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
Is Market Excited or Worried About President-Elect Obama?
Gary B. Smith, Exemplar Capital: The market is down about 7 percent since Obama won the election. Obama's rhetoric indicates it will be a bad time for big businesses, especially if you are making outstanding profit like ExxonMobil. Spreading the wealth will apply to businesses, affect their profitability, and thus be reflected in their stock prices.
Tobin Smith, Changewave Research: Over the next 72 days, we are going to hear a lot of news about what Obama will and will not do as president. Obama will not be able to do anything about unemployment potentially rising to 8 percent. He can't do anything about the additional trillion dollar write offs from bad loans, etc. The market is trying to price this in first. This past week showed the reality of how rough the economy is.
Marc Lamont Hill, PH.D., Temple University: There is some doubt and anxiety about who and what Barack Obama will be in the eyes of the corporate community. Also, there is some gap between what Obama said and the realities he faces. Obama will be good for big business and help the automotive industry and provide a tax plan that will not cripple the rich. Obama has said America's future can't be put on hold because of the financial crisis. But he hasn't been clear about how he will get the money to push forward certain new social programs while continuing to lower taxes.
Eric Bolling, Fox Business Network: Wall Street wants to see Obama select a treasury secretary that can handle the job, understand the toxicity that brought the market down, and provide stimulus to give hope to the market. The market is in dire need of hope. Paul Volcker would be a good choice for treasury secretary, the market would like him. Anyone else the market will see as a negative.
Pat Dorsey, Morningstar.com: We can't know what the market thinks about President-elect Obama with only three days of market action. Candidates campaign in black and white and govern in shades of gray. Obama will have to get things done, and this requires compromise and dealing with the economic reality we're in. Some of Obama's proposals won't get done because we don't have the money.
Obama and Pelosi Want More Stimulus: Will It Help or Hurt Economy?
Gary B. Smith: A new economic stimulus package will not work. After the last stimulus package, the market has gone down 30 percent, unemployment skyrocketed. Consumer spending, which in theory should be affected positively by a stimulus, is at a 30-year low.
Marc Lamont Hill: The proposed new stimulus package will help the average Joe with day-to-day life, including unemployment benefits, extended food stamps, developing infrastructure. People need this stuff.
Tobin Smith: President-elect Obama has talked about prioritizing infrastructure and capital investments that would be very good job stimulants. When in a severe recession, a physical stimulus from the government will work as long as you get the funds out and create jobs. Sending checks to people doesn't create one job.
Eric Bolling: When George W. Bush signed the original stimulus package earlier this year, he said it was a one time event. The government setting a precedent to send out checks to people every time there's an economic downturn is a bad idea.
Pat Dorsey: The government should put checks in people’s pockets. But it could create jobs that rebuild electricity infrastructure, for example. Infrastructure investment benefits the country for years to come in a way that spending at Best Buy doesn't. However, it cannot be earmarked or part of pork barrel legislation. That won't do any good.
Are Americans Looking for a Free Ride From Obama Presidency?
Eric Bolling: We should not start handing out any stimulus money to any industry that is a dinosaur. We should not become a nation of moochers. It's a bad path.
Marc Lamont Hill: People can get help through a check in the mail or government funded structural reform. Just sending a check in the mail is not good. But if people need help paying for gas, then a tax cut will make that possible.
Tobin Smith: The notion of the government taking of us is not how America became great. It is entrepreneurship with the encouragement of government that allowed America to become what it is.
Gary B. Smith: 40-percent of the population doesn't pay taxes. That's 40 percent of the vote that is locked in for Obama. But no government official is smarter than the market. Government cannot create jobs better than private capital can.
Predictions: Stocks to Own for the Next Four Years
Gary B.: Molson Coors (TAP)
Eric: Cisco (CSC)
Tobin: ISIS Pharmaceuticals (ISIS)
Pat: Expeditors International (EXPD)
Cavuto on Business
Obama's Jobs Plan: Will It Create or Kill Jobs?
Cheryl Casone: The economy is losing jobs and it will lose more. Unemployment is at 6.5 percent and it will go higher; it could go as high as 10 percent. President-elect Obama is potentially planning to raise the minimum wage. Many small businesses are already struggling to keep people employed. If they're forced to pay more for to their employees, there will be more job losses over the coming months. 65 million people are employed by small business. It is a third of GDP. It's a big deal how the next president deals with small business.
Dharles Payne: Overregulation, overtaxing and over governing could make the economic problem worse; that's what helped spawn the great depression. Minimum wage is a double edged sword. It has not kept up with inflation, but it would hurt a lot of small businesses, much as tax hikes do. You can't equate a company making $300,000 a year with one making $3 billion. You also don't want people to become financially comfortable on minimum wage. You want people to live, but not live well enough where they're able to survive on minimum wage; it's an impetus to do things that could make them more successful.
Dave Nelson: A raise in the minimum wage would ultimately hurt the people you are trying to help. Many small businesses are dependent on unskilled labor. They'll have to cut back, and these businesses are already on the brink. So instead of getting a job or getting a raise, many of these small business employees will get pink slips. Everyone would like to see a higher minimum wage for the bottom run of society, but we have to wait for a sense of economic recovery. Raising the minimum wage should have been done perhaps two or three years ago.
Susan Estrich: I don't know how people manage to live on minimum wage. It's a tricky economic situation. We assume that anybody can make ends meet--supporting kids, paying rent, heating and health insurance. But on minimum wage it just doesn't add up. We are bailing out people making tens of millions of dollars, and people say we can afford to do that. But we can't afford to make sure that a single mother has enough money to feed her kids.
Adam Lashinsky: Raising the minimum wage and debating if it will hurt jobs and the economy is a red herring. No one knows really how high to raise the minimum wage; there is no right number. Lower would be a better "right" number. What President-elect Obama is suggesting is to index the minimum wage to inflation. The minimum wage is a safety net, designed to raise-up what the bottom rung of society is earning. But it won't have a significant impact on higher paying jobs.
Wilbur Ross' Mortgage Rescue: Will It Save Housing and Economy?
Wilbur Ross: To fix the housing crisis, all mortgages should be valued down to the price the homes are worth. For mortgages already in default this would be easy. For ones that are not, it would be voluntary on the part of lenders. The incentive for lenders in default would to have the government guarantee half of the reduced balance of the loan. That would be sold separately to guarantee liquidity to the original lender.
Wilbur Ross (Cont'd): For guaranteeing the loan, the government would get, say, a 2.5 percent annual fee, coming from the savings between the present mortgage's interest rate (generally around 6.25 percent) and a federal government borrowing rate around 4 percent. The government would also get a share in the home's appreciation when it sold, as would the lender. The lender gets a chance to recoup. Plus, the homeowner would get to keep a small portion of the home's initial appreciation. This is the ultimate mark to market.
Did Voters Just Give Obama 'Green Light' to Hike Taxes?
Adam Lashinsky: President-elect Obama said he would essentially raise taxes. However, he has said that he would eliminate capital gains taxes on investments in start-ups, give a $3,000 tax credit for job creation, extending tax breaks for investments in business up to $250,000.
Patricia Powell: Obama has come out with an extreme tax policy that could be absolutely devastating to the economy next year. But when he gave his press conference yesterday (Friday), Obama and his advisors started using the past tense for some policies. So since the campaign is over, maybe they won't raise taxes.
Cheryl Casone: If you're a family making $250,000, watch out. Anything above that income and you will have your capital gains tax rate increase, along with your income tax rate. It's possible Obama will have to drop down the limits to pay for some of his proposed spending programs. But, campaign promises do not always make policy. Yet taxes will probably go up this year. Everyone is desperate for money. Cities and towns are hurting.
Dave Nelson: This is a state and local government issue. But they can't do what the federal government can do. The federal government can keep printing money. But state and local governments cannot. They are facing cutbacks in vital services right here in New York City. Mayor Bloomberg is cutting back on fire and police. I expect this to be echoed in many more cities.
Charles Payne: The Massachusetts vote to raise taxes will tax the people that have the money, but will not tax the little guy. There is no doubt with all of President-elect Obama's proposals, the bar will come down, not necessarily immediately, but at some point.
Stocks to Own for the Next Four Years!
Charles Payne: Fluor (FLR)
Patricia Powell: Apple (AAPL)
Adam Lashinsky: JPMorgan Chase (JPM)
David Nelson: NCR Corp (NCR)
Forbes on FOX
In Focus: Does Obama's Successful Campaign Mean He'll Be a Successful CEO?
Steve Forbes, editor-in-chief: He'll be a good political CEO, not a good economic CEO. Franklin Roosevelt was supposedly inefficient but he ran a good political shop. That's why he won those landslide victories. Even after the economy wasn't doing well he was still reelected. We have to see what Obama is doing on trade, free elections for unions and raising taxes on capital. He could do these things and be an effective political CEO but be a bad business CEO.
Quentin Hardy, Silicon Valley bureau chief: He has a great ability to run a good campaign, have his staff in line and deliver a great message of strength. I think that is the key thing that is missing in the economy right now. People and companies have stopped spending. They have no confidence in the face of this financial crisis. I think Obama's capability to signal strength and confidence is the kind of thing you need in a time like this. Like in 1932 and 1982 a President rose up and made people believe again.
Jack Gage, associate editor: Obama won't be an efficient CEO. We've already seen layers of bureaucracy laid on in the past 6 months and four more years of the same is not going to help things. If Obama were to reverse and renounce his policy proposals from the campaign trail I'd be optimistic. I just don't see that happening.
Neil Weinberg, senior editor: Obama has a lot of the makings of a good CEO. He's intelligent, charismatic, he gets the troops moving, and he's organized. The question is what are his policies going to be. If he drives us into a rut with pro-union, anti business type polices we're in big trouble.
John Rutledge, Forbes contributor: We have no idea if he's efficient or not. He was drowning in money. It's easy to run a campaign when you've got money coming out of all the cracks. It takes years and years in a career to become a good CEO. He's a good talker. We've seen two Obamas; the "healer" and the "hater." The "healer", the person who can rally the troops, say stop being afraidand lets go forward - that's important. I think he can do that. He's also the "hater" of rich guys, banks, insurance companies and drug companies. He's got to get off that message.
Elizabeth MacDonald, FOX Business Network: He better be a good CEO because we've practically nationalized the banking sector. Like any CEO he's shown that he can be innovative by opting out of regulation such as public financing. He stays on message, he's focused but rhetoric and eloquence alone won't fix the problem.
Flipside: More Dem Control In Washington Will Create a New Bull Market!
Neil Weinberg: Would you rather own stocks under George Bush or Bill Clinton? The cliché that Republicans are good for the markets or that gridlock is good for the markets – that doesn't hold up if you look historically. The question with Obama is will he solve problems or will he be an arm for the left and for unions and the things that are going to mess up our economy.
Steve Forbes: Obama wants to make history with card checks for unions which would devastate small businesses, by putting higher taxes on capital, that's going to hurt businesses. It's hard to see how all of this is going to be good for stocks. It will be like the 1930s. There will be rallies but it's going to be flat.
Mike Maiello, editor Intelligent Investing: Dems in Washington are going to be excellent for stocks. We have a crisis of confidence in our markets. When the Democrats are able to lead, you're going to get a restoration of confidence. I think Obama is going to keep Wall Street from creating new weapons of financial destruction that will threaten the system.
Evelyn Rusli, Forbes.com anchor: It's a double-edge sword. Legislation will pass more quickly but the good and the bad legislation will pass more quickly. I hope that cooler heads will prevail but the problem is right now we have a financial crisis. And there is a lot of panic. The Democrats may tend to be a bit more extreme and pass legislation that could be problematic when it comes to regulation.
Quentin Hardy: At times like this, don't expect a recovery in the market no matter who is in power. Look to see what kind of base they build for when this ends. I think the Dems will build a better base.
Mike Ozanian, National Editor: Right now Wall Street is saying that they don't believe in Obama at all. Based on forward earnings the Dow's multiple has tanked. Obama has the advantage of starting from a base of very low expectations. Wall Street is taking him at his word of punishing success. If he can somehow move to the middle and not punish capital and punish success, we could have a very big rally.
Obama's First Executive Order: Ban Lobbyists' Money for Good?
John Rutledge: Obama should ban lobbyists' money. It would be a chance to put the money where his mouth is.
Steve Forbes: The only way you are going to get rid of lobbyists is by getting smaller government. When you have big government you're going to have people who are going to try and influence where it goes.
Mike Ozanian: The government's budget has grown from 10 percent of the economy to almost 30 percent of the economy over the years. Look how poorly McCain/Feingold worked. That was supposed to clean up campaign finance. That didn't do it at all. The only way is to shrink the size of government.
Elizabeth MacDonald: We're becoming the "United States of Bailouts". We've got to worry about the burden we're putting on taxpayers. Every sector is coming to the government via lobbyists. Temporarily ban lobbyists for now.
Lacey Rose, Forbes.com senior reporter: Anti-lobbying makes for very good campaign rhetoric and with good reason given the amount of back scratching and corruption that too often accompanies lobbying. But I don't think a plan like banning lobbyists is practical. I think it's too difficult to implement.
Will President Obama Lead Us Out of a Recession or Into a Depression?
Jonathan Hoenig, CapitalistPig Asset Management: I think it will make it much worse. What is Barack Obama proposing higher taxes more regulation and bigger government spending. That makes the economy worse so I don't see a recovery on the near terminal.
Wayne Rogers, Rogers & Co: That what I'm not sure I fully understand. When you go to Congress with two and a half pages like the Secretary of the Treasury Paulson and said give me $700 billion and they do, which is insane, it is beyond me.
Tracy Byrnes, FOX Business Network: I'm as worried as Jonathan is but he will govern from the center more than the left. I think his hands are tied. I think he will have to come in and show Pelosi and Reid he is in control. That is the first thing on his agenda. Then he's probably going to have to say we might have to take a step back and give the economy some time to let this $700 billion work in and see where we are.
John Bradshaw Layfield, Layfield Energy: No doubt about it. They feel like they will have to raise taxes. It is one of the greatest days that we have elected a black man to be President. I was filled with pride Tuesday. I'm worried very much about being as a business owner, if you don't lower the corporate tax rate and if you raise my personal income tax rate I'm going to have to lay off good people with families. It is a one for one correlation. That is not good for the economy. That is what scares me the most about Senator Obama because he has a Democratic congress that will go with him.
Jonas Max Ferris, MaxFunds.com: but this president is going to have all he needs to start a new deal 2 massive stimulus package because the economy looks like it is falling apart. We saw the unemployment rate at 1994 levels. That is scary with democrats in power they can spend a lot of money that. Will be a short-term stimulus and have positive effects and could get us out of a recession. It has bad long-term effects because to Jonathan's point you are increasing size of government but the unemployment figure would have been worse if the government didn't hire a lot of people, that is what you will see a lot of.
Dems Controlling the White House and Congress: Will This Keep Gas Prices Down or Hike Them Back Up?
John Bradshaw Layfield: It has everything to do with Congress and lack of an energy plan. There are solar farms lined up to build them much the government will not let them. There are wind farms that are idle in west Texas because the government won't build the infrastructure. Would not cost the government a penny. Now don't let us drill, don't want nuclear. This energy policy is absolutely crazy. Makes us more dependent on fossil fuels.
Jonas Max Ferris: I think that the Democrats are going to spend a lot of money on alternative energy that will lower gas prices but not in every way. They can build trains and say you can ride thermo free and lower gas price bus that is not an effective use. I don't think they will hit the levels they were in the Bush administration for 20 years. No, it is because the global economy is strong during that period. I'm not all negative on the Bush administration. We will have a weak economy for a while. That is why gas prices are plummeting largely.
Wayne Rogers: I think you have to peg oil that forces using to the alternatives because JBL is right in the sense you can't ask a venture capital firm to invest this money in alternative fuel sources unless you give them a period of time to recapture the investment and we are not doing that. If oil falls too low we will never do that. That what happened in 1979 when Jim Carter said we would have this in the next 10 years, it went way because oil prices came down. I can make the argument that you are very unpatriotic unless you agree with this. Unless you say we have to do this you are delivering us into the hands of the Arabs. They are like a pusher and we are like an addict.
Tracy Byrnes: I also think we have to think about…first of all global demand is not going away. We are in a global recession but we will continue to keep growing. Prices will go back up and we have to. They have to in a very odd way because then we have concerns from Chavez, Putin, we can't -- we have to worry about national security a little bit which is why we need policies.
Jonathan Hoenig: If oil prices go down why do we need energy alternatives? I don't understand.
New Plan To Bail Out Credit Card Debt: Is It Fair for America?
Tracy Byrnes: This is socialism at it's best. You got into a bad mortgage. Maybe I could justify that but when I spend money on a pair of shoes and run my credit card that is my problem, my bill. Not the government's problem to help me pay for shoes I can't afford.
Wayne Rogers: It is an outrageous idea with one exception and that is my wife. I hope they bail her out.
Jonas Max Ferris: Well, there is so much I don't understand about this. First of all I don't think the credit card companies are any better than the home lenders. The home lenders were not that crooked. The credit card companies are a little more crook and confusing. When after you home loan you don't get a letter that had he adds new default rate if you miss a bill. It is much more straightforward than that in home lending. I don't think the bailout is they are going to give tax liability if they write off the debt.
John Bradshaw Layfield: I think it is absolutely ridiculous. We are moving more to the left of Cuba. You have some businessman that gets drunk and uses a credit card to get a high dollar hooker and we will pay his bill? You have to be kidding me. He should not be Governor of New York and I should not have to pay his bill. This is socialism redistribution of wealth. You have to stop somewhere.
Jonathan Hoenig: Well, then they need to go bankrupt. I'm sorry. No bailouts, no bailouts for Wall Street, no bailouts for mortgage holder. No bailouts for teenage pregnant unwed daughter of a steel worker. To no bailouts and the floodgates are open so anyone who has a need is coming to Uncle Sam with their pockets empty saying don't I deserve a bailout and the problem starts with Bush and Paulson who got the bailout train rolling and now anyone who can't pay bills will go to Uncle Sam looking for it.
Best Stocks to Own for the Next Four Years
Obama has won the White House for the Democrats. So what are the best stocks to invest in for the next four years?
JBL: World Wrestling Entertainment (WWE)
Jonas: Intel Corporation (INTC)
Jonathan: NETS Tokyo Stock Exchange REIT Index (JRE)
Wayne: Ultra Dow30 ProShares (DDM)