tv Cavuto Coast to Coast FOX Business July 7, 2022 12:00pm-2:00pm EDT
okay? before we wrap it all up, don't forget to send in your "friday feedback" questions, comments, critiques, thal, we want it all. send in the fan fried videos, jr. you are from. you have to say you're watching "varney & company." do that, if you're not careful you're on tv. my is up, time now for the youthful neil cavuto. it is yours. neil: stewart, your illustrious producer never passed along to me it was your birthday. i feel bad. i look at all the great people commemorating you. it's a big day. it is a big day. i'm a little angry at her. i want to relay to you how happy i understand for you. happy birthday! hope you have a great day!
no? stewart, other -- stuart, look at all the change you've seen. the dawn of the automobile, invention of the wheel itself. collapse of the roman empire. collapse of partly the british empire. you've timed it impeccably with boris johnson resigning today. stuart: yes i did. neil: it is a remarkable life. i was thinking, stuart, way pack, you and i go back decades of course, we used to cover similar events. you have not aged. unfortunately i have. so i want you to have many, many more years. i mean, i got to tell you, stuart, i've been watching a lot of the tribute and all, it kind of had like a funeral approach to it and worried me a little bit. so i'm just saying about susana, used to work with me, look over your shoulder. usually that what happens right before they have a switcheroo. all right. we did the birthday thing. be on guard. all i'm saying. happy birthday, seriously.
stuart: that was fantastic, neil. you went on for one minute and 3seconds. that is pretty good ad-libbing like that. that is not bad at all. you made up for not welcoming me. neil: i caught it once or chance. you are loved, my friend. we go back many, many decades through big changes, presidencies. you go back to king george for god's sake. look at changes we see, they always come to us, stuart, what was it like? you can go back to the civil war, here is what it was like, son. stuart: absolutely. neil: saying that to a woman, which is interesting. have a great time. you have a beautiful family. beautiful day. make it very special. they tried to do something like this for me, stuart. they couldn't pick up any fans. it was embarrassing but i finally told bret baier, please something, anything. have a great one. stuart: have a great show. thank you, neil. neil: susan narcs looking at you looking at you. we have a lot on special day.
ancillary to stuart's birthday of course the big shakeup in his home country of great britain where we have now prime minister, about to be a former prime minister, he has to hang on a while though. the latest is, maybe as late as october. you're looking at 10 downing street which is an iconic symbol pretty much to the free world here. going greg palkot, out of london. what happens now? reporter: neil, end of an era sort of. conservative party leader uk prime minister boris johnson stepping down today, stepping down as the leader which should lead to his departure as pm. johnson broke the news you're right in front of the very famous 10 downing street office and home with family and staff in attendance. essentially 1/3 of his government, cabinet members, junior officials quitting last couple days in protest, demanding resignation, mostly loss of trust in the man
following a variety of scandals, misstatements, some say lies. here is a bit more what he had to say of the herd of conservative party members that drove him from office. >> the herd instinct. when the herd moves it moves and my friends in politics no one is remotely indispensable. reporter: no one is indispensable, neil. what happens in the uk of course matters to the u.s., especially strategically. johnson and the uk along with the u.s. have been strong backers of ukraine in its fight against russia. johnson went out of his way today to say that that support would continue even calling ukrainian president zelenskyy by phone to say that. what happens next, neil, in the parliamentary democracy a tad complicated. conservatives pick a new leader, who would then become prime minister that could take a couple of months. then there might be new pressure to have a general election to get a broader mandate, more
time, all the while the uk just like the u.s. facing a host of burning domestic issues. neil, there is no clear-cut replacement in the wings. foreign minister, defense minister, treasury minister talked about. because of that boris says he wants to stick around until it is all resolved but others like the opposition labour party, even people inside of his conservative it party say no, you should get out now. we'll stick in a caretaker prime minister. we'll see what happens next. back to you. neil: you know, greg, i'm curious if they force an election, irony for the tories who turned on the prime minister, the leader of their party they could lose, labour could win a whole different game, right? reporter: that's the real danger in fact. the idea that we could force in a no confidence vote against an exiting boris johnson might just open the door for a labour victory. that is another thing that
johnson always the political player right to the very end is playing with and some of the conservative party worried about too. no, there is no successor. there is no massive mandate for the conservative party even though they did very well in the 2019 election. a bit of a mess but that's politics, neil. neil: greg, thank you very much for that. by the way there is no truth to these rumors that stuart varney has been recruited as an interim prime minister on his birthday here. not having it but i will keep you abreast of that. also thomas dillon, former boris johnson advisor. thomas, great seeing you. what happened here? he dodged many a bullet and a few weeks ago what looked like a dicey you know, vote of confidence. so he survives that but he kept compounding the problems by creating more problems, didn't he? >> yeah. the government really lost their way in recent months and i think one of the big problems that we're hearing now is that they
have really lost their position as a conservative government. they got confused. they weren't sure which side of the aisle they were on, on many issues. he was elected as the brexit prime minister but we've still yet to see many of those benefits come through that were promised. you know, obviously the whole covid situation interrupt ad lot of what he was planning on doing. you know, that has done everyone in but there was just scandal after scandal from them having the parties while we were all in lockdown they were having big parties in downing street which doesn't play very well at all with anyone. so you know, he is just had sort of issue after issue. they have just tried to squirm their way out of things. it is finally come down that he no longer has the support. i think it was 43 resignations in final, the most a prime minister ever had in history. it was a pretty dire situation i'm afraid. neil: he had dodged that bullet though with the parties and everything else, or so i thought and then he comes along and
appoints someone to a ministerial position who no one should have appointed to, knowing full well, all the problems that he had, if he was trying to spite that. just curious why? >> you know, that whole situation with the colleague is rather complicated but he just made a few mistakes. you know, what it tended to be when the members were going out to their districts and talking to people in the street they real -- realized they would lose their jobs f an election comes now, there will be a large amount of conservative politicians losing their seats. that was the moment they realized we have to fix something. so they really just pulled out of their support of him and now we're going to see how long he can stay. i mean former prime minister sir john major come out says he didn't want him to stay as interim. he should go now. he has caused too much damage to the party and polls are showing
that. we'll see whether he actually stays in place or we'll have a caretaker stand in in the meantime. neil: you know has had nine lives of a cat and probably on his nine 1/2 so i understand that but he is a crafty and very savvy politician. he has risen from the political grave more than a number of times. can you see him reemerging again? >> i don't think so. i think unfortunately it is the end for boris johnson. he has a legacy. he was the brexit prime minister. neil: that's right. >> he did get you there the final brexit deal. we haven't yet to reap the benefits we were all hoping for with a free britain but he got it through. he got past the impasse, something they said he could never do. he does have a legacy but i'm afraid i think it is the end of the road for dear boris. neil: we'll watch closely. thomas, thank you very, very much. the backdrop of this was an economy heading south because prices were heading north very
rapidly in great britain. that is played out across the globe but particularly pronounced there. clete william, joins us former deputy assistant presidential economics, in the last administration, trump administration. clete, good to have you. i always wonder when politicians get hit with scandal or worse. the economic backdrop is crucial. for richard nixon watergate was horrific enough but runaway inflation and oil embargo. you could argue for presidents like bill clinton, quite the opposite. the scandal with monica lewinsky and the impeachment trial, the backdrop for that was a very strong economy, very strong market. i wonder if the situation in england were better, you know, the economy were better, this inflationary problem, everything that has come along with it weren't as bad, would he, could he have survived this? >> i think that is an excellent
point, neil. i think what ends up happening is when the economy is good you have a larger margin for error. when the economy is bad, well, there is not much margin for error. i think that is what happened to boris johnson this week. scandals he is dealing with are really nothing new. nine 1/2 lives as you called it. so that is not what is different. i think what is different now it happened at a time when you're dealing with some of these deep-seeded economic problems. neil: i'm just wondering, what happens now for europe? i mean you know, boris johnson was very fond of saying we are the economic engine of europe. i'm sure germany winces at that but nevertheless he has in his roughly three years in power which isn't a long time, made some huge, revolutionary changes in britain and now the big question is, where does europe go without boris johnson? >> right.
well, i think short term impact is probably somewhat limited. you were talking about earlier on the program, it will be some time before we know who the successor is going to be, what that person's policies are going to be. hopefully someone in the tory party who follows similar policies but that remains to be seen but i think the longer term implications are going to be interesting and in particular whether it can revitalize the u.s.-uk economic relationship. i don't think it is a secret that joe biden and boris johnson weren't the best of friends. they didn't have the same kind of positive relationship we saw in the trump administration. that contributed to the demise of the talks on the trade agreement and i'm hopeful maybe, the biden administration gives someone who is not so closely tied to ex-about it a different look -- brexit, a different look a fairer shake, improve the relationship and help their
economy. neil: that is very well-put. i'm curious though, i know boris johnson was a tory member a conservative politician. he led as such as london mayor but he seemed to have morphed over the last two years in particular with tax hikes a few more regulations, government health, not at all like a conservative politician. now it kept him popular, minus the covid experience and these revelations but did he change and did that kind of hurt him among femme low tory members and kind tighten the screws all the more? >> probably in certain factions of the party that was significant but i do want to give him a little bit of a, not a pass but he was doing dealing with covid which was very challenging for a lot of us. the fiscal policy there i think ultimately is what is contributed to some of the
inflation that they're dealing with and so you know, that is going to be something that is maybe a new leader can take in a different direction but what, he had a challenging set of circumstances. i think he handle didded it pretty well. i think the sore spot i mentioned relationship with the u.s. under president biden and hopefully the biden administration will be a little more welcoming to someone not so closely affiliated with brexit. i don't blame boris for that but what it is what it is. neil: he had a good relationship, certainly much better, boris johnson, with donald trump. it helps when competing world leaders are on the same political page. rarely happens. with maggie thatcher and ronald reagan that comes back to mind, they were in sync. i am wondering if they call an election here because tories cannot find a replacement, all bets are off, right? it is possible the tories could lose that, right?
>> i think that's right and i witnessed first-hand the relationship between donald trump and boris johnson and it was a very positive one and it was a productive one. neil: right. >> and that doesn't exist today. you know from, from the perspective of the biden administration, maybe they would like to see the labour party in power there but historically the labour party has not been as pro-american. there are some downsize too. as you alluded to this is a very open question in terms what happens next. neil: i'm going to miss the irreference, the fact that he didn't fit the mold between the messy hair, extemporaneous but brilliant off-the-cuff remarks. that is something you don't see among global leaders, let alone politicians in general of the, so that part i think i will miss. how about you? >> for sure. i thought he was very charismatic and the interesting thing is, even though he had
this persona, when you actually saw him debate the substance he was excellent. neil: absolutely. >> that view he gave to the public in some settings. neil: that is well-put. clete willem waiting to see what the tories do next. a lot are leery of boris johnson what he might plot if he remains in office as a caretaker they want him out of there. you have to find the interim person to take over or they rapidly agree on someone they immediately move. with a parliamentary system there are things you can do, things you can't do. there are a lot of benefits of that kind of system the immediacy of something like this, implementing for something like after this. more after this. ♪.
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in many cases, 20% or more from their highs, dating back to may and in a couple of cases back to march. so we're sort of putting it in perspective here. madison alworth taking a look at all of that and what this could mean. madison. reporter: hi, neil. so soybeans and wheat have really been tumbling over the last couple of weeks with agricultural commodities futures in bear market territory, more than 20% off their peaks from earlier this year. wheat really down, at last check, more than 37% from its high in march. soybeans also down, around 20% from their highs. they have seen a slight uptick this morning but here's the thing, farmers are not expecting prices to settle here. there is a lot of uncertainty over summer weather. that could continue to move prices. plus even at these lows that we're seeing today, commodities are trading above normal levels. agricultural commodities skyrocketed earlier this year when russia invaded ukraine, the
bread basket of europe. any low we're seeing today is coming off of that high. another commodity that was impacted was fertilizer. russia a major exporter of fertilizer sent the category way up. now fertilizer come off the peak, down 30% but it still remains at the elevated levels. the usda is working on a plan to allocate hundreds of millions of dollars in grants to farmers to help them address rising fertilizer costs, to also address the competition here in the u.s. fertilizer market. there is a severe lack of competition. we went from 43 different companies down to 18 companies or 13 companies that produce fertilizer here in the u.s. you will also need to add lumber to the list of commodities plummeting recently. a slide in its price could be another canary in the coal mine signaling recession. lumber futures are down 27% over the last few months. things driving this change, high
house prices and soaring mortgage rates could be slowing down that demand for lumber. neil? neil: madison, thank you for that. i do want to go to luke lloyd, dave maney, get their take whether today is reflection of re-- reality to come, despite down prices for key commodities or whether this is anomaly. luke, to you first, what do you think? >> the federal reserve has barely done anything yet. i don't i this the commodity selloff is a reflection of the federal reserve hiking interest rates but i think direct reflection after government-made recession we're about to enter. politics really screwed up this economy. everything from trillions of dollars in stimulus, states that were locked up for years, to biden's war on oil triggering to the massive recession we'll most likely be entering. the free markets have not been free since the pandemic which messed everything up.
which on the other side politics played a large part on the federal reserve which we're playing for right now. many people wonder why the fed is so late to the game. i think it is a direct result of political pressure a year ago up until november when powell got reelected. the fed said inflation was transitory for so long. that is powell wanted to get reelected and neglected to get hawkish before that, because cooling the economy would upset biden. now everyone is feeling pressure of policies that didn't look out for main street america. sadly i think this is just the beginning of that pressure. neil: what if it is a slow down could save the day, dave? i mean by that these lowers rates, the fear that the fed has to keep hiking and that will hammer economic growth all the more even if we have growth at all, that is debatable, then what? >> well, neil, one thing that i keep saying about this thing is, you know, we are in terms of
progress and in terms of change we are as far from the 1981-82 recession as ronald reagan was from the ulysses s. grant panic of 1873. we're in a completely different economy and yet gray hairs, neil, like you and i, were around for that 81-82 recession and, i think there has been too much pay, this is how it works when you raise rates this is how a recession works. this is the time frame. i don't think we know that and so i think there's a possibility with instantaneous information flowing throughout economies that things can change and pivot and turn a whole lot faster. i'm not saying it's for the good. i'm just saying it's faster. so where exactly this is going, i'm not sure but don't expect
this to play out the same way that 1982 did. neil: well it is interesting you should say that, and luke, on this look at 30-year mortgage fell for the third week in a row. we're down to 5.30%, down half a point in all could have weeks here and well south of the nearly 6% we were flirting at before. i'm taking a look as well what has been going on with both the 30 year and 10-year. just today, where yields are backing up a little bit. maybe the market think it overdid it. but do you think now that those rates stay as they are in this neck of the woods now, in the mortgage industry, that that could change the complex shun of that, all of sudden, i wouldn't call real estate crash but correction doesn't materialize? >> i think what we're seeing right now again is a direct reflection of the federal reserve being late to the game. because what fed rate hikes were
supposed to do help the middle class by taming inflation but the reality right now the fed is so late it is essentially a double-whammy to the middle class. not only prices are extremely high when you go out to buy goods and services but now the cost of borrow something crazy expensive, right? if we were able to tame inflation last year with rate hikes, even with the cost of borrowing being a lot higher maybe for a mortgage, the middle class would be a lot stronger able to afford this kind of stuff. right now they can't. weak middle class means a weak economy. talking about mortgages, the 1980s, i think the situation is way worse than the 1980s. 1981 inflation was 10%. 1981 mortgage rates were 16%. 1981cd rates were 16% as well. basically could put money in a cd and get a house. cd krafts are 2% t puts investors in a big dilemma.
they can't make the money work outside of the stock market. do they take on a long of risk to put their money at risk or keep their cash in savings and lose 10% of purchasing power, right? there is a big dilemma going on. neil: i love luke to death but he is young, dave. i don't see the '70s comparison with all respect because we are at a much stronger economy than we are. he is quite right to point out the anemic cd, savings rates not following what is happening with the other rates, i get that, but the fact of the matter jobs are in a much more secure place than back during jimmy carter. job growth might be slowing. we had it reversing back then. i see us you know, in a stronger position economically other than where we were back then. i also don't see some of the devil-may-care bubble bursting activity that we saw with the financial meltdown over a decade ago. so i think there are distinct
differences here that might shield us from something worse but what say you? >> yeah. different, different in a lot of ways. i was thinking about this today, neil. in preparation for today, i was thinking you know, you take this shocking gas price increase, right? and you think about what effects that would have had circa 1982 when people had, and were demanded to be commuting every day? you think about it now, say, well, yeah that's right. it would be murder on my commute in gas prices ticked up 200%, but, i only have to be in the office one day a week or two days a week or no days a week. it's different. so again, i just look and say, anytime you see or hear somebody say, hey, this isn't behaving the way i thought it would, i look and say yeah, this is the first time. this is a first and you can get
clues but you can't get a road map from the past. neil: we'll watch it closely, gentlemen. i appreciate both your brilliant perspectives on this. we'll see how it all sorts out. we're a long way from seeing that sorting out stage. i do want to alert you, you heard boris johnson is resigning as the prime minister of britain. the russian ambassador seems to be saying don't let the screen door hit you on the way out. russian ambassador of britain, says boris johnson's fall is just reward for belligerent anti-russia policy for support in ukraine. that sounds to me like they're delighted. we'll have more after this. ♪
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foy in lviv. nate, what is going on here? reporter: neil, good afternoon. we'll get to the latest from snake island in a moment. i want to start with two attacks two miles apart in the donetsk region. one civilian has been killed, six more have been hurt. take a look at the video just into the newsroom. this is why the regional governor, neil, in donetsk is urging 350,000 residents to evacuate. nearby we see another attack with unknown number of injuries. here is the mayor explaining what happened. >> translator: again it was shelled. again with multiple rocket launchers. do not go outside unless you have a particular need. let's stick together. take care of yourselves. reporter: neil, take a look at this video, ukrainian forces posted this yesterday showing troops flying a national flag on snake island in the black sea after taking it back from russia last week but overnight as you mentioned russia is claiming a
missile strike that hit and killed ukrainian soldiers moments after this video was taken. also today in kyiv, senators lindsey graham and richard blumenthal visited president zelenskyy. both of them say russia is a state sponsor of terrorism and they promise to try to pass a resolution in the senate reflecting that. back out here live, president zelenskyy's office released a statement saying he is urging the senators to support his push for two things. that is better air defense for ukraine and rebuilding the schools in the country before the next school year in september. send it back to you, neil. neil: nate, please be safe. i want to go to general jack keane on all these fast-moving developments. general, always good to see you. you know about boris johnson resigning, general, and no greater friend than ukrainian president zelenskyy has and i'm wondering the impact on ukraine with now his imminent departure. does the man make a difference? >> yes, it is an interesting
question. i mean the government in power in the uk, the conservative party has made a decision to support ukraine. so i think that will continue but the fact is though that is boris johnson of all the world leaders who have committed support to ukraine by far has been the loudest voice, and he was the first one, neil, very early on to call about, make the statement, this isn't just about supporting ukraine. this is about achieving ukraine have a victory and defeat the russian army inside of ukraine. no other leader on the world stage had said those words until boris johnson said them. certainly that resonated significantly with zelenskyy. other world leaders began to echo that to include the president of the united states i may say and also boris johnson personally visited ukraine twice to provide moral support to zelenskyy. certainly that is certain very
noteworthy. he did it very early on which surprised a number of people. so i think, yeah, the support will continue but whether it will have the same strength behind it i know from insider reports that the nato summit recently and g7 and similar meetings back in march that boris johnson carried a loud and persuasive vote, voice, in dealing with his counterpart leaders, stronger than our president did as a matter of fact. so i do believe zelenskyy is going to miss him for sure. neil: i heard one british reporter refer to him as maggie thatcher just with messier hair. i want to get your take, general, on another issue that has come up, russian reaction to boris johnson and they blame it all on his policies towards ukraine. the russian ambassador saying right now, that boris johnson failed to focus on the economic need of the british people.
he left the country behind going on to say, we would prefer someone less an tag an antagonistic for prime minister. with tories in control that is unlikely. british press editorials, a lot of them are pointing out britain has given a lot of money to ukraine and they have got plenty of problems back home. i'm not saying that they're saying step the aid but they're squawking a lot about it? >> yeah, well the optics parties for sure in britain, the labour party and, the scottish national party, i mean they believe that nato bears some responsibility for why this war actually took place in the first place and they would not provide the degree of support that currently the tory party, conservative party is providing under boris johnson's leadership. we know we're changing party
leaders here and prime ministers. i think the policy will remain and the degree of support will, will continue under the, under a new government, reflecting the same policy decisions of the conservative party. whether they, that personal charisma and moral support and persuasion dealing with counterpart world leaders will be there remains to be seen based on who they select. neil: you know, general, you're right but most of the western world is united in trying to help ukraine as much as it can and will but i did catch that line from president biden last week when he was asked about these high prices which he blames exclusively on vladmir putin. of course that is not the entire story but that aside he said as long as it takes. in other words, we will support ukraine, its efforts to topple russia as long as it takes. the signal being here we'll have to deal with the higher energy
prices. normally it is one thing if a war is just starting, you're just getting used to this reality. it is quite another for people to maintain that steadfast resolve as everything around them at home gets crazy, right? >> yeah. you're absolutely right about that. i mean the american people suffered as a result of it. so have our european allies. most notably the ukrainians of course. this is a problem i think we've had in the united states for some years and is not a democratic or republican problem. i mean going all the way back to the war in iraq under president bush, it continued coming forward to subsequent presidents. that is to continue to keep the american people aprizeed of what is happening, why it is happening, why our support is still needed. you have to have american leadership communicating effectively to the american people about that and why the sacrifice should continue to be made. obviously wars that we were
directly involved in conflict, as much as there was an economic burden, the human burden obviously was a major issue in terms of the loss of american lives and casualties. but, yes, i think we are in for a protracted war here that is going to go on for some time. whether the conflict is at the highest level it is now may not be the case but the fact that there is russian troops inside of ukraine and we're sort of stalemated and frozen in place, should still require some america sure of support from us, i think is likely to happen. we're going to need american leadership to explain to the american people why this is necessary, to provide and continue to have that kind of support. i mean the amount of money that we're providing pales by comparison to the trillions of dollars this administration has thrown at other issues. you're more conversant with all of that in some level of detail
than i am but nonetheless you still have to make the case because as we all know, the gas pump, other things are happening to the united states economy and its inflation in part, i have don't think it is, i don't think it is a major contributor the way the president has outlined it but, i do think it's a contributor. the american people deserve to get a very frank explanation of why we should continue to provide the support. neil: it has to be hammered every day. you're quite right, five trillion dollars in other related spending. if you want to throw everything in with the kitchen sink, general, $40 billion for ukrainian relief, and legislation passed on its behalf. a little difference in the math. general jack keane, always good to see you, my friend. thank you. >> good to talk to you, neil, thank you. neil: we talk a lot more about inflation in this country. well governments can run it up as well including those with the generous state benefits.
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neil: remember ronald reagan's line i'm here from the government and here to help? number of states are trying to deal with inflation, but the way they're going about it, actually doing worse. grady trimble with that. hey, grady. reporter: states are taking a page out of federal government playbooks, instead of calling them stimulus checks, calling them inflation relief checks. the problem it could make inflation worse according to some experts. some families in new mexico could get 1500 bucks in help from the state. 23 million californians could receive as much as $1050 from the the state. in georgia the state is giving out as much as 500 bucks for every eligible family. the same for virginia.
12 states, red and blue alike are sending out money to families in form of direct payments or tax rebates. in several states the money coming from state budget surpluses after getting billions of dollars of covid relief from the federal government and collected millions more in taxes than they expected to. the goal is to help americans dealing with high prices for every day items but so many states are jumping on the policy band wagon, experts say it could drive up demand even more and therefore prices could go up even more. >> these inflation relief checks should be called inflation boosting checks because that is what they're going to do. i understand politicians are coming here. they want to help consumers, they want to help their constituents but sometimes the cure is worse than the disease, that is certainly the case with the relief checks. reporter: in many ways states are at the mercy of the federal reserve to tamp down inflation but they're to the comb plight powerless. >> they have taxes. they have regulations.
they have enormous impact on, because of the house values and things, cost of shelter which is a big part of the inflation problem. so they might want to pull the levers they can pull, instead of just sending out checks. reporter: some economists argue the best thing states can do right now is to stop spending, save their rainy day funds, neil for rainy days, especially if a recession is on the horizon, as some economists believe already here. of course during recessions states have trouble balancing their budgets. use that money for those rainy days. neil? neil: you're right about that. there is a concept. grady trimble, thank you. by the way new york state's comptroller is also saying the same thing. we have to set aside for this rainy day to come. i think he was saying it is already here. we'll have more after this.
early march. what is really happening here with reports the slowdown is on and gas prices will resume their slide? they're down a lot right now. phil flynn, gas buddy and our friends over there they say we'll be under four bucks pretty soon because of all of this, what do you say? >> you know, listen, 4th of july, neil, so many years we top out. it is the peak of the summer demand season. guess what, he is probably right. we'll probably dip below the four dollars a gallon, i would get a couple of jugs to fill up because i don't know if it is going to stay there. you know what? we saw this big selloff right this week. everybody was pricing in recession the last couple of days. demand is going away and then we got some data today that might suggest the depth of demand might be a little bit exaggerated. we saw a big jump back up in gasoline demand this week, distillate demand, diesel fuel, things like that we're back
above 20 million barrels a day, which is pretty darn good. if that is recession i would hate to see what a booming economy is going to look like. neil: so the way you look at it right now, it is not the matter of the demand is slowed but that it is not as dramatic i believe as we thought? >> that's it. you know, listen, the last couple of days, you know, two weeks ago, neil, everybody thought, we wouldn't have enough barrels of gasoline and oil to get us through the week. that was probably overstated. you know then of course over the holiday weekend everything ground to a screeching halt. oil prices collapsed, demand destruction across the board. the truth is somewhere in the middle. bottom line is, if you look at the global oil market it is still very tight. if demand is better than expected, we're going to see these prices start to go back up. neil: we'll watch closely. phil flynn, great having you my friend. that doesn't mean you're still not having hell to pay at the nation's airports.
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prepared for the demand that would inevitably come as the economy got back and people got back to work? >> tens of billion dollars of taxpayer support went to these airlines to keep people in their jobs, demand has come back faster than most people thought possible. part of a general return of demand and the spending in our economy that happens more quickly than expected but the airlines have to be prepared to service the tickets that they sell. neil: a lot of that money -- >> here's where the money went. it went to keep people on the job and prevent people from laid off and furloughed. you saw the airlines guide a lot of pilots and experienced crews into early retirement. what buyouts and retirements did is left airlines unprepared to service those roots and it is coming back to bite the system. ♪♪
neil: a bit of a complication and an answer from pete buttigieg, $53 billion, did not go to protect jobs and workers over salaries so the big question remains where did the money go? still don't know, still looking into it. what we know in the meantime is there is more money to follow that including a commitment on the part of mr. buttigieg to fix up a lot of airport terminals. >> reporter: he is expected to be at lax today, not discussing travel chaos from the interview with him but more government
funding and set to announce $1 billion and that will go to 85 airports across the country as part of the bipartisan infrastructure bill. normally this would be funded by the airlines and improve terminals for passenger experience, al located to the maintenance backlog and delays and cancellations many wonder why funds are not going to fixing the immediate problem. 1400 flights canceled and already at 192. the root cause is a bit of a blame game. beyond the shortage due to incentivizing retirement in the interview with him united is accusing the faa of needing more traffic control staff. in a statement to fox business the faa firing back saying, quote, it is unfortunate to see united airlines conflate weather-related traffic control members with staffing issues. airlines canceled 1100 funds
1/4 of which were united airline flights. they are attempting to fix it with aggressive hiring but the demand doesn't seem to be there. it takes time and education cost, 80 to one hundred thousand dollars, not a decision an applicant would take lightly as they move into a potential more taxpayer funding as -- where is the money going as you opened this segment. he will speak at 4:00 eastern and bring the latest on whether he does address this travel chaos. neil: kelly o'grady, thank you. we have gotten into this before this effort to help the airline industry, may be it was right and proper to do so in the middle of a pandemic that shut down the industry. >> i think we also have $150 billion on covid relief for
airlines. they spent the money they didn't get and why we are spending $1 billion on infrastructure when there is unspent covid 19 money all over the place, time for the biden administration to start shutting stuff down and asking congress to look at stuff that hasn't been located, hasn't been spent or reallocated so we can start to ease pressure on inflation. the more it puts pressure on inflation, to start doing that and reduce what the long-term debt will be. neil: dozens of airport terminals around the country, just think the more immediate issue, thousands of flights delayed or canceled on a daily basis since going back to
memorial day and not slowing dramatically i would think that would be the priority if you look at terminal refurbishment down the road, maybe have at it but we have our priorities backwards. >> i do too. terminal refurbishments are done by the terminals or airports themselves. mia has a $2 billion terminal replacement in the next 5 years. it is a drop in the bucket of the needs these airports need but right now the issue is getting flights off the ground and not having thousands of flights being terminated, canceled, delayed and all these disruptions all over the united states and everybody pointing fingers at each other. air traffic controllers pointing things at the airlines in the airlines at them and all kinds of stuff. we need to see what is really going on in the airline industry and get back to where it should be.
neil: where it is now is cutting down a number of airports to deal with this but seems to get worse and don't know why that has come to be. i would be curious about pilots, not enough to go around. when issue that has been raised, we put them out to pasture too soon. 65 is the cutoff age you've got to retire as a pilot. do you think it should be older? >> an individual themselves, some people age faster than others, others at 65 are just fine. i would probably pilot an aircraft. neil: but a blanket cutoff age you would not be for that? >> no not -- i think it is based on the individual, based on objective factors based on
the individual's abilities, not you reach that age and it is done. that person may serve another two, three, four, five years in that capacity based on their individual traits and the way they kept themselves up. neil: the older i get the more i support what you just said. good seeing you. >> the older we get the older -- i am not old, just older. neil: thank you very much. a leader put out to pasture is boris johnson. he was forced to resign, did so today. >> that is exactly the moment, to continue with its work, not to walk away. the job of the prime minister is difficult circumstances with the mandate.
>> are you planning tomorrow? >> i want to know how sad i am to give up the best job in the world. but them's the breaks. ♪♪ neil: about the stuff i said yesterday, forget it. i am out of here. ashley webster with us right now. what happened? 24 hours he wasn't going, then everyone started -- ashley: what happened to that english accent? when you close the pubs because of covid butt hole drinks parties at 10 downing st. during the pandemic that alone is unforgivable to most britts. it was one of several scandals
that forced the uk prime minister to finally admit it is time to leave and let someone else take over. take a listen. >> the new leader, i say i will give as much support as i can from now on until the new prime minister is in place. your interests will be served and the government of the country will be carried on. neil: the announcement comes after dozens of officials, aids, and numbers of his cabinet could his government saying they could no longer serve under his leadership. johnson says he will stay in office until the conservatives choose a new party leader who will take over as prime minister but others say johnson should duck out the back door immediately, that includes piers morgan. >> a rising tide of anger from conservative members of parliament that think it is
ridiculous and must go immediately. my gut feeling is he will have to go very soon. this is unprecedented. ashley: it is. several say johnson should go now and nurse the party to elect a new leader as soon as possible. one scenario could see the queen appoint another conservative lawmaker as a stopgap. current deputy prime minister dominic rob likely to be the front runner in that scenario but actual timetable for picking a new prime minister, be released next week, boris could not hang on anymore. ashley: neil: it is not as good as my scottish accent but -- thank you, my friend. let's go to the senior research fellow, margaret thatcher
center for freedom, he knows of what he speaks. let me ask about the backdrop for this. if the economy in britain hadn't turned so south, would we be looking at this resignation. was that backdrop hurting boris johnson's persuasion to stay in office? >> absolutely. the backdrop behind all these scandals was if you forgot about brexit which was a historic achievement, the boris johnson government has not been a very conservative government. it has been a big spending, big administrating non-taxcutting, tax raising kind of government. when the going got tough with all these scandals he didn't really have a lot of conservative friends left to back him up when he really needed their support.
neil: it would be like ronald reagan raising taxes or cutting back on the military, he didn't do the latter but my point gets to the economic backdrop and whether he was doing enough. i would imagine that is a reminder to leaders around the world no matter their political persuasion or party, that is one thing they are looking over their shoulder, for most countries they are in a world of economic hurt. >> also leave voters tend to vote, mps in britain tend to decide on the basis of how the economy is doing. for boris johnson at the conservative party of the united kingdom, pretty simple. if you are a conservative government you need to act like a conservative government, cut taxes, cut regulations, cut spending. neil: what happened? he didn't start out that way. she's only been there for three years but what happened? he was a true conservative,
seemed to be, all the details, how he led the city, it propelled him to eventually become prime minister but he didn't start out this way so what happened? >> part of it is the seduction of being in power. there is always the desire to do a little bit more if you are in the number one session, you have the illusion of control but we should always remember boris johnson although he was incredibly sound on brexit and foreign policy issues was never a really by the line conservative domestically. he had a very irregular private life. he was not a standard thatcher like taxcutting conservative even when he was mayor of london. people were willing to overlook that because of brexit but it has caught up to him. neil: when you run a major city like a republican who gets control in the city i am in, new york, they are at the very
least ruling as a moderate. it is what it is but it is a wild turn of events. thank you very much. larry boudin is responding to the resignation of boris johnson saying the west failed in an attempt to -- the start of the transition to a multi-polar world, he was stepping back and saying much as his ambassador, that these are the times in which we live. as ambassador to great britain, went so far as to say all of this is on the war effort that by and large boris johnson let in europe, came back to bite him and now he is resigning. a little more after this.
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the worst levels but apple is playing a significant role in this. it is a 1-stop consumer staple but a bit of a tease and it likes to sprinkle out some crumbs, very intriguing developments in a lot of popular products. hey, susan. susan: as apple goes over the broader markets, 4% of the s&p, afford a winning streak, and chipmakers, nvidias, micron, intels getting a lift after samsung forecast numbers that weren't that bag. samsung is one of the largest memory and flash chipmakers guiding for a better-than-expected springtime and we are looking for the full list earnings growth in two years but it is growth, the chip stocks have been hammered into thousand 22. the you supply chain, ukraine,
inflation, if you look at stock leadership, you mention apple stock rallying with the rest of the broader markets, the fed won't be as aggressive at hiking interest rates but apple planning to launch a sports edition of its watch according to bloomberg news and that means a metal case, larger watch base, longer battery life and apple wash could be announced in september along with new iphones and annual upgrade cycle. in terms of software making news with its new security measures to protect against cyber attacks, lockdown mode and apple says it is more secure, less access to hackers using software like the infamous pegasus and alleged jeff bezos personal photo pack and you heard of activist journalism politicians being targeted by pegasus so it is
important for those individuals. i want to talk about crypto, crypto billionaires, deleveraging prices, mostly done in their view and evidence from bitcoin pulling upper $20,000, more contagion, one of crypto's largest lenders, genesis, tens of billions in loans and they say they have been cut up in the blowup, other crypto companies are on the verge of collapse and suspended client withdrawal. at the end of this, there will be giants like the dot.com blowup in the 2000s. neil: charlie gasparino following the meme stocks. charles: there is a meme out
there that crypto is over. the strength of bitcoin, and other people trying to create a bottom for some of these companies. i'm not advocating buying and not saying i agree with it. we should put on screen a very unusual tweet from the ceo. adam aaron, ceo of amc theater chain. i am getting asked -- i will describe in a minute, i always keep my word. i said the council would not happen before second-quarter earnings are announced. q 2 earnings, read between the lines. last i looked, 13% a little off its highs.
that is what traders are trying to come to groups, she should pounds, squeeze the short-sellers, and something good is going to happen right before earnings. i have never seen this. you don't the ceos pre-announcing earnings, very bizarre. this is not -- i don't think it is a rule, financial disclosure, announcing it to everyone at the same time but it is highly unusual they do stuff like this particularly what you don't want to be accused of is manipulate the share price you want to let the markets tasted and when it comes out at once, it is beyond me, out to john coffey, the
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administration is working with democrats to lower the drug cost part of it all. lori von is on capitol hill. >> reporter: there has been a bipartisan push to bring incentives to us chipmakers in the us and help us companies compete with china and make us less reliant on chips from china but that bill just had a major snag because senate minority leader mitch mcconnell was threatening to tank the bipartisan innovation act if senate democrats move forward with the separate bill, reconciliation package to address climate and tax reform. mcconnell tweeting let me be clear, there will be no bipartisan us ica as long as democrats are pursuing partisan reconciliation bill. congress delaying getting the bill done is having an impact on the industry, they delay the groundbreaking for a new multimillion dollar chip
manufacturing facility in ohio over concerns the $52 billion slated for the industry might not actually happen, the white house is calling out mcconnell for throwing a wrench in negotiations that were close to being done. white house official telling me in a statement, quote, congress was close to a final deal on the bipartisan innovation act until leader mcconnell demanded his negotiators put pencils down. senator mcconnell is holding hostage a bipartisan package to make more in america and strengthen our competitive edge. leader mcconnell himself agreed that bipartisan negotiations shouldn't be paused for other priorities, that's a reference to when mcconnell protested democrats who wanted to link the passage of the bipartisan infrastructure bill to the build back better bill, but now he is kind of doing the same thing saying if democrats continue a separate effort to pass a prescription drug reconciliation package, the bipartisan innovation act is dead but he reached out to
mcconnell laptops and asked if he's worried about killing this bill, if it would be a big blow to us chipmakers and a wintry china. we also asked about the white house calling him a hypocrite but they did not respond to any of that instead just telling me the tweets he sent out last week stand. neil: thank you for that, hillary vaughan. larry kudlow, the host of the kudlow show, advisor to donald trump. obviously every time we look at inflationary numbers a lot politicians say what can we do about it? it is one thing to talk about lowering pretrip and drug costs or using the full weight of the government to force that. what do you think of that approach? >> the whole bill is a terrible idea. what is in that bill, you have from what i gather at least $1 trillion of social spending and $1 trillion tax hike to pay for it.
the spending is inflationary and the tax hike will bury the economy into a deeper recession. the combination is lethal. i hope mitch mcconnell stay stuff and tanks tough. this whole thing is a terrible idea. neil: i will put you down as a maybe on it. a number of administration officials seem to think we are doing all we can but to man and woman, they seem to be hoping it takes care of itself as we were seeing prior to today, the run down in interest rates, market rates, energy prices, gas prices, oil prices even though we are up one hundred $3 a barrel, they will point to the fact that $128 a barrel just a couple months ago, they think the effect of higher
prices has been lower prices, sapped demand and that is doing the trick. what do you think? >> i don't think those wishes are going to pan out. inflation is probably even worse. when you look at inflation of nondurable goods, rising at a double digit weight, durable goods rising at lower but double digit rate. inflation is very sticky. inflation expectations are becoming embedded. you see it in the labor market. you see it in consumer surveys, confidence board, michigan and so forth. it is going to be a tough battle. there is no easy way out. two points. in the commodity markets it looks like we have seen a peak, okay? i don't think it is crashing down but we have seen a peak. won't filter through in the ppi, for about a year.
it is a good signal that the fed has had a good start and i do believe the fed will go 75 in july and 75 in september. neil: another 75 in september on top of that? >> yes. you've got to get at a minimum you've got to get the policy rate above the inflation rate and i don't think if the fed is watching this pce the which is running 6%, the core is 5 and one quarter of one%. in theory you would want to get the rate above 5% to 6% so they have a lot of work to do. may i make one point? in the world oil market i think the biggest change is that
russia is now producing at prewar levels again. russia was moving 10 million barrels a day prewar. then, when the sanctions came in and everybody pulled back it dropped to 9 million barrels a day. that is a big drop. that drove up prices. look, india and china who violated the sanctions are buying russian oil so russian oil production is back up to 10 million barrels a day, maybe slightly more. that has given some relief to the world oil markets. prices have slipped down. it is an unfortunate story in my judgment but nonetheless india, here's one for you,
india was buying 70,000 barrels a day from russia prewar. 70,000. as of the middle of june india had up to get to over a million barrels a day purchased from russia. neil: china picks up the slack for the business russia is losing. speaking of oil, i'm little more detail from john kirby at the white house of the president's plans when he goes to saudi arabia, he will meet with the saudi king, that will include one on one with the crown prince mohammed been salmon. oil is not part of this discussion, he expects the saudis to open the spigot more. what do you think comes of it?
>> the biden foreign policy is so anti-saudi, anti-abraham accords, anti-israel and still trying to make a nuclear deal with iran, one of the craziest things i have ever seen. these gulf states by the way are producing close to capacity, there might be a couple hundred thousand barrels available but i don't think you will see saudi arabia do much to help president biden. you read the reports. saudi arabia is working with israeli intelligence to stem the terrorism in the middle east. the irani and terrorism which is the principal source of it. i don't know for the life of me. almost every foreign-policy person i know in both parties do not understand why this administration is talking to iran about another deal. i don't get it. i figure it is the worst thing in the world.
the point is the relief in the world oil market coming from china, from india, that is letting, basically at least 1 million barrels back on the world oil market, when that supply increases, prices come down. whether it continues to comes down remains to be seen but the bidens shouldn't count on that. gasoline is a particular problem because the refinery running at 96% capacity and the administration will not provide, will not allow any permits, first of all, to drill or frak or pipeline and for refining. the supreme court decision last week may work some magic but it is going to take a while for it to hit. we are at capacity here because
mr. biden has opposed fossils from the day he was elected as opposed it during the campaign. gasoline would ease down a wee bit. i don't think it will come down much. could pop back up. we will see. neil: let me circle back to this, anna the pressure using a little bit, including copper, corn, borrowing overstuff. they are down 20% from their highs and i know you said something will pop up in the ppi, producer price index, inflation. from your days in the white house, back when you followed this stuff on wall street, did you look at that as a preview of coming attractions up or down, the general inflation rate and i am curious, did we see a break in those same
commodity prices during and later with the paul volcker increases in rates and that is where it starts? it is starting now? >> i do. a great friend and brilliant guy, governor wayne angel really taught me about the, oddity price rule. when you look at that there are a couple important indexes, the crv spot, crv futures, bloomberg, s&p, they are all showing the same thing and i think you are right, down 20%. in a commodity price world, that suggests the very beginning, the fed is now on the right track. we are not seeing commodity deflation. we are seeing it is coming off the highs but the highs are
pretty high and if you trace the chart it shoots way up from late 2022 a peak may be a month ago. the fed should be guided by that okay? they are on the right track. that is what i think commodities are touting. it is not so much that they will filter into the ppi but they will at some point later on. it is a price signal. it is a price signal that the dollar is gaining strength against real assets and commodities. it is a lost art. you covered this. wayne angel, manly johnson, robert heller. i have had heller on our show and those guys were reagan appointees working with alan greenspan, another reagan
appointee, they really created the basis for the price stability that lasted i don't know, three decades plus and remember greenspan used to go before congress and talk about gold. i loved that. always titillated me, sent a chill -- charles: they neil: i remember greenspan would say if you understood my testimony i have failed to. always good seeing you. see you in two hours on your hit show kudlow. the dow is up 66 and a half points. no single commodity assembly more than lumber and that could be good news for the housing industry. if it would turn around. okay.
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a lot of people we met, spending time out here the last few days, tells us this drought came at the worst possible time for wheat which is planted in the fall and harvested in the spring. >> from october to the middle of may most of the area around here received less than three inches of moisture. a lot of the wheat that was planted on dry land either never sprouted or germinated or if it did, it didn't produce a crop to harvest. >> reporter: the department of agriculture estimates the yield will fall 20% statewide, the wheat yields around here in this part of the state likely down 50%. marita hauser's family were early settlers out here and this is as bad as she has seen it, she is still holding out hope. >> we get paid twice here, we have our wheat harvest and mild
harvest. the wheat harvest was a disaster for our farm but we are banking on what came too late for the wheat to help with the fall harvest. >> they are hoping things will be better but think about the timing is the war in ukraine took so much wheat off the market the world could have used the kansas wheat but they are not able to grow it with the weather being as bad as it is. neil: reality capital's ceo has been watching lumber, prices have been dropping precipitously down 28%. what is going on? >> we' ve seen improvement in lumber prices. if you look across the broader cost of construction you see massive spikes in construction
spots since covid which is a tale of a couple stories which is a near-term massive supply constrained market, supply impaired market which is going to have head wind, challenges for the industry whether you are talking single-family residential, multifamily and the like. offset by longer-term positive views toward fundamental supply and demand which is generational. neil: from realty capital you see nothing like housing first like we saw a decade ago. >> hard to say right now. there is an interesting challenge going on. in addition to broader costs, broader supply constraint issues in the market, you've got interest rates and so i was
listening to larry kudlow's comments and i agree with him. i think the fed is going to have to slam hard on the demand side via interest rates, ultimately start to correct and balance the supply side which is the issue with respect to inflation so ultimately how that impacts housing and prices, yet to be determined. it will be a lumpy bumpy 18 months. neil: i wish we had more time. i would love to have you back to expand on this. you are worried about getting things worse from federal reserve's governor, he thinks fears of a recession are overblown, we will see, more after this.
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neil: all right. this is the best four-day performance for the markets since at least mid-march. we could have a winning week at that we shall see. here is charles payne. >> party time on wall street. neil, thank you so much. love the tie. good afternoon, i'm charles payne. this is "making money." we have a little bit of a rally. hoping to become something much greater. buyers buoyed that inflation is past and recession will be shallow. the question is how nimble do you have to be to be able to play the bear market rallies. i have a panel of market experts that show you how to take advantage of the big bear bounces. we'll go to chart school for a