Recap of Saturday, May 22


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Bulls & Bears

This week Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Eric Bolling, Pat Dorsey and Richard Goodstein.

Dems' Financial Fix Leaves Out Government Lenders Fannie, Freddie

Gary B. Smith, This would be akin to the oil disaster in the Gulf, and the government saying that BP doesn't have anything to worry about, and not holding them to any degree of accountability. It's absurd. Fannie and Freddie aren't affected at all by financial reform. Executives at Fannie and Freddie were pushed by the government to expand into the subprime housing market. They tried to fight back, that they would be exposed to delinquent payments, but ultimately the government's desire to expand housing won out.

Richard Goodstein, Democratic strategist: There's no doubt there were excesses associated with Fannie and Freddie. The good news we've had since 2008 is that the Federal Housing Finance Agency has been granted oversight and regulatory ability to better monitor the two companies. Fannie and Freddie might not have been dealt with in this bill, but this legislation has addressed the notion of "too big to fail" and dealing with abusive lending practices. If you're on Main Street, you want to make sure big banks can be winded down, and derivates come out from the shadows. I think Fannie and Freddie will be dealt with next year.

Tobin Smith, NBT Media: There should be a special place in hell for people who created the legislation that forced trillions of dollars of bad loans onto Fannie and Freddie's books. Then Congress decides to implement financial reforms that don't even address these issues. And it's a major problem that the two companies have taken on 95 percent of mortgage loans over the last 12 months. If you take them and the Federal Housing Authority out of the equation, there is very little private lending going on in this country. This issue is going to bite us a hell of a lot harder than some credit card company charging someone a 13 percent interest rate instead of 12 percent.

Pat Dorsey, Fannie and Freddie are already in wind-down mode. There's some nasty stuff on their books. But the loans they've recently took in are at much higher credit levels, so that less of a problem. Though there are still major problems with the two companies that need to be fixed. I don't know why this isn't in the bill. I think a major problem down the road is the Federal Housing Authority. It's going to be the next Fannie. They're giving out 3.5 percent down loans to very shaky borrowers. The FHA represents 25 percent of mortgage loan volume right now, and many of the loans are crap.

Eric Bolling, Fox Business Network: You can't ignore Fannie and Freddie. Before the crisis, Fannie and Freddie backed about half of all mortgages in the U.S. Last year, that number grew to about 70 percent. They have about $5 trillion of loans outstanding. Part of the reason it's not being addressed in this financial reform legislation is that it's just too big and scary. If new regulations take Fannie and Freddie down even further, that could bring the whole system down. So it's gotten moved aside in favor of everything else. Yet it's the real source of the housing crisis.

Would Investor Tax to Pay for Spending Hurt Jobs?

Eric Bolling: This will be a job killer. The government is trying to create economic relief and is going to tax the people creating jobs. Washington seems to be the only place that doesn't realize when you raises taxes you drop business confidence. When confidence drops, businesses and people stop spending, economic activity goes away, and so do the jobs. And the economy as a whole goes right down with it.

Tobin Smith: We have to care about this because of jobs. The bureau of economic analysis has said that since 1985, over 40 percent of all high paying jobs, people making $75,000 or over, were created by companies that started with venture capital--Google, Apple, Cisco, etc. This bill would raise taxes on venture and entrepreneurial capital companies by 157 percent. You're telling me that if someone raised your taxes 157 percent it wouldn't change your behavior? As a result, we won't raise as much money, or manage as much money, and won't create as many new high-tech companies.

Richard Goodstein: I would say if you looked at two groups not suffering in the economic downturn, it'd be hedge fund managers and oil companies. That's where potential tax revenue is. I think there's a general feeling that maybe these guys could do with a little less than the billions and billions they're making every quarter. The fact of the matter is the chief economist from Standard & Poor's, and Moody's, said the Obama economic plan is working better than projected. We have to spend more because unemployment is at 9.9 percent.

Gary B. Smith: It has been unionized government workers that have suffered the least in this economic downturn. Government workers have the lowest unemployment rate of any sector. This is robbing Peter to pay Paul. In this bill, they've got provisions like expanding unemployment benefits, or helping states pay for Medicaid. Yeah, that's going to protect jobs. My favorite is the billion dollars to create summer work programs for young people. But again, the government is just taking money away from businesses and people succeeding.

Pat Dorsey: Jobs will come back when businesses start hiring. It always happens more slowly than you want it to, but the market comes back and businesses start hiring. There's obviously an incentive for the government to do something, but the best thing to do is wait it out.

Treasury Forgives $1.6 Billion Chrysler Loan; Union Handout?

Gary B. Smith: This is just another union payoff. There is a big conflict in this country--the bailout of Wall Street. But Wall Street has been painted as evil and mean. Take out Wall Street and substitute auto workers and you have the same scenario only worse because most of the financial companies actually paid back their loans. In this instance, the government is forgiving loans. The same union that got GM and Chrysler in trouble wants their old benefits back. Sure, GM made a profit last quarter, but they'd have to have that same profit margin for the next 14 consecutive years to pay off the $50 billion they received from the government.

Richard Goodstein: Let's not forget the auto company bailouts were the original idea of the Bush administration. So this is hardly some payoff to the unions, considering George Bush wasn't exactly their best friend. The alternative here is that the auto companies would go belly up if some of these loans weren't forgiven. As a result, millions could potentially lose their jobs by a cascading effect. The administration determined that Chrysler would not be able to adequately compete in the market if it didn't have some of these loans forgiven.

Tobin Smith: Chrysler originally should have just gone out of business because they were making a lousy product. Fiat has come in and taken over the company for dollar. Remember, this money is a small amount compared to the $34 billion government auditors say are going to be lost as a result of the auto bailouts. We just keep duplicating stupid behavior.

Pat Dorsey: I think the main story here is what happens after the auto bailout, when a municipality or state comes knocking on the door to the federal government saying we need a bailout, and you gave one to Detroit. Aren't you going to bailout our city? It's hard to say no to. This has set a bad precedent.

Eric Bolling: We have almost $70 billion to GM and Chrysler. That money just isn't coming back. We might get a couple billion back. But Ford is the model here. It never got bailed out, it got to renegotiated its finances with its lenders, put cars on the road that work, and don't pay absurd amounts per hour in salary and benefits to UAW workers.


Gary B. Smith: Profit don't panic! "SPY" spikes 20 percent by 2011

Tobin Smith: House passes beer resolution! "SAM" brews 40 percent gains by July 4

Pat Dorsey: People still smoke no matter what! "PM" lights up 25 percent in 1 year

Eric Bolling: Get ready for state bailout! "GLD" shines 30 percent in 1 year

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Cavuto on Business

This week Neil Cavuto was joined by Charles Payne, Dagen McDowell, Adam Lashinsky and Kristin Bentz.

Dems Rushing to Pass $190 Billion Spending Bill Within Days

Charles Payne, I like how Congress is trying to disguise this and say it's an unemployment extension bill. For 99 more weeks. But what about the rest of the money? Another $60 billion for Medicare doctor fix costs not attached to health care legislation. There's $24 billion for states to pay for Medicaid. And $30 billion for tax cuts for property owners who don't itemize. Democrats are putting their agenda ahead of the voice of the people.

Dagen McDowell, Fox Business Network: I think Congress thinks Americans are suckers and that if they keep throwing more money at the problem, that'll somehow solve things. Meanwhile, the markets are starting to collapse due to fears of all the spending and accumulating debt. Americans themselves have finally gotten their own financial houses in order--cutting up credit cards, etc. But Americans have to start demanding this from Washington.

Kristin Bentz, The first step of recovery is admitting you have a problem. This reminds me of the corporate executive to hit up the mini bar one more time before he gets the corporate credit card away. At this stage, the Democrats really just don't seem to care. They want to get as much onto the tab as possible before their ability to do so might come to a halt in November. I think this is going to backfire.

Adam Lashinsky, editor-at-large, Fortune Magazine: First of all, it'd be a mistake to say that the Democrats in Congress and the Administration aren't worried. I'm sure they're worried--they aren't stupid. I think this take that they're just spending as much as they can before they're called on it is just cynical. I'd call what they're doing governing. They're doing what they think is right. They're acting on what they ran on. They need a record to run on in November, and then voters can decide whether or not they approve of it.

Walmart Shoppers Cutting Back; Deadly Sign for Economy?

Kristin Bentz: This could be something to worry about. Walmart has missed their same-store sales guidance for the last four fiscal quarters. The CEO, Mike Duke, has only been there five fiscal quarters, so he might need to be looking over his shoulder a little bit. Walmart has been struggling and cutting expenses to compete better. They're negotiating with shippers and suppliers to keep the company a strong global retailer. But recent positive earnings from Nordstrom's, Saks, etc. show people are shopping again, and it's something to pay attention to.

Charles Payne: The deep discounters, like Family Dollar and Dollar Tree have actually seen gains in sales. Their stocks have gone through the roof. This whole market rally isn't so much a sign of a rallying consumers, it's large, multi-national corporations that are doing well, and emerging markets adding on to their profit margins. Cautious guidance has been the key word with retailers. Walmart's decline is a proxy that we're not out of the woods yet.

Dagen McDowell: Those dollar stores do well because they build around Walmarts and by nature attract customers shopping there. One important indicator is that Target's same store sales are actually up. I think there's a sign consumers are branching out a bit in terms of their purchases, and going to other stores like Target to do their shopping.

Adam Lashinsky: Walmart has some specific issues here. Investors call them "difficult comparisons." Walmart did extremely well during the financial crisis. So, it's extremely hard to top those numbers. The fact companies like Target are doing well is a sign that consumers are starting to come back. It's a good sign for the economy. I think we can say though, there are certainly major problems still in the economy, and the profits of retailers will be an interesting indicator of how well we come out of the recession.

Government Workers Told to Return Bonuses Given in 1994

Dagen McDowell: In the words of my mother, "you're nickel and diming me to death!" The irony is, the IRS only has 10 years to go back and collect tax liabilities. This is 16 years ago! It's a stunning example of the great lengths that any municipality, state & local governments, and even the federal government will go to bring in extra revenue.

Adam Lashinsky: This is an extreme, but good, example of what's going to go on in municipalities around the country. If these guys got paid an amount they shouldn't have been paid, they should give the money back.

Kristin Bentz: Well, good luck with this. I think the county will have a hell of a time getting this money back. But I think we'll see more moves like this from local and state governments. People will protest, and it might get a little ugly, but we're bound to see more actions like this.

Charles Payne: Get used to this. The real deal here is that these governments can't stop spending! This is why we see states moving to legalize marijuana, or gambling, or drugs in general. These guys will do anything not to stop spending.

Vote of These 'New' Stocks

Charles Payne: Aruba Networks (ARUN)

Adam Lashinsky: Auto Desk (ADSK)

Kristin Bentz: Aeropostale (ARO)

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Forbes on Fox

On Saturday, May 22, 2010, David Asman was joined by Rich Karlgaard, Neil Weinberg, Stephane Fitch, Mike Ozanian, Quentin Hardy, Victoria Barret, Elizabeth MacDonald, and Kai Falkenberg.

In Focus: White House Calling for New $23 Billion Education Bailout; Good Use of Taxpayer Dollars?

David Asman: The White House is out pushing a new bailout, this one for public school teachers. The price tag: $23 billion. Some here at Forbes think that billions in education haven't paid off in the past and they won't pay off now. Hi everybody, I'm David Asman. Welcome to Forbes on Fox. Let's go In Focus with Rich Karlgaard, Elizabeth MacDonald, Neil Weinberg, Quentin Hardy, Victoria Barret, and Stephane Fitch. Rich, there isn't necessarily a return on investment with education spending, is there?

Rich Karlgaard: There hasn't been and that's a tragedy because I think both liberals and conservatives can agree that we have a real problem here. America's K-12 education has fallen out of the top 10 in global rankings and in math and science out of the top 20. The liberal solution is generally to throw more money at the problem, which is being proposed now, but there's no accountability. You simply can't fire the incompetent teachers. President Obama himself said we ought to be able to do that, but his NEA (National Education Association) simply won't allow it.

Stephane Fitch: I'm not going to say there aren't problems, but spend the money because it's not about the 300,000 teachers that are going to be affected; it's about the 6 million kids. And here's a way to make the investment smarter: offer additional funds to states that are willing to reform their bloated pension systems and straighten some of these problems out.

Elizabeth MacDonald: A lot of this doesn't go to the kids and that's a problem. There's no reform of the system before the taxpayer money goes out the door. Where the money goes is pretty shocking. It's for buyouts of unused sick days, paid leave time, for union work and union activities, and for things like overtime pay for custodians and cafeteria cooks who sleep on the job. So is that money getting recycled back to the union coffers in the form of union dues? I think that's the behind-the-scenes activity going on.

Quentin Hardy: Custodians who sleep on the job sound to me like welfare queens and other made-up tropes. I don't see how there's more deadwood here than there might be on Wall Street or in the police department or the fire departments or most any other corporation. In the current issue of Forbes, we have a big takeout on education. I was just in a school on Oakland, California where they've doubled test scores in an area where 60 percent of the people don't speak English as a first language. The teachers do a great job there, and the parents are involved, and there's accountability on both sides. Blaming a couple of bad teachers for a whole systemic problem is missing the point and frankly, the easy way out.

Victoria Barret: Federal dollars are increasingly making up a larger portion of what we spend on education. States have needed federal dollars for years, and this push that Obama is making is a worrisome trend, especially because that money isn't going to the students or the teachers. Teachers' salaries have been stagnant while administrative salaries have gone up. The whole system is broken and instead of just throwing money at it, we need to completely reform it. I think Obama could do that if he did it in a smart way.

Neil Weinberg: So we're going to take $13 billion and bail out Goldman Sachs for their credit default swaps with AIG, but twice as much for education is too much? Yes, there's waste and fraud in education and it all needs to be reformed. You have as many administrators as you do teachers—it's a sick system. But we're talking about taking $23 billion, which isn't a lot of money given the way Washington has been throwing it around, and saving teachers' jobs.

Flipside: Greece Should Sue American Investment Banks for Greece's Financial Crisis!

David Asman: Greeks hitting the streets once again this week. Tens of thousands walking out, protesting plans to cut their pensions and raise the retirement age. Now Greece's prime minister is pointing the finger at you—at Americans and American companies—for creating the money crunch that led to riots like these. He's even considering suing U.S. banks, and Neil, you say he should?

Neil Weinberg: Of course he should! I can't sit here in good conscience and not say that Greece primarily has itself to blame, but some very funny trading went on before the Greek debt crisis occurred, and there are questions about whether or not some of our big banks helped them cook the books. And if our big banks helped Greece aid and abet their own fraud, maybe they should go after them.

Elizabeth MacDonald: Greece is the fraudster here. It faked its numbers for the better part of two decades. It borrowed the size of the economy of Hong Kong when its productivity level is about the size of Croatia. Greece should sue itself or use the money to buy the whole country pacifiers. ((laughs)) The Greek government admitted that it knew about the swaps in 2001 and a German market regulator said these derivatives had nothing to do with Greece's downturn.

Stephane Fitch: Bankers love to get paid like surgeons and baseball players, and they ought to get punished the way surgeons do when they commit malpractice or the way baseball players do when they rig games. They should sue and they should consider criminal prosecution on their own turf, because at the very least, we'll find out more about what went on.

Kai Falkenberg: Stephane sounds like an ambulance chaser. They wouldn't win the case. There's something called caveat emptor—buyer beware. They should learn that Latin phrase from the ancient Romans. They entered into this transaction. They knew what they were doing. This is a highly sophisticated party. They are to blame.

Victoria Barret: They should have known what they were getting in to. They were asking for it. We've seen this here with the subprime fiasco. Just because someone offered you the chance to pay zero down on a house that you couldn't afford, is it their fault or your fault for taking them up on it and providing no documentation? It's the same thing here. I think the reason for them to sue is completely a public relations move. It allows them to point fingers. The finance minister of Greece has even said, it's not our fault—previous Greek governments didn't really tell us what was going on.

Mike Ozanian: I would love for the Greeks to sue because it would show how stupid the politicians are. As part of the Eurozone, they had debt limitations on their deficit and the size it could be relative to their economy. They were exceeding that so they essentially asked Goldman Sachs to move the debt into these vehicles where it wouldn't show up on their balance sheets. Don't blame the casino when you gamble and lose!

Cities and States Push 'Temporary' Taxes, But Are Taxes Ever Temporary?

David Asman: Temporary taxes? Yea right. More city and state governments pushing short-term tax hikes, and some voters even approving them this week. But Rich, you say don't bank on temporary taxes going away any time soon?

Rich Karlgaard: David, whenever a politician says, I served in Vietnam, I did not have sex with that woman, and the tax I am about to impose on you is temporary, be skeptical! ((laughs)) The tax code is laden with taxes that were supposed to be temporary. My favorite is [the telecom tax] from the Spanish-American War, 1898.

Stephane Fitch: It's easy to be cynical about temporary tax hikes, but they can do good. Indiana Governor Mitch Daniels, a Republican, promised in 2005 to raise taxes on wealthy people for one year. He did it, wiped out a bunch of Indiana's debt, and then he cut the tax again. It worked. Indiana is fiscally as fit as a fiddle right now.

Mike Ozanian: Sometimes these taxes do come down. In New Jersey, Governor Christie is going to cut the millionaires tax. In the instance that Stephane just mentioned, they also cut spending. My problem with a lot of these temporary taxes is they just put off the day of reckoning. The unions in New Jersey want Christie to continue the tax so the union members can continue to get these lavish perks with health care and pensions and so forth. My favorite temporary tax is the income tax, which came from the Civil War when the top rate was 7 percent. It's going to soon be 39 percent!

Quentin Hardy: I think that temporary tax hikes have an appropriate, situational use. Ronald Reagan signed the biggest tax hike in history, but he also cut taxes. There's a time and a place for these things. To think these taxes never go away would suggest that we are now being taxed at the highest rate ever. If taxes didn't go away, they'd only go up. That's a simple math statement. Instead, we're actually taxed at a relatively low rate right now.

Neil Weinberg: A good example is the Johnstown flood tax which was imposed in Pennsylvania in 1936 to help with the flood. It's still there and now it's on liquor and it's 18 percent. A lot of these taxes unfortunately are just an excuse to raise our taxes higher and higher. I think in a time like this, when the economy is struggling and people can't make ends meet, the worst thing we can do is impose a lot of these temporary taxes, many of which won't be temporary.

Informer: Stocks to Help You Create Your Own Emergency Fund

David Asman: We're back with our Informers and the stocks they say will have you covered in any emergency:

Victoria Barret: Hewlett-Packard (HPQ)

Neil Weinberg: DuPont (DD)

Mike Ozanian: Philip Morris (PM)

Stephane Fitch: Mack-Cali Realty (CLI)

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Cashin' In

Best Way to Fix Our Illegal Immigration Problem: Fix Mexico's Economy?

Cody Willard, Fox Business Network: Let me be clear, I'm not talking about setting up aid. Aid never works, I'm always about aid. I think we should go in, help them figure out how to create a better constitution, banking system, property laws that could be enforced and actually go into the problem rather than setting up and throwing up barriers that aren't working anyway. We have a huge immigration problem, let's address the root and create prosperity, it will be good for everybody.

Wayne Rogers, Wayne Rogers & Co: Listen, we can't teach them. I remember Woodrow Wilson saying teach the South American Republicans how to elect good men. That's an arrogant statement. You can't teach them anything. They've got to do it themselves. They have to create their own jobs. We can't do it. You want us to go down there and have another stimulus package, hell, it's not human. Maybe we should enforce our own laws.

Erica Payne, The Agenda Project: By the way when you start anything with the word illegal, illegal alien, once you say illegal, everything else is out the window. We're absolutely part of the problem. Let's start with illegal, drugs are illegal, who are the customers, customers are people who live in the United States of America, why do you think we have the problem because there are a whole lot of customers for the Mexican drug lords here in the United States.

John Layfield, CEO/owner: We should fix the border, but look, we can't even fix our own country. We ignore our own constitution and property rights and we have our own banking system that needs to be fixed and we're not doing a very good job at it.

Jonathan Hoenig, Thank God they come, I fear the day they stop coming. Immigrants are a huge benefit to this country. Call them what you want but the only reason why they're called "illegal" is because we put a quota on how many immigrants can come here. Its ingenious to say oh we love immigrants, but only legal ones. They make it impossible for people to come here legally. Do they cost us? Yes, because we have a huge entitlement state. I don't care if my tax dollars go to Jose or Joey. Its looting me either way.

Jonas Max Ferris, What's illegal about it is they're not being taxed, the same problem with drugs. I'm for raising the wage level because now you have to pay taxes higher than what you actually let them undercut other people a little less, salaries.

Are Stocks Now Going Down Because of Obama's Policies?

John Layfield: They have to, they owned this. The White House said the economy made a rebound and Thursday, the market was down 200 points on the news. Look, here is the problem. There are no incentives for banks because they can't price risk because of financial regulation, when banks can get money from the government for zero, free, loaning it back to the government at 3.1 percent. For treasuries, what incentive is there to take a risk and loan that money to anybody else. They're getting free money and I'm a from a Texas high school, please have an Ivy League moron explain to me.

Erica Payne: It's incorrect to say it isn't working. You have to start with the idea that the stock market is not related to the health of the real economy, it feels like it is, but it isn't. The stock market is down because of Greece, because of Spain, because of Portugal and uncertainty around financial regulation. There is uncertainties in financial regulation because a bill has passed in the Senate and there's a piece of it in that bill which is about derivatives which has not, which is not similar to the House bill. Now they have to put those bills together and so, the banks are thinking that-- the top 28 banks will probably lose about 20 percent of their earnings because we're going to split this business off.

Wayne Rogers: I think Erica has a point. In other words, I think there's a disconnect between the stock market and the government. And you know, I certainly don't want Robert Gibbs being a money manager and my broker are for sure because he doesn't know. But point is there are certain things in the economy right now that are doing very well and yes, this is the latest bubble, if you will, in the market is due to the situation and result of uncertainties and nobody knows whether they're going to solve a great problem and go to a government that's going to become a military dictatorship and have to take over and that may happen. All of these things happen, they work out, they will be okay.

Jonathan Hoenig: It's untrue to say that banking and finance was unregulated and in fact, Erica so unregulated that Fannie and Freddie I know were government sponsored entities, I mean, we don't have to go--

Cody Willard: The main thing I've got here is if Robert Gibbs is such a great top indicator, well, that was the media top you could have shorted the market the day he said the White House is taking credit for the market. I do think, look, it's going to be okay, forget what's going on in Greece it's not going to be as traumatic as the market is indicating, if you're bullish yesterday should be bullish today, it's a buying opportunity, but wait for Robert Gibbs to say we don't know what we're doing and he will be a bottom indicator next time.

Jonas Max Ferris: Look, the number one asset moving through globally this week was U.S. government debt. If the government was screwing up bad, I don't know if that will be the number one destination of new money.

Union Protests at Banker's Home, Scare His Kid: Are Families Now Fair Game?

Jonathan Hoenig: I think these unions are goons, trespassing and disturbing the peace and stoop to intimidating people's families to kind of make a point shows the moral depravity. The bankers should be picketing their homes, they are paying their mortgages.

Cody Willard: I'm not going to say that these people aren't trespassing and thuggery, but the fact of the matter is they're demanding justice because the government isn't giving them any. These bankers shunting -- the bankers themselves are on welfare and those people are providing those welfare for the bankers.

Jonas Max Ferris: Doesn't make trespassing right, but the bankers should be protesting because the people got loans at a lower rate than corporations pay to buy a home. The government already helped them get a loan at a ridiculously low rate. They wanted to buy an inflated home then it tanked like we said it would do on the show five years ago.

Wayne Rogers: It may be crazy, but freedom of speech. As long as they don't trespass, as long as they don't go on the guy's porch, in his yard. They can stand across the street and run up and down with signs and do all of that stuff that's fine, I'm all for free speech and against anybody invading somebody's private property so that's where you draw the line.

Erica Payne: I just want to ask Jonathan is when the far right extremists posted the address of congressman Tom Perriello's brother-in-law who had four children under the age of ten and encouraged people to go there and cut their gas lines, would you refer to them as thugs the same way you do here?

John Layfield: We called them lunatics on this show. And if you watched the show... We said they were wrong, said they were thugs and criminals and should be locked up. Intimidation is against the law, going off a guy's family and children, you've got to be kidding me, ridiculous.

What Do I Need to Know for Next Week?

John Layfield: The textbook controversy down the great state of Texas…. It doesn't matter how it plays out. It's going to benefit the iPad. Soon all books will be on a computer. Buy Apple (AAPL) when you see a dip.

Jonas Max Ferris: I've been off on Gold in the last 5 years but gold went in a super bubble now. I can prove it. The U.S. Dollar is up. Inflation is down and those are things that should be bad for gold, but gold goes up every day it's in crazy insanity mode like the Nasdaq in 2000 and it's going to collapse and cost big time, 50 percent or more. Sell your gold and short gold by buying (DGZ).

Jonathan Hoenig: Actually holding on to my gold and acts more like stocks than an independent asset and that's why I like the Yen and we've talked about it before as well. Buy (FXY) -- it is negatively correlated with stocks. When stocks go down the Yen goes up and I think the one safe haven play to keep an eye on right now.

Wayne Rogers: Well if you would have followed the old rule of "sell in May and go away," You would have avoided this down turn in the stock market. I think this is disconnected though from the real economy, I think the real economy is much stronger than the market is indicating, and so if you're an investor you can stay there, if you're a trader, watch out.