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And Fox Business.
He had the president on Tuesday.
Is that we elect come to the president that the yes.
I'm outside get to see yet.
Did -- back at noon.
I guess do I would take its second except that I and you didn't know I was up this morning have a good on the day busy earnings day -- to do it.
-- -- Yet now it's everything's going great yeah we've been doing and what the web show and I morning also with our friends so that's Atlanta fun content if not an island.
Let -- -- and yes today that Larry King.
-- -- -- -- -- -- The William and -- that Syria was -- -- part of the description that he felt like you arrived because you were in the -- Larry -- well without really Larry King now rob Bartlett imaginary thing but yes -- -- and I really arrived yesterday.
I don't think we -- relegated to that agreement that's suitable for the web even though one -- -- entity.
It's a little risque and it was -- -- -- that's that there was yes there were actually having a lot of fun in the morning with Imus and -- what shows so -- funding by the -- -- in the morning is the -- -- -- -- of the same crew in the morning.
You know I'm absolutely.
Up -- not in Nebraska loyal to assure us absolutely they're up at the moment I did that it is we love having -- so an anti somebody was.
Watch generally Jenna -- brother I think was -- Bobby Nebraska actually was out of this Watson and faculty -- -- do bundling.
They lost last weekend and had a rough a little bit of rough game and I'm asking him about that well you know.
So we're hoping everything goes okay for Zach this weekend because he actually got taken out of the game at one point -- Yeah.
We're hoping that starts this weekend accidentally on from there has got other things to talk about the right to markets -- -- Stand even watching this all morning Europe clearly up and Adam I mean it's a lot to do with.
A little bit of everything these days we got going on weekend economic numbers we got.
Earnings disappointing although caterpillar.
-- Yeah it's more the economic data so far today that's turned to slower than anything because apple was a blow -- number last night at caterpillar was great this morning I mean you could say the -- a little light and add another numbers but the once the -- of the PPI was as negative as it was in the housing starts for disappointment at 830 -- -- -- that started to come out.
That's we start.
So we knew that there are way -- week that this is really going to be weaker housing.
Although that hasn't this week yet nomination up culminating on Friday -- that big number so really watching housing numbers and and unfortunately they're not all.
Now they weren't great housing starts with clients and you -- We'll talk about that we have a lot more coming up Andrew -- -- that cover story in Barron's over the weekend about.
A fed start raising rates is gonna be here Bob Brusca -- That fact and opinion economics speaking of superstar writes all the will be here from the -- conference out in California PB's coming on Peter -- so great lineup -- -- -- No problem doing that Larry it was just -- Starts us off from.
-- financial planning services -- -- today to see you Larry what do you think about -- where we are here in this it in the market environment.
Especially with regard that.
You know the negative reading we had on wholesale inflation this morning which seemed to be a little bit of a surprise to some people have been on the earnings are pretty strong.
Well you and again a lot of the earnings that have been coming out and mainly due to a lot of cost cutting measures a year over year revenues down and and what we're starting to see with the PPI coming out negative this morning is is just basically.
You know less and less demand at the at the end line consumers.
What what I think -- what we did get out of this number is that this whole notion and all the talk about deflation.
It's kind of done right we're not seeing -- police -- much at all now.
If any of the concern going forward would be inflation but this you know we every now and -- we get people coming out of -- saying you gotta worry more about deflation.
And I think this number kind of prove that that's not so much anymore.
I would agree that Tracy you know one of the things that the Fed has been doing is is is making -- increasingly here's the economy over the last year so very.
Very easy with with Loma with low rates and and all the stimulus packages.
Because deflation is a big threat and I think the consumer when we get through the end of the -- season here is that is gonna prove to be somewhat adequate but not overwhelmingly strong.
And and right now we're we've we've basically stop the the free -- of the economy if you will we're just starting the stages of economic recovery you know we need to see some jobs come back we need to see bank.
Start to land and that's really the -- hurdle that we need to get over you know it's interesting we're gonna talk to Andrew Berry about -- about his article saying that the Fed should begin raising rates.
And it's got a lot of talk last couple of days as to you know when does that discussion start to happen.
And is now the time to the Federal Reserve to start that consideration or are we nowhere near -- yet what your view.
-- one of the biggest threats to anybody's retirement plan and our firm works with a lot of retired people.
Is the loss of purchasing power so inflation is a major concern in everybody's portfolio.
I think it's a good conversation always have on the front burner but by no means should the Fed start tightening but right now we need to see job creation happened first.
Without job creation consumers not gonna come back.
Two -- warned that consumption which is then gonna start the the inflation worries so.
I don't see the Fed really starting to tighten or pull back any stimulus for for several months to a year from America.
And -- -- have a -- and again we're gonna talk about this more but based on their balance she.
Mean to raise interest rates right now would almost.
Become -- contradictory.
But so going forward let's -- about what you like and I know in your talking points do you still like overseas even within the next couple years.
International plays as opposed to domestic equities can talk a little bit about that.
Yes yes yes I do like that Tracy you know when you take a look at at the rising middle class around the world.
They don't want to go backwards they they are starting to consume more more just take China for example.
You know their consumption rate of their consumers about 35%.
Of their GDP here in the states where 7072%.
So there's a lot of of consumption is going to be happening over the next the next several years or so in China and the emerging markets around the world when you take a look at.
At the fact that that.
The consumer spends most of their money when they're 47 -- fifty years of age.
And you take a look at all the baby boomers that are that are getting older right now they're they're starting to the -- back their spending and I think companies.
That are mainly selling to the American consumer.
I'm gonna see their top line revenue growth decline over the years and that's why we like.
Companies that are working not only America but around around the world as far as earnings go -- -- -- It in a lot of the big multinationals that are even reporting -- might -- -- and I this morning.
Would be an example of that but also more consumer related companies and is it just to play on China are there other markets -- really.
Are attracted you that you would look at the companies -- that they're operating in some are not America or origin.
-- other parts of Asia or Europe and and and you're playing it that way what is or to just China.
Now it's it's basically everything that -- mentioned Connell we we we do like China -- like Brazil a lot and -- and and kind of what we're doing and in our portfolios with the -- with the emerging markets sector is we're getting some broad based emerging markets have been going deeper into.
China and Brazil a little bit.
Parts of the days that US companies that operate over there are -- buying with the native companies from those countries.
Or ETF mainly -- Who mainly some ETFs and -- on base like that you know cut.
So that so it's pure international play it's not multi national place right now.
Let's say if I'm trying to the -- looking out next couple years.
You gotta believe the domestic equity market is going to come back what sectors do you see coming back first.
And a lot of responsibilities been put on the -- sector right now it is certainly holding its own it's not ride into the case and all that much.
-- -- you see the quickest turnaround here in the states.
Well we we like tech we'd like to -- for for some time we also like financials.
You know back in March this year when when congress started talking about how changes to mark to market accounting we went pretty heavy into financials and the dollar cost averaging along the way there.
We also like basic materials and some of our recent purchases.
Tracy have been in the basic materials sector simply when you take a look at the economy declining the way it has.
Sort of getting along the bottom and scraping along here is starting some sort of an of an economic expansion.
Basic materials comes in the place who recently when purchasing in that sector.
-- make sense site and in a lot of ways but the US market.
You know we're right around almost almost 101000 even as a look at where the Dow stands so it's -- it's it's like.
We've had a huge run off the lows and we could talk all we want about emerging markets and all these other places that we might find growth but we've had plenty of domestic equity growth at least the last six months and and you wonder.
What's next here.
Well that's just -- I think the market is trying to find.
What's gonna -- of the next 1012.
You know 12115100 points on the down and what's gonna rise the S&P -- -- you know 712% over the next year.
I think the markets trying to find some of that that that data out there.
And as we start to see that the the consumer come back into their spending mode.
Taking away from the government stimulus holding everything up what we effectively need to see is it is a handoff going back from the government supporting everything.
Back to the private sector right that's what we're gonna start to see that probably -- second half of next year by the way that we can talk about that a little bit but -- the consumer going back -- the spending mode is that what we saw last night from apple because we were having.
In the debate on the morning show this morning -- discussion about.
Well it does that mean that consumers are back Apple's numbers and indicative of that or is it just a one off that apple itself this is such strange animal that it's able to our.
You know it's it's apple but out or or or was -- -- larger message in that report last night.
Now I think -- I think apple has a new technology there's no doubt about it that that is a leading leading that that space.
And a lot of consumers are seeking out their particular products -- you have to look at the -- that the breath.
Of the consumer spending.
You know a whole conversation.
So a lot of money have been directed at apple and and -- -- the numbers out which is which is wonderful but then you have to step back for a moment take a look at the overall economy say.
How is everything functioning.
You know it it's just not all apple we really have to to look at all the numbers across the board there.
-- we've seen people.
Online for days who can't make their mortgage payments but they're there again meant a lot on its troops there's a political one up there before we -- to break.
Where do you think this market's -- -- be then by the end of the year up or down.
I think it'll be slightly up from where it is right now.
That's something that's nice holiday gift and you think of anything to do with the fact that people might come out this holiday season and spend a little more.
You know that's a great great conversation Tracy last year a lot of grandparents were not able to deliver a lot of extra Christmas present to the kids.
And there's talk this year about grandparents say we're not -- -- -- Christmas is in a row.
But I would say this I would really focus on on companies that or are on the consumer staples section rather than discretionary sector.
When it when it comes to spending.
Larry thank you very much for your insight lack Roosevelt president finance -- claims service is down in DC.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But major -- variances of the talk about that controversial cover story from over the weekend next up foxbusiness.com.
Welcome back Fox Business black McShane -- -- -- in place.
Chris caught -- we both sides.
Well it doesn't concern for Chris -- well being we're not sure he's those terrorists over he's.
When we're helping we haven't heard he's been gone for -- -- on Twitter -- know.
And he's so you know that he -- into the radar that I make fun of that but -- -- -- that -- I watched the show -- sometimes the gym now and watch the show on my iPhone under the you know -- this dot com live -- live on iphones there.
-- -- she almost self promotion are -- -- -- from six to nine.
By the way if you as the nobody should join us in the morning also on the web from six to nine on the iPhone and them.
And who and I pulled and -- and others -- -- act theory Barents.
Who doesn't especially after this weekend's cover story and the author of a cover story in your bag is here with us right now associate -- it is the -- -- I superstar.
Came out basically calling telling Ben Bernanke what to do not -- -- wake up smell the coffee and start raising rates.
-- the crisis is over in the economy in the markets and dad may third zero right now short term interest rates and.
-- could be fueling inflation it's hurting -- dollar foreign credited -- unhappy.
We think it's time for the Fed to consider -- rate rise to one or 2% which would be still be very accommodative but would be a not crisis accommodated.
That's -- -- setting article that the Fed lowered rates to these emergency levels when we were in an emergency it is no longer an emergency so they should wake up and do something.
Inflation argument is a tough one though is -- -- we haven't seen signs of inflation yet meaning -- inflation.
In -- created when people get up and start buying stuff and right now people are still in shell shocked mode and they're not doing anything.
-- consumer prices have risen the past two months have been writing about a three or 4% rate while that may not continue.
I think you could see inflation to a 3% next year and short community to zero are way below that and you might think they give -- inflation is.
-- sure to make to be 2% right now.
We've also seen them ignoring the dollar that -- big concern that our dollar keeps devaluing.
And we don't really have much talk from DC about doing something about it.
I think -- -- the Obama administration the Fed day -- that we want the dollar of the debt you know help the economy figured -- Boost exports and -- create jobs potentially and they feel that the dollar won't go down that much -- that they can kind of finished this whole thing.
-- interest is a great did have this discussion we talked to earlier housing starts came in below expectations this morning -- -- reading on inflation on wholesale inflation.
PPI -- down unexpectedly was down six tenths of 1%.
For the month of September and do it that you know would give you decide that hey there's not very much inflation out there at all we keep these rates.
As well as they are for an extended period no it won't mean a -- wholesale prices are volatile month to month you -- oil prices rise has conceded -- also priced gasoline prices have gone out.
And I think food prices may may start to -- more -- -- -- I don't think inflation data being -- deflation argument did very hard to make right now given what's going on in the world.
And I think the -- I recognize that the conveyed based on their -- based on the deficit out there can actually get away with raising rates.
Mean -- they can do what they want I mean I don't think I think I don't think it has much impact on the devastated or on -- on the economy really I mean I think that.
0% short term interest rates have basically been a boon to financial speculated the Smart money sees the dollars and one way trade down.
They seek my and one way trade up and so far it's been a one way -- up and stopped and I think -- fostering and I think wolf we've benefiting.
How much damage means -- really getting help by this asking our viewers what they think it's Simpson now don't raise rates yet some Mike Tomlin -- -- say -- raise rates and lower taxes and an apprentice he's saying something that's interesting.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- I think one thing if -- ignoring you favor the nation's favorite.
-- in an elderly who saved all their life and maybe getting routine nothing on their money right now right and I don't know if they shouldn't -- that the government argument does in the overall.
-- again and more more by Geithner than by Bernanke but is that hey we're gonna do more rather than less than times of financial crisis -- past crises here in other places have told us.
Is that the government has to err on the side of doing more not less and that means accommodative monetary policy would think and more fiscal stimulus in these types of things.
They they they would rather do more.
I think it's right or wrong on this thing that's the read on what they would rather do.
Did that do less -- that you think they'll leave rates low for a.
I think I think they probably will lessen the dollar crisis -- commodity prices coming to basically forces their hand but.
You know used to be either one or 2% sure to me if -- be.
Extremely accommodative apps and you know for a long time greats never went below no one -- 2% and -- notion that somehow.
One -- 2% -- raids.
Are restrictive in its gonna continue economy I think -- the far fetched idea and I think.
Worried giant debtor country right now are creditors are unhappy with a -- the Chinese OPEC countries -- seeing the value of their treasuries decline in dollar terms.
And that the Fed doesn't seem to care about that.
But we got two questions how soon would you like to see rates up and how soon in reality do you think it's gonna happen.
And I think whoever rates ought to -- anybody and this year they ought to be 11 to 2% by the end of this year I think the markets he definitely I think the markets don't think that.
You'll have a 1% short term rates until a year from now trying to get to -- that's.
-- -- -- -- To know 2010 at bats -- -- ten -- one -- 101% in May be 20112%.
Which I think -- -- -- -- -- -- the -- gonna have to move sooner -- the economy gonna go to that a 3% -- if they don't have that -- -- economy dead.
Merit is an announcement notes.
-- accuracy growth this quarter reporting and follow up -- hopefully we'll see what happens.
Thanks it is you and you very associate editor and they cover story this again.
Alleged -- -- -- it -- -- the.
Had to -- all right.
You're making people think there's no doubt -- ever asked question because that's that's really -- -- this whole thing is trying to decide when -- -- study offense interest is not if you can raise rates but it is win and to expect my we're talking -- 12% when I talk about seven or eight I mean this is not these are not.
Astronomical numbers right.
That little bit might actually stave off inflation and today.
-- -- -- But they're not gonna do know that and it.
The Manila and that was kind of the point those you know that that a lot of people -- is that -- -- we could talk about it but they they're just they're convinced that that's not the right thing to do this that's all right.
-- -- but think Bob Brusca Bob Brusca of fact and opinion economics for his chief economist for the maybe we could stop talking about it and then maybe they'll do it hard when you talk about models on the -- -- -- -- -- On this exciting game.
It was that was great last -- migrated here and give him it was the great -- it was as some of the game before which I I said the size it up to what's Saturday night game.
And I said that it was over within 24 hours when I had wake up for work on Monday.
Night -- that -- anyway.
-- a tiger fan I didn't enjoy it much -- and while that's right now while.
To try to tough city for a lot of reasons than that -- -- was actually a bright spot.
Should -- -- -- -- we can we just continue this discussion with fear another economy the tigers shouldn't I think that the Fed kitty there.
For you that I don't I don't think we're there yet I'm.
I think a winning you have to -- -- well I think the thing you have to think about is that.
When the Fed begins to raise rates in the markets expect the Fed's gonna raise rates and expects -- gonna raise them again.
And so market rates begin to go up one the Fed -- its rates and it's very hard for the Fed to modulate the whole process and I think it's too soon.
To put that in place to take look at the housing data -- you were just talking about housing.
Yeah the starts numbers.
You know they were they were up on the month but actually -- was the same place without that where the month before.
Because of the downward revision so.
And if you look at the data across regions housing is actually very flat at come up from the bottom but now the regions have flattened out there isn't really any more upward momentum.
If you look at the big bad -- I'm housing you have there's this tremendous drop and then this ET TC -- see little.
Increase at the bottom that doesn't have any momentum left to it right so.
We're going to be -- the housing credit pretty soon.
You know any boxes facility -- are -- My -- -- -- what we know about right but what about as as you know current situation we're losing the housing credit.
Can simulate a fight and what that credit to keep going right -- -- was just a bobs are optimistic economists think that we needed optimistic economists lately.
Anyway we've called Bob and he even says it is that this I think your recovery can be optimistic that you still have to look at the facts and the facts -- housing right now aren't real positive.
Write him off on that and you've got the negative policy shot coming people looking -- the -- potentially raising rates at some point.
-- -- the economy doesn't pick up housing isn't going to be underpinned by very much so it doesn't strike me that that this is a real propitious time to start raising rates because.
No other sector of the economy has really come on -- manufacturing has a little bit of -- momentum.
The last I SM report on services that survey showed some improvement in services but.
We haven't seen services jobs and I really think you've got to see some thing -- to -- him you gotta see this this is or you've got to see jobs coming on stream.
-- can't raise rates on nothing.
You gotta have something.
Yet we have nothing -- -- -- like a daily weather Sonya I think in particular there's been no talk of the dollar and EE.
I've noticed it in Ben Bernanke's speech yesterday no talk of the doubt whatsoever.
It seems that they're not talking about it at all down there in Washington and I'm not really sure why now I do now we've had people -- say.
The dollar has been devaluing slowly over the course of years it's not new phenomena.
The same time.
You gotta believe it's -- get to be a point where -- insane amounts and then -- got fit his -- -- not anything.
The Chinese currency the holding its value better than other currencies -- dollar's decline against the currencies that are probably should decline against that's because.
It can't decline against the current season should decline against the China's currency.
You know call out the -- -- -- the renminbi you know if you -- -- -- it needs to -- the -- that needs to -- more.
And they don't want to do that on the other hand they don't want to keep buying dollars which is what they need to do not heed their currency weak.
-- the Chinese have Aaron Aaron a conundrum and they've got to decide what they really want to do and right now while they're sitting dollar -- -- sitting back complaining about everything.
The fact of the matter is is -- all the time that we have run this this this horrible.
Strong dollar policy we haven't ever done anything about it.
So this is just this is lip service that's all it is.
And when you take a look at the problems in the US economy we've got a big current account deficit and how do you get rid of it we get rid of that really.
It two ways you know either you let the dollar declined to become more competitive you kick out more export to -- imports.
Or are you run a recession if you -- a recession and imports collapse and you trade deficit well collapse then.
I don't think anybody wants that solution and I think that's a good solution you know until you pleases you could get other countries to grow more right.
You couldn't get them to grow more you could get them to buy more US goods as well as what Bernanke was talking about -- his speech well we can consume -- they can consume our.
You know kind of the -- -- -- solution again that any evidence that that's happening the key point in that they talked about it they kicked it around.
And they sort of give lip service they think gavel kind of try to do that.
And it's like your kids and -- -- data did my homework we'll.
China is making this transition are trying to from a -- beef export driven economy to trying to finally have some consumer demand back that up in this.
Promise of that the Chinese consumer billion strong.
Being there and drive world economic growth has been talked about for a long time but will it actually come to fruition.
In the next.
I don't gonna check I don't so much evidence of doing that they still basically have an export.
Driven economy so that's all high and ten and -- and Japan has an export driven economy in Germany has an export driven economy won't look at.
If if some of the biggest economies the world and out of export driven economy somebody's gotta have the imports.
And that's the problem -- problem right now is that the US has got too many of those imports and we need to figure out what to do about it and if you don't do anything about it the president actually files on the dollar that's what happened.
Don't think it's about as clearly no one -- let's face it one.
Internally doesn't seem to know answering -- -- -- -- most savior that comes to that you know.
You know I think is about both the foreign exchange market figures it out they figured out.
That's what it obviously having all the talk about how the dollar -- in the week is that funny because I if nobody is gonna do anything what else can happen but the dollar -- weaker the public can happen.
Yeah but the good solution that -- of the alternative what's the alternative the alternative is that.
That it doesn't get weaker but we have another classic recovery of the US economy you know takes off we have another import boom we have an even bigger.
You know current account deficit that we had last time.
And we have now and I'm now another crisis gonna get what we have even more dependence on foreign capital flows may definitely worth an area.
Much worse scenario -- -- I think that this erosion in the dollar is actually good it's something that is healing something that needs to be healed.
And down as long as the doesn't fall you know too fast I think that infected the -- and I think and it makes it clearer you know where the burden of adjustment really should -- The US I think US could do more -- -- -- we could adopt something that none of us really want to putter got the consumption tax then they talk about European found the AT.
Right and -- that would really cause people to stop consuming a lot which would cut imports down a lot -- You know and and that and it doesn't penalize your income you can -- all the income you want but when you -- to spend it and you pay your -- -- The argument to those is that it's regressive tax and it really -- the middle class more because they spend more of their money on consumable goods.
If it could you give good attempt at food you can exempt certain kinds of you know lower priced clothing items -- there are ways to poke some holes and it -- also.
I think some of the -- -- -- raising capability maybe you can do some of that.
And actually make it very effective.
Felt like I don't think it's something you can't -- and I think the problem basically is that Republicans hate it.
Because they know it's such a powerful revenue raiser.
And you put that kind of revenue raising power government's hands and you're never gonna stop government from growing -- -- is promising counter argument you know the lap and then.
I don't know -- happening now that we need to do something that I know that that is a powerful remedy -- you know it's a little bit like a baseball player taking a steroid you know Richard Nixon would say.
You know -- it would be wrong -- peaceful.
-- -- these -- unheard of thank you I've -- good to talk to you Bob -- with the sun today but this is stuff -- glass half well always.
I speaking of which -- so that's coming up from out of the Milken conference payless yes exactly it is very optimistic guy in California.
Peter Barnes is gonna try to extend Tracy's home buyer tax credits are looking forward to that everywhere in our that I since Chris -- started a new segment on what -- his -- to them that they would -- my.
Today next foxbusiness.com -- I look back -- -- isn't flat at 12:30 AM East -- that means it's 930 on the West Coast good morning to all of you out there Dow's down about 78 points right now.
Mostly on economic data today we've got some pretty decent earnings open ports yes sellable -- -- -- -- -- lot -- were -- -- that.
Important 101000 mark though.
McShane is here today and he is going to tell us what -- his.
There's a new thing you got started to sticker over the show we can't drive -- just.
-- -- -- -- -- -- -- -- So yet -- -- -- being here to tell you what caught his eyes -- tell you -- well right and Cotter who as we know is stumbling around drunk somewhere -- we don't know what areas -- -- that we don't of that that would combat missile Cotter.
-- -- this has saints you now looking homeless yes anyway you know I tell you what you know what actually cut did you -- to our friend Stuart Varney.
On Imus this morning this really caught my -- in the best thing I've seen our network all day today a -- so Stewart's on -- Stewart's great by the way Atlanta one of my favorite people.
And he's and I -- this morning any and all I saw was him blather on about the economy in the normal stuff -- caught the end of it.
Talking to him afterwards for awhile and everybody was telling me that was there SARS coming -- to do my report.
That how great Stewart was -- city is fine but he's talking about the company's that we'll deal with.
But so that I went back and I watched it ended the beginning of the interview was great people should watch the latest on our website to dig it up on the on the video section.
He went on and on he did you know he hitchhiked around Europe of around the world for four years and somehow stumbled and -- ended up in Hong Kong.
And then always wanted to go to America so four years after.
Hitch hiking around the world he gets to San Francisco and applies for -- job -- is -- random job opening its televisions.
Newscaster could start a job and ends -- getting the job of randomly was in business news and that's -- -- got to start -- He's -- around the world that in the British peace corps always random blood London school.
So does all these amazing things but I always.
He's -- great but I tell you with that British accent he could gone and recite the -- alphabet and the well listen mom -- and that was -- that's why they had in mind.
Glad you brought that up that's exactly why they had him on a joke -- lies on the other dead -- and -- happen to be when I was up there they started talking about Imus and and Bernie and and and now -- start talking about how.
Imus had been watching Stewart the day the Dow hit 101000 stores on of course next hour in the 1 o'clock hour network until it was on the exact moment and he says no matter what the heck Stewart says.
It is believable and authoritative than -- and you know no matter what so that was their theory going is -- they booked -- literally by the book the -- they brought a piece of copy with something.
Some idiotic story on it and -- highlighted and they made Stewart read a lot of -- down to prove that if someone else.
-- -- it useless if Stewart says it.
Actually from Jersey I could recite them magnet car and it would still sound that exactly.
Speaking of authoritative Brian Sullivan joins us now from out in LA would you agree that -- -- -- conference that that's -- the most authoritative person on the network.
-- -- -- -- -- I would agree to that yet.
I think if he.
Hasn't gone out there how's the -- now deal and I said that very supportive very authoritative -- there -- no authority of what you just said but that's -- how's that -- the -- -- deal out there when he learned.
Learned Californians -- a lot of problems -- I mean that's already here I mean first off this is what's called the state of the state conference but a lot of Milken Institute -- Los Angeles really it's a one -- Think tank.
Lot of different panels some great guests and great people here.
Try to figure out how to solve the problems of California -- mean the idea being is as goes California so goes the United States.
I don't think that's is true is it used to be.
But still it's the most populous state I mean it is the fifth biggest economy in the world to me put it this way guys if California were its own economy he would be a member of the G-8.
Huge so what kind of your ideas to the size and scope of California.
So Brian what's the game plan out there because you're right it is huge state it anchors our country we look to it for guidance and examples.
And it's kind of a big -- so what what are they doing to try to improve this.
-- that's that's you know right now they've been cutting costs and governmental level but it's only been a small sliver Vista got a 26 billion dollar budget gap you've got to solve.
Course a got a real estate crisis that is ongoing here.
Really what it comes down to for the -- that we've had on we interviewed John Chung the comptroller of the state of California.
We've got Gavin Newsom coming up a bit later on they've got some great guest coming on.
The idea is that we've got to get jobs going because it doesn't matter how many mortgages you modify.
Or what interest rates are.
If you don't have a job if you all the permanent long term job you're not gonna by -- not -- -- car.
You're not gonna feel economically sound and you probably gonna be a bigger drag on the system.
-- a net add to GDP because if you're not working you're not paying income tax and sales tax -- -- you by.
So it really comes back to.
The job market and how do you do that everyone's focusing -- young green -- that's -- we just ninety's.
Well it's nice but the problem is this as we discussed with with -- venture capitalist guest earlier on today on Fox Business he said listen.
We come up with the ideas for green tech here we develop the technology -- patented technology.
And then we build the solar panels in the wind turbines in another country we've got to start making them.
In the United States and in California -- British -- and -- ideas overseas for cheaper labor the problem is that the jobs are not being created that's.
And point that the -- -- -- because that it is you think intrinsically.
Green jobs California like basically put the -- and on green technology.
And yet we're not we're not helping them create these things so they need.
State tax credits to stay in house they need that kind of those kind of benefits to encourage people to manufacture in the state.
-- -- -- terrifying statistic one that give we heard from Erica McAfee McAfee capitol this morning.
So how many people live in in the city California what is it 4050 million people -- like that right.
How many people do you think hey what's the number of people who pay half the income taxes.
-- -- say 4050 million population what absolute number of people pay 50% of the income tax in the entire state.
I'd -- the top 5% 10050070000.
Paid the top fifty what they got 5051.
No no no they don't -- the topic did they pay 50% -- the end of the accessible only Communist state a forty to fifty million people that's right.
-- out so that's what I guess what -- counsel a lot of those people.
Well hello illicit or my parents right I -- I grew up I grew up here I was born in Los Angeles and we moved around a little bit moved out of San Diego and in 1985.
My family packed -- got to you all and -- to Virginia.
You know my dad my mom both gainfully employed -- in California you know my mother.
Not to -- you personable my mom you know you never finished high school -- -- California and she's a teenager.
My dad was in the navy got out -- San Diego like weather stay here you know that was the California dream right they met -- love had me.
Fell out of love after having me -- and obviously.
And and you know and then they moved you know that was the California -- and what's happened is that even -- population is growing in California.
The people that are producing -- -- starting corporation starting companies they're moving away.
She got more people that need assistance and fewer people to give them.
That assistance and so the problem is how do you solve that right you've got I mean my take nobody cares I think but.
You know it's got a lower taxes you've got you've got encourage people to start companies to stick around and to build stuff.
Right they haven't -- stuff we had to jump into the and a big illegal immigrant problem.
That's what I'm saying session had me on the left -- to be top of the list.
I'm sure it is that's probably a little more of a political hot button and then now this you know dull business -- willing to get into.
You know I will say that you think about it if you know we have a high percentage of people who are non citizens.
They're not going to be paying income taxes right now that's why there's been -- call for of that.
Because the idea being is that people who are here illegally or people that are you know committing -- -- -- living -- gangs whatever might be.
There are gonna pay income taxes right how much what's income tax rate on a dime back.
However they will buy stuff they'll buy cars that might close the -- so if -- -- if you get him.
Higher sales tax -- maybe reduce income taxes you might go the capture some of that underground economy.
Which has been estimated as much as 15% of the -- California economy completely underground aren't so and raise tax makes Jersey looks pretty good doesn't it.
If I -- you -- -- energy and hope.
-- -- I've got out of there I felt I have -- content.
Conference and he's gonna have guests on throughout the day is immune some of the things that -- -- peoples and just go there.
Gavin Newsom one of them.
Talk about scenes yes date of the state is not so hot anyway we have our market movers today that we're looking at that stuff -- it I mean we're down ninety but there's a lot that's happening apple of course was it blew it out of the park last night.
Selling more -- -- and that is the Mac computer is helping these numbers it's been over the years of course iPhone clearly doing well to Raytheon numbers crazy iPhone but apple on fire.
Caterpillar we talked about moving today really because global.
Revenue numbers not so great although again beat estimates the bottom line and the outlook -- great but lineup out there and but again on global write my guess that is global absolutely.
China exactly -- -- shares climbed about 5% earlier actually after the -- little -- pharmaceutical company initiated clinical study of an H1N1.
It is the -- -- guys at that time they one trick pony there.
Pretty much a winter it is absolutely -- -- cardinals flew them all the way it should be as opposed very.
And UAL parent company -- United Airlines moving today.
Put -- in our third quarter loss because of falling.
Fuel prices and I just have to say that was very inching every day Alexis Glick had gone.
CEO of Southwest Airlines.
Gary Kelly Gary Kelly an opening -- -- interviewed him he is already hedging against.
Fuel prices going up going forward and he won last time.
Well in the master pitchers for years -- did so well it's why they were profitable airline and everybody -- bleed money exactly then -- mind you it doesn't always work they.
That -- got to learn that -- buildings there and like buying high when you are already going forward.
UAL benefited from these prices but may we all can take a lesson from.
Southwest we're gonna hot to break right now and then I get to tell you what -- -- when we get back.
-- analysts saying -- you can get -- all over the place on Twitter at the end live you can email us at the end live at foxbusiness.com.
And of course you can download our podcast on iTunes and watch and -- -- -- In line in the that's -- -- that who is another great one of this and normally shoot 69 so it's all this -- programming -- -- does this stuff that you say you wanted somebody to extend your home buyer protectorate.
Maybe people aren't it weren't sure about that Peter Barton.
Yeah Martin's home.
We need this to be extended to not just first time homebuyers to all of us -- Tracy -- And then you can go up on the it's gonna it's gonna happen.
Haven't and it's gonna extend but like when it expired does it just become a one wrong.
Well what at a minimum they're gonna probably extend the 8000 dollar tax credit for the first time home buyers but the one of the leading proposals out there is from senator Johnny Isaacson.
By Georgia Republican from Georgia.
He wants to not only -- and make sure that first time homebuyers can take advantage of but also.
All homebuyers anybody.
And he testified about this this this morning at the senate banking committee.
And among other things that his his plan would also allow the credit to be extended to June 30 of next year.
He would limited to individuals who make up -- 150000 dollars a year.
And -- couples who make it up to 300000 a year and so Tracy I don't know you might be -- you know -- -- lock on that did you make so much money.
And then Congressional Budget Office the Congressional Budget Office says that extending it.
This broadly to first time homebuyers as well as big and not not first time homebuyers and to those income levels would cost about sixteen point seven.
1000000000 dollars again through next through next June.
Lot of momentum a lot of traction to do that that senator Christopher Dodd the chairman of the senate banking committee said that he would like to see the senate act on it in the next few days and then Shaun Donovan the housing secretary on behalf of the administration said the administration.
Is looking over this proposal as well as others.
Is concerned a little bit about the cost and how I in the form of it but he said that they would make an announcement on it sometime within the next few weeks it does expire November 30.
So if they if the industry and congress and and and policy makers here -- -- get this thing going through the very tough.
Sales season of December January February that's the slowest time of the year as you know because of the weather.
They gotta do this and in the within the next few weeks and it and there's a lot of support fort.
They're trying to figure out how to pay for it whether to just that it that the deficit or take -- out of the stimulus package as Republicans are proposing but it's it's gonna get done.
In one form or another Tracy.
I -- -- my two cents and he's all better but it is a shocker here we go out I'll leave now not have predicted when you look at that it's been.
That by limiting any income that means -- limiting the housing for -- home that you're probably going to purchase so we're talking about moving.
If they extended it and allowed the big leagues to go around -- -- multimillion dollar colossal messes.
And get a break for it they would go do so.
And then you get in this new home you put on it kicks in and you start with employee.
But -- little big -- but they thousand dollars -- to one of those people -- yeah that's I think what it was -- grand you to do -- -- how upset over a million.
-- make something work that you asked about that -- and -- that attend these people -- well our income songs Tracy our good little if you're on TV while the average railing that.
We're spending too much money but that's when you have a hundred K let's.
-- -- -- -- -- -- 300000 dollars as in the top 5% having come so you're providing a credit to probably 95%.
Of the population out there and the average home price is what -- 160000.
This could move -- -- that they say it it's sold -- Xperia.
Houses just -- from the from the launch the program until now so far this year that's about a month's worth of inventory so they're projecting it will sell another 400000.
Under this proposal with those income caps -- -- the 400000 houses extra houses could be sold because of this according to us some of -- -- to -- Some understanding and said this is the house version of cash for clunkers I don't talking to about their military is about as and they said the same note that this.
There's going to be a handful of people that are gonna run out in these middle income homes if I guess I'm I'm biased because I -- there.
Lowering come I don't think it's lower income the average cost the moment America right now the average cost you know is about a 1506870000.
-- I -- -- -- summit that's a middle class home you're right for New Jersey and new York and why it's not and it it can't.
-- -- higher price top housing market you're absolutely right.
But outside of the beltway in Winchester Virginia where you know Brian Sullivan went went grew up our live for awhile.
They can buy a nice -- out there for a 330000.
Dollars and use that and that tax credit.
-- could help a lot.
Is the rich folk like you look at Peter touch with the people.
People -- our world broke and Peter the -- you just make too much money I think and I don't I think at the -- problems both but I I think we'll.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Yeah it's important to understand they have to stay and the house and that's the minimum at like three or minimum -- itself.
Peter by the way to sixteen point seven billion just -- -- lose track of where all this coming out of that stimulus money out of the 78 wells that are additional money we're not another try at a with the -- that are proposed the Republicans would like that sixteen point seven.
To just come out of the existing stimulus package they -- they do not want that they support this idea they just don't want to tack it on to the deficit -- -- let's use existing money appropriated money and you know what they're they're -- They're gonna -- -- not because this thing is very popular it has been like cash for clunkers if you look at all the stimulus programs out there.
They're they're -- couple of that have been very successful and this is one of them.
-- -- thank you Peter I would bet -- this stuff is -- elements board gets her fired up I.
-- me Susan dude is Susan duties in the Virginia housing development authority you wanna have -- with Susan anyone asked you some questions of us is open before I dive and tell us what you're doing for at the lower in there's a low income.
Out there now what is it.
Well I believe you promised to be a little bit nicer to me than you were to the other he has my dyslexia or other parties like young celebrity Obama and yesterday you I.
I not yeah.
Well thank you -- Very excited yesterday when the administration announced a new plan to help state housing finance agencies.
I'm not sure of -- committee with state houses -- finance agencies that each state.
Had the housing finance agency that really concentrates.
On providing affordable.
Rental and home ownership within the states.
And this plan will really help us get back in business and fortunately you know win -- housing.
Wasn't so much in troubled over the last year the bonds that we -- -- about our capital.
Had a penalty associated with them because it was housing.
And we have not been able to sell our bonds in a way that would allow us to provide the first time home buyer of mortgages that we.
Have done for many decades.
So this plan will it enable us -- -- housing finance agencies have a long history.
Providing mortgages and we do have the right way you know a lot of what happened and calls to the mortgage crisis was because people got sub prime -- and adjustable rate.
Loans and they were not able to stay in the hands what we do without housing finance agencies.
Is we make sure there are well documented loans we do -- tried and true.
Thirty year fixed rate mortgages.
We really emphasized things like home -- education so people understand.
The obligation they're about to undertake.
And mostly we service -- line and so that we can do everything we can do to make sure people stay in this kind.
And so Susan isn't it took about new bond purchases to keep these rates reasonable where people go then if they are they -- it.
What I think that they qualify and too where they go within their state to try to get one of these months.
That's a great question the best thing I think for.
Your listeners to do is to go to our national organization's web site and that's www.
Dot -- and that stands for the national council of state housing agencies.
And they can go on there and click on their state and find the name -- information for their and -- state housing finance agency.
I'm in Virginia and -- as the Virginia housing development authority.
And then we can work with them on making sure they know if they qualify what -- limits are.
And how they can go about working with one of our lenders to get -- mortgage -- up.
-- topic that we just finished up with Peter in all seriousness if that's something like that was not extended.
The 8000 dollar credit you have for people galore in come wrongs what would happen in the market vs it being extended and you deal with people.
That this could help all the time and how -- how much of the big deal something like that.
Well I think right now that's very important get that first time -- buyer in the market.
Because we really believe -- and -- buyers will help.
With economic recovery in the housing market.
And didn't want to a couple of concerns we have right now for example there are many communities that have.
Vacant properties because of foreclosure.
And the more we can get those first -- -- -- back in the market.
Purchasing those hands are also purchasing homes have been someone -- can trade up.
To a bigger -- it's gonna be better for everyone in this economic.
This got -- back to the whole moral issue of it is -- -- -- right.
Yeah you know should we be pushing people into homes this is what got us into trouble the last time.
We had clearly no one was checking whether or not you had a shot or pulse and they gave you -- mortgage back in the day so.
Here we are again trying to get people back in homes are we creating you know bubble number two.
And that's the difference and that's with the administration has recognized.
In working with housing finance agencies.
We never dead those types of ones that you're talking about we didn't do sub prime loans.
We did the tried and true is fixed rate.
Thirty year mortgage we made sure that people have the where -- -- to repay those mortgages.
We make sure they understood -- home -- education what they were undertaking.
So the type of -- we do it's not the type -- lending that got us in trouble.
That over the last year -- OK Susan thanks throats.
Amanda -- and I Nokia.
I'm just -- Gregory didn't have I'm very -- -- -- Indiana.
Nobody's saying and I'm good with this Virginia housing development authority I'm -- -- after everything we -- there room for flexible for the work with you that -- I have have.
Right now I I at.
An employer abhor government spending but would you guess I'm I I can't -- -- But this is the one thing that could get this economy going because housing is the root of the problems here if we don't get the housing market back.
We're toast for much longer time right.
-- you put out his credit but you're dancing it's there I just only see you being able things hypocritical got -- absolutely not because you're you're gonna.
Credit -- out to everybody is our notion that just like.
A handful of people qualify.
I'm afraid of what may have -- your eyes until we get to find that out and industrial site that's okay that's just fun.
I had you -- dot com foxbusiness.com live don't go away.
About about business that -- -- -- making.
Just can't -- what it's only down seventy it's Connelly are a little bit not had been with Alex 71 we started and you -- the -- -- at that point you work so hard that it.
-- that that you -- and we're down a lot.
I'll live -- housing we've been talking a lot about housing this is actually a week of housing data at Friday's numbers big culmination of -- -- and it's not all the numbers have been disappointing.
They weren't they weren't there -- -- below forecasts today that the earnings have been pretty good all things considered the other thing is the consumer apple was good last night but in general there's a lot of concern about.
The consumer whoever that is are going in that holiday shopping shopping season Jeffrey Hoffman should know figure to about that yeah.
You did dot com joins us with -- outlook for the holiday season Jeffrey good to see you so you did an auction -- essentially for those and aren't familiar with -- right can you give us a little.
-- -- Sure but were actually a little bit bigger than just an auction site can -- do excess inventory sales for.
Retailers and manufacturers around the world we do it on you -- dot com and auction but we also do it in red tagged dot com and fixed price format as well.
OK so -- so what excess inventory means.
Anything I mean I'm in the market for a -- -- idol look -- want.
Yes -- you know excess inventory exists in every single specially in the retail economy of this past year and every single product category.
Right we have -- specialized primarily in things like consumer electronics computers.
We do jewelry we do apparel those are strengths but we do have sporting goods as well if -- -- what you're looking for giggled some diamond.
Hearings on here and whatnot -- I'm looking are now bigger interest to your wife would be happy this yet is exactly right so tell me Jeffrey over the last.
-- to now safe to say for the last six months what's changed what of the trends been and in the inventory cycle and things like that -- that you've noticed terms of maybe that'll give us an idea about what's -- really gone economy.
Sure there a couple of big -- first of all.
After well you know after -- a disappointing retail season last Christmas season.
And just the overall recession impede consumer spending less the manufacturers and retailers finally got a chance to cut inventory.
You can't cut inventory as quickly -- you notice that you need to because production lines take months to run product out but here's -- statistic Korea.
In the second quarter of this year department store inventories in the United States are down eight point 8%.
So there's less product in the store they've cut back -- scaled back in prepared for prepared for this retail season to move less product total.
So what does that mean for someone like you know if they cut back inventory there's no access.
Well there's always excess there's always access for a couple of reasons first of all.
It's still really difficult especially in a recession for retailers and manufacturers to -- to forecast retail sales.
Sales were down in the second quarter and you know across consumers this country about six point 9%.
So sales declined less an inventory which means they should be able to get closer to meeting targets but there's a lot of categories if you take consumer electronics for example.
There's always excess inventory because there's always a new model they plan it that way they called planned obsolescence as soon as you get your iPhone.
A new one comes out.
-- it's better and we get all the ones that -- on the shelf yesterday drives me nuts as always that haven't we had the 3GS iPhone came out right after I was an idiot enough to by the regular iPhone and right next week followed by the way how does this thing work so -- you did -- looking at.
Parts on the get a cat TV right twenty inch this LCD you just -- -- -- on your marriage so it says it's -- countdown clock.
Counting down to zero I would assume at some point and it's his bid to win -- a hundred bucks and buy it now for 169 and have been 66 did so far so.
That means I can buy right now -- under 69 nobody can bet against me -- that was so that means.
No it doesn't mean they can't bid against you they can keep bidding -- if you look at the quantity typically we might have a hundred of them.
So if you wanna just grab one of them and be done with the -- and and not take your chances of the -- going beyond the level you wanna bid.
You can buy one now but they're still 99 left in the option typically -- and making it will give you way to do it both ways.
That's right that's -- so what do you forecasting for this holiday season.
Well I we always see -- -- forecasting a -- an online sales online sales will grow again.
One of the things that's a really interesting consumer trend is consumers have figured out.
Did the Internet typically knows where the lowest price is and can look at a lot of places for the price of the product you're looking for a plus product reviews very very quickly so consumers are are we think they'll be increasing consumers doing online shopping.
Using the net to find the best product at the best price in the nearest place they can get it.
Good luck and I I think I am and I think the consumer is much more savvy -- he or she used to be you did dot com thanks a lot -- joining us Jeff Hoffman today.
Thank you thank you wonder what Tracy what caught -- -- like today okay -- -- don't have that if I don't I you can knuckles are white from.
-- of the -- YouTube to stream.
Their entire concert.
On YouTube I did see that the entire -- now you have been like way in the front as far as the home using social media at a gunfight with their record labels over it because.
Because they've been so good about it but Sunday's shell at the world -- California for the first time will be streamed including -- dot com or YouTube.
So YouTube pandora YouTube and watch the entire think they're expecting a two billion people to show up.
And at what times -- show.
Well California Sunday is Sunday night in California and I California centric -- on my check yet.
It was a sore point for me that everything would have but did you know they were -- stadium recently.
Best and -- -- to go Friday night show and -- the canceled the show moved to Wednesday night I couldn't go Wednesday.
It's terrible so I missed the shows that I can watch it on YouTube the first concert I ever went -- -- an amplifier for you to.
I -- a -- for the first time person.
How did you change your -- if -- -- around the world and like before that well when he got very political.
In a bunch years there with the whole -- into our human club president but anyway.
The whole point is that look what's he clears about.
The -- that he cares about the world.
It didn't look what we're doing this is cool and the question becomes why go to a concert why even bother standing -- -- fighting if any back in the day.
My ex husband would sleep out two days at a time for Springsteen concert to a -- tickets why pat -- -- don't care where he sleeps and put it best talent if I wish I could expect that the I don't know that you -- it's it's got a -- You do anything now and -- -- the secondly it was gonna make money it's just another not in that coffin.
Of the practically good point I was gonna watch that show think that is actually very good -- -- -- -- -- can make -- for -- thank you thanks for having -- and I sat in the -- Tickets out of the morning from six to nine also on the Internet but this is not come lines.
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