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Bulls & Bears
This past week's Bulls & Bears: Scott Bleier, HybridInvestors.com president; Tobin Smith, ChangeWave Research; Eric Bolling, FOX Business Network; John "Bradshaw" Layfield, Layfield Energy, and Sarah Flowers, Democratic strategist.
Scary news on jobs, stocks, oil and gas: What's next?
Eric Bolling: Oil market took off for several reasons and the dollar is weak. Congress looking whether or not there is manipulation in oil market. The oil companies said no. Oil prices went up…and stocks went down.
Scott Bleier: You stay out of the way. Oil is capitalism run amuck. Oil being up has nothing to do with supply and demand. It's going to kill corporate earnings later this year. Wait for new lows in the DOW.
Tobin Smith: Teens are the biggest part of jobs lost therefore the unemployment rate is up because of seasonal issues. Bigger issue: Congress said "It's okay what you're doing oil companies."
John Layfield: Scott is on Pluto thinking that oil going up in price is not a supply and demand issue. Congress is lame for these interrogations of oil companies. Raising taxes on oil companies is a stupid idea.
McCain v$ Obama: Which one can get the economy back on track?
John Layfield: Election is about age and race - and I don't care about either issue! Obama will be a detriment to this economy by raising taxes on oil. Economically, Obama is wrong.
Sarah Flowers: Obama only wants to tax those in the upper-upper-upper percents of this economy to stabilize taxes. Reducing troops in Iraq will reduce oil prices.
Tobin Smith: Obama is telling us incorrect facts. 80 percent of Americans paid less income tax than they do Social Security and Medicare. The top earning 10 percent of Americans pay 75 percent of total income taxes. Why does the middle class need a tax cut? Why tax the rich more?
Eric Bolling: Higher taxes are bad for the economy, and Obama needs to raise taxes to pay for his programs.
Stock X-Shange: November Winner$
Tobin Smith's Pick: Chemical & Mining of Chile (SQM)
Scott Bleier's Pick: Advanced Semi Engineering (ASX)
Eric Bolling's Pick: Alliant Techsystems (ATK)
John Layfield's Pick: Oracle (ORCL)
Tobin Smith: Big Brown wins Triple Crown; CHK up 50 percent by '09 Derby!
Scott Bleier: New U.S. industrial revolution! Barnes Group (B) up 30 percent in '08.
Eric Bolling: Level 3 (LVLT) going crazy on my radar! Doubles by end of '08.
John Layfield: T. Boone wins with his bet on 'GE'; up 20 percent by end of '08.
Cavuto on Business
On Saturday, June 7th, 2008, Neil Cavuto was joined by Ben Stein, "How to Ruin the United States of America" author; Charles Payne, wstreet.com; Dagen McDowell, FOX Business Network; Adam Lashinsky, Fortune Magazine; David Nelson, DC Nelson Asset Mgmt; and MeMe Roth, National Action Against Obesity.
Bottom Line: Obama's Health Care Plan – A Financial Disaster?
Neil Cavuto: Senator Ted Kennedy recovering from a successful brain surgery right now. But, would that be the case under the national health care plan Barack Obama's pushing for?
Charles Payne: Certainly not in the time that he got it… that's for sure! Ted Kennedy, they checked him out, saw what the problem was and took care of it. In England, almost a million people a week are waiting just to get into the hospital. In Sweden, patients wait up to 25 weeks for heart surgery. So the answer would be no, absolutely not. In addition to the cost! It always comes down to that. Who is going to pay for it and how good is the quality of care going to be? Everyone feels bad for the next person without health insurance, but at the end of the day, what is forcing this issue?
Neil Cavuto: Ben?
Ben Stein: I think Charles is absolutely right. For the poor, it is a vital, incredibly important issue. Even when they get it, there are going to be stories in the newspaper saying, as Charles says, John D Rockfeller V gets in overnight for heart surgery and some poor person in Mississippi has to wait a year and died. There are simply differences in human society between the way wealthy people live and the way poor people live no matter how you slice it.
Adam Lashinsky: I think we are asking the wrong question here. The question isn't if the poor people can get the same kind of care that rich people can get. The question is can they get any care?! If you look at what has gone on in Massachusetts, which we are going to have a heated debated on, and the number of uninsured adults from 13 percent to 7 percent. Yes, it costs a lot of money, but the goal is to cut down the number of people who have no medical attention.
Neil Cavuto: But, they are penalizing people like heck who don't participate in that with fines. Dagen, to the greater point - The kind of care that allowed Senator Kennedy to get this special surgery at Duke University, apart from the Boston area which is home. Would that have been afforded to anyone under any type of federal health care program?
Dagen McDowell: I would argue that even today, somebody who is not rich and fortunate and famous cannot get that kind of care, particularly with the speed in which Senator Kennedy was treated for the tumor. The question is, to me, and in Obama's plan, is if you don't have health insurance, and you don't have health care, you have no quality of care today and that is what Barack Obama's plan tries to do. He says he's not going to take away your private insurance. It is to get insurance for people. Don't send them to emergency rooms and bring down hospital costs.
Neil Cavuto: You can't do both. You can't have your cake and eat it, too! I just don't think you can be a little bit pregnant on this one. I think this invited a host of bureaucratic nightmares. But, would we be allowed, under any type of regimented health care, to get special care for special situations like tumors?
David Nelson: Probably not.
Neil Cavuto: So you die?
David Nelson: That could happen. I think the real cost here is probably five or 10 years from now when we are sitting at this table debating what happened to medical innovation and technology. Captain risk has to have a profit incentive and you are going to bring health care down to the lowest common denominator and it's going to go somewhere else, not here.
Neil Cavuto: Charles, what do you think?
Charles Payne: If there are 47 million people without insurance, and I am an insurance company, I would love to insure them. There are another 43 million on Medicaid. I would like to insure them as well.
Dagen McDowell: You don't see something wrong with what we have today, despite the quality of care that Senator Kennedy got? That health care costs have gone up 78 percent since 2001? And the burden on business here?
Charles Payne: I do see some of that, but I don't want me, Charles Payne, to pay for it.
Neil Cavuto: You can afford it. What are you bitching about?
Adam Lashinsky: That's a valid point. That's exactly what we're talking about. People like Charles can pay for himself and others who cannot afford health insurance. I know you and him hate to hear it, but it's true.
Neil Cavuto: You're getting off topic. What I want to hone in on with you Ben Stein is if we help those who can't afford health care, would we diminish the quality of healthcare?
Ben Stein: That is an incredibly dangerous prospect! The original "Hillary Care" provided prison time for people who didn't follow the government's regiments for providing healthcare. It's a terrible idea!
Dagen McDowell: But Ben, that's not part of the plan. Obama's plan is to expand health insurance we have today. It's not going to be like England.
David Nelson: The median level of healthcare will certainly go down. People from the middle on up would see their quality of healthcare diminish.
Ben Stein: That's an immense problem. How are they going to keep costs down if they regulate healthcare. It would greatly affect freedom of healthcare choice.
Neil Cavuto: Bottom line is we just don't know. We better start eating better because I see where is this is going.
Head to Head: Pay Per Pound Flying
Neil Cavuto: This week alone, nearly 150 fewer planes flying as fuel costs force Continental and United to cut back. Now, a new plan to make fat fliers pay up! Let's go "Head to Head"… or in this case, belly to belly.
MeMe Roth's on board. She's with the National Action Against Obesity. Fat flyers paying more, you must love it, right?
MeMe Roth: The big booty duty is here, right?
Neil Cavuto: That's horrible.
MeMe Roth: There is a cost to carting that.
Neil Cavuto: There is an arrogance to thin, fit people.
MeMe Roth: We are already seeing this happen. There are some regional Alaska airlines that are doing this. They max out 250 pounds. Anybody above that pays a fee or doesn't fly.
Neil Cavuto: How do they know that?
MeMe Roth: I don't know. This is what they should do: forget weighing the individual. You need to look at the total weight of the passengers; that's person plus baggage. You need to motivate people to carry less. However they figure that out is up to them.
Neil Cavuto: By that definition, my wife would be Mama Cass. You're saying this makes good sense. Fat people take up more room, etc.
MeMe Roth: It's thousands of dollars on flights. They shouldn't go into bankruptcy politely.
Neil Cavuto: Ben Stein, this sounds a little extreme to me, but what do you think?
Ben Stein: Even a medium size jet liner weighs about 50 tons. That's about…a lot of pounds. That is about 100,000 pounds. What difference could it make if a person is 20 pounds over weight if you are comparing it with 100,000 pounds? This is a question of portion. It is ridiculous to think that overweight people causes more cost. It's just a joke.
Neil Cavuto: By the way, he's thin. Charles, what do you think?
Ben Stein: I'm not thin.
Charles Payne: People are paying more. I am going to Wyoming next week and I have to pay $1,300 more. The coach seats are just too thin for me. I feel like I'm sitting on a coffee can. I am going to start to charge the airlines. If anybody ever got on the airplane with a box cutter, I'm big enough and willing to take them down. So I am going to start charging the airlines and MeMe a fee for riding on with me.
Dagen McDowell: I love that. I want to fly with Charles. MeMe is not off base though. It's not unprecedented. Southwest airlines, if you don't fit in the seat, you have to buy two. They do not weigh you, however, if you can't fit in the seat with the arm rest down, so. It might sound outrageous. I personally don't think the airlines are going to do anything to alienate the people even more.
Neil Cavuto: They're not done. They're not done.
MeMe Roth: It's not ridiculous. JetBlue cut 1,000 pounds. That's a modest amount of weight, and saved $6,000,000 right off the bat.
Ben Stein: I don't believe it.
Neil Cavuto: 1,000 pounds where?
MeMe Roth: Not just JetBlue, airlines are asking passengers to go to the bathroom before they get on a flight!
Ben Stein: What are you talking about!
Meme Roth: I couldn't win Ben Stein's Money, but Ben to let you know, they're cleaning the fuselages because the grim weighs something.
Ben Stein: That's nonsense! That's friction! I'm on a plane nearly every day. I never had an airline ask me to go to the bathroom before getting on a plane.
Neil Cavuto: Adam, is this just the latest on the war on obesity? I always wish there was a nicer word than obese and obesity, but it is what it is. Adam, is there any merit to this?
Adam Lashinsky: Yes, I do think there is merit to it. It says more about the crisis the airlines are in than it says about fat people. They have been providing buffet service in terms of how they price their seats, and they are saying — well, some might be saying one way to think about this is à la cart instead. If you are going to eat more, you are going to have to pay more. It is an extreme situation, but it makes sense in an extreme situation only.
Neil Cavuto: I agree with Ben. Planes are big things right? Whether I had a big lunch is not going to affect the fuel consumption of that plane.
MeMe Roth: Don't argue with me. Argue with the industry analysts.
Neil Cavuto: I am arguing with you because you're here. You hate fat people.
MeMe Roth: That is a low blow. It is too much of a ridiculous question.
Neil Cavuto: Ok, miss smarty pants, go ahead.
MeMe Roth: If you take a parcel for shipment, do you get offended when it is based on weight? No.
Ben Stein: It's not the same thing at all!
Neil Cavuto: That is under the belly of the plane. It is in luggage. If you want to put us in luggage too, fine. It does not make a different with the fuel.
MeMe Roth: Ask the annalists themselves.
Neil Cavuto: That is like using the polar bear in Alaska as an excuse not to drill. This is an scapegoat.
MeMe Roth: Let me finish my point. What they're saying is they're rounding up. 80 percent of us are over wet so they round it up 100 percent and give us baggage fees. We are all paying for the fact that Americans are overweight. They are overweight everywhere, and we are paying.
Neil Cavuto: Go ahead, Ben.
Ben Stein: MeMe, this is a comment about your particular neurosis about weight. The amount of extra weight added by a few overweight passengers is absolutely trivial.
MeMe Roth: It's absolutely rational. It is important.
Dagen McDowell: Wait, should more airlines make people pay for two more seats then? Because that would make flying feel more comfortable.
Neil Cavuto: If they use two seat, fair is fair. Charles?
Charles Payne: Here's the bottom line: this is moving us in the wrong direction. It would be a form of discrimination. It is sort of making fat a sin. We have a sin tax on alcohol and tobacco. It divides a nation where the skinny people are the good guys and they should get everything. Overweight people pay more money for insurance. If you park an SUV in New York City, you are going to pay thousands of dollars extra a year to park.
Dagen McDowell: Isn't it a good thing if women pack less?
Neil Cavuto: I wish we had more time. You know, Charles, we could always sit on these guys.
Charles Payne: I am thinking about buying a bike or skate board or something.
Neil Cavuto: MeMe, great to see you. We have a box of Crispy Creams for you to take back.
MeMe Roth: And I'm going to seek some advice from Ben Stein later on about some neurosis treatments.
Neil Cavuto: You are becoming a little extreme here. You are a bright and funny woman, but you are becoming a nut. We love you.
More for Your Money: The Best Funds!
Neil Cavuto: Ben Stein's secret to big money? FUNDS! Let's get "More for Your Money."
Ben Stein: Cohen & Steers Quality Income Realty Fund (RQI)
Charles Payne: Select Brokerage and Investment Management (FSLBX)
Adam Lashinsky: Vanguard Total Stock Market (VTSMX)
David Nelson: CGM Focus (CGMFX)
FOX on the Spot
David Nelson: Banks go digital; Bank on "NCR" to jump 25 percent!
Ben Stein: Greenbacks will bounce back! Buy and hold onto "EFA"
Adam Lashinsky: Corporate travel budgets cut; buy videoconferencing-maker "PLCM"!
Charles Payne: India outshines China; make your wallet shine with "INFY"
Dagen McDowell: No Dem dream ticket; Hillary won't be Obama's VP
Neil Cavuto: My advice for John McCain: Embrace your inner fuddy duddy!
Forbes on FOX
In Focus: Would Dem "Dream Ticket" Be Dream or Nightmare For Wall St. and the Economy?
Rich Karlgaard. Publisher: I wish Barack Obama would pick Hillary Clinton because I think even if they were elected, it would be so dysfunctional, so driven by gossip and intrigue, that they wouldn't get anything done. I'm worried that Barack Obama, who is to the left of even Hillary, would actually get things done and that could be dangerous. There isn't anything about the free market economy that he doesn't want to tax or regulate more.
Mike Maiello, Associate Editor: A definite dream. A Barack Obama/Hillary Clinton ticket would unify the Democratic Party. It would get Obama elected with a huge mandate which is something we haven't had in a long time. A president with a mandate, and we had a good economy then. I would love to see it. The democrats ran so many great candidates. Barack Obama should pledge right now to give those who had supported him some jobs in his administration.
Victoria Barret, Associate Editor: I definitely think it would be a nightmare. I think Rich might not be giving Hillary and Barack Obama enough credit. They could decide to divide tasks, and Hillary would take over health care. We would get a nationalized system. Instead of more choice, you would be told which drugs you could get, which doctors you could go to. You'd lose your choice in healthcare, so I think it would be a nightmare.
Quentin Hardy, Silicon Valley Bureau Chief: Look at history, recent history in particular. Cheney gave us outsourcing the war to Halliburton, deficits don't matter, and shoot your friend in the face and then hide out. I don't think future presidents will be outsourcing their spine the way George Bush can. The next vice president is going to be in the tradition of Dan Quayle, Spiro Agnew and William Rufus King. It's not going to be Hillary Clinton.
Elizabeth MacDonald, Fox Business Network: Look, having three presidents in the White House, Obama, Hillary, and Bill Clinton would be a dream for talk show hosts. It would be a nightmare for the economy. They already are opposed to each other. Obama and Hillary differ on health care. They have separate plans on taxes. Get this. . .Obama says he wants to cut middle class taxes, but he wants to raise social security taxes by raising the cap. Hillary is against that, and she's also against raising capital gains, maybe hiking it to 20 percent, but Obama wants to raise it to 25 percent. It would be a nightmare.
Mike Ozanian, National Editor: I think it's a dream for tort lawyers and a dream for the unions, but for most other average working Americans – a nightmare. And a big nightmare for Wall Street because they want to tax profits. That makes returns lower and hurt stock prices.
$45 Trillion to Save Our Planet! Will It Destroy Our Economy?
Jack Gage, Associate Editor: These environmental scams are going to damage the economy beyond belief. We're talking about $45 trillion over the next 42 years or so. This is going to be a train wreck. The 111th Congress entering in January of next year is going to write more IOUs than the New York Fed by going green. This is a pork project. This is beyond abominable.
Elizabeth MacDonald: It's not a scam, it's not a train wreck, and it's not abominable. There's no consensus on global warming, but I want to bet that I don't want to be living on the surface of the sun by 2050. These trillions of dollars are going down some rat hole, they're going to possibly build 32 nuclear plants, the type of things that Jack Gage likes – nuclear.
Rich Karlgaard: As Jack says, it's based on information. If anything the consensus is going the other way, Liz. There's a great book called ‘The Deniers" by Lawrence Solomon. I urge everyone to buy it. He's gathered some of the great scientists around the world like Freeman Dyson who are skeptical of global warming. Isn't it an irony that we're coming off one of the coldest winters in 50 years in the northern hemisphere and we're still clinging to this bad science?
Quentin Hardy: I don't know, I just read a Freeman Dyson piece and he was very clear that there is such a thing as global warming going on, but let's get back to the facts here. What this report says is that for economic growth of 3 percent - you will have to spend 1 percent of GDP on energy. And, it says 1,500 nuclear plants in the mix. I hope it does destroy the economy. That's what capitalism is all about. It's about being courageous and investing in new sources of energy.
Neil Weinberg, Senior Editor: First of all, $45 trillion sounds like a lot of money, to you and me it is, but over 42 years from the world economy, we're only talking about a couple of percents. It's not that much. The risk is this thing gets so politicized by guys like Quentin, and Rich that what we end up having here is a lot of money getting wasted instead of going to intelligent things that will actually create new forms of energy.
Lacey Rose, Forbes.com Senior Reporter: I think we should be worried about the cost, not the cost of acting now, but the cost of NOT acting now. We are going to be inundated with far greater costs if we don't address climate change now from droughts and shortages to more severe hurricanes, and even higher energy costs.
Flipside: Best Housing Fix: Let Ed McMahon and Others Lose Their Homes!
Josh Lipton, Forbes.com Staff Writer: Here's a question – why should any homeowner who acted responsibly, put his 20 percent down, worked hard to make the monthly mortgage payments turn around and bail out the guy who made a poor decision? So as long as the government is going to artificially prop up home values, the housing market can't find that floor from which to recover. It makes sense to let the market recover.
Lacey Rose: I don't think it's a moral issue here. It's not about saving or punishing homeowners. It comes down to a financial issue, and foreclosures don't make financial sense. They hurt everyone from the homeowner to the lender to the larger neighborhood to the larger economy.
Mike Ozanian: I have to agree with my good buddy Josh. It's good because what happens is instead of homes being owned by banks, they are owned by people who can afford them. That's good. That's how you clear the excess inventory. If Ed and Evander can work out a deal with their mortgage bank, that's great, but we don't want the government doing another bailout. That would be catastrophic.
Evelyn Rusli, Forbes.com Anchor: Josh, you are such a scrooge. I never realized this. We knew that heads were going to roll and we knew that people were going beyond their means in getting these loans. At the same time, we don't want to open the flood of foreclosures. That would be incredibly detrimental to the economy. Unemployment is at 5.5 percent. How high do you want it to be?
Victoria Barret: It's a necessary clearing of the market. The market will make good decisions. You have hundreds of McMansions that were built outside of cities like San Francisco, San Diego, and Washington DC. Think about what we could do with them. We could turn them into condos and apartments, and turn them into more affordable housing for workers that can't actually live anywhere near the cities where they work now. That's how the market can clear this out.
Informer: Stocks That Pay You No Matter What's Going On in the Market: The Best Dividend Paying Stocks
Josh Lipton: Procter and Gamble (PG)
Evelyn Rusli: International Business Machine (IBM)
Jack Gage: iShares Lehman Aggregate Bond (AGG)
Neil Weinberg: Pfizer (PFE)
Our Cashin' In crew this week: Jonathan Hoenig, CapitalistPig Asset Management; Jonas Max Ferris, MaxFunds.com; Wayne Rogers, Wayne Rogers & Co.; Tracy Byrnes, Fox Business Network; Chris Kofinis, Democratic Strategist; Matt McCall, Penn Financial Group.
Who Is Better For Jobs: McCain or Obama?
Tracy: First of all, almost 8 million jobs created since August of 2003. That can't go on the wayside. The Bush Administration has done something right. And I think the biggest thing to look at is that Obama is talking about raising taxes. You raise taxes, you crush the small business and the entrepreneurs and you lose jobs because those little companies will not be able to afford to keep these people on their books. And that is a huge amount of our workers out there. They'll be the first to go. So I think we raise taxes, we lose jobs.
Jonathan: I think comparing Obama and McCain, certainly McCain seems to be a bit more of the capitalist ilk. What really worries about Obama is if you listen to what he says his philosophy seems to be this total renunciation of self-interest. So yes, Obama wants to create jobs but it's not to make money. It's to help the environment, it's to help your neighbor, and it's to help your community. None of it is about helping yourself. I think it's that self-interested capitalist spirit, that's where the jobs come from at the end of the day.
Chris: I don't think it takes much of a Ph.D. in economics to figure out that the George Bush administration has completely I think destroyed the fundamentals of the economy. From the national debt to the deficit rising, you're seeing foreclosures at an all time high, you saw today in terms of the job loses, the highest one month jump since 1986. This is an economic team in the White House that has completely mismanaged the country and unfortunately John McCain has chosen to basically follow the same Bush model. Barack Obama is going to pursue a middle class tax cut, he's going to pursue investment in the environment and "green" jobs, and create as many as 5 million new jobs in the coming years. This is not even a question of wanting to go into a new direction. Let me put it this way: taking economic advice from John McCain is about as smart as taking marital advice from Charlie Sheen. Let's be frank about it.
Wayne: The point that was just made I kind of laugh at because when you say this remember the Democrats came in a couple years ago into the Congress. They control the Congress. The President doesn't have anything to do with this without the Congress saying something or without the Congress making these decisions or enacting these laws, the President is essentially helpless. The Congress is controlled by the Democrats as of two years ago. They rode in to do this and they haven't done anything. They have done absolutely nothing and you sit there and crow like "oh my God, it's Bush and he's terrible." That's easy for you to say because you don't know what you're talking about in the sense that you don't blame your own Congress.
Jonas: You guys are overplaying the whole job creation role of the President. In my opinion, and it's not just in my opinion, I'll go back further than the Bush administration, Democrats create more jobs. Obama is going to create more jobs. The unemployment rate will be lower than it will under McCain. I'm going back to ‘41. It's because the whole notion of income redistribution and tax and spend creates jobs. If you look at the job report this week what was the one strong area? It was the government. I'm not talking this is good long term policy and I'm not saying creating jobs is a good thing to do anyway as a President but if you want to talk just about creating jobs, these large government programs employ people. Offering national health care to the whole country is going to create jobs.
Should College Be a "Birthright"?
Barack Obama says college education should be a "birthright" for all Americans? Is he right and should the government pay for everyone to go to college?
Jonathan: Absolutely not. What is a right? A right is a right to action; it's not to a freebie from someone else. Your life, liberty and the pursuit of happiness doesn't cost me anything. But when we start saying, well yes, education is a right, and health care and housing and all this other business, those are all goods and services that have to be provided by someone else. That's an infringement on their life, liberty and the pursuit of happiness. That's what makes this whole notion of a right to education completely immoral.
Chris: I think it's absolutely a birthright. I know from first-hand experience. I used to be a professor back in a university in California and I saw a lot of kids struggling to be able to pay tuition at a state university. I think the greatest thing we can do for our country, in terms of both strengthening our economic security, strengthening our national security, and moving forward is to focus on human capital. What is the key part of human capital? I think it's education. We want the best educational system in the world and we want everyone to be able to go to college who can go to college. And I think the economic burden on a lot of individuals and families is unfortunately the reality that they can't go to college. So I think it should be free.
Wayne: There's not any way that a person can't go to college in this country. If you're smart enough and you're bright enough, there are a lot of scholarships and everything that go begging every year. College isn't for everyone. There are some people who probably shouldn't go to college. But in this country anybody can go to college. There are junior colleges, there are community colleges, there are private colleges, there are state universities, all of these things. It's not the big expense that you think it is. You can work your way through school. I happened to have done that. I know that for a fact and I went to a very fancy schmancy eastern school. 55 percent of the undergraduates at (my alma mater) Princeton are on scholarship. Most of today, everybody at a big eastern school you can go there. So don't tell me it has to be paid for by the federal government.
Matt: Wayne makes a great point. I think there's really two points to this argument. First of all, it's not a birthright. The problem here is I think our youth right now is a bit lazy, let's say, compared to a lot of other youth around the world. So saying this is a birthright, saying college is for you, it's paid for, how's that going to motivate them to go for those scholarships that Wayne was talking about? Secondly, money. Who's going to pay for this? Obama wants to do everything for everybody but then it's going to be taxed. So I look at this crazy circle, it's going to tax it, it's going to ruin the economy and then it's not going to matter anyway because there's not going to be any jobs available for anyone getting out of college.
Tracy: You're talking to someone who's going to have three kids in college all at the same time and I still don't think it's a birthright. To Wayne's point earlier, we need laborers in this country. Not everyone needs a college degree. We have this influx of immigrants coming in to help us do the jobs that we don't have people trained to do because again, a lot of people too lazy, they don't want to take the low pay, minimum wage. We need people like that.
Jonas: I think Obama's speech would have been good 80 years ago because there was a time where you had to be privileged to go to school in this country and that wasn't a good system. There were too many uneducated people in this country. Today I don't think he's talking about America because if you want to go to college, you can go to college in America. There are a lot of government programs. The budget for my local school, they spend $21,000 a kid for public school? How much more are you going to spend on these kids? I got paid to go to graduate school by the school just on merit and test scores and stuff so it's not a bad country anymore like it was. I don't think we should go back to that like Jonathan is hinting at but Obama is talking about a world we don't have anymore really.
Would Banning Speculators Cut Gas Prices?
Jonas: If you could make the oil markets what it was originally supposed to be, which is producers and consumers, like the airlines hedging their future use of oil, if you could just focus on just the real players in the commodities markets and not the gamblers, you would lose at least a dollar on the price of gas a gallon. No question about it in my opinion.
Wayne: It's like saying "hey, you bought a stock at 5 dollars and you sold it at 20 dollars," should we tax away all of that profit just because the guy was smart enough to do that? Or somebody who bought an oil future at 50 dollars a barrel and he's profiting from that and you should tax that away and take that away. Of course not! The free market will do that. Jonas is essentially saying that the market is not free, that somehow it is fixed. And you have to remember something, 25 percent of the price of every gallon of gas in this country is due to the devaluation of the dollar. That is the problem.
Tracy: I'll tell you why we need the speculators. They offer liquidity. They need to be on the other side of the trade. So Exxon's going to hedge its bet against oil? Well, who's going to be there on the other side to take that risk on? You know what? By adding that liquidity I think they actually smooth that price out. Because if there wasn't enough liquidity in the market you would see wicked spikes and movements because of that.
Jonathan: If you take a look at the Bloomberg and the CFTC (Commodity Futures Trading Commission) data speculators—the hedge funds and what not—have actually cut their long bets on oil since last July. So even as oil prices have been heading higher, the big, bad speculators have been cutting their bets. I'm offended by the way that speculation has become sort of this slur term for judgment. The hedge fund in New York has just as much right to buy oil or gas as the single unwed mother in the Midwest. And to the extent that speculators do push prices up, that's actually a good thing because price is the best indication that we have that we need more supply. If you want to blame someone for high oil prices, don't blame the speculators. Blame the environmental movement, blame the greens; they're the ones that keep that supply off the market.
Chris: Yeah, it's pretty easy to blame the greenies. In terms of the speculators, I think there has to be a serious investigation as to whether they have been manipulating the price and how they've been driving up the price. No one is going to debate that gas prices have become a serious obstacle to economic growth in this country. We just saw that with the airline industry just this week. Cutting jobs, cutting flights, this is becoming a serious issue.
Best Bets: Triple Crown Stocks!
Jonas' pick: Brown Shoe Co. (BWS)
Matt's pick: Imperial Oil (IMO)
Wayne's pick: M&F Worldwide (MFW)
Jonathan's pick: Hitachi (HIT)