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But the key here, Maria, is that the bank was firing employees all the way back in 2011 for this very -- what's called illegal activity by federal regulators.
If the bank knew in 2011 that its employees were conducting illegal activity, what did the bank do to stop it?
BARTIROMO: Right --
SHAPIRO: Why didn't they stop it and how high up does it go?
BARTIROMO: Yes, really good questions, Adam, thank you. We'll be following your report, Adam Shapiro there. Some free advice from the head of the FBI. Cheryl Casone has it right now, Cheryl.
CHERYL CASONE, FOX BUSINESS: Yes, this is crazy headlines this morning, Maria. FBI Director James Comey is recommending that everybody put a cover on their computers webcam. The idea prevents somebody from hacking into your computer and of course looking at you without your permission.
But it's because this is Mr. Comey, this is why we're paying attention here. He told a security conference that putting a cover over webcams is one of the "sensible things that everybody should be doing."
And he said that he places a piece of tape over his webcam. Moral of the story, better safe than sorry. But remember guys, Facebook CEO Mark Zuckerberg apparently agrees with Comey. Earlier this year, an image of Mark Zuckerberg's desk shows that he uses a piece of tape to cover the webcam on his MacBook Pro.
So, security, front and foremost again, back to you.
BARTIROMO: That is incredible, Cheryl. Who on the panel has tape on top of their webcam? The camera --
MURPHY: I do not.
BARTIROMO: You do Lenore?
HAWKINS: I will today --
CARTER: I do, I do.
BARTIROMO: I'm going to start doing it.
MURPHY: I can hear companies starting right now, you know, fantasy covers for webcams. You know, new businesses --
BARTIROMO: New business --
MURPHY: Being started, yes --
BARTIROMO: Yes --
MURPHY: It's scary, but you need to have it obviously.
BARTIROMO: Yes, and you know, you don't know how far it goes. I mean, do you need to do it on your phone too if your phone is sitting there. It's the same thing, wow --
MURPHY: Scary.
BARTIROMO: Still to come, the Bank of England leaves rates unchanged this morning, but will the Fed follow suit. What you need to know ahead of the opening bell this morning.
Then from Hillary's health to Ford's move to Mexico, GOP vice presidential nominee Mike Pence will join me to talk top issues surrounding the race to the White House, back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, we're watching markets this morning, particularly European markets as the Bank of England votes to leave interest rates unchanged. We're also signaling a rate cut could be on the way.
Of course here in the U.S., Futures are indicating a higher opening this morning, but it's been a volatile situation.
Investors are waiting next week's Federal Reserve meeting where the consensus now is that we will not see an increase in interest rates by the Fed next week.
The market is expected to open up about 75. I want to bring in Grant's Interest Rate Observer founder Jim Grant is with us this morning. And Jim, it's always a pleasure, good to see you.
JAMES GRANT, FOUNDER, GRANT'S INTEREST RATE OBSERVER: Lovely to see you, Maria.
BARTIROMO: Thank you so much. Were you surprised at what we heard out of the Bank of England --
GRANT: No --
BARTIROMO: Today?
GRANT: No --
BARTIROMO: What?
GRANT: Well, Brexit after all was not the Lehman moment at some of the great and the good head projected, and there was no need for urgency and no urgent action was taken.
But you know, I think it's helpful from time to time, look back and see what our masters at the central banks have achieved over the decades of manipulations and interventions.
Once upon a time, the pound sterling was worth one quarter of one ounce of gold. One quarter of one ounce. Today, we're -- almost today, the value in gold and the pound sterling -- now, I have to consult my notes is 0.000994 an ounce.
BARTIROMO: Wow --
GRANT: So, there's been, you know, a 99.99 percent devaluation of the pound in terms of gold since 1931. And people have become inured and desensitized to these constant interventions. To the manipulations of interest rates to the suppression of interest rates.
To the purchase of government bonds with money that didn't exist until our monetary (INAUDIBLE) from thin air. But that is the regime.
BARTIROMO: Yes --
GRANT: And as we talk about what the Fed will do next week --
BARTIROMO: Yes --
GRANT: If we talk about what the Bank of England has not done there, I think once in a while, step back and say what is this?
BARTIROMO: Yes --
GRANT: My friend Paul Isaacs(ph) calls it settled pseudoscience, the settled pseudoscience of central banking.
BARTIROMO: Well, you're right, and that's why people are saying, look, there's manipulation here.
GRANT: Right --
BARTIROMO: And you mentioned the Lehman Brothers moment, today, it was -- it's the 8-year anniversary --
GRANT: Eight-year anniversary --
BARTIROMO: Of when --
GRANT: Oh, doesn't time fly?
BARTIROMO: Lehman failed, right.
GRANT: So --
MURPHY: Jim, big fan of your work. And looking back 8 years now, I think the number is roughly 672 central bank cuts globally --
GRANT: Yes --
MURPHY: Since Lehman failed. Like --
BARTIROMO: Wow --
GRANT: Why do -- we need 673 or fewer because it's not working.
MURPHY: Right, well, that's kind of my point, so far -- but if you look at the equities market, especially here in the U.S., we're right --
GRANT: Yes --
MURPHY: Near all-time high. So, from that standpoint it has worked.
My question though is if at some point, it turns out the Fed or the Bank of Japan or the ECB somewhere, someone is just pushing on a string that it doesn't work, that they actually call them out on it, can that cause a -- I mean, what happens then --
GRANT: Well --
MURPHY: If that happens?
GRANT: People have been buying government bonds at negative rates of interest. Now, what this means to ordinary intelligent people is when you buy a new car and drive it out the lot, it instantly loses value, right?
That's a negative yielding bond. As soon as you own it, you're a loser. And never before in the history of interest rates which goes back 5,000 years have we had this particular setup in fixed income securities.
And people have forgotten I think or haven't realized just how radical, how unprecedented is this -- is this marketplace in government bonds.
MURPHY: Right --
HAWKINS: Well, today --
GRANT: So, it's not working in short, yes.
HAWKINS: And today, we have a market where I buy bonds for capital appreciation and I buy stocks for yield. I mean that's completely insane.
And yes, I mean, it's worked with stock prices because if we were to look at the actual keep the PE ratio constant with all of its monetary stimulus.
Given that we're in a corporate profits recession, the S&P today would actually be about 20 percent below where it is if we hadn't had all that monetary policy induced inflation and how much money you're willing to pay for every dollar of earnings.
But is that really something we want? Is that really contributing to a healthy economy just to have stock prices going up when we have a recession in capital expenditure on businesses?
We have a recession when it comes to corporate profits. We have a recession when it comes to CAPEX. We have a recession when it comes to durable goods.
MURPHY: I agree with you --
BARTIROMO: Yes --
MURPHY: Completely. And I think that my question for Jim would be, you know, can this send -- to Lenore's point, I think she's completely right and I think the market does need some sort of correction to get this excess out. But can this end well?
Can the Fed extract themselves --
GRANT: Well, one can't dogmatize about these things especially when something is unprecedented in 5,000 years of history.
But it seems to be the odds or against the happy ending. When there is -- the sheer -- you know, the nearest animation that central banks are stepping back.
There is a terrific rumbling in these markets as part(ph) has been manipulated to the upside. You know what? It seems to me our politics as much as is our economic pronouncements give you insight into the consequences of these asset manipulations.
You know, people feel as if it's unfair, as if -- as if Greenwich, Connecticut, shouldn't be the only place in the country that's doing great, right? So --
BARTIROMO: Well, what is your feeling on the backdrop right now of the economy? We are here about 5 minutes away from getting the retail sales number, giving us another window, a monthly window into the consumer. How would you characterize the backdrop right now?
GRANT: It's -- I think it continues to sleep-walk. The economy does, if one can invoke that, I think it's kind of -- it's kind of meh as they say in Brooklyn --
MURPHY: Yes --
(LAUGHTER)
GRANT: M-e-h, meaning not quite bad --
BARTIROMO: Yes --
GRANT: And certainly not good.
BARTIROMO: So, it doesn't give any --
GRANT: It's -- what our economy lacks is the characteristic American dynamism that I think people are searching for in our policies.
Now, I'm not sure they'll find them in our politics. But I think that's what people I think are searching for.
BARTIROMO: Jim, great to see you.
GRANT: Thank you.
BARTIROMO: Thanks so much for joining us, Jim Grant joining us there. Still to come, new polls show Donald Trump continues to close the gap on Hillary Clinton.
GOP vice presidential nominee Governor Mike Pence will join me with what the campaign needs to do to take the White House this November.
He's live, he's next, back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, good morning everybody, I'm Maria Bartiromo, it is Thursday, September 15th, here are your top stories 8:30 a.m. on the East Coast.
Back on the trail. Hillary Clinton gears up for her first event after nearly collapsing on Sunday. Donald Trump is preparing for a major economic speech in New York later today.
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Hillary sent me here to tell you, if you want to vote to make America great like it was 50 years ago, have at it, do it. But if she wins she is coming back for you because we all deserve a chance.
TRUMP: I am running to reverse these policies and to create a future of prosperity for all Americans. Three words: Jobs, jobs, jobs. And that begins with a new America first trade policy.
(END VIDEO CLIP)
BARTIROMO: The very latest on the race for the White House straight ahead. Markets this morning looking higher.
We are a minute away from the retail sales report for the month of August and the Dow Jones Industrial Average is expected to open up about 75 points.
Expectations for this number down one-tenth of a percent for retail sales in the month of August. As you can see, markets this morning poised to rally. We'll see what that number is in about 30 seconds.
In Europe, mixed performances, the Bank of England held rates steady this morning. However, the Bank of England did signal that a rate cut could be on the way for Britain.
In Asia overnight, markets were mixed, only the Nikkei in Japan and the Hang Seng in Hong Kong open for trading.
And as you see there, the performances were mixed. The future of footwear, we've got a look at sneakers made of wool and the buzz is building, we'll tell you why coming up.
But we kick this half hour right off with our top story and that is the race for the White House. Republican presidential nominee Donald Trump set to put the economy front and center this morning at a speech at the New York Economic Club today.
This coming as Trump slams Ford's latest announcement that it plans to move all of its small car manufacturing plants to Mexico. Watch.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENTIAL CANDIDATE: I think they made announcement today because they think I'm going to win and I'm going to stop it. You know, I have a way of stopping them. Basically, when they make their car and they think they're getting away with this. And they fire all their employees in the United States, they move to Mexico. When that car comes back across the border into our country that now comes in free, we're going to charge them a 35 percent tax. And you know what's going to happen they're never going to leave.
(END VIDEO CLIP)
BARTIROMO: Joining me right now is Republican vice-presidential nominee, Governor Mike Pence. Governor, good to see you.
MIKE PENCE, VICE-PRESIDENTIAL CANDIDATE: Thank you, Maria. Good to be here.
BARTIROMO: Thank you so much for joining us. Do you think that's right? Do you think at the end of the day should Donald Trump become president and you become vice-president, Ford scraps the plan?
PENCE: Well, look, I think Donald Trump has a plan to get this economy moving again, after 7.5 years that have stifled the American economy. I mean, the avalanche regulations, higher taxes, Obamacare, the war on coal is been crushing the vitality out of this economy. And we've seen the result. I mean we have the slowest economic recovery since the great depression. And Donald Trump on issues of trade, on lowering taxes on rolling back regulations, ending the war on coal, all of that represents a 180 degree turn from where Barack Obama has been, and where Hillary Clinton wants to take us. And so, I have every confidence you're going to see -- you're going to see manufacturing come roaring back in America. And we're going to make America more hospitable place to make cars and to build things, but we're also going to have smarter and tougher trade deals, that will cause American companies to think twice about making the kind of decisions that Ford announced yesterday.
BARTIROMO: So, what do you think is going to be really the crux or the most important part of Donald Trump's economic plan today? He's talked a lot -- he's come on this program talked about a 15 percent corporate tax rate.
PENCE: Right.
BARTIROMO: What kind of an impact will that have?
PENCE: I think it's going to have an enormous impact.
BARTIROMO: And is that the most important part of the plan?
PENCE: Well, I think -- I actually think every part of it is important. I think lowering marginal rates for working families, small businesses, ending death taxes once and for all, but recognizing that we have one of the highest business tax rates in the industrialized world, and we're literally our driving companies and driving capital out of this country. Donald Trump and I understand that, and lowering the corporate tax rate to 15 percent is going to make it possible for businesses to make decisions that keep jobs and opportunities here.
But, I actually think of equal importance to the tax reductions, and getting tougher on trade, and ending the war on cool, is rolling back this avalanche of regulation coming out one of Washington, D.C. You know, when Carrier announced that they were pulling up stakes and taking 1400 jobs from the state of Indiana, earlier this year. I had the folks in my office that run that company and they told me that part of it was that all of their competitors were already in Mexico. That's why we need to reform NAFTA and renegotiate it as Donald Trump has advocated. But the other part they said was that avalanche of regulations, the Department of Energy, in their business alone, Maria, there were 50 new rules in the last two years, rules come out about the size of a phonebook for a company.
BARTIROMO: Yeah.
PENCE: Fifty new rules that came out that only applied to their company and to their industry, that kind of red tape is stifling American jobs. Donald Trump is going to sign a moratorium on any new regulation the day he becomes president. And in addition to that, we're going to repeal all of the Obama executive orders that are stifling growth and creating a tremendous burden on American jobs.
BARTIROMO: Look, it's a direct compact. We've seen that there is basically a recession in terms of business spending right now. Businesses are not putting new money to work because of the regulatory hurdles that you're talking about. What would you say is the most onerous out there, is it Dodd-Frank, is it Obamacare? What's really the crux of the problem when it comes to regulation or is it just too many?
PENCE: Of course, there's too many it is. It is almost unaccountable to assess the amount of regulation that's poured out of this administration. I would say a couple of levels, I think for manufacturing -- excuse me, so strong in the state of Indiana. Regulations coming out of the Department of Energy, the EPA that are stifling growth and costing jobs. But on the small business level, Maria, Obamacare is a job killer. I've lost count of the number of small business owners in the state of Indiana, and as I travelled around this country as a candidate for vice president, who told me they will not hire that 50th employee, they stop at 49, and that's to avoid the additional strictures that come under Obamacare. We're going to repeal Obamacare in its entirety. We're going to bring forward the kind of health care reform Donald Trump will describe in the weeks ahead. That will build on free market principles, and on allowing states to innovate and reform Medicaid the way we started to do in Indiana.
BARTIROMO: So you have to walk a balance here, I mean, it happens to be that today is the 8-year anniversary of when Lehman brothers went bankrupt. And we know that partly the regulatory environment really did -- the pendulum swung so far because of what happened in 2008 crisis. How do you walk this balance of ensuring that you've got the right structure of regulations in place, but it's not overbearing and really strangling corporations and stopping them from investing?
PENCE: Well, number one, you asked that question. Instead of driving policies that promote the kind of consolidation in the banking industry that pretends that what happened -- that what happened during that collapse happened with all the financial institutions in the country. Frankly, it happened with just a handful of larger investment banks that got involved with all of these different boutique financial instruments.
BARTIROMO: Right.
PENCE: . your community bankers out there, your bankers out of the state of Indiana, they were solvent, they were strong, but Washington's answer always -- you know, I always like to say Washington does two things very well, nothing and overreact. Washington, D.C., overreacted with massive new regulations, that ultimately now is raising the cost of lending, the cost of being in financial services, is driving consolidation, we've got to pull it back, and we've got to ensure real vitality in our financial markets.
BARTIROMO: I want to ask you about the child care proposal and Ivanka Trump and the women next to him. But, first, you hit on something a moment ago and that was trade.
PENCE: Right.
BARTIROMO: I think one of the worries of people -- who worried and supporters of yourself and of Mr. Trump, people worry that the trade upset is going to create a lot of dysfunction. If we're redoing NAFTA, and we're redoing a deal with China, we're just redoing all these trade deals, does that create disruption at a time that we actually need stability.
PENCE: Well, look, Donald Trump and I are both -- are free traders. We support free trade. We understand that exports support jobs in the United States, imports lower the cost of goods for the American people. We recognize all of that. But the -- the simple truth is the 20 years on into NAFTA, it's been a much bigger winner for our neighbors to the south than it's been for the American worker, that announcement by Ford, the announcement by Carrier in Indiana. I was in Scranton, Pennsylvania, yesterday, the policies of this administration have been brutal to families in that community. And so, you know, what you're going to have in Donald Trump is someone who does just what he did in Mexico City. He's going to sit down with our partners, he's going to roll the sleeves up, and he's going to negotiate in a way that's tough, and fair, and make sure that our trade deals are a win for the American worker, and for American jobs.
BARTIROMO: So that means it may not include new tariffs then. Because that's what people are worried -- you put new tariffs in place, is that going to make products more expensive for the average consumer?
PENCE: Well, I think it's got to be -- you know, there's that old saying in business, things are going to be a win-win, right? And we've got a lot of trading relationships out there today where people have access to the most powerful economy on earth. And we have very limited access to their consumers and their economy. And, you know, China is chief among those. Countries with whom, we do business. So, I think Donald Trump is just a guy who's going to have the ability to sit down, find out what we can agree on, but then, drive a hard bargain and make the kind of deal that will put American workers first.
BARTIROMO: So, you were in Pennsylvania, yesterday. Donald Trump is in Pennsylvania earlier this week with his daughter Ivanka, going through with greater detail.
PENCE: Right.
BARTIROMO: . the child care plan. It includes tax deductions for child care costs, incentives for employers to provide child care at the workplace. I'll ask you about this because you're a conservative, you've got a great following, and support from the Republican Party and the conservative movement, but this is -- this is going to cost money, I mean, you know, we talked about $2.5 billion just for maternity leave. So, you're comfortable with this plan?
PENCE: I am. I am, because we're not talking about mandating anything on businesses, we're talking about creating opportunities for working families and working women in this country, to be able to bring a child into the world, and have the kind of leave that allows them to get a good start in their life, and then have the cost of child care covered while they're in the workplace. It's just an idea whose time has come using unemployment insurance resources to backstop that for businesses that don't currently offer those benefits. This is really -- this is really just about recognizing the important role that working mothers play.
BARTIROMO: Yeah. It was a great point.
PENCE: The working parents play in the workplace.
BARTIROMO: It was a great point that you made and that Donald Trump made that these rules haven't been changed.
PENCE: That's right.
BARTIROMO: Since -- I mean in decades.
PENCE: That's right.
BARTIROMO: . and now we're looking at an economy where many people -- most people have dual income families. The woman is out there working.
PENCE: That's right. And a lot of people fully deduct the cost of child care while they're both working. And, you know, my wife and I during many years that I served in congress, she was a schoolteacher, an art teacher, we're both working, kids were in school. So, you know, we're a family that has, you know, made our own way, and so many other American families have. And I think what you see in Donald Trump and the great vision of his daughter Ivanka on this, is such an outstanding executive in her own right and a mom, I think brings a real -- brings a real sense of compassion and understanding in this to this proceeds out of the man that's going to be our next president.
But, in terms of how you pay for it, you get this economy growing again, Maria, for heaven's sakes. There's a whole lot you can do in this country from -- including balancing our budget, if you get this economy growing at 3 or 4 percent or even more, Donald Trump's economic plan, again, you announced top of the show that he and I will be at the economic club here in New York, he'll be laying out that plan once again today. We really do believe, and many leading economists believe, just as it did with John F. Kennedy, lower marginal rates just as it did when Ronald Reagan lowered marginal rates, when Donald Trump does the same kinds of things, and adds tougher trade deals, ends the war on coal, rolls back the avalanche of regulation, we're going to see this economy come roaring back, and we're going to have the resources to meet the needs of this country.
BARTIROMO: By the way, it was impressive to see Donald up onstage with his daughter and all of those women. We had Marsha Blackburn on.
PENCE: Yeah.
BARTIROMO: . this week, right after she was with Donald Trump. Do you think that resonate with women, he's got to crack the woman's vote, is this the beginning of that?
PENCE: I think it is a continuation of a message in this campaign, that.
BARTIROMO: Are you seeing any evidence that more women are favoring Donald Trump.
PENCE: We are. I will tell you when, you know, I was in Scranton, Pennsylvania, yesterday campaigning with Donald Trump and for Donald Trump. There just as many women at our rallies as there are men. We're seeing tremendous enthusiasm. People are starting to hear this man, to hear his heart, to hear his mind. And also, as we go into the final phase of this campaign, I think people will take a closer look at his long history in business. You've known him a long time, Maria, this is a man who has recognized the enormous importance of women, and men in his organizations, and empowered them with great positions, and trusted them with great responsibility on an equal basis. And I think people are starting to sense that this is a man who wants to make America great again, for the women and men of this nation.
BARTIROMO: Obviously, the health issue has become front and center, Hillary Clinton and Donald Trump both releasing some medical records yesterday. But there are still questions that remain about both of the specifics of their health. Will you also be releasing your health records, by the way?
PENCE: Yes, we are. We've requested that information from our physician. I did a physical a couple months ago, and so we will be putting that information out. I think the American people have a right to know that information. I'm pleased that Donald Trump announced a few weeks ago that he would release his medical records whether or not our Democratic opponent did that. But, you know, when American people are going to ask someone to step into the role of the highest office in the land, leader of the free world, understanding that that person has the energy, and the health and the stamina to be able to do it. And I can tell you, campaigning with Donald Trump around the country over the last several months, he is up early, he is out late, he is energized by the opportunity to make this country great again. I have every confidence that he has the energy and the stamina to really turn this country around.
