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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital; Tobin Smith, ChangeWave Research; Eric Bolling, FOX Business News; Matt McCall, Penn Financial Group; Marc Lamont Hill, PhD, Temple University.
Trading Pit: McCain vs. Obama: Best Commander in Chief for the Economy?
Matt: It's McCain. First off, he wants to cut the corporate tax by 10 percent to 25 percent. This will allow U.S. and foreign-based companies to stay here (or think about moving their headquarters here). It would also spur more growth of the corporations that employ the middle-class that is struggling on incomes taxes, McCain wants to keep the Bush tax cuts and lower rates on dividends and capital gains. This will give investors an incentive to remain in the stock market and not punish the top earners in the US that pay the majority of our taxes that fund our government. McCain's plan has a long-term vision that will get us through the current economic crisis and have the country on solid ground for years to come. Obama on the other hand will tell the people whatever they want to hear and react to short-term trends in the economy. That is what got us in the situation we are in – McCain has the long-term vision.
Eric: McCain wins by default. I think neither he nor Obama have a handle on how to fix the economic ills. But McCain's stance on taxes (not raising them) and spending (a freeze) trumps Obama's tax the wealthy and spread that wealth borders socialism. We are a nation built on free markets, not socialistic ideology and government.
Gary B: Obama would be terrible for the economy. Here are five reasons why:
1. He's basically against free trade.
2. He's pro-union (an industry killer no matter what industry.)
3. He wants windfall profits taxes on oil.
4. He wants to raise taxes on small businesses.
5. He wants to raise the minimum wage, thereby driving up costs and killing even more businesses.
Tobin: If "redistribution of wealth" was the most successful economic system, then Norway or Sweden would be the world's strongest economies. Since that is not the case, I'll stick with free market capitalism.
Sarah Palin's Plan for More Drilling in America or the Dems' Plan to Ban More Drilling in Amerca: Which Is Better for Your Wallet?
Matt: It's the Palin plan! Here's why: A report out of the EIA (Energy Information Administration) this week suggests that oil wells may be running dry in the future. This will ultimately be the end result if we do not begin to drill now! The issue with drilling is that politicians believe we do not need to drill with oil in the $60s because they take a short-term view of the situation. Palin is spot on by pushing drilling whether oil is $150 or $60 – she is thinking long-term.
Gary B: The cheapest, most cost efficient energy source is oil. It makes sense to increase the supply, thereby further lowering the price. In addition, it's what the market wants, NOT want the government decides we should have.
Bolling: Given that oil was just near $150 and gas was just $4.we better start exploring now for the future energy needs of our economy. The U.S. exports hundreds of billion of dollars to governments that dislike us. That could be money and jobs here if we drilled domestic wells rather that buy foreign oil.
Tobin: Unless the oil market sees an aggressive offshore drilling policy from the U.S. we will see oil $100 in 2010 just as the US economy would be coming out of its 24 month recession—which would kill the recovery in the U.S.
The best time to start drilling for oil is when drilling costs have come down - like now. If we wait for oil to get back to >$100 pricing to "reconsider our reconsideration" of offshore oil drilling, we go back into recession in 2010.
McCain brings the best compromise - push green energy with $100 billion in new spending and drill exploration wells in the trillion barrels of oil in the Continental Shelf.
Will We Get a 'Relief Rally' After the Election?
Gary B: Yes, there will be a relief rally. All the bad news about Obama's presidency is baked in. Assuming he wins, there's no more reason to sell off and up we go!
Matt: I can't agree more with your thinking of a relief rally after the election. We saw the uncertainty crush the market this year with the uncertain election and the uncertain recession. This past week was a perfect example: we get terrible economic numbers on Monday and Thursday the GDP came in negative. Both days the market rallied because it was already priced into the market and once it is "known" it is too late.
That being said, an Obama victory is already priced in the market so there is nowhere to go but up if he wins or if McCain can pull it out
Tobin: Not as easy as saying we rally no matter who wins. We are going see one of three things…
1. If McCain pulls off a surprise win, the Dow has an immediate 600 point rally.
2. If Obama wins big and the Senate and House pick up major seats, we will see a sell off, 300 points.
3. If Obama wins but the Senate and House stay pretty much the same, we see a rally, 300 points.
Eric: History shows that September is the worst month of the year for stocks (it was) and that October is the month for crashes (it was) and that November is the take-a-breath month before the BEST month of the year. In December, I am looking for a ground swell of anticipation in November and a rally into the end of the year. The strength of that rally will depend on the president elect and his ideas for taxing gains and dividends.
Predictions: Stocks That Win No Matter Who Wins the White House
Gary B.: Microsoft (MSFT)
Eric: Home Depot (HD)
Tobin: Suntech (STP)
Matt: Regional Bank HOLDRs (RKH)
Cavuto on Business
On Saturday, Nov. 1, 2008, Neil Cavuto was joined by Charles Payne, wstreet.com; Dagen McDowell, FOX Business Network; Adam Lashinsky, Fortune Magazine; and Gary Kaltbaum, garyk.com.
Bottom Line: Obama's Tax Hike Plan: Definition of Rich Going Lower And Lower?
(BEGIN VIDEO CLIP)
JOE BIDEN, DEMOCRATIC VICE PRESIDENTIAL NOMINEE: What we're saying is that $87 billion tax break doesn't need to go the people making an average of $1.4 million. It should go like used to, to middle-class people, people making under $150,000 a year.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
JOHN MCCAIN, REPUBLICAN PRESIDENTIAL NOMINEE: Senator Biden said tax relief should only go to middle-class people, people making under $150,000 a year. Are you getting an idea what's going on in their mind? Huh? A little sneak peek?
(END VIDEO CLIP)
Neil Cavuto: Is John McCain right? And are Barack Obama and Joe Biden dropping hints that McCain may be right? Last year – Obama said you're rich if you make a million bucks a year. This year – he dropped it to $250,000. In his big informercial, he said $200,000. Joe Biden supposedly "slipped" when he said $150,000. What's going on here?
Gary Kaltbaum: I don't believe we have a Freudian slip here, Neil. Look. They like your money! They like consumers' money. They do believe in big government, whether it's education, health care, or anything else under the sun. I expect tax hikes on everybody. You know, they talk about tax cuts for 95 percent... they are not really tax cuts. No marginal rates are coming down. It's handing out money if someone performs an act. Expect the greatest tax hike in history and at the most inopportune time. It worries me very much.
Neil Cavuto: We always have to remind folks that this plan is to move forward the president's expiration of the top rates, not a couple of years… but immediately. Is this the time to do it?
Charles Payne: It is not the time to do it. Also, once we let this tax genie out of the bottle, we know it will spread like wildfire. I think what's interesting is they are doing a bait and switch here. What they are telling the American public is if you think it's ok to tax people making $250,000, if things get tight enough, you already said that's a good thing to do. Maybe if you're making $150,000, you have already signed onto the bottom line that this is good for the country, you'd be willing to do it at $150,000, $125,000, or $100,000. It's the old bait and switch. Once you say it's a good strategy, let's tax the bums!
Dagen McDowell: They will not do that. Not in this economic environment. You know it's the Democrats who, particularly if they get 60 seats in the Senate, you know what's going to happen? They will raise taxes on those making more than $2,000. Watch those rates in the next couple of years go even above where they were before the Bush tax cuts. Tax hikes are in the cards.
Adam Lashinsky: First of all, what's $100,000 among friends, right? Seriously though, I don't… it's not a matter of a Freudian slip or sloppy language. Senator Obama has repeatedly put the figure at $250,000. I don't think there is any reason not…
Neil Cavuto: Did you watch the infomercial? That thing was slick. Well done. It was a script. He said $200,000. I did a double-take! I almost dropped my popcorn and my Bud. I didn't know what was going on.
Adam Lashinsky: Dagen is right, Neil. The taxes will raise and go up. The question is there has been so much focus on this comment that Obama made about spreading the wealth around. That's what the tax policy has been – for approximately the last Century. We take taxes from people. We spend money where we think it's needed. That includes social programs from the unfortunate. It's what a rich, industrialized nation does.
Charles Payne: We're talking about taking money from people who have earned it and giving it directly to people who didn't earn it. That's not what the tax policy is all about. That's what it's supposed to be about.
Gary Kaltbaum: Let me go one further. It's not just about numbers. It's also about attitude. I'm hearing words out of the supposed Administration going forward that it has been a free ride for the wealthy under George Bush. Last I looked, people earned their money. It's our money. We give it to the government. The attitude is just plain bad. It's penalizing success. You're supposed to reward success. Successful people are the hirers of the people of this country.
Adam Lashinsky: It's interesting. The language that you and Charles are using is really interesting. It's taking money that people have earned away from them. No. It's about being part of a community and contributing part of what you make to make your community a better place.
Neil Cavuto: Adam, you're forgetting something. This idea of this whole Robin Hood… I guess you could say we live in a progressive tax world. I understand. It's as if you say you're paying 35 percent just of your salary, your base income, to the government and leaving aside all the other extra fees that are going to go up. This talk about limitless Social Security, taxes, etc. That's a lot as it stands. And it's a moving target. I heard one prominent Democrat tell me, "Neil, don't forget that not more than 20 years ago, we had a 70 percent tax rate." He said this! That is a quote I never get.
Dagen McDowell: I raised this issue on the show a few weeks ago. The sky is the limit! It was 91 percent before President Kennedy cut taxes. Here's what is going to happen…
Neil Cavuto: I don't think the Kennedys had the good sense to offshore that… I'm kidding.
Dagen McDowell: What's going to happen is the taxes are going to go up on those making more than $250,000, and it's going to work because the people will spend it. And where does it stop? So the rate is going to go up and up and up. At some point, it's going to hurt investment, it is going to hurt how we grow as a nation, but we're going to have to wait and see what that level is. That's the big story.
Neil Cavuto: Do you think that whether it's the income tax hike, the capital gains hike, the raising the Social Security income threshold, could effectively mean guy like you are paying more than 50 percent of their incomes to Uncle Sam?
Charles Payne: That's the issue. Also, the issue is the vitriolic nature that Gary alluded to. We have a thing in America that's very unique – the Ladder of Success. The idea is we're going to saw this ladder in half just to get at those few people at the tippy-top who are making $1.4 million a year. We're going to cut off the ladder of success. At the end of the day, it's going to hurt the people who have nowhere to go.
Dagen McDowell: Charles, I worry though. We all live in New York City. We all live in high-income areas. We all do. $48,500 is the median household income in this country. Sometimes I think we forget that.
Charles Payne: We're buying into this one-world system. At some point, we're going to be told that as Americans, since we make $50,000 a year and the average person in the world makes $2,000, that we should contribute not just to our community, but to the larger community as well because that's the direction we're going in.
Gary Kaltbaum: I'm hearing them float trial balloons about 401k's being taken over by the government. That is what I talk about when I say attitude. They believe everything should be government based – not private based. This is a worry going forward.
Adam Lashinsky: But Gary, listen to what you're ascribing to them! I know you mean they are the Democrats, but the government is what enabled 401k's to exist in the first place.
Neil Cavuto: Adam, they are changing it. You're right. The genie is out of the bottle because Republicans were the first to take it out of the bottle with a $1 trillion rescue. The fact of the matter is it happened, folks. It happened. And it's not good. That's my view, anyway.
Head to Head: Palin Pushing Free Market Plan: Is That the Best Way to Fix Economy?
(BEGIN VIDEO CLIP)
SARAH PALIN, REPUBLICAN VICE PRESIDENTIAL NOMINEE: "What John McCain and I believe in is what Ronald Reagan believed in. We believe in the forward movement of freedom and not the constant expansion of government."
(END VIDEO CLIP)
Neil Cavuto: This week – Sarah Palin pushing policies that sound more and more like Ronald Reagan's policies: Less government and more free markets. This – even as the guy at the top of her ticket seems to keep promising more government and less free markets. So what's going on here?
Charles Payne: Palin is staying true to the Party and to the beliefs of the Party and to the ethos of the Party. McCain is trying to win a presidential election where populism rules. You can argue that one person has sold his soul and the other person hasn't… Obviously, I preach free markets all the time. I think it's the way tot go. Here's the irony: This week, the Governor of New York, David Paterson, almost echoed the same things that Sarah Palin said! Paterson is a liberal Democrat. He said we need lower taxes in New York State… that we need to get back to the nation that we once were. I could not believe it was coming from a guy like that! But, he knows exactly what's going on.
Neil Cavuto: He has a record deficit, too.
Charles Payne: Just the fact of the matter to hear someone outside of the Republican Party say that is really amazing… and from the Governor of New York?!
Dagen McDowell: Charles – free markets, the ideology as we know it, has been thrown right out the window, at least for the time being with that $700 billion rescue package. You know it. Even Greenspan says "Oops! I kind of misjudged that the markets, at least the credit derivatives markets, could regulate themselves." And with that, which Sarah Palin was in favor of, you know there is going to be more government.
Charles Payne: If you have a baseball team, you don't send them out there and start pitching a football at them. You don't change the entire game. We need to tweak it. There is no doubt about it. It's always evolving.
Dagen McDowell: She comes from the most Communist state in all of America – they tax oil companies!
Adam Lashinsky: Well, Dagen - not Communist. Totalitarian.
Dagen McDowell: She raised taxes on the oil companies and then sent a check, a $1,200 check, to every citizen of Alaska with the budget surplus. Before we start talking about…
Neil Cavuto: You raised a good point. It does come at a time where at least Capitalism as we know it has been turned on its head by this president, a Republican president. Republican and Democratic leaders – they seem to assume… and every capitalist I talked to is on board with this rescue – thinking it's a good idea. Maybe it's what Dagen says – that now the government is the answer. What do you make of that?
Gary Kaltbaum: Neil, after watching Bush and friends, who I call the Bolsheviks at this point in time, take over insurance companies and helping auto companies… I don't even know where to begin! I'm just happy somebody is talking about free markets. I would like to see them put their money where their mouth is because John McCain did vote for this bailout bill, also. I'm just looking for anybody Reagan-esque at this point in time, who understands that the greatness of this country, throughout the last 232 years is our freedoms and our abilities to become whatever we want. Not to have to be in competition with the government. By the way, private companies will now be in competition with the government. I am SO not thrilled about that.
Neil Cavuto: Adam?
Adam Lashinsky: Neil, these are slogans – not policies. The fact of the matter is we have had a generation, a bi-partisan generation, of the government having created this problem. We used our tax policy and weak regulation to inflate the housing bubble, to guilt people into owning a home. Now, we have got to unwind that. It's obvious that the government has to be part of that solution. It was part of the problem. It would be great to let the free markets reign.
Neil Cavuto: Do you have a fear, Adam, it's going to go too far the other way? I know every pendulum swings too far. We are coming from a period of low regulation and low taxes… for the sins of a few, we're sort of having the government take over everyone, right?
Adam Lashinsky: I have thought about that. I think that any sensible Treasury Secretary will want to get out of the market as quickly as possible. Now, I know people are going to say that's naïve, but the Treasury Department does not want to be a long-term holder of private securities if it can help it.
Dagen McDowell: There is some free market thinking in that $700 billion rescue package. They didn't put restrictions on what the banks have to do with the money that they are getting from the government. Of course, plenty of folks are up in arms about that…
Neil Cavuto: Have you ever had a party, Dagen, where some guests just won't leave? That's the government.
Dagen McDowell: We have a spent a Century of wading deeper and deeper into private business.
Neil Cavuto: So you love this government??
Dagen McDowell: I just hope they get it right. Cross your fingers and hold your breath.
Charles Payne: The irony is we are victims of our own success. So many people have had it so good for so long. Poor people in American don't know what it's really like to be poor as people around the rest of the world do. We have had it so good for so long….
Neil Cavuto: When they call it a Depression, and our parents certainly know a thing or two about that, our parents are the ones shaking their heads… saying "My goodness…"
The Cost of Freedom: 150,000 Gov't Workers Make More Than $100K; Time to Freeze Their Pay?
Neil Cavuto: Barney Frank and other lawmakers saying no more big payouts for banks getting bailed out. But what about big payouts to government workers? Did you know that nearly 150,000 of ‘em make more than $100,000 a year? Is it time to freeze their salary to save the taxpayers some money?
Gary Kaltbaum: I think government is the most over-bloated, unaccountable corporation in the history of time. Take a machete and go after everything. I'm not so sure cutting $10,000 from the workers is the greatest thing in the world, but start there and go after all the programs that don't work and get this government back on track again.
Neil Cavuto: What would you pay the average Congressman?
Gary Kaltbaum: $7.95
Neil Cavuto: Dagen, what do you think of this idea?
Dagen McDowell: They are capped. People who work in the government, who are on the general schedule, their salaries are capped. You have a growing number of people whose salaries are capped. Level 15 is the highest. It's based on what people on the executive- level make. You have like 7,100 people in this country who are capped at like $149,000 right now.
Neil Cavuto: The president makes $400,000, right?
Dagen McDowell: You get a standard raise, but these raises are not kicking in for some employees.
Adam Lashinsky: But, they are capped in a different way. The people who work for the government have no upside opportunity. They don't get equities. They can't get these obscene riches. We need to pay people to do their jobs wells. These are fair salaries by and large.
Dagen McDowell: I say lift the caps. Maybe you will get better quality people.
Neil Cavuto: You seem to be saying, though, that everyone gets these incredible salaries elsewhere. I think most people do not. There are certain areas like in the finance and other arenas where that happens…
Adam Lashinsky: I'm just saying they don't have the same opportunity the top-earning people in the private sector have.
Neil Cavuto: Maybe, but they have good health care.
Charles Payne: By the same token, Adam, they don't have the same sort of problems and anxieties because they get these jobs and never lose them. They don't have the same accountability. Look at some of these agencies. They are so poorly run, it's a nightmare. Everyone watching the show knows exactly what I am talking about. Have you ever been to the DMW, tried to register this, or tried to register that?? These guys sit on their butts and collect this money. They have cobwebs on their heads.
Neil Cavuto: Not all, Charles. Not always.
Adam Lashinsky: Let's make them better. It's our government.
Dagen McDowell: You're Mr. Free Market. Let the government be free market.
Charles Payne: A lot of people should work on some sort of incentive to do a great job.
Neil Cavuto: What happened to you at the DMV?
Charles Payne: It's what didn't happen to me!
Dagen McDowell: How about working on incentives that are real for all those Wall Street executives?
Charles Payne: You shouldn't get a bonus on Wall Street if your firm is not making money. It's obscene. By the same token, teachers should work on some sort of incentive. You can't just go to school and walk through the doors and let these learn the way it has been going. There has to be some kind of accountability.
More For Your Money: Stock Winners No Matter Who Wins the White House!
Neil Cavuto: We're back with the stocks ready to make you money no matter who takes over the White House!
Adam Lashinsky: ExxonMobil (XOM)
Gary Kaltbaum: Dollar Tree (DLTR)
Charles Payne: ITT Educational Services (ESI)
*Charles owns shares of this stock
Forbes on FOX
Are You Selfish If You Don't Spread the Wealth?
Elizabeth MacDonald, FOX Business Network: John F. Kennedy didn't think it was selfish when he cut taxes down from 70 percent. There are many countries like China, Iran, Cuba, Romania and Russia that have lower corporate tax rates and many times they have lower individual rates than here in the U.S. Those countries don't see it as being selfish. They see it as growing jobs and growing the economy.
Mike Maiello, editor, Intelligent Investor: In 2000 John McCain said if you make more you should pay a little more because that's what societies do. They help each other.
John Rutledge, Forbes contributor: This is not about redistributing wealth, this is about destroying wealth. This business about tax cuts below $250,000 is a hoax. If you have any kind of stock market account you are going to pay through the nose.
Quentin Hardy, Silicon Valley bureau chief: Paying your taxes and paying your fair share is an obligation and it's a right and a privilege as a citizen. How else do you pay for things police, aircraft carriers, all the other things you want for your country. Those that have been blessed should give back a little more. This country has been good to them, why not give it back a little bit.
Victoria Barret, associate editor: The top 40 percent of households make 74 percent of the income. And they pay 99 percent of the income taxes. We have a very progressive system. Now is not the time to be loading taxes onto anyone.
Neil Weinberg, senior editor: Everyone agrees lower taxes are a good thing. But the question now is fairness. We have a huge deficit now. Someone is going to have to pay the taxes. The rich have gotten a lot richer in this country and if we don't have a strong middle class then we are going to completely gut our entire economy. We need to redistribute our wealth. Not by a socialistic mechanism but by our tax policy. It's time to make it more balanced.
Banning Bonuses at Bailed Out Banks: Good or Bad For Economy?
Jack Gage, associate editor: The problem on Wall Street right now is not that are taking risks, it's that they are not taking enough risks. We have to incentives performance at the executive level. It could take us into a greater recession if we take that carrot away.
Quentin Hardy: They have so mismanaged their businesses that they've destroyed the entire global financial system. Then they ask Washington for a bailout. They don't need extra pay!
John Rutledge: There is no example in history of a country setting prices or wages that has had a good result. If I were on the board of a bank I would give no bonuses – because bonuses for what? If I was a CEO of a bank I would work for $1.
Mike Maiello: Alan Greenspan recently said that one of the greatest mistakes he made was trusting bank managers to look over their best interests. We can't trust them.
Mike Ozanian, national editor: You don't want the government setting wages. Look at the last big government rule that was passed. It was Sarbanes-Oxley. It killed Wall Street. All that did was move the I.P.O. business to London.
Elizabeth MacDonald: Morgan Stanley's CEO gave up his bonus in 2007. Wall Street executives are in talks with the government to do more to cap their compensation because they know it's a PR disaster.
Dem's Pro-Union Law: Will It Create or Kill Jobs in America?
Mike Ozanian: This bill does not reward people for good work. It rewards them for how long they've been on the job. It would destroy productivity and it would destroy profits.
Neil Weinberg: Anything that makes it easier to unionize will kill jobs. But to think that in today's day and age to think that this is going to have a negative impact on our economy is ridiculous.
Victoria Barret: I think there will be a huge temptation to form unions right now because we're in a rough economic patch. This bill makes it easier for union bosses to get union votes.
Quentin Hardy: Japan is much more unionized than we are and that hasn't had a negative effect on employment at all. This bill would promote jobs and job security.
Lacey Rose, Forbes.com senior reporter: This bill is a job killer. Unions distort the labor market and they impede the nimbleness that is necessary to adapt to shifting markets.
Obama's 'Dangerous' Trio of Obama/Pelosi/Reid: Dangerous for the Economy?
Jonathan Hoenig, CapitalistPig Asset Management: Liberal economic philosophy. Wealth redistributions, bigger government, more regulation; it's always been disastrous. Those on the left, it seems they have an open disdain for capitalism. They seem to have hatred for free markets. Somebody who thinks those are integral to the American ideal, I find that very worrisome.
Look what happened under George Bush. That's a problem he had with the Republicans. It was good in the short run. It was terrible long-term policy. It's going to be no better with Obama and all Democrats doing whatever they want and doing all their kind of spending. It will have a similar effect on Bush. We get this new deal type policy next year and the huge spending plan, but long-term that will not be good for the economy.
Wayne Rogers, Rogers & Co: I don't ever think it's a good thing for any one party to have total control, because if you have that kind of a government, everybody just ram rods everything through, and I don't think that's ever good. Dissent is always good, even if it's from the left or the right, that's good for the country. No. The other problem is if you have to blame the Republicans to a certain extent for getting us into this position, so you can't blame the Democrats on the other side for not having some kind of wild reaction to it, regardless of what it is. It's unfortunate, unfortunate for the country.
Pat Powell, Powell Financial Group: I actually agreed with Milton Friedman who said that if you put the federal government in charge of the Sahara Desert, in five years you wont have sand...You put Pelosi and Obama and Reid in charge of the economy, it won't take five years to have a shortage of both jobs and capital in this country.
Jonas Max Ferris, MaxFunds.com: The argument as you said can be made that we have the divided government for the past few years and look at the situation that we're in. Voters are well aware that it will be a Democratic controlled Congress and potentially a Democratic President. They want that. They want change. They are saying hey, we want some new thoughts. We want some new blood in there. We want to do something radical. If this is the thing, we need some fresh young thoughts in there.
Rebecca Diamond, Fox Business Network: I think what people are focusing on now is the fact that, yes, their homes are worth significantly less. They are opening their 401-k statements and they are just getting slammed left and right. They are seeing these bailouts for Wall Street. They perceive it as helping the fat cats. They perceive it as by Republicans even though Senator Obama and the Democrats voted for that, so this is the reason that they are sweeping all of them out of office.
Nationalizing Mortgages: Good or Bad for the Housing Market?
Dani Babb, author of "The Accidental Landlord": All we're going to do is just delay the inevitable. We will create more anxiety in the marketplace that has already had enough of it, quite honestly. People are going to have a period of time in which they may be able to pay their mortgage but in the long run it's just going to come back and we're going to have exactly the same issue.
Rebecca Diamond: We're the ones who started the problem in the first place. Shouldn't you get to the root of the problem? Not just all the other aspects of it. I mean, this is the inherent problem, right? This is the problem, is that people aren't able to afford. They are under water. If you have some assistance — we already have some type of guarantee with the FHA.
Wayne Rogers: I think it's a good idea in the following sense. It should occur between the lender and the borrower. A lender does not want a bad loan. A bank does not want a foreclosure. That's a bad loan for them. If they sit down with a borrower and the borrower and lender can get together, pay interest only for a while, suspend payments for three months and then come back and do that, that's the way to work this out. It should be worked out between the borrower and the lender and leave the federal government out of it because it's going to cost us all and be a disaster.
Jonathan Hoenig: From the beginning we have had government stepping in with this cockamamie help for homeowners, all these programs that essentially coerce the private borrower or lender into having to change the terms of the contract. Wayne is right. Lenders have always been able to change the terms. People don't have a right to a home they can't afford. I know it sounds so asinine in today's bailout environment. If you can't afford your home, you can't afford your home. We need the foreclosures.
Jonas Max Ferris: It's going to cause a crash unless we defer these sales into the future by keeping these people in their homes by any way and means necessary. This is one of the first plans on a large scale that addresses the issue of people not making payments. My only problem with it, I think there should be some punishment for taking this plan so people not making their payments don't get screwed. We have to keep people in their homes. That's why I thought it was a bad idea when the government pulled that thing where if you walked away from your mortgage, it was a tax liability. That was a good policy.
$5 Billion Election Price Tag: Bargain or Rip-off?
Jonas Max Ferris: The media companies need the advertising revenue. But the reality is I find it extremely offensive that it takes hundreds of millions of dollars. Obama $400 million? It's unbelievable how much money these people spend on the election. I think in my opinion it really ruins the election policy. It means you can't run for office unless you're rich or you know these people or you can raise money from lots of people. It's great that people back these people. The way it's escalating, the next one is going to be $10 million. When does it stop? When you limit how the government spends the money and you don't spend the money and it evens out the playing field a little.
Pat Powell: What are people actually trying to do here? They are trying to buy access and influence. Look at where these are coming from. The labor unions make up six of the top ten donors to all these campaigns. When you start looking, what do they want? They want bigger government. It makes sense. Health care companies, professionals have flipped. There are giving more to Democrats than Republicans. I know I'm going to be a little sarcastic here. It would be cheaper if we went to swing states, took $5,000 a vote and went out and paid for them. Maybe kids could go to college and use that choice for their tuition. This is really obscene. It's not what the founding fathers had in mind.
Rebecca Diamond: They will get it done one way or the other. If it's not for paying for the campaign contributions, it will be something else. The study that was out recently as well, the center for responsive politics, only 4 percent of Americans give donations. It accounts for just a small percentage of people who are influencing this election. Yes, you know, we all go out and vote, but the people who were actually as Pat is saying, buying the vote, a small percentage are deciding this election.
Jonathan Hoenig: Donating to a campaign right now is so difficult. There is this maze, this web of campaign finance regulation that makes supporting a candidate that you like so difficult. I think it's one of the reasons unfortunately that we don't have other alternatives as we have this two-party system. The regulation makes it so difficult for a new contestant to basically get on the stage. Honestly, Jonas, this isn't like condo board president we're electing here. This is the president of the free world.
Best Bets: Stocks That Win No Matter Who Wins the Election?
Jonathan: NTT DoCoMo (DCM)
Wayne: Calpine (CPN)
Pat: Molson Brewing Company (TAP)
Jonas: Yum! Brands (YUM)