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E.U. ASKING COUNTRIES TO "COME TOGETHER" TO DEAL WITH EUROPE'S FINANCIAL WOES
TRACY BYRNES: Cheryl, all of this kumbaya stuff is expensive. Look, we send money to the IMF and the IMF sends money to Europe. Is anybody in Europe paying attention to the austerity measures they're supposed to be taking? No. So we keep bailing each other out. Everyone keeps saying he did it. No one takes any blame for anything anymore including here at home. We keep bailing our own selves out. It has to stop or no one is going to fix anything. Why should you when just expect your next check is coming in the mail?
JOHN LAYFIELD: The problem with Europe started by letting Greece in the EU and lied about their debt to GDP. They never had that three percent level that you're supposed to have to get into the EU. So they don't have anything to go back to and right now Angela Merkel is trying to bail out her own banks through this huge IMF bailout. It's the same thing that happened with AIG. Once you stick all of that money to AIG that went straight to different banks trying to bail it out. That's exactly what they're doing. It's a back-door bailout for banks. You've got to let these countries start dealing with themselves. There is no hope, I don't believe in my opinion, when it comes to Greece and a couple of other countries.
SALLY KOHN: First of all I agree with John. Most of the plans here are governments trying to help their own banks, including banks here in the United States, and not worrying about affecting the people on the ground, but the reality is that the United States has skin in this game. A fifth of our export economy is dependent on Europe and our exports have recently dropped by 11 percent because of the trouble in Europe. So like it or not, no matter how we got into this mess, we've got to help solve.
JONATHAN HOENIG: Well we're all in it together right? That's the dot, dot, dot of what Sally is saying. We're all in it together so we have to bail them out otherwise reality might God forbid, actually insert itself. It always does. All these bailouts have failed. I mean we talk about another bailout for Greece. Greece has already been bailed out two times in the last two years. We have ongoing bailouts to Tracy's point of Freddie and Fannie, GM. Taxpayers have lost billions. You know it creates the moral hazards that we've been talking about going back to 2007 when this began with the prior president. It needs to stop and people need to take responsibility for their own actions; individuals and countries as well.
WAYNE ROGERS: Well you've already got a negative effect right? It's just a question of reality. When you allow the political process to obscure the economic realities you're just fooling yourself. We've been fooling ourselves. We keep kicking cans down the road. We've done it in this country. As De Tocqueville said writing in 1831, when the congress discovers that it can bribe the people with its own money, that's the end of the republic and that's exactly what's happening in Europe and it's going to happen here.
MCDONALD'S CAVING TO FOOD POLICE BY LISTING CALORIES ON ALL MENUS; BAD FOR BUSINESS IN AMERICA?
JONATHAN HOENIG: Yeah it frightened me Cheryl. First of all, the direct economic impact; think of all the hundreds of thousands of dollars it's going to cost millions of dollars nationwide to print up the new signage and comply with these completely arbitrary laws and the fact that New York is actually passing that completely asinine beverage size ban. When they mandated the menu signage two years ago people actually consumed more calories. Government control actually hurts the problem it's supposed to remedy and the fact that it's impacting people's private lives I think is pretty frightening.
WAYNE ROGERS: Well I don't think that is the danger. I think the big danger, the one Jonathan is talking about I think is minor compared to the fact that you are allowing the government to coerce you under some health care reason to do things that are personal and private for you. I mean the next thing they're going to do is say they're going to regulate clothing because in the winter time you can catch a cold if you don't wear such and such. I mean the fact that they've inserted themselves in the private lives of the American people to this extent under the guise of helping health, which is okay we all agree with that, but that's a personal choice. It's not up to the government to tell me where I can eat and what I can eat.
SALLY KOHN: If we actually go back to some of the founding theories of capitalism, you know even Adam Smith himself said there is an important role of government to make sure we have the information as consumers to make informed decisions and that we don't just let capitalism and we don't just let markets sort of do exactly what they want. You get a can of soda, you get a candy bar today or a bag of chips, it says the calorie and nutrition count on it not because companies voluntarily decided to do that, but because government said look you have to provide that information to consumers and that's what incentivizes them to do better. That's how the markets work.
TRACY BYRNES: So the 20 piece chicken nuggets are 940 calories. I'm grossed out by that, but it's not going to stop anybody. It doesn't change habits and what it's going to do is it makes those 20 pieces that much more money and that's the problem. It's the people that are now eating at McDonald's and are going to continue to eat at McDonald's that are going to end up paying more. That's where this hurts the economy.
JOHN LAYFIELD: Yes childhood obesity, diabetes is costing this country billions of dollars and it could be hundreds of billions of dollars in the very near future. Look, you're not telling some big fat guy who walks in McDonald's that you can't have a cheeseburger. All you're saying is hey, look big fat guy there are a lot of calories in this that aren't good for you and money fungible people are still going to work out and McDonald's has some very healthy things on their menu that a guy can look at now and say maybe I want the salad. Maybe I want to go to Saladworks. Maybe I want to go somewhere else and eat. It's just a matter of choices. We're not stopping anybody, I say we the government is not stopping anybody from eating something bad. They're just saying here are your options.
NEW IPHONE COULD BOOST GDP BY A HALF A PERCENT
JONATHAN HOENIG: Well it's pretty frightening. Thank the almighty for Apple. These products are literally the atlases; Apple is the atlases holding the economy up. It's a little frightening however how on one economy it can have such a dominant impact. You know what? There's no reason why we couldn't have a dozen apples, two dozen apples. There's an unlimited amount of wealth that this country could be producing. I fear though, it's a better business environment, it's a better economic climate that we need to get folks actually producing and making more miracles like Apple does.
TRACY BYRNES: Well I think it's more about how anemic the numbers are Cheryl and they're so bad these days that even if you go out and buy one phone you're going to move GDP because people are sitting on their hands not willing to do anything and look, what happened the other day with Ben Bernanke pumping more money into the economy is basically a sign that he thinks that capitalism doesn't work and that's wrong because Apple is going to make a difference and people are going to keep buying these products and Ben Bernanke is going to continue to deflate our dollar.
SALLY KOHN: I mean look there's this sort of built in paradox to what Jonathan and Tracy just said which is you know look, clearly Apple is succeeding in this market and in this economy and in this moment in the United States and yet for some reason other companies can't do it. There's a little bit of a look like if they can do it other companies can and if they're not then there's other reasons than just the government enabling environment, but the other reality is Apple is on the one hand an American success story and on the other, the extent of their success may in fact be hurting other innovation. It's so hard to get into the economy right now, but hey whatever it's still a half a percent of my GDP expenditures at home.
WAYNE ROGERS: No it's a reflection on the man's brain. He's an idiot. Here is the case it's a simple thing. We've had innovation in the United States for years. In my lifetime Polaroid started, had success and died. It happens all the time. If we don't have innovation than we won't have anything. Apple is just one. There's a lot of fanfare about it. Look in the medical products area. There are thousands of new inventions coming out; new medicines and things like that. It's good for the economy. All of this is good for the economy not just Apple. God love them, let them be successful. I want everybody to be successful.
JOHN LAYFIELD: Wayne's right. The numbers don't work on this. $700 billion because of one product? Apple only does 149 billion right now and to Tracy's point and Helicopter Ben; it helps if we have cyclical unemployment. We have structural unemployment right now so anything like Apple that comes out, the key is if you're an entrepreneur don't copy, create. That's what Apple does.
WHAT DO I NEED TO KNOW?
TRACY BYRNES: Stocks focusing on Fed stimulus, not Middle East violence.
JOHN LAYFIELD: New Fed rescue plan will pump up REITs like (CMO).
WAYNE ROGERS: Add to your profits with additive chemical maker (POL).
JONATHAN HOENIG: Rising rates and a strong dividend makes (BKLN) a winner.