points. what is going on? >> you know, it's really counterintuitive, anderson, one of the reason the dow is down is that wages are up. it should be a great thing that people are getting wage hikes finally after many, many years. well, the markets actually don't like wage hikes because that means that interest rates are probably going to go up at some stage, the fed is going to need to raise them to get ahead of inflation and the markets don't like that. so we're having a strange disconnect between wall street and main street where things are finally actually starting to look a bit better. >> so the president obviously has linked himself very closely to the rising dow and we should point out overall it's down just 3% from the high. >> yes. he -- you know, there's two things happening here, anderson. yes, the tax cuts, there's no doubt that they have raised animal spirits in the sea suites and in business and on wall street, but the fed is really

the key actor here. the fed has kept interest rates low for many, many years. the wage inflation that we're seeing now is really the result of that. i always say presidents get too much credit for good economies and probably too much criticism for bad economies and that's true not just in this presidency but for any. >> it's interesting, as the president was speaking the dow is going down and now we just saw it go down to 800 and now it's at 793. just overall, just to put it in context and perspective, how big a drop is this, a drop of 3% today? >> you know, it's not as big as you would think. if you look at it in sheer numbers, you can say this is the biggest sheer number drop in some time, but actually it's roughly around the same kind of drop we saw during brexit a couple of years ago. so yes, it's significant. yes, it's coming at an important moment. but no, we're not talking about going back to 2008 again here. >> i also want to bring in david

chalian. david, we heard the president during that speech refer to i believe it was all democrats or i think he was referring to all the democrats as treasonous and unamerican. >> yeah, i wrote down both those words also. and he even noted, and i'm supposed to sit down and make a deal with nancy pelosi? yeah, it's tough to sit down and make a deal with people you're calling treasonous and unamerican. so if there's any talk of bipartisanship, remember, that was a big theme going into the state of the union that the white house was saying that the president was really developing a bipartisan approach and extending an olive branch, today he called democrats treasonous and unamerican, it's less than a week from his state of the union address, so i don't think we should believe that bipartisan outreach was all that authentic in the state of the union. the other thing to note is we're getting a preview of what president trump is going to be doing and selling on the campaign trail this midterm election year. he's in one of those states that has a democratic senator,

sherrod brown running for re-election in a state that donald trump won. there he is boosting the republican nominee there and questioning and saying, and you're going to hear this every time he goes to a red state that he won that has a democrat up for re-election, he voted against you on the tax cuts. he or she voted against you. this is what he's out there to sell today, this notion of the tax cuts. but obviously the dow and what it's doing today complicates that message a bit. >> rona, for folks at home watching this number, 748 now, what is your advice to them? how should they see this? >> well, i would say don't make any sudden moves. it's really difficult to tell at this stage whether or not this volatility and this drop is going to continue over the next few weeks and months and turn into something really much more significant or whether this is just a natural reaction. look, we have a new fed chair coming in. we finally have a little wage inflation. this is all new territory for the markets. i would say sit tight. don't do anything for the next

few weeks unless you really need your money right now. hopefully most people are invested long term and don't need to make any quick moves. >> rana, what are the circuit breakers for a dow loss? >> well, you know, you don't want to see things -- you don't want to start getting into a 5% dip. you don't want to start getting into territory in which the markets look like there is a fear factor coming in. and, you know, i think the big question right now, is this a natural correction. many people, including me, have been saying look, we're due, we're overdue for a correction. we have had market highs for many, many years now. we're at the end of a recovery cycle. this is interesting politically because republicans have a really tough calculus. there's a very good chance that the economy could slow down in the next year or two. i don't know about before the midterms but certainly before 2020. so it's going to be very interesting to see whether or not this dow going down signifies bigger economic problems which would then have a

much bigger political impact. >> david chalian, that is in the past why presidents haven't really linked themselves to the stock market or claimed that the stock market's success is their success like this president has. when it goes down, then the question is, well is it their fault. >> and the white house had an answer for that question when they had a little briefing with reporters on the way out to ohio on the plane saying, well, there's going to be short-term fluctuation in the market, everybody knows that, but the fundamentals of the economy are strong. well, that is not at all what president trump has been touting as he's been touting the huge market success and claiming credit for it. so when he does that, he's also going to have to own when the market goes bumpy and certainly if there's an actual economic slowdown in the years ahead, there's no way for him to avoid owning that. >> rana, now we're over a loss of 900, closing in on 4% from the market high just a few weeks ago. just talk about the good economic news that did come out friday, that wages are up and

wall street's reaction to it, not 'embracing that news. >> yeah, it's such a strange thing and i'm sure it's so hard for people sitting and watching now to understand. wages are up. that should be a good thing. why are the markets going down? well, markets like low inflation. they like low interest rates. what happens when wages go up, you start to get inflation in the economy. that means that the fed may have to come in and put the brakes on those markets. markets love easy money. the music keeps going, people keep trading, they keep going up. really what we're seeing now is the end of a very long process. you know, it's been a decade since the financial crisis. we've had a long recovery and things may be shifting now. we finally got a little bit of wage inflation and there's a zippi synchronized global recovery, europe is up, asia is up, but we're coming to the end of that. in the next year or two it's very possible we could see the markets go down and growth start

to slow as well. >> just in terms of international markets, how are they doing today, rana? >> international markets have been somewhat jittery off the back of what's happened in the u.s. as i say, though, it's very interesting because it's quite rare to find the real economy in the u.s. going up, europe doing well, asia doing well. a lot of people i'm talking to are saying, hey, don't panic. this is a natural correction. we may be at a change cycle in terms of interest rates, but the economy is really pretty healthy going forward. now, the big question mark still is whether or not the markets have been so overinflated for such a long period of time, as other people -- many other people think they have. many people think that wall street has become really, really disconnected from main street and we're due for a much bigger correction. when that happens, do all of us that see our stocks go down, do we start to panic? does that start to have a real effect on main street? those are always the big questions when you start to get a correction.

>> there is also the new fed chief, janet yellen has been -- is leaving, has left. i'm wondering what his impact is and what the belief is that the fed is going to be doing? obviously interest rates have been extraordinarily low since 2008. >> yeah, absolutely. boy, what a tough time to come in and be jerome powell taking over at a real turning point. no matter what kind of a person he was, no matter what kind, this is a big change point. he is going to be under pressure to certainly not rattle the markets, but also to not let inflation get out of control because that can really start to have a slowdown effect. it's going to be a big tight rope that he's walking. and the fed is kind of out of ammunition. they have trumped about $4 trillion worth of money into the economy over the last decade. we've had really low interest rates, as you're saying. there's not a lot else they can do. it's really time for washington to pick up that ball and run

with it but of course we have incredibly polarized politics right now. >> i want to bring in our richard quest who is joining us right now. richard, as you see these numbers down 4.22% off the high, what do you make of it? >> well, add i said the best part of an hour ago, anderson, i'm not surprised. we're in that tricky part of the day where the market closes its po books within that last hour or so. so that there was acceleration in the selling is not a surprise. we are overall and we need to put it fully in perspective. we're down anywhere between 8% and 9% now from the all-time high. the traditional definition of a correction is 10%. so we're well heading towards that direction. >> you're talking about over the last two days, friday and today? >> well, if you just take from the all-time high to where we are now -- >> which was just a couple of weeks ago. >> yes, dwre, within the last two weeks. what we're also seeing now, of

course, because of algorithms, because of high frequency trading, we see considerably more volatility. just as much as we saw that volatility on the upside, so we're going to see it on the downside, which is why we are going to see these 1,000-point moves in a day, 5%. by the way, to those who are thinking about circuit breakers and i heard rana talking about it a moment ago, the timing is 3:25 in the afternoon when the circuit breakers rules change. if the market was to fall or the s&p was to fall more than 7% now, there would be a circuit breaker. but as you see, we're some way off that at the moment. this is frightening, there's no getting away from it. when you see a market in full flood, it's when you have to keep calm and just remember that it's up 30% to 40% since the election and what you're seeing is the froth coming off the top in a very ugly way. >> people have been talking about valuations being too high for quite some time. >> they have.

but prices -- people are always talking. as long as i can remember and rana probably would agree, people are either sagely saying, well, p ratios are very high and then pe ratios are very low. the reality is it depends on the sector and it depends on the point of the cycle that that sector is. so some like amazon will be at one end, ford will be at the other. >> yeah, i agree with that. i'd be looking particularly at the tech sector, at the financial sector. some of those have really driven the markets in the last year and say, okay, how much froth is going to come off of there. i have to say i have been one of the people in the last year or two who thought that the markets have become way too disconnected from main street so i'm not at all surprised there's a corrections. i wouldn't be surprised if there's a bigger correction. >> we are 9% off the all-time high. so we're just about at the -- there's no official definition,

the conventional definition. and i promise you it will not be long before the soothe sayers will be out reminding us that the bear market definition is a full of 20%. that's when everybody will be looking at it. there's nothing extraordinary investors can do now. this is the thing you need to bear in mind, anderson. the consumer investor -- unless you have to get out of this market, you don't. >> that's right. >> because the market is now on a frolic of its own to the downside. >> some people obviously will be looking into this market at this point? for those who have been concerned that stocks have been so high, this is an opportunity, i assume? >> you know, i think that some people will be buying into the dip. it really depends on whether or not you think the economy both in the u.s. and globally is fundamentally okay and whether things are going to get better and whether what the president is saying about businesses reinvesting in america is really

true, or whether you think we've been in a kind of sugar high for the last several years, buoyed by this $4 trillion of fed money, $30 trillion dploeglobald whether or not we're due for a correction off the back of that. >> the sugar high did lead to the market rally, but the market rally and the sugar high did lead to fundamental economic growth. the u.s. 2.2 to 2.6%. the eu is growing even faster than that. so to sort of suggest a total all-out calamatous crash would be averse when you look at the underlying economic fundamentals. yes, i know there are people worried about debt and debt ratios that are climbing. but take those to one side at the moment. >> you know, i would add one thing to what richard is saying, which is that the market and the real economy are connected in the sense that we all feel

wealthier when the market goes up and that has an impact on our spending, right? you're willing to go out and unzip your wallet if you feel like, hey, my stock portfolio is doing really well so those two things really are connected. it's going to be interesting to see as the market goes down how much real impact that has on people's behavior. >> i want to bring in also claire sebastian who is live at the stock exchange. claire, i'm wondering what the reaction is there? >> yeah, anderson. we did hear a bit of a roar when the market went down over 1,000 points. it's been pretty calm on the floor up until then. some traders even telling us that the volatility is actually something they have been looking for for a long time. don't forget traders don't just make money when the stock market goes up, they make money when you have dips and troughs an things that you can bet on. suddenly the sense is that many people have been looking for a correction, that this is long overdue. despite the fact that the economic fundamentals are there, job growth, wage growth, that

that perversely can concern some investors. the wage information we got last week was the highest since 2009 and that could lead to fears inflation could rise and the fed could react more aggressively than planned. thing have been calm on the floor but now we're around the 1,000 mark we are getting more of a sense of tension here. >> claire, when you look at the actual numbers, the dow jones at 24,499 right now, i'm not sure when it hit 24,000, but it wasn't all that long ago. when it went over 20,000, that was new territory and we've been seeing it go up and up. the high was, i think, around 26,000, so we're not that far off. >> no, we're absolutely not. it is definitely worth putting that in context when you look at the historical chart even over the last year and a half. the dow, the s&p and nasdaq all up 21%, even more since trump's election. don't forget there were those

horror stories that we had just before he was elected that it might lead to a major crash in the market and it hasn't. the market has been supported by the promise of that tax cut, by strength of the economy, by the earnings that we've seen and of course by the low interest rates that we've seen from the fed. i think many of those things still stand. the tax cut, the economy. earnings have been pretty strong. it's just the interest rates really where we have the question now and that's because the bond market has seen some turmoil. but overall, yeah, this is a correction perhaps we're getting cloegetting close to that point now but not a bear market which is a 20% dip from the high. >> so to explain what we're now seeing in the market, what you're looking at is effectively computers trading. you're looking at algorithmic trading. normally there's no way a market can go from 5.2%, 5.5% down to

3.4% down to have a swing of 600 points in the space of less than five minutes. so this is what we've known for a long time drives the market. the moment these algorithms see opportunities, they're back in to buy and the moment they see it going the other way, the market will sell out. i would not be surprised -- i haven't seen the volume number at the moment but i would imagine it will be well over a billion shares that will be over on today. you're literally seeing huge numbers of trades, automatic trades being completed. >> it's worth noting, i think, and correct me if i'm wrong, richard, if the s&p declines 7% in a single day, stock trading comes to a stop for 15 minutes? >> 7% is the first one, 13% is the second one for another 15 minutes and then 20% is when the

market shuts for the day. but that's only if the first two happen before 3:25. and we're now at 3:15 eastern time. so within the next ten minutes, after ten minutes it's got to be a 20% fall before the circuit breakers, but it's coming back. look at that, 3.1% now. i'm not even looking at the numeric, just look at the percentage. now 3% down. we've had a range of 2, 2.5% in the space of five minutes. >> you say you're looking just at the percentage, not at the number because the number is misleading. for you the number that you care about is the percentage? >> always. the number becomes frightening for every one of us invested through 401(k)s in the market, but it's meaningless in the sense that, you know, it just looks big. it's actually the percentage that you've got aketo keep an e on.

24,600. well, 25,000 was psychologically important. that was a barrier that the techs and the chartists would look at. if it tests certain levels going down, it will push further down and the same on the way up. >> david chalian, the president has not seen any of this. he is still speaking in ohio. >> right. and so he's a cable news aficionado so he is keenly aware, i'm sure, that while he's speaking these numbers are scrolling across the screen but he's not aware of what these numbers are saying. i'm sure he'll learn as soon as he gets offstage. but this is the risk of a president who lives and dies by the numbers. he stands there. these market numbers are scrolling right next to him and it is impossible to separate the two, especially when someone like president trump has so hung his hat on the good stock market numbers during his tenure. >> do you think, david, that he then comments on this once the markets are closed? or does the white house just stay away from this?

>> i don't know how to predict that. i think predicting that donald trump doesn't comment on things always seems to be a bad prediction because of his addiction to twitter, so we may hear some commentary from him on this. >> david chalian, though, he can honestly say that, look, the mrkets are still in record territory and this has happened under -- while he has been president. >> not only that, i would imagine him to say how good it is that wages are going up on main street and he's more of a main street president than wall street president and play to the populist theme and completely ignore all of his comments and tweets about the success of the stock market up until last week. >> the president now finished speaking, greeting some of the workers at that manufacturing planting in cincinnati, ohio, where he has been speaking for the last quite some time. sorry, richard? >> i was just saying, look at that, we're over 1,000 points down again, down 4%. now we really move into i don't

want to say dangerous, you move into a very volatile territory where anybody who's involved in the market, particularly on the floor of the exchange down to know wall street and broad itself, they will all be trying to ensure that they are in the position they want to be in going into the overnight. you know, you don't want anything hanging over if you're long in the market. at the same time, you want to make sure you're fully covered. there could be a lot of people who were short in the market who will be liking this. they have sold shares they didn't own. they're now buying them back. you could start to see the shorts being covered in the next day or so. but for the moment, we're just basically 35 minutes away, 40 minutes away from the closing bell. >> go ahead, rana. >> i think both richard and david are bringing up an interesting point in terms of how the president would spin a potential market correction. it is true that the top 20% of

the population owns 80% of the stocks. so you can imagine a story where the populist president says, hey, don't worry about what's happening on wall street, that's just the rich guys that you have to worry about, all of this algorithmic trading that richard was talking about. although it would be a great irony because he is one of those rich guys. >> but obviously, richard, a lot of people watching this are thinking about their 401(k)s. >> and that's the irony to go on what rana has just said. if you think back to some of the president's recent speeches, he's looked out to his audiences and said, hey, don't you love what's happening to your 401(k)? he's said it by name. he's used the phrase. i think it was with firemen. you love what you're seeing with your 401(k). well now, mr. president, go back in front of those same people and say much of what you've gained is now gone. the bit of market psychology here, which rana will know well, you are more upset about what

you've handed back than losses you may have made in the first place. >> yes. >> so if the market has gone up and you didn't sell, you are more aggrieved about the fact it's come down and you had the chance to lock in those profits and you didn't do so. >> but people who try to sell at the high, that's -- obviously that's what people dream about doing, but very few people are actually able to do that. >> oh, absolutely not. most individual investors should by no means be actively managing their own portfolios. you know, those of us who have stocks indexed know that you have to wait out these market highs and lows. you know, but as claire was pointing out, volatility is where wall street makes its money. i think you'll see a lot of traders being very excited. we have not had this much motion in the market in some time. you're going to see fortunes definitely being made and lost. >> and that exactly was what we saw in the banking numbers when

they reported results over the last year or two. all the banks basically said volatility has been down. therefore, our earnings have been hit as a result of it. this is -- we study this and look at this on an hourly basis every day of our working lives. i can understand to people who have watched the last two to three years and seen pretty much a salted ascendancy of the market now thinking is this calamity. well, there's not much you can do about it, you're in this now. this is where it is going. unless you have to get out, you don't. that's the fundamental rule. >> that's right. >> in terms of inflation, you referenced this before with the new fed chief, does the fed have the same kind of options they did before? they pumped a lot of money into this economy over the last decade. >> absolutely. you're hitting the nail on the

head. no, they do not have the same options and that's what a lot of people are worried about. if you go way back a decade ago to the financial crisis, the fed had a lot of options. they put the $4 trillion in, they lowered interest rates. that's why people are a bit nervous right now, i think, because we have had a decade of totally unprecedented monetary policy. we don't really know what the implications are going to be. a lot of people that richard on i have spoke to have said, you know what, the hens are going to come home to roost at some point and we're going to see a big correction. other people are saying, no, it's okay, slow and steady. a small correction may be due, but underlying fundamentals are good. the jury is still out. we don't know yet. >> it's interesting, richard, because you also have a lot of people who now work on wall street who have been there the last ten years who are really only used to a rising market. >> yes, we have had a couple of days where there have been

thousand-point falls. the brexit incident and flash crashes and the likes where we have seen very sizeable moves. but there's an entire generation of americans who have never seen a full-scale bear market nor have they seen interest rates above, say, 1% or 2%. >> yes. >> and even -- look, even if the fed's worst prognosis in 2018 comes true, which is another four interest rate rises, three or four, of a quarter point each, you're still only heading towards 1.75% to 2%. so you're still way off anything like those of us of a certain age that remember 5%, 6%, 7%, let alone those who remember the 13% and 14%. >> this is a great point. the point about interest rates rising and what that does to

debt both for consumers, individuals and companies is really salient here. interest rates make a big difference in your home mortgage prices, in your car loans, in your student loans. for corporations, corporations that have been holding a lot of debt, those stocks could be particularly in trouble now if interest rates start to go up faster than people think. >> have the mistakes that led to 2008, rana, have they -- have those lessons been learned? are the fundamentals stronger than they were in 2008? >> well, that's the -- i hear richard laughing. that's kind of the $60,000 question. or what is it, $30 trillion question. that's how much the central b j bankers have dumped in. i've got to say i'm not sure lessons have been learned and i'll tell you why. if you go back to 2008, politicians weren't able to do a lot. we got somewhat of a fiscal stimulus plan under president obama but what we got was central bankers dumping a ton of

money into the economy. a lot of people think that's a band-aid over problems. it's kind of like the tide. as warren buffett once told me, when it pulls out, you see who's been swimming without their shorts on. i suspect that if we get a more serious correction, we'll see exactly that. >> so you've got on the macro prudential side, yes, things are considerably better. there are a lot better buffers, all these sort of things. however, however, if you look at the debt levels and the rising debt levels, consumer debt, credit card debt, auto loans, they have been rising once again to worrying levels. and the feeling is that the credit worthiness of much of this debt they have learned nothing from it. so yes, we saw some numbers recently in fact in the banking numbers. if you look at nonperforming loans and loans expected to nonperform, they have risen.

all major banks have increased the amount of provision against those loans. however, as a result of the fed's work, even worst case scenario from stress testing, it shouldn't be anywhere near what we saw back in 2008. >> that's a great point. richard is absolutely right, that the financial system, the formal panicking system itself is definitely safer than it was, no question. banks have offloaded a lot of their riskiest stuff. the shadow banking center, hedge funds. that's interesting to me is the fundamental lesson, it's a deep one, but i don't think we have learned, we haven't shifted our economy to one that operates primarily on debt to one that is really about a high wage, good job economy. this goes to some of the points that the president was trying to make in his speech. he was saying, oh, i love manufacture, i love good jobs. we haven't really made that shift back to a manufacturing economy and may not be able to make it back to an old style manufacturing economy, but we need to move away from an

economy that's based on debt to one that is based on higher wages and can cope with that. there are other economies that do this, germany is one of them. but that's a transition that we're still trying to make. i think that politicians on both sides are going to try to own the solutions to that issue. >> the fed is in a very tricky position today. janet yellen's last meeting, no move. everybody is expecting a move in march. they will take note of the market concerns. and if they feel a confidence issue, there's a variety of things they could do. they may be out of bullets in terms of lowering interest rates. they have 1% they can play with. they still have qe they can restart. before they get to anything like that, they'll jawbone the market. they'll use inflationary expectations and interest rate expectations and jawbone the market over the next month. >> explain jawbone. >> well, basically put out

statements. the statement at the next meeting will talk about what they are prepared to do. the statement at the next meeting may talk about what they expect in terms of -- >> so they'll telegraph stuff. >> absolutely. and that's their first and initially most powerful weapon, just literally to jaw the market into where it wants it to go. >> gloria borger is also joining us. gloria, just from a political standpoint, i'm wondering to what your reaction is from the president? >> as david was point out earlier, when you use the market as your yardstick for a positive economy, you're going to have to swallow hard and try to figure out how to explain this. an i think what we see coming out of the white house from some of our early reporting is that they're going to say, well, this is -- you know, this is due to higher wages, for example. and i think as i look back to the debate over tax reform, i remember lots of democrats saying, look, the economy is fine now.

we're at full employment. we're chugging along just fine. why do you want to juice the economy and have a tax cut now. what you may be seeing is the result of an overheated economy. so you're already at full employment. you have a huge corporate tax cut. and you have, you know, there is a worry here that it's overheating. and i think you're going to hear lots of democrats saying this is exactly what we predicted was going to happen because of these huge corporate tax cuts. mr. president, you're going to have to explain this since you used the stock market as your measurement of a good economy. >> i also want to ask you about something that the president said at that plant in ohio. he had made prepared remarks about wage increases, about tax cuts, about tax reform. clearly he went off script at a certain point and was talking about kind of regaling people

with his point about the state of the union, democrats not aflaweding wh applauding when he was talking about african-american unemployment numbers. let's listen to what he said. >> there was one guy when i said the lowest african-american unemployment, he was sort of clapping like -- who was that guy? he's a nice guy. i think he was a reverend. and he was -- i wouldn't say it was exactly arousing, but he was putting his hands together. i want to find out who he is. i'm going to send him a letter of thank you. he was probably severely reprimanded. you've got half the room going totally crazy wild, they loved everything. they want to do something great for our country. and you have the other side even on positive news, really positive news like that, they were like death. and unamerican. unamerican. somebody said treasonous, i

mean -- yeah, i guess, why not. >> gloria, treasonous is a pretty strong term. in fact the u.s. code on it, the definition is whoever owing allegiance to the united states levels war defense him or adheres to their enemies giving them aid or comfort within the united states or elsewhere is guilty of treason and will suffer death or be in prison not less than five years. what do you make of those comments? >> i think -- i think this is a president who is going to try to cut a deal on dreamers with democrats who's got a lot of work to do with democrats. and i think if i were to look into donald trump's mind, which is a difficult thing to do, but if i were to think about the whole political environment we're in right now, you have to think about the nunes memo of last week and how he regards the democrats and said what's going on in this country is tragic and that the fbi investigation was a hoax and the whole russia investigation is a hoax and of

course he believes that's something the democrats are stirring the pot on. so i think it's all of a -- it's all of a piece here. i think that, you know, sometimes like in the state of the union just a week ago, we heard the president talking about bipartisanship. and how we all have to work together. and because democrats didn't applaud him, he is now willing to call them treasonous and unamerican? it's kind of stunning to me, particularly since he actually needs to try and get some things done with them, particularly on dreamers, because a large majority of the american public wants to get something done. and so i think it's all part of the same package right now, anderson. >> gloria, stand by. i want to bring in angela riles and rob astorino. thanks to both of you for being here. angela, you hear the president calling democrats treasonous who didn't stand or applaud enough.

what do you make of those comments? >> well, i think it's really interesting. i don't think he was actually talking about all democrats, though. i think he was talking about a certain segment of the group. they happened to be adorned and was the congressional plaque caucus. he also talked about hispanic and he said people would rather see donald trump lose than americans win he says in the speech and i think that that is remarkable because i think what you were really seeing and hearing are people who know the truth. the truth is that economic indicators lag and that he can't credit for something that is squarely an achievement of president barack hussein obama. that was the reason he didn't get the applause that he so desperately needs to feed his ego. >> so you think he was talking specifically about members of the congressional black caucus as being treasonous or unamerican. >> absolutely. well, no, overall because he mentioned nancy pelosi as well.

but when he started talking about african-american unemployment, he was talking about they and how quiet it was. i definitely know he was talking about that group because i watched it. >> rob astorino, are democrats treasonous? >> no. that kind of rhetoric is crazy and it's just as crazy for maxine waters to go on her rants half the time talking about the president and he's got to -- we've got to impeach him. none of that is helpful. but i do think a lot of americans were taken aback that on simple things, on things we can all agree. black unemployment being at the lowest level recorded is a good thing. i don't care what side of the aisle you're on, that's a good thing. >> it's great. >> and for democrats to look at each other like can we clap here, is that going to hurt us? that's silly. same thing with the hispanic caucus. democrats at a whole. when you've got things that ae over arching things that we should all agree on and they're just sitting on their hands because they feel they have to, i think that's what most people were agreeing with the president with. he was looking at them like,

okay, we can all agree now, we're going to talk about transportation, right, infrastructure? >> is it any different -- is it any different than what happens at state of the unions all the time? from past presidents as well? republicans stand up when it's a republican president, democrats do when it's -- not saying it's right, but it just -- do you see this year as particularly different? >> i do, yes. i think it's -- i mean it is so toxic right now on both sides of the aisle. and for the democrats, a lot of it is az specific hate towards donald trump, the person. and sometimes you also have to say the presidency or the office of the president. when they were at the inauguration saying we're not even going to go. he didn't even get started yet and they were boycotting his inauguration. let's remember that. >> do you remember why? >> this is a continuation of what's been going on. >> do you remember why? >> does it matter? >> yeah, it absolutely matters and i'll tell you why it matters. it matters for all of those people who are brown who were called drug dealers and rapist.

>> he didn't say all. >> it doesn't matter if you say all when you say mexicans are drug dealers and rapists, you have a problem. that was the day of his campaign announcement of this is a man at that started talking about build a great, beautiful wall to keep people out of the country. so when you build a campaign built on hate-filled rhetoric, build on bigotry, sdrdiscriminan and race im, i'm not going to applaud you and people who look like me are not going to applaud you and people who have heart all across t country aren't going to applaud you. congresswoman maxine waters did issue a state of the union are you butle. unfortunately for you and what you might believe there are several people all over this country who believe just like congressman waters believes, that there is something dangerously wrong with this president. that it's high time and overtime that he gets a psychological evaluation. >> i would say the same thing of maxine waters. >> and i wish you would. that as my mentor you will not disrespect her in that way ever. let me go back to this point. it is so very important that a

commander in chief behave as such and that we can rely on the words that come out of his mouth and we cannot. it is so very important when he talks about black unemployment that he recognizes that since it's plummeted it is also now increased. so i wonder if he's going to take credit for that as well. it's time for this president to be honest. >> angela, what rob was saying was that it wasn't -- it wasn't helpful for the president to call democrats treasonous just as, you know, rhetoric on the other side talking about impeachment is not necessarily helpful and, angela, there are a lot of democrats who feel like the talk of impeachment is not necessarily helpful. >> it may not be helpful, anderson, but the reality of it is there are a number of people who have called into looking into impeachment. that is a talking point on the left certainly that works very, very well because people have a number of questions. every time twitter thumbs picks his account back up and opens it up and says something else, he is the one that proves the reason why people are looking into this. i think it's time for us to stop

with the false equivalency. >> i would say that's as crazy and over the top -- >> i'm sure you would. >> -- as obama not being born in the united states. you and democrats and most people said that's a little out of the mainstream. >> no, it was nuts and he was the chief -- the reason why nobody -- >> let's let rob finish. >> he was the spokesperson for it. >> let rob finish. >> so is impeachment right now. remember the moment the president was elected and inaugurated, a lot of democrats were saying we're going to impeach him. we'll get to that somewhere somehow, but we're going to talk about impeachment. when you start in a defensive mode there and everyone is attacking you, the campaign is one thing. there were a lot of things that hillary clinton said that she regrets. there were a lot of things obama said -- >> name one thing. name one thing that sounded that racist and that toxic. name one thing from barack obama that sounded like that, please. >> well, race relations were at the worst under president obama. >> because he was black. >> that's ridiculous.

>> that's absolutely the case. >> that's the only argument democrats are using now. >> no, because it's the truth. you don't like it but it hurts. >> let's not relitigate that -- >> i don't want to relitigate it either, anderson, but what happens is people continue to try to draw these parallels that don't exist. the bottom line is donald trump is dangerous and toxic for this country. he's dangerous and toxic every time he tweets about his nuclear button being bigger. i mean come on. this is someone who is not stable and i've been saying it from the beginning and i will continue to say it until somebody looks into his mental stability. it is a problem and that is where we are. >> rob, just quickly, rob, i want you to respond. >> well, using words like dangerous. >> he is dangerous. >> and mentally unstable. >> he is. >> those are words that are reserved under unique times. now, i say he should layoff -- give his thumb a break and not go on twitter as much. i agree with that. you've got to be careful when you start using words like that.

i never agreed with obama but if i said he was dangerous and mentally unstable, what would your response have been. >> i would say that's another false equivalency and not true. >> i've got to get back. rana is still with us and steven moore, economic analyst and former advisor to president trump. steven, we haven't heard from you. as you look at the percentage points down to the dow today, also from friday, what do you make of all of this? >> well, anderson, you know, these numbers are pretty spooky. we've now seen a 1,500-point decline in the dow over the last two days, so that's -- that's an extraordinary fall. but let's not forget the dow is up 7,000 points since trump's election, so it's only given back a small percent of that. but, you know, one other point i would make about this because people are scratching their head wondering why is this happening, why are we seeing this big decline. i would point to what happened on friday morning.

we got two pieces of economic data, one was a very good solid jobs report with wage gains of 3%, one of the biggest gains in wages we've seen in years and the other was the fed reserve bank of atlanta projected that we'd have 5% growth in the first quarter. and so this was one of those paradoxes, anderson, where good news in the real economy was interpreted by wall street as bad news because investors were worried that you would see a spike in inflation due to higher wages and a spike in interest rates. of course i believe that's what really triggered this panic sell-off. but if you look at the fundamentals of the economy, anderson, they look really healthy right now. >> rana, you agree with that? >> i would agree with steve that what triggered the sell-off was certainly the wage information, which is itself a reflection of growth. now, this goes to the point that gloria made earlier actually. democrats would say, hey, we didn't need this tax cut right

now. we didn't need to throw kerosene on an economy that was actually growing pretty well. that's the sort of attack on the trump policies that you hear. and i think that there is some validity to that. we have been at the end of a long recovery cycle. it doesn't feel like it for most of us, but we've been in a recovery since 2009 if you can believe it. so it's natural that things should have been slowing down. but of course republicans want to get through the midterms, they're already starting to talk about 2020. you heard president trump talk about that in his speech in ohio. and so of course they want things to be great. but it does put the fed and the new fed chair, whom the president appointed, jerome powell, in a very tricky position. of course he has to balance if growth is stronger, we've got to have higher interest rates. markets don't like higher interest rates. that might mean a bigger correction. what happens if there's a big correction. do people start to feel insecure and stop spending? what effect does that have on the economy. all of these things are connected. very tricky moment.

>> steven, was it a mistake for this president or really any president to tie themselves so closely to the stock market gains? because if there are then significant losses, do they then have to kind of explain that? >> well, yes and no, anderson. i mean, first of all, when the dow goes up by 47%, it's not unnatural for a president to boast about that, so we've seen gigantic gains in wealth since the election and trump i think rightly said, look, this is an affirmation of my policies. in fact if you look at my writings over the last six months, i said let's show some caution because i've lived through a lot of these, anderson. i lived through what happened you may recall in october of 1987. we had a stock market crash and of course what happened in 2008 and 2009. so the dow jones and the stock market are much more volatile than the real economy. i think that's what -- when we talk about what's happening with the overall healthy economy, we

should look at the jobs report, we should look at capital investment, we should look at what's happening with respect to business hiring. i think this is where i disagree with rana a little bit. the tax cut has really triggered a big increase in investment and hiring by workers, which is exactly what we hoped would happen. now, if you get real faster, real economic growth, you tend to also get higher real interest rates as businesses want to borrow more and invest more. so i'm not too surprised about this except i am surprised about the big sell-off because i'm thinking this is a market overreaction and, you know, i would not be -- i would not be surprised if you started to see investors buy on this dip. >> rana -- go ahead. i want you respond to stephen but also if you could, your advice to people watching who are worried about 401(k) and the like. >> my advice to people watching is don't make any sudden moves. the jury is still out about what kind of dip this is. it could go two ways.

we could see a lot of people say, you know what, the economy is okay. we're in a global recovery right now, things are all right. people buy on the dip. the markets go back up or they maintain a little volatility but we don't see a big plunge. the counterargument is that, hey, we've been on borrowed time for the last few years. the fed put $4 trillion of money in the market over the last decade. wall street is totally out of sync with main street. those two are going to connect and we'll see a big dip in the stock market. we don't know which will happen yet. >> anderson, if i can add one quick point. i agree with rana on this. the worst time to sell stocks is they sell when the urkt ma markw and falling and buy when it's high and that's exactly the reverse. for people that have 401(k) plans where you're investing for your retirement, you want to keep your money in the market. you don't want to panic when the market is down and you don't want to buy when it's high. >> stephen moore, appreciate it.

joining me now is hogan gidley. hogan, thanks for taking the time. i want to start with the markets. the president has been speaking in ohio through this market, i don't know if you want to call it a correction or a plunge. i'm wondering has the president seen it yet? what's his reaction? >> well, i haven't spoken with him directly about that obviously. he's on his way back to the white house. but i can say the overall economy obviously is very strong. we've seen trillions and trillions of dollars of wealth created since this president took office. we've seen a 7,000-point increase in the stock market. you know, in the previous administration we heard that 1.9% gdp was the new normal, that manufacturing jobs wouldn't come back to our shores. this president's policies have turned all that around, even though most economists said that if he were elected, the economy would see permanent harm. but that's not been the case at all. >> stephen moore was just saying, though, there's a difference between the real economy and what's happening on wall street and this president has repeatedly taken credit for the dow over the past year, for the enormous gains we have seen

on wall street. is anyone at the white house concerned that now he's going to be held responsible if there is a correction? >> no, because still it's overall -- overall in a very strong place and it's exorbitantly higher than when he took office. you did talk about the real economy. i did hear the previous guest and they're right. the president this is a place where this company, they were giving their employees thousand dollar bonuses, wage increases. we've seen 3.5 million americans receive bone uses and that's all because of this president. so overall this economy is soaring. even though there is a one-day fluctuation, it is in a really good place and much better than when he took office. >> actually two days but i understand. i want to ask you, about an hour from now, i believe they're expected to vote. the rebuttal to the one the

republicans released last week. that memo by devin nunes alleges the fbi misconduct. will the president declassify this democratic memo if the committee approves the release? >> i can say that the president will treat it exactly the same. using the same methods and mechanisms. you'll recall, what did he was sit down with the white house counsel. members of the national security team and go through it meticulously. if there were any sources and methods that were revealed. if the democrat memo comes over, we'll have the same treatment. >> the president did say on that off mike that it was 100% that he would release and it supposedly he hadn't even read it at that point. >> i don't know if he had read it or not but the president will make the same accommodations for the democrats as he did for the republicans. he wants sunlight. he wants it to be out in the open and he'll treat it as such.

>> it does seem like the president had made up his mind. you had chris wray, roenls, meeting with chief of staff kelly asking the white house not to release this. the president obviously, and kelly told them it was like i to be released. it does seem like the white house was ready to release it even before it was read. >> the president was clear, if there was anything in the memo whatsoever that could impact national security or put american lives at risk, that he would not have declassified it. whenever they come the a decision and vote, and it gets to the white house, it will take the five-day process. the president will go through and it treat it exactly the same. can you explain why the president says he feels vindicated? >> what we've heard for so long with some of the biases against

president trump and for hillary clinton during the hillary clinton investigation at the highest levels of both the fbi and the d.o.j. >> you think comey was biased for clinton? >> i think the tweets and things like that prove an anti-trump bias for sure. when people saw those, there was cause for great concern. you don't want them to be biased at all. now we know from the that noobs memo, for example, that a large portion of the case for fisa warrants were granted solely on the purpose of a discredited hillary funded document. >> that's not true though to. say it was granted solely. >> i didn't say solely. i said largely. >> how do you know largely? in the nunes memo it doesn't talk about -- it doesn't talk about the other information. it is a very cherry picked memo.

>> right. and we'll see the other side of that if it runs through the traps and all things considered and it shows any type of methods that and sources. the american people have been concerned. i was in an uber just yesterday. the driver looked at me and asked me something about politics and i was making small talk. and he said i don't like donald trump at all of the he had no idea where i worked. but he said a whole year and nothing in the investigation? it is time for it to end. if there is no collusion is that no obstruction, it is time quit spending time and the american people's money. >> i'm not sure the uber driver

represents others. >> this vindicating him. >> the dossier has nothing 22nd the meeting at trump tower or with an, with the meeting. it doesn't have anything to do with obstruction of justice. so there's going to be a russia probe even without a dossier. >> i want to stress, bob mueller should be allowed to turn over every rock, pursue every lead, so we can have trust and know what the russians did or did not do. >> to pittsburgh the special counsel should not complete his work. i support his work. ? i support the russian investigation. i home he does it fairly and honestly. >> so that was a number of congress people. not just tray gowdy.

? first, i would like to talk about putting so many south carolinians in one segment. the president has been clear. we've turned over thousands of documents. we've given over interviews to the special counsel. to suggest anything -- >> does that mean the president will testify in front of mueller? >> that's up to him. i haven't spoken with him directly. when you again to people back the layers and you see how some of these ill gotten fisa warrants weren't even revealed to where they got the documentation. that's cause for concern. when the fbi and the d.o.j. use the most intrusive surveillance methods and mechanics on the american people, folks should be worried about it. >> you said the ill gotten fisa warrants, plural. i'm wondering, other than this one, is there another? >> i'm not familiar with all the

documents surrounding the memo. from what i've seen so far, i share in most americans' concerns about the politics being played at some of the highest levels of the fbi and the d.o.j. the president called adam schiff a liar and a leaker. >> well, look. a lot of the information we know that adam schiff and his staff were involved in, there is no reason for republicans to let that information go. that's coming from democrats and staffers on the hill. he have one in the town knows, if you tell someone on the hill something, it will be a couple of minutes. >> are you saying that it is only democrats who leak stuff? and not the republicans. >> i said anyone on the hill. if you're talking about specific meetings with adam schiff and then republican congressmen, and then information comes out, it is not republicans. it is someone like adam schiff

and his staff. >> how do you know that? >> because it is in the news. if the only people meeting are republicans, republicans aren't leaking it. it is xhonl sense. >> not all republicans agree. some leak information that, for a variety of reasons. >> of course. but not in this particular instance. you're talking about one specific instance. this town is full of leaks and nonsense. it hurts people and damages the process when people put their own political desires and motives among the american people. that's what's happening here. >> appreciate your time. thank you. >> you're getting some behind the scenes looks at the markets. >> the president is flying back. he has just left the cincinnati airport flying back to wash. and one of his habits is to watch the news coverage.

so he is now seeing with his own eyes, most like i for the first time, this massive fall-off of the dow. i'm told behind the scenes, it was jarring when the president's speech was interrupted in ohio. the coverage of it. even on the prefd preferred channel when it was interrupted to show this fall of the dow. this again is showing some of the risky business of politicize go the stock market. only ten days ago in davos, the president said if hillary clinton had been elected, the market would have fallen 50% so he will be asked this question when he arrives at the white house in an hour and a half. >> do we expect him to make any statement about it? >> we don't think he'll make a statement but of course reporters will be asking questions of him. we'll we'll find out this

afternoon. our special coverage continues now with jim sciutto and "the now with jim sciutto and "the lead." -- captions by vitac -- www.vitac.com that's the bell at the new york stock exchange as the market plunges at layoff count, more than 1,100 points. at the worst during the day, it was down some 1,500 points. the dow's worst week in more than two years. i want to bring in claire sebastian. she is at the new york stock exchange. what led to this market meltdown? >> reporter: it was a variety of factors, the perfect storm. we've seen on wall street in more than a year. the measure of volatility has more than doubled today. that shows that we're entering a new chapter here. it really started from the early part of trading session. the d