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 | Cavuto on Business | Forbes on FOX | Cashin' In
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Tobin Smith, ChangeWave Research editor, and Larry Winget, author, "Your Broke Because You Want To Be" -- www.larrywinget.com
Trading Pit: Airline Chaos: Disaster for Economy?
The friendly skies? Hardly! Lots of turbulence there! The only thing going up: cancellations, fares, and bankruptcies. Thousands of flights canceled or delayed this past week, leaving hundreds of thousands of travelers scrambling. Could all the airline chaos end up grounding our economy to a halt?
Larry Winget: I'm not sure it's going to take down the economy, but it's not doing individuals any good. I travel 250 days a year. I've been in an airport every single day this week. People are frustrated, angry and upset. When they get that way, most people spend money - money they can't afford and on things they don't need or want.
Tobin Smith: This is a nightmare. We all have war stories but will the airlines take down the economy? They really can't. Remember FedEx and UPS? If you want to ship something, they're there for you. That's where most of the commercial side goes. Yeah, this upsets people, but this is an FAA issue. I'm a guy that flies every week. I'm glad they go out and do their job. It is going to be a painful sore here the next two or three weeks. I think we have bigger problems than the airlines.
Pat Dorsey: In all seriousness, the economy has bigger fish to fry right now. We are working through a recession. I think that's painfully obvious to anybody in the grocery store or watching the reports coming out. This is just a consumer issue it's frustrating and annoying. It's partially this issue in the near term because of all the safety issues, longer term is an issue with air traffic control and the system is 40 years old and hasn't been updated.
Scott Bleier: I think the airlines are like canaries in the coalmines for the whole U.S. Economy. Fuel prices are doing to the airlines what they're doing to the rest of the consumers. All this frustration, all these safety problems stem directly from costs being so high that corners are cut everywhere. When you go out, you spend less money because it takes you 80 bucks to fill up your S.U.V. I think this frustration and anger are seeping into the entire U.S. economy and can hurt us later in the year.
Gary B Smith: For the short-term there's going to be an impact on the economy. For the long-term I think this could be good. It points out just how flawed this FAA Gestapo oversight is because they're going to at the minimum have to be more efficient in how they give these airlines these checkups and regulate them. It's going to cause creative destruction amongst the airlines. Scott's points are eventually going to die off. It's going to give new industries a chance.
Will Tax Breaks for Foreclosed Homebuyers Tank Home Prices?
Buy a foreclosed home.. Get up to a $7-thousand dollar tax credit. It's part of a new $15 billion dollar senate bill looking to boost the battered housing market. But could it actually make foreclosures soar and home prices tank?
Scott Bleier: This is a ridiculous plan. $7,000 is not enough to get people into foreclosed houses. They're speculators. If you give them $7,000 more, if it falls in value in a year, we are right back to the same mess we were in before.
Larry Winget: A lot of people are going to use this as a real opportunity because people have been faced with inflated housing costs way too long. So for first-time home buyers, this is a real break for them. I think it's an amazing idea and I like it!
Tobin Smith: I think it's a great idea. We need to get these homes out of the hands of people that can't afford them.
Stock X-Change
The tax deadline is coming.. And so are millions of refund checks! Here's how to make even more money with that extra cash in the stock x-change.
• If you want to watch what each had to say about each stock, click here.
Gary B Smith: PowerShares DB Commodity Tracking Index (DBC )
Scott Bleier: Plains All American (PAA )
Tobin Smith: Continental Resources (CLR )
Pat Doresy: AIG (AIG )
Predictions
Larry Winget: Forget The "Doom & Gloomers"; Keep Investing To Make Money!
Gary B Smith: We Still "LUV " To Fly! Southwest Up 20 percent By End Of '08
Tobin Smith: Get In On The "GE " Dip; Up 25 percent By Next Spring!
Pat Dorsey: "LNG " is a gas, gas, gas! Doubles in two years
Scott Bleier: Spring Has Sprung & So Will Toro! "TTC " Up 25 percent This Year
Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
On Saturday, April 12, 2008, Neil Cavuto was joined by Charles Payne, wstreet.com; Adam Lashinsky, Fortune Magazine; Pat Powell, The Powell Financial Group; David Nelson, DC Nelson Asset Mgmt; and Peter Schiff, "Crash Proof" author.
Bottom Line: Bad Weather Bad for the Stock Market?
Neil Cavuto: The costly cleanup after tornadoes blow through the South and Midwest. Experts predicting more dangerous storms ahead. Could that be a dangerous forecast for our markets as well?
Peter, despite a rough Friday, stocks are up this spring. Are you afraid all this catastrophic weather could knock ‘em right back down?
Peter Schiff: They are going down regardless of the weather. As a nation with nothing saved for a rainy day, we have to hope for perpetual sunshine. The last thing we need is to try to deal with costs of repairing damages from natural disaster. There are a lot of people who espouse the "broken window" theory of economics by saying… "Well, a natural disaster is good for the country because we have to repair what has been damaged." But, all that does is take resources away from creating new wealth and we have use it to replace what was lost.
Charles Payne: I disagree.
Neil Cavuto: Have you ever agreed with Peter?
Charles Payne: We agreed on something once. I forget what it was though.
(laughter)
Charles Payne: The reality is people get paid for repairing broken things. The stock market doesn't react to natural disasters and hurricanes the same way it would for say 9/11 because weather is seen as an act of God. Katrina was a prime example. Obviously, we had that bump, but the Dow went from 9,600 to 14,000 in two years.
Adam Lashinsky: Well, I think you need to take a big step back. I will make two predictions. The first is that the experts will not be right on whatever they expertly predict for the hurricane season.
Neil Cavuto: You're right about that.
Adam Lashinsky: They say 12 – 15… maybe it'll be 18.
Neil Cavuto: I'm saying two.
(laughter)
Adam Lashinsky: Exactly! Here's my second prediction… if there's any inclement weather this summer, there will be many public company CEOs who will get on their earnings calls and say the weather affected our quarter and that's why we didn't perform well. Of course, that is rubbish, but that's the way it works. If they have a bad quarter, it hurts their stocks… but it's almost never because of the weather.
Neil Cavuto: What do you make of that?
Pat Powell: You know what? I think he's right. Our economy and our markets weather these storms all the time. Whether you look at Camille in '69, or Andrew in ‘92, or Katrina. Despite the economic chaos that seems to have been caused by Katrina, when you look at the market… and I was a little more myopic when I looked at the market…
Neil Cavuto: Hey. Hey. Hey! Watch the kind of words you're using.
(laughter)
Pat Powell: Katrina was from the 23rd of August to the 30th. On the 22nd, the Dow closed at 10,569. A month after Katrina was over, it closed at 10,568. It lost a point.
Neil Cavuto: Here's where I will try to distinguish… we are certainly seeing more of these storms. Do you think if we have a lot of them, as we have already with the tornadoes, that this does get to be something bigger than we appreciated?
David Nelson: I have to agree with that. Peter is over the top, for sure, as he always is. But, we don't want to go past the tipping point. We are struggling at best to deal with the economic event of my career. You have a weak consumer. GE's numbers were horrific. Retailers' numbers weren't good. Anything that slows down the recovery is just going to exacerbate an already bad situation.
Neil Cavuto: The argument could be that all of this destruction means construction down the road and could be good for people in those areas?
Peter Schiff: Well, not at all because you are replacing assets we used to have. You have to remember we don't have the money saved. We have to borrow it from the Saudis or the Chinese. And in Charles's example, if you have to write a check to the guy who replaces your window, then you don't have the money to buy a new suit. So now your tailor goes without money. If you think you can create economic wealth by breaking windows, they go smash windows.
Charles Payne: Hold on. Or maybe you're the guy who was out of a job because you were a construction worker…
(crosstalk)
David Nelson: How do you turn that into a positive?
Charles Payne: I'm saying the stock market turns it into a positive.
(crosstalk)
Charles Payne: Look, you can take wars for example. Pearl Harbor, 9/11…
Peter Schiff: They don't help the economy.
Charles Payne: Of course they do.
Peter Schiff: No, they don't! That's nonsense.
Pat Powell: They're absolutely normal. We get rain every year. We get storms every year.
Neil Cavuto: I actually did a little research for this show, unlike prior shows, and this is a record tornado season.
(laughter)
Neil Cavuto: The tornado damage we have had thus far is apparently worse than the last three years combined. That is what I've heard. We have seen more tornadoes and more natural disasters on top of this forecast for a bad hurricane season. I agree that you have to take it with a grain of salt… but, is it problematic?
Pat Powell: Well, it could be problematic, but I want to dispute with you a little, if you don't mind.
Neil Cavuto: No, no, no. I'm the host. Charles is fine. Adam? Open season.
(laughter)
Pat Powell: You may be right about the tornadoes, but I checked with NOAA.
Neil Cavuto: Noah, you mean the arc guy?
(laughter)
Pat Powell: And NOAA's the one who follows the weather. They basically say there is absolutely not discernible pattern or not discernible change in the amount of storms that hit land in the last 100 years.
Adam Lashinsky: Neil, let's try to apply some common sense to this. If it's a bad season and we're in the economic situation we're in, and I'm worried about agreeing too much with Hurricane Peter over there, but we have a lot of negative forces in the economy right now.
Neil Cavuto: Well, Hurricane Peter has been right.
Adam Lashinsky: If we have a worse than average storm season, it is difficult to argue that it would help anyone. The key difference is the markets, like people, are adaptable. I'm not agreeing with your point about creative destruction, necessarily. But, if part of the country is hit, another part of the country typically picks up the slack.
David Nelson: Adam, don't you think that the market is looking ahead? It has been feeling good recently, until yesterday. Sometimes the market looks ahead and sees a mirage… and 6 months later, investors are left drinking the sand.
Charles Payne: You drive up the FDR and you're going to see two Yankee Stadiums. One is going to be deliberately torn down by man. It's called progress and creative destruction.
Neil Cavuto: Alright, you know you are sitting nearer to me… and you're scaring me.
(laughter)
Charles Payne: But, they have a security guard right here.
Neil Cavuto: And he will deal with you.
(laughter)
Head to Head: Would Olympic Boycott Create Olympic-Sized Nightmare for U.S. Economy?
Neil Cavuto: The Olympic torch on its way to Africa after running into more protestors in South America. All the mayhem may have some US sponsors running scared. Coca-Cola already cutting back some of its torch run events. Now, more people are calling for Coke, Mike, and all American sponsors to completely pull out of the summer Games in China. But, would an Olympic boycott cause an Olympic-sized backlash to our economy? Let's go "Head to Head" to find out.
David Nelson: I am against this type of thing, Neil. We have done it in the past and it doesn't work.
Neil Cavuto: You mean the boycotts? Like the one in 1980 and 1984?
David Nelson: Correct. It is the wrong forum for this type of political protest. This is a time we are supposed to come together as nations in the spirit of competition and sport. From an economic standpoint, it simply doesn't make sense because as Americans we want to be over there exporting the American way of life. I don't want CEOs of major corporations, where I am a shareholder, making a political statement with my money. If I want to make a political statement, I will turn off the Games.
Neil Cavuto: They have made a statement by being there.
David Nelson: Well, they made a statement being there, but they're there to sell goods. That's what they're supposed to do.
Adam Lashinsky: They thought in fact that they weren't making a political statement. They thought they were selling sugar water, sneakers, and what have you.
David Nelson: They are selling sugar water.
Neil Cavuto: But, they knew they were doing the Games in China. I agree with what he's saying, but my point is I don't know what the big fuss is now. The time to have started complaining was when China was awarded the Games if you feel they shouldn't have gotten the Games.
Adam Lashinsky: Well, tell the protestors that.
Neil Cavuto: You just gave me attitude…
(laughter)
Adam Lashinsky: The situation changed in Tibet. We could discuss why that happened, but that is not important. It changed. And that gave the protestors the opportunity to get the conversation going again. So, it turns out that the Chinese government and some of these corporate sponsors miscalculated. They didn't realize.
Neil Cavuto: So, what do they do now?
Adam Lashinsky: Of course, they stay in the Games, and if they are smart, they find a way to say "We wish the Chinese would be better on human rights." I don't think this is going to have an impact on our economy in any way, shape, or form.
Pat Powell: I think businesses are just about business. They aren't about making political statements…
Neil Cavuto: Do you think there's any fear of association here?
Pat Powell: There might be, but I think American businesses are tripping over themselves to get at 1.3 billion Chinese consumers, not just for today, but for the long haul. I think they are very concerned about insulting the Chinese.
Neil Cavuto: Exactly. You had a choice of ticking off two groups of people: The Chinese or the rest of the world.
Charles Payne: Yeah, 25 percent of the population or scattered protestors around the world. I kinda disagree. China didn't miscalculate; they just don't care. The leadership of China doesn't give a damn. They don't care about the stuff going on. The Games are going to go on. And to that degree, I think that's where the protestors are making a mistake because I think it's a shame that the Olympic torch, which should represent something else, had to go into the witness protection program.
(laughter)
Adam Lashinsky: You're absolutely right. I was in San Francisco and I thought it was a shame… a shame for the people who get excited about this… it's a shame for the athletes. But, I think you might be wrong. I think the Chinese might care. They are very excited about this being a big event for them to show the world how successful they are.
Neil Cavuto: They have done nothing to show that.
David Nelson: In the political environment we're in… it's an election year. The protests are a populist message.
Neil Cavuto: I think it would have happened any way.
Charles Payne: It's happening all over the world.
Pat Powell: You can't get away from the fact that China is not a free country. China is a totalitarian country.
Neil Cavuto: But, we knew that when they got the Olympics.
David Nelson: Eighty years ago, I believe it was 80 years ago, we had Jesse Owens standing on a podium in Nazi Germany…
Peter Schiff: You're missing the point here. We have an Olympic-sized problem on our hands, regardless. But, China might be the only thing standing between America and the economic abyss right now. We have to be very careful about how we treat the Chinese, what we say in front the Chinese. They are the biggest buyers out our bonds and mortgage-backed securities.
Neil Cavuto: Well, Peter, they get something out of it too, right?
Peter Schiff: No they don't.
Neil Cavuto: We buy a lot of their stuff.
Peter Schiff: We don't pay for it. They give us their stuff… we don't pay for it… they just haven't figured it out yet.
(laughter)
Charles Payne: Peter, where did they get they get the money to buy our bonds if they aren't getting them any money from us?
Peter Schiff: No, no. They're recycling their earnings back into our stuff, but they're not getting any real products from us.
Charles Payne: It's a symbiotic relationship. They have cheap labor and they sell us cheap stuff.
Neil Cavuto: Symbiotic, myopic, where are we going with this show?
Peter Schiff: It's not symbiotic if we don't export stuff to them.
Pat Powell: Peter's actually making a good point. There is a half a trillion dollars of US debt that is held by the Chinese.
Neil Cavuto: I know, but everyone who fears they're going to pull the "financial Armageddon"…
Pat Powell: I don't fear it.
Neil Cavuto: They are as much beholden to us…
(Cross talk)
Neil Cavuto: Well, yes they are to infinity. And I'm the host and that's the end of it.
(laughter)
Neil Cavuto: You can keep talking, but we are going to a break. That is what we are going to do… because I am the host.
(laughter)
More for Your Money: $tocks to Buy with Your Refund!
• Click here to see this segment!
Neil Cavuto: Tax Day is Tuesday! Our guys are here to help you profit off that refund check by investing in stocks. Let's get "More for Your Money."
Pat Powell: Constellation Brands (STZ)
Charles Payne: Big Lots (BIG)
*Charles owns shares of this stock
Adam Lashinsky: Intuit (INTU)
David Nelson: H&R Block (HRB)
Peter Schiff: Alumina (AWC)
*Peter owns shares of this stock
FOX on the Spot
Adam Lashinsky: Only 3 Big Airlines Will Be Flying by 2010
Charles Payne: Heat Up Your Wallet with "LDK"; Jumps 40 percent in ‘08
Peter Schiff: Government Stimulus Plan Stimulates "GLD"; Up 30 percent in '08
(Peter owns)
Pat Powell: Become a Cash Cow with "MOO"; Up 50 percent by 2010
(Pat owns)
David Nelson: Shine with Apple; "AAPL" Will Jump 60 percent by 2010
(David owns)
Neil Cavuto: Now Everyone's a Dem; Big Gov't & Big Talk Is Back
Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
In Focus: Does America Want the Candidate Who Can Raise the Most Cash?
Jack Gage, Associate Editor: Absolutely. Politicians aren't advocates, they are salesmen. They go across the country, hat in hand. They accept Paypal on their websites, they cold call voters during dinner and they swear on a Bible that their policies are best for America. Any politician who can sell their program and agenda best before the election to perspective voters can do the same thing to Congress after they're elected.
Neil Weinberg, Senior Editor: No, and Jack isn't really answering the question. The fact is money follows the popularity. The reason Obama is raising so much money is because he is a great politician. You look at John McCain - whether you agree with his policies or not - he is kind of dull, and so is Hillary. Obama has come along and captured the imagination of Americans. I come from the democratic republic of New Jersey where our governor is John Corzine He spent more than anyone else trying to become governor, and he barely made it because he's boring.
Evelyn Rusli, Forbes.com Anchor: A large war chest is another form of a great mandate, and a person who can deliver their message and garner support and get that momentum is the one the people want to win the election. Especially when it comes down to Clinton and Obama, that's why people are coming around to Obama because he has all this momentum, and that's why he'll probably win.
Victoria Barret, Associate Editor: They are connected, but the relationship isn't direct. We are being way too short sighted here. A year ago the stories that were running were all about Giuliani and Romney... remember them? They were both out-fundraising McCain. They were doing a better job getting millions of dollars. That didn't go very far. It's about the message, too, and that is something Obama has been strong on. His message for change, though a little vague, is working.
Mike Ozanian, National Editor: I don't know what Obama's message is other than the word "change". He hasn't pointed out anything specific. It is a measure of popularity, but it also is a measure and indication of how beholden they are going to be from the people who are giving this money. Look at Obama: he is getting all this cash from lawyers and rich CEOs of companies. He's making a ton of money. He's going to have to pay these people back.
Quentin Hardy, Silicon Valley Bureau Chief: I think that multimillionaires is low-balling it. It's now clear that Hillary and McCain are worth over $100 million. Is anybody worried about the republic? Am I alone here? Mike is right. Obama does stand for change. He stands for small change. He collects off the internet from small holders that give him a little bit of money, and it holds. It's such a better strategy than Hillary and McCain. They give $20 and $50 again and again and again on this internet style campaign. That engages people and keeps them committed and I think will hold him better when it comes to voting. It will motivate people better than the kind of fat cats that Hillary and McCain have.
Wasteful Spending by Government Employees: Proof We Need Tax Cuts Now?
Victoria Barret: Yes. That live-in boyfriend had a good deal. That's a lot of money. Here's the message: we should be cutting taxes now. There's a lot of waste in the government. It's a huge bureaucracy, so waste is inevitable. Let's cut the budget and cut taxes. This is a crucial time in the American economy. A lot of people are struggling to make ends meet, so let's do an across the board cut and match it with cuts in government spending.
Quentin Hardy: Instead of being completely discredited with a supply side argument, let's have a little reason, too. This report from the government on its own weight came in context of a cash card system they want to introduce to cut back on this kind of misbehavior. Compare that to all the boondoggle conventions in Hawaii, or $6k shower curtains or what the private sector has done to rip off the government in Iraq, and I think the government comes out about the same as everybody else; maybe a little better. Victoria does have a good point about tax cuts in a time in a recession. We are going to go into a recession, but tax cuts have not been proven to do as much good long-term as infrastructure spending like high speed rail or high speed Internet. That would be a better way to go into deficit.
Mike Ozanian: What's funny is that during the great era of balanced budgets during the Clinton administration there wasn't any more spending on roads and bridges. That's all a great big liberal myth. The problem that we have now is the federal government eats up 20 cents on every dollar of our economy. That is why Victoria is exactly right. We should start dismantling the federal government, start with the department of energy, go do the department of education and stop subsidizing millionaire farmers.
Neil Weinberg: Mike and I agree on something. We shouldn't be cutting taxes. We should be cutting spending. Let's make the government smaller. You could do both, but the fact of the matter is we have been living on borrowed money for a long time, and now we have to pay the piper which is a big part of the reason why we're having problems right now. In this country, our dollar is weak. We have a huge debt in the private and public sector. What I'm saying is first cut the spending, get the budget balanced, and then let's cut taxes after that.
Jack Gage: It comes in two phases, but the thing that Quentin has failed to distinguish is the difference between a rebate and a tax cut. It is not just a hand-out for taxpayers or investors when you cut the tax rates. It's a stimulus. It stimulates the economy and stimulates growth. John McCain talks about cutting pork spending and trying to starve it. If you burn the candle at both ends, maybe we will finally streamline the government.
Flipside: CEOs Giving Up Bonuses: Bad for Business?
Neil Weinberg: I want the CEOs of the companies I invest in to get filthy rich because I want them to be making money for me. Would you like someone like the CEO of Goldman Sachs getting a big bonus because they avoided the subprime mess or someone like John Mack at Morgan Stanley who is giving up his big bonus because they took a $9B write-off?
Lacey Rose, Forbes.com Senior Reporter: What a bonus is designed to do is reward performance. If a company is not doing well, and much of corporate America is not, why do they deserve more money? Frankly, foregoing that kind of grand sum in the face of sagging profits and layoffs shows integrity. It is a welcome gesture of accountability for shareholders and employees alike.
Jack Gage: I think Lacey got it wrong. It's not retributive justice getting a bonus. It's "incentivizing" risk taking and innovation and pushing that limit to create wealth and value for shareholders. It's an incentive thing, like sticks and carrots. It's the basis of free market capitalism.
Kail Falkenberg, Editorial Counsel: I think it's good for the employees, the investors and the CEOs themselves. From the employee perspective, it's a good morale boost. It makes them warm and fuzzy inside to see their CEO is sharing in their pain. From the investors perspective, it shows they believe in paying for performance from the top down and the CEOs themselves they recognize they can always make more money.
Quentin Hardy: I think you have to kind of check the fine print on this. A lot of these guys are foregoing their bonuses because they did such a lousy job, and they are giving it to the employees, a nice little bit of money there. That is helpful, but the real leadership is taking a stake in the future and responsibility for what you do. When Steve Jobs takes a buck a year and ties his future to the equity compensation, when Bill Gates takes a low salary and ties it to his equity compensation that is leadership that shows he is believing in the consequences of his actions. By the way, similarly, I think political leadership is the same way. I wish the president would meet some of the planes of the dead from Iraq, it would show he was committed to the war.
Informer: Stocks to Buy With Tax Refunds
• Click here to watch the segment
Mike Ozanian: Transocean (RIG)
Evelyn Rusli: Coach (COH)
Camilla Webster, Forbes.com Anchor: McDonald's (MCD)
Neil Weinberg: WisdomTree India ETF (EPI)
Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
Time to Buy Stocks Again?
Matt McCall, Penn Financial: Absolutely. This is a time when you make money. Everybody is running for the exits, which they have been doing, that's when you have to go the opposite way. In May everybody is looking to buy. The best asset class out there is stocks, not bonds. Stocks are the place to be.
Jonathan Hoenig, CapitalistPig Asset Management:. Generally speaking, you want to be long in a bull market. I still think we are in a bull market for stocks. I have done well hanging out in the foreign currencies and some of the commodities plays.
Wayne Rogers, Wayne Rogers & Co: The key problem is in their financial group. And that contributes most of their earnings, as a consequence. Yes, they took a hit. I happen to be on the other side in this thing. I don't see this as a bottom yet. I don't think is the time to buy stocks or to by the averages. Any time is good to buy certain individual stocks, but not now to buy in this market. I don't think we have hit rock bottom but there is a recession coming in a bigger way than we have seen thus far.
We have costs rising everybody. Transportation costs are going up because of the price of gasoline. That affects everything you do in the economy. We have had a rise in all of the raw materials. We have had a big bump in commodities all over the world and that affects everything we do in this country. Wages are not going up, and ultimately if there is a wage push, you are going to have an -- if you will, a stagflation because we are not producing what we could and we are not consuming what we did. It is not going to happen. So I see this thing going into a much longer, if you will, recession area period.
Jonas Max Ferris, MaxFunds.com: Compared to bonds, compared to real estate, compared to cash, it is a pretty good time to be in the market. Is it going to go down another thousand points? It could. I went 75 percent with stocks myself. I would go to 100 percent in an aggressive account. I am concerned about the financial falling more.
Dagen McDowell, FOX Business Network: Well, if you are a contrarian, the fact that everybody is so eager to jump back in and call a bottom in the finance shams is an indication that we aren't near a bottom yet. I would argue the market hasn't factored in how bad a recession this country might go into because we haven't seen a bear market in the Dow or S&P. You still have home prices dropping. Consumer confidence is falling since the early 80s. It isn't near over. We are entering a period where financial companies have to deleverage and raise cash. That means they aren't going to be lending to people and that is impacting a whole variety of businesses.
Outsourcing Aircraft Manufacturing Jobs: Putting Your Life in Danger?
Mary Schiavo, Former Transportation Department Inspector: Well, it is, and it is a growing trend. Back in the 1990's about 37 percent of our maintenance was outsourced. Now it is up two 2/3, 54 percent. Of that, 2/3 is being outsourced to foreign countries. What we found when we did investigations was that in foreign countries you don't have adequate oversight by the F.A.A. The inspections are announced and some never get inspected. You have a language barrier because the manuals are in English.
And then a problem with security and oversight. There is no background checks, no drug and alcohol testing. Those are just examples of things we expect and demand in the US to keep us safe. There was also a problem on the parts integrity. Many times the parts were not up to standards. Accidents in the United States are at an all-time low but accidents around the world are not. Particularly they are climbing in less developed countries.
Ben Ferguson, Syndicated Radio Host: If you are going to put me in a tube and fly me thousands of feet above the earth, I want to know what is happening. I don't trust Mexico to have the same rules, regulations, oversight and parts as in America. You look at the reality of the problems with things you buy out of Mexico. They are known for cheap parts.
Jonathan Hoenig: Everything you buy is made in Mexico. Furniture, cars, food, washing machines, satellites, Hershey bars, they are all made in Mexico. It is the worst kind of scare tactics to suggest that just because something is made in Mexico, it is not safe. The worst plane disasters in history were all on planes like DC-10's and 747's that were made and manufactured here in the good ole' US of A.
Jonas Max Ferris: About the safest place you can be is in that death tube. Jonathan is right. The MD-80 has given us problems. It was a McDonnell-Douglas plane made in Long Beach, California. You can make a dangerous product anywhere in the world.
Wayne Rogers: Doesn't bother me in the least bit. There was a big problem about whether the Japanese cars invaded the U.S. Market. They make cars in Mexico. You have the same problems on the highway that you might have in an airplane when there's an accident. You can't be prejudice just because a Mexican guy makes something. It can happen here.
Dagen McDowell: Jonathan is right. You drink beer that was made in Mexico, you could be driving a car that was made in Mexico. As outsourcing has increased, accidents last year were at an all time low. So if outsourcing is going up, why is it a concern if accidents aren't?
Blame Housing Mess on 'Out-of-Control' Spending By Congress?
Ben Ferguson: They have been a terrible example for the American people and here's why. They have told the American people if you make bad decisions with your money, we will try to get a moratorium to stop foreclosures, or we will try to pass a budget that pace some of your notes as Barack Obama said. When you have a Congress that can't balance their own budget and them saying it is not your fault, it is corporate America's fault and we are going to help you, of course Americans are going to spend out of control because they are following the leadership of their government! The government can't balance their own checkbook and they are telling America if you can't, we will bail you out.
Wayne Rogers: I understand that, but Congress has been morally and fiscally bankrupt for the last 50 years. How many balanced budgets have we had? Very few. This has nothing to do with Congress being out of control. They have always been out of control. This has to do -- this crisis was caused by the fact that the borrower and the lender got separated and they became a derivative action and we have all this in the derivatives market. That is where it came from. The fact that the borrower and the lender have been separated and don't know each other any more, it got shoved down in the derivatives market, and lax lending practices were the result and that is what caused this.
Jonathan Hoenig: If the borrowers had paid their bills, there wouldn't be any problem. It is caused by people who did not pay their bills. I know we've mentioned Obama and Clinton with this before, but isn't Mccain getting in this business, too, of bailing out people?
Jonas Max Ferris: How many people think know the government runs the deficit? We're living in a fantasy world…People have gotten into the housing market when they had no business of doing so. Congress is to blame but not because of their dumb spending. It is because of ridiculous incentives to buy a home, Tax deductions, Fannie and Freddie backing. That is a ridiculous logic.
Best Bets: Tax Refund Stock$
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JONATHAN HOENIG: United States Gasoline Fund (UGA)
WAYNE ROGERS: Vimpel Communications (VIP)
MATT McCALL: ABB Ltd (ABB)
JONAS MAX FERRIS: Fidelity 130/30 Large Cap Fund (FOTTX)
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