• With: Matt McCall, Regina Calcaterra, Gary Smith, Jonas Ferris, Tobin Smith

    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.

    Is unemployment about to get a lot worse as CEOs plan more layoffs?

    MATT MCCALL: Yes, unfortunately I am the bearer of bad news this morning. I really think the numbers are going to get worse and it comes down to a few factors, but I think number one is confidence. There is not a lot of confidence in American's right now. That means they are not going out there and spending money and creating demand for more goods and services. So that is a big reason CEO's are saying wait a second, we're not seeing demand for goods, why exactly am I going to hire? Not only that, we may actually have to lay people off because the demand is falling off. It is not that it is staying stagnant, it is actually falling off. Very concerning in a same report the came out, the capital expenditure spending the Cap Ex, that means how much money these companies are going to be spending on goods to increase their production of goods, is actually looking to drop as well. So that is going to have this trickledown effect where we know eventually it is going to get to you and I. Unemployment jumps through the roof, it could hit 10 percent by the end of the year.

    REGINA CALCATERRA: I think this survey is bogus. First of all, the survey was done by the business council. The business council is the same lobbying group that lobbies Washington to deregulate the financial industry, it's the same lobbying group that represents the big banks that led to the meltdown . So when the business council comes out with a survey that says 1 in 4 CEOs are actually going to terminate someone. I'm questioning the validity of this and the reason why is because are these the same CEOs who last year were members of the S&P 500 index that got an average increase in their salaries of $12 million who are now turning around and terminating employees. I want to see a little bit who these CEOs are and get a little bit more information. Otherwise, I think the business council is using this as a ruse and a tool to get something out of Washington.

    GARY SMITH: Well, I'll tell you what Brenda, I don't see unemployment improving. I'm not quite sure it is going to be what Matt says, 10 percent, but it is going to be closer to that than it is to 8 percent. You know you just look at the reasons, whether you believe as you say the survey or not it really doesn't matter. You look at just one segment, the consumers, if you don't have a job you're not spending; you're trying to cut back. If you do have a job you're looking around and you're fearful for your job, so you are also cutting back spending. If you're an entrepreneur, basically the Obama administration says hey, you get really rich and famous and do well, were coming after you and I'll tell you what, even if you are not worried about that, you're worried about health care. We just saw the report on Friday that incomes are coming down. You know across the board Brenda there is just no good news. I don't blame anyone out there including myself for holding back the purse springs whether it's me as a consumer or me as a business person, which is why you are not going to see unemployment improve because the economy is not going to improve.

    JONAS FERRIS: Okay first of all, you can see from all those charts and graphs this is a global phenomenon so it has very little to do with the United States directly as far as only here our unemployment is going to go higher. The survey incidentally, even though it seems dour and it is, its higher than its been over the last decade, the survey which means we might just have a mediocre economy which doesn't naturally cause a depression or double digit unemployment rates. I think we'll just muddle along with what is currently very high unemployment but it is not going to get drastically higher.

    TOBIN SMITH: Well for the last 20 years the alt Harvard study was clear, 40 percent of all the jobs created in the last 20 years have been in health care and government. So here is what is happening, certainly on the government side, we already know there are 500,000 less jobs going to be happening in the states, cities and counties over the next 6-12 months. Those are the ones that are already announced. On the health care side, with the $500 billion out of Medicare, if you look at hospitals particularly who are the prime drivers here, hospitals for the first time in 20 years have cut their nurse count, the doctor count, their services count, so those two main drivers are stalled. Right there that a million and a half jobs and right there that's why we're not adding jobs and of course our GDP growth rate, which by the way our current administration has said they are factoring a 4 percent growth rate for the economy, well were at 1.3. We don't create jobs until we get to about 3.

    Are new bank card fees proof government regulations backfiring?

    GARY SMITH: Absolutely Brenda, you know the current administration once again showing their totally tin ear when it comes to how the market and the economy really works. What is basically did was every time you went in and used your debit card at a retailer the banks got 44 cents. The government said no now you only get 24 cents. So the banks operating like any business says we got to get our profits somewhere were trying to defend our profits for our shareholder, they try to pass it on to the consumer. That is why Bank of America raised it fees for using a debit card, that's why free checking is going away. That is how the economy works. Price controls don't work. Now maybe the customer reacts and starts using cash and moves away from companies like Bank of America, all well and good, but for now the consumer is getting it right across the backside.

    REGINA CALCATERRA: Actually, I don't blame anyone. I do not see that there is a problem with this. This is a service that the bank is providing and the consumers have to pay. When you have a checking account that is below a certain limit and you used to use checks, we were charged for those checks. It is the same thing and I much rather actually have to pay a flat fee per month than getting charged per transaction every time I use my debit card. What I am a little concerned about is where is this money going to go? I mean now the banks are going to get an influx of a few hundred million dollars a year, are they going to use it to line the wallets of the fat cat CEOs or are they going to turn around and hire low to middle income employees to start helping unemployment.

    TOBIN SMITH: I'm just lining my pockets here hold on. You know, there are a couple of things that are actual and reality. First off, this isn't the first attack on the banks because they were also not allowed to charge for what the government thought was excess fees on overdraft. So wait a minute. I am in the banking business, somebody writes a bad check, I am not allowed to charge them a fee because that's not fair. That was $5.6 billion, this is another $6.8 billion of revenue that has come out of that business model and as Gary B. says, of course there is no free lunch. The unattended consequence in this case goes to the people who can least afford it. You know someone who has $10,000 in their checking account they won't ever pay a fee, people who have $500 absolutely will. So the people who can afford it the least get hammered all in the name ‘were just trying to make life fair. If we just regulate it enough I know things will work.

    JONAS FERRIS: Okay, first of all banks need excess fees to make up for all of their excess losses in the past and I am only half kidding with this sadly. I also say, I don't think people understand what is going on here. This is kind of like the airline industry who is now making you carry bags onto a plane, who is paying this was merchants actually and other consumers who aren't using their debit card because some guys using their credit card or debit card because those fees are being eaten, they are reflected in the price and they are being paid by the cash customer. This is letting you pay your own way. There are costs to use a debit card, they cost these banks maybe a dime or two dimes to do the transaction that should be borne by the user not the merchant or the consumer who does not use a debit card. That is why gas stations now charge a little more for using credit cards, because they were eating the cost on that. It is not fair to the cash paying customer.

    MATT MCCALL: Well I think this is another example of Obama going after the rich trying to help the poor, but he is actually ending up doing the exact opposite right now. I mean Bank of America could take a $2 billion hit in revenue, that's about 3 percent of their entire revenue. What does that mean? That means they are going to lay off more jobs and create every fee under the sun. And like Tobin said they are going to go after people who can't afford the $5 a month. I think he feels he is doing something good and keep in mind this regulation is only for banks that have over $10 billion in assets. So again in his mind he's going up to the big guys but he is hurting the little guys.

    Costs for family health plans are on the rise, will the Health Care Law really lower costs?

    TOBIN SMITH: Well they are because remember they are mandating coverage now that many health plans never offered. I mean they are mandating Cadillac plans number one. Number two, they have also mandated 100 percent universal coverage. And we know in New York and other states who have done that, that they have averaged an 8 to 9 percent rate simply because it's like selling fire insurance after your house burns down. If you have to sell insurance after the house burns down, or in this case pre existing conditions you're going to have higher use rates.

    REGINA CALCATERRA: The 10 percent increase that occurred this year, according to the Wall Street Journal which is the paper here at News Corp, 1.5 percent of that 10 percent actually was affiliated with the Affordable Health Care Act, the rest of it was just increases that were made by health insurance companies and quite frankly that was the average. Over the past decade premiums for families have increased by 133 percent and that means it is about 13 percent per year. So all the sudden this year it increased 10 percent which was a little less than what the average is. So these are insurance companies who are increasing it, it is not triggered by the Affordable Health Care Act.

    MATT MCCALL: Well maybe it is not in there yet but what is happening is this law is only going until next year. Once we actually see this implemented and expands you're going to see it go through the roof. And Regina you said 133 percent whatever it may be the last ten years, wages have only been up 34 percent so this trend that is going right now is going to rush the economy as health care costs go up.

    JONAS FERRIS: It is a long term friend that goes on before the plan. I will also say that Regina is partially right because the cost of health care, not including health insurance, are not going up as fast. Look at United Healthcare stock compared to the S&P over last year, you will see where some of the money is going. I will also say the parts of this plan that theoretically control these costs, notably the mandate which can share costs across a bigger pool does not kick in until 2014 so we are not going to see this stop for a while.

    GARY SMITH: First of all Regina is the greatest strategist in the world. She just made a 10 percent increase look like a 3 percent decrease because it is below the trend. I love that. Look the point is the administration said your health care costs are going to be flat or go down. They are going up. The reason is simple. It is the same as in our previous segment, the tin ear on the free market. You can't use price controls, you can't mandate that now insurance companies have to take all these people for free. Insurance companies have to pass those costs on, they are going to pass those costs on. Matt is right, right at the top of the block, our rates are just going to keep going up.

    Predictions

    GARY SMITH: BANK OF AMERICA

    Brenda, people shouldn't worry about Bank of America, they are going to be fine, better than fine and up 50 percent over the next year.

    MATT MCCALL: WAL-MART

    Very bearish on that one. I think as incomes come down, we see the first time since 2009, actually you're going to see Wal-Mart stock go up because people are looking for bargains. I think Wal-Mart stocks up 25 percent over the next 12 months.

    TOBIN SMITH: BOEING

    Boeing 787 Dreamliner is taking off. This is finally time to buy this stock. I say it's up 50 percent this thing is going to go on for 10 years.

    JONAS FERRIS: SONY

    Why in the pad war were about to be beaten by Apple. We have got Sony coming into the game with a really slick new player and the news this week that Amazon has an even cheaper version coming out by Christmas. I say Sony up 20 percent by next year.