• DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

    Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In

    Bulls & Bears

    This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Tobin Smith, ChangeWave Research editor; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Bob Olstein, Olstein Funds president, and Tom Adkins, Re/Max Fairlawn real estate agent.

    Trading Pit: War on Terror Saving Lives and Stocks

    A major terror bust in Miami with the Feds nailing seven Muslim fundamentalists who thought they were doing al-Qaeda's dirty work. According to the FBI, their plan was to hit several targets, including the Sears Tower in Chicago.

    Is the War on Terror saving lives and the stock market?

    Tobin Smith: Yes! We are winning. Arrests like these and killing Zarqawi are making people safe. The stock market needs this and this news is helping. We forget how strong our people are and what a great job they are doing.

    Scott Bleier: We are winning War on Terror and this is money well spent. However, the market doesn't care. It is looking at the economy, interest rates, and corporate earnings. We are bigger than 9/11 and any terror attack.

    Gary B. Smith: The War on Terror is definitely saving lives and the market. This plot could've killed hundreds and thousands people. If we awoke to news that this tower went down, the Dow would have fallen a thousand points. The consensus would have been that we're no better off than we were back on 9/11.

    Bob Olstein: This is like asking the question if you value air. You don't value until you don't have it. Terrorism is a fear. It's my fear and I'm usually a guy who only looks at numbers. If there is a terrorist act on this soil, it will destroy price/earnings ratio, which is how confidence is expressed. We're doing a good job, but we have to get tougher. When I see demonstrations out in the street with people ripping the American flag and saying they want to kill us, it makes we think we have to get even tougher.

    Pat Dorsey: If I woke up and the Sears Tower was leveled, the market would sell off, but it would come right back. We have a very large economy, and this is only a drop in the bucket. The market got hit very badly after 9/11, but it came right back. As tragic as 9/11 was, if you look at the economic impact over the last several years, was not that large. The short-term impact may be quite large, but the impact on the economy and the market over months and years, will be negligible.

    Housing: Do-or-Die?

    More and more homes are going unsold. Spring and summer are usually the best times to sell a house. Is right now do-or-die for the housing market?

    Tobin Smith: I've got bad news for you. As we said last March, if you bought a house in one of these hot areas at the top of the market, you're underwater. Ten to twenty percent haircuts on $750K-$2 million houses is the norm in the 26 markets we survey.

    Tom Adkins: Housing has gone from the very best year in American history to the 5th best year in American history! Essentially, we are reverting back to a normal market. Some areas will be a little lower than others and some will be a little higher. This is a media driven event. Sales are down about 3.5 percent. What's the problem with that? If sales had continued at that rate over the past 3 years, every American man, woman, and child would own a home in 7 years. We actually need softer sales to prevent an enormous crash. Everyone needs to live somewhere. So somewhere, somebody is always buying a house, regardless of the market.

    Bob Olstein: Housing prices are down ten percent and will probably slip some more. I agree with Tom that we are getting back to normal. The bullish thing is that it's taking the steam out of the economy. It could fix the inflationary expectations out of the economy and maybe stabilize interest rates. This would be very bullish for the market.

    Gary B. Smith: The facts don't bear out the bursting of the bubble. The median price for a home has not budged since the beginning of 2006. It's gone up and come back, but overall has remained pretty flat. It's unlikely that we'll see a big bursting in the housing bubble because we don't have a lot of unemployment right now. We've never seen a housing bubble burst without a lot of unemployment. Interest rates are up, but are historically low.

    Scott Bleier: This is not do-or-die for the housing market. Homes are all about price, just like stocks, except it's more long-term. This is the only investment that the government pays you to own. The housing market is never going to be destroyed, as long as the government pays you. If you don't own a house, you're nuts.

    Pat Dorsey: The aggregate home price statistics mean absolutely nothing. What are the three most important words in real estate? Location. Location. Location. Housing markets are local, local, local. You can have a house down thirty percent in Arlington, VA and I can sell my condo in Chicago in two weeks.