Risk & Reward for December 21, 2015 - Part 2



Slaten, Bill Conner, Noelle Nikpour, Capri Cafaro, Mark Luschini, Gary

Smith, Bruce Welty>

Lawsuits; Accidents; Awards>

Now turning our attention to a lighter story, Huge Gaffe.


HARVEY: Miss Universe 2015 is Colombia.


KENT: That was Miss Universe, and that was the pageant host Steve Harvey making a very big mistake, in actually naming the wrong contestant as the winner. When he realized it his mistake, the pageant had to do the unthinkable, the most awkward thing, watch this.


HARVEY: I have to apologize. The first runner up is Colombia.


KENT: Wow. Joining me now Republican Strategist Noelle Nikpour and Ohio State Senator Capri Cafaro, welcome back to both of you, this is Steve Harvey trying to explain what happened. Listen.


HARVEY: This is exactly what is on the card. I will take responsibility for this. It was my mistake. It was on the card -- horrible mistake, but the right thing I can show it to you right here. The first runner up is Colombia. It is my mistake, still a great night.


KENT: He seemed like a nice guy trying to own up there and take all the blame. Noelle, was there any other way he could have handled that situation?

NOELLE NIKPOUR, REPUBLICAN STRATEGIST: No, I mean he did only thing he could, bad day for Steve Harvey, good day for all of the exposure that Miss Universe got, but the worse thing is the fact he sent out an apology on twitter and spelled the two countries wrong.

KENT: He did.

CAPRI CAFARO, OHIO STATE SENATOR: You stole my line there, Noelle. That is where I was going with this.


CAFARO: If you misspell the two countries that is adding insult to industry.

KENT: Well, Cafri, also Donald Trump quickly responding to the situation on social media saying, "Very bad -- what happened last night at the Miss Universe Pageant. I sold it 6 months ago for a record price this would never have happened." Cafri, really?

CAFARO: Well, I mean, who can control the host, if Steve Harvey was under contract who knows, but Mr. Trump did offer up a suggestion on how to solve the problem -- how to solve the problem if you will, I saw this coming into studio, they should be co-winners, co-Miss Universe, Colombia and the Philippines, so you know maybe that is the way to go.

KENT: All right, well there you have it, we agree honest mistake but certainly not awkward for Miss Colombia. She handled it well. Thank you both for joining us. And the force is with Disney, announcing its crossed $5 billion mark in global box office sales this calendar year for the first time ever.


UNIDENTIFIED MALE: I have it. My sister has it.


KENT: I thought it was really good, no spoilers here. Absolutely shattering worldwide box office records on opening week brought in $529 million globally, $248 in U.S. and Canada. This is on track to be the biggest box office opener of all-time, Disney stock though up on the year, one of best performers in the DOW it was down by 1 percent today with a downgrade by a research shop.

And Donald Trump and Apple CEO Tim Cook? They actually agree on something, we'll show you after this.

UNIDENTIFIED MALE: That is total political crap.



TIM COOK, Apple CEO: That is total political crap. There is no truth behind it. Apple pays every tax dollar we owe. This is a tax code, Charlie that was made for the industrial age, not the digital age. It's backwards. It's awful for America. It should have been fixed many years ago. It is passed time to get it done.


KENT: That is Apple CEO Tim Cook dismissing the notion that his company is avoiding taxes as utter nonsense. Apple saves billions of dollars in taxes a year through subsidiaries in Ireland where it declares much of its overseas profit. Let's bring in our market panel here -- Janney Montgomery Scott Mark Luschini. Mark, let's start with you, Apple would owe estimated $59.2 billion in taxes if they tried to bring this and declare it in the United States. Do you blame Tim Cook or the policy for keeping a lot of this business overseas?

MARK LUSCHINI, JANNEY MONTGOMERY SCOTT: I am blaming the policy, because what Tim Cook shared is actually a view I am sure is very common among a lot of other corporate America chieftains where we have $2 trillion in cash in overseas bank accounts that is ready to come back to the United States.

KENT: That is right. Gary, would you believe that Trump actually agrees with Tim Cook? Here he is back in September -- Donald Trump addressing the inversion topic. Listen.


DONALD TRUMP, PRESIDENTIAL CANDIDATE: Reason companies are not bringing it back is taxes onerous, it does not make sense, I have millions of dollars overseas, I can't bring it back in this country. We file papers. We've been doing this for a year and a half. You can't get it back in.


KENT: So Gary, what needs to be change to encourage U.S. companies to stay here?

GARY SMITH, KADIMA GROUP: Clearly, we need to lower corporate taxes, we saw that with individual taxes, the tax revenue has increased. Look, what Tim Cook is doing probably to some people stinks to high heaven, but on the flip side, what position is he supposed to be in, does he go to his shareholder saying we only owe x, but I paid 2 x because I fell it of our duty. Guess what? Tim Cook would probably be out by the board the next day, I could pay more taxes but I write-off that mortgage interest so I don't have to pay as much. I think it is the smart thing to do it is the right thing to do.

KENT: All right, Gary Smith, Mark Luschini, thank you both so much.

I got a news alert for you, Amazon getting called out by its own customers for packaging small items in giant boxes, shoppers complaining on social media about excessive amount of packaging for the small unbreakable items, maybe even pillows, some are no bigger than your hand -- shipped in a box several feet long. Back in 2008, you might remember Amazon pledged to cut back on the amount of packaging used. But for the procrastinators, Amazon may be your saving grace. It is not too late to order those enormous packages for Christmas. According to Amazon, you have until 9:00 p.m. tomorrow for standard shipping, Wednesday is the deadline for one day shipping, and same day delivery deadline is Christmas Eve. Meanwhile, Amazon stock closing flat today, slightly below its $664 high.

A new report that their warehouse robots may one day replace minimum wageworkers entirely, but Amazon pays above the minimum wage, coming up a robotic CEO who is helping other companies do it as well, after this.


KENT: All right, Amazon is able to handle last minute orders, thanks in part to this massive fleet of thousands of robots, but they are not only company in the robotics game. Bruce Welty is the CEO of Locus Robotics. You are here to tell us how robots may or may not displace workers, but first you would do something similar to Kieva but you are different. How do you help increase productivity at some of these warehouses?

BRUCE WELTY, LOCUS ROBOTICS CEO: Well, Locus Robotics is -- we have just come out with a Kim -- we've been basing this technology on recent changes in robots. There is a lot of new technology, new innovation, and software. The robots now can do thins that we could not do ten years ago. For instance, our robots go to the locations that are in warehouses that already exist and position themselves ahead of the worker, and the worker walks to the robot, reads the task on the screen, and performs it. It is very fast, takes aways unproductive work.

KENT: Some of the companies you work with (Inaudible) have you found that there is -- by increasing efficiency you may be hurting worker opportunity for the future? There has been an ongoing concern about eliminating jobs through this?

WELTY: Well, you know we actually look at that differently. In our view a lot of these jobs go unfulfilled. We have at any given time hundreds of openings in our buildings, there is a lot of demand, we need to find these people to makes job for attractive is pay them more. We are going to be able to do that if we can make them more productive. So when we install these systems we see an 8 to 10 time's labor improvement. But also, the minimum wage is going up, so we have to pay more, we would like to pay more, but our customers don't want to have us charge them more. We have to increase productivity.

KENT: You are clearly doing that by increasing the amount of opportunities to get people to deliver products. What do you think about minimum wage debate, there are a lot of protests right now for companies, fast-food companies in particular to raise the minimum wage, do you stand behind that across the board?

WELTY: I think it is important we raise the minimum wage, but to do that you have to be more productive. And not just a little bit. But really, really be more productive. That is what we're doing at Locus Robotics.

KENT: How would do they do that at McDonald's or Burger Thing.

WELTY: Actually I am not at that business. I would think similarly, productivity improvement with technology.

KENT: All right, so the argument here is more productivity, higher paying jobs, and no loss of jobs.

WELTY: Exactly. KENT: All right, thank you so much from Locus Robotics, we appreciate it.

WELTY: Thank you.

KENT: Speaking of robots, the FAA's mandatory drone registration program starts online today. It will cost five bucks for most registrations, so look out for that if you get one for Christmas.

Coming up, political candidates calling out Silicon Valley encryption, my next guest actually provides D.C. with their encrypted telephones, he joins me next.

JAMES COMEY, FBI DIRECTOR: Before they left too commit mass murder, one of them exchanged 109 messages with somebody we know is a terrorist outside of the United States, and I have no idea what they said. I still can't tell you what they said, because they communicated with each other that morning 109 times using a mobile messaging app that is end-to-end encrypted.



UNIDENTIFIED MALE: Encryption is a major problem and congress needs to deal with it.

HILLARY CLINTON, PRESIDENTIAL CANDIDATE: We need to put the great disruptors to work in disrupting ISIS.

TRUMP: We're losing a lot of people because of the internet, and we have to do something -- closing that internet up in some way.


KENT: Closing that internet up in some way. Politicians calling out social media over encryption, but those tech companies in Silicon Valley aren't the ones using it. A phone app developed by Silent Circle is now certified for use within the U.S. government. The CEO of Silent Circle Bill Conner joins me now. Bill, tell us about how your product works.

BILL CONNER, SILENT CIRCLE CEO: We have a platform of products geared for governments and enterprises so they can secure their communication. The U.S. government just passed 140-2 which says our security is at the standard the U.S. government can use to keep its communications secure within its departments or within our government against other governments.

KENT: So basically governments are able to encrypt. So what do you think is the fair place to be? Apple wants to protect privacy and keep that in place. Then you have encryption services allowing ISIS to proliferate. Then you have encrypted phones, plus the government encryption to protect communications of their national security. Where do you stand on the encryption battle right now?

CONNER: We really believe that enterprises around the globe need to be able to protect their privacy and their intellectual property. Absolutely we have just a different spin than he does. He's selling mostly to the consumer. Our focus is around an enterprise. We know not everyone will buy our phone, but it's the most secure phone. If you are an executive traveling around the world or the cities, you don't want the data leakage of your enterprise apps leaking your sensitive information or your communications on that. But we think these enterprises need more than a phone. We have no grandeur or a vision that our phones will be the only ones. Our silent phones apps can sit on top of Tim Cooke's products or any other Google or Android product. So an enterprise that has people coming with BYLD, which is increasingly large piece of an enterprise, can have secure communications.

Why is that important? As these employees try to communicate globally, they need an ability to secure that information.

KENT: If the U.S. government comes to you and says we need information because of a potential terrorist threat, what do you say?

CONNER: About what, is the question? Here is the reality of this technology...

KENT: We have got to go. Bill Conner, I am so sorry. We are running out of time. That's just the beginning of our conversation. That is it for us today. Thank you for joining us. For more on Twitter, follow @JoLingKent.


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