Neil Cavuto was joined by Jim Rogers, president of JimRogers.com; Gregg Hymowitz, founder of Entrust Capital; Ben Stein, economist and former speechwriter for President Nixon; Colonel David Hunt, retired Army Colonel; and Mike Norman, chief investment strategist at GETrader.com.
Neil Cavuto: Iraq says its decision to destroy those illegal Al Samoud missiles shows it's complying with the U.N., but the U.S. says it shows Saddam Hussein is still playing his same old games. So, is Saddam Hussein finally caving in or just playing more games? And does that answer mean the difference between war and peace, and a bear and bull market?
Colonel Hunt and the other guests all agree that Saddam Hussein has not changed his ways. Colonel Hunt points out that if Hussein was serious about these inspections, he would be laying things out on the field and calling over the inspectors to inspect them.
As for how the market interprets Hussein’s latest move, Ben Stein says the market knows there is going to be a war and that Hussein is a weasel and that he's not going to weasel his way out of this one.
Jim Rogers thinks the market is indicating something good is about to happen. Gold is going down and the dollar has stabilized. Whether that means there will be peace or that there will be a quick war, I'm not sure.
But Gregg Hymowitz does not think the market has factored in a war. He points out that anytime we get the feeling that we're going to war, the market goes down. When the terror alert was lowered, the market rallied 4 percent. So, I don't agree with Ben that the market has already factored in the war. I think the markets perceive that inspections are working because of these concessions by Hussein.
Ben Stein: Well, if the market has not factored in the war by now, the market is blind, deaf and dumb. The whole world sees it coming. Surely, the markets do too.
Neil Cavuto: Col. Hunt, what if for whatever reason we go into Iraq without the support of the Russians, the Chinese, the French and the Germans. The markets might not like that. What do you think of that?
Col. Hunt: We can ask our neighbors for help, but if they don't help then we have to do it alone. War is dangerous but we are justified to go after any serious threat to the U.S. due to the mass murder we suffered on Sept. 11.
More for Your Money
Neil Cavuto: Two bucks a gallon for gas! Record high home heating bills! Nobody knows better than you how higher energy costs are eating into your bottom line. Big oil firms blaming most of it on worries about a possible war in Iraq. But are they really just gauging consumers?
Gregg Hymowitz: I don't think they're gauging us. You have to look at the price of crude. Crude is up roughly 76 percent year over year and it's being reflected at the pump. Ever $10 increase in gas causes a decrease of half of one GDP.
Mike Norman: That's not true. Crude has doubled and the GDP is growing.
Ben Stein: If there's price fixing, that's against the law and it should be investigated and prosecuted. But I don't see any sign of it. Fuel prices are tracking oil prices.
Jim Rogers: The price of oil has gone through the roof for most of the world. And that's being reflected at the pumps.
Mike Norman: I can prove that they're not gauging. Take a look at oil company stocks. They're going down. Profit margins on refining have been steady for one year. If they were gauging those margins would also be going through the roof.
Neil Cavuto: In this higher oil market, what would you buying right now?
Gregg Hymowitz: One company our firm likes and owns is EnCana (ECA). It's a natural gas company and it's price is just 13 times it earnings.
Mike Norman: I like and own Marathon Oil (MRO). It's a stock I have been long for sometime now. But I'd be selling the French oil firm, TotalFinaElf (TOT). It has exposure in Iraq’s oil field and will come out a loser in post war Iraq due to France’s anti-war policy.
Ben Stein: I do not currently own it, but on the theory of buy low, I like BP (BP). BP is trading near its 52-week low. It's run in a very aggressive way. They're desperately trying to add to their reserves.
Jim Rogers: I wouldn't be buying oil stocks now, because most of them are overpriced and I think the sector needs to have some consolidation. I would be buying solar energy and alternative energy companies, because higher energy costs will make these companies more economical.
Neil Cavuto: Do you think we should tap the nation’s oil reserves?
Jim Rogers: I would tap the reserves now to help control prices and prevent further economic damage due to higher energy costs. Especially if we go to war.
FOX on the Spot
Mike Norman: Tax cuts will pass! Short war helps win support for Bush's tax plan.
Gregg Hymowitz: Lack of cash forces half of Democrats running for President to quit.
Jim Rogers: New head of BOJ will clean up Japan's corporate debt mess.
Col. Hunt: U.S. will give North Korea more money to solve conflict.
Ben Stein: North Korea's leader backs down to keep his fortune.
Neil Cavuto: All this deficit-war spending talk, specifically everyone who says sky-high interest rates are coming because of ballooning deficits, is nonsense. It hasn't happened yet and didn't happen 20 years ago. There's no correlation between the two.