CEO of Swiss America Sees More Financial Trouble on the Horizon

This is a rush transcript from "Your World With Neil Cavuto," July 2, 2010. This copy may not be in its final form and may be updated.

STUART VARNEY, GUEST HOST: One hundred and twenty-five thousand jobs

wiped out, but don`t get down and out.


PRESIDENT BARACK OBAMA: Now, make no mistake. We`re headed in the right direction.


VARNEY: Are we? Well, welcome, everyone. I`m Stuart Varney, in for Neil Cavuto. This

is "Your World."

And if fears for a double-dip recession weren`t heightened before,

they are now, the labor market losing another 125,000 jobs last month, the

jobless rate dropping two notches, as 652,000 people simply stopped looking

for jobs. In all, more than 3 million jobs have been wiped out since

the president took office.

Wall Street`s clearly troubled, the Dow diving over 400 points this


My next guest says double-dip recession, here we come.

Craig Smith is CEO of Swiss America.

Craig, are you absolutely — are you saying flat-out, set in stone,

here comes another recession?


Stuart. No mistake about it, to quote Mr. Obama. We`re heading into the

wrong direction.

All you have to do, Stuart, is look at bond rates. We`re below three

percent, got corporate — corporate balance sheets are stuffed with cash.

They see a slowdown coming. The consumer is deleveraging. Unemployment is

still high.

How in the world can this president say that we`re headed in the right


VARNEY: Well...

SMITH: Everybody knows, if you look at the data, we`re heading for a


VARNEY: I`m not going to put words into the president`s mouth, but he

could point to the 600,000 new private sector jobs created in the last six

months. That is, as he would put it, a step in the right direction.

SMITH: Well, Stuart, but I`m suspect of those numbers to begin with.

I mean, you know, this president wants to create or save or — I mean,

the jargon is getting ridiculous. Let`s look at just the data, Stuart. If

you look at the manufacturing number, it dropped 1.4 percent. If you look

at consumer confidence, eight percent of the people think that business is

good. Four percent believe that jobs are plentiful.

Stuart, there`s no confidence out there. I`m a business owner. I had

a big expansion on tap. I put it all on hold because I don`t know what new

policy`s going to come out of Washington tomorrow.

VARNEY: OK. What the politicians want, what the Democrats want, and

what they are pushing for is more government spending. They say you will

get a recession all right, if you stop spending now. So, spend more now.

Are you buying that?

SMITH: Stuart, you and I both know better. We have spent almost a

trillion dollars, and what have we got, Stuart? We have gotten nothing.

The American people had this right. Seventy-two percent of the people

were against the stimulus package, but the Democrats pushed it through the

House regardless. Same thing with health care. I mean, we can right

through the gambit.

The bottom line is, we need to cut taxes. We need to create an

environment in the public sector — private sector — excuse me — where

people will start hiring again, Stuart.

VARNEY: Craig, I...

SMITH: And you can only do that when people feel confident.

VARNEY: I hear you, Craig, but what you have suggested is in the

long-term. It`s not going to happen in the next six months, probably not

in the next year. So, you`re leaving us by saying, it`s going to happen,

we`re headed for recession, certain, and that`s the way we leave it, right?

SMITH: Absolutely, Stuart. And I think we have got to be prepared to

take it on the chin for a couple months. Probably, by the first quarter of

next year, we are going to be fully verified that we are in the double-dip.

Look, we`re going to come through it, Stuart, but we have got to

batten down the hatches. That`s why corporate America is doing it and

that`s why the bond market is reflecting it.

VARNEY: All right, well, Craig Smith, I hope you have a very happy

July the 4th weekend.


VARNEY: It`s good to see you, sir.

SMITH: Thank you, Stuart.

VARNEY: Thank you.

SMITH: You do the same.

VARNEY: Oh, I certainly will. All right.

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