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.
Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Tobin Smith, ChangeWave Research editor; Cheryl Casone, FOX Business Network; Bob Froehlich, DWS Scudder chairman of investor strategy, Joe Battipaglia, Stifel Nicolaus market strategist, private client group
Trading Pit: Best Week for Stocks in '07: Will Storms & Oil Wash It Away?
The Fed's rate cut fueling a wild rally last week... But could new storms fueling higher energy bills wash it all away?
CHERYL: If oil prices go up, the price at the pump goes up. We already have a consumer that is very nervous right now. If we get inflationary pressure, that’s going to stop the Fed from giving us anymore rate cuts.
TOBIN: $100 barrel oil in today’s value is somewhere equivalent to where we were in 1982. If we’re there for six months, forget about it bad news. With the dollar down, oil goes up. But we are more resilient than people know.
GARY B.: There’s no doubt at some point it will drag down the economy and potentially the market. We’ve become used to this $3.25-$3.50 a gallon gas price. At this time last year, with the same prices at the pump, it was in every headline. We’ll know it’s worrisome when another Congressional hearing is held looking into the outrageous oil profits. But strangely Congress has been silent on that, and that is good news for the market.
JOE: No. We've had rising oil prices for several years now and while it may have hindered growth it hasn't killed it. For oil to bring down the economy and the stock market there would have to be a massive supply interruption that causes rationing and significantly higher prices.
PAT: It’s a worry if oil prices affect consumer spending. Higher interest rates when mortgages reset this fall my hit consumers hard this fall. We haven’t seen this level of resets in the past. This combined with higher gas prices and what it will do to consumer spending is a worry that shouldn’t be shrugged off.
BOB: Supply disruptions are the big wild card. As an investor, you can’t invest based off of that one potential event. We have to go by the supply and demand fundamentals. We’re going to see higher highs and higher lows for the price of oil.
Iran's President: Should Your Tax Dolllars Help Support Him?
Iran’s President Ahmadinejad arrives in New York Monday to address the UN General Assembly. Should our tax dollars support it?
JOE: Absolutely not. Iran is a terrorist sponsor and avowed enemy of the U.S. and its allies. We should arrest him as a supporter of terrorism, and as a violator of international law.
TOBIN: Hold your friend’s close and your enemies closer.
PAT: The United Nations is located in the United States. Therefore, we have to protect the people that show up to speak there.
GARY B.: No, he shouldn't be allowed to enter this country, and should be arrested. We could have our arm around him and have him to the white house, and he would still deny the Holocaust, he would still be a friend of terrorist, and he would still want to blow Israel off the map. This type of person should not be welcome in our country.
BOB: If we want to block our political enemies from coming into the United States then we need to re-think as a nation whether or not we want the United Nations headquartered here. We can't have it both ways!!!
O.J.'s fallen even further. Which stocks have fallen too—but unlike OJ—these stocks will get their “juice” back!
TOBIN: MasTec Inc. (MTZ)
PAT: PMI Group Inc. (PMI)
BOB: Dolby Laboratories (DLB)
GARY B: Toyota Motor Corp. (TM)
JOE: Dell Inc. (DELL)
Bob's Prediction: Dow dashes to 15,000 by the end of the year!
Tobin's Prediction: Forget Dow! United Tech (UTX) jumps 25% higher by spring
Pat's Prediction: Black and green! Int'l coal (ICO) doubles in 3 years
Gary B's Prediction: Get a boost from health care buzz: buy CR Bard (BCR)
Joe's Prediction: China bubble bursts! FXI gets slammed
Cavuto on Business
On Saturday, September 22, 2007, Neil Cavuto was joined by Jack Welch, former GE CEO and “Winning: The Answers” author, Ben Stein, “The Real Stars…” author, Charles Payne, wstreet.com; Tracy Byrnes, New Yort Post Business Writer; and Adam Lashinsky, Fortune magazine.
BOTTOM LINE – Obama’s “Fairness Tax”: Fair or Unfair?
NEIL CAVUTO, HOST: Barack Obama wants to hike taxes on the rich and cut taxes on the poor and middle class. Have a listen:
SEN. BARACK OBAMA (D-ILLINOIS), DEMOCRATIC PRESIDENTIAL CANDIDATE: Under my plan, 150 million Americans and their families will get a tax cut... We'll also turn the page on an approach that gives repeated tax cuts to the wealthiest 1.0% Americans even though they don't need them and didn't ask for them.
CAVUTO: So Jack, what do you think? Fair or unfair?
JACK WELCH: Well, it just doesn’t make any sense. I mean the rest of the world is cutting taxes and this guy is out getting class warfare once again and talking about a tax on the rich to give to the poor. He’s going to give a trinket to people. Meanwhile, capital gains, which drives investments and drives the economy, would be thwarted. I think it’s a dumb move. It’s a typical class warfare move.
CAVUTO: Ben Stein, he pointed out that he’s going to return the gains rate to 28%, what it was under Ronald Reagan…
STEIN: Well, I think the capital gains rate should remain at the low it is at right now. It encourages investment and planning for retirement which is a gigantic crisis. But, I think the general problem with it is it’s too much like the demo grant that McGovern had where he was just going to give $1000 to everybody. Basically, he was just going to give out $1000 to everybody who isn’t rich and take it from the rich. I don’t approve of that. That’s just too much like buying votes. I do approve of raising taxes on the rich during war time and giving a special bonus to people who fight and risk their lives for America. But just to take from the rich to give to the poor doesn’t make much sense.
CAVUTO: I wouldn’t mind taking it from you, Charles.
PAYNE: You know what bothers me about it is the hostility toward the so-called rich. First of all, the top 1.0% pays 31% in taxes. I don’t mind tax cuts, but tax cuts for everyone! Obama talked about people making $250,000. That person he’s talking about works 60-80 hours a week, has a 2-hour commute, and they’re bustin’ their butt to get their kids through private schools. They’re not the villains! Unfortunately, it seems like success is a bad word to the Democrats. And that’s really scarier to me than any aspect of what’s going on.
CAVUTO: Tracy, they’re looking to history. They’re probably saying, “When Bill Clinton was President, he raised taxes on the upper income and we didn’t do too shabby.” What do you say?
BYRNES: Yeah, but he’s hurting his own constituents. He’s trying to appeal to the lower income, to the seniors. He’s going to hurt them at the end of the day. You know, that whole mortgage interest thing he’s talking about? Ten percent across the board. Well, anyone who’s in a higher tax bracket will actually lose a piece of their mortgage interest deduction. It’s a huge part of my tax return. I don’t want to lose that.
CAVUTO: Obama says you would favor that over whatever deductions you get?
BYRNES: But, it won’t work out in the end. I’ll lose at the end of the day. And the same with the seniors. Many seniors live off their dividend income. You’re gonna raise the tax on dividend income? You’re hurting the people you’re trying to help. I think the whole thing is going to backfire. And not to mention, he’s made no mention of how he’s going to pay for all of this.
CAVUTO: Adam, I was talking to a prominent Democrat recently. I’ll leave names out, but she’s a prominent Democrat…
CAVUTO: And, the argument was, “Hey! It’s time for fairness and we think it’s resonating.” What do you think?
Adam Lashinsky: Well, first of all, no one’s acknowledging that Sen. Obama is in a Democratic primary right now. So the message is tailored toward getting votes among Democrats. Not you Neil, and Jack Welch.
CAVUTO: You don’t know what we are! But go ahead.
LASHINSKY: Fair enough. And you don’t know what I am. But, he’s going for Democratic votes. And let’s face it: We know what trickle-down does for the economy. But, we also know what it’s done for the people Obama’s is talking to. Income inequality is rising in this country, so it hasn’t been working so well for them. And Neil, I think what he’s doing is making good bully pulpit points: Simplifying the tax code, closing loopholes that we all know only apply to the richest people, making filing your taxes an easier thing. These are good talking points for a presidential candidate and a President.
CAVUTO: You know, Jack, when they talk about closing loopholes and all of that… where are we going with all of this?
WELCH: It’s going nowhere. And in fact, his platform doesn’t mean much because he’s going nowhere.
CAVUTO: Why do you say that?
WELCH: He doesn’t have a shot!
WELCH: He doesn’t have a shot! The guy doesn’t have a shot.
CAVUTO: Ok, next time, let me know how you really feel about Obama.
CAVUTO: Ben Stein, is there a sense though, that this idea of the two Americas will resonate?
STEIN: I think it does resonate, Neil, and I think it’s true. I think there are two Americas: There is a very rich America who’s able to buy anything they want, and there’s an America that’s just barely squeaking by. And I think for the America that’s just barely squeaking by and also offering up their lives, also offering up their family’s peace of mind, I do think they should get a lot more money. And I think it should come from the rich. The rich can afford it. They can afford it easily.
PAYNE: Ben, there’s always been two Americas. It goes back to F. Scott Fitzgerald.
STEIN: I agree.
PAYNE: There’s always been two Americas. So to say the poor are poor at the expense of the rich is where I have a problem with this.
STEIN: Charles, I agree with you. I don’t think the rich got rich because the poor got poor. But, I do think if the poor are wearing a uniform and risking their lives for America, they deserve a lot more money.
PAYNE: Oh, absolutely! But, I’m talking about broader. You know, the rest of the world is catching up with America. We’re going to go into the next four years, perhaps, with capitalism being under assault. This week we had a company from Dubai make a big bid for NASDAQ. The rest of the world is growing at a rapid rate, and here we are trying to kill capitalism.
STEIN: Some of us are trying to kill capitalism. But some of Barack Obama’s comments about regulating the broker/dealers are very intelligent.
Inside Jack’s Head – Why the Economy and Job Market Will Hang Tough
CAVUTO: Is our economy really on the ropes? Plenty of folks say it is, including former Fed chairman Alan Greenspan. He stopped by my show earlier in the week. Greenspan thinks there’s a one-in-three shot we fall into a recession. Well, I think that’s what he said. Anyway, does Jack Welch agree? Let’s go “Inside Jack’s Head” to find out.
WELCH: Well, I think it’s a lot lower than that. Clearly we’re going to have a spillover from the housing issue. Gas prices aren’t helping. So we’re going to have a slowdown, but we aren’t going to have a recession. Look, a weak dollar helps the hell out of exports. Almost half of the S&P 500 profits-scale comes from overseas. So, this economy is going to hold up well with a slow down.
CAVUTO: You also know economic history better than just about anyone I know. We’ve gone a long time without a recession. The numbers are not in our favor.
WELCH: We didn’t have a global economy to the extent we have today.
CAVUTO: We had a global economy then.
WELCH: We didn’t have it to the extent we had to today. We didn’t have 40-50% of S&P profits coming from overseas. We didn’t have a dollar weakening the way it is…
CAVUTO: Yeah, but what helps some US manufacturers also hurts coming in. So, you could argue that with China dealing with hyper-inflation and India stumbling, that maybe something does happen?
WELCH: Well, you could make that case. That’s why Alan Greenspan’s saying a 1-in-3 chance of a recession. And I’m saying a 1-in-10 one.
CAVUTO: You think the housing issue is contained enough that it doesn’t blow up…
WELCH: Well, we’re going to have $400-500 billion in adjustable rate mortgages reset over the next year, year and a half. We’ll be able to deal with that. It’s not that big in a $13 trillion economy. We are gonna slow down, but in my view we will not have a recession.
CAVUTO: Didn’t you tell me once that recessions happen when you don’t expect them?
WELCH: Well, we all expected something to happen. But, we didn’t know when or what. I think people were adjusting. Federal Reserve Chairman Ben Bernanke’s moves have been extremely helpful.
CAVUTO: But, some have argue that if it’s just “one and done,” in other words the cut he orchestrated is it for a while, then we are going to have a recession. Do you think he’ll keep cutting to prevent it?
WELCH: I think if he doesn’t get the response he wants, then he’ll make a move again. He may not move in October, but he’ll move by the end of the year. This guy doesn’t want to derail the economy. And inflation, despite our fear, is not blowing up. Let’s face it. It’s below 2.0%. Everybody’s talking about commodities going up. Commodities don’t go up in a weak economy.
CAVUTO: Unless you’re looking for a safer place because you think the world equity markets are not safe?
WELCH: Do you think that’s why copper’s up?
CAVUTO: Well, I think it’s a factor in gold. I think it’s factor in the dollar slide.
WELCH: Gold is different.
CAVUTO: Yeah? Well, you see for me, it’s a moot point because I buy costume jewelry for my wife… Bottom line: No recession.
WELCH: No recession.
More for Your Money — Late Flight Fight: Higher Fares for On-Time Flights?
CAVUTO: Unless something changes, this will be the worst year ever for flight delays. If you’ve been on a plane recently, you know firsthand what I mean. Now, one major airline’s CEO says if you want to get out on time, you better pay up big time. But, would that really get you “More for Your Money”? Ben Stein, your second home has gotta be the airport. I know you speak all over the country. Would you pay more?
STEIN: I would cheerfully pay more. I would pay a lot more. Even if it were coming out of my own money, I’d pay a lot more!
STEIN: Airline deregulation has been a catastrophe. It has ruined air travel. I wish they’d to back to regulating and bring back the CAB (Civil Aeronautics Board) and raise prices. There’s just too much insanity in the air and I’d cheerfully pay more for an orderly, on-time airline service.
CAVUTO: Tracy, when you do fly commercial, would you recommend that?
BYRNES: The problem is, paying more is not going to stop plane breaking down, the weather, all those things. So you’re paying more and you’re still going to be delayed. So many of these airlines, just to meet Wall Street’s expectations, just to keep themselves from going under, slash their staff, slash their fleet to keep themselves from going under water. And as a result, when a plane breaks down, there’s no one there to fix it, there’s not another plane available to put you on, so the whole thing gets backed up and the whole thing becomes disastrous. So paying more is not going to help.
STEIN: Yes, but I think it should be a regulated utility, like it was until the idiot idea of deregulation.
WELCH: Yeah, but Ben, you’d take a lot of people out of the air.
STEIN: Who cares?
Jack WELCH: Oh Ben! C’mon now.
STEIN: I want people to only travel if they need to. I don’t want people just traveling because they’re bored. That just wastes a lot of natural resources.
CAVUTO: Boy, you must be a real party to fly with. Sheesh! He’s the one guy who takes the last of the peanuts…
CAVUTO: Charles, what bothers me about this CEO’s offer is that you’re telling me for a little bit more money, you’ll take care of me. So for the money I pay now, you’re telling me you won’t take care of me.
PAYNE: Yeah, well first of all, it’s disingenuous. To Ben’s point, they have been raising prices! Southwest, the big discount airline, raised prices about a half dozen times this year alone! You know what? We should buy cars without steering wheels, and pay extra for it. Order your coffee. But, if you want it hot, that’ll be an extra quarter. C’mon, Ben. This is ridiculous! For the airlines, which have been so dishonest with us, to leave us on the tarmac for four hours and say the plane left on time… we should let them raise prices? I don’t think so.
STEIN: I say make it into a regulated utility so fares would be dramatically higher and we will not have this waste of carbon-based fuel.
BYRNES: It’s not going to make a difference! And you know what? We’re stuck. It’s a global world now. We gotta go. You got business in Costa Rica? You can’t walk there. So no matter what, you have to get on a plane. And whether the airlines want to charge you more or less, you’re going to have to pay it and put up with it all.
STEIN: I think people should have to take a health test before they get on a plane so they don’t cough on me.
FOX ON THE SPOT
BYRNES: $moking Will Cost Ya; Tobacco Tax Hike by 2008
WELCH: No Need for the "R" Word; We Will Not Have a Recession
LASHINSKY:Oil $ets $100 Record in Time for 2008 Olympics
STEIN: Thank American Oil Companies for Getting Oil without Bloodshed
PAYNE: "Jumbo" Loans Will Grow; Your Wallet Can too with FNM!
CAVUTO: Dan Rather Will Win $70-Million Fight with CBS
Forbes on FOX
More Foreclosures: Good for American and Economy!
Neil Weinberg, Senior Editor: We’re in a position where it’s either foreclosures or forbearance. There are a lot of people living in homes they can not afford, so they’re eventually going to have to downsize. If you’re living beyond your means and capabilities, you’re never going to catch up financially.
Elizabeth MacDonald, Senior Editor: Keep the people who are about to be foreclosed in their homes and let them pay rent to their mortgage companies. If you foreclose a home, it only brings negative attention to the community, which increases crime and lowers the market value of surrounding homes. Let them stay in their houses and have them pay the money back little by little. Many people are forced into getting a mortgage without thinking about the responsibility. Let the banks pay the price for giving out loans to people who didn’t deserve them.
Richard Karlgaard, Publisher: Young homebuyers are new to the housing market and do not have experience with budgeting themselves and paying a mortgage. Foreclosures are the only way to help the market. We have a high risk – high reward society…you must work for what you get.
Steve Forbes, Editor-In-Chief: Foreclosures are horrible for the economy. The majority of people who borrow money can pay it back over time. People who are not economically stable are the ones who we should focus on and are the ones who should refinance regularly to keep their homes. But the majority of subprime borrowers are good money for our economy. If you have a heart attack, do the open heart surgery, and then talk about improving your lifestyle.
John Rutledge, Forbes Contributor: Foreclosure is terrible and embarrassing for the homeowner. Most people struggle to buy their first home. It’s the American Dream to buy a home in this country. We should not give these people trouble if they fail to keep up with their homes. Trying and failing is all about entrepreneurship. It makes the economy work. Paying for your home is not a government matter, it’s a matter of a contract between two people, so let’s not worry about it.
Quentin Hardy, Silicon Valley Bureau Chief: Banks lost up to $50,000 when they foreclose on a home, they don’t want that. Trouble with our economy today is not only about mortgages, there are many more areas which need attention. Cut this matter off and don’t let it get too out of hand.
Will “Hillary Care” Make America's Job Market Sick?
Steve Forbes: Hillary’s new plan would cut jobs and not really help sick Americans. We’re going to get what you get in other countries; more government control, rationings and killings. Have consumers in charge of their health care dollars. Give people who can not afford medical care health stamps to go out and buy healthcare.
Quentin Hardy: This makes economic sense. People will seek medical attention earlier and will not get so sick. This puts less pressure on hospitals and allows for more productivity. Fifty million people in this country can’t go to the doctor. Getting medical care earlier will keep you healthier for longer and that is good for the economy. Other developing countries which have healthcare for all are outperforming the US
John Rutledge: Her health plan is nuts. It is illegal for your doctor to sell you a procedure which Medicare does not cover. The doctor will lose all of their Medicare revenue for a year.
Mark Tatge, Contributing Editor: Two things are going to happen here. Either businesses are going to start offering benefits for free or the federal government is going to mandate it. There’s already a move to do this. Businesses have brought this on themselves. It’s an embarrassment that millions of people in this country do not have health care.
Mike Ozanian, Senior Editor: If you push higher costs on businesses, they’re just going to raise the price for their goods and services.
Elizabeth MacDonald: Hillary has learned a lesson and that is to keep healthcare plans as vague as possible. She wants to discontinue the Bush tax cuts for those in the $250,000 bracket or higher, that’s where small businesses sit. Small businesses will be hiring their employees. She will provide a tax credit, but it’s unclear how that will hurt jobs.
Media Paying for the 'Juice' on O.J.: Is That Right?
Elizabeth MacDonald: Journalist sites should not be able to shell out money and purchase evidence which could be used in a court case. The material needs to be turned in immediately to authorities. Also, the person who sold the audio tape of OJ should hand the money to the Goldman family for all their grief.
Mark Tatge: I t’s about time for media to start paying for their sources. Why shouldn’t they have to pay for a videotape or a source?
Lea Goldman, Associate Editor: Paying for sources brings up the issue of credibility. TMZ.com is a website which featured audio of OJ during the robbery. TMZ is not a credible source. It’s a cardinal sin of journalism to pay sources. But no one was paid here, someone was just smart enough to tape the voice of OJ and sell it. It’s not like someone paid a source here.
Mike Ozanian: If I go out and snap a picture of OJ trying on a black glove, why shouldn’t I be able to sell it? Why should the only people who make money on news be big time journalists and reporters?
Steve Forbes: They shouldn’t pay money for evidence, but someone always does. If you need to pay money for sources, sometimes you have to do it. In entertainment, there’s always a relationship between different outlets where you can do this.
Informer: Rich Picks
Josh Lipton : Home Depot (HD)
Neil Weinberg: KB Homes (KBH)
Lea Goldman: Clean Energy Fuels (CLNE)
Richard Karlgaard: Oracle (ORCL)
Our Cashin' In crew this week: Dagen McDowell, Fox Business News; Jonathan Hoenig, CapitalistPig Asset Management; Jonas Max Ferris, MaxFunds.com; Gary Kaltbaum, Kaltbaum & Associates; and Price Headley, BigTrends.com
Stock Smarts: More Honest: Wall St. or Washington?
Barack Obama, in an economic speech at the Nasdaq last week, took a jab at Wall Street’s honesty. But who do you trust more: Wall Street or Washington?
Jonathan: I trust Wall Street more. Washington is mostly full of hypocrites. They prosecute Norman Hsu for running a Ponzi scheme, but they run one called Social Security. They say they protect freedom of speech, but then go after Janet Jackson for showing her boob for two seconds on television. Washington says it protects free markets, but Whole Foods (WFMI) and Microsoft (MSFT) are under attack. They say they protect Americans, but then allow Mahmoud Ahmadinejad to come to New York City. I trust Wall Street over Washington any day.
Jonas: There are a lot of crooks on Wall Street and in corporate America and they get fines and penalties. There are a lot of crooks in politics also. In some ways you can trust Wall Street more because of all the rules in business. Politics doesn’t have that.
Dagen: Wall Street is one of the most heavily regulated businesses ever. That’s what makes it trustworthy. Regulators go after the people who are ripping folks off.
Price: At least Wall Street has some incentive with the individual investor in that everyone wants to make money. If you don’t make money on Wall Street, eventually the CEO gets booted out. It could be an expensive boot out, but in Washington they only have one incentive: getting elected. Once a guy is elected and in, the reason for staying is to build their coffers and keep getting elected. They are able to do whatever they want, rather than what the taxpayer wants.
Gary K: Comparing Washington to Wall Street is like comparing the flu to pneumonia. Each is just as bad. Washington has nobody regulating it. Then, you find guys with $100,000 cash in their refrigerator. Sure, there are bad guys on Wall Street, but someone is hopefully watching over what is happening.
Dagen: C’mon Gary K. The voters are overseeing what goes on in Washington. It’s up to the voters to get out there and vote people out of office if they don’t like what is going on. Maybe you’re touching on that as American people we need to do a better job of doing that.
Jonathan: Incumbents do get back in some of the time. The fundamental difference is how each achieves values. Wall Street achieves its value by trade. Washington achieves value by coercion and force.
Price: With stocks, you have 14,000 choices. With parties and politics, you have two and both are corrupt. It’s a choice of a lesser of two evils. There’s really no right choice. Both parties have the same problems. We’ve seen that with this war. It keeps on going on, as more and more debt and problems build for our economy.
Gary K: I was hoping Obama would come out and not be like John Edwards and his school of class warfare. It is about time the Democrats stop this. Successful people, for the most part, worked their butts off and earned their money. The majority are not crooks. This class warfare has to stop eventually. I am hopeful, but it’s not changing yet.
Dagen: The Democrats crowd is Wall Street. If you take a look at the contributions, Barack Obama is #2 behind Rudy Giuliani in terms of money and contributions coming from the investment and securities business. He’s #1 with commercial banks and he’s taking in a lot also from private equity firms and hedge funds. This is all talk and no action.
Jonas: Just take a look at all these guys in this crooked stock-lending scheme we saw this week. These guys are out for themselves and are no better than politicians. They are not doing any more for shareholders.
OJ’s NFL Pension: Time To Cut It?
OJ is out on bail for his arrest on armed robbery and kidnapping charges. By law his $20,000 a month NFL pension can’t be touched, but it is time to revisit this rule?
Jonas: It is time to revisit these rules. I don’t like this situation with a pension that is protected from all these judgments. No matter how much damage a person does in the world, I don’t like that they get to keep their pension money.
Dagen: Even though you might not like OJ for what he is accused of doing or what he did, the rules need to stay in place for everybody. What if you hit someone with your car, get sued, and there is a judgment against you. They will come after you and every dime you’ve saved for retirement.
Jonas: It’s not for everyone. It’s like OJ crookedly cranks a corporation to generate a pension so he can have it.
Dagen: It’s for everyone who has a 401(k) or pension.
Gary K: It is completely illogical that someone can lose a $30 million judgment and take in $20,000 a month, while the plaintiff receives absolutely nothing. There should be some sort of happy medium in the rule where somebody can get something. I don’t care if it is OJ or somebody else. When you lose a judgment, you should be paying up.
Price: The key point is if you are convicted of a major crime. If he is convicted of assault with a deadly weapon he could be put away for 3-35 years.
Dagen: Gary K, I guarantee you would change your tune if you lost a civil judgment and someone came after your money.
Jonathan: If OJ was a stock, he would be going to zero. I just don’t know why anyone would make this case now and not 11 years ago when the civil verdict came down. Now we want to say he should be stripped of his pension because he was caught with a gun and sports memorabilia?
Jonas: It’s bad enough that people like OJ can buy better legal help than everyone else. It is even worse that they can protect their assets in ways that everybody can’t.
Gary K: The real problem is the law is wrong. It’s an all or nothing law and simply makes no sense. What do you say to a Goldman who wins a $30 million judgment in a civil lawsuit and not being able to get one dime?
Jonathan: That actually isn’t true. Isn’t the Goldman’s book #1 on Amazon right now?
Gary K: That’s a separate issue. I’m talking about the civil lawsuit itself.
Dagen: He indeed was hiding assets in offshore accounts. If OJ has other assets that are not coming out of the pension, the Goldman family has and is going after that money, which is perfectly legitimate. But the law reads as it is and the pension is untouchable.
Rate-Cut Rally: A Sign Now Is Best Time To Buy In Years?
Price: It’s not too late to get back in. It’s very bullish the Fed is easing rates again. Historically, you don’t want to fight the Fed. It is doing everything it needs to be doing to get the economy back on a mild growth track. I don’t think we are going into a recession, but it will definitely prevent us from going into one. I see the Dow hitting new highs, ending the year around 14,500 and pushing the 15,000 territory early next year.
Gary K: This is a Fed-induced rally. It is dropping trillions of dollars out of airplanes just like Ben Bernanke said he would. That is my biggest worry. If it is anything like we saw this week with gold skyrocketing and interest rates going up rather than going down, it could be a problem. You have to be very selective here.
Jonas: It is scary what they are trying to do to save the housing market from collapsing. I don’t think this is a good new entry point. I would wait until we are back down at 12,500. I don’t see this carrying on forever.
Jonathan: I put millions of dollars into the markets this week, but it wasn’t the stock market, it was the currency markets. Gary K. is right. Gold is at a multi-year high, oil is at an all-time high, and the dollar doesn’t look so good now. This is why I’ve been buying and holding onto a lot of the CurrencyShares I’ve been talking about like FXE, FXB, and FXC. My hedge fund has got a lot in the market, but in these places.
Dagen: I don’t think you need to bend over backwards to put your money in foreign currencies, which is very speculative. I also don’t think what the Fed is doing will make the housing troubles go away. There are interest rate resets in October. We could see huge financial losses and we don’t know where they will turn up.
Price: It’s not time to buy mortgage stocks or even housing stocks, but inflation is going up. Oil stocks are a big part of the market. Take a look at all the other sectors that are doing well: gold, industrial metals, Chinese stocks. There are so many ways to make money and you don’t fight the Fed.
Gary K: The Fed did not lower rates to help Aunt Mary and Uncle Bob with their house. This was purely to help Wall Street as it recognizes tons of leverages that were imploding last year. Mortgage rates are going up in the next couple of weeks because yields have been going up.
Best Bets: "Outlaw" $tocks
Gary K: Smith & Wesson (SWHC) (Friday’s Close: $19.06)
Jonathan: Stillwater Mining (SWC) (Friday’s Close: $10.35)
Price: Las Vegas Sands (LVS) (Friday’s Close: $129.65)