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.
GLOBAL MARKET SELLOFF SPARKS FEARS OF NEW RECESSION
TOBY SMITH: We are already in a recession. People have watched this show for years and seen the research that my company did on recessions and contractions. The numbers that we have been tracking for the future sales over the next 90 days, which is our key indicator, have rolled over. That means the slim GDP growth that we had is converting into a recession. We're going to have a recession. It's not going to be as deep, but this is a double-dip and if you don't believe we're in a double-dip, I don't believe you're looking at the data and you're not looking at our data.
GARY B. SMITH: Yes, the market last week was horrible, but just a few weeks ago it was up by almost the same percentage as we lost last week-about six and a half percent. It was up the same percentage in the same period of time over about five or six days. That's number one. Things have not done a 180 since then. Number two, the reason that I think we sold off is because we're up. The Nasdaq was up almost twelve percent in a month. Something had to give. So whether it was Operation Twist or Operation Twist and Shout, whatever. If you recall, in the early 1980's, all of South America-that was the Euro crisis of then-and the U.S. banks had a lot more exposure then. What happened after that? We had one of the greatest bull runs in history. So, I'm bullish right now. I'd rather be buying now than selling.
BOB FROEHLICH: We're not going into a recession. The central banks around the world are lowering rates. China raised rates to get food inflation under control. The Central Bank of Brazil was worried about inflation. They raised rates, slowed things down. They are already cutting rates. Finally, the European Union, that central bank has go to realize you can't have a single mandate and only worry about inflation when Europe is in trouble. Once they cut rates, you watch what happens. We're all going to be surprised. They cut rates, German exports go up. Everyone will be caught off guard. The world's not ending.
STEVE MURPHY: The markets are highly volatile right now and trending down because they are primarily concerned about debt, not the economic stimulus that a lot of us think is necessary to create jobs and to get things moving again. There's a European debt problem. There's a federal debt problem. States are in terrible shape in terms of their debt, mostly on the pension side. The middle class is upside down on their mortgages and you're not going to stimulate demand until that problem is solved. 50 percent of the working families in this country are living paycheck to paycheck. Many of them are homeowners. They lost $50,000-$75,000 in home equity. They borrowed against that. They are not going to start consuming again. We need mortgage relief for the middle class, principle relief for the middle class so we can get this going again.
CALLS TO FREEEZE NEW GREEN LOANS AMID SOLYNDRA MESS
GARY B. SMITH: It is almost ludicrous. It's not even sweetheart deals. I think it's fraudulent deals. It's like the rich uncle who came to your house and when he went to leave you went to the sofa and picked up all the loose change that he left behind. That's what the government is with these "Solyndras". We just spend the money. It's there. You saw the Solyndra thing-the deal was forced through. Whatever they want for money-big offices, big office parks, nice furniture, let's spend it. The government is lousy at trying to pick winners. When we try to pick winners, we invariably end up with losers. If you look at some of the reasons we went into the whole green area to create jobs. What has it created? Twelve jobs? And even if I'm off by a factor of one hundred, what does each job cost? About $500,000? We have not moved the needle one inch on replacing oil, nor will we ever unless we let the free market work. The first time we got into oil it certainly wasn't because of the government. It was because of the people like John Rockefeller that made billions. Let the next billionaire get in and do the green stuff.
TOBIN SMITH: We have enough oil in the United States if we were allowed to drill offshore we could have all our oil and wouldn't have to bring it in. The Mideast is the smallest part of our import. That's not the really big case. The big case is this Solyndra case, what people don't understand is, is somehow George Kaiser-Argonaut Capital-go a loan where they put money into Solyndra ahead of the Department of Energy. In 40 years of the Department of Energy that has never happened. If they can get that type of sweetheart deal, what's going on with these other nine, ten, twenty deals? We have to stop it. I guarantee you there are more sweetheart deals because there are more big supporters of the current administration who are donators to his cause that are in these deals that are on the table right now. It's an outrage.
BOB FROEHLICH: What's good for one is good for the other. Everyone in this country should be outraged. If we did it for one-the old, traditional energy like oil-we have to do it for the clean and green, as well. This country deserves to have answers to a lot of them and I think it's ludicrous that they're trying to throw this money out the door just because it's clean and green energy. That's just atrocious. We need to stop it and stop it now.
STEVE MURPHY: You would just be compounding the error. We shouldn't have frozen offshore oil drilling. We shouldn't be freezing green energy. We have a huge energy challenge, a huge energy crisis in this country. When we all stop arguing about when the economy and how the economy is going to get going again and it does go again, we're going to have a crisis. Our dependence on foreign oil is our big problem. There are two ways you attack that. Number one, you produce as much oil and natural gas as you can here. Number two, you move to renewable energy as fast as you can. The real way to do it would be to force utility companies to accept and integrate an electric grid and a free market in energy.
GOVERNMENT SHUTDOWN LOOMING OVER NEW SPENDING FIGHT
GARY B. SMITH: I don't really understand the problem with this. When we have had to spend extra money on disasters and FEMA and such, we've historically taken that from another side of the balance sheet so it all balanced out. Now, all of a sudden, we're supposed to be Daddy Warbucks with all the money when we've already gone through this debt crisis. All anyone is saying, yes pay the disaster relief bill. Just take it from many of the other areas that we have extra money and just balance the ledger. That's all.
TOBIN SMITH: The issue here is that by playing chicken again with the faith and credit of the United States, while we're going into a recession, you have the choice of having a little recession or a big recession. If you get into the every 90 days that no one can depend on anything happening, we shut down government every 90 days, we're going to have another great recession. On a relative basis, this money is peanuts and the fact that they're fighting over it means they're stupider than I thought.
BOB FROEHLICH: This is so simple. Why do they have a different system for an individual, for a corporation, anyone that has a problem? Gary B. is 100 percent correct. If you have a problem, you have to prioritize that problem, take the money from somewhere else. We don't have an unlimited supply. We lost our triple-A rating. We're going to turn into the next Banana Republic if we don't get our house in order.
STEVE MURPHY: It's pure politics. The republicans are picking a partisan fight here. FDR said it best. My neighbor's house is on fire, I lend him my garden hose. We figure it out later and that's what they should be doing.
GARY B. SMITH: DIA up 10 percent by January
TOBIN SMITH: DRL up 20 percent by December
BOB FROEHLICH: QQQ up 25 percent in one year