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    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; Pat Dorsey, Morningstar.com director of stock research; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Mike Norman, BIZRADIO show host, and Charles Payne, Wall Street Strategies CEO.

    Trading Pit

    The Iraq war: "Go big" and add more troops, "go long" and keep training Iraqi forces, or simply "go home." Which does Wall Street want?

    CHARLES PAYNE: Go big! Wall Street likes decisiveness and that’s been the big problem with Iraq — we were not decisive and went in with a small amount of troops. We need to go big and get the job done. This will also make our troops safer and bring them home sooner.

    GARY B. SMITH: I agree with Charles that we need to go big. However, I don’t this is what the stock market wants. Wall Street wants fewer troops in Iraq because that cuts our costs. The market hates this war because it is costing us billions. But this is not good and is such short-term thinking. I think Wall Street would like nothing better than for us to pull out and concentrate on our own shores. In my opinion, this would be very bad and send the wrong message to the terrorists. But, it would make the market soar.

    TOBIN SMITH: Wall Street does not want us to go big without a strategy. Adding 250,000 troops means we’ll have to start a draft. And if you think people are nervous and upset about the war now, see what happens if we start a draft. Wall Street wants a rational plan. It also wants to see some progress from Iraqis — not just us doing all the work. Just spending a trillion dollars and sending over 250,000 troops is not the answer.

    SCOTT BLEIER: More troops. I don’t want to seem callous, but this bull market started the day we went into Iraq. If we leave without testing some new strategy of going big and going long, the market will suffer. The market has loved the war. The numbers speak for themselves.

    PAT DORSEY: I think it’s wash either way. If we go big and spend a lot, it will calm things down in Iraq. However, this will be a drain on the economy. If we pull out, it will increase the instability in the region, but would be a positive for the economy.

    Will Your Home Be Worth More or Less in 1 Year?

    You've heard the reports. Home sales and prices are down. Builders can't get rid of new construction without giving away the kitchen sink — literally! So one year from now, Thanksgiving 2007, will home prices be worth more or less?

    Tobin: Home prices will be down one year from now. In the Midwest, home prices haven’t gone down that much, but they haven’t gone up that much either. This is not true for the coasts and other places with huge amounts of inventory. Homebuilders are telling me they need at least 12-18 additional months to sell that inventory. Plus, there are a number of people who have pulled their homes off the market and will have to sell next year. The big areas will be down another 10-15 percent.

    Gary B: Home prices are going up! We’ve already had a pull back. Two things will sustain this housing boom: low unemployment and low interest rates. Historically, this is what has contributed to housing prices going up. The bubble areas may come down, but across the board, prices will continue to go up.

    Charles: The economic slowdown is not going to be as bad as some people think. The housing market correction is sharp and will happen quickly. A year from now housing will be higher.

    Scott: The homebuilding companies might have 12-18 months of inventory, but the company stocks have stopped going down, even on bad news. That tells me the end of misery is near. If you live in the areas that have seen the bubble, be prepared for more downside. You should be fine if you have a nice house, near a big city with lots of jobs. In these areas, prices have stopped going down and will begin to go up.

    Pat: To Scott’s comment, I can think of a lot of nice houses outside Washington, D.C., that are still going down. In areas like Miami, southern California, San Francisco, and Las Vegas, there’s more downside to come. Here in the heartland, prices never went up that much, so they aren’t going to go down too much.

    Stock X-Change

    Christmas is exactly one month away. Don’t hit the malls! We’ve got the best stock gifts that will keep on giving all year ‘round.