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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Patricia Powell, The Powell Financial Group president; Kevin Kerr, Resource Trader Alert editor, and Julie Roginsky, Democratic strategist.
Trading Pit: New Congress Wasting America's Time and Money?
The new Congress spending most of the week—even coming in Saturday—to vote on an Iraq resolution that ultimately means…nothing! Are lawmakers simply wasting our time and money?
Tobin: This is a complete waste! Where I come from, you either go big or go home! This is something that Republicans will be able to build on. Julie's the strategist…I'm the realist! Congress is just wasting our time and money. Let's get on to the important stuff.
Julie: If this were such a big waste of time, then why did Republicans spend all their time and energy trying to kill it? If it's such a waste of time then let the people vote on it! This is not wasting time and money. It actually talks about taking this war in a different direction. This war has been going on longer than Nazi Germany or Japan and we still haven't won. All we're doing is wasting lives.
Gary B.: At least Congress isn't screwing up and taking action on things they shouldn't be. I guess idle hands in this case are good. What's the outcome of this going to be? President Bush is not going to say, "Ok, I'm going to change course." That's not going to happen. So what's the best that could 's going to happen, his feelings are hurt? If Congress wants to take action, they should do the only thing they can do and withhold funds. I just wish Congress would just come out and say that they oppose more troops in Iraq instead of wasting all this time and money.
Scott: Congress has always wasted time and money. This is nothing new out of Washington. Wall Street won't care so long as they don't focus on regulating the economy. There will be an exit strategy eventually. War is serious business, and we've got to figure out how to win and exit.
Patricia: I'm very concerned what this means to the average American and to the troops on the ground. Congress is not supposed to get involved in war tactics. If Congress had been involved in the tactics during World War II, there would have been no Battle of Midway, no D-Day, and we would be having this conversation in German. Wall Street likes that Congress is doing nothing. The more Congress talks, the less they do, and the less they do, the better off we all are.
Will Knee-Jerk Reactions to Global Warming Chill Out Stocks?
Stocks: red hot. The weather across much of America: ice cold. But the global warming issue keeps heating up. Can America tackle the problem without putting the market in a big chill?
Gary B: It would be terrible for the market. Let's spend $100-$400 billion a year—just in the US—for compliance on something that we don't even know exists! But, I guess it's the perfect government program. Everyone's forgetting that, yes greenhouse stocks may go up, but what about all the other industries that are going to have to spend billions of dollars to comply? They're going to drop like a stone!
Tobin: The government is not always wrong. And when there is a huge type of multi-country, multi-societal issue, like this, they can help. But more importantly, the government can legislate to get the private equity going, and this could be the biggest boom to the stock market we've ever seen.
Kevin: If you think this is going to increase Wall Street's confidence, you're breathing in greenhouse gases! Economic growth is fueled by energy, and if you start putting caps and restrictions on energy, you're going to see the economic growth of energy fall way down.
Patricia: If Congress gets it right—and I'm not sure they will—this will actually be a positive that can drive the market. Every market is driven by something. There was the internet and technology in the 1990s. Pharmaceuticals in the ‘80s. Oil in the 70s. "Green" stocks could fuel the next leg up in this bull run.
Scott: Renewable energies are going to be one of the greatest economic drivers of this century. I don't think that fighting global warming, whether you believe it or not, will hurt the market, because we're already spending billions of dollars protecting the environment. We've been doing it for 30 years and we're going to continue to do it, whether the money is well spent or not.
Bank of America going national with a plan that makes it easier for illegal immigrants to get credit cards. The Bulls & Bears each picked stocks that are more interested in helping true blue Americans!
Tobin: GEO Group (GEO)
Gary B: Armor Holdings (AH)
Patricia: FedEx (FDX)
Kevin: Whole Foods (WFMI)
Scott: United Industrial (UIC)
Tobin's prediction: JetBlue (JBLU) was grounded but now flies up 25 percent
Patricia's prediction: No action on global warming; buy Chevron (CVX) and Peabody (BTU)
Kevin's prediction: Real Alternative Energy: Nuclear! Fronteer (FRG) up 30 percent
Gary B's prediction: DaimlerChrysler (DCX) job cuts puts stock in fast lane; up 45 percent
Scott's prediction: Blu-Ray beats out Hi-Def DVD; Sony (SNE) gains 30 percent
Cavuto on Business
On Saturday, February 17th, Neil Cavuto was joined by Ben Stein, "Yes You Can Get a Financial Life" author; Jim Rogers, "Hot Commodities" author; Tracy Byrnes, NY Post business writer; Laura Schwartz, Democratic strategist; Ben Ferguson, "The Ben Ferguson Show" host; and Chris Lahiji, DailyTrends.com.
Gregg Hymowitz will be back next week.
Neil Cavuto: A parade of potential daddies may be lining up to grab a piece of Anna Nicole's fortune, but would you believe the biggest beneficiary of Anna's dough will be her uncle... Uncle Sam? Does that seem fair to you, Jim?
Jim Rogers: No, it's outrageous! In this country, we really tax people too many ways, and the "death tax" is one of the worst. You put money in the bank; you pay taxes on the interest. You buy a stock and you pay taxes on the dividends. You have a capital gain and you pay taxes again. Social Security is money the government's already taken away from you, but when the government gives it back to you, it charges taxes again! And God forbid you should die in this country; the government taxes you again. It's horrible!
Neil Cavuto: Tracy, the argument is that very few people end up paying the estate or death tax, so if Anna had a lot of money anyway, she should pay the tax.
Tracy Byrnes: That's ludicrous. Well, in Anna's case, she inherited it. But when people earn their money, it's unfortunate! The way the system works, if you don't die in 2010, which at this point should be part of your planning (laughter), you're toast come 2011 because the rate goes back to 55 percent and assets of more than $1 million will be taxed. That's easy to hit. It's very difficult for people to prepare for this. It's unfair. If you earned your money, you should not have to give it back.
Ben Stein: Well, first of all, I can't bring myself to talk a lot about Anna Nicole Smith. People die every day in Iraq fighting for this country. They don't get a moment's notice. Anna gets 24/7 notice. Look, the government needs money. That's the sad fact. It'd be nice if the government could cut it the way Jim always says, but it never can. So who better to get the money from than dead rich people? It's much better than to get it from live, working-class people.
Laura Schwartz: Dannielynn, the baby of Anna Nicole, is part of the less than 1 percent of people who are affected by the "death tax." If we were to abolish it altogether, it would cost the entire U.S. population $1 trillion over 10 years. The estate tax does need to be adjusted. And the Democrats have an alternative plan that would cost $75 billion over the next 10 years. So, I think there's a chance to find common ground here between the $1 trillion and $75 billion over 10 years. We do want to safeguard the small businesses and the family farms by raising up the money you get taxed on to $6 million per couple next year, $7 million the year after, and so on.
Ben Ferguson: I don't think it's a Republican or Democratic issue. You've already paid taxes on the money you've made. You should be able to give that to your family without having to get taxed again! There are a lot of family businesses that when the grandparents die and leave the business to their kids, the kids can't afford to pay the taxes to keep the business in the family!
Neil Cavuto: This is a little different.
Ben Stein: Why don't we just talk about Anna Nicole's chest? (laughter)
Neil Cavuto: Ok, let me ask you. In Anna's case, it's a little different because she inherited the money from a guy she married. Should there be different rules for people who just get money handed to them versus people like Jim who toiled from scratch?
Ben Stein: I'm not sure. But I know the government needs money and it should mostly come from rich people. There's no reason it should come from poor people. Dead rich people don't need the money.
Jim Rogers: Ben, I need money. Tracy needs money. Tracy's got three kids! She needs the money.
Ben Stein: You're not dead!
Jim Rogers: Supposed she dies? I got a kid. Suppose I die?
Ben Stein: They'd be phenomenally rich!
Jim Rogers: I pay taxes year after year after year!
Ben Stein: Jim, the government needs the money!
Jim Rogers: Why doesn't the government stop spending so much money?
Ben Stein: Because they have to defend you!
Tracy Byrnes: That $1 trillion is misleading because first of all, they're talking about 2012 and 10 years on, so this is once the rates go back up to 55 percent. Keep in mind: People spend so much money trying to not pay estate taxes, it's almost a wash between tax attorneys and tax planners and actually paying the tax.
Neil Cavuto: So what are you saying?
Tracy Byrnes: Raise the rate. Raise it as high as you can possibly make it. Make it a $10 million exclusion. Then, you'll have only your dynasties taxed. And if that's where we're going to get the money from, from the rich inheritance, then that's what we have to do.
Neil Cavuto: Is this part of a bigger issue? Ben says if you want to get money, you tap the rich folks. There is a logic to that in Washington because every time it needs money, it does tap the rich folks. Is that where we're going?
Laura Schwartz: Well, this administration said the war would pay for itself, but it hasn't! So where are we going to get the money while still supporting our efforts over there? You know, it's funny that George Bush doesn't have it in the budget after 2009. But c'mon, we're still going to be over there. And the money's got to come from somewhere. But you know what? I think there's a chance for middle ground. But I gotta tell ya, this will be a voting issue in 2008.
Neil Cavuto: I have never seen class warfare rate as a political issue.
Ben Ferguson: What is the American Dream?
Neil Cavuto: Well, right now it's these images of Anna Nicole. (laughter) But I digress. Go on.
Ben Ferguson: You're supposed to be to accomplish whatever you want in business and not get screwed for doing it. And what the government is saying is: if you're successful and rich, congratulations! We're proud of you for doing the American Dream. Now, we're going to mess with you and your family over your inheritance. Not everyone can win Ben Stein's money in his or her lifetime. Not everyone can write a book every other month and have it be a best seller. I wish I could!
Ben Stein: I wish I could, too. But wait a second. Let's have this be without seeing Anna Nicole's chest so we can concentrate.
Jim Rogers: Ben, you dirty old man! Listen to young Ben's point. You break up a lot of farms, you break up a lot of family businesses, and you break up a lot of families over this absurd "death tax." You say, let's tax dead people. Well, that's the way politicians think: Dead people can't vote so we're going to screw them.
Ben Stein: The government needs the money!
Jim Rogers: Who cares?! When you need money, you stop spending, right?
Ben Stein: The government doesn't work like that.
Ben Ferguson: Can we all agree that small businesses are what keep this country afloat? Small businesses get passed down from generation to generation. And if you don't get rid of this estate tax, you're going to end up killing small business that may be worth $1 million. They may not make that much, but they're worth $1 million.
Neil Cavuto: Laura, you're the one intent on raising all of our taxes. I'll let you have the final word on this one.
Laura Schwartz: Well, that's why the Democrats want to adjust it so it doesn't kill the family farmers or family businesses. That's why the Dems want to raise the estate tax to $6 million, and then $7 million, and so on.
Neil Cavuto: Alright, I wish we had more times guys, but we ran out of that video!
Head to Head
Neil Cavuto: No Social Security number? No problem if you want a credit card at Bank of America. Bank of America has started a new program that makes it a whole lot easier for illegal immigrants to get credit. Chris Lahiji joins us now. So what do you think, Chris? Is it a good business move?
Chris Lahiji: Neil, I thought that Wal-Mart was the worst company in America, but now I think it's Bank of America. I think they're putting greed before ethics and morality. I think now that they've monopolized the entire industry, they can loophole the law and give credit to people who don't deserve to be in this country. I hope to God it backfires on them. I think illegal immigrants should be deported. They should not be able to build good credit.
Neil Cavuto: What they're doing is legal, Jim.
Jim Rogers: Of course it's legal. If these people were someplace else, you'd give them a credit card. So what does it matter if they're in the U.S., Germany, or Australia? I mean, if I moved to Asia for instance, I'd have a Bank of America credit card and I'd pay my bills. What is wrong with that?
Chris Lahiji: What's wrong with it is their own country should provide them with credit cards. It shouldn't be big corporations in America. Jim, you got to understand one thing: these people are illegal. They are breaking the law! It's just unfair.
Jim Rogers: Chris, suppose they go to their home country, get a Bank of America credit card, then come here. Are you going to take it away from them because they crossed the border?
Ben Ferguson: Bank of American figured something out. The number two stimulate of the Mexican economy is illegal immigrants sending money home every month. The number one is oil. Bank of America knows there are hundreds of millions of dollars floating around in this country and they want a hand on it. Is it good business? Yes. Is it unethical? Sure. This is the first time we've ever seen a major corporation knowingly and willingly go after people that break the law. We have more rules on pawnshops than we do on illegal immigrants getting a bank account in this country.
Ben Stein: Well, I think as long as they're here and as long as they're working, why not rip them off and charge them 21 percent interest? Why shouldn't they be ripped off like the other poor Americans? That's just the way business operates. Listen, they're here doing hard work. Let's let them have a credit card. They're contributing to the economy. They're hard-working human beings.
Neil Cavuto: Laura, regardless of whether they're hard-working or not, the issue that gets lost here is that we're giving credit cards to folks who are here illegally. Is that right?
Laura Schwartz: Until the government starts cracking down on the businesses that employ illegal immigrants, how can we hold Bank of America responsible? I think they're really being smart. The common ground between the Democratic Congress and the Bush administration is comprehensive immigration reform. So if that goes through, you're going to see that illegal immigrants can stay here, pay a fine, pay taxes, learn English, get to the back of the line for citizenship and, in the meantime, keep making money and keep spending money in our economy.
Ben Ferguson: Illegal immigrants are a billion dollar business and Bank of America wants its hand in it. Most people have already rationalized this. Illegal immigrants work hard. They're here. They're just trying to do the right thing. But, they're also breaking the law, and Bank of America is marketing to people who are breaking the law. I have a fundamental problem with that.
Laura Schwartz: Hey, until we either change the law or enforce the law, what are we gonna do?
More For Your Money
Major League Baseball's spring training got underway this week. And while it may be too soon for you to place your bets on who the newest stars on the diamond will be, our group says it's not too soon to bet on the newest stock superstars!
FOX on the Spots
Ben Ferguson: Wanna be a billionaire? Cater to the Hispanic community!
Tracy Byrnes: Avoid Anna Nicole's me$$; update your will now!
Jim Rogers: Today's poll leaders will be losers in '08. Sorry Hillary!
Ben Stein: Dems will rule if America continues to ignore its poor!
Chris Lahiji: Buy Yahoo! (YHOO) cuz Microsoft's about to!
Neil Cavuto: Beware of the media spin on the economy!
Forbes on FOX
In Focus: Going Soft on Iran: Danger to Our Lives and Livelihoods?
Steve Forbes, editor-in-chief: It's about time we took a harder stance on Iran. They've been fueling this rebellion for 3-4 years, sending agents over to Iraq, training them, giving them weapons and giving them money. This action is a bit late, but better late than never.
Dennis Kneale, managing editor: I worry if we talk to too tough too soon we'll just be giving attention to this little kid, Iran, that wants to stir up the world. I think we should talk directly and quietly and shut up about it.
Mike Ozanian, senior editor: We've sent this second aircraft carrier to the Persian Gulf and if you'll notice, we haven't heard much from the extremists since that happened. We're putting a squeeze on their financial assets. We've gone after an Austrian gun maker that has been making sniper rifles to kill our soldiers in Iraq. I think we need a hard-line. And what bothers me is that Congress has been bashing Bush over the increase in spending and has been undermining the new General we have fighting the war in Iraq. I think that really hurts us.
Quentin Hardy, Silicon Valley bureau chief: It is about the efficacy of the team in charge too. Iraq continues to be a horrible blood bath and Afghanistan, the President has warned, is probably going to get worse. And this week we cut a deal with North Korea that basically reinstates what Clinton had, but lets them have nuclear weapons. With this administration you don't want confrontation with Iran. They've bobbled everything else. What makes you think they'll get this right?
Jim Michaels, editorial vice president: We better face the fact that they sense weakness in Washington, and they are taking advantage of that. I think we can expect them to stick their thumb in our eye a great deal, with Congress repudiating the President and Congressman Murtha actually wanting to put in a resolution forbidding Bush to do anything about Iran.
Victoria Barret, associate editor: I think the weakness is in Iran. The support for Ahmadinejad is dwindling. The former President of Iran has knocked his policies in public. Half of the parliament there is against how he's dealing with the U.S. He's facing problems internally and the unemployment level is skyrocketing along with inflation. I think Bush is playing this right. He may fall before we have to push him.
Housing Bust: A Complete Myth Created By Media?
Jim Michaels: Sometimes you can make a lot of money by finding out what the media consensus is and then going against it. This may be one of those times. They are mistaking what is really an inventory over lag with a bubble bursting. The homebuilders got greedy and raised home prices too fast. The result was an overhang of inventory, which has to be cleared. But underlying demand for housing remains strong.
Dennis Kneale: Let's remember one thing: the media doesn't create anything. We don't print the truth, we print what people tell us. That said, I think the housing crisis has been anything but. I think the worst is already over.
Elizabeth MacDonald, senior editor: I don't think there is a national housing bust. I agree with Bernanke and Greenspan. There is frothiness that's being corrected in certain markets. But nationwide, rates are lower than they were a decade ago and that's keeping a floor under housing. And incomes are rising too. You'll see a correction in some markets but not a national housing bust.
Lea Goldman, associate editor: The media has not invented the housing burst. Just look at Florida where condo inventories have doubled in the last year alone.
Steve Forbes: There was a housing overhang in 2004 and 2005. We had four years of activity pressed into two. But home sales are still strong. The key things to look at are mortgage rates. If the 30-year rate stays around 6 ¼ percent-6 1/2 percent we'll get over this thing pretty quickly.
Quentin Hardy: There is one more leg of this to play out and that is consumer spending against home borrowing. And home borrowing has dropped significantly because the values of houses have fallen. Look, we're critters of history, there was a huge drop in prices and that tends to indicate a crash. This time we got lucky.
Flipside: Next 'Dictator' To Threaten Your Money: Russia's Putin!
Michele Steele, reporter Forbes.com: Yes, Putin is a big threat! Russia is the biggest exporter of natural gas. We forget that Iran is an importer of natural gas. We've talked about Iran being a big threat. Who do you think is building Iran's nuclear reactors? Russia!
Jim Michaels: He's a pain in the neck, no question about it. But a threat, No! He's trying to raise the price of gas, that's free enterprise. If you find a demand for your product, you raise prices. As far as a tax on the U.S., he's annoyed because the Middle East should be his playground and he objects to our involvement.
Victoria Barret: I think the threat here is that Putin lends weapons and technology and talents to our enemies, like Iran. He's currently like the bully in the playground and he wants to get attention so he's going to knock us around. Russia has fallen off the international map since the Cold War and that upsets him. Russia's economy is smaller than Mexico's. Their population in the next few decades could be level with Vietnam. The only way he can flex his muscles is by funding our enemies.
Steve Forbes: He's not putting nukes into Cuba, he's not aiming missiles at Europe, and he's not sending troops into Iraq. He may fund some of our enemies but that's very different than starting a nuclear war.
Elizabeth MacDonald: He could be helping to start a nuclear war by helping Iran develop a nuclear weapon. It is anti-market and a regression to authoritarianism when Putin is shutting down gas pipelines in Georgia or Belarus. Or when he's helping to rig elections in the Ukraine. Or when he's jailing his political rivals. This is authoritarianism coming back and Russia is very bad for the markets.
Informer: Stocks That Win With National Health Care
Lea Goldman: Weight Watchers (WTW)
Michele Steele: Coventry Health Care (CVH)
Victoria Barret: Computer Sciences (CSC)
Mike Ozanian: McDonald's (MCD)
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; Charles Payne, Wall Street Strategies; Dr. Victoria Zdrok, Penthouse Magazine, and William Gheen, Americans For Legal Immigration.
Stock Smarts: Hugs For Hugo?
Joe Kennedy's Citizens Energy Corporation coming under fire for taking cheap oil from Venezuelan dictator Hugo Chavez. In commercials for the company, it credits "our good friends in Venezuela" for supplying much of the oil.
Is Kennedy being fooled by a dictator?
Charles Payne says that he doesn't blame the people who are taking cheap oil from someone like Chavez; Charles mentions that when growing up In Harlem, NY, he would have taken cheap oil from the devil if offered. But it's outrageous for someone like Joe Kennedy to take this oil then pass it off like it was coming from real friends of America; he is no friend to the American people.
Jonathan Hoenig thinks that this is nothing more than a P.R. stunt for a socialist dictator. Chavez has no respect for property rights, he has no respect for individual rights and we are going to look back at this like Jane Fonda from the Vietnam era.
Wayne Rogers says that Kennedy is a private citizen and he has the right to do whatever he wants, and just because he takes oil from Chavez doesn't make him a bad guy. We have to remember that Chavez is the bad guy in this situation and that none of this has to do with the U.S. government. Chavez is an enemy of the Untied States, but Kennedy is a private citizen and he can do what he wants.
Dagen McDowell says that as a nation, we do a lot of business with Hugo Chavez; we are the biggest buyer of Venezuelan oil. The Kennedy situation illustrates the troubling and conflicting relationship we have with Venezuela: are we going to keep buying and consuming oil from this man?
Jonas Max Ferris says we should be taking cheap oil from Venezuela. There's no doubt it a publicity stunt on both sides on this story. But Venezuela is a country that is dirt poor compared to the United States, and the Venezuelan people are the ones that should be mad about this deal, since Chavez is playing with their oil revenues.
Obsession Over Anna Nicole: Bad For Stocks?
The obsession with all things Anna: the beauty, the baby, the $500,000,000 grabbing headlines across the nation. Never before have so many men wanted to be called "daddy" by one little girl. But could this obsession actually be costing people money?
Maybe people should be paying attention to their investments instead?
Charles Payne thinks the problem is that Americans are so "hooked in" to the celebrity culture that other news dealing with the economy and the stock market gets shoved to the side, and that is to the detriment of the public. And Charles is most concerned about the young people in America, who feel that their hands are tied behind their back and a re disillusioned with the system
Dr. Victoria Zdrok says that we love to see a star fall and implode before our very eyes. She also points out that a "fall from grace" is a democratizing process: no matter how rich you are, bad things can happen.
Dagen McDowell says that she's talked with people in the financial industry about this story, and while they might not want to admit it, they are totally paying attention to this story. It's really no different that talking about sports stories. So in terms of Anna Nicole affecting the market, the answer is no.
Jonathan Hoenig works in the financial industry, and he could care less about the Anna Nicole story. He takes his computer everywhere, and he is looking at his graphs and charts, not the Anna Nicole headlines.
Wayne Rogers agrees with Charles; our country's focus is in the wrong place. We are a "sick" society and we don't want our children's attention on the wrong stories.
Boycotting Bank of America?
Bank of America opening up its credit cards to people without Social Security numbers, and opening up a load of controversy over the possibility of legal immigrants getting these cards.
Is a boycott of the bank they best way to deal with the situation?
William Gheen says that people all across America are already "cashing out" of Bank of America by canceling their accounts, because Bank of America is aiding, abetting, inducing and encouraging illegal immigration. But in addition to supporting a boycott of the bank, we also want people to contact Congress to get the laws changed so this kind of activity won't happen in the future.
Jonathan Hoenig just doesn't understand how someone coming in from another country, someone who wants to work, and someone who might want to open a line-of-credit, doesn't have the right to do so.
Fat Stocks for Fat Tuesday
Wayne's pick: Titanium Metals (TIE)
Friday's close: $35.35
52-week high: $47.63
52-week low: $18.51
Jonas' pick: United Industrial (UIC)
Friday's close: $52.61
52-week high: $70.38
52-week low: $39.78
Jonathan's pick: CurrencyShares Japanese Yen (FXY)
Friday's close: $83.92
52-week high: $84.03
52-week low: $82.40