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Iowa Caucuses Results Examined; North Korea Announces a Planned Satellite Launch; National Debt Question; Yahoo Investors Unhappy with



Satellite Launch; National Debt Question; Yahoo Investors Unhappy with

Turnaround Effort; Cruz Calls Both Democratic Candidates Socialists;

Twitter Possible Takeover Candidate; Shkreli Interview - Part 1>

Jonas Max Ferris, Juliegrace Brufke, Steve Moore, Nicholas Horbaczewski,

Tamara Holder, Jillian Melchior>

Energy; Stock Markets; Budget; Lawsuits; National Security; Terrorism;

Treaties and Agreements>


TED CRUZ, (R) U.S. PRESIDENTIAL CANDIDATE: Iowa has sent notice that the Republican nominee in the next President of the United States will not be chosen by the media.


DONALD TRUMP, (R) U.S. PRESIDENTIAL CANDIDATE: We will go on to get the republican nomination and we will go on to easily beat Hillary or Bernie or whoever the hell they throw up there. I think I might come here and buy a farm. I love it, OK? Thank you.


MARCO RUBIO, (R) U.S. PRESIDENTIAL CANDIDATE: They told me we have no chance because my hair wasn't gray enough and my boots were too high. They told me I needed to wait my turn. That I needed to wait in line.

UNIDENTIFIED FEMALE: This is your turn.


RUBIO: But tonight, tonight here in Iowa, the people of this great state event sent a very clear message, after seven years with Barack Obama, we're not waiting any longer to take our country back!


DEIRDRE BOLTON, RISK & REWARD SHOW HOST: A night with surprises. The Iowa caucus last evening as Senator Cruz beat Donald Trump on the republican side. It was close, close call for democrat Hillary Clinton, eking out a victory against Senator Sanders.

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

Here is Donald Trump's take on his silver medal finish.


TRUMP: We finished second and I want to tell you something, I'm just honored, I am really honored. I want to congratulate Ted and I want to congratulate all of the incredible candidates.


BOLTON: Donald Trump took an uncharacteristic break from tweeting last night but in the past few hours he has started again. He is now framing his second place finish as a financial decision on his part. So here is what he posted. "I was told I could not do well in Iowa. I spent very little there, a fraction of the Cruz and Rubio. Came in a strong second. Great honor."

Former 2012 presidential candidate and former Minnesota Governor, Tim Pawlenty is with me now. Governor, thanks for joining me. You also co- chaired Mitt Romney's campaign. What do you think of the finish last night, that is to say, Cruz, then Trump, then Rubio?

TIM PAWLENTY, FORMER MINNESOTA STATE GOVERNOR: Well, I think Cruz held his own and then some an overperformed, Trump underperformed and Rubio overperformed. And I think it doesn't pick the nominee but it certainly winnows the race dramatically to those three, and maybe one more person who could can sneak in change a place in New Hampshire, but I think it basically winnows the field.

BOLTON: OK. So, starting to winnow the field. Donald Trump normally we know normally using aggressive language. I want to bring up something he tweeted out something two years ago, quoting the late professional golfer, Walter Hagen, saying, "No one remembers who comes in second." So, last night's finish may hurt his confidence. How do you think he's going to do in New Hampshire?

PAWLENTY: I think he's going to do pretty well. I think Marco Rubio is going to be on the rise. I think the real question might be how is Ted Cruz going to do in New Hampshire because that's a tougher territory for him.

But I think Donald Trump is going to have make-or-break his future in this campaign in New Hampshire. And I suspect he's going to do pretty well there. And I think odds would be that he would win it.

BOLTON: All right. Now you said you did expect some winnowing. Any candidates that you're sure maybe we won't see on Tuesday or maybe a little later?

PAWLENTY: I think after New Hampshire, if you're interested in trying to stop either Trump or Cruz, if that's part of your agenda, then you want to see the field winnow. And I think those running out of money basically are going to have to reconsider their options. And that's going to include I think almost everybody other than the three we've been talking about with the exception of probably Jeb Bush, and I think the rest of the field is probably going to wither after that.

BOLTON: OK. So, Governor, you alluded to this point this campaign is breaking so many patterns. Senator Rubio even making this comment.


RUBIO: They told me that we had no chance because my hair wasn't gray enough and my boots were too high.



BOLTON: So, why are so many polls off? What is the new political normal?

PAWLENTY: No. I think the interesting thing about Iowa is the turnout was much higher than many people expected but they expected a higher turnout to benefit Donald Trump when, in fact, it was really Ted Cruz who benefited it seems from that higher turn crowd. We should give props to Donald Trump, by the way, he got more votes than any republican in those caucuses in history with the exception of Ted Cruz.

So, when you say it like that Trump did pretty darn well. But in terms of why are the polls are off? They predicted Cruz's level percentage wise pretty accurately. They didn't predict Trump's number or Rubio's number. I think it is very hard to pull for caucus attendees. It's very different than going to the polls and pulls just to lever in a one minute span.

BOLTON: Governor Pawlenty, thank you so much for the time. Glad to have you here.

PAWLENTY: You're welcome.

BOLTON: Now on the democratic side the results were the closest in Iowa democratic caucus history. Here is reaction from both Hillary Clinton and Senator Sanders.


BERNIE SANDERS, (D) U.S. PRESIDENTIAL CANDIDATE: I think the people of Iowa have sent a very profound message to the political establishment, to the economic establishment, and by the way, to the media establishment.


HILLARY CLINTON, (D) U.S. PRESIDENTIAL CANDIDATE: And I am excited about really getting into the debate with Senator Sanders about the best way forward to fight for us and America!



BOLTON: The founder of Americans for Tax Reform, Grover Norquist is with me now. Grover, great to see you.


BOLTON: Senator Sanders, the tax plan is going to mean that almost all Americans will pay more in taxes if he wins. He has been clear about it. Are you surprised at all by how much he, support he has anyway?

NORQUIST: No. Because the focus on Trump and the republicans going back and forth has really obscured how far to the left the modern Democratic Party has gone. Everyone focused on Obama being the first African-American president against Hillary, the first woman president. And neither talked about their world view. And how they had steadily marched left ward.

So, the modern Democratic Party is committed to higher taxes to an almost European welfare state. Democratic socialist world view. Sanders says it out loud but Hillary has been advocating it for years.

BOLTON: OK. Do you see anything in his plans, Senator Sanders' plan, that makes sense to you? You have worked so closely on these issues. I mean, he is saying essentially we are going to raise taxes and that's going to make lots of services cheaper for Americans down the road. Do you believe that? Does his math check out from what you know of it?

NORQUIST: No. When the government takes more money out of the economy, when it raises rates, when it becomes a disincentive to work, save and invest you get less work, less savings, and less investment. When the government hands out free money to people it becomes another disincentive to work. So, all of these efforts to expand the size of government reduce economic growth.

BOLTON: All right. Grover, we thank you. Short and sweet. Very glad to have you here. Thanks for the time.

We are going to be speaking of big money but in a different context in the markets. If you look, stocks got crushed. You had triple-digit losses for the Dow. You had oil down below $30 a barrel. And in fact, in the last two days, you have seen the steepest two-day decline for oil in almost seven years.

Chief economic advisor for Allianz, Mohamed el-Erian is with me now. Mohamed, great to speak with you. I should mention this book, you're author of this recent, "The Only Game in Town." So, congratulations on that. But I need to ask you with while I have you on global growth, of your outlook. Is it so slow, is it so pessimistic that only logical reaction is to sell oil and stocks?

MOHAMED EL-ERIAN, ALLIANZ CHIEF ECONOMIC ADVISOR: No. What we seeing in both the oil and the stock market is a response not only to a more uncertain global economic outlook but they are responding to two other things. Both of them have lost their seatbelt.

In the case of the oil market it can no longer depend on OPEC as the swing producer on the downside. It can no longer depend on Saudi Arabia to cut production to support prices. And for stocks, they can no longer depend on the central banks being on the same side supporting financial asset markets.

So, the first element of lost their seatbelt and the second element is they both have limited liquidity. There is a very little pools of patient capital to be on the other side of this enormous volatility.

BOLTON: OK. Speaking of enormous volatility, I mentioned the oil drop. You know it well. Goldman actually putting out a piece today saying it's too late for OPEC to support prices saying $26 a barrel is next? Do you agree with that, and the premise of the call, which is basically it's going to take too long to enact production cuts and stockpiles are growing?

EL-ERIAN: So, I don't think OPEC is even interested in going back to the role of the swing producer and for good reasons. They figured out that every time they reduce production, they lose market share. And in this world of alternative energy supplies it's very difficult to regain market share.

So, OPEC will not be cutting production to support prices. And if they do it won't be effective. So, I agree with that date of the argument. As to whether we see 26 or we see 35, I really don't really know. It is enormously volatile in this sort term, there are a lot of technical issues.

What I do know is over the longer term demand and supply factors alone don't justify oil in the 20s.


EL-ERIAN: So, if you ask me to look 12 to 24 months I think we go higher from here but the short term very volatile.

BOLTON: So, Mohamed, I want to ask you, why, what led to you write this particular book? You're a prolific writer. What made you want to work on this one?

EL-ERIAN: It's a call for action. It's a sense that the new normal of low growth and excessive dependence on central bank is getting exhausted. That the path that we were on for the global markets, for the global economy is coming to an end within the next few years.

And this book tries to explain why that's the case and tries to explain why the alternatives that are out there are subject to our own choices. And it really is a call for action on the political front for people to start simply implementing pro-growth policies.

BOLTON: All right. Mohamed, I'm going to read it. I thank you in the meantime for the time. So great to speak with you. Mohamed el-Erian joining me from Allianz and you heard he is the author of this new book, "The Only Game in Town."

North Korea is announcing a satellite rocket launch saying it's imminent, adding another breach of U.N. resolutions only weeks after its most recent nuclear test.

Also, President Obama warning the country about defaulting on national debt. This was back in 2013.


BARACK OBAMA, UNITED STATES OF AMERICA PRESIDENT: We don't fully understand what might happen, the dangers involved, because no Congress has ever actually threatened default.


BOLTON: My guest from The Daily Caller, says the administration's warnings misled the public. We're going to show you the exclusive federal documents that prove some statements.

And forget giving terrorist jobs, the top U.S. commander for military operations in Iraq and Syria is saying the U.S. needs to put more boots on the ground in the region. Retired Lieutenant General Thomas McInerney is my guest next.


UNIDENTIFIED FEMALE: We cannot kill our way out of this war. We need in the longer term, medium and longer term, to go after the root causes that lead people to join these groups, whether it's the lack of opportunity for jobs.



BOLTON: North Korea issued a formal notification of an imminent launch of what they call a satellite. The rest of world sees it as a ballistic missile test. Now if the exercise happens it would just weeks after North Korea's recent nuclear test.

Former Air Force assistant vice Chief of Staff, retired Lieutenant General, Thomas McInerney is with me now. So glad you're here, sir. So, North America has this goal of developing a long-range rocket that could strike the U.S. mainland. So, how close is North America, or North Korea that is to achieving the goal to hit us here?

THOMAS MCINERNEY, RETIRED U.S. AIR FORCE: They are getting very close, Deirdre. And I think that if we don't take notice of this, and start working with the Chinese very aggressively, we're going to see overnight, North Korea has the ability not only to hit the United States, but all the Asian countries.

And here is what I recommend. We should start putting the pressure on China and saying, if you let North Korea continue on this path, then we are going to enable Japan, and South Korea to have a nuclear capability.

And as interim step, we will do what we did during the Cold War and still have in Europe where we will let them sit alert on U.S. weapons that we control but their pilots would deliver them as a counterbalance to the North Korean nuclear capability. We have to get serious about this.

BOLTON: Well, to your point, General, there are a lot of people who are saying that North Korea is just outright snubbing China right now and either China won't act or can't act. But I hear what you're saying about arming or at least supporting our allies in the region.

I want to stay on this topic of international security because Germany accepted more than a million migrants, refugees last year. More than 60,000 fled to Europe in the first month of this year alone. So, the latest study says that refugee crisis is going to be costing Germany $54 billion by the end of 2017.

More to the point of daily security for everyday citizens, German Chancellor Angela Merkel putting emphasis on idea of a short-term plan. So, this weekend she tweeted out, or this is her quote, "This is temporary residential status. Once there is peace in Syria, once ISIS has been defeated in Iraq, you go back to your home country with the knowledge that you have gained."

So, General, how, first of all, will Germany get these people back to Syria and Iraq?

MCINERNEY: Well, they're going to have to have some very tough love, Deirdre, because they must do it. The price tag of 54 billion euros is not sustainable for Germany. In addition, the most unsustainable position is, Islam is not assimilated by the Western-Judeo-Christian ethics at all very well.

And in this particular case because of age group of people that have come, it is what they call a Higarah, h-i-g-a-r-a-h, which is a mass immigration into a foreign land to spread Islam. And it is an important part of their doctrine, and Allah looks very highly on those that do it.

So, they have a big challenge in Germany. And if they don't understand the ideology they're going to be dealing with, it is more than a religion, then they are going to have a major problem.

BOLTON: Well, General, we did see even New Year's Eve in Cologne and other German cities, I mean, everyday citizens were attacked, women were assaulted. And I think that is why Angela Merkel is saying look, this is only temporary. To your point, there are huge cultural differences, huge language differences.

Speaking on the theme of intense regions, the top U.S. commander for military operations in Iraq and Syria saying that more American and coalition forces need to be on the ground in the region to fight ISIS. Does this mean we will be putting and should be putting more American boots on the ground?

MCINERNEY: I don't think so. And I'm a great admirer of the commander there. But the fact is, we need Arab Muslim ground forces. We should use our air power in far more aggressive, take the handcuffs off the rules of engagement, still do it in accordance with the rules of land warfare, but be very aggressive, 24/7, hundreds of sorties a day, Deirdre, and then let them come in with an Islamic force.

We've already proven before that we can win. There is no doubt about it in my mind. The question is what happens once we've done it. So, they must take responsibility for this.

BOLTON: General Thomas McInerney, thank you so much. I appreciate your perspective on all these subjects. General McInerney joining me there.

Yahoo under fire from investors. Three years of a turnaround effort has not worked. The company is now being sued from a former employee about its ranking system, one where the charge is manipulating ratings to fire hundreds of people without just cause.

Our legal expert will tell you what your rights are if you are ever in the same boat.

Also, a Daily Caller reports that President Obama's warnings during the debt crisis were unfounded and misleading. The details are next.


OBAMA: We don't fully understand what might happen, the dangers involved, because no Congress has ever actually threatened default.



BOLTON: Google parent Alphabet passing the market cap for Apple, meaning it is technically the largest tech company in North America. So, Alphabet, aka, Google, closed up today around 1 percent.

Jonas Max Ferris is with me now. So, Jonas, Wall Street has a lot of love for Alphabet. I'm looking at all these upgrades. Target raised by more than two dozen analysts. Is this the old, new again darling?

JONAS MAX FERRIS, MAXFUNDS.COM EDITOR: It is. And for some reason Apple is not a darling right now. So, that's -- it's really Apple come down to Google's level, while Google gone up. So, they kind of doing in different directions. Apple actually is the cheaper stock. Google is probably twice as expensive in earnings.

But they like the Google story. The growth is really there and it doesn't seem interruptible People are worried about the iPhones. You're talking about basically 20 percent growth across most of their areas. But they keep throwing away, and burning money in this moonshot ideas that lose billions of dollars now but it's all covered by this massive of cash cow that is online search, which they're so big and so dominant no one is catching up.

And that's really the risk, is that what if the ad revenue stops growing? They can't grow up 20 percent for every year because it's going to catch up to worldwide ad spending and that doesn't grow that much.

So, down the road this is -- they got to get into other stuff or they'll hit a wall. Which is why they do the nest and all the speculative stuff. I think speculative have also lets them keep top talent who wants to work on its exciting projects more exciting than search engines at this point of the development cycle. So, I think they again, the Wall Street loves it.


BOLTON: And it's also Wall Street loves it. And to your point, Jonas, I mean, that is why they were so crystal clear with what money is going there. That is to say the R&D, the research and development, it's all very clearly delineated so investors can understand. Jonas Max Ferris, you will be back with me in a bit. We have to talk about Yahoo.

In the meantime though, new reports showing that President Obama misled Congress and the public during the debt limit crisis of 2011 and 2013.


OBAMA: Failure to meet this responsibility would be far more dangerous than a government shutdown. It would effectively be an economic shutdown with impacts not just here but around the world.

We don't fully understand what might happen, the dangers involved, because no Congress has ever actually threatened default. But we know it would have a profound destabilizing effect on the entire economy.


BOLTON: My next guest says that is false. Juliegrace Brufke is with me now from The Daily Caller. So, Julie, what about the president's message was misleading?

JULIGRACE BRUFKE, THE DAILY CALLER: Well, the House Financial Services Committee has come out with documents showing that the government had run through plans and to make sure that payments for Social Security, disability, the veterans benefits, and the principle interest payments on the debt would have happened in the case of a government shutdown, when you had Jack Lew come out and blatantly lie to the American public saying there was no contingency planning.

BOLTON: So, there was a contingency plan is what you're saying?

BRUFKE: There was. They were running through, they were running through plans to make sure that this happened in the federal -- that these issues would have been taken care of in the federal government.

BOLTON: OK. So, essentially it seems as if the president or could be the president could be accused of creating a crisis for political gain. I want to ask you on related theme, the Obama administration Paris Global Warming Treaty is going to cost taxpayers at least $12 trillion over the next 25 years.

A lot of Americans, at least in polling, saying they're not particularly worried about this issue. Is there a mismatch in the way our government is seeing global warming or not?

BRUFKE: I think there is absolutely. I mean, this is a huge issue. This is 10 years ago, we had Al Gore saying that global warming, I mean, the country was going to be facing a disaster. And I mean, I don't think we've really seen that. And you've got this green non-profit saying it's going to cost 500 billion over the next 25 years. That is 3 trillion less than the crazy amount of debt that our country is holding right now.

And speaking of Paris, I mean, ISIS launched their most deadly attack there. And I think America is much more concerned with terrorism as far as polls have shown than they are global warming.

BOLTON: all right. Julie, thank you so much. Glad to have you here, Juliegrace Brufke with me there from The Daily Caller.

CEO of Yahoo, Marissa Mayer is under pressure. Now the employee ranking system is as well. One ex-employee is accusing the company of manipulating the ratings, the HR ratings that is, to fire hundreds of people without just cause. Our legal expert is going to weigh in to tell what you to do if you ever find yourself in the same situation.

Also, the sport of the future. The CEO behind a new drone racing league will be with me in a few minutes.


UNIDENTIFIED MALE: To fly a drone is like an out of body experience.

UNIDENTIFIED MALE: When you put the goggles on, your eyes convince your brain that you're not sitting in a chair anymore. When you're 100 feet off the ground and you do your first backflip, your brain then you feels like you did a backflip 100 feet off the ground until your stomach roll. You get nauseous.




DEIRDRE BOLTON, RISK & REWARD SHOW HOST: Yahoo CEO, Marissa Mayer is under fire. She has been working on this turnaround plan at Yahoo for three years with little to show for it.

Now if you look at the stock it's down around 2 percent after hour session, the company reported earnings. So, in line with estimates sales actually a little bit stronger than forecast. Yahoo also announcing its plan to cut about 1,600 jobs, a few business units.

Jonas Max Ferris as promised, so back with me now. So, Jonas, what is left at this point for Yahoo? Honestly, is it just a sell-off for parts kind of situation?

JONAS MAX FERRIS, MAXFUNDS.COM EDITOR: Right. And that's -- no one likes a slowly dying tech company. I mean, it went so bad. To earn a billion dollars of revenue a quarter which is spectacular, it's one of the oldest dot-coms basically around. But it is dying, it is so dead in mobile. That's where the growth is Google sees great growth there.

Apple obviously a good player. They got they bought like a Tumblr acquisition which was another mistake because Instagram was bought by Facebook, that's a lot more successful than Tumblr is to this company. So, not heading anywhere, not any that trendy area is becoming like a snail older company, not quite an AOL kind of death, but it's definitely and slowly dying.

Investors get mad, they want the pieces sold off. They want to rip it apart like you would do with any kind of value stock at that point. And the CEO has not proven that she either, can acquire a way to success, come with new ideas, get in mobile, get growth going.

Again, it's a very slow death. It's not going to get bankrupt because they still got a lot of cash flow, but it's not a story investors wanted to see. It's worth 5 percent of what Google's worth today.

BOLTON: And the only two silver linings the that position that they have in Yahoo Japan, which is actually separate. And then of course, Alibaba. But at the moment that seems like it.

Jonas Max Ferris, thank you so much. Talk to you in a little bit. We just want to get to this legal angle because when Marissa Mayer joined the company in 2012, she implemented this rating system for employee performance, so one to five, and it led to hundreds of terminations.

A former manager who was fired due to the ranking system is suing the company alleging anti-male discrimination.

Trial attorney Whitney Boan is with me now. So, Whitney, based on what you know about this suit, is there is an argument to be made?

WHITNEY BOAN, ATTORNEY: I definitely think that there is. I think that Yahoo has violated the California and federal laws governing the warnings and notifications that employees are entitled to when mass layoffs are happening.

And that's what happened with Yahoo. That's what allege in the lawsuit by Mr. Anderson, is that at the time he was let go. There was about 600 people let go within a month. That triggers WARN, which is the Worker's Notification Act under the Federal government legislation and then also by the State of California.

They were required to give 60 days' notice, they didn't do it. So, now they will have to pay these employees, such as Mr. Anderson, $500 a day for every day that they fail to give notification that he is going to be laid off as part of a mass layoff.


BOLTON: Right. Whitney, because -- sure. To your point, I mean when you lay people off or the make the positions redundant you're supposed to, at least in theory, pay severance. If you fire them for cause you don't have to pay out anything. So, I think that's part of the calculation as well.