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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; Eric Bolling, FOX Business Network; Tobin Smith, ChangeWave Research editor; and Mike Papantonio, Radio talk show host.
Stocks Rally After Bad Jobs Report: Good Sign for U.S.?
Gary B. Smith, Exemplar Capital: Conventional wisdom says when the market rallies on really bad news, that's generally a good sign. Last week's rally is promising, but I'm not sure we are out of the woods quite yet. We can have a recession and a bull market at the same time. I think all this bad news is priced in already. In terms of economic vitality, the price of oil is the canary in the coal mine.
Tobin Smith, Changewave Capital: The loss of 533,000 jobs in November was incredible. The market should have tanked on that news. But this was a classic short covering rally. We'll get out of this recession in 18-24 months. Right now, the government is the only player that can add growth to the economy.
Eric Bolling, FOX Business Network: Oil going down to $40 a barrel is very helpful. The American economy is so consumer-based, a drop in a commodity as fundamental as oil will help things out.
Pat Dorsey, Morningstar.com: I'm not seeing a whole lot of bullish signs. But it is often a good sign when the market rallies on bad news. Investment grade bonds are still a great buy. I think we need to reconcile with the idea of a stimulus package being passed, along with unemployment topping out at 8 percent or 9 percent. This is going to be a bad recession, and it will go on for awhile.
Two-Month 'Income Tax Holiday': America's 'Recession' Savior?
Gary B. Smith: The idea of a two month income tax holiday is great. It essentially gives everyone a 16 percent tax cut. It really would let people determine how to best spend their money in this recession—not a bunch of “brainiacs” who think they can mange the economy better than people can.
Mike Papantonio, Radio Talk Show Host: Gary B. is giving the same old Republican talking points. They're shying away from Obama's plan to rebuild the nation's infrastructure and help strengthen the American economy. Countless U.S. corporations have put their money in offshore banks, paying no taxes on this cash. We're talking billions and billions of dollars. So now just let them bring their cash back into U.S. banks and get a tax break? It's ridiculous. And we cannot afford a tax holiday for individuals—the country is practically bankrupt.
Eric Bolling: There should not be a tax holiday for individuals. It would bankrupt the country.
Pat Dorsey: Stimulus packages clearly don't work. People save the money, or pay off debt. They don't spend the vast majority of it. A tax holiday would be no different from a stimulus package. It would not work.
Time to Nationalize the Big Three Automakers?
Mike Papantonio: I think you have to merge the three U.S. automakers into one company. The captains of this industry have proved they're incapable of making things right. Can the government really do a worse job in the board room than these guys have?
Tobin Smith: Try going to Russia. Russia tried building a car with a state-run company. It doesn't run; it's a horrible car. The problem with the U.S. automakers has been they've failed to build cars that can compete in the global marketplace.
Gary B. Smith: We're moving away from capitalism, and we've been doing this for the last 10 years. The amount of federal regulations pushed onto the automakers has been suffocating and have contributed in part to their demise. The idea of putting the car companies in government hands is insane.
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