• 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.

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    Bulls & Bears

    This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Patricia Powell, Powell Financial Group president; Gary Kaltbaum, Kaltbaum & Associates president, and retired U.S. Army Colonel David Hunt, FOX News military analyst.

    Trading Pit: Wall St Demands Action Against North Korea!

    Another historic week for stocks as the Dow shatters old records. Wall Street shaking off the news North Korea allegedly tested a nuke. But if the world doesn't take action soon, will stocks suffer?

    Gary B. Smith: Wall Street wants the U.S. to take action. I don't know if North Korea's leader, Kim Jong Il, is the smartest or dumbest guy in the world, but I think we can all agree he is crazy. If he has a nuke and set one off, the Dow will be cut in half. We must be proactive and go on the offense.

    Colonel David Hunt: Any military action is very limited. We don't have a lot of intelligence and cannot even confirm that they've set off a nuclear weapon. We have the option to use the Air Force and Navy. Submarines can throw cruise missiles. But Seoul, South Korea is only 32 miles from North Korea. North Korea has a million man army. There are a lot of things that must happen before we can take the military option. Initially we could only use an air campaign due to our troop deployments in Afghanistan and Iraq.

    Gary Kaltbaum: The big key for Wall Street is tough talk and for other nations to join in. It doesn't want the U.S. to go it alone. The big surprise for me was that North Korea's pen pal, China, said punitive things towards North Korea. Wall Street likes that other countries were starting to get tough and that is why stocks were strong last week.

    Patricia Powell: Tough talk is worthless—but we can't do an awful lot. We can only deal with one war at a time and we have two going on right now. To start a third front would spook both Wall Street and Main Street. Wall Street can work its way through a war and has proven this throughout our history. But it's just not a good idea to add a third one now.

    Pat Dorsey: This is fairly low down on Wall Street's list of concerns. The gains this past week told the tale. This was well telegraphed. The stock market tends to react most badly to things that are unexpected. North Korea has been saying for weeks that they were going to test a nuclear weapon. If this should be higher on Wall Street's list of concerns is another question, but right now it's fairly low.

    Scott Bleier: I don't think Wall Street wants any action at all. It's not just the leader that's psycho, it's the whole country! This is a very dangerous situation. We should not fight a war with them because if we do, they will role into South Korea and destroy the tenth largest economy in the world. We must continue to isolate them

    Proof Housing Market Is A-OK!

    The "fabled housing crash." It hasn't happened yet and Gary B. Smith has proof it won't.

    Gary B: I like rhetoric as much as anyone, but behind all that, I like the numbers more. I took a look at a chart of median home prices, and it indicates that housing is A-OK! The chart show it has been moving up for 16 years. Prices are now pulling back to the trendline, but the line is not broken. In fact, there's never been a crack in that upward trendline, as far back as I looked.

    Gary K: I'm not buying it. Take a look at the inventories out there. Who's going to buy all this inventory? Homebuilders are giving buyers 50 percent off in addition to all sorts of other goodies like cars and LCD projectors. They don't do that for any reason. It's because they have to move the product. Prices are going to come down. As far as Gary B's charts, I don't care what happened in 1970.

    Scott: I agree with Gary B. Smith. Housing is ok. The only people who are complaining right now are those who are late to the party and the speculators who like to flip. Now is a great time to buy a house. Housing is not going to crash.

    Pat Powell: Charts Schmarts. The fact is interest rates are up 2 percent more than two years ago. Every time the long mortgage rate goes up one percentage point, the borrowers lose 11 percent of borrowing power. The average borrower can't handle that. They are borrowing 22 percent less than just two years ago. This one you don't look at a chart for, you have to think it through.

    Pat Dorsey: I'm glad there's another Pat who doesn't think much of charts. I thought I was the only one. There is no national housing market. You have to think about the different areas, for example the Midwest versus Washington, DC. In the Midwest, there never really was a bubble, so it can't really come down too much. My parents live near DC, and they tell me that the market is now soft. Prices had run up pretty hard. In areas like that, Miami, and Arizona, it's going to be ugly. In other parts of the country, the housing market looks good.

    Chartman