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Investors Eyeing Brexit; Oil Supply & Losing Streak; PG&E Suffers Major Plunge; Facebook Fallout; Migrants to Seek Asylum; Army Gets Into E-

November 15, 2018



<Date: November 15, 2018>

<Time: 06:00:00>

<Tran: 111501cb.231>

<Type: SHOW>

<Head: Investors Eyeing Brexit; Oil Supply & Losing Streak; PG&E Suffers

Major Plunge; Facebook Fallout; Migrants to Seek Asylum; Army Gets Into E-

Sports; Avenatti Faces Felony; Phillips Auction House Holding 20th Century

And Contemporary Art Auction - Part 2>

<Sect: News; Financial>

<Byline: Maria Bartiromo, Lauren Simonetti, Deirdre Bolton, James Freeman,

Phil Flynn>

<Guest: Morgan Ortagus, Ben Phillips>

<Spec: European Union; Britain; Brexit; Jamal Khashoggi; G20; Xi Jinping;

Oil; Russia, OPEC; ASEAN; PG&E; Wildfire; Garth Brooks; Tribute; CMA

Awards; Keith Urban; Amazon; Oil; Crude; China; Saudi Arabia; Russia; Iran;

General Electric; Bitcoin; cryptocurrency; Facebook; Mark Zuckerberg;

Sheryl Sandberg; Instagram; Google; Donald Trump; Michael Avenatti; James

Mattis; Kirstjen Nielsen; Bob Wright; Army; Esports; Fortnite; Recruitment;

Domestic Violence; Bail; Contemporary Art; Phillips Auction House; Art;

20th Century; Alberto Burri; Warhol>

And I do think there’s a danger, Deirdre --

BOLTON: Uh-hmm.

FLYNN: -- because you look at where we were a month ago, we were worried about undersupply, you know. And all of a sudden, we flip a switch a month later, we’re talking about oversupply.

And so you got to be really, really careful here because of this volatility that oil producers don’t make decisions that are too rash.

You know, we keep hearing, you know -- I’m very disturbed because I keep hearing people use the word “oil glut.”

You know, we don’t have an oil glut. We had one in 2015, you know, supplies were 50, 60 percent above normal.

You know, we had a huge build in crude supply overnight according to the American Petroleum Institute, you know, almost nine million barrels.

But that only puts you as supplies two percent above the five-year average.

Globally, supplies are barely above average. So, if we’re wrong on this economic slowdown and producers cut back too much, we could be undersupplied going into winter.


FREEMAN: Phil, James Freeman here of The Wall Street Journal.

Speaking of that undersupply --

FLYNN: Uh-hmm.

FREEMAN: -- possibility, we’ve read a lot in the last year about bottlenecks getting U.S. oil to refineries --

FLYNN: Uh-hmm.

FREEMAN: -- pipelines in the Permian Basin, and et cetera, can you give us a status report on bottlenecks in the U.S. production chain?

FLYNN: We are starting to see some of them lift a little bit.

We have a new pipeline come on just last week, really in anticipation to replace Iranian oil that they didn’t have to do.

We expect, in the fourth quarter of this year, we’re going to see that open up quite widely. But then I have to caution everybody, you know.

If this oil price continues to fall, there’s going to be less incentive for these companies to get rid of these bottlenecks because they’re having a very difficult time making money at these price levels.

So, we have to be careful, you know, I know Donald Trump wants to tweet down the price of oil because it’s good for the economy and that’s a great thin.

But he has to remember, too, if he tweets it down too far, it’s going to hurt the U.S. Energy producers.

BARTIROMO: Yes, so what are you expecting in terms of the price here? I mean knowing that, you know --

FLYNN: Uh-hmm.

BARTIROMO: -- the supply is there from the U.S. and this is not --

FLYNN: Uh-hmm.

BARTIROMO: -- an overnight story, this is going to continue, you know, showing that there is supply from the U.S. and there is supply elsewhere. I’m surprised that the Iran sanctions did not move the market the other way.

FLYNN: I agree with you absolutely. Listen, the U.S. energy story, it’s changed the world, U.S. shell producers.

You know, the problem is, is that I think that this drop in price could actually increase supplies quite dramatically.

And the U.S. shell producers, while they’ve done a great job raising production at historic levels, they’re not good at raising very quickly, to me, the surge in demand.

So, if we get a big surge in demand, we’re still going to have a very, very tight market going forward.

BARTIROMO: All right. We’ll leave it there. Phil, it’s good to see you. Thanks so much.

FLYNN: Thank you. Good morning, thank you.

BARTIROMO: So Phil Flynn, joining us there.

Well, we’ll take a short break.

When we come back, the border battle heats up, the first wave of migrant asylum requests expected today as even more troops line in the border, we’ve got the very latest coming up.

We will take you there.

And then delay, deny, and deflect, the new report on how Facebook’s top executives dealt with controversy as stocks and employee morale takes a tumble, all of that next.


BARTIROMO: Welcome back, good Thursday morning, everybody, thanks so much for joining us, I’m Maria Bartiromo, and it is Thursday, November 15th, your top stories right now, 6:31 a.m. on the East Coast.

Markets are higher this morning. Take a look at Futures, indicating a gain of about 40 points on the Dow Industrials, up about 36 on the NASDAQ this morning, half a percent higher. This after the markets finished lower yesterday.

Take a look at the damage at the close, where the Dow Jones Industrial average gave up 200 points, almost one percent lower at the close. S&P was down 20 points. That was three quarters of a percent, and the NASDAQ also down almost one percent, 65 points lower at the close, on NASDAQ, yesterday.

In Europe, this morning, markets are mixed, FT-100 is up 11 points, the CAC Quarante in Paris is down 20, and the DAX Index in Germany, down just five points.

Overnight in Asia, Asian markets mostly higher, Japan’s Nikkei Average, down about a quarter of a percent, but the Chinese market did well, as did the Hong Kong. Hang Seng up one and three quarter’s percent.

Tension at the border, the first wave of the asylum request expected today, from that migrant caravan, at the Mexico border. We have the very latest coming up.

And then, worries over G.E., General Electric’s, mounting debt, is sending ripples throughout Wall Street, cover story of the Journal this morning, we’re going to get into it, coming up. And we’re talking with Former G.E. Vice Chairman Bob Wright, later this hour.

Plus, crypto crunch, Bitcoin breaks below the psychological 6,000-dollar barrier. We’re taking a look at what’s next for crypto currencies this morning, as Bitcoin is lower.

And the power of E-Sports, why the U.S. Army is turning to fortnite to help boost its ranks, all those stories coming up.

But first, our top story this half an hour, a new crisis for Facebook, the New York Times out with a bombshell report. The headline reads this, delay, deny and deflect. How Facebook leaders fought through crisis.

The story details how CEO Mark Zuckerberg and COO Sheryl Sandberg reacted to a series of issues for the company, including Russian misinformation, data privacy and abuse of content. Deirdre, you’ve been covering this. What do you make of this report?

DEIRDRE BOLTON, FOX BUSINESS NETWORK ANCHOR: I’m going to actually even refer to our colleagues here. The Wall Street Journal even publishing that Facebook employee morale, just in a year, has gone from like the 80s to the 50s.

I mean, I think the company is struggling. And we were talking about this, the fact that it has gone from a tech company, which is how it was built, to a grown-up media company.

So, I think what we’re seeing is really teenage angst, like, they’re just having a tough time deciding on issues, which let’s face it, are not easy.


BOLTON: That is their job to do. Going forward, I feel like Facebook needs to buy and develop another company. Like, their success right now, brand wise, is coming through Instagram, WhatsApp, Messenger. I just think the overall parent brand probably has to step back a little bit, get organized internally --


BOLTON: And move forward with another --

BARTIROMO: Well, I know that they didn’t see themselves as a media company, initially, James. But at this point, I mean, this is one of the most powerful companies in terms of media. I mean, people get their information from Facebook and Twitter and other online --

BOLTON: Yes, whether they want to be or not, they are a media company.

BARTIROMO: That’s exactly right.

FREEMAN: Yes, I think that’s a challenge. They’ve obviously been treated under the law since the 1990s, in a more favorable way than a normal media company, which is why, I think, they can expect some changes if they are censoring viewpoints they don’t like.

But on this Times’ story, I think we should keep in mind here that the New York Times and other media outlets, like Hillary Clinton, enjoy casting Russian interference as the decisive event of the 2016 election.


FREEMAN: The fact that Facebook didn’t want to go along with that highly questionable narrative, I don’t think should be held against them.

BOLTON: That’s right. That’s the point.

FREEMAN: They have a public effort in Washington, to give people perspective. You recall a lot of that effort was to say -- was to show people how small a percentage of their overall business and traffic, the sort of bogus Russian bot messages were, right?

I think that’s absolutely valid for them to point out the facts, which did not necessarily support the narrative being promoted by Democrat senators like Mark Warner, et cetera.

BARTIROMO: And they wanted to tie Donald Trump to it also.


BARTIROMO: -- which is obviously, no evidence of that.

ORTAGUS: I think the question is not when -- is regulation coming but what kind. I mean, I think Facebook, Google, everybody knows that it’s on its way, me, Dagen, many others have called for the social media companies, taking more of a self-regulatory approach, which might be -- might be, you know, too late at this point.

But, I think what might be in Facebook’s favor, like many industries that we are looking at, is the divided Congress. Can you get the Democrats in the House and the Senate Republicans on the same page as it relates to any self-regulation? I think that that’s a tough call, but that would have to come in a broader package as it relates to election security at large.

BARTIROMO: Yes, that’s a good point. Are the Democrats going to go along with this? Yes. Salesforce CEO Marc Benioff, meanwhile, took aim at the social media giant. In a new interview, he reiterates his comments, likening Facebook to cigarettes, citing how addictive they are.

That’s interesting analysis there, James, in terms of regulation, is it the fact that they are incredibly powerful that they are going to be forced to get smaller or is it the fact that they are censoring Conservative ideas, which we know, they have done?

FREEMAN: Yes. It’s amazing that Times’ story, apparently there was internal backlash when Zuckerberg said, no, we are not going to censor Donald Trump’s tweets. I mean --

ORTAGUS: Facebook post, but yes.

FREEMAN: Oh, I’m sorry. Facebook posts. Excuse me, not tweets, it’s Facebook posts, which, you know, a media company should not be in the business of doing, right? So --

BARTIROMO: Just the fact that they said that, just shows so much.

FREEMAN: It’s interesting. But I really think, to me, the danger is, regulation here, because I worry that you do get a bipartisan deal with Facebook and the other social media giants that basically puts up barriers to new competitors, freezes the market as it is.

I don’t think we -- as many problems as people may see in Facebook, I don’t think a federal internet regulator is the answer. I think what you want is to keep the pressure on them, not to do what they appear to have been doing in terms of diminishing Conservative voices.

BARTIROMO: And maybe, competition comes in, and sort of that fixes the issue.

ORTAGUS: But Senator Graham and others have sort of said consistently in their line of questioning that they question, is Facebook a monopoly? I think that’s something that you’ll continue to see. The Senate sort of pursue that line of questioning against them. And don’t forget --

BARTIROMO: Look at Google. Google does 90 percent of all search, I mean, when you’re looking at monopoly.

ORTAGUS: Yes, not just Facebook, that’s a great point, Maria. I do think something that we should watch is when this Mueller report does finally come out. I think that there’s probably going to be a pretty significant part of the report on social media, at least that’s what has been reported.

Who knows what the Mueller report will actually say, but that might actually drive the conversation again, to have social medias come back before Congress, if it’s mentioned in the Mueller report.

BOLTON: But I think it is public opinion and it is competition that is going to keep these companies in line. I mean, I was in D.C. when Mark Zuckerberg was testifying in front of Congress. I mean, technology is changing so quickly, whatever regulation --

Let’s even just say for argument’s sake, you can find the perfect amount of regulation, by the time you implement it, the needle will have already moved.


BARTIROMO: That’s a good point.

BOLTON: I mean, it all moves too quickly. And then, what do you do? Do you take the stance that is, for example, in Germany, right? Where you have hate speech and then you send people to jail over a hate speech. I mean, until we’re ready to ignore the constitution and do that, I think, it should not -- in self-regulation, makes more sense than government regulation.

BARTIROMO: Yes. And then, there’s this, Kanye West, posting this photo on Twitter yesterday, showing him, singing karaoke, with Mark Zuckerberg.

ORTAGUS: Do you remember in 2016, Maria, when Kanye went on big rant, asking Zuckerberg for a billion dollars --

BARTIROMO: That’s right.

ORTAGUS: -- on Twitter?

BARTIROMO: Yes, I do remember that.

ORTAGUS: So, maybe he finally got the money.


ORTAGUS: Do you remember? He said I have $53 billion (INAUDIBLE) I want a billion dollars too, and I sing well, Zuckerberg.

BARTIROMO: That was funny. I will take a short break. When we come back, Michael Avenatti has been bailed out, the attorney and critic of President Trump, released this morning, from jail. He was arrested yesterday on domestic violence charges. We’re going to talk about that and bring you details on it, next.

Plus, Bitcoin comes tumbling down, the crypto currency crashing under $6,000. So far, Bitcoin has lost more than 60 percent of its value, this year alone, back in a moment.


BARTIROMO: Welcome back, while Stormy Daniels’ attorney, Michael Avenatti, is out on bail this morning, after being arrested yesterday, on domestic violence charges, Lauren Simonetti with the details now, Lauren.

LAUREN SIMONETTI, FOX BUSINESS NETWORK ANCHOR: Oh, Maria, Avenatti, the lawyer for Stormy Daniels, as you noted, is denying those charges.


MICHAEL AVENATTI, STORMY DANIEL’S LAWYER: I have never struck a woman. I never will strike a woman. I am looking forward to a full investigation, at which point, I am confident that I will be fully exonerated.


SIMONETTI: Well, Avenatti was arrested after a confrontation at his Los Angeles apartment, with an unidentified woman. He later posted a $50,000- dollar bail and he’s facing a felony charge, but let’s see if he gets due process, after Kavanaugh.

Well, the first wave of the migrant caravan expected to start requesting asylum today, about 800,000 migrants beginning to arrive in Tijuana, some actively trying to get appointments with American border officials, in order to make their case for sanctuary.

All of this as Defense Secretary Jim Mattis and Homeland Security Secretary Kirstjen Nielsen visited the border, Mattis defending the deployment of thousands of troops there.


JAMES MATTIS, UNITED STATES SECRETARY OF DEFENSE: It’s very clear that support to border police, our border patrol is necessary right now.


SIMONETTI: There are close to 6,000 troops on the border, with more than 7,000 expected as the migrants get closer. The defense secretary emphasizing that he doesn’t expect troops to come in direct contact with migrants, adding that the only military personnel, who will be armed, are the military police.

And major fallout from a credit crunch at General Electric is being felt across Wall Street. G.E. used to have a triple A credit rating, but now, yes, its bonds have tumbled into junk territory. G.E. selling all parts of the company to raise cash, reduce debt, also announcing plans earlier in the week to sell part of its stake in Baker Hughes. Taking a look at shares of G.E., down 50 percent this year. And programming note, former G.E. Vice Chairman Bob Wright, will be your guest Maria at 7:30 a.m. Eastern Time.

And this, the army is getting into e-sports. As the army fails to meet its recruitment goals, it’s looking for other ways to raise interest with today’s youth. So, they are putting together teams to compete in e-sports like Fortnite. The army is interested in having soldiers represent the branch in competitions as a way to get the brand out there and once again to connect with young players, Maria.

BARTIROMO: All right, thank you so much. Michael Avenatti out on bail this morning. So, a woman filed a criminal complaint against Stormy Daniels’ lawyer, she was all bruised, black eye, felony domestic violence is what she charged. James you wrote an article about this back in September about Michael Avenatti, that Stormy Daniels might be embarrassed by him.

FREEMAN: He, I mean, obviously deserves the presumption of innocence but this is the police report on the injuries to the woman involved here, right. I was wondering if Mr. Avenatti had become embarrassment to Stormy Daniels, that was kind of the question at the time, maybe it’s time to take the question mark off there, right? I’m not sure where Mr. Avenatti goes from here if potential clients in the pornography industry are not willing to tolerate his behavior, perhaps El Chapo is in the market for some legal services.

ORTAGUS: Of course, he says all this was fabricated to hurt his reputation. We have to, either way, assume that his potential bid for 2020 is off. I’d say that at the very least.

FREEMAN: Yes. So, this is, I guess what he’s saying, we’re suppose today think that this is conspiracy that involves the city of Los Angeles, the D.A.’s office, Los Angeles Police Department.

BARTIROMO: He is said to have kicked woman out of his L.A. apartment on Tuesday, then he was running after her saying she hit me first. Her face is all bruised.

ORTAGUS: Well, so there’s a terrible woman who has -- I mean, a woman who has gone through something clearly very terrible and as you said, James, everyone deserves, you know, presumption of innocence. But whatever the woman has gone through today, it doesn’t matter political what her affiliation or what Avenatti is planning on planning on doing, this woman deserves our support.

BARTIROMO: After he was arrested then she denied any incident took place and then she defended Avenatti. So, we’ll keep following that. Coming up, pieces from some of history’s most famous artist will go for auction tonight. In New York City, we’re going to show you what’s on the block, next.


BARTIROMO: Well, the eyes of the art world will be in New York City tonight. Phillips Auction House taking bids on pieces from some of the most famous artists of all time. Joining me right now is the CEO of Phillips Auction House, Edward Dolman. Edward, great to see you. Thank you so much for joining us.


BARTIROMO: Let’s talk about what’s on the block, some of the most-talked about pieces. Jackson Pollock’s number 16, let’s talk about what you’re seeing this evening.

DOLMAN: Well, I think the Pollock is probably the most important on what we’re selling tonight. Although, we have great works by Basquiat and Warhol, but the Pollock is a particular favorite of mine actually because the drip painting series that he did. It’s probably one of the most, sort of, iconic of all 20th century art works.

BARTIROMO: What will this fetch, you think tonight?

DOLMAN: Well, we’re hoping it’s going to get somewhere between 16 and $20 million. It was bought by Nelson Rockefeller in 1950 directly from Betty Parsons and the gifted to the Museum of Modern Art in Brazil, who are now selling it with us. First time at auction.

BARTIROMO: Contemporary art, assess the situation, I mean, in terms of the reception and contemporary art and the value today.

DOLMAN: I think it just get stronger and stronger and stronger.


DOLMAN: Yes, I think the -- in fact, even in New York this week we’ve had a series of sales of impressionist modern contemporary art and you can see this taste change continuing -- that more and more people coming into the market and want contemporary.

BARTIROMO: And when you see the stock market where it is, do you think the art world mirrors the stock market in some ways?

DOLMAN: There is a correlation.

BARTIROMO: There’s correlation.

DOLMAN: Absolutely, yes.

BARTIROMO: Let’s look at the John Miro piece, what can you tell us about this painting and how important is this one here?

DOLMAN: Well, I think Miro is also one of the great 20th century artist, but this is a particularly flamboyant and optimistic expression of his art, because it was painted in 1945, at the end of the second world war. There was new hope --

BARTIROMO: Interesting.

DOLMAN: And this is a -- you know, it’s a much more optimistic and upbeat work than you would sometimes.

BARTIROMO: Yes, and you’ve got to put it in context in terms of when the work was done and what was happening at the time, so I’m glad you did that there. Another iconic European painter Alberto Burri piece will be up, what makes this piece interesting?

DOLMAN: Well, I think one of the most undervalued areas of 20th century art is Italian art. It really was very distinctive with some very important group of artists working within it, of which Burri was a leading light. And they used, sort of, found objects to create canvasses to almost sculptural. So, you’ve seen on this one he’s used wood panels, veneers of wood staple to canvas, and then actually used the blow torch to create sort of energy and in lack of third space. It always got a three-dimensional quality to it.

BARTIROMO: Really interesting. Who are the buyers at this point? Has the market changed in terms of foreigners coming in and looking for interesting and important pieces as we look at the Basquiat, you mentioned this, this is obviously that the market is having its eyes on this one too?

DOLMAN: Yes, I think we’ve seen over the last 20 years waves of new ultra- wealthy buyers coming into the art market.

BARTIROMO: Is it China, Russia?

DOLMAN: It’s from Russia, it’s from China, it’s from the Middle East, it’s from India and we’ve seen them come in waves and they’ve all had significant impacts in the market when they arrive. But now, I think the market is most stable, most sensible and predictable than it’s been for a long time.

BARTIROMO: And Warhol continues to gain lots of interest across the world.

DOLMAN: Yes, I think Warhol is recognized, if not the greatest of the 20th century artist, if not the greatest. And he’s the most impactful and most perceptive, I think, in terms of the society we live in.

BARTIROMO: Tell us about Warhol’s gun?

DOLMAN: Well, Warhol himself, as we all know was shot in the 1960′s and although he recovered, the wounds from that particular attack, eventually led to his death. And so this picture of this gun (INAUDIBLE) is particularly poignant, and I think in the discussion in America today that image of that gun really does raise so many questions and Warhol is known for showing a mirror on society and I think that when he created that in ’81, ’82, he’s still asking us today in 2018 -- you know, what’s going on there.

BARTIROMO: Isn’t that fascinating?


BARTIROMO: I mean, this one really just has worked and resonated throughout the years.


BARTIROMO: And continues to do so. Do you think this will go for what?

DOLMAN: It’s a really superb example of the series. I mean, Warhol’s technique was to screen print. So, many of his images have multiples and this is a really exceptional example of this particular series.

BARTIROMO: Just fascinating. Any changes that you want to remark on the market over the last couple of years, how it changes, particularly contemporary art?

DOLMAN: Well, I think it is, it is now truly global. It’s much more stable than we’ve seen for a while. There are less, sort of, crazy prices, less disaster in market, it’s much easier to read, it’s a really stable solid market right now.

BARTIROMO: We’ll be watching the auction. Edward, thanks very much for coming in.

DOLMAN: Not at all. Thank you.

BARTIROMO: Good to see you, Edward Dolman there. Still ahead, flying you in style; a new list details the best of America’s biggest airports, next hour right here MORNINGS WITH MARIA, stay with us.



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(Show: MORNINGS WITH MARIA) (Date: November 15, 2018) (Time: 07:00:00) (Tran: 111502cb.231) (Type: Show) (Head: Awaiting Walmart Earnings; Brexit Backlash; Saudi Arabia Brings Charges over Khashoggi Killing; Investing and Retirement; Wall Street Journal: General Electric Credit Crunch Ripples Across Wall Street; Seeing Purple for World Pancreatic Cancer Day; The Keurig Cocktail Machine; LeBron James Passes Wilt Chamberlainin Points; Dallas Mavericks Honors Military) (Sect: News; Financial)

(Byline: Maria Bartiromo, Deirdre Bolton, Lauren Simonetti, Jared Max)

(Guest: Morgan Ortagus, James Freeman, Bob Drbul, Dan Houston, Bob Wright)

(Spec: Stock Markets; Retail Industry; Business; Economy; Insurance; General Electric; Pancreatic Cancer; Keurig; LeBron James; Lakers; Dallas Mavericks; J. C. Penney; Wall Street Journal; Jack Welch; Barry Diller; Health Care; Mueller Probe)



Good Thursday morning, everybody. Thanks so much for joining us.

I’m Maria Bartiromo. And it is Thursday, November 15th.

Your top stories right now at 7:00 a.m. on the button on the East Coast.

A check on the state of the consumer. Walmart is reporting earnings momentarily. The estimates call for earnings of $1.01 a share on revenue of $125.5 billion. Stock is down half a percent going into the numbers. As soon as those numbers hit the tape we will bring them to you. It could certainly be a market mover.

Meanwhile there’s this -- Britain’s future in the European Union hanging in the balance. Two cabinet members resigned overnight because they did not like the deal that British Prime Minister Theresa May announced last night with Britain exiting the E.U. She backtracked a bit, speaking before parliament in the last hour.


THERESA MAY, BRITISH PRIME MINISTER: What we agreed yesterday was not the final deal. It is a draft treaty -- it is a draft treaty that means that we will leave the E.U. in a smooth and orderly way on the 29th of March, 2019.

Update hourly