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; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Tobin Smith, ChangeWave Research editor; Matt McCall, Penn Financial president; Van Jones, Founder, Green For All
Trading Pit: Dow Falls 1,000 Points in a Month; What's Next for Your Stocks?
A Dow pow! Blue chips hit hard, below 12,000 for the first time since March. Down over a 1,000 points in a month. Will it be a summer meltdown for stocks or is the market ready to heat back up?
Matt McCall: I'm buying. As they say, “no pain, no gain”. We have had the pain. I think we're ready to move on and get the gain now. What's hurting this market is uncertainty. We don’t know how high oil will go. We don't know when the financial crisis will end. In the next couple of weeks, we’ll start bouncing back up. Economic stimulus checks keep coming in. Oil is topping out right now. We have a housing bottom right around the corner. With all of this and the Fed holding interest rates steady, we'll have a nice summer rally.
Gary B Smith: It's emotional at this point. Maybe a little over a year from now, these are going to be some of the greatest bargains in the world. When we say “the market”, there are three different markets. The financials and the oil have a disproportionate effect on the Dow. The Dow is almost at the March lows. Yet you look at the NASDAQ, it's still almost 10% above the March low. So all that said, if you talk about the S&P 500 and the NASDAQ, I’m still bullish on the market. I don't know if I’m going to rush out Monday morning and buy, but I would rather be a buyer than a seller.
Tobin Smith: If you use the baseball metaphor. We're probably in the seventh or eighth inning of the subprime mess getting cleaned up. We're in about the second or third inning of the recessionary issues hitting the market. We're not even halfway there with the financials. We still have another $600 billion to go. That's what the market reacted to this week. That means more pain than gain to come.
Pat Dorsey: Over the past year and a half, the financials have led the market both up and down. When they have been up a fair amount, they have dragged the market up. When they have been down, they have dragged the market down as well. Over the past month and a half that's really kind of accelerated. Since early May, the S&P 500 is off about 3%. Financials are off about 15%. That's a huge acceleration of the downside which means: A) there is just so much more pain to come or B) there is a possibility that we are hitting that fear phase, that capitulation phase where people are pricing in a much worse scenario than actually will come to pass.
Scott Bleier: The fact is that the market is testing the lows. It looks really scary, but the stock market is trying to bottom, commodities and oil are trying to top. It's messy. It's scary. I think next week we may get to that crescendo. I don't think we'll have a new bull market. The markets need to stabilize. Energy and commodities need to come down and reflect supply and demand.
Time to Demand Offshore Drilling to Drop Gas Prices?
Record oil and gas prices spooking leaders around the world. Now the Saudis calling for an emergency energy meeting in the Mideast. But someone here says wrong people, wrong place. "Washington" should call its own emergency meeting to demand drilling offshore right here in the United States. Would that really knock down prices at the pump?
Matt McCall: You better believe it! If we start drilling right now, gas prices will fall immediately overnight. It will have a psychological effect. People in America now know that the government is behind us, looking for ways to get us out of this oil crisis. We have to start drilling here. We can't be depending on countries like Iran and Nigeria for our oil. It's right here in our back yard. We need to do it today.
Van Jones: The reality is we have 21 million barrels a day that we're using. If we start drilling right now, we're only going to increase production by 0.3 million barrels a day. That's all the offshore oil available to us. That won't come online for 5-10 years. The problem is demand is going up! We have to cut demand and change our supply.
Gary B Smith: Look, this is a simple economic problem. There is a great demand for oil out there. We want the oil, we can drill for it. This is for the market to decide not the government. Oil and gas powers the American economy. It's our cheapest source of fuel, whether now or five years from now. Drilling for more oil is closer than any other alternative solution.
Pat Dorsey: I think the issue is short-term versus long-term. If you announce offshore drilling tomorrow, you could get a short-term psychological downdraft in gas and oil prices. That's a fair point. But it would be short-lived. It wouldn't solve the long-term issue which is that we are not efficient enough. Investment in efficiency and conservation are the only long-term solution to this. More oil poking holes off the coast of Florida just prolongs the problem.
Stock Exchange: Lightening Round
It's back in business...the fastest way to make money on TV!
Gary B Smith: Wyeth (WYE)
Pat Dorsey: Chicago Merc (CME)
Tobin Smith: Penn West (PWE)
Scott Bleier: Siliconware Precision (SPIL)
Matt McCall: Kaydon Corporation (KDN)
Gary B' Smith’s Prediction: Blockbuster Summer for "RGC"! Up 30% by Labor Day
Tobin Smith's Prediction: China Hikes Gas & CNOOC Wins! "CEO" Up 50%
Pat Dorsey's Prediction: When My Baby Smiles At Me I Go To "RIO"; Up 40% In 1 Year
Scott Bleier’s Prediction: Profit From Falling Oil Prices! "TSO" Up 50% By End Of '08
Matt McCall's Prediction: America Goes Nuclear! "NLR" Up 35% In 12 Months
On Saturday, June 21st, 2008, Neil Cavuto was joined by Charles Payne, wstreet.com; Dagen McDowell, FOX Business Network; Adam Lashinsky, Fortune magazine; David Nelson, DC Nelson Asset Mgmt; and Pat Powell, Powell Financial Group.
Bottom Line: Time for a Gas Tax Holiday to Rev Up the Economy?
Neil Cavuto: This week, gas still above $4.00 a gallon. Barack Obama still opposed to cutting the gas tax. John McCain still for it. McCain says it will help motorists. Someone here says it will help our economy, too. Let’s get “The Bottom Line.”
Pat Powell: That savings is going to help the little guy. It’s going to help every consumer. The gas tax holiday shouldn’t be temporary. It should be permanent. You have people in Washington who constantly pick your pocket and they do it in all these obscure ways and people don’t even realize it’s happening. You don’t see on your receipt: “$0.18/gallon for the federal gas tax.” It’s absolutely abominable that they do this. What we need to do is put more money into the hands of people and less into the hands of politicians.
Dagen McDowell: Pat, who’s going to pay for the maintenance of the roads? The people who don’t even drive??
Pat Powell: I’m glad you brought that up. You know, there was a FOX News special on a couple of weeks ago that had a $270 million appropriation for a road that went by a congressman’s property. That’s where our money’s going.
Dagen McDowell: A large percentage of it goes to keep the roads in this country in good condition.
Neil Cavuto: … it seems to be doing wonders…
Dagen McDowell: If you cut the gas tax, it’ll do nothing for the economy. If anything, it’s going to encourage people to drive more at a time when we’re finally cutting back.
Neil Cavuto: You’re yelling again. What happened to you?
Dagen McDowell: This is a political sop and this stuff gets me fired up.
Charles Payne: What’s sop?
Neil Cavuto: I dunno.
Charles Payne: Ok. All I can tell you is this gimmick looks better and better every day. Listen, I know it’s small compared to all the things out there. This is what bothers me: You have Barack Obama talking about helping the little person. This helps the little person! Also, this is immediate. Alternative energy may not have an impact for decades.
Neil Cavuto: That’s a sop!
Adam Lashinsky: Look. It’s pandering. Everyone knows its pandering. There was an interesting moment in the campaign a couple of months ago when John McCain and Hillary Clinton were trying to pander to voters. When Hillary Clinton couldn’t produce an answer when asked to name an economist who thinks a gas tax holiday would help the economy, Barack Obama stood on principle…
Neil Cavuto: Adam, I love you dearly…
Adam Lashinsky: I’m not finished!
Neil Cavuto: It isn’t a badge of honor to say you got an economist’s blessing… they’ve missed recessions and recoveries alike. Why is it a sop when you cut someone’s taxes? Why is it pandering if you cut someone’s taxes? And somehow noble when you raise them?
Adam Lashinsky: I’ll make an equally as simplistic argument, Neil: Do motorists want to have good roads to drive on? Or do they not want to have good roads to drive on?
Neil Cavuto: We don’t have great roads to drive on right now! And this is with the tax. I’d like to know where the money goes.
Adam Lashinsky: We do have good roads! We can debate this…
Neil Cavuto: You’re out in Palo Alto, right? Your roads are phenomenal.
Dagen McDowell: It’s not cutting the tax. It’s the type of tax we’re talking about. This isn’t broadly saying that cutting taxes is a bad idea… it’s the type of tax. If anything, it sends the message to this country that we have plenty of oil…
Neil Cavuto: You are Patty Hearst with a southern accent. A couple of weeks ago you were advocating much higher gas prices and now you want higher gas taxes. Have you no shame?
Dagen McDowell: I think that would be genius. I think it would be genius if any politician had enough guts and you know what to actually step up and say “Here’s how we conserve.”
Neil Cavuto: Higher taxes is going to do it?
Dagen McDowell: Yes, absolutely.
Pat Powell: We have been on notice for 35 years since the first oil embargo in 1973. We’ve had 35 years to step to the plate. This is not a political problem. Step out of the way, Congress. Let the markets solve its problems.
Neil Cavuto: Whatever relief you get from cutting the gas tax is temporary. I know you’d like to see it permanent…
Pat Powell: You know? Tell that to the guy who’s driving up in his 10 year old pickup truck, trying to fill the tank so he can take the kids to their soccer game. He’d like some temporary relief. I’d like to make it permanent for him.
Dagen McDowell: It’s over the summer! It’s maybe $30 or $40! Carpool! If you’re struggling, you have to come up with ways…
Charles Payne: First of all, you’re starting to sound like an elite New Yorker. There are a lot of people who could use that money. And to me, that’s whom I thought Barack was going after. You keep talking about keeping prices high. People need to drive! It’s not a habit. I was in the store the other day, and I heard a guy say the pack of cigarettes would be $9 instead of $7. People are still going to buy and that’s a habit! It’s not something we need.
Dagen McDowell: It will mean permanent change in this country in terms of how we drive and how we consume energy.
Neil Cavuto: Every environmentalist says that. “We’re doing this for your own good.” You’re losing the argument with the average American person.
Dagen McDowell: No it’s not.
Neil Cavuto: Yes it is. To infinity!
Dagen McDowell: You hand the money back to the people who do need it. You cut taxes somewhere else.
Pat Powell: Why trust the government to do that?
Adam Lashinsky: Charles makes a real interesting point. Is it elitist to talk about good public policy? Good public policy is having consistent and effective tax policy. Do we need the tax dollars for the roads? We talked a couple of months ago, Neil, about how gasoline consumption was not coming down in the United States; well, it has started coming down. So right there, that’s less revenue for roads. Do we want to let the roads deteriorate more than they are? Is it good tax policy to fund highways? If you want to say no and let them go to potholes… then fine.
Neil Cavuto: Adam, when we had the bridge collapse about a year ago, weren’t you and people sympathetic to your beliefs saying we need more taxes because this money isn’t being appropriately spent?
Adam Lashinsky: What I’m saying is if you take away money for infrastructure purposes, then you have to find somewhere to put it. I don’t know that I would have made a broad-based statement about infrastructure crumbling because we had a tragedy.
Neil Cavuto: Locked boxes never worked for Social Security. Locked boxes never worked for money that was earmarked for a variety of causes liberals seem to love. And I think a locked box for roads and bridges… it’s the same sort of stuff.
Charles Payne: Adam, what good is having pristine roads if no one can afford to go on them?
Head to Head – Does Wall Street Want America to Vote Out Congress?
Neil Cavuto: Did you hear what Congress did this week? The House passing the “Captive Primate Safety Act.” Talk about talking “monkey business” to a whole new level. It could explain why Congress didn’t have time for an energy bill… primates over prying us from these high gas prices. My next guest has had enough! He says throw these baboon out in Washington and you’ll start seeing bulls on Wall Street.
David Nelson: This Wall Streeter would like to see a change. I think most Americans feel the same way I do. And that is that both sides of the aisle have let us down. We’re tired of watching Congress attack a problem by waiting till it’s a crisis and passing legislation that’s as much as a decade late. I think the monkey bill is just another example…
Neil Cavuto: In fact, they gave the monkeys the right to vote. It’s kind of a good move…
Neil Cavuto: You know what amazes me? You remember the steroid hearing at the beginning of their term? As they were looking at the steroid issue, gas prices were starting to move up.
Pat Powell: There is rarified air in Washington. They don’t pay attention to what the rest of us are doing. The only good thing about this story is that maybe this will keep Congress from doing silly things like making corn-ethanol our solution to high gas prices. Economic problems need to be solved with economic solutions, not political solutions.
Dagen McDowell: But, it’d be bonehead out, bonehead in. The American people elect Congress and we don’t know who we want. We’re just going to get the same thing. It’ll be different. But it could be worse. You just don’t know.
David Nelson: That’s a pretty defeatist attitude.
Neil Cavuto: I’d vote for the monkeys because they were smart enough to get a bill that would protect them. Everyone else is complaining, but the monkeys are saying, “You know what? We got a bill.”
Pat Powell: I’d like to point out that in 1994, when we got a new Congress, we had 5 great years of prosperity.
Neil Cavuto: To Dagen’s point, it runs out of steam fast.
Pat Powell: Five years is good. I’d take 5 years.
Charles Payne: I’d be happy, too! Congress waits for a crisis, then they start to point fingers. This Congress is much less popular than the president of the United States.
Neil Cavuto: Nineteen percent approval rating.
Charles Payne: Wall Street has to be afraid that this new crop of politicians is trying to make its bones by taking on Wall Street.
Neil Cavuto: But maybe they’re more altruistic than that. They’re helping the monkeys. The monkeys can’t vote. So maybe they’re pretty decent folks?
Adam Lashinsky: You and I have had this conversation before…
Neil Cavuto: About the monkeys?
Adam Lashinsky: No, about our elected leaders in Washington. I refer to this as a Democracy problem. We can look at any Congress, Democratic or Republican, over the last 25 years and we can find plenty of silly things they have done. By the way, Congress passed legislation last week authorizing funding for the wars in Afghanistan and Iraq. They also passed legislation to extend education benefits to the military.
Neil Cavuto: Adam, if you measure productivity by the amount of bills churned out, this is the least productive Congress in the history of America.
Adam Lashinsky: Should we throw the bums out? It’s just a different way of asking should Republicans be controlling Congress? I’d say Wall Street has far more important things on their mind than what the party of power will be in Congress. They’re far more concerned about the credit crisis, which has nothing to do with what’s going on in Washington.
Neil Cavuto: You bring up a good point. And I want to raise this with David. This idea that Congress is always vilified and Wall Street would prefer it to be vilified…
David Nelson: There’s actual, statistical evidence that shows that the market goes up more when Congress is out of session than when it is in session. It’s a statistical idiosyncrasy, but it’s the truth.
Adam Lashinsky: It’s a dangerous thought! I totally reject the notion that we elect these people into office, then we don’t want them to do anything. We want to elect good people. We want them to make good legislation. And if they don’t, we should say so.
Dagen McDowell: Statistically, the market goes up the most when there’s a Democrat in the White House and a Republican-controlled Congress.
Neil Cavuto: That’s just a sop. There. I used my new word!
More for Your Money: “The Love Guru” Stocks!
Neil Cavuto: Who needs a love guru when you have our stock gurus to get you “More for Your Money”?
Pat Powell: FLIR Systems (FLIR )
David Nelson: Goldman Sachs (GS )
*David owns shares of this stock.
FOX on the Spot!
Pat Powell: Make Money on Weakness!
"XLK " Jumps 30% by 2010
David Nelson: World's Tuning in to DirecTV; "DTV " Will Grow 15% each year!
Charles Payne: Hot Stock to Buy Now:
"PHM" Up 20% by Dec 2008!
Adam Lashinsky: Watch Out Mozilo!
FedsLooking for Mortgage Scapegoats
Dagen McDowell: Warning to Commodity Buyers:
Are You Revving Up Gas Prices??
Neil Cavuto: Saudis Using Emergency Oil Meeting to Cover Its Assets
In Focus: Nationalizing Oil Refineris: Will It Lead to $20 Gas?
Elizabeth MacDonald, Fox Business Network: Yes, I say $20 a gallon is where we’d be headed given how nimble and efficient the government is when it comes to the free market. Why don’t we nationalize the sun for the solar industry? And do an antitrust action with Congress because they are monopolizing wind energy with all the hot air coming out of there.
Mike Maiello, Associate Editor: You know what, the government is supposed to step in when the market can’t provide. The government could take over the refineries and bring gas back under $2 a gallon. Then, I will go and buy back my Mustang muscle car I had when I was a kid because I’ll be able to afford to drive it again.
Steve Forbes, Editor-in-Chief: You’ll burn $30 waiting in the lines. Right now, even though we’re paying a high price, at least we can get the gasoline. And, let’s look at the government’s record. Can Mike or anybody name one government that efficiently runs refineries? Also, look at FEMA, look at social security, and what they did what that.
Quentin Hardy, Silicon Valley Bureau Chief: No offense, but for starts this is just pre-Fourth of July grandstanding. No different from President Bush saying ‘I want Congress to allow offshore drilling before they break for the Fourth of July.’ They always play these games just before a holiday. They don’t worry about it. I wouldn’t take it seriously, but I wish they would do it because it would prove how bogus the claims are that environmentalists are preventing the building of new refineries. Between 1997 and 2000, the refiners asked the EPA for one permit for a new refinery. They aren’t interested in building in the US. Why? Because it makes more sense to refine near where the oil is: Indonesia, Kuwait, Nigeria. They’re all building new refineries. We might need a new refinery if we drill offshore, but that’s at least 10 years away.
Evelyn Rusli, Forbes.com Anchor: Mike and Quentin should just move to Venezuela. This nationalization plan would be absurd and impractical and illogical. The government would step in, they would mismanage these oil refineries which are already running at full capacity, and run them into the ground and halt production. If the government wants to take over oil refineries, just imagine what they would have to pay the companies. They have to give just compensation according to the Constitution. That of course would trickle down into oil prices and boost the price of oil.
Bill Baldwin, Editor: Let’s have a yardstick competition. I propose a people’s energy company to be funded with $5 billion of taxpayer money, but there are some catches here. The first one is that people’s energy would be subject to the same onerous taxes, the same ridiculous regulations, and the same loony tort suits that ExxonMobil is.
Second thing, and this is far more important; once people’s energy goes bankrupt, which it would, all congressmen would have to shut up. They could not complain about how ExxonMobil is being run.
Should Tax Payers Have to Pay to Rebuild Levees in Flood Prone Areas?
Neil Weinberg, Senior Editor: My thoughts go out to the people in Iowa, but this is a manmade disaster. This is a result of agribusiness, and their cronies on Capitol Hill. The fact of the matter is we have changed the land in Iowa. Ninety percent of the wetlands are gone. The wetlands used to absorb the floodwaters. We have 106,000 acres in Iowa that have been taken out of a conservation reserve in the last year. With this type of development, rebuilding the levees is absurd.
Josh Lipton, Forbes.com Staff Writer: When you talk about the natural disasters, you have to question was it the weather that did the damage or was it substandard public infrastructure that broke down? If it was the latter that caused it, the taxpayers should step up and rebuild. The broader point is this- in every region there are risks: Midwest floods, California earthquakes. I think people feel they should step up and help out their neighbors. That’s part of what defines us as a national community.
Jack Gage, Associate Editor: It makes me sick to think that all our tax dollars are getting shipped to the middle of the country where we’re also spending all the subsidies for ethanol farmers. As long as they are spending the subsidies on fuzzy dice and 20 inch rims for their tractors, they will not have the proper insurance to guard themselves against a disaster like this.
Steve Forbes: This is part of Iowa. Of course you build levees. In terms of the land being taken out of conservation, a lot of the acreage was just good farmland that was taken out because of a misbegotten program in the 1990s. You have to rebuild those levees. The other thing is as part of that program, we need to revise flood insurance and catastrophe programs. In Florida and elsewhere where they found they had proper materials, the claims were 60% less than with normal materials. That’s where the push should be – preparation.
Victoria Barret, Associate Editor: Yes we should use tax dollars if it’s about infrastructure, if it’s about rebuilding these levees and rebuilding bridges. That’s why our nation is great at. That’s where tax dollars should flow. Some things are done better on a national scale. Disaster relief is one of them. As Josh was saying, there are risks in every area. There is a city on a hill in San Francisco right on a fault line. Eventually we’re going to have a tough time. I hope that the nation would step in. What we shouldn’t do is incentivize bad behavior on the part of individuals. We shouldn’t send the checks just because you live in an area that got flooded.
John Rutledge, Forbes Contributor: We are "incentivizing" bad behavior, but I think we first have to remember there are people living in shelters today who have lost their homes this week, so empathy and respect is in order. But there is a difference between infrastructure, roads, bridges, dams, levees, and subsidies. You know, about half of all the goods that make up American GDP cross the Mississippi River Bridge. Infrastructure is really important, and the government has a role to do that. But, subsidies and handouts that lead people to make bad decisions are not such a good idea. They help them when they decide to move to places where they shouldn’t. So we should build roads and bridges, maintain and warn people about risks. But we shouldn’t distort people’s decisions by subsidizing flood insurance or over building places like that.
Flipside: New Home Construction Hits a 17-Year Low – That's Good News for the Housing Market!
Jack Gage: The S&P homebuilders are down, trading for 20 cents on the dollar from where they were at their July ’05 peak. It’s time to start looking at them. They’re a bargain. As they go, homes will follow as we start to clear the inventory here, some of these mortgages reset. Get the bad news behind us. It will make for fatter margins for investors and homeowners now.
Victoria Barret: I think it’s still too early. We have farther to fall. I was speaking to someone yesterday who is trying to invest in foreclosed homes in Sacramento. Her observation was that banks are only now starting to be willing to sell homes at any price, and that there are still lots more foreclosures to come as people realize they are paying mortgages that are way overpriced given the value of the home. There are more people who will walk away. We have farther to fall.
John Rutledge: Sellers have to realize denial is more than just a river in Africa. In the deal business there is a moment where you say you cracked the spine of the seller. We’re not quite there yet, but the prices are falling, the bankruptcy numbers are up. Most people don’t know, but bankruptcy numbers and foreclosures always peak well after the recovery. That’s because in order to have those two things happen, there has to be a buyer willing to take the bet. When the buyers are willing to take the bet later this summer, we’ll see numbers perk up. We need a bond market. We need low prices. Those together will bring this market back.
Quentin Hardy: Jack has maybe an interesting stock pick idea here, but the relationship between their stocks plunging 80% and the overall housing market isn’t really very clear. They are down 80%. Maybe they have the cash to endure what’s going to be a grueling period while the demand is low. A while back, I saw real estate billionaire Sam Zell. He pointed out something very interesting. Historically, we have 62% ownership in this country. If it varies much off that in either direction - look out. Due to the bad regulation and free money, it went up to 69%. That was disastrous. We’re now going to head back to the mean of 62%. It’s going to take a while.
Steve Forbes: It’s already starting where the market is allowed to operate. In Florida prices are starting to go up. The areas where the prices have fallen the most are the areas where you’re starting to see the most recovery because the bottom fishers are starting to come in. The real threat to Jack’s scenario is Congress coming up with a bailout bill for Countrywide and others that will give maybe 7 or 10 cents on the dollar. That would retard recovery and not bring about the recovery that should happen.
Informer: The Be$t Stocks Under $10!
Bill Baldwin: Grey Wolf (GW)
Neil Weinberg: Ford (F )
Josh Lipton: Taseko Mines (TGB )
Evelyn Rusli: Brightpoint (CELL )
Gore Endorses Obama: Say Hello to $7/Gal Gas?
Eric Bolling, FOX Business Network: This is the last thing we need. We need it like a hole in the head right now - an Obama-Gore energy baked policy. Obama is going to tax oil companies on a windfall basis. That's going to drive up the price of oil. Oil companies aren't going to — they are going to turn afternoon and take that money and send it to congress instead of dropping drill bits into the ground, finding more oil. Then you add on Al Gore's climate change folder, which basically says you produce greenhouse gases, you produce carbon dioxide and we're going to tax that also. Oil companies will say this is very, very difficult to do business in this climate. I might go overseas. Let me look at Dubai, some of the Middle Eastern countries that are very friendly to asking U.S. Businesses to come here, to Dubai. You will have a situation where higher taxes, higher individual taxes will pay for the climate change. Then oil prices will go up, gasoline prices will go up. None of this is good. Guys, what we really need to do are find ways to drill ANWR, the outer continental shelf, possibly even to drop the speed limit to 55. These are the answers, not taxing.
Wayne Rogers, Rogers & Co: I don't know that he is necessarily going to go the green route. I don't think this is a case of the greenies. Al Gore doesn't control the world price of oil for god's sake. The point here is that we have never involved ourselves in a national intent to try to do alternative fuels. Here is Honda that came out last week with a hydrogen powered fuel cell car. Why we didn't do this 30 years ago? Why? Because the people in Congress are morons…because people in the Congress don't address it. That's why.
Jonathan Hoenig, Capitalist Asset Management: Yes, Barack Obama is an environmentalist. I think that will certainly be bad for gas prices. Unfortunately John McCain kind of is as well. He wants to drill offshore but not in ANWR. He wants a cap and trade system which is a tax by any other name. But the environmental movement will push up gas prices. That's their point. They want to make gas and energy so expensive that none of us can use it.
Tracy Byrnes FOX Business Network: They still have to drive to work. I don't think they are that malicious. They are going to tax us dramatically when they get into office, but let's face it, both sides of the political parties are against offshore drilling. Nobody is opening that moratorium up…except for our current president. He has a bunch of boneheads beneath him.
I don't know why we're still playing around with this moratorium quite frankly. I pity the President that he has to deal with this. We have both sides here. We can't just point the finger. It's not just these guys that are bringing up the price of oil, as much as we would like to blame the Democrats. There is a multitude of other issues, of course. Geopolitical, supply demands. And we are still driving our cars…that's not going anywhere any time soon.
Jonas Max Ferris, MaxFunds.com: Speaking of driving cars, did any of you have a car when Gore was in the White House? It was 97 cents in Georgia when I was growing up. Now as an advisor or buddy to Obama, it will make gas go up? Environmental policies can raise the price of gasoline when you're talking about no drilling and supply issues. They also can lower the price of gas. For example, raising the cash standard - It does lower the price of gas. Gas taxes can lower the price of gas.
For example, my car which gets 23 miles to the gallon came with a gas guzzler tax. My SUV which gets 12.5 Miles per gallon did not come with a gas guzzler tax. There are policies like that that would lower the price of gas. You have to look at both sides of the equation.
Members of Congress are Raking it in: Time to Cut Their Pay?
Eric Bolling: A lot of millionaires in that building. A lot of people making a lot of money every year. $169,300 for a congress American. $188,000, Up to $217,000 if you're among the rank-and-file of the leadership in the houses. Let me tell you something. These guys get benefits, pensions, health benefits, disabilities, offices, drivers. These are the elite of the elite. These are wealthy people running the country representing the average American. This is too much. Cut these guys’s pay now!
Tracy Byrnes: With power inevitably comes wealth. They do well in their communities. All of a sudden they are working down in the White House. A lot of these guys take pay cuts to go down there. $200,000 Gets you nowhere fast in New York City. Hank Paulson, one of the smartest guys that has been in Washington in a long time is leaving when his term is up. He said because well, he can make more money elsewhere. If we didn't have a Rockefeller or a Kohl’s down in congress, they wouldn't be making a lot of money. I actually think you know what? Maybe if we paid them more, we wouldn't have them worried about their next speech, getting on the lecture circuit.
Jonathan Hoenig: I think the best way they could serve it is by actually doing less. I would rather pay these people more and have them do less. Politicians involving themselves in health care and housing and education. Everything else besides protecting the constitution and the individual rights of all Americans. Pay them 10% less.
Wayne Rogers: It's a terrific idea. I think the idea to have rich people in office is a very good idea. There is nothing the matter with that. Why should you be penalized because you have money? Secondarily, those people are not tempted to do anything. They are not subject to earmarks and bribery and lobbyists and all of the things that people will do to try to influence a legislator. If a legislator already has that money, he is impervious to that. I think it's a terrific idea that people who are in office have money. We shouldn't be interfering with their private business anyway.
Jonas Max Ferris: Why can't a king represent the interests of the public? The fact of the matter these people have been in politics for generations. They all live in the D.C. Area. They haven't worked in the real world. In my opinion, you will attract top talented people with higher wages.
Should Employers Be In the Business of Helping Workers Avoid Foreclosure?
Jonas Max Ferris: Well, employees actually spend a lot of time helping employers. A lot of those things are good for morale and keeping them working at your company. This in specific I don't like. I don't believe it's good to keep someone in a home that they are under water on. I think that's a bad financial decision. If the house has fallen, they are never going to say that even with a zero percent loan. They should lump it and walk away from it. It's not great for the whole housing market if everybody gets foreclosed on. This seems like it's charity. It's not. It's presuming the home will recover in the next two years which it's not going to do.
Wayne Rogers: But I think you're also presuming the employer is not going to get involved in the process. We have to go back to the original appraisal. If the house is appraised for a million, only worth $500,000, that's where the whole thing began. If we try to get the numbers back in line and we have an employer helping his employee, that Americans the person can continue to live in his home, doesn't have to move out on the street, potentially quit his job. That helps the company. That eventually helps the shareholder value. All in all it's not such a terrible thing.
Tracy Byrnes: It's the employer's choice if he chooses to do this. As long as at the end of the day it does not affect my shareholder value, I don't see what the problem is.
Jonathan Hoenig: You can help — on an individual basis, why couldn't they help? Many times you have an employee who is suffering from some a disease or something like that. You will help them. It also helps the company. All of those things are going to come back to you in spades. You don't have to worry about them that you are spending shareholders' money in some bad way. You're doing it in a good way. It will come back to the employer.
Most Recent Stock Buys
Eric Bolling: PowerShares DB US Dollar Index Bullish (UUP)
Jonas Max Ferris: DB Gold Double Short ETN (DZZ)
Jonathan Hoenigh: Kyocera Corporation (KYO)
Wayne Rogers: PMC Sierra (PMCS)