Asian and European Markets Close Lower; Treasury Department Sanctions 11 Companies for Illegal Sales to Iran; Glen Frey Passed Away;



Sanctions 11 Companies for Illegal Sales to Iran; Glen Frey Passed Away;

Democratic Debate Examined; SpaceX Rough Landing; Martin Shkreli Speaks

Out; Sean Penn Labels El Chapo Interview a Failure; Flint, MI, Residents

File Class Action Suit in Lead Case - Part 1>

Noelle Nikpour, Jessica Tarlov, Jamie Colby, Alveda King, Lis Wiehl>

Elections; Stock Markets; Taxes; Nuclear Weapons; Health and Medicine;

Policies; Hostages; Prisons>

DEIRDRE BOLTON, RISK & REWARD SHOW HOST: There are numerous red flags in the stock market. Asia and Europe closing lower, setting up tomorrow to be a volatile day in the U.S.

This is Risk and Reward. I'm Deirdre Bolton.

So far, 2016 in the same category as three stock market crisis years, 1929, 2010, and 2008. In August, the S&P 500 fell 10 percent from its highs. Another drop of that magnitude happened in January. So, in just six months' time, two big market drops.

If you're wondering what to do with your money, we have you covered. My market pros are here. Market bull, Hilary Kramer, market bear, Jimmy Lee. Hilary, as our market bull you're the contrarian in the past 100 years, this has only happened three times, started a great depression. The tech bubble bursting, financial credit crisis year, how can you still be bullish?

HILARY KRAMER, A&G CAPITAL PRESIDENT: Because corrections do happen. We have had quite a run over the past seven years since the 2008, 2009 crisis. We need to let some air out of the balloon. There's been a lot of excess created by the Federal Reserve.

This is nothing like 1929, which is fraud. Nothing like 2000, which was technology, and really based on one specific sector. And it's certainly not a financial crisis created by -- $7 trillion of insurance that's been sold all over the world and no one knew how they are going to pay it out, which was 2009.

BOLTON: Hilary, thank you for going through that point by point. All of them well made. Jimmy, picking up on that, even if it doesn't look like those three crisis years, at least according to Hilary, should investors take some money out of stocks? Put more in cash, put more in bonds or gold? Because even if maybe the reasons aren't there, sentiment feels very, very skittish.

JIMMY LEE, WEALTH CONSULTING GROUP CEO: Well, actually on the short-term basis, Deirdre, I think that the market from this point on to the end of this year, I think -- I'm actually a little bit of a bull. Longer term, I'm a little bit concerned. But I agree with the last guest in the sense that I look for four things when in terms of looking at this decline and can this sort into a recession, which is what everybody is talking about.

First is unemployment. And that data actually suggests the opposite. So, it looks like the employment is actually very good for this late stage in the business expansion. Second is, are our bubble in stocks? Are stocks trading too high? And we're back to historical levels now on the price to earnings ratio.

And as far as, you know, our clients coming to me and buying stocks and you at the state of mind, I can tell you that's not happening for sure. Don't fight the Fed. Now, the Fed did raise rates because they had to. But, you know, rates are -- they signal that rates are not going to go up very fast because we're not anyway close it being an overheated economy, and so that's not going against us. And finally...


KRAMER: Right. And what this -- and what this does is it brings investors just like they've been for the last seven years, it brings all investors back into the stock market. Because the rates are still low. You still aren't going to be able to make more than half a percentage point or 1 percent in a CD. So you're forced into the stock market.

BOLTON: So, Hilary, very quickly. You went through the reasons why you don't think this is a crisis year but we didn't talk about China to what extent there is a new report that many expect to prove, yet again, that the Chinese economy is slowing. We're all interconnected. Could China's slowing be the wild card that maybe you're not thinking about right now?

KRAMER: Well, to great extent that's what has happened to us since the first of the year is we have been pricing in what's happening in China. Clearly there may even be negative growth in China.

There's certainly been corruption, gambling, and now the cracks are so imminent, the only big problem is what happens if China starts selling all of their U.S. treasuries? That would be one of the only areas of concern for me.

But otherwise, I'm not concerned. Money's going to flow to the United States because we have proven that we have transparency and the strongest economy in the world.

BOLTON: Hilary Kramer, well said. Thank you so much. Hilary Kramer and Jimmy Lee. Well, investors have a lot to consider including unintended consequences of U.S. foreign policy shift.

As of today, the U.S. Treasury Department is sanctioning 11 Iranian-linked entities in response to two missile tests done late last year. So, in two separate instances Iran test fired missiles which Western officials said were in violation of U.N. Security Counsel Band.

The U.S. prepared to impose sanctions in December but delayed the move amid finalization of the nuclear cord. But, also in anticipation of this prisoner swap, which did, in fact, happen on Saturday. So, a total of five Americans were released. President Obama touted the developments.


BARACK OBAMA, UNITED STATES OF AMERICA PRESIDENT: Today's progress Americans coming home and Iran that has rolled back its nuclear program and accepted unprecedented monitoring of that program. These things are a reminder of what we can achieve when we lead with strength and with wisdom. With encourage and resolve and patients.


BOLTON: GOP candidates say the Obama administration blinked and allowed Iran to get the upper hands.


MARCO RUBIO, (R) U.S. PRESIDENTIAL CANDIDATE: It proves once again that now nations and enemies of America around the world know that there's a price for Americans. If you take an American hostage, Barack Obama will done -- will cut a deal with you.

TED CRUZ, (R) U.S. PRESIDENTIAL CANDIDATE: This deal is a really problematic deal, and it reflects a pattern we've seen in the Obama administration over and over again of negotiating with terrorists.

DONALD TRUMP, (R) U.S. PRESIDENTIAL CANDIDATE: This should have happened years ago, George. We're giving them $150 billion. This shouldn't be happening now.


BOLTON: Media tycoon and historian on that point, author of numerous works including "Flight of the Eagle," Lord Conrad is with me now, Black is with me now. Thank you so much for joining me. President Obama pardoning...


LORD CONRAD BLACK, "FLIGHT OF THE EAGLE" AUTHOR: Happy New Year, Deirdre. I haven't seen you since then.

BOLTON: I know, Happy New Year indeed. Obama pardoning seven prisoners, the U.S. Treasury imposing these sanctions in exchange for five Americans. As a historian, how will history judge this swap?

BLACK: I haven't studied it enough to say that, but I think it fits into the well, now well-established policy of this administration with Iran, which is to gamble at taking the initiative in tendering an olive branch will be reciprocated and will be, will lead to more responsible conduct than the Iranians have shown for many years.

I personally don't believe that. I think what we have done is given them a green light to develop a deliverable nuclear weapon within 10 years if they want to honor the agreement, and they do not have a history of honoring agreements very well.

And I mean -- I'm very respectful of the holder of the great office of the president. But when this president says that his decision and his conduct has been a matter of encourage and wisdom and so forth, it's not really for him to say that. And I don't see that it has been.

He was a man who less than three years ago, was speaking of the only possible end of the nuclear discussions with Iran being the abandonment of the Iranian nuclear program for any military purposes and that's not what we have.

On the matter of exchanging hostages, I think it's more of the same. But I don't want to sound cavalier but the concerns for the individuals in question, and I have as I said not analyzed precisely to see who I think got the better of it.


BOLTON: Well, let me bring in some comments from our colleagues at the Wall Street Journal. In their reporting they say the Obama administration was worried that a prisoner swap would be viewed by Congress as a form of diplomatic extortion. For those not following the situation as closely, we just want to bring in comments right now from the Secretary of State, John Kerry saying the prisoners were not part of the sanctions delay.


JOHN KERRY, U.S. SECRETARY OF STATE: But these tracks were separate. We almost had these folks out several months ago. And then there was a snag that occurred...


UNIDENTIFIED MALE: But the timing, Mr. Secretary, looks a little suspicious, you know, we still...

KERRY: Well, what can I say? We were not going to waste any time in getting them home.

UNIDENTIFIED MALE: So, it's just a coincidence?

KERRY: Absolutely a coincidence.


BOLTON: Does it seem likely, though, that the U.S. waited to put sanctions in place until after these five Americans were freed?

BLACK: Are you asking me?

BOLTON: Yes. I mean, were that a coincidence as John Kerry...


BLACK: Well, you know what, I don't. I'm hesitant to second-guess the Secretary of State but there's a credibility gap here. Yes, I mean, the policy of this government has been one of considerable appeasement to traditional opponents of the U.S. in the theory that let's give it a try.

And I understand the reasoning. I just don't think it's going to work. You know, I'm happy that people are going home but it -- even under strong administrations, I mean, President Eisenhower and people like this trading some of the successors trading Gary Powers for one of the Soviet Union's leading spies.

We've got fox, we, the West got foxed on the deal. But whether that actually happened here, I must say...


BOLTON: It's too soon to tell.

BLACK: I just don't know enough but it, but I do know a fair about the pattern of the Iranian-American regulations, and I think this business is giving them a green light to being a full-pledged military nuclear power in 10 years if they observe every single requirement of the agreement, which they have no history of doing is a mistake.

BOLTON: All right. Lord Conrad Black, so glad you are here. Thank you for the time. It's great to chat with you.

BLACK: Thank you so much, Deirdre.

BOLTON: Lord Conrad Black joining me there. Well, speaking of candidates and politics. Last night, open season on Donald Trump.


BERNIE SANDERS, (D) U.S. PRESIDENTIAL CANDIDATE: It is beyond my compression how we can elect a President of the United States somebody like Trump who believes that climate change is a hoax invented by the Chinese.


BOLTON: That was at the democratic debate last evening. Donald Trump's spokesperson is my guest in a few moments. Also, President Obama declaring a state of emergency in Flint, Michigan over poisoned water.


UNIDENTIFIED MALE: We've been fighting too long. We need more help. We need Obama to come in here and change these pipes. It's not about anything else. We need the pipes changed in this city. You know, they're talking about giving us filters and going around giving us water, how long is that going to last?


BOLTON: Flint residents are fighting back with a lawsuit. Our legal expert will tell you what your rights are if you ever find yourself in the same position.

Also, actor Sean Penn says he was practicing experimental journalism with his interview with Mexican drug lord, El Chapo. CBS 60 Minutes host Charlie Rose press Penn on his motivation and his process.


CHARLIE ROSE, CBS 60 MINUTES SHOW HOST: You're not naive, and you knew that if Sean Penn went to see a drug lord on the run.

And had a conversation with him, with a Mexican actress, where you just meet with, you knew that the story, you knew that's a big story. You're not naive. And now you're blaming people for wanting to know more about it.


ROSE: It's inevitable.

PENN: No, no, no.



BOLTON: We are seeing reports that musician Glenn Frey, a founding member of the Eagles who also achieved a lot of success during his solo career has passed away after a lengthy illness at 67 years of age.

Shifting back to politics, Donald Trump not in the room, but his name came up an awful lot during the democratic presidential debate. So, he was the only GOP candidate arguably targeted.


SANDERS: It is beyond my compression how we can elect a President of the United States, somebody like Trump who believes that climate change is a hoax invented by the Chinese.

MARTIN O'MALLEY, (D) U.S. PRESIDENTIAL CANDIDATE: Donald Trump wants to start a registry in our country of people by fate. He can start with me, and I will sign up as one who is totally opposed to his fascist appeals that wants to vilify American Muslims.


BOLTON: The national spokesperson for the Trump campaign is with me now, Katrina Pierson. Katrina, welcome. Glad to have you here.


BOLTON: What about the Donald Trump, right now the subject of let's say a discussion in the U.K. Parliament. We want to play a sound bite right now from leader David Cameron.


DAVID CAMERON, BRITISH PRIME MINISTER: I think his remarks are divisive, stupid, and wrong, and I think if he came to visit our country, I think he'd unite us all against him.


BOLTON: So, Katrina, it seems as if Donald Trump is being targeted from the left in this country, but actually even from a conservative in the U.K. How does he see this?

PIERSON; Well, I think if you look at what's happening in the U.K. within the Muslim population, you'll find out why. You know, it wasn't too long ago when Mr. Trump was talking about the danger that the police are in and with no go zones, and of course the parliament came out and said, oh that's not true.

But, Deirdre, five police officers came out in the Daily Mail saying that Donald Trump was right. This is a very serious problem and with regards to the democrats. Bernie Sanders, I mean, that was funny because Donald Trump was joking about that.

But I will say to Governor O'Malley, there is no new registration system. Even this administration under Barack Obama, he talked about adding biometrics to these refugees coming into the country and where exactly is that stored? Because I don't think it's on a paper file anywhere.

BOLTON: So, Katrina, let me ask you, Mr. Trump and Senator Cruz are feuding. Here is a short example.


TRUMP: The truth is he's a nasty guy. He was so nice to me. I mean, I knew it. I was watching. I kept saying come on, Ted, let's go, Ted. But he's a nasty guy. Nobody likes him. Nobody in Congress likes him, nobody likes him anywhere once they get to know him.


BOLTON: So, Mr. Trump has admitted to going after Senator Cruz after seeing some poll numbers where Cruz was rising particularly in Iowa. But is Senator Cruz Donald Trump's biggest competitor as Donald Trump sees it?

PIERSON: No. I don't think so. I mean, they're obviously statistically tied in Iowa. I'm confident Mr. Trump is going to win Iowa. And during the subject of the debate when they ask Mr. Trump, well, why now, and he says because it has change. It's not the fact that his polling numbers has changed, it's the situation has changed.

You now have the democrats talking about filing a lawsuit against Senator Cruz, which has already happened, by the way. But from Mr. Trump's perspective just like he said in the debate. If this is somebody that he wanted to put it he bottom of his ticket, he had to make sure that they were in the clear.

BOLTON: OK. Katrina, I want to ask you. You are working with him, Donald Trump, on his campaign day in and day out. What is the one thing that the public does not know about Donald Trump?

PIERSON: I think the public doesn't know -- which they got a little taste of during the debate when he talked about New York. Just how much love and compassion that he has for this country and the people in it. Mr. Trump loves this country so much.

And I think it comes across in some of the rallies if you watch them through live stream or go to one, and you can feel it. But he has so much love and compassion for the country and the people in it, which is why his policies are very much pro America.

BOLTON: All right. Pro America, we can get behind that. Katrina Pierson, thank you so much for the time.

PIERSON: OK. Thank you.

BOLTON: National spokesperson for Donald Trump's campaign.

Well, Michigan is in a state of emergency. Elevated levels of lead were found in the water. Our legal expert joins me to tell you what your legal rights are if you are ever found in the similar situation.

After his indictment, the notorious drug-hike CEO is breaking his silence.


MARTIN SHKRELI, TURING PHARMACEUTICALS CEO: I think people the hate is sort of quick reaction and it's something that they're looking for. They want someone to hate and if I fit to all of then I'm almost, you know, I almost feel like I'm starting some utility.


BOLTON: Martin Shkreli says he has been unfairly targeted. We'll bring you more from that interview. And speaking of interviews, actor Sean Penn, saying he regrets doing the interview with the Mexican drug lord, El Chapo. Find out why.


PENN: I have a terrible regret.

UNIDENTIFIED MALE: What are the regrets?

PENN: I have a regret that the entire discussion about this article ignores its purpose, which was to try to contribute to this discussion about the policy in the war on drugs.




CLINTON: The fact is we have the Affordable Care Act. That is one of the greatest accomplishments of President Obama of the Democratic Party, and of our country.

SANDERS: But the secretary neglected to mention not just the 29 million still have no health insurance. That even more are under insured with huge co-payments and deductibles.

CLINTON: To tear it up and start it over again, pushing our country back into that kind of a contentious debate I think is the wrong direction.


SANDERS: It is no way of tearing this up. We're going to go forward.

CLINTON: He has voted with the NRA, with the gun lobby numerous times. He voted to let guns go on to Amtrak, guns go into national parks.

SANDERS: I don't take money from big banks. I don't get personal speaking fees from Goldman Sachs.


BOLTON: In last night's democratic debate, front runner's Hillary Clinton and Bernie Sanders clashed on numerous issues including health care, gun rights, and taxation of Wall Street.

That's why republican fund raiser, Noelle Nikpour and pollster Jessica Tarlov with me now. Jessica, my take on tone Hillary Clinton ditched the easygoing demeanor, Bernie Sanders was indignant. If you degree --- if you agree with that, what does that say about the campaign and where it stands now?

JESSICA TARLOV, DEMOCRATIC STRATEGIST: I think it says that things are close, which is what the polls are showing. Bernie is within a couple in Iowa, he's ahead in New Hampshire. Naturally, though, she's up 25 points in yesterday's NBC's Wall Street Journal poll, which is a great sign for the general election. And we know that she's still very strong in the south and out West.

But it's a real competition and I think all, you know, everyone who was speculating, oh, she's just the anointed one, she doesn't take him seriously. And I do know that there was the near time peace over the weekend that said many staffers didn't take him as seriously as they should.

But Hillary Clinton what happened to her in 2008 is haunting. So, I think that she's been taking Bernie Sanders very seriously from the start, and she has to create daylight between the two of them, and they actually are very different candidates. So, I think it's a great thing.

BOLTON: It's a great thing. I want to bring in one of Bernie Sanders' quotes. Because both of them, Sanders and Clinton, spoke about taxing the rich.


SANDERS: So, what my first days are about is bringing American -- America together. To end the decline of the middle class to tell the wealthiest people in this country that, yes, they are going to start paying their fair share of taxes and that we are going to have a government that works for all of us and not just big campaign contributors.


BOLTON: So, Noelle, as far as hurting or taxing the rich more, this seems to resonate in different ways with both candidates. What does that mean as they face off against the GOP fields?

NOELLE NIKPOUR, REPUBLICAN STRATEGIST: You know, poor democrats. I don't know which candidate, you know, is more sincere or more authentic and you're having to choose between them. What I think is really ironic is the fact that they're both trying to tout how they really want to stick it to the rich, and it's really funny because if you break down the numbers and what a lot of people they really look behind the scenes at this, it hurts the middle class. It hurts who they're trying to protect.

You know, with a payroll tax, for example, what Bernie Sanders wants to do, all that is that's going to be passed down to the worker and then eventually the consumer. I mean, so, you know, I really don't understand why, you know, they keep going back to the argument on, you know, tax the rich and get at the rich. You know, I really don't know.

What is very interesting is where they differ. And the fact that one is going to have to defend the other like, for instance, on gun control with Bernie Sanders and the NRA. You know, Hillary Clinton is trying to say, well, look at me. I am more gun control than you are.

And then look at Bernie Sanders by saying, you know, you are, you know -- you're from Wall Street. You know, you've been paid big bucks to speak for wall street. So, I'm the guy that really wants to stick it to Wall Street.

So, it's back and forth and back and forth. It's really going to be a close vote for those guys in Iowa.

BOLTON: All right. Noelle and Jessica. I invited you here to talk about politics and to hear your perspectives on the campaign. But we are receiving reports that musician, Glenn Frey, a founder member, guitarist of the Eagles has died after a lengthy illness. He was 67 years old, I mean, six Grammy's, "Take it Easy," Lion' Eyes, "The Heat is On," I mean, the list is very long. Noelle, I understand you're a big fan. What is your reaction?

NIKPOUR: Yes. Oh, my gosh. I mean I've seen him in concert several times, and it's really, really sad to me. And, you know, we just came off the heels of losing another great one. You know, we didn't even know this guy was dealing with an illness. David Bowie.

So, you know, we just came off David Bowie and now we lose another great, you know, musician. It's sad, you know? Great music and that's what they left us and that's what we have now to enjoy. But it's really sad one after another.

BOLTON: Noelle, that is a great point to leave it on underlying the legacy there. Certainly, left us a lot of great music. Thank you very much, Noelle and Jessica. Great to have you both here.

Michigan Native, Michael Moore joining the Flint water protests today.


UNIDENTIFIED MALE: He wouldn't come here. Now all of a sudden since we got media attention and president already signed the state of emergency declaration, now all of a sudden he wants to come here and sound like he wrote a letter last night and that's the reason why the president signed the letter.


BOLTON: So, as you can tell some say Michael Moore shut butt out. But we will talk about this issue and what your rights are if you ever find yourself in a similar situation.

Also, find out what happens with billionaire Elon Musk's latest SpaceX rocket try.

And actor Sean Penn saying his interview with El Chapo failed. Find out why he thinks so.


PENN: My article has failed. Let me be clear. My article has failed.




UNIDENTIFIED MALE: We've been fighting too long. We need Obama to come in here and change these pipes. It's not about anything else. We need the pipes changed in this city. You know they're talking about giving us filters and going around and giving us water. How long is that going to last?


DEIRDRE BOLTON, RISK AND REWARD HOST: Local Flint, Michigan residents are filing a class-action lawsuit against the state of Michigan and against its governor, the charge allegedly ignoring Flint's led-poisoned water. The crisis has affected more than 100,000 people. Fox News Legal Analyst and author of the book, News Makers, it is just out, Lis Wiehl with me now. Lis, thanks for coming in.

LIS WIEHL, Fox News Legal Analyst: This is really upsetting because apparently the governor knew about this and told Time Magazine that they knew about it by October 1st, right? But the testing wasn't actually done until January 5th. So all those months between October, November, December...

BOLTON: They were still drinking the water.

WIEHL: Exactly, exactly. I mean it's just so horrible that he knew about it, should have done something and didn't.

BOLTON: So what are the chances he or someone in his administration goes to jail over this?

WIEHL: Well, first the civil claim. So let's get that through the civil action. But when the FBI looks at this and says wait, if you cover it up for those months and there were injuries that they can attest to that cover-up, then that could be a criminal charge.

BOLTON: And controversial filmmaker Michael Moore is there. Not every single resident in Flint is happy to see him there, but he is there. So it means that the profile of this particular...

WIEHL: Huge.

BOLTON: Is going to go bigger.

WIEHL: And it should. Think about that. Just from what we know...

BOLTON: Irreversible.

WIEHL: Three months of those children -- everybody in that area getting led damage. I mean it's indescribable.

BOLTON: So that means as far as we know -- both of us as moms, this causes neurological problems and they don't go away.


BOLTON: So I am assuming there are going to be lawsuits.

WIEHL: Damages, exactly. Now some of those damages will take a while to figure out what they are. But damages to your children like that? You bet you the moms and dads are going to be filing lawsuits.

BOLTON: Well, if their kids need treatment, I don't see what other choice they have.