This is a rush transcript from "On the Record ," April 1, 2009. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Alexis Glick is back with us, and she's not here to just do anything, she's going to answer not my questions, she's here to answer your questions. Earlier today, we took to the streets of New York. We wanted to know what questions you have about the economy. You did not disappoint.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm curious what's going to happen to the stock market if the auto industry does go bankruptcy, with General Motors looking like they're not going to be able to bail out.
(END VIDEO CLIP)
VAN SUSTEREN: So Alexis, what happens?
GLICK: Oh, we could be in for some troubled waters. I mean, here's the issue. We've lost 4.4 million jobs technically since the recession began in December of 2007. The risk to further job losses is very dangerous not only to the stock market but for the economy. When you look at the stock prices, though, where the bonds are trading, they're at such depressed levels. The concern, though, for the market will be how big the ripple effects are, and that could cause a lot more harm.
But keep in mind, most economists predict that we will come out of this recession by the end of this year, first quarter of next year. Stock market usually recovers six months ahead of the end of a recession.
VAN SUSTEREN: All right, but if GM goes into bankruptcy -- if it doesn't go into bankruptcy, it's going to have a restructuring by the federal government. So either way, something's going to happen, right? I mean, this is -- I mean, in some ways, it may be -- I would think it would almost have the same effect, except that if it doesn't go into bankruptcy, there's a chance that the union contracts won't be renegotiated. That's the big hang-up.
GLICK: Yes, and look, the bottom line is, in the long term, it'll be a better situation for these corporations as it relates to the UAW contracts and the bond holders, so it may come out that they are much healthier. That's one of Ford's greater concerns because Ford hasn't tapped into the government.
The issue is, is this government prepared to do a pre-packaged bankruptcy, and have they thought about all the ramifications to the suppliers. If they do it effectively, it could actually work out to their benefit and they could return to profitability much faster. That's why there's a lot of people on the Hill here supporting a pre-packaged bankruptcy.
VAN SUSTEREN: And the key word is work it out effectively. All right, let's have the next question for Alexis.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Where are we with the gas prices now? And why are they still so high with the state of the economy?
(END VIDEO CLIP)
GLICK: Great question. The national average right now is about $2.05. A year ago, we were about $3.30. So we've come down fairly substantially. Here's the thing. Oil prices right now, they're just below $50 a barrel. They've traded up about $10 in oil prices in the past month. Oil and gasoline prices very much interconnected.
A lot of people look at oil and gas as an indicator for whether or not we will have a recovery in the economy. Some have speculated that since we've seen some signs of hope in some pieces of economic data, that perhaps we will start to see the recovery this year, as opposed to next year. That's why oil prices have ticked up slightly, and so have gasoline prices. They're up about 11, 12 cents in the past month.
The good news for everybody this summer is that last summer, we got to $4 a gallon. The likelihood is we top out $2.25, $2.50 this summer even in a seasonally high driving season. So the expectation is the economy is not going to recover as quickly and gasoline will still be really relatively cheap, if you compare it on a historical basis.
VAN SUSTEREN: All right, question -- let's get another question from a viewer.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: The question is about my 401(k). I look at my statements and it makes me nervous. Should I keep my money in my 401(k) or should I take it out? Should I invest it elsewhere? I'm really confused.
(END VIDEO CLIP)
GLICK: Isn't that the number one issue right now I feel everybody should feel because it doesn't matter whether you're at retirement age or you're 20 years from retirement, everyone's 401(k) -- many cases, 401(k) is down 40, 50 percent.
Two things you should keep in mind. I'm a big believer, you do not stop contributing to your 401(k). It's still your long-term savings. But there's some other things you can do, particularly right now. Makes a lot of sense to invest in a Roth IRA. The difference when you invest in a 401(k) is you do it without paying taxes. When you invest in a Roth IRA, you're taxed on the money you put in right away, but you make money tax-free and you withdraw that money without paying taxes later on.
If you think right now that you are going to be moving into a higher tax bracket and that taxes are going to move higher over the next five, ten years -- and that's very likely -- a Roth IRA is a great way to save money. And there are going to be some great tax incentives that go into effect next year. So if I were you, I'd look into a Roth IRA and continue to do a 401(k). And don't panic. Wrong time to panic and pull out.
VAN SUSTEREN: Yes, it's -- I don't know if -- don't panic. I don't know if we can follow that advice. We can follow the rest of your advice, but don't panic, I think, forget it. We...
(CROSSTALK)
VAN SUSTEREN: Alexis, thank you very much.
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