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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; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Adam Lashinsky, Fortune magazine senior writer; and Cheryl Casone, FOX Business correspondent and host of "FOX Business Now" on Yahoo! Finance.
Trading Pit: UBL Tape and Job Loss: Good News for America and Market?
Usama bin Laden out with a tape for the first time in three years. Jobs down for the first time in four. Stocks sell off hard. So why is this good new for America and the markets?
Gary B. Smith: No one likes it when anyone loses a job. However look at the job numbers more closely. Jobs in the private sector increased. It was the loss of government jobs that caused the shortfall. And I like when government shrinks. This job report will make the Fed will cut rates. As far as bin Laden, we know he's alive and he's planning some evil act. But we've known that for years now and have done a great job preventing an attack. Now is a great time to pick up some bargains.
Scott Bleier: This is just the beginning of bad news. Last time bin Laden attacked we were in the same situation. Stocks were calling for a rate cut. The economy was just starting to slow. That's when he dropped the hammer. More economic weakness is coming. The market wants the Fed to cut, but it won't happen. Bull markets are built on expansion of the economy and credit.
Tobin Smith: When we get through this bad news cycle, stocks will be fine. We could be up 250 points next week if someone comes out with good news. The stock market is suffering from post shock syndrome. Some are saying we're heading to a recession. Don't worry—we're not!
Adam Lashinsky: Job losses are not good. Not ever. Manufacturing jobs are down and there is a tremendous amount of pain in the housing sector. The next jobs report will be worse and a lot more jobs will be lost. UBL does not have a day-to-day impact on the market, but if he's able to release tapes, it's not good. We'd be a lot happier if he was not putting out tapes.
Cheryl Casone: Recession talk? On what basis? There's been no slow down in GDP growth. Consumers are keeping strong. Yes, bin Laden is a problem, but the market's big terror on Friday was that the Fed was not going to cut rates.
Best or Worst Time to Buy a Home?
The housing market hit with more tough news. Foreclosures hitting a record and the number of folks signing up to buy a home tumbling to the lowest level since the 9/11 attacks. Will things get worse or could now be the very best time to buy?
Gary B. Smith: Best time! I like to look at the price of housing stocks. When these stocks drop 60-80 percent like now, and like in the late 1980s and early 1990s, it generally signals a bottom in the housing market. Maybe not the exact bottom, but it's a lot closer to the bottom than the top.
Tobin Smith: Don't buy now! We are experiencing a different situation than what we had in the early 1990s. Then we had a recession. Now we have a housing bubble due to low interest rates. This has to correct itself. The housing market had 25 years of appreciation in just 4 years. This will take at least another 2 years to correct.
Cheryl Casone: There are fire sales in states that had a construction boom, like Florida, California, Nevada, and Arizona. That's a sign now's a great time to buy. I don't think you can time the stock market or the housing market. But, if you can afford to buy a home where you're at right now, get a fixed rate loan because now is a great time to buy.
Adam Lashinsky: You should NEVER think of your house primarily as an investment rather than a home. We are just a year into this correction. It's going to get worse. The time to buy a home is when you move, if you need a bigger or smaller home, etc. We are going to get back to the time in this country when people buy homes for rational reasons, not to make money.
Scott Bleier: Not the worst—and approaching the best. Early in 2008 there will be a lot of mortgage resets and many people will unfortunately lose their homes. That will be the best time to buy. But, housing prices are still not coming down as much as buyers expected.
Cowboys are back! 3:10 to Yuma riding into theaters. And this has our own gang all fired up and ready for a stock shoot out.