices in the executive suite. so the theory that jamie said now might be the time to go. so that's where we are right now. soft bank is telling peopling it's standing behind the company, that means it's likely to put money in, and then they could raise money. but if soft bank backs away, i don't know if they can raise money. and we're going to find out. i mean, i think this is going to come to a head soon. liz: charlie, thank you very much.

charlie gasparino. the nasdaq taking it on the chin down 1.9 5%, a lot of 112 points. we are coming right back. don't go away, ten minutes before the closing bell. ♪ ♪ but allstate actually helps you drive safely... with drivewise. it lets you know when you go too fast... ...and brake too hard. with feedback to help you drive safer. giving you the power to actually lower your cost. unfortunately, it can't do anything about that.

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liz: orthodontic disrupter, ipo disae direct club is now down 15%. gerri willis, what's happening? >> so orthodontists are disrupting smile direct club, that's what's happening. they're pushing back on this company, all kinds of talk about lawsuit against the company, so now they are the worst performing its po of the year, down 50% from their ipo price, and this despite lots of support from analysts. they've got all kinds of great news coming out of analysts, even so the stock down yesterday and today. liz: thank you so much, gerri.

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liz: china trade visa restrictions a dovish fed chair, it adds up to a selloff on wall street the dow down 318 points. where to stash your cash? we which in 146 billion-dollar man, clear bridge investment special i. jeff, where do i put my on any at times like this. >> dovish fed, economy not on strong footing, trade wars it makes sense to get more defensive with your allocation, move into areas like utilities and consumer staples. we think tightening of the fed over past year-and-a-half has not made a full effect on the u.s. economy. we'll be feeling weakness over next couple quarters. we expect choppiness in the

market, higher volatility, those sectors are a good area to follow in. liz: do you like utilities because they have good dividends in many cases? >> when the market is volatile, not clear whether you're going into recession the clear bridge is only capital appreciation goes down. so those are a favorite of investors when things get a little more choppy. liz: i'm looking at nasdaq down 125 points. transports down 180 points. it is a rough day. what do you advise your clients when they get on the phone and say, jeff, i'm nervous? >> it is important to be committed to a long term investor. since 1986, 10 month prior to a peak 10 months after the trough worse off investor that stayed invested entire time. you don't want to panic. you want to upgrade in quality. move into the defensive oriented sectors but move into dividend growing types of companies. companies with a moat around their business that can provide

that dividend. the only source of income when the marketells off. closing bell rings] liz: sound like buffett. dow will close down 311 point on a big news day. that is it for the "claman countdown." connell: visa restrictions hurt us late in the afternoon it appeared. we were down 38. came roaring back. back down again. s&p and nasdaq in negative territory for the second day in a row. good to have you with us. i'm connell mcshane. this is "after the bell." charles: i'm melissa francis. this is what is new at this hour. tensions on the world stage. china warning the u.s. to brace for retaliation after president trump blacklisted eight chinese tech