MARIA-00
Economy; - Part 5>
Cheryl Casone>
Morgan Ortagus, Morgan Ortagus, Jenny Fleiss, Lori Feinsilver>
Clinton; Bernie Sanders; Panama Papers; L.A.; Stock Market; Brussels;
Sesame Street; EU; Rent the Runway; Donald Trump; Ted Cruz; John Kasich;
Victoria Secret; Verizon; Yahoo>
CHERYL CASONE, FOX BUSINESS: Now, good morning Maria, yes. A Belgian authorities are now asking for the public's help, these shows you where they're at right now in this investigation and looking for the man in the hat, there he is. He is one of the Brussels bombing suspects who's still on the loose in this new video. This has been released to the public shows the suspect leaving the airport shortly after the explosion, tracking him through the city as he made his escape, with all these footage you have still can't find him.
Well, early-morning tornadoes ripping through Southern Georgia and parts of Florida causing massive damage and several injuries. Three separate confirmed tornadoes touched down yesterday, the weather services wind speeds may have reached (inaudible) more than 130 mph.
And finally this morning shares of Yahoo are jumping in the free market and after reports say Verizon's is expected to make a bid for Yahoo's web business next week, even willing to acquire the company's Japanese business to sweeten the deal. Now Verizon and its subsidiary AOL reportedly working with at least three financial advisors on the bid assigned the communications giant is actually serious about these plans, Maria.
We could also reporting Yahoo as moved the deadline for its bid one more week down to April 18th. So, they want some time here guys, Google and alphabet that's still part. Yes, the Google side that's a possibility, Microsoft saying no way, not interested. So, this could be the final -- the bid from that we see is from Verizon.
Maria: They have been pushing back John on any deal, I think Marissa Mayer was sort of pushing back on something but it looks like something is going to happen here because they can't break out of this malaise.
JOHN HILSENRATH: That they have been working on restructuring this company for over a decade now. You have to wonder if this latest deal is going to get them any further along the process.
MCDOWELL: I think at this point, it's either she gets the deal done or she doesn't have a job there. That she has got to do something.
UNIDENTIFIED FEMALE: He's going to do something. Board members have stepped down; criticism about the company's performance has heightened up.
MCDOWEL: And criticism about her performance. So, whether it is fair or not, but in terms of the optic seven all member of that party remember that party what they had late last year, you know, anytime you're sitting on a throne and photograph sitting on a throne at a company funded party that's going to be a problem.
HELSENTRAH: She hasn't fixed it but who has? He's took a label, the CEO's that have been able to turn the place around.
MCDOWELL: That's what I was saying is that I raise the issue, she has been heavily criticized and very publicly. Is it fair or not?
(CROSSTALK)
HELSENRATH: Who went on leave when she became CEO. You know, I think she was in the spotlight when she became CEO and that's what's been getting so much attention.
ORTAGUS: Yes, but did she took away the ability, for employees to work at home who were doing that for women who were very frustrated with that. So, I think, it means, she has in the PR side is the strategic play.
BARTIROMO: I think now I think that she walked into kind of I hate to say a sinking ship. But I think I just did and yes look At&t, Comcast, they're not interested. Microsoft, no thanx, come on, I mean, that's those are bad times.
I always say Verizon app is interested apparently. If something happen, Cheryl, thank you. Take a short break, then we're looking at markets, the IPO marking comes to a standstill in the first quarter, levels unseen since the financial crisis. What that says about the markets and are we finally seeing a break? Are the IPOs is going to picking up? Then Selfies, High 5s, donuts on the L.A highway, and extraordinary story. We've got the details behind what might go down as one of the craziest car chases in history. You don't want to miss this bizarre video. Back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, we are expecting a bounce back and stocks today. Markets coming off from a rough session yesterday, the volatility so far this year taking a serious toll on the IPO market, The first quarter saw the fewest IPOs since 2009. But my next guest says we should start seeing things pick up soon. Turning us right now, our friend Kathy Smith, founder of Renaissance Capital. Kathy it was great to see you.
KATHLEEN SMITH: Thank you.
BARTIROMO: Thank you so much for joining us. So, IPOS squat in the first quarter really its our period. To what do you attribute that?
SMITH: Well we've been a big winter freeze we've never seen -- you have to go back 2008-2009 to see this kind of shutdown. It has to do with overall market volatility. And when investors are afraid, they tend to hide in the large safe places, they get away from and sell these companies that are the bread and butter of the IPO market. So, yes it was bad news. The market has stabilized since February 11th I think was the bottom. And from there we're seeing some very strong performance of companies that have already gone public. We have an index that tracks the last couple years worth of IPOS. BARTIROMO: Yes, we're looking at it that the renaissance IPO each year.
SMITH: Yes and well, it is still down for the year. The performance has been very good. That is a sign that positive things are happening.
HELSENRATH; So, The Wall Street journal is reporting today about the coming IPO of first Hawiian Bank. And I financial stocks are you know.
SMITH: Well, I think First Hawaiian Bank it's because everyone wants live in Hawaii
But we are seeing one of the first icebreakers as we would call it because out of these. One as the market stabilize and the returns have become better, the first IPO we see priced next week is BATS. And that's a exchange, yes the exchange stands for Better Alternative Trading System. And that is significant company and we expect to see significant companies with good valuations now. It's not going to be just any be just any company. And that is a company with almost $2 billion in revenue. It's the second-largest US. That is a very interesting point. They did try the IPO and they're going to try the IPO again on their own exchange. Now it did -- they sell on the -- BATS
BARTIROMO: OK, great.
SMITH: And that's is global. The point is since they tried and failed four years ago on their own experience.
HELSENRATH: Because their own technology failed.
MCDOWELL: Exactly, so our bet would be they're going to make it work this time.
If you look at it industrywide, which sector is the least appetizing in terms of IPOS? Which companies would have the hardest time going public?
BARTIROMO: Right, and which might be easiest?
SMITH: Well, the unicorns are the biggest challenge that we have or those companies that have had the business model of growth at all costs. They're not earning money and investors are when they are cautious they're going to look for the most solid business models, not a model that says topline growth only and they're going to look for attractive valuations and there has been evaluation disconnect in the private market with those numbers versus what the public is willing to pay.
BARTIROMO: Would you put Uber in that category? I mean, that's quite the quintessential Unicorn?
UNIDENTIFIED FEMALE: Uber maybe able to defy that formula but many others won't and it's still .
UNIDENTIFIED FEMALE: Like what company is exactly.
UNIDENTIFIED FEMALE: Well, we're going to look at Air B&B, there's Snapchat, there's Pinterest, so many of them, they're very good headline companies, they need to have a bottom line. And one of the problems with looking at this whole set of private companies is there is not a perspective, so we're kind of guessing what that bottom line if they have one looks like. But there is a disconnect and that's going to be very painful for startup companies, the pain is already being felt because they can't monetize and the venture community is not in business to hold the stocks forever.
BARTIROMO: Well that tells me that investors are becoming more value conscious and recognizing that, you know, just because it's this private company that everyone is talking about, as Unicorn you know--
MCDOWEL: And I think Twitter, and Twitter. And Twitter has shown a lot .
BARTIROMO: Got to be, yes.
MCDOWELL: Because of lack of ability to monetize.
UNIDENTIFIED MALE: It flies in the face of this idea that there's a bubble on our stock market If investors are so discriminating and IPOS are -- so slow to get off to a start.
SMITH: We may argue the bubbles that's in the private equity venture capital market --
MCDOWELL: public markets are very --
SMITH: A lot of -- the public markets become very --and maybe because we've have had some lessons learned in 2008-2009. We got through the dot com bubble. The public has been cautious and corrected valuations. We haven't seen that in the private market.
BARTIROMO: We will watching dat's global for and indication of what's happening next in the IPO market. Thanks very much, Kathreen.
SMITH: Thank you.
BARTIROMO: Good to see you as always. Kathleen Smith, our Renaissance Capital.
Coming up the National debt keeps climbing. But Donald trump says you can make it stop. But his plan, is it too realistic? We will talk about how much these economic plans are costing. A nightmare on the green, golf legend Ernie else got off to the worst start in masters history, we will show you. .
(COMMERCIAL BREAK)
BARTIROMO: Good Friday morning, everybody. Welcome back. I'm Maria Bartiromo. It is Friday, April 8th. Your top stories right now at 6:30 a.m. on the east coast.
Donald Trump shakes up his campaign preparing for the possibility of a contested convention. His main rival, Ted Cruz going on the offensive.
(BEGIN VIDEO CLIP)
SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: Donald Trump has been supporting liberal Democratic politicians for 40 years. I have no experience with that.
(END VIDEO CLIP)
BARTIROMO: Meanwhile the war of words on the Democratic side as well. Hillary Clinton and Bernie Sanders going back and forth over their qualifications for the White House.
A wild car chase on the streets of Los Angeles to tell you about. Robbery suspects spinning doughnuts, weeding (ph) dangerously, you will not see how this ended, with high-fives and selfies. We'll bring it to you.
The Masters tournament underway. Ernie Else (ph) struggling to sink six puts on the first hole, whether he recovered from that rough start ahead.
The end of an era, "American Idol" crowning its final champion last night. We will look back at that juggernaut.
Turning to markets this morning, mix action overnight in Asia. The Nikkei average was off in Japan as well as the Hang Seng, but many of the other averages down fractionally.
In Europe this morning, we've got slight gains across the board. Most of the major averages there between two-thirds of a percent and 1 percent higher.
In the U.S., we are expecting a pretty good bounce back this morning for stock prices from yesterday's selloff. The Dow Industrials expected to open up about 100 points this morning.
Donald Trump and Bernie Sanders running on bold policy platforms. One promises to pay off the national debt in eight years. The other says he will expand federal programs and offer free college tuition mostly by raising taxes.
My next guest is doing the fiscal fact checking on these policy promises and she says both have some glaring short falls. We want to bring Committee for Responsible Federal Budget President Maya MacGuineas. Maya, good to see you.
MAYA MACGUINEAS, COMMITTEE FOR RESPONSIBLE FEDERAL BUDGET PRESIDENT: Good to be with you.
BARTIROMO: Thank you so much for joining. I'm so happy you're here today because I'm calling you on Twitter, the truth teller, Maya.
Donald Trump, let's do his plan first. I've been reading what you've studied about it. He says he's going to wipe away the debt in eight years, doable, Maya?
MACGUINEAS: Not even close, I'm afraid. So the plan that Donald Trump has put forth so far would actually double the debt under the eight-year term that he would be president where he's saying he would pay off the entire debt.
And set aside whether you actually want to pay off the debt, first off, it is what creates treasury market, the backbone of the financial system here.
But really what we are talking about is there a plan to balance the budget so that we don't borrow each year, but on top of that actually pay down all of the debt.
And being consistent with all the plans he's laid out, to cut taxes very dramatically, and not to touch Social Security is just impossible. He said that he would sell some assets to do it.
But in keep in mind, you can only sell an asset once and that means you still have these glaring deficits, which would grow the debt back up. So these numbers don't come close to adding up.
While I'm glad to hear talking about the debt, it's completely at odds with the policies that they put forth so far.
BARTIROMO: What would work? What in your opinion is necessary in order to actually make a dent in the debt? We know that much of the spending is in the entitlements and we are not hearing about Social Security from any of these candidates?
MACGUINEAS: That's exactly right. To fix the fiscal challenges that this country faces and they are significant. Our debt is at record levels right now and projected to grow faster than the economy going forward indefinitely.
It's no mystery what it would take. The most important thing is to deal with our aging population and our healthcare problems. That's our entitlement programs.
Those tend to be the areas that candidates don't like to talk about. In this campaign in particular, you have Democrats who are talking about expanding these programs and Republicans refusing to touch them. Nobody has really come out with responsible plans to deal with entitlement reform.
On the other side of it, you are going to have to deal with revenues and instead of talking about tax reform that would be able to generate new revenues, we are talking about massive tax cuts, which would explode the debt even further.
So we are taking many, many steps backwards instead of the real discussion of what it would take.
BARTIROMO: Maya, here is Jon Hilsenrath from the "Wall Street Journal." Go ahead, Jon.
JON HILSENRATH, "WALL STREET JOURNAL": Maya, Donald Trump has talked a lot about renegotiating deals, renegotiating trade deals and of course, the CEO of a casino business, he renegotiated a lot of debt deals. Can the United States of America renegotiate its debt with its creditors like China and other foreign countries, is that an option for paying down this debt?
MACGUINEAS: Yes, that's a great question, it's interesting question because you kind of have to have a sense of what the debt is. The first thing to understand that the $19 trillion debt that we hear people talking about, about a one-third we owe to ourselves in trust funds.
So that's the entire debt. A good portion of it owed to Social Security and other government trust funds. Of the $13 trillion debt that owe, the portion that's owed to savers or abroad a lot of it wouldn't come due in eight years.
And if you were to renegotiate it, if you were to pay down all that debt, you would have to pay a premium so would cost additional trillions to pay it off prematurely. So I don't see us renegotiating our debt deals.
I see us renegotiating our budget and looking at what our spending programs are, what are revenue programs are and getting control of how much we borrow year and gradually getting control of the debt that way.
That would be a way that's workable. I'm not sure that even the goal of paying down the debt is something that's a discussion that's helpful because it's so out of the realm of what's realistic.
BARTIROMO: We want to move on to Sanders because he's also making all of these promises. Demystify Sanders for us. He's basically saying he wants to raise $1.7 trillion in new taxes.
He's also taking on Jeff Emelt, the CEO of General Electric saying he is a self-proclaimed socialist. He is doing this op-ed and says Bernie Sanders is wrong. GE is not destroying the moral fabric of America.
I love this quote. This is from Jeff, "GE has been in business for 124 years and we have never been a big hit with socialist. We create wealth and jobs instead of calling for them in speeches. Maya, your take on Bernie Sanders and his plan.
MACGUINEAS: OK, there's two things. The Bernie Sanders plan and the whole discussion we are having about the economy, on the Sanders plan the good thing I will say that the Sanders campaign has tried to pay for what is unquestionably a massive expansion of government.
They are looking at expanding the government by roughly 50 percent compared today where it has on the historically. To their credit, they put a lot of detail, specific ways that they would pay for it all of it raising taxes. There still would be trillions on top of that.
The Sanders campaign has not talked about the debt as an issue at all and they use so many new revenues, tax increases are huge. They couldn't really happen in this political environment.
But if they were to, there wouldn't be a penny left to deal with the debt. We look this as underpinning of a healthy economy. You can't have debt growing faster than the economy. If you want to deal with the economy, you have to deal with the debt.
You can't use all of your revenues or spending cuts on other priorities and leave nothing left to debt or you haven't fixed the problem. More broadly for that, Emelt's column, which I thought was really interesting.
It's so unfortunate how compartmentalize our discussion and fights in these campaigns are when what this country needs is a comprehensive plan to grow the economy that would look at economic growth.
That would look at the very legitimate issues of income inequality and share prosperity and would look at fiscal responsibility. It seems that candidates always take one of those issues, compartmentalize them, and fight against the others.
We need businesses to help grow the economy and create jobs. We shouldn't be making bad guys out of people who are helping the economy. We need to think about how to make it better.
BARTIROMO: Yes, that's very practical of you.
DAGEN MCDOWELL, FOX BUSINESS: I hope the president and all of his people surrounding people heard you say that, Maya, because they are going to do everything in their power to crush business between now and next January.
BARTIROMO: Feels that way.
MACGUINEAS: Yes, it's really too bad that the hostile environment that has happened between the administration and the business. We worked a lot with the business leaders to talk about the importance of fiscal reforms and they have been so outfront in talking about what they'd be willing to do to help the problem.
I would really like to see politicians, business leaders and civic leaders working together because these challenges kind of affect all of us, the entire economy. We shouldn't be picking bad guys, we should be trying to fix solutions.
BARTIROMO: Which is why I like the fact that Jeff Emelt came out and fought back on this, Morgan, because somebody has to basically put it out there that what GE is doing, how much taxes they're paying.
Otherwise, it's just this political football that everybody just gets on board. It's like the line, the rich don't pay their fair share.
MORGAN ORTAGUS, MAVERICK PAC CO-CHAIR: I thought it was a brilliant op-ed. I think we can -- give in to it later, but you know, we also have to look at defense spending, sequestration, and all of these are going to have effect not just to the entitlements, which is a broader issue on defense spending that Donald Trump is bringing up in this campaign as it relates to NATO.
HILSENRATH: And also economic growth. People aren't talking enough of that how you get economic growth and you can't pick a number and make that magically happen, you have to have policies that create that kind of environment.
MCDOWELL: Less than 3 percent growth for ten years in this country and we are wondering why wages aren't going up.
BARTIROMO: We are wondering why Donald Trump is to popular, Maya.
MACGUINEAS: That's exactly right. The growth issue is a huge one because on the fiscal front you cannot grow your way out of the problems, but you cannot fix the problems without growth. We heard candidates rely on policies that make situation worse.
Huge tax cuts, huge spending increases, and then they promise growth that we are not going to be able to achieve to fix the problem. We need a realistic discussion about how to grow the economy and what we can accomplish with that.
BARTIROMO: And that's why you are my truth teller.
HILSENRATH: Maya should be running for something.
BARTIROMO: Maya, thank you. Always a pleasure, my friend.
MACGUINEAS: Thanks, everyone.
BARTIROMO: Thank you. Maya MacGuineas joining us there.
Coming up from zero to selfie, how a high-speed chase turned into a modelling opportunity for burglary suspects in California.
It was the final curtain call for American staple, the biggest moments from "American Idol's" farewell next.
Don't forget to watch the second part of John Stossel's Libertarian Presidential Forum tonight. It was hot. Former two-term New Mexico Governor Gary Johnson, technology entrepreneur, John McAfee, and libertarian Republican founder, Austin Peterson, all taking the stage.
That's the second part of the Libertarian Presidential Forum tonight 9 p.m. Eastern on Fox Business Network. We are back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back. Well, this is bizarre, a car chase through Hollywood yesterday. Cheryl Casone with that and the other headlines right now. Cheryl, good morning.
CHERYL CASONE, FOX BUSINESS: Maria, it had all the elements of a good old fashion car chase in Los Angeles. This is two burglary suspects on the run in a convertible in the rain and they were having a lot of fun.
They were spinning some doughnuts as you just saw and hit what you see there on the screen. Police staying back, because, that's what they do, they don't want to endanger the public. Those guys kept on rolling and clipped the TMZ bus right there.
Get this, some people who are watching the chase unfold on live television, they stopped and hugged the crooks, got a few selfies with them. No worries, we are going to chill out for a while. Anyway, police finally arresting them and they didn't seem to mind. All right. It's over. Typical day in Los Angeles.
SpaceX is set to resume deliveries to the International Space Station today, the first attempt since the rocket failure nine months ago. There's going to be 7,000 pounds of cargo on the Falcon 9 rocket including an inflatable module that can be used on deep-space missions. Lift off is scheduled for about 4:40 Eastern Time today.
And this, Dagen, I know you've been watching this, the Masters got underway yesterday. Jordan Spieth got off to a great start defending his title. Here are the leaders for you, they are Jordan Spieth, Danny Lee, and Shane Lowry.
The Masters was over for Ernie Else (ph) on the first hole. He lined up a 2-foot pot on the first hole and unbelievably took in six attempts to get the ball in the hole, agonizing to watch.
Resulted in a quintuple boogie 9 on that hole, 14 shots behind leader Jordan Spieth. Rough day for him. It's unexplainable. He could barely speak out for that. It was embarrassing.
BARTIROMO: My God. That was so sad.
MCDOWELL: Every time I watched him miss I'm like go, go. He was so close to the hole. It was the biggest choke I've ever seen in golf.
HILSENRATH: He had the yeps.
MCDOWELL: Like Charles Barkley, you know, has the famous --
BARTIROMO: He really does. He explains it like it's a baseball bat, I love you, Charles.
All right, a Fox Business exclusive right now, San Francisco Federal Reserve Chief John Williams making headlines, speaking with our own Peter Barnes, Williams said that he thinks the economy can withstand two more rate hikes this is year. Listen.
(BEGIN VIDEO CLIP)
JOHN WILLIAMS, SAN FRANCISCO FED PRESIDENT: If you look at the projections that my colleagues and I put out there, you see the number of two, three or four, four rate increases, I think again, it's going to depend on the data.
If the U.S. continues to add jobs at the phase we are seeing, if inflation continues to improve, then clearly we should be raising rates gradually in the way that people have written down projections.
PETER BARNES, FOX BUSINESS: Is it fair to say when you talked to reporters a couple of weeks ago you foresaw two or more rate increases this year? Do you stick with that?
WILLIAMS: That's my personal view of what I would expect to be appropriate policy.
(END VIDEO CLIP)
BARTIROMO: Now, let's not forget, Jon Hilsenrath, economics correspondent of the "Wall Street Journal," with us this morning, John Williams is coming from San Francisco where perhaps the economy may not look the same as a real heavy manufacturing town, where you see may see a different sentiments.
HILSENRATH: Williams is an interesting guy because he's used to be the research director for Janet Yellen. He's a little bit more bullish right now about the economy than Yellen is and last night, I was at an event with Janet Yellen, Ben Bernanke, Allen Greenspan and Paul Volker, the four living --
BARTIROMO: Former chairman, wow -- with the big shots.
HILSENRATH: We've talked about the risk of us going back into recession. Donald Trump has talked about this being a bubble economy. They all said, no, the economy is doing well and we are not going back to the recession. This is all four current and former fed chairs.
BARTIROMO: Maybe. That doesn't equate to me that things are really vibrant right now, right? We may very well be bumping the bottom for a while.
ORTAGUS: If you go to upstate New York, people are used to be able to get a high school education, get married and have a nice family. You've talked about this a lot, Dagen. People in New York, San Francisco, and Washington are in the bubble in their own minds if they don't realize that the real economy for real Americans in these small towns it's not what it was ten years ago.
HILSENRATH: This is not a great economy by any stretch. It's not creating a lot of job growth. The point they were making is it doesn't look like we are going back into a recession.
BARTIROMO: Why the meeting of the minds?
HILSENRATH: That's not to say the 2 percent growth is something that people should be excited about.
BARTIROMO: I'm wondering why the meeting of the minds? Because are they trying to come up with some sentiments change in terms of the Federal Reserve? You've talked about it a lot that the fed has been out of bullets and they've been criticized, Dagen.