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.
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; John "Bradshaw" Layfield, Northeast Securities senior vice president, and Adam Lashinsky, Fortune magazine senior writer.
Trading Pit: Wal-Mart Helps the Poor More Than Any Politician?
Wal-Mart, the same company vilified by some Democratic White House hopefuls, announcing a plan to open stores in cities that need an economic boost. That's not to mention the impact its low prices and plenty of jobs offer. At the end of the day, does the number one retailer do more for low-income areas than any politician could ever do?
Gary B.: Without a doubt Wal-Mart does more for the poor! The only way government can help the poor is to stay out of the way of private industry. But unfortunately, the government always seems incapable of doing this—especially this Congress. And this is exactly why the government will always be inferior to a private enterprise like Wal-Mart.
Adam: Wal-Mart is not in business to help the poor. Yes, low prices have been good for people with less money, but that is not the real reason for their success. Wal-Mart has been successful by bringing a little bit of the third world into the United States. The company pays workers less, does not allow unions, and does not have the health benefits equal to other employers. There is a very capitalistic reason Wal-Mart is moving into the inner cities: it needs more places to put stores.
Bradshaw: Other than the government, Wal-Mart is the largest employer in the United States. It has driven down food inflation by more than one percentage point. As for unions, look at the disaster they created for the automakers. Unions will destroy Wal-Mart. Free enterprise will always be better than the government. Wal-Mart has done more for the poor than the government ever could.
Tobin: It is all about politics here, and Wal-Mart has been a lousy politician. That has really been the issue. Wal-Mart can't fight its way out of a paper bag when dealing with politicians.
Scott: How many lower skilled employees have been put to work by Wal-Mart? Some blame Wal-Mart for putting "Mom and Pop" stores out of business. But this is not true. Politicians tax and spend, and when they spend they're inefficient. They don't bring in added value, and Wal-Mart does.
Effort to Weaken President Bush Weakening U.S. and Stocks?
From politicians to the media, the far left trying its best to weaken President Bush on issue after issue. But are these efforts actually weakening America and our stock market instead?
Bradshaw: Absolutely! A perfect example is from when President Bill Clinton was in office with the Monica Lewinsky scandal. Republicans went after him like crazy. He said he was close to a Middle East peace plan and close to catching Usama bin Laden. But we don't know if that really would have happened. Clinton was a true lame duck president. The same thing has happened to George Bush. He is such a lame duck president. If we needed to go after Iran, he doesn't have the political will to do so. And this has weakened our country.
Adam: All I can say is our far-right Vice-President Dick Cheney is hurting America by questioning the patriotism of the Speaker of the House. This is just politics going on here. We are actually having a good year. The stock market and economy are both doing very well.
Gary B.: The Democrats seem to feel that if they adopt the "let's pull back, isolationist kind of strategy" America is going to be better. However, if you look back at the strength of our economy and stock market, has been that America is willing to fight the battles that others are not. If that goes out the window, we will essentially become Europe with its much higher unemployment, lower growth rate, and less innovation. I just don't think we want to go there.
Tobin: NO! This makes us stronger! Going after the President is political nature. However, we have the right and freedom to do it. No one is getting locked up in jail, nobody is getting burnt to a crisp, and that is what freedom is about. This is what our soldiers are fighting for!
Scott: I only know what the market tells me. When the President was at the height of his power and popularity, the economy was weak and we were down and in a recession. As his popularity has gained strength so has the market.
The Stock Oscars! Each of the guys picked his award winning stock.
Scott's prediction: Avoid Anna Nicole's me$$! Pre-Paid Legal (PPD) up 30 percent
Tobin's prediction: Bald is not beautiful! Alberto-Culver (ACV) up 20 percent
Adam's prediction: Forget Dow 13K; It's 14K! Oil falls to $45/barrel
Bradshaw's prediction: Oil hits $80 by mid-summer; buy Exxon Mobil (XOM)
Gary B's prediction: PetSmart (PETM) is a top dog stock! Gains 50 percent in 1 year
On Saturday, February 24, Neil Cavuto was joined by Ben Stein, "Yes You Can Get a Financial Life" author; Gregg Hymowitz, FOX Business contributor; Charles Payne, wstreet.com; Leigh Gallagher, SmartMoney senior editor; Stuart Varney, FOX Business correspondent; and Laura Schwartz, Democratic strategist.
Neil Cavuto: Lots of people are ticked off at Bank of America because of a program many say is designed to lure illegals as customers; some are even organizing boycotts and cutting up their credit cards. But in a letter to the Wall Street Journal on February 22nd, Bank of America's CEO denied the bank is targeting illegals and said, "After a week of listening to our customers, we have made a decision. We will continue our card marketing pilot program in the Los Angeles market."
So Laura, is customer outrage and threats of boycotts falling on deaf ears?
Laura Schwartz: I think so! You know, actions speak louder than words, so cutting up your card gets great media coverage. But what speaks louder than that will be the $1.7 million 30-second commercial at the Oscars when Bank of America calls itself the "Bank of Opportunity." Bank of America evaluated this crisis before it got started. They knew what they were getting into. And quite simply, the money they might lose from an upset group of customers is not going to outweigh the money the bank's going to gain.
Neil Cavuto: I think they did weigh it, Ben. And they did weigh those advantages. What do you think?
Ben Stein: It seems to me that we have a situation of "do you believe in the free market or not?" The government obviously doesn't consider these people dangerous enough to deport them or do anything serious toward sealing off the borders and make this a real country with real borders. So, why shouldn't Bank of America make money off the illegal immigrants? That seems to be basic capitalism.
Gregg Hymowitz: Am I missing something here?
Neil Cavuto: Probably.
Gregg Hymowitz: I must be, because this is lunacy in my opinion.
Neil Cavuto: What's lunacy? The bank or our reaction?
Gregg Hymowitz: The reaction! Are you telling me restaurants should not serve illegal immigrants? Shall we starve them of food? Should businesses not accept them? Should hotels not allow them in? I mean you gotta be joking with me! Ben keeps making this argument that we're some open, porous country. That's ridiculous! Try getting into this country. It is almost impossible. Yes, some parts of the Mexican border are easy to cross, but it's not for a lack of trying.
Neil Cavuto: Well, apparently 20-million have tried and succeeded.
Gregg Hymowitz: But over how many years, Neil?
Charles Payne: Listen. No one's talking about harming illegals. It's one thing to say ok, let's harm them and not feed them. It's another thing to say let's be an accomplice to something that might be illegal or is illegal. Let's face it, Gregg.
Gregg Hymowitz: What percentage of your daily transactions are done by credit cards? It's part of life today.
Charles Payne: Not for everyone.
Leigh Gallagher: You guys have to look at the business-sense of this decision. Shampoo companies, potato chip companies, everyone has targeted the Latino market. No bank has yet captured it, and the first one to do it is going to win big. This is great for the shareholders! If I were a shareholder at Bank of America, which I am not, I would firmly want them to be going this route.
Neil Cavuto: Charles, I think Laura touched on it here. I think the bank weighed all the pros and cons and then made a business decision that there would be more money to be gained by catering to this community.
Charles Payne: It's a brilliant business decision. But in an era that comes on the heels of all the shenanigans of the late 1990s, you start to ask yourself if businesses are willing to go into a grey area. We've had scandal after scandal…
Neil Cavuto: Let's bring Stuart into this. Go ahead, Stuart.
Stuart Varney: What is the responsibility of a capitalistic company in the U.S.? Is its responsibility to its shareholders and depositors or is it to the government and ensuring the proper functioning of our immigration laws? The answer is A! It is a functioning business. It has a responsibility to shareholders and depositors.
Neil Cavuto: So you have no problem with this bank practice?
Stuart Varney: Whenever I talk about immigration, I have to preface it by saying I am an immigrant. I've been here 35 years.
Neil Cavuto: I thought that was a fake accent.
Stuart Varney: I was born in the Bronx. (LAUGHTER) What the banks are doing is legal. I came here with every single advantage you could have: I speak the language, I'm well-educated, and the Brits are relatively popular in America. I cannot say anything harsh about the illegals coming to this country. I won't do that.
Gregg Hymowitz: I don't understand what's so brilliant about this strategy anyway. I travel all over the country. And, Neil this may shock you, when you go into a McDonalds in another country, there are regional foods. What's so brilliant about this? They're targeting clientele.
Neil Cavuto: I don't believe you've ever been in a McDonalds.
Gregg Hymowitz: I told you you'd find that unbelievable.
Ben Stein: I don't understand where those 13-million illegal immigrants came from, Gregg, if the borders are so incredibly hard to get across. But, leaving that aside, clearly it's not up to Bank of America to enforce the laws. If the laws are not going to be enforced by the government, Bank of America owes it to its shareholders to make money.
Gregg Hymowitz: The illegal immigrants didn't all come in yesterday.
Neil Cavuto: We're not going to rehash how immigrants got here. They're here. And Bank of America is targeting this group. So Laura, maybe it's a way for Bank of America to grow?
Laura Schwartz: Bank of America is ahead of the curve. An immigration agreement between President Bush and the Democratic Congress is very likely in the next few years.
Neil Cavuto: Do you think we're almost making it too easy? Next thing we're just going to start sending them menus, maybe from McDonalds?
Laura Schwartz: Well, we could do that. Or we could crack down on the employers that give illegals money in the first place.
Stuart Varney: We're not going to kick them out of this country.
Gregg Hymowitz: Are you kidding? Or are you just playing "Devil's Advocate?" You've got to be kidding, right?
Neil Cavuto: What am I kidding about?
Gregg Hymowitz: You really think we should not serve immigrants?
Neil Cavuto: Do you cater to an illegal community? When you know the product you're offering is catered to an illegal community and you're within the law to do it… and you do it…
Gregg Hymowitz: Do you think illegal immigrants shouldn't be allowed to buy certain shampoos?
Neil Cavuto: I think you are targeting them. You are targeting them as a market, as an untapped market. They're here illegally, but you're saying, "What they hell. They're money." Is that what it comes down to?
Gregg Hymowitz: So where do you draw the line?
Leigh Gallagher: That's what it comes down to. But they're also going after a market. It's not just illegals. It's people having trouble getting credit.
Neil Cavuto: That's fine. But we know it's extended to illegals. Gregg has no problem with that. Stuart, you didn't have a problem with it earlier. And Bank of America doesn't have a problem with it.
Stuart Varney: We are not going to throw them out of this country. That is not going to happen. We're going to move toward a situation where we allow them to stay, get some documentation, and move toward a path to citizenship. Presumably, a credit card is the beginning of some kind of documentation. I gotta say I'm for it.
Charles Payne: The banks aren't doing this because they like immigrants. It is a brilliant business decision, but there are moral aspects. They are loopholes in the law that other people could exploit… perhaps terrorists.
Leigh Gallagher: Bank of America isn't the first bank to do this. Wells Fargo did it in 2001.
Stuart Varney: The answer is to close the border!
Neil Cavuto: The most brilliant line on this came from Ben Stein a couple of weeks ago. And Ben, I hope I'm paraphrasing this correctly, but you said maybe if this comes down to people getting gouged with sky-high interest rates, have at it.
Ben Stein: That's what business is all about!
Neil Cavuto: I wish we had more time Gregg, but unfortunately in your case we do not.
Head to Head
Neil Cavuto: XM and Sirius Satellite Radio… you've probably heard about their blockbuster merger plan. But is the timing of the deal a sign that Wall Street is predicting a Democrat will win the White House in '08, thereby making these types of pairings less hospitable? It's time to go Head to Head.
Charles, what do you think?
Charles Payne: Yeah, I think that definitely plays a role. Another thing I think is interesting is how everyone is saying the market is overbought. So why are businesses buying other businesses after a four-year rally? Also, there's a sense of urgency that more regulations on the way. There's a lot of anti-capitalistic rhetoric among the Democratic contenders, and I would be intimidated! If I were going to merge with someone, I'd do it now.
Laura Schwartz: I think the Democrats going into 2008 are looking at this very differently based on the past, present, and future. Past: Democrats have proven themselves to be pro-business under the Clinton economy. Right now: The Democrats' priority is building a strong middle class. So for the future: There is a wave of pro-business Democrats who will win votes.
Gregg Hymowitz: Charles, you are so big; I can't believe anything could intimidate you. But look, the mergers have nothing to do with Democrats; they have nothing to do with regulations. It has to do with liquidity. There is so much money pumping through the system. That's what's fueling this.
Neil Cavuto: I'm not going to waste time arguing with you because you're going to say the same-old Bush stuff. Ben, if the feeling is there's going to be a change in the White House and if you're a smart CEO trying to push through what could be a very controversial, dicey merger, is now the time to strike versus two years from now?
Ben Stein: Well now is the time to strike, but for the reasons Gregg said. There is indeed a tremendous amount of money in the system. And I don't think the Democrats have shown themselves to be anti-business. The Clinton administration was very far from being anti-business. And I don't think the Carter administration was particularly anti-business. The businessmen are running the show right now.
Neil Cavuto: Ben, you know what's happened to you since you've been writing for the New York Times, right?
Ben Stein: I've become a Bolshevist.
Neil Cavuto: Leigh, we do know the Democrats are kicking around the idea of hiking capital gains taxes; we know they are going after the upper-income, and by the way, some Republicans are with them on this… so what's so crazy about saying having a Democrat in the White House would complete the trifecta and make a CEO want to move sooner rather than later?
Leigh Gallagher: I think there's something to that. But this is one of the more benign regulatory environments this country has seen in a while. So if you're a CEO, you may want to pull the trigger now. I agree with Charles. A lot of this is from the boom that started in 2005.
Stuart Varney: I think the Democrats have a natural urge to want to slow down rapid change in the economy and control it through regulation.
Stuart Varney: I think that's the Democrat urge. The natural urge of my good friend Gregg is to slow the growth down.
Gregg Hymowitz: I have nature urges, but that isn't one of them.
Neil Cavuto: Charles, let me ask you. If there's an urge to merge, your issues notwithstanding Gregg, is that what's going to keep driving the markets for the next couple of years?
Charles Payne: I think the fact that the market is undervalued is going to help drive the market for the next several years.
Neil Cavuto: Several years of a bull market? Really?
Charles Payne: Several years. But listen to the candidates out there. If you take Iraq off the table, the number one issue among the Democrats is that some people have too much and others don't have enough.
Laura Schwartz: Not all the time! Democrats have to ignore that urge. In order to get the Independents in 2008, they've got to be pro-business. The Democrats want to take off the burden of health care and share it with the government.
Gregg Hymowitz: Don't let Charles characterize what the Democrats are saying. He makes this stuff up. There's not a single CEO in America trying to plan a merger based on the possibility of a Democrat taking over the White House. It's just not happening.
Neil Cavuto: Do you know I could tell you about off the record conversations I've had with CEOs who say just that? To show you just how ignorant you are.
Gregg Hymowitz: Tell me!
More for Your Money
Anna Nicole Smith's baby girl could inherit nearly half a billion dollars. There are lots of guys claiming to be little Dannielynn's dad, but our guys just claim to know where the baby should put her money until she turns 18.
It's time to get more for yours and Dannielynn's money. Click here to watch the segment.
FOX on the Spot
Gregg Hymowitz: David Geffen is right! Hillary loses nomination
Ben Stein: Dems owe big oil a big apology!
Stuart Varney: Middle class tax cut paid by tax hike on rich
Leigh Gallagher: "The Departed" wins big, so does Time Warner (TWX)
Charles Payne: I could win "American Idol's" male competition!
Neil Cavuto: More merger mania before '08 election
In Focus: Impact on Stocks and Economy if Hillary Gets Her Wi$h Li$t!
Mike Ozanian, senior editor: Hillary wants to begin troop pull out of Iraq in 90 days, she wants universal healthcare and higher taxes on big oil and rich Americans. If she gets her wish list it would be disastrous to our economy. She changes her military strategy daily, depending on which way the political wind is blowing. The latest strategy is to weigh down our troops with so much body armor that they will barely be able to move. In terms of the economy, she's a Socialist. She just wants to take money from people and companies that have it and give it to those who don't. This takes incentive away.
Dennis Kneale, managing editor: We shouldn't demonize Hillary, she'll do that herself. If we did pull out of Iraq, don't you think the markets would boom on that news? And if we didn't drain $100 billion on Iraq, we'd spend it on the economy.
Jim Michaels, editorial vice president: What makes you think the markets will go up if we admit defeat and turn the Middle East over to the Iranians? Hillary says she's going to "take" oil company's profits away. That makes me think that she has no respect for the basic rule of law that we should treat everyone equally.
Lea Goldman, associate editor: Oil companies are not people. What Hillary is advocating is that we redirect oil subsidies and grants that have propped up the oil industry and redirect them to alternative energy companies, which are really the direction that our country should take in the new millennium.
Victoria Barret, associate editor: Our corporate tax rates are higher than France's. Oil companies don't need to be taxed more. Hillary is a double whammy. The market doesn't like uncertainty. Historically, the market under performs the first 2 years of a Presidential term. With Hillary we have no idea what she stands for.
Michele Steele, reporter Forbes.com: The markets don't like uncertainty, but what is certain is that Iraq is a failed policy thus far and there is no reason to throw more money and more lives at it. And how about the terror premium we're paying on oil right now!
$uper Rich $uper$tar$ Should Pay More Taxes?
Lea Goldman: When we cry out as taxpayers against CEOs and oil companies for not paying their fair share, l think we overlook Hollywood. They are some of the richest folks on the planet. Steven Spielberg pocketed $300 million last year, Tom Cruise $67 million, Oprah over $150 million. We're hearing more and more how they're shipping their money over to the Netherlands for tax shelters. They should be paying their fair share.
Jim Michaels: No we shouldn't tax celebrities more. It's totally un-American to treat one class of people different than another class.
Michele Steele: The richest bracket of Americans is paying less than they've paid in the last 60 years. The celebrities have been left off the radar screen.
John Rutledge, Forbes contributor: There are two words you'll never hear together; celebrity and economist. It is un-American. We believe in the rule of law, not rule of envy.
Victoria Barret: These celebrities are in the highest tax bracket. They are paying high taxes. They are also creating jobs. Plus, there is a demand for what they do. The prices they fetch for movies aren't made up. There is demand for the content. And they spend a lot of money and that's good for the economy.
Flipside: Government Should Butt Out of All Business Deals
Bill Baldwin, editor: These trustbusters should stop worrying about mergers like the proposed XM and Sirius Satellite Radio deal, stop picking on so-called monopolists like Microsoft, and focus on where the real monopoly power is operated by the government. Private monopolies fall under their own weight and they attract competitors. The real evil monopolies, the ones the trustbusters should really bust up are the post office, the K-12 education monopoly and the milk cartel.
Michele Steele: I think that the government is there to maintain a vibrant and competitive market place. I think it's about developing initiative.
John Rutledge: The government should butt out. Politics got involved in mergers with CNOOC/Unocal, the Dubai Port merger, and the blackmail that happened during the Bell South-AT&T merger. They should get out of this business. Monopolies only exist for two reasons: a government license and the other is intellectual property. The problem is that we abuse monopoly power. We have anti-trust laws for that already.
Dennis Kneale: To say that the government should have no roll in corporate mergers whatsoever is going too far.
Jim Michaels: Competition today is across industry lines. If you have only one satellite radio company and they gouge the public, the public will use their iPods or go back to free radio or the internet radio or read a book.
Informer: Merger Winners
Victoria Barret: eBay (EBAY)
Lea Goldman: Constellation Brands (STZ)
Mike Ozanian: Brinker International (EAT)
Bill Baldwin: Anadarko Petroleum (APC)
Our Cashin' In crew this week: Wayne Rogers, Wayne Rogers & Co; Jonathan Hoenig, CapitalistPig Asset Management; Jonas Max Ferris, MAXFunds.com; Dagen McDowell, FOX Business News; Tracy Byrnes, NY Post, and Mike Norman, BizRadio Network.
Stock Smarts: President Al Gore: Good or Bad for Wall Street?
Al Gore keeps saying that he won't run for President this time around, but with the Oscar spotlight now on the former V.P., many people don't believe him. If he really would run and win the White House, would that be good or bad for the market?
Jonathan: Wall Street would hate it. Environmentalism, as practiced by Al Gore and other "Greens" is not pro-environment, it is anti-man. They hate achievement, hate technology, and hate man. Green is not what I want to invest in. I don't think Gore has any chance of winning, or even running, in 2008.
Wayne: Jonathan should run! Green is in and green stocks will do very well. There's a lot of popularity right now because of the emphasis on global warming. I don't think it will be good or bad for Wall Street. Al Gore doesn't even have a chance anyway.
Jonas: Al Gore would be fiscally responsible, which Wall Street would like long-term. Environmental policy is very important for us long-term, but in the short term those policies are disruptive to business and profits. It's disruptive when we start talking about changing our energy behavior.
Dagen: Jonas is totally wrong. Corporate America and a lot of executives already know that democrats are going to move in and do something about it, regardless if it's Al Gore or not. Corporations are preparing for that.
Tracy: Hillary Clinton has no substance and Barack Obama is inexperienced Wall Street would actually respect the fact that Al Gore is coming in and he's passionate. He's been in the White House before and has experience. Plus, he has a business background.
Mike: Wall Street might hate it at first, but with Gore I think he would try to develop his economic policy around the environment. It would create a lot of new markets, which would stimulate the economy. We would be the world leaders in this area and export these technologies. We've seen it with the Clean Air Act of 1963, which transformed industry. We've seen it in other acts that stimulate the economy. Al Gore could wait before he announces himself a candidate. That could be part of his strategy.
JetBlue Fiasco: Would Government Regulations Make It Worse?
JetBlue has taking a big beating after a huge collapse of its systems after a winter storm. Now, some lawmakers led by Senator Barbara Boxer, say that if JetBlue doesn't clean up its act, Congress will. Would the government make a bad situation worse by trying to "fix" the airlines?
Tracy: Congress has enough on its plate. It does not need to be taking care of customer service problems. JetBlue got beat up. If a company is stupid enough to leave people stranded on the tarmac for hours, its stock will feel the pinch, people will stop flying, and the company will go down. The government should just stay out of it. The airline industry doesn't need any more rules and regulations.
Dagen: It's not just JetBlue; all the airlines are mistreating customers. This kind of thing has been going on for years. In 1999, the airlines kept the government at bay by putting in customer service agreements, but now they are not abiding by those agreements. Fifty percent of the time they aren't even announcing flights that are delayed. It is disgraceful. I hate the government stepping in. But if the airlines won't do it, it's time for Uncle Sam to do it.
Wayne: We don't need the government to put regulations in place. It can't run the post office. It can't run anything. This JetBlue fiasco was a wake-up call. In turn, the company has changed its policy and put in place some rules for itself. You can't run an airline and not expect bad weather. We have some of the best airlines around the world. Competition is what makes the market work.
Jonathan: This is already one of the most regulated industries. Everything the airline does from how many times the plane can take off to how many hours the pilot can log and how long the crew can work. The worst is the anti-trust regulation, which has kept these companies from becoming more efficient.
Mike: I don't see how the airline industry could be any worse with the government involved than what it already is. Many airlines have gone bust since deregulation in 1978. Tens of thousands of workers have lost their jobs. We don't have meals anymore. We don't have blankets or pillows.
Jonas: The government's role with the airlines is to ensure competition. That's how these issues improve. If Virgin Airlines was able to fly some of JetBlue's routes, then problems like this could be taken care of, but the government won't let that happen.
Would Stocks Have a Huge Meltdown If Iran Successfully Tested a Nuke?
Iran has made it clear that they are going to keep enriching uranium and developing nuclear weapons. What would happen if one morning Wall Street woke up to the news that Iran had successfully tested a nuke?
Jonathan: No one wants to invest in weakness. We look weak now. If one morning we wake up and find out Iran has a nuke, we are weak. We have been appeasing and emboldening militant Islam this whole time. Iran is the number one state sponsor of terror. It is the financial and spiritual home for militant Islam, the real enemy we are fighting. We're going to just sit around and wait until they have the capacity to destroy us.
Dagen: Thursday (2-23-07), the market got weak when the UN nuclear chief came out and said that Iran had not frozen its nuclear program. In fact, it had ramped it up. The market did see weakness on this news.
Wayne: This is a terrible thing for Wall Street. We brought it on ourselves. The deterrent for Iran was Iraq. Our policy in Iraq has destroyed Iraq. They fought each other 15 years ago and we have made a mess out of it by advocating what our policy should have been about: the balance of power. We could have balanced the power in the Middle East if we had left Iraq somewhat in tact and strong because they would have been the deterrent fro Iran. We've got to engage the Kurds and the Saudis and the Jordanians. The Middle East has got to come together and bring back the balance and we've got to support that. We don't need boots on the ground to do this. We have to get our foreign policy right and unfortunately Bush just doesn't get it.
Mike: Saddam Hussein was on the quest to develop a nuclear device. We can't say that Iraq was our buffer against Iran. If Iran explodes a nuclear device, the market will tank. Up until now the market has been going up because it has built up the assumption that we will deal with this problem.
Best Bets: Stocks Better Than O$car!
Wayne Rogers, our very own Hollywood royalty, has never won an Oscar. He says who needs one when you can have these winning stocks!
Wayne: My first pick is WCI Communities (WCI), which develops leisure and retirement communities. For me, it's not really a play on the fundamentals or on real estate; it is more a play because of the big players that are in it. Carl Icahn has about 15 percent of the stock, Hodkins and Wiley's have about 15 percent of it, and the Bill Gates Foundation is even in it. It is a risky bet, but I do own this stock. (WCI Communities closed on Friday at $21.68.)
Jonathan: I don't like it because of the sub-prime market. It is high risk and low probability.
Wayne: I also really like Urban Outfitters (URBN), which has been growing at a 30 percent rate over the last 4-5 years. The chart looks very strong right now and I also own this sock. (Urban Outfitters closed on Friday at $26.14.)
Tracy: I think teens are done with this store. It's old news. Same store sales are down, while its competitor America Eagle (AEOS) is up 17 percent.
Wayne: Finally, China Unicom (CHU). I really like this one, along with other foreign telecom companies like China Mobile (CHL) and Vimpel Communications (VIP). They've all been great over the last few years. I think they will all continue to go up. I do own China Unicom. (China Unicom closed on Friday at $13.23.)
Jonas: The stock price reflects the opportunity of China, but not the risk of China and that's dangerous.