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Facebook, Apple, Amazon, And Microsoft All Reporting Earnings This Week; Apple’s FaceTime Bug; PG&E Files For Bankruptcy; Huawei Criminal

January 30, 2019



<Date: January 29, 2019>

<Time: 06:00:00>

<Tran: 012901cb.231>

<Type: SHOW>

<Head: Facebook, Apple, Amazon, And Microsoft All Reporting Earnings This

Week; Apple’s FaceTime Bug; PG&E Files For Bankruptcy; Huawei Criminal

Charges; Nvidia Issues Warning; Senator Kamala Harris Backs Medicare For

All Plan; 2020 Presidential Run; Artic Temps On The Way; Effects of the

Shutdown; California Tax Debate; U.K. Weighs Exit Amendments; Colorado

Farmers Renting Water; Test For 911 in Milpitas; Progress Toward Peace - Part 6>

<Sect: News>

<Byline: Maria Bartiromo, Dagen McDowell, Cheryl Casone, Janice Dean, Jack


<Guest: Grover Norquist, Jon Hilsenrath, Matt Schlapp, Phil Orlando>

<Spec: Facebook; Apple; WhatsApp; Earnings; PG&E; Bankruptcy; Huawei;

Nvidia; Howard Schultz; Michael Bloomberg; Steven Mnuchin; Larry Kudlow;

Burger King; CBO; Federal Reserve; T.J. Rodgers; Cypress; European Union;

Theresa May; Super Bowl; Chicago Tribune; Sears; Eddie Lampert; Colorado;

Boulder County; Farmers; Taliban; Afghanistan; American Troops; Pakistan;

ISIS; al-Qaeda; John Bolton; Venezuela>

KUDLOW: I think’s very important. Look, I --

BARTIROMO: Do you think you’ll get a deal by March 1?

KUDLOW: I don’t want to predict. It’s just too hard to predict. And, of course, these are decisions that will be made by the President, who is his own best negotiator. Best I can is, as I said, the scope of this thing’s going to as wide and broad as anything we have ever seen. That does not ensure positive negotiator. Best I can is, as I said, the scope of this thing is going to be as wide and broad as anything we’ve ever seen. That does not ensure positive outcomes --


KUDLOW: -- right? I think everybody, including the President, is basically moderately optimistic about this, OK?

BARTIROMO: Yes. Wait, let me ask you, your tax plan --

KUDLOW: Ultimately -- one other thought which the President believes that he and President Xi will probably be the ultimate negotiators.


KUDLOW: OK? And the work being done tomorrow and Thursday is vitally important to lay out options, OK? But --

BARTIROMO: So the President will be involved in these talks tomorrow and Thursday?

KUDLOW: That is what he has been saying in our meetings. And I hope so because he’s a great negotiator.

BARTIROMO: Let me move on to the tax plan.

KUDLOW: Uh-hmm.

BARTIROMO: Because we’re hearing a lot of ideas in terms of taxes now, now with a lot of 2020 hopefuls. The Tax and Jobs Act obviously did move the needle on economic growth along with the deregulation out of this administration. Now you’ve got Elizabeth Warren talking about two to three percent tax on the very high wealth people. So if you have $50 million in wealth, you’ll get two percent tax. If you’ve got a billion dollars in assets, you’ll get taxed three percent. And you’ve got Alexandria Ocasio- Cortez talking about tax of 70 percent tax --

KUDLOW: Uh-hmm. Uh-hmm.

BARTIROMO: -- on the highest earners. What is your take on this? Give us your reaction and what kind of an impact those policies might have.

KUDLOW: Right. These are prosperity killers, these are growth killers, these are job killers, these are incentive killers. This is a return to some heavy government planning essentially direct to the economy. You know, I hate to dwell on this because it’s a crisis right now, but take a look at Venezuela, just for the heck of it. What (INAUDIBLE)

BARTIROMO: There was a time when that was vibrant -- it was a vibrate country.

KUDLOW: That is correct. That is correct. And investment was flocking to it. Then they took, down through the years, really exact measures you’re describing that are coming from some of these Democratic candidates --


KUDLOW: -- and the economy was destroyed. I mean I hear this notion we have to have equality, equality of income, equality of results, which I think runs counter to all human nature. You know what? A place like Venezuela has equality. Everybody’s poor.

BARTIROMO: Do you think they’ll be able to reverse the tax cuts then?

KUDLOW: Everybody’s poor in Venezuela, except for a hand -- Maduro and a handful of this top military people. Is that what we want in America? We are growing right now.

BARTIROMO: So will the Dems be able to reverse your tax cut plans?

KUDLOW: Never. Never, not until the President’s configuration. I -- look, first of all, if they want to try to raise taxes, it will be defeated in the Senate, Republican. I personally believe even if it went beyond that --


KUDLOW: -- the President would veto any efforts to turn back his program.

BARTIROMO: How important --

KUDLOW: We’re doing what people said we couldn’t do.

BARTIROMO: But how important is debt?

KUDLOW: They said we couldn’t grow at three, four percent.

BARTIROMO: But how important is debt, Larry?

KUDLOW: We’re growing at three, four percent.


KUDLOW: Let’s not mess with it. If it ain’t broke, don’t fix it.

BARTIROMO: The Congressional Budget --

KUDLOW: There’s a tremendous surge in prosperity here shared by the middle and lower middle income people.

BARTIROMO: The Congressional Budget Office is saying that the deficit is hit -- set to hit $897 billion this year.

KUDLOW: Uh-hmm.

BARTIROMO: That would be the highest level since World War II. When does debt become a priority? Do you think the President, let’s say he does have another term, will try to attack the entitlements?

KUDLOW: Well, look, I think right now the two issues are maintaining economic growth. You know, growth is the single biggest factor in these budget calculations. Growth brings income and revenues. And in fact I haven’t gone through it with a fine-toothed comb yet, but I will. I think I see that the CBO is acknowledging that our faster growth, which they did not predict, is now paying for over 80 percent of the tax cuts. OK? And I think you’ll see more about that as we get through. The reports just came out yesterday.

Second point I want to make is we will have a tough spending budget coming up in a few weeks, a very tough spending budget with reductions of at least five percent across the board, in non-defense accounts. So I think that’s going to be very important. Let’s minimize government where possible. Let’s grow the economy to its max. And you will see the debt burden, which I thought debt, as a share of GDP, will be coming down, and by the way, it already is.


KUDLOW: That’s what happened during the Reagan years. That’s what happened during the John F. Kennedy years. So, I wrote about it in my book.


KUDLOW: That -- that’s the best way to measure that.

BARTIROMO: But, Larry, you know what I don’t understand? I mean you’re all about growth, you have been for all your entire career. Why are so many people worried about the slowdown?

KUDLOW: Uh-hmm.

BARTIROMO: Why are we hearing some people say a recession is on the horizon?

KUDLOW: Uh-hmm.

BARTIROMO: You know, there’s just -- it’s funny in this town and I guess a little bit in New York, this is a lot of pessimism. I don’t --

BARTIROMO: Do you expect a recession this year or 2020?

KUDLOW: I do not. I don’t see it right now. If I look at financial indicators, credit spreads, the actual numbers, you know, it’s just -- we - - GDP will come out a week late because the Commerce Department has reopened. We’ve seen stuff like falling unemployment claims, rising manufacturing.

BARTIROMO: But what are the markets telling us, Larry? In the month of December, there was no high-yield debt issuance at all. Credit markets are still tight.

KUDLOW: They’ve come back.

BARTIROMO: They’ve come back a bit.

KUDLOW: Come back. I like that. Profits, the mother’s milk of stocks, I don’t know who first that.


KUDLOW: Profits, the mother’s milk of stocks are rising. The early indications are they won’t to 25 percent but they’re going to rise 10, to 15 percent. I like that a lot. Interest rates, the level of rates, are historically low.

BARTIROMO: So you’re not worried about market volatility?

KUDLOW: There’s a million things to worry about when I get up in the morning, you know, mainly getting here on time so I could do this great interview. But I just want to say, if you look at the sum total of all the evidence right now, there’s no recession out there. I am the happy warrior. I am an optimist. President Trump is an optimist. I think America, right now, we are the hottest economy in the world and we should remain so.

BARTIROMO: We’ll end it there. Larry Kudlow. Good to see you, sir.

KUDLOW: Thank you, Maria.

BARTIROMO: Thank you so much. National Economic Council Director, Larry Kudlow. Back in a moment. Stay with us.


BARTIROMO: Welcome back. The government shutdown may be over, but the effects are still being felt. Hillary Vaughn is live this morning at a craft brewery in Escondido, California where the shutdown effects are actually still lingering. Hillary.

HILLARY VAUGHN, FOX BUSINESS NETWORK REPORTER: Hi, Maria. Good morning. Craft beer is a $76.2 billion industry, and for many craft breweries, like Stone Brewery, where we are today, the effects of the government shutdown are not over.


DOMINIC ENGELS, CEO, STONE BREWING: When the industry craft is built on seasonal beers, it’s built on new beers, it’s the new sexy thing, and if we can’t get the new sexy thing to market, then we’re not going to connect with our fans. They’re going to be disappointed. We’re going to make the sales numbers we planned to make in our financial plans, and these things will have repercussions.


VAUGHN: As Federal workers at the Alcohol and Tobacco Tax and Trade Bureau are finally back in the office, a mountain of paperwork is waiting, about 11,000 applications for alcohol labels have been backlogged leaving craft breweries waiting to ship and sell all their new beer across state line, which means they’re in limbo until these approvals go through. Maria.

BARTIROMO: All right, Hillary. Thanks very much. We’ve be watching that. Hillary Vaughn. Stay with us. We’ll be right back.


BARTIROMO: President Trump is tweeting this morning. He’s talking about a former staffer. Here’s what he just said. “A low level staffer that I hardly knew named Cliff Sims wrote yet another boring book based on made up stories in fiction. He pretended to be an insider when, in fact, he was nothing more than a gofer. He signed a non-disclosure agreement. He is a mess. Dagen McDowell, great to see you this morning thank you so much.


BARTIROMO: John Hilsenrath, Matt Schlapp. I don’t know why the President tweets this. He’s got how many million view, you know, users and followers. He just let everybody know who this guy is like --

MATT SCHLAPP, CHAIRMAN, THE AMERICAN CONSERVATIVE UNION: Well, he literally sat in a -- he sat in a cubicle outside my wife’s office in the West Wing, and so it is kind of amazing like this insider whole kind of mythology is something the President knows is not true.

JON HILSENRATH, GLOBAL ECONOMICS EDITOR, THE WALL STREET JOURNAL: But he’s got some extra sales thanks to that tweet.

BARTIROMO: Exactly. That’s what I’m saying.


BARTIROMO: What do you think, Dagen?

MCDOWELL: No. Again, everybody’s got a book to write.


MCDOWELL: Jim Comey, this guy. Hmm.

BARTIROMO: That’s true.

SCHLAPP: Oh, that was a good answer. Hmm.


BARTIROMO: Well, Jim Comey’s book, yes, well, there’s -- I think that will be a story that we’re going to continue following, Jim Comey and the FBI. You know what.

MCDOWELL: Yes. Everybody wants to be Norma Desmond, Maria. I’m ready for my close up.

BARTIROMO: There you go. Thanks, everybody. Great panel today. Great to see you Dagen McDowell, Matt Schlapp, Jon Hilsenrath.


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