NEIL: ALL RIGHT.
CHARLIE GASPARINO AND I WERE
JUST TALKING ABOUT THIS MARKET
NOW IN AND OUT OF SESSION LOWS.
WE'RE OFF THE WORST, WORST
LEVELS.
THIS IS ALL ON INTEREST RATES
BACKING UP HERE.
WHAT GOT THE ATTENTION ACROSS
THE 3.20% LEVEL ON 10-YEAR NOTE.
THAT GETS A LOT OF ATTENTION
SIMPLY BECAUSE THE 10-YEAR IS
ATTACHED TO SO MUCH, MORTGAGES,
HOME EQUITY LOANS.
A LOT OF CAR LOANS ARE ATTACHED
TO THIS.
EDUCATIONAL LOANS, WHEN THAT
RATE GOES UP A LOT OF THOSE
RATES GO UP, IF YOU HAVE A LOT
OF THOSE TYPE OF LOANS, YOU'RE
SEEING A LOT MORE MONEY YOU WILL
HAVE TO PUT OUT TO KEEP THEM
GOING.
CHARLIE GASPARINO ON THAT.
YOU AND I CAN OF COURSE REMEMBER
WHEN RATES WERE A LOT HIGHER,
BUT PERSPECTIVE IS EVERYTHING.
THIS WASN'T A WORRY YESTERDAY.
SUDDENLY TODAY.
>> THAT IS THE MARKETS, RIGHT?
NEIL: I'M GLAD YOU SAID THAT'S
THE MARKETS.
>> THEY GO UP AND DOWN.
BOND AND STOCK TRADERS, I HANG
OUT WITH A LOT OF BOND TRADERS
JUST BECAUSE OF THE MARKETS I
USED TO COVER.
THEY SAID STOCK TRADER ARES ARE
STUPID.
NEIL: WHY?
>> I COVERED MANY DIFFERENT BOND
MARKETS, I WAS BREAKING STORIES
FROM THE FINANCIAL CRISIS
BECAUSE I UNDERSTOOD THE
SHORT-TERM LENDING MARKET.
BOND TRADERS ARE SAYING STOCK
TRADERS ARE STUPID.
THEY DON'T DO ANY ANALYSIS.
THEY TRADE OFF HEADLINES.
THE HEADLINE, 3.2 ON THE 10-YEAR
WHICH IS GETTING HIGH.
NEIL: LIKE THE INITIAL REACTION
TO 3%.
>> A REASON TO TAKE PROFITS.
THIS BECOMES PROBLEMATIC LONG
TERM, IF YOU'RE AN INVESTOR YOU
SHOULD WATCH IT.
WE HAVE GDP PRINTS COMING UP.
WE HAVE DEFICIT NUMBERS COMING
UP.
IF WE DON'T HIT REGULARLY DECENT
GDP NUMBERS, 3 1/2, 4%, IF WE
DON'T KEEP THIS GOING, WE'LL
HAVE BUDGET DEFICITS GAP OUT.
WHEN BUDGET DEFICITS GAP OUT YOU
HAVE TO PAY HIGHER INTEREST
RATES TO ATTRACT PEOPLE TO BUY
YOUR DEBT.
THAT IS WHERE THE THING GETS
PROBLEMATIC.
IF THAT HAPPENS --
NEIL: WE HAVE $20 TRILLION IN
DEBT, EVEN A SLIGHT UPTICK --
>> IS A PROBLEM OF THE DEFICIT
IS A BIG THING.
IF YOU TALK TO MICK MULVANEY WHO
I REALLY LIKE, SMART GUY, BUDGET
DIRECTOR.
NEIL: HE IS REALLY SMART.
>> HE IS ONE OF THE BEST GUYS WE
HAVE IN THERE.
NEIL: NO-NONSENSE.
>> HE IS NUMBERS GUY BUT HE WILL
TELL YOU IF WE CAN MAINTAIN
3 1/2% GDP REGULARLY WE'LL PAY
DOWN THE DEFICIT.
HISTORY SHOWS THAT IF YOU --
NEIL: PAY DOWN THE DEFICIT A
LITTLE BIT, YOU GO A LONG WAY
FROM GETTING THE DEBT UNDER
CONTROL.
>> A REASONABLE AMOUNT OF DEBT
IS NOT WORST THING IN THE WORLD.
NEIL: WHAT IS BEYOND REASONABLE.
>> WHEN YOU TAKE DOWN THE
DEFICIT YOU PAY OFF THE DEBT.
THAT IS ONE OF THE GREAT THINGS
OF THE CLINTON YEARS, YOU TOOK
DOWN THE DEFICIT WE STARTED
PAYING OFF THE DEBT OF THE
THINGS BECOME MUCH MORE
MANAGEABLE.
THE PROBLEM IF YOU HAVE LOWER
ECONOMIC GROWTH AND DEFICITS,
THINGS GET REALLY SQUIRRELY.
NEIL: THAT IS WHAT YOU'RE
HANGING YOUR HAT ON.
OPTIMISTIC VIEW REFLECT AS
STRONG ECONOMY.
>> SO FAR.
NEIL: SEEING THIS IN THE STATS.
THIRD QUARTER EARNINGS ONCE
START GETTING THEM THEY WILL BE
VERY, VERY STRONG
YEAR-OVER-YEAR.
IN THAT EVERYTHING IS OKAY.
>> HERE IS WHERE YOU GOT TO
WORRY.
IT IS NOT EARNINGS SCENARIO.
THE TAX CUTS WHICH WAS MASSIVE
TAX CUTS, PARTICULARLY FOR
BUSINESSES, NOT A LOT ON
INDIVIDUALS --
NEIL: RIGHT.
>> IF IT DOESN'T CREATE SUPPLY
SIDE BANG FOR THE BUCK, IMPROVE
THE ECONOMY ENOUGH.
IF THE ECONOMY FALLS BACK INTO
SUBPAR GROWTH OR MEDIOCRE CRAPPY
STUFF IN OBAMA, WHICH WAS
COMBINATION OF MEDIOCRE AND
CRAPPY DEPENDING ON QUARTER --
NEIL: IT WASN'T A MELTDOWN BUT
MEDIOCRE.
>> YOU STILL NEED GOOD GDP
GROWTH.
NEIL: WILL THAT GET RID OF A LOT
OF THESE SINS OR PROBLEMS?
ANOTHER THING TOSSED AROUND GOOD
THING BAD THING, TIGHT LABOR
MARKET ALL OF SUDDEN IT WILL
STILL GET TIGHTER, WAGES WILL GO
UP MORE, INFLATION --
>> THAT IS UP LOUSY WAGE GROWTH
OVER THE LAST 10 YEARS.
NEIL: I LOOK AT THAT.
NOTHING WRONG WITH PEOPLE
GETTING A LITTLE BIT MORE IN
THEIR POCKETS.
>> YES, AS OUR ARGUMENT SHOWED
THE OTHER DAY AND LOOKED, WE
HAVEN'T HAD DECENT WAGE GROWTH
THERE.
>> IS WAGE GROWTH, I CORRECTED
YOU FROM YOUR IDIOCY.
>> 2.9 TO 2.7.
NEIL: FROM THE OBAMA YEARS.
>> IT NOISE THE AVERAGE.
WHERE IT IS AT LAST.
NEIL: YOU DISMISS FACTS THAT I
THROW AT YOU.
>> I'M TELLING YOU --
NEIL: TALK A LITTLE BIT ABOUT
THE ENVIRONMENT HERE AND
COMPANIES THAT MIGHT BE RIPE FOR
A FALL.
A LOT OF FINANCIAL ISSUES WERE
SOARING BASED ON THE IDEA THIS
WAS GOLDILOCKS TYPE OF
ENVIRONMENT FOR THEM.
IS IT STILL?
>> BANKS, USUALLY WHEN YOU HAVE
COLLAPSES LIKE THIS, MOST BIG
COLLAPSES HAPPEN IN THE
FINANCIAL SECTOR.
IF IT IS NOT, I DON'T SEE A LOT
OF THAT.
I DON'T SEE A LOT OF FROTH ON
TECH FIRST.
NEIL: IS BERNIE SANDERS GOING
AFTER THE BANKS AND BIG BANKS?
>> WANTS TO BREAK THEM UP.
NEIL: WANTS TO BREAK THEM UP.
>> ESSENTIALLY WANTS TO BRING
BACK GLASS-STIEGEL.
NO INVESTMENT BANKING.
NEIL: HE SAYS COULD HAPPEN AGAIN
IF WE'RE NOT CAREFUL?
>> IT COULD.
I AGREE GLASS-STEAGALL WAS A
COMMON SENSE --
NEIL: THAT SEPARATED INVESTMENT
BANK FROM TRADITIONAL BANKS.
>> BECAUSE YOU DON'T WANT THE
INVESTMENT BANKS, BECAUSE
TRADITIONAL BANKS ARE INSURED.
YOU HAVE DEPOSITS THERE, RIGHT?
YOU DON'T WANT MISTAKE ON
INVESTMENT BANK WHICH --
NEIL: HOW WOULD YOU BREAK THEM
UP?
BANK OF AMERICA SEPARATED FROM
MERRILL LYNCH, IS THAT WHAT HE
IS SAYING.
>> THAT COULD BE ONE WAY.
IT IS HARD BECAUSE A LOT OF
BANKS --
NEIL: THERE IS NOISE THAT HE IS
GETTING --
>> JOHN McCAIN WAS SUPPORTING
THIS.
IT HAS SOME SUPPORT IN THE
REPUBLICAN PARTY.
NEIL: THAT IS NOISE THAT COULD
CONTRIBUTE TO A SELLOFF IF IT
GAINS MUSTER.
>> IF THAT GAINS MUSTER BANK
STOCKS WOULD TRADE OFF,
DEFINITELY, THERE IS NO DOUBT
ABOUT THAT.
AND THEN PEOPLE --
NEIL: WOULD THE JUDGE HAVE
ANYTHING EFFECT -- I'M
PING-PONGING I WANT ALL THE
BREAKING NEWS.
>> THAT'S FINE.
THE JUDGE WOULD HAVE IMPACT IF
THE BANKS CHOSE TO BRING IT TO
THE SUPREME COURT.
NEIL: IF THE JUDGE MAKES IT TO
THE SUPREME COURT --
>> LOOK AT IT THIS WAY --
NEIL: EXPECTATION HE WILL,
RIGHT?
>> THAT'S WHAT I'M HEARING.
I DON'T KNOW WHAT'S IN THE MINDS
OF THESE, SOME OF THESE --
NEIL: HE DIDN'T, SOMEHOW SHOT
DOWN, WOULD THE MARKETS BE
STUNNED?
>> THE MARKET WAS HAVE AN ISSUE.
INVESTORS WOULD HAVE AN ISSUE
BECAUSE -- YOU KNOW HERE'S THE
THING WITH THE MARKETS.
THEY WILL LOOK AT THE NEXT ONE
IN LINE.
IF THAT NEXT ONE IN LINE GETS
APPROVED QUICKLY, IT IS NOT
GOING TO HAVE IMPACT.
THAT NEXT ONE IN LINE IS, I
CAN'T HER NAME, SHE IS PROBABLY
MORE CONSERVATIVE THAN
KAVANAUGH.
SHE IS MORE CONSERVATIVE ON
ROE V. WADE.
NEIL: THE NOTRE DAME PROFESSOR.
>> IF DEMOCRATS WERE SMART, WHAT
THEY'RE GOING TO GET -- IF THEY
THINK REPUBLICANS WIN THE
SENATE, KEEP THE SENATE, THEY
SHOULD APPROVE THIS GUY JUST ON
POLITICS THE BECAUSE THEY WILL
GET SOMEONE A LOT WORSE FROM
THEIR STANDPOINT.
NEIL: REAL QUICK, HOUSE, SENATE,
WHAT IS THE FORTUNE, WHAT DOES
IT LOOK LIKE?
>> BEFORE THIS KAVANAUGH THING I
THOUGHT THEY HAD, DEMS HAD A
CHANCE WINNING HOUSE AND SENATE.
I JUST WONDER IF THEY WENT A
STEP TOO FAR WITH ALL THESE SORT
OF, YOU KNOW THESE ALLEGATIONS
ARE COMING OUT OF LIKE NOWHERE.
NEIL: YEAH.
>> THERE IS NOT A LOT OF MEAT TO
THE BONE.
WHO KNOWS HOW MUCH TRUMP
ENERGIZED HIS BASE.
HE HAS, SOME PEOPLE AT
"NEW YORK TIMES," BRETT STEPHENS
WHO HATES TRUMP SAYING, THAT
BLEW ME AWAY WHEN I SAW THAT.
NEIL: NOT EVERYONE THE AT