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Bulls & Bears
This past week’s Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Pat Dorsey, Morningstar.com director of stock research; Charles Payne, Wall Street Strategies CEO; Rebecca Gomez, FOX Business News correspondent
Trading Pit: Wall St. Worried the Far Left Is Hijacking the Democratic Party?
Hillary Clinton trotting out that whole “vast right-wing conspiracy” charge. John Edwards and the rest of the Democrats caving to far left blogs canceling a FOX sponsored presidential debate. Are the far left Democrats hijacking the Democratic Party and should Wall Street be worried?
CHARLES: Wall Street is absolutely worried. Not only Wall Street, but the Democratic Party should be worried too. It’s amazing how all these candidates are pandering to the left. Wall Street is worried because they are talking about protectionism, higher taxes, increased regulations — of course Wall Street is very concerned.
SCOTT: Wall Street is not afraid; the Democratic Party should be afraid. The extreme elements of the Democratic Party run the risk of alienating the moderate Democrat and turning that vote to a moderate Republican. That would be a win for Wall Street.
GARY B.: Assuming that Hillary Clinton and Barack Obama are the Democrats’ two frontrunners, they are two of the most liberal senators in the Senate not to mention two of the most liberal Democrats. I can’t remember the last time someone that far left won the presidency, however one of them may and will win the nomination. America normally votes to the center, even if it is a Democrat. And that goes back to people like JFK and Bill Clinton . They were more centrists than ultra left liberals.
TOBY: Republicans are probably worried that this real sort of ultra liberal is coming out like this. But I think that the other thing that Republicans have to want is to see a little turn in the Iraq war. If this surge and other things start to do well, then the real trump card of the ultra liberal which is “let’s pull out of this place” goes away. When you take that away, you’re left with a guy who wants to raise taxes on everybody, and take everything out of the economy that has made is work. I think they are going to die a slow and ugly death.
PAT: The subprime mess seems to be what’s on everybody’s mind, worrying that it will cause some kind of financial meltdown, which contrary to some doomsayers, it is not. The real worry is whether these issues we’re seeing in the subprime market will spill over into the larger part of the mortgage market, which are folks who are the prime market, who have decent incomes. If they start to fall, then you get a real weakness in consumer sentiment and consumer spending. That’s a real danger, not a large one, but something that it worth worrying about — far more so than if someone on the far left or far right takes the presidency.
REBECCA: Wall Street is probably in wait-and-see mode like the rest of us. I don’t think the left liberals are going to hijack the Democratic Party. The Democrats want to get elected here, so they will say “hey we can’t go that far to the left here”. There are more tangible things that they are worried about right now then what will happen down the road
Stop Illegal Immigration by Creating Jobs in Mexico?
Want to stop the flow of illegals into America? Invest in Mexico’s economy to create as many jobs as possible. That's what Mexican president Felipe Calderon says we should do. But is it a good use of our tax dollars?
REBECCA: Absolutely, we already give Latin America $1.6 billion in aid for health programs. Why don’t we push a lot of that money towards economic development? The sole reason they are coming here is for jobs!
CHARLES: We keep giving money and we don’t even get credit for it. All we have to promote is capitalism and free trade. As far as creating jobs in another county, that is not our responsibility.
GARY B.: It’s a fantastic use of our money. We aren’t just giving it to give it. It ends up helping us. It’s another county we can export to, that will import from us. It will create jobs, and cut down on the immigration problem. We have a great example just north of us. We don’t have a problem with illegal Canadians coming across the border. They have a great democratic, capitalistic country that provides jobs for people in that country. The same can be true in Mexico and everyone wins.
PAT: You have three ways to solve this: either you let them keep coming, you build a fence to stop them from coming, or you try stem the flow a little bit. Mexico has been slowly moving over the past 25 years to a populist, very highly regulated economy towards one that is more open and more free market. We should do everything possible to support that because it will drive growth there. Mexico has been severely below its potential.
SCOTT: The Mexican economy is a direct reflection of the U.S economy. As long as we do well, Mexico will do slightly less well. They can’t do better than us! And even when we’re doing great and they are doing better than usual; they still come over en mass. And that will continue to happen.