One Hour Until Indiana Polls Close; Trump Only Candidate With a Chance to Lock Down Enough Delegates Prior to Convention; Markets Concerned

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Chance to Lock Down Enough Delegates Prior to Convention; Markets Concerned

on Slowing Global Growth - Part 2>

Charlie Gasparino, Adam Shapiro, Ben Stein, Gary B. Smith >

Economy; Coal; Facebook; Google; Apple; Dow; S&P500; NASDAQ >

GASPARINO: Right.

ASMAN: If it's Donald Trump they are going to want to dump on Trump because Janet Yellen wants Hillary to win.

BOLTON: All right. So, Charlie, bottom line, with rates so low, where do you get paid? So, what makes me nervous for what it's worth about rates being so low, is that it pushes people into riskier assets.

GASPARINO: Absolutely right.

BOLTON: That's why if you can't get paid from bonds you can't get paid even on a very simple level at your save -- at the bank savings account.

ASMAN: You're getting killed.

BOLTON: Then you start looking for more aggressive things that maybe you understand and maybe you don't.

GASPARINO: Mortgage-backed securities?

BOLTON: There you go.

GASPARINO: Listen, it is the double-edged sword here. Our stocks, I mean, for example, stocks, you know, should we be, should you be investing in Apple right now is a big question. Is Apple overvalued even as it keeps going out?

BOLTON: No, at 95.

GASPARINO: Because this, I know, you probably own. So you own some?

BOLTON: I actually don't.

(LAUGHTER)

GASPARINO: But that was, I was making a joke.

BOLTON: No, I wish I did. I wish I did.

GASPARINO: But the real question is, do you buy equities right now in this environment? I would just say this. If Janet Yellen is not raising rates.

ASMAN: I understand what you're saying.

GASPARINO: What is the rationale that we're going to?

(CROSSTALK)

ASMAN: That is a trade. What you laid out before was exactly Janet Yellen's point. Janet Yellen said eventually people are going to have to put their money in stocks or riskier assets and that is going to help the economy.

GASPARINO: Right.

ASMAN: But it hasn't happened.

(CROSSTALK)

ASMAN: As Charlie said at the beginning, people are save money in cash. People are stuffing their mattresses.

GASPARINO: You just made the argument for Muni Bonds. I'm not saying Puerto Rican Muni Bonds.

(LAUGHTER)

GASPARINO: I'm just saying, I go, and if I have a few bucks, I go and buy a New York State Municipal Bond. I don't think the state's going bankrupt just yet.

ASMAN: Well, if they bail out Puerto Rico, maybe Illinois is next. So Muni Bonds could go bad.

(CROSSTALK)

GASPARINO: New York State, I'm just saying, you get the income, it is tax- free.

BOLTON: You're accountant is happy. They will love that.

GASPARINO: You don't have this theological conversation about equities, right?

BOLTON: All right. We're going to bring it back down to earth. Charlie Gasparino, David Asman, staying with me. We just have a quick break to take. What you need to know, stocks sold off across the board as did oil. We're back in just a minute.

(COMMERCIAL BREAK)

BOLTON: Stocks down across the board. Oil fell for the third straight session. I want to bring in my colleague, Adam Shapiro. He has been following the coal industry. And, Adam, this is obviously a huge topic for politicians.

ADAM SHAPIRO, FOX BUSINESS: Right.

BOLTON: Hillary Clinton famously flip-flopping on her stance in the last 48 hours, so what is catching your attention?

SHAPIRO: The fact that the cost of generating electricity is still somewhat cheaper now if use natural gas than goal. Look, coal is going to be around for a while, but the latest numbers from the EIA actually show that in 2016, we are only to mine about 752 million short tons of coal in the United States. To put that in perspective, two years ago, it was a billion tons. So we dropped close to 250 million tons in just two years because natural gas has surpassed coal. Now, the costs of generating electricity, here is where the real savings are taking place with natural gas, it costs roughly $1.73 for every million BTU when you're burning natural gas, coal is $2.16. So there is an economic reason why people shift away from coal towards natural gas.

The problem that politicians will not address, you won't hear Hillary Clinton talk about this, is that the EPA just announced that we leaked more methane gas into the atmosphere than we ever have before. That's natural gas. And methane gases are far worse greenhouse gas than carbon dioxide, which is the byproduct of burning coal. So we are putting coal out of business, that's what Hillary Clinton wants to do, and returning to a fuel source, which is a far worse green house gas. Go figure.

BOLTON: All right, Adam. Thank you as always, joining us there on the coal industry. And just as a quick reminder on a related theme, oil closing lower for the third straight day. I'm rejoined by Charlie Gasparino and David Asman. We were speaking earlier about the interest rates. So I feel like I should say where is the money going, is China's weakening (ph) expected, Europe's weakening (ph) expected, we are holding steady at best. But I was looking at the 10-year, 1.8 percent. So it just seems as if everybody is a little bit panicky, looking for safety. I want to play the sound bite From Warren Buffet on interest rates. I want to get both of your takes on it.

(BEGIN VIDEO CLIP)

WARREN BUFFET, BUSINESS MAGNATE: Hillary is going to get the nomination. And as it looks to me, Trump is going to get the nomination, too. But Bernie Sanders is short of 3 percent or something like that, and attracted millions and millions of particularly young people.

UNIDENTIFIED FEMALE: Would you if you were running the fed today tighten rates again in June?

BUFFET: I probably wouldn't.

(END VIDEO CLIP)

BOLTON: On the phone with me now, economist Ben Stein. I'm glad you could join us.

BEN STEIN, ECONOMIST: I'm honored to be here. Thank you.

BOLTON: So you just heard Warren Buffet whether you agree or disagree, although it is hard to find people who disagree with Warren Buffet, but his take on interest rates, what do you do, how do you see U.S. economy right now?

STEIN: Well, I think the economy is extremely strong. I think this is the strongest developed economy in the world by a long, long way. And I don't think there is need to change interest rates one way or another. There is no sign of inflation or a bubble in any particular commodity except perhaps the only commodity that there may be a bubble is stocks, and it's not exactly a commodity.

BOLTON: So, Ben, I don't want to interrupt you, but when you say the U.S. economy is strong, do you think the traders on the floor are saying we're the cleanest dirty shirt in the closet or do you think we're fundamentally strong? Are we strong just because we're better than maybe some weaker players right now?

STEIN: We are very, very strong. We have below 5 percent unemployment. Corporate profits are a little weaker this quarter than they were in recently past quarters. But the economy is very, very strong. I have to say Mr. Obama gave an interview to the New York Times in which he bragged about how well he handled the recession. And I have to say, although I'm not a fan of Mr. Obama, I think he's right. His administration is doing better than previous administrations. I think he deserves some credit for it. I'm not a fan of his, but they are doing well. The economy is doing well. Where is the money going? Well, the money is just circulating all around the world. It doesn't have to go any particular place. It's circulating around and around and around.

BOLTON: So, Ben, let me ask you to play devil's advocate and I respect your objectivity and admire it. But as far as labor market participation rate, it's still at the lowest since the 1970s, meaning some people have given up looking for jobs.

(CROSSTALK)

BOLTON: I'm not even finished, hold on. One other point about wages, even for people who have jobs, they haven't gotten raises. If you look at adjusted for inflation, people really don't have any muscle like extra earnings muscle.

(CROSSTALK)

BOLTON: I just wanted to point out those two stats.

STEIN: We have enough extra muscle to keep the economy running at a very high level. We have enough extra money for people if you include government benefits, they are living at a much higher standard of life than they were 20 years ago. It's true we have a lot of people not engaged in labor that are labor age. The government -- this is a giant government mistake. The government bribes people not to work. They give lavish welfare benefits to people who don't work.

BOLTON: Oh, Ben.

(CROSSTALK)

ASMAN: Can I just say one thing? Ben Stein and I used to work together at the journal. I love Ben Stein. His father was one of the most brilliant economists ever. But, Ben, 0.5 percent is the growth of the U.S. economy in the last quarter. Over the entire Obama years, it has been 1.7 percent. Granted that we came out of a great recession, but so did Ronald Reagan, his average GDP growth was 3.5 percent during his term. How can you possibly say it's a strong economy?

STEIN: Well, it's not as strong as it was under Reagan.

(CROSSTALK)

ASMAN: Half as strong.

(CROSSTALK)

GASPARINO: My family lives in Italy. To compare us to them is like.

(CROSSTALK)

GASPARINO: Northern Italy is pretty developed. Southern Italy is kind of a hole.

(CROSSTALK)

BOLTON: Charlie is going to get kicked out of all kind of restaurants.

(LAUGHTER)

STEIN: All the countries I mentioned are considered strong advanced western countries. We don't have a strong growth rate. (Inaudible). We have a large number of people joining labor force age who have no particular skills, no particular training. We have a very poor attitude about work ethic and that's a problem. How Mr. Obama addresses that, I don't know.

GASPARINO: That's exactly the reason why we have had a slow -- under President Obama, not all of this is his fault. Under President Obama, we have had the slowest economic growth ever since the 1930s.

(CROSSTALK)

GASPARINO: This is the on recession in my lifetime, Ben, that we have come out of where instead of lowering tax rates and lowering regulations to stimulate the economy, we have done the exact opposite.

(TECHNICAL DIFFICULTY)

STEIN: Wait a second. There are way too many regulations, I totally agree with that. In the carbon area, they are waging regulations.

(CROSSTALK)

STEIN: There is no conclusive data that lowering taxes stimulates the economy.

ASMAN: Lowering tax rates, you didn't do anything in the 1980s.

(CROSSTALK)

STEIN: In 1980s, Mr. Reagan lowered taxes and for the next six and a half years, he had substantial tax increases every year.

(CROSSTALK)

BOLTON: All right. I have got to break up the fight.

ASMAN: He just wants me to pay higher taxes.

(CROSSTALK)

BOLTON: Ben, you're going to get a table at any Italian restaurant he likes. Charlie, who is not.

(LAUGHTER)

BOLTON: We have a quick break. We are back in just two minutes.

(COMMERCIAL BREAK)

BOLTON: We are back. Stocks down across the world. Asia sold off, as did Europe. That's how we finished here, the Dow, the S&P500 and the NASDAQ lower. One exception today, Apple, if you take a look, up better than 1 percent. But just keep in mind, it had an 8-day losing streak that it hadn't seen the equivalent since 1998. And this of course was after Apple said in its last earnings released that it reported it first quarter of revenue contraction. With me now, Gary B. Smith, he is joining me. Are you on the phone or are you in person? There you are, Gary. Great to see you.

GARY B. SMITH, KADINA GROUP FOUNDER: Nice to see you, Deirdre.

(CROSSTALK)

BOLTON: Despite my colleagues being envious of your location, I want to get down to some brass tacks here. So is Apple a buy or sell at this point, 95 and change?

SMITH: Well, you know, that question, Deirdre, always depends on your time frame. I think for Apple, the kind of the go-go days are over. You saw that in the recent report they can't even kind of keep up you know iPhone sales, and iPad sales, they are kind of flat. It reminds me of kind of IBM you know post-60s. It was a great company and they still do good things. But it was kind of in the mature stage. If you have a long time frame, yeah, I think Apple is great. I think there are better places I will park my money. But I'm a little bit shorter. I do think the stocks should go lower.

BOLTON: All right, Gary, you can say you have better places to park your money. I'm not saying where. What's better?

SMITH: I still think Google. If you want that sector, if you will, I think Google is a much better -- they are still doing innovative things. They are still growing as a company. They still got their hands on a lot of different things. I just haven't seen that for Apple. What else are they doing? Maybe they have some product announcements coming down the road and they will wow us.

(CROSSTALK)

BOLTON: Are you calling it a monopoly the same way that is the Microsoft in the year 2000 and that essentially bothered Microsoft for the next decade?

SMITH: God bless, I like monopolies.

(CROSSTALK)

SMITH: I wish we had more Google's and Comcast, and companies like that. They are great places to have your money right now.

GASPARINO: That 1998 number kind of scares me. Maybe, Gary, you can help me out with this, 1998 is that when Jobs comes back, was it 98?

SMITH: That sounds about right.

GASPARINO: John comes back, and the great innovator starts innovating. He assembles a team around him. Tim Cook was a key member of that team. But Jobs actually said in that book, Tim Cook has never been a product guy. And I think the issue always was Tim Cook is a brilliant operations guy.

(CROSSTALK)

BOLTON: And the Apple watch is a flop.

(CROSSTALK)

ASMAN: Google speaks to a point that Ben Stein and I are talking about, which is the cost of regulation, which is just extraordinary. You think all the regulators in the world now. Not only have we had huge increase regulations in the United States, but Europe now is controlled by these international regulators who not only control individual countries, but control all of Europe and very often have an influence of what happens in Asia as well. So the cost of regulations and as you mentioned, Google is in the cross hairs of some of these European regulations.

(CROSSTALK)

SMITH: The point here for an investor, if you think where am I going to put my money, which tech stock firm, Google or Apple? And Gary can back me up or not back me up on this. Apple is not innovating right now. Google faces the same sort of regulatory pressures and is constantly figuring out how to make a dollar out of a dime.

ASMAN: How about Facebook?

(CROSSTALK)

SMITH: I actually like Facebook. I soured on them a few years ago. But I think a lot of millennials have withdrawn from Facebook, but it is our crowd here that are more into Facebook.

(CROSSTALK)

SMITH: And I think the need for connection amongst us old farts if you will is growing and growing.

(CROSSTALK)

GASPARINO: Don't put me in that category.

(LAUGHTER)

BOLTON: All right. So, Gary, stay with us. We are just going to take a quick break. I'm back with Gary B. Smith, Charlie Gasparino, and David Asman. We are talking tech with Google, Facebook and Apple, whether they might be a good investment picks for you or not. We'll be back in just a minute.

(COMMERCIAL BREAK)

BOLTON: We are back. With markets down across the board, a quick recap here, the Dow, S&P500, and the NASDAQ, the NASDAQ down the most. We have been talking tech. I'm joined in the studio by Charlie Gasparino and David Asman. OK, Google, Facebook, Apple, if you had to buy one, what will it be?

GASPARINO: In a purely theoretical sense, because I don't give stock recommendations or put a dollar to put in one of those. I like Google because they are constantly innovating, and Apple is in an end of innovation right now.

ASMAN: I have to say Facebook just because they have one of those leaders, Zuckerberg, who doing exactly what Amazon is doing.

(CROSSTALK)

ASMAN: Consistently changing, evolving and providing new products and interfaces, their company with other companies.

BOLTON: OK. You don't feel less secure. When you talk about Google and Facebook, it's more about mindshare and Apple is more gadgets.

GASPARINO: Right, right. And Facebook, you take about security, Facebook is so far ahead of anything, anybody, even the government could possibly do.

(CROSSTALK)

ASMAN: It is so contingent, and Gary will back me up on this, on innovation because of their closed system.

(CROSSTALK)

ASMAN: They got to get more products and Steve Jobs was obviously a huge loss.

BOLTON: He was indeed. OK. We're going to continue the conversation after a quick break. Actually, we might even be letting you go. So I should say thank you for the time.

(CROSSTALK)

BOLTON: We are back in just 2.

(COMMERCIAL BREAK)

BOLTON: A quick recap on the day. You will see red on your screen. The Dow, S&P500, and the NASDAQ, all lower across the board. This of course followed a sell-off in Asia and Europe. The NASDAQ in percentage point terms is down most at 1 percent. We have been talking about Google, about Facebook, and about Apple. So Apple had a rebound, but just keep in mind that was after an eight-day winning or rather losing streak. Apple in fact rebounding today, closing up better than 1 percent. So that is what is going on in the markets. Worth noting as well that oil closed lower for the third straight session, so many people who watch commodities of course focusing in on that price continuing to drop.

We do want to let you know that Fox Business Indiana primary coverage starts very soon. Neil Cavuto is with you in just 10 seconds.

END

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