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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Adam Lashinsky, Fortune magazine senior writer; and Cheryl Casone, FOX Business correspondent and host of "FOX Business Now" on Yahoo! Finance.
Trading Pit: UBL Tape and Job Loss: Good News for America and Market?
Usama bin Laden out with a tape for the first time in three years. Jobs down for the first time in four. Stocks sell off hard. So why is this good new for America and the markets?
Gary B. Smith: No one likes it when anyone loses a job. However look at the job numbers more closely. Jobs in the private sector increased. It was the loss of government jobs that caused the shortfall. And I like when government shrinks. This job report will make the Fed will cut rates. As far as bin Laden, we know he's alive and he's planning some evil act. But we've known that for years now and have done a great job preventing an attack. Now is a great time to pick up some bargains.
Scott Bleier: This is just the beginning of bad news. Last time bin Laden attacked we were in the same situation. Stocks were calling for a rate cut. The economy was just starting to slow. That's when he dropped the hammer. More economic weakness is coming. The market wants the Fed to cut, but it won't happen. Bull markets are built on expansion of the economy and credit.
Tobin Smith: When we get through this bad news cycle, stocks will be fine. We could be up 250 points next week if someone comes out with good news. The stock market is suffering from post shock syndrome. Some are saying we're heading to a recession. Don't worry—we're not!
Adam Lashinsky: Job losses are not good. Not ever. Manufacturing jobs are down and there is a tremendous amount of pain in the housing sector. The next jobs report will be worse and a lot more jobs will be lost. UBL does not have a day-to-day impact on the market, but if he's able to release tapes, it's not good. We'd be a lot happier if he was not putting out tapes.
Cheryl Casone: Recession talk? On what basis? There's been no slow down in GDP growth. Consumers are keeping strong. Yes, bin Laden is a problem, but the market's big terror on Friday was that the Fed was not going to cut rates.
Best or Worst Time to Buy a Home?
The housing market hit with more tough news. Foreclosures hitting a record and the number of folks signing up to buy a home tumbling to the lowest level since the 9/11 attacks. Will things get worse or could now be the very best time to buy?
Gary B. Smith: Best time! I like to look at the price of housing stocks. When these stocks drop 60-80 percent like now, and like in the late 1980s and early 1990s, it generally signals a bottom in the housing market. Maybe not the exact bottom, but it's a lot closer to the bottom than the top.
Tobin Smith: Don't buy now! We are experiencing a different situation than what we had in the early 1990s. Then we had a recession. Now we have a housing bubble due to low interest rates. This has to correct itself. The housing market had 25 years of appreciation in just 4 years. This will take at least another 2 years to correct.
Cheryl Casone: There are fire sales in states that had a construction boom, like Florida, California, Nevada, and Arizona. That's a sign now's a great time to buy. I don't think you can time the stock market or the housing market. But, if you can afford to buy a home where you're at right now, get a fixed rate loan because now is a great time to buy.
Adam Lashinsky: You should NEVER think of your house primarily as an investment rather than a home. We are just a year into this correction. It's going to get worse. The time to buy a home is when you move, if you need a bigger or smaller home, etc. We are going to get back to the time in this country when people buy homes for rational reasons, not to make money.
Scott Bleier: Not the worst—and approaching the best. Early in 2008 there will be a lot of mortgage resets and many people will unfortunately lose their homes. That will be the best time to buy. But, housing prices are still not coming down as much as buyers expected.
Cowboys are back! 3:10 to Yuma riding into theaters. And this has our own gang all fired up and ready for a stock shoot out.
Scott Bleier: Portugal Telecom (PT )
Adam Lashinsky: The Blackstone Group (BX )
Gary B. Smith: eBay (EBAY )
Tobin Smith: Geron (GERN )
Scott's prediction: Fed does not cut rates & Dow drops 1,000 points by 2008
Adam's prediction: "Da Bears" rule in 2008! Dow falls to 11K next year
Tobin's prediction: Bet on Indy! Colts repeat & IndyMac (IMB ) gains 25 percent
Cheryl's prediction: More "rotten" news coming from Apple
Gary B's prediction: Mattel (MAT ) gets new game plan; up 20 percent in 4th quarter
Cavuto on Business
On Saturday, September 8, 2007, Neil Cavuto was joined by Ben Stein, "The Real Stars" author; Charles Payne, wstreet.com; Tracy Byrnes, New York Post business writer; Laura Schwartz, White House Strategies; Ben Ferguson, "The Ben Ferguson Show"; and Leigh Gallagher, Fortune Magazine.
Head to Head: Hillary Bashes Bush's Economic Plan
Neil Cavuto: For the first time in four years, the economy's lost jobs. Hillary Clinton says it's proof President Bush's economic plan isn't working for America, even though millions of jobs have been added since Bush has been in office. Is Hillary right?
Tracy Byrnes: It's just another attempt by the Democrats to try to wipe out years of strong economic growth. The fact of the matter is 8.2 million jobs have been added since August of 2003. Jobs have been added for 47 consecutive months. So we had one bad month. If you look at the numbers, a lot of job losses came from the construction industry. So this has nothing to do with Bush and his economic plan. His plan has actually done wonders for the American people.
Neil Cavuto: Ben Stein, there hasn't been much talk about the 47 months of growth. Now, the focus is on this one month. What do you make of it?
Ben Stein: Well, I think it's just politics. The statistics show very clearly that the Bush economic program has been a huge success, although much more so for the rich than for the non-rich. But, the idea that Hillary would say anything but criticism of Bush is kind of silly. She's a politician. We should expect political partisanship from her and that's what we got.
Neil Cavuto: Charles Payne, does this give the opponents a chance to seize on data like this and leverage it?
Charles Payne: Well, I kinda disagree with Ben in the sense that you can't take Hillary seriously on this. Once she puts this out there, she's gotta formulate a plan. Her plan is higher taxes and more regulation. If you think one bad jobs report after 4 or 5 years is going to hurt us, imagine what would happen to corporate America. I really worry about people jumping on the bandwagon. Particularly Hillary's.
Neil Cavuto: Laura Schwartz, let me ask you this. When Bill Clinton came to the White House and hiked taxes on the upper income, he was doing it into an improving economy. If Hillary Clinton gets into the White House and hikes taxes on the upper income, she would be doing it, by almost anyone's estimate, into a declining economy. That does not seem to be a good prescription.
Laura Schwartz: Well, I think she would balance it out. This 4,000 person job loss demonstrates what she and the other Democrats candidates are talking about and listening to; the working class Americans who are losing jobs. Tracy made a valid point. We've created about 8 million jobs in the last 3.5 years, but we've lost 3 million full-time manufacturing jobs. Those jobs were replaced with part-time jobs that have no benefits. On the campaign trail, you will see Democratic candidates calling for fiscal responsibility. It's something Hillary Clinton's been talking about… creating jobs by focusing domestically on technology and energy, health care and education…
Neil Cavuto: Leigh, what do you make of that?
Leigh Gallagher: For any Democrat right now, this is their moment! The economy's gonna play a big role in the election. The Democrats are the out Party. They're trying to get in. This is their moment to talk about this stuff. I think Hillary's going to come in from a populist angle. She's going to talk about raising the (federal) minimum wage.
Ben Ferguson: Which hurts small businesses. You have to understand. Look at the economy right now. We just had a federal minimum wage increase and people lost jobs because of it.
Leigh Gallagher: The minimum wage hasn't been increased in 10 years.
Ben Ferguson: Yes it has.
Neil Cavuto: Ben, let Leigh make her point. I promise I'll get to you.
Leigh Gallagher: The bigger here is that the jobs number is a lagging indicator. It confirms trends, it doesn't predict them. So, I think you have to pull the camera back.
Neil Cavuto: You know, you remind me of my dad when I was a kid.
Leigh Gallagher: Really??
Neil Cavuto: If I had a good report card with a lot of A's, he'd focus on the one B. Not that I was ever so lucky…
Leigh Gallagher: It's not just a B, Neil.
Neil Cavuto: But, I'm just saying. We've had 47 great months, right?
Leigh Gallagher: We're not looking at just a B situation. We're looking at a possible C or D situation, and that's why everyone's freaking out about it.
Neil Cavuto: Ok, this is a C or D situation. That's the theme the Democrats are going to push this election season. Ben Ferguson, are we in a C or D situation?
Ben Ferguson: I think if you look at the overall economy, it looks pretty good, especially with everything happening in the housing market. Hillary's going to say look how bad this President's economic plan has been for this country. Her alternative is to raise taxes. Her alternative is to put a bigger burden on small businesses with minimum wage increase. How in the world is that going to help the economy? All it's going to do is cut jobs to middle class Americans. Yes, things haven't been perfect lately, but our economy has been phenomenal compared to what's going on around the world.
Laura Schwartz: Ben, but not for the majority of the country.
Neil Cavuto: Ben Stein, you're economist. I want to ask you if by November 2008, we're going to be in a recession.
Ben Stein: I doubt it very, very much. Proportion is a very important thing in life. The job losses announced today are roughly two one-thousandths of one percent (0.02 percent) of the labor force.
Ben Ferguson: Thank you.
Ben Stein: It isn't a very big thing. And, by the way, to Charles Payne's very excellent point, Hillary isn't going to do anything dramatic about the economy. She is so in the pocket of Wall Street and the hedge funds. She's been taking so much money from them. She has so much owed to them. She's not going to do anything.
Neil Cavuto: Laura Schwartz, I get this sense then that this might be making a bigger deal out of a little deal?
Laura Schwartz: Not according to everyday Americans out there. Listen, the working class, the backbone of our economy, the middle class, are those who feel most left out by this current administration, and they want to return to shared prosperity and fiscal discipline. And that fiscal discipline is what's going to make Independents want to vote Democratic. The economy is going to be the number one issue in 2008.
Ben Ferguson: The child tax credit didn't leave anyone out. And it didn't just go after rich people. I'm so tired of people saying that the Bush tax credits only help the rich people.
Laura Schwartz: Oh Ben! And what was the difference between those? You had the rich people getting $46,000 and middle class Americans getting $400.
Head to Head: Forcing "Majors" on "Minors" to Keep America Competitive?
Neil Cavuto: Forcing "majors" on "minors." High schools across America are telling 8th and 9th graders to pick a major. That's years before they even have to pick a prom date! Which for me, simply never happened. Sounds like a lot of pressure on kids, but could it be the best way to keep America competitive? It's time to go "Head to Head." Ben Ferguson, what do you think? Not about the prom date-thing…
Ben Ferguson: I think it's one of the best decisions I've ever seen. You look back in history and what did you do with the kids? You sent them to be apprentices under people with trades. Look at my career. I went into talk radio when I was 13 years old because somebody gave me the opportunity. Now, I'm doing TV and I'm definitely one of the youngest in America. Same thing when I wrote my book. They said there's no way a college kid can write a book.
Neil Cavuto: Ben Stein, I think it's goofy. You've covered your bases… you became a lawyer, an actor, an economist. But what if someone had sort of targeted for you for one field early on? I don't know if that's constructive.
Ben Stein: It's the most preposterous idea I think I've ever heard of in the field of education. It has absolutely nothing to do with scholastic achievement whatsoever. Why don't they just order the kids to all get 800s on the College Boards? Then they'll get some real results… And why don't they just order all the kids to read War and Peace by the time they're out of 8th grade? Ordering kids to do something doesn't make them do it. This idea has to have been thought up by people who do not have children.
Neil Cavuto: Tracy Byrnes, I wanted to be an astronaut when I was kids. Then I discovered that the capsules are quite small.
Neil Cavuto: So, I'm just thinking this is crazy. How can you inflict this on kids who don't even know what they're going to have for lunch?
Tracy Byrnes: That's right. They can't even pick out their own clothes. You know, Neil. I was one of these people. I did well in math…
Neil Cavuto: I was cheating off of your papers.
Tracy Byrnes: So they said you should be an engineer. So here I am, a year and a half into a civil engineering curriculum, and hating every minute of it. I had to start all over again. I barely graduated on time. I was pushed into something. It makes no sense. I think our children are not learning literature or geography. Ask a kid to point out where they live on a map. They probably couldn't do it. I think we need more of an arts and science curriculum for these kids.
Leigh Gallagher: It's true.
Neil Cavuto: So Leigh you agree?
Leigh Gallagher: What we want people to do is value education, not just be forced into something because they won't really care about that either. I agree with Tracy. I mean, I think even college is a little young to decide what you want to do.
Neil Cavuto: Charles Payne, I want to bring you into this because I don't know where Charles was in school, but obviously he's done ok for himself.
Charles Payne: I disagree with everything I'm hearing here. I think it's a great idea!
Neil Cavuto: Ok, cut Payne's mic.
Charles Payne: Our kids are in trouble. Between the instant messaging, the video games, and the Internet, the social networking. Our kids are in trouble!
Neil Cavuto: Charles, how does forcing a major on them change that?
Charles Payne: Let me explain. Our kids don't know how to study. They don't know how to prepare. If you give kids a focus, you don't have to become an astronaut, but if learn how to study for that.
Neil Cavuto: You gotta look at Ben Stein's face…
Charles Payne: I see Ben's face. Ten years from now, what we're going to be doing is asking politicians to create jobs because our kids can't get the great jobs that the Asians are getting.
Neil Cavuto: Ben Stein, what do you make of that?
Ben Stein: The idea that you can order kids to be smart or disciplined is just nonsense. You cannot do that.
Ben Ferguson: Ben, hold on for a second. You go around the world and you talk to kids at leadership conferences. Kids need a vision. We're not saying once you pick this major you can't change it. But right now, if you can give kids a goal and help them go for something… I played tennis in college. Wasn't a pro, but I had a vision.
Ben Stein: Ben, you're one out of 300 million people.
Ben Ferguson: And that means others can do it.
Neil Cavuto: Ben Ferguson, you're too young to even have kids! I can't get my daughter to clean her room.
Ben Ferguson: But, I understand what kids are going through.
Tracy Byrnes: You know what, Neil? I taught high school for a year. And high school kids don't even know what's out there. They don't know what half the careers are. If we want to help our kids, we should institute a program where professionals come in, where kids can shadow professionals…
Ben Ferguson: You've got to give kids the ability to succeed if they don't go to college.
Ben Stein: That has nothing to do with ordering them around!
Leigh Gallagher: But, you can't force it down their throats, Ben.
Tracy Byrnes: We need to introduce careers to these kids. Let's have more of the "take your kids to work" days.
Ben Ferguson: And that's worked so well…
Leigh Gallagher: The more kids are exposed to, the more they can make a decision by themselves.
Ben Ferguson: You have to understand this program. They're not being dictators saying, "Ben Ferguson, you're going to be this. Charles Payne, you're going to be this." No, you ask them what they're interested in and help them work toward it.
Leigh Gallagher: But, they haven't seen anything yet!
Charles Payne: Let me get in for one second here. More importantly, our kids aren't prepared to do things. You can't just turn it on! You can't BS your way through high school and think you're going to turn it on automatically. You have to be used to doing reports. You have to have accountability. The biggest problem with our children, and it's what's going to kill our country, is a lack of accountability and a sense of entitlement, and parents saying things are too tough. Well, things are supposed to be tough!
Ben Stein: What does that have to do with choosing a major?
Ben Ferguson: It helps you have a goal for your life.
Charles Payne: That's accountability!
Neil Cavuto: By the way, you can BS your way thru school. I'm living proof of it.
More for Your Money
Neil Cavuto: We were just talking about kids mapping out their futures before they even step foot in high school. Now, we've got the young, hot-shot CEO's that already made it big and can help you get "More for Your Money."
Leigh Gallagher: Blue Nile (NILE )
Charles Payne: Yahoo (YHOO )
Tracy Byrnes: Under Armour (UA)
Ben Stein: Berkshire Hathaway (BRK.B)
*Ben owns shares of this stock.
FOX on the Spot
Laura Schwartz: Fred Thompson's vice pres will be NH Senator Judd Gregg
Charles Payne: Fed needs to cut rates by 50 pts to save economy
Ben Ferguson: Markets don't fear bin Laden, neither should you
Tracy Byrnes: In honor of 401k day, max out that retirement account!
Ben Stein: REITs are like gifts now; buy Public Storage and Extra Space
Neil Cavuto: Dems sadly remain "invested" in defeat in Iraq
Forbes on FOX
In Focus: "President Al Gore": Savior or Nightmare for Wall Street?
Mike Ozanian, senior editor: Al Gore would be a nightmare for Wall Street. He really believes that business is to blame for many of our problems and that we need much more big government. At least Hillary and Edwards are capitalists when it comes to their own lives.
Lacey Rose, Forbes.com markets reporter: I think Gore is good. You have to look into the future. I think that he will make us globally independent in the long-run. I think the world is already shifting in a green direction, whether America wants to believe it or not. Al Gore was on the forefront of that. He'd allow our ExxonMobils to continue to dominate globally and down the line.
Steve Forbes, Giuliani campaign sr. adviser: Gore would be a disaster for Wall Street. The only industry that would benefit would be bicycle makers. The only global warming would be financial market meltdowns because of his excess taxes and regulations.
Quentin Hardy, Silicon Valley bureau chief: If you look at the Vanity Fair article on Al you see that the mainstream media made up most of the dings on him. He didn't say that he invented the Internet or discovered the Love Canal. What he did say was that it was a bad idea to go into Iraq and that climate change is real. I think a firm foundation and sound thinking would be better for Wall Street than what we have.
Elizabeth MacDonald, senior editor: Gore was wrong about global warming in his movie "An Inconvenient Truth". He said 6 of the last 10 years have been the warmest. 1934 was the warmest. 3 of the 5 years before 1940 were the warmest. He's yet to come on the record and say he made a mistake. That would hurt the market because he'd come into office and possibly go along with the Kyoto style treaty which is based on flawed science.
Rich Karlgaard, publisher: I think Al Gore would be bad for the markets. I think he's unhinged. His timing here is very interesting. Obama isn't getting any traction right now and this last week was a reminder of the scandal bombs that lie in the Clinton's path like Democratic fund-raiser Norman Hsu.
Would You Pay a Massive Tax Hike for National Health Care?
Steve Forbes: National health care would hurt the economy. We've seen that in Western Europe, they're trying to move away from their high taxes. This would also be the end of innovation. Pharmaceutical breakthroughs are made here in America. People aren't going to stand waiting years for elective surgeries. Americans wouldn't stand for higher taxes to pay for this. We'd pay more and get less.
Josh Lipton, Forbes.com markets reporter: If you talk about access to affordable health care for everyone, I think that is an idea that resonates with a lot of Americans. As far as taxes, we already have a lot of hidden and direct taxes because we don't have health care access.
One of the costs driving this problem is the uninsured. They show up to county hospitals. Who pays for that? Thetax payers in those counties.
Rich Karlgaard: One of the little known stories in America is that Canada is rebelling against its own health system. The Canadian Supreme Court, which is one of the most liberal in the world, called their single-payer system unsafe. The Democrats are constantly holding up this Canadian system as the model that they'd like to adopt and that's the one that Hillary Clinton wanted to adopt in 1993.
Quentin Hardy: Americans go over to Canada to get more affordable drugs. We're treating this like it is an automatic tax hike. We don't know that. What we need in this country is more preventive medicine. Many Americans only make it to the hospital when it's critical. There's no preventive care. We need a system that provides that and that would grow the economy because there is more efficiency.
Dennis Kneale, managing editor: The reason that America has the best health care system in the world is because it is motivated by profit. If you look at what happened when the government tried to provide Medicare for the elderly, the costs soared out of control.
Elizabeth MacDonald: The idea that national health care will solve all of our problems is ridiculous. The national health care system in Canada is killing people. You have to wait 4 months for a breast cancer procedure when you should wait 4 weeks. Britain is moving towards privatization.
Flipside: Take Le$$ Vacation to Keep America Great!
Elizabeth MacDonald: When we're on vacation, 9 out of 10 of us use our blackberries. 4 out of 10 of us check our e-mail. That's why we are the most productive, because no one is taking vacation.
Dennis Kneale: I think vacation increases productivity. Vacation is good. You recharge your batteries. You come back feeling better and with more ideas. We need vacation, we just shouldn't mandate it.
Lacey Rose: We work so well in America. Whether our end goal is money or prestige, we focus on results. We focus on getting the job done, then we take our breaks.
Quentin Hardy: Between 1/4 and 1/3 don't take their full vacation or take no vacation at all. That's not good for productivity. It runs you down and stresses you out. You can have a balance.
Steve Forbes: If these guys get their copy done and edited on time, they can take as much break as they'd like. I don't care what hours you do, get the job done!
Informer: Mo$t Productive Stocks
Mike Ozanian: eBay (EBAY)
Elizabeth MacDonald: Vanguard 500 (VFNIX)
Dennis Kneale: Yahoo! (YHOO)
Josh Lipton: National Oilwell Varco (NOV)
Our Cashin' In crew this week: Dagen McDowell, FOX Business News; Jonathan Hoenig, CapitalistPig Asset Management; Jonas Max Ferris, MaxFunds.com; John "Bradshaw" Layfield, Northeast Securities; and Cody Willard, Financial Times
Stock Smarts: Better at Fighting Terror: Free Market or Government?
A fresh tape from Bin Laden and busted terror plots are new reminders that we are still terror targets. GOP Presidential candidate Ron Paul said this week that the free market, not the government, would do a better job at protecting us against terrorists. Which would be better at fighting terror?
Jonathan: Ron Paul's exactly right. A private security force, when it comes to protecting private property like the airplanes, could focus on the real threats like young Islamists, young Muslims, and guys from the Middle East. We still have the government telling me I can't bring my Diet Coke on the plane. We can't bring our knitting needles or bottles of shampoo and we're waiting on line at LaGuardia while they are shaking down granny. This is 6 years after 9/11.
Dagen: We have not had a terrorist attack on America soil in 6 years. We've had the TSA, which was set up after 9/11, so what are they doing wrong?
Jonathan: Dagen, you don't think we haven't had an attack in this country because you've had to take off your shoes at the airport? That's crazy.
Dagen: I think the evidence shows that the government is not doing such a bad job, despite you nitpicking about not being able to take your Coca-Cola through security.
Cody: More to the point, though, the one thing the government is supposed to do is protect us from murderers. The airlines are not supposed to be in business to protect me from those that want to kill. That's the only thing we ask of the government. We don't want them to be telling us what a fair price on a route from LA to NY is. We just want them to keep us safe.
John: The airline industry is the most regulated industry in the country. That's why it has also lost money since Orville Wright first flew a plane at Kitty Hawk. It's true: we haven't had a terror attack since 9/11, but Jonathan is right on the money. The airlines are screaming for bomb-sniffing machines. They want all this technology, but don't know who is going to pay for it. If you charge passengers an extra $3-5 each way, passengers won't have to take their shoes off or their laptop out and the airlines will have the equipment to check for bombs.
Cody: You're talking about some sort of government regulation to fund this thing.
Jonathan: John is saying that if the airlines can provide the security, they could compete on price.
Cody: That's the whole point. The government is supposed to provide the security.
Jonas: Ron Paul is about half right in the sense that the airline industry has been treated with kid gloves since 9/11. There was a fund set up so people can't sue the airlines for anything they may have done wrong. They got off easy. There's no proof that the private industry is going to do a better job of this. Nothing is stopping an airline from hiring extra security personnel to put on an airplane. Before 9/11 and today, people aren't going to pay and extra $50 to fly to Ft. Lauderdale because one airline has higher security planes than another. That's where free markets don't work.
Jonathan: People want the cheapest fair because the government has a monopoly on security at the airport. The airlines aren't given the opportunity to compete on that fact. A lot of people would pay an extra $25 a flight to know it will be the safest flight in the skies.
Jonas: There's nothing stopping an airline from adding additional security. There's no law.
John: There is a law. It's called supply and demand. It's the law of economics. You're not going to be able to add security like the El Al airline did. It deals with terror all the time in Israel.
Dagen: Unfortunately, the only thing that will change the mentality of fliers would be another airline related terror attack. John, the airlines couldn't even leave enough seats on planes for people stranded because of weather. It was a disaster this summer. You would trust them to handle security?
Jonathan: The private security would have the chutzpah to do what government employees will never do, which is focus on the real problem.
John: After 9/11, security gave us workers falling asleep in Chicago and letting people come on board with knives. The government's not going to fire these guys. Private enterprise is so much better than this.
Jonas: Usama bin Laden and his tape is living proof of the limitations of free market. There's a bounty on this guy's head. Where's Dog the Bounty Hunter to go get this guy? Private industry can't get this guy with a financial reward.
Jonathan: Jonas, that's wrong. It's the government that can't get this guy. That's the whole point.
Cody: Let me get this right Jonathan: You want the government to go get bin Laden, but you don't want the government to protect us on the plane?
Jonathan: It's not the government's job.
Cody: This is the one time in my life I'm arguing for the government intervention and all I want is for them to not allow another plane to fall on my head.
Jonathan:Certainly then you want to post a U.S. marshal outside every Wal-Mart warehouse? If they are protecting the private property of American Airlines, certainly they should protect the private property of Wal-Mart.
Wall Street's No. 1 Fear: A Cat 5 Direct Hit?
The U.S. has dodged two category 5 storms this hurricane season. What happens to stocks if we take a direct hit?
Jonas: We're very lucky that the U.S. hasn't been hit with a major hurricane this season. However, if we were to get hit, we'd see a big boost in energy prices and that could be a major problem for the economy and stock market. Right now, Wall Street has its hands full with so many other problems: the unemployment report and the jobs report. We don't need a category 5 hurricane. Oil prices have also remained stubbornly high, even with a slowing economy.
John: I completely agree with Jonas. Consumer spending keeps the economy afloat, but we have a housing slump that spills into consumer spending and consumer confidence. People no longer have the wealth effect of a house being worth $500,000 because now it's worth $400,000. This does cut into spending and people are strained. If a hurricane comes along and we add surging oil prices to our current state, consumers would be strained even more.
Jonathan:No one wants a hurricane, but there's so much else on this market's mind. We've gotten so good at tracking hurricanes. The market's a smart animal, so we can anticipate these things.
Cody: I don't think we can trade for a hurricane. You can't invest for a hurricane. Major events come along like Hurricane Katrina and 9/11 and that doesn't matter to the economy or market. As a trader, you will waste time, money, and energy trying to gauge big catastrophic events. Instead, you have to find good companies to invest in.
Dagen: You can factor in the possibility of a hurricane to a certain extent, particularly with oil. The fact that it is being ignored by the market is dangerous because I agree with Jonas & John Layfield.
Cody: If you are a hedge fund manager and are spending 80-90 hours in front of a monitor each week obsessing about the economy and individual stocks and how to hedge all of that, then you may have an advantage.
Jonas: Then why worry about recession?
Cody: You can worry about recession, but a hurricane is not going to be a catalyst for a recession.
Dagen: The government poured more than $110 billion into the southern states after Hurricane Katrina. I don't think the U.S. government is in that kind of position to pour that kind of money in if we have another devastating storm. They've got to worry about the housing crunch.
John: You don't have to be a bright guy to understand that if a hurricane hits, it's going to hurt this economy. This economy is fragile right now in many ways. You don't have to study 80-90 hours a week to know that if we have a hurricane, oil services and oil drillers and oil stocks are going to go through the roof.
Should Businesses Be Forced to Find and Fire Illegal Immigrants?
Find them and fire them…or pay the price. That's what the government is telling businesses to do in the fight against illegal immigrants. Is that really corporate America's job?
John: Businesses should be forced to find and fire illegal immigrants. We have a border that is not enforceable. These guys come here and they are illegal. The problem is we can't deport 12 million illegal immigrants at one time. Until we get border security, we have to go after employers who are also committing a crime by hiring illegals. This will help alleviate this problem significantly.
Jonathan: They are committing a crime by giving someone a job? That's an irrational crime. The immigration law is an irrational law. Picking cabbage for $1.50/hour is not a crime. These people are great benefits to our society.
John: Most companies have a "don't ask, don't tell" policy when it comes to immigrants. I grew up working with illegal immigrants in Texas and they were good, honest, hard-working people, but our problem now is that we have to stop the flow of them coming into our country because terrorists and crooks are also coming across. We have to stem the tide somewhere. If that raises cabbage prices, then so be it.
Jonathan: Many people say, "I don't have a problem with immigrants, I just have a problem with illegal immigrants." Believe me, they don't want to traipse across the desert to try to get here. If we had an Ellis Island in San Antonio or somewhere as we had in earlier last century, we could have illegal immigration and let it benefit our country.
John: They are breaking the law. I am for legal immigration, but I am not for deporting 12 million people. They've got to pay into the system that they are draining. The only way to do that is to get these guys to register with the government and know who is here.
Jonathan: It's a little disingenuous to say let them come legally, but then make the process of legal immigration so unbelievably impossible.
John: That's a separate topic, Jonathan, and I agree with you on that.
Jonathan: You're advocating private industry becoming deputies. You're basically deputizing CEO's in this country.
John: No. I'm advocating that people obey the law.
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