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Take time it's been all work out in the end.
But Dow up 147 points that really doesn't matter that you can't get -- -- doubt that that's way more important right now at least -- most investors these days.
-- you see some good numbers.
Earnings season start to kick up restarting a little bit we -- -- -- runup yesterday in anticipation of Wednesday's numbers coming out -- might suddenly it all ready with that -- -- -- Running up yesterday in anticipate that -- their numbers.
That's your what are they gonna do on Wednesday and are totally lost -- airport it's almost like it's a rite of fall or spring.
We're summer or -- depending on which quarter we're talking about that Alcoa comes out -- -- -- at the very least.
Gives a loss how could still be disappointed.
It's like I when I lived in Georgia every year we were and drought we were like fourteen inches behind the average normal rainfall.
So is there a new normal if every single year you below the normal than the normal come down that become normal.
Is an Alcoa losing money in the new normal so that is why we have expectations and then not doing so -- Let's talk about coffers second -- because it's always known to -- up for what kicks up every earnings season and it's supposedly have been you know best overall representation of our economy these days I'm on that anymore -- Yeah I I don't think so anymore either I mean I guess the fact that same materials name therefore it's a proxy for the global economy and it is a global player.
-- in its industrial space so I mean I guess you can look at it that -- Jeff Mortimer actually might be able to answer that question -- -- share his opinion on that he's senior VP.
And -- investment officer Charles Schwab investment.
Joins us right now from San Francisco beautiful San Francisco Jeff why on earth do we.
I don't wanna say glowingly -- -- cola or we certainly look at them as.
-- the kickoff of earnings season nowadays when it seems like every quarter they just give us a loss.
Well I like your earlier comments about a new normal.
And I am a believer that markets are quite efficient and would and would figure out that if -- -- always disappoints at the whisper number we might be lower.
And therefore in the you'd still a 5050 chance of the stock moving higher or lower after they report earnings -- And I also believe that we're in a bullish phase of -- market so although the stock has run up in earning season.
I'm not I -- I don't can't predict but uncle is gonna do after.
After they report but I I we're not on that went on a bearish -- removed from both sides he might move up in earnings season and also -- move up through earnings season off to see.
But isn't -- -- because you don't actually think the market is ahead of itself most people most of the pundit and we talked to seem to think that.
We've got ahead of ourselves the markets just move into our team -- And yet you don't think so how come.
Well I was at the same question -- -- ahead of ourselves that -- 8000 that's the same question we're ahead of ourselves that down 9000.
And -- being asked the same question and doubt you know 9600 I'm and I'm -- you that far.
None that I know I'm just I Bennett I've been in this camp for awhile.
I think we have to understand what history shows -- that is that bull markets when they begin our front end loaded.
And bull markets give about 50% of the return half of their return in the first year of their life.
So that this violent move awful low is actually quite typical.
And to say that it's ahead of itself it has to pull back if you if you look at back at all phases.
Again you won't see that that that a 5% or 10% correction.
Happens quite frequently during bull market early bull markets but that's usually about an and then the market -- -- resumes you know -- move higher at a much slower pace.
But still tends to move higher over time so I I only might be you know ahead of ourselves and to have a correction sure.
But judging -- via a long term buying opportunity yes -- I'm in that camp.
But -- we talk about the new normal is the new normal this earnings season that that -- -- are set to lol it every company is going to be.
On the profit side and many will lead and -- on the revenue side is we're expecting that the finally come around here this quarter.
You know that is clearly the hope of the bulls no question and that tends to be what happens.
You get in -- again and early bull market phases.
One of them the biggest drivers of earnings is -- inventory control and expense control.
After that -- -- to accelerate and they tend to accelerate both on continued cost control but also revenue growth so that is what the market is looking for.
You know what what companies report as as we move ended you know as we move into this earnings season.
-- all the latency together but that's clearly what the market has him looking for not only top not only bottom line but also top line.
And also guidance going into -- you know now you can companies can begin to look into 2010.
And certainly the comments by senior management will be listen to.
What's it what's interesting though is that and you noted it in your notes that investors aren't -- because everything has changed.
They're still on the sidelines they're heavily under invested.
And really seem to -- that -- missing any sort of rally whatsoever as far as they're concerned their money -- and people have written -- ask us viewers all the time.
Wendy get back and and at this point it almost becomes more the gut check than anything else.
And that that's the ship that is the shame.
That is the unfortunate chain that these are markets we -- you don't get as as investors we've been through two horrific bear markets.
Just in the last decade most people don't get bear markets like that but once in a lifetime.
And investors now been hit with two.
So you cannot blame them.
But is unfortunate that it it forces them to become -- investors unfortunately.
And to not take advantage of the opportunities that exist in front of them.
I tell investors when I -- and speak to them Schwab clients.
And Schwab non clients alike.
And I talk to -- about that -- markets don't give you 506070%.
Returns all the time and so you have to be there to participate in them.
And investors are now waiting for -- pull back and then they'll feel that they'll get back in.
My worry there is that the market never pulls back enough not to get the men and as it as agreed begrudgingly moves higher.
Those investors that are on the sidelines stay on the sidelines.
I wrote a piece back in 2005.
The title was -- where the sidelines.
So even have the rally of 2003 which of NASDAQ was up some 50%.
After a 10% or so 2004.
Investors still -- on the sidelines and I told them.
You know it that's a very dangerous place to be all investments have risk including caption that's loss of purchasing power.
And cast certainly has opportunity cost risk as mentioned earlier.
They -- fall oil trash one of law are viewers has a question about this commodity.
Boom that we're seeing -- today certainly is evidence -- -- -- oil bugs are not on the sideline as they push -- to an -- gold gloves and all time high on gold oil above 71 dollars a barrel today as well.
What do you make of these recent -- Well I -- -- the you can have the dollar the dollar trade as far as -- you know gold -- concerned dollar even as far as oil is concerned but.
To me I'm also looking at them as a sign of global growth.
That rising commodity prices are to -- a a wonderful indicator of a global recovery.
And whether or not there's fear that traded -- and the precious metal side on the gold -- -- platinum silver side.
But also you see copper.
TN -- -- all the industrial metals which also have pushed higher and that to me is is that that China especially emerging markets brick countries.
Are clamoring for these raw materials and it's -- -- to me.
A potentially global growth continues to come Australia Iraq raising interest rates this morning you're kind of seeing that that part of the world perhaps leading.
The global recovery effort and again we'll have to see how that plays out in -- land and over and into the states and North America.
But to me I think that's what's also going underneath -- which a lot of people haven't really talked about so I actually like to -- -- -- like to see you know rampant rise in these prices.
But to me consisting a strong bid under these commodities and oil names shows me that.
There is demand for these products because of growth -- recommend playing it from the retail investor perspective.
-- awfully tough to play commodity moves I I instead look at them as.
I used for stock market direction and strength of the overall global economy and -- a stock market would participate in that as well and so I I just as soon have players kind of stick with.
You know stocks that they know instead of -- moving over and playing a commodities peace -- -- timing NE TF personally catch -- while we're we're fairly conservative get your -- allocation right.
Diversify your portfolio we still believe that's the best way to build long term wealth.
So I'd rather have investors stick to kind of what they know and just use these sides that are going on the background as markers that they're that they're doing the right thing -- What sectors are you overweight and then these days are slot as a whole the swap portfolio is -- -- in which particular -- these days.
In the in the portfolios that we managed we utilize a quantitative methodology so we rate 3200 stocks he Schwab equity ratings to pick portfolios for us.
So we're not sector which we won't really overweight a sector what Schwab equity ratings is telling us however is that.
It it does not tend to do very well on market bottoms so it's a quantitative methodology which.
Has been hurt this year through reversible reversal of momentum that is taking place.
So it doesn't like financials for example.
We have overridden some of that model and actually have made sure that we true up our financial weight so investors who to me are underweight financials because.
They kind of don't like them or there or they don't screen through.
Based upon their individual stock screening methodology.
I would make sure that I have financials -- my portfolio.
The same thing I would say also for materials.
While those suffered during the correction.
They clearly have that as we mentioned -- but earlier some of the leaders coming out so I would make sure that I've I've kind of -- got my materials.
Wait and my financials wait.
Even if I don't kind of findings that meet my criteria there I think you may see that those names we'll continue to do well as they have done off the -- -- Jeff thank you so much for your insights Jeff Mortimer senior vice president and chief investment off -- sir -- sunny San Francisco out you're out.
But not clap not -- that good morning out there to the west coasters Watson thanks Jeff come back again.
-- -- -- we're gonna take a quick break and when we get back I have some.
Moments in history that I have really you know I didn't development and -- audience yeah PC to talk about that.
The PPI heat cool if I would -- is we give back.
-- welcome back at the end -- They're -- -- foxbusiness.com.
Slash live and of course -- at the end live at foxbusiness.com.
You can follow us on Twitter at at -- -- live are you one yet.
No I'm not going to be -- said that about FaceBook and I'm on FaceBook now so as.
You know when you've found the -- picture -- that sense I regret that already well.
To put if you tags I -- join FaceBook buddies from college I.
Look at -- the UN and a tagging and I think exactly is I don't not a running around naked in the you know there's not always hungry children -- -- -- -- care.
You know not enough screen to show the hair from that's actually true unpopular there's no problem that I could you run for money -- some pretty began -- schooled him.
Was just did you dates and they can't -- -- I rest well we're talking -- about the pundits and how everyone what would we listen to and I got a little list for you today.
Nouriel Roubini reiterates his belief that the markets have gone up.
Too much too fast -- -- -- stated George Soros -- US banking system basically bankrupt he's always different.
And Joseph Stiglitz -- Nobel laureate -- investors irrationally exuberant.
We haven't had them yeah I know -- has been little losses we heard that don't give any good news day here at AT and Moulin Rouge opens and has now -- -- it's important and I think that's very enlightening to know what that is what is the rule is we can't can't is that right.
That compares against parents.
I've never been to Paris now Ali that it put and good like that I got a market and they're all games again.
2008 the Dow Jones Industrial Average closed below 101000 for the first time since 2000 war.
He unfold mall as a voice that was shortly after I was Chris hasn't.
What's happened now -- and I and else memories all right I've got -- what I'm watching that anyone realized when I got my -- on on the UN development program.
Hold basically -- it's more of an index.
Of the most developed nations and -- world nations he would most want to live in.
Okay what do you think the US ranked.
In this poll what do you think now well well they base it on literacy life expectancy GDP the US is not in the top six I'll give you the top six it's right now that's nothing not even close number six is -- and the Netherlands number five Ireland that.
Number -- for Canada -- that smarts number three Iceland that.
Number two Australia and number one Norway now I have to put an -- here.
These are based on 2007.
Numbers so Iceland's financial system collapse complete collapse is obviously not a part of this -- neither is really.
The whole global financial meltdown you over the last time.
-- -- -- You -- -- the show of course you know.
Really the person who did this -- -- blondes because every single one of these kind of necessarily fun.
-- -- you would you say -- -- Ireland blinders and nordic and there isn't that -- -- and these are all failed to the end of the wind here's what hurts the mine's not European Italians in the mix isn't what hurts the most headlines while I'm.
Lot of people on the list.
-- Sheets the United States -- thirteenth.
We don't -- -- -- Alliance and has nothing to do with the Moulin Rouge last -- Niger which beat out Afghanistan.
Was really stuck to live in Niger and if that Afghanistan BC on on this list that's what I got my eye on thin ice and that's why I'm blondes.
Bonds I'm going to savings -- -- This is that all right ever bearing -- and -- It's all about -- today and I -- now I think striking out left right.
This is blonde like this is yeah I think that it's unedited footage of the I don't pay a lot of money to come up with a lot on my head there.
I did so we have an anniversary.
We had an anniversary of the tar.
Is this whole thing working of course we have -- -- out there too which is that you know it was supposed to be the savior.
That would ever all the private cup thanks -- gonna invest money into this big pool.
-- was gonna go out one big happy when -- got family and by mortgage backed securities and that's not happening.
Yeah they delayed -- and and -- is working to an extent.
This program it's private public.
Investment partnership thank our program.
It originally was a one trillion dollar program when it was on the drawing board they've scaled -- back to forty billion.
And we actually have some closed end mutual funds.
Applied to the SEC right -- for approvals and so you me and the guy next door.
Should be able to invest in troubled mortgages before this year is out.
I guess that was my next question when all the gonna get started with this thing we do have news here over the last couple weeks that we -- -- on board black rock I believe we had about a twelve billion dollar purchasing power now.
And the PP IP because we've got private investment now.
But win on earth are these private investors now going to be able to start buying these toxic gasses and getting them off these banks' books is -- by the end of the year we thought we confident about that.
I yeah I talked to people at black rock yesterday that that actually have a closed and funded registration right now.
What that means you know what you'll see first is institutional investors beginning to buy these troubled commercial and residential mortgages.
From the banks.
Some of these companies will roll out closed end mutual funds.
And the reason -- closed that this government requires you become a longer term investment of these troubled assets.
It's interesting that -- says these companies put money and treasury matches but then also -- -- dancing.
Yes they did leverage of about four to one.
Which you know in the scheme of things doesn't sound that exciting.
You know but again it's.
In you know if you're like me and you look at the real estate listings in -- city.
These mansions going for have to write -- thank you.
I should run out by that except you know I don't have money for you from happen you know -- Chrysler -- So this is the way for the for the average investor.
To get into the distressed.
Real estate market.
So that you know it helps the vulture and -- -- I just wanted to I had Jim this started as a trillion dollar program and right now Tim Geithner recently said -- he thinks it might be.
A forty billion dollar program that seems to need to be a huge drop in -- -- I just equate that to.
The economy getting better in the last six months and it seems to me like that's a big discrepancy there.
I think it was a policy error in the beginning because.
You know essentially -- when the the financial system started to collapse no one really knew what to do and so they were just throwing ideas against the wall.
And the one idea was to.
Sort of turned the federal government into a bad back -- all these assets.
All the trouble assets from the banks so that.
They would have money so they can go out and start lending and make problems.
Now what treasury says -- is that they -- they realized at some point.
That the banks could raise capital in the private market with Al.
This ridding themselves of all these toxic assets.
I think it's because the government.
Under -- put so much money into these banks.
You know they had they didn't have to sell the troubled loans because they had worked Cashman can actually.
The -- at that time.
I think this program will get larger than forty billion -- Because.
I agree with George Soros -- -- that banking sectors realise significant problems.
Simpson what has happened now going forward in order for this thing to be -- success is right now it just seems to be like.
Bunch of money parked in one place do enough and it.
Well yes yes you know supposedly.
And our investors will buy these troubled mortgages.
And on the banks.
We'll take the cash they receive the proceeds of -- sales and go out and they -- real estate loans.
That's what would have to happen for this program to be a success and and the problem here -- You know banks.
Have a lot of money -- right now and and there's no demand for two reasons first the the banks are overly cautious now.
Because of the creditors so there is -- charging rates that are extremely.
And so you Syrians and small businesses especially.
They're not borrowing for capital expansion and higher.
And number two the consumer if you look at the savings rate in this country.
It it's up to 6%.
And some economists see it going 8%.
So that means that you know people or word or not hoarding cash.
Because are frightened and I had to drag on the economy.
You mentioned France and the last segment by the way.
The favor and rate in the -- Is 16%.
It's incredible he can't.
And the French people right now are miserable -- in their economies is terrible right now so but I but I mean even 8%.
In the short run it's troubling long term it's a great.
But -- they have them run routes and and lie and -- and all that matters timid sea bird the great bread.
Team I can go on and on it's my -- -- and didn't exceed special senior writer our parents thanks so much for parsed through that with us.
Thank you they engine.
Radio city music calls the site of the world business forms of -- an -- that is there yet Shibani Joshi is there.
Yeah -- -- -- could be Iraq get on any other day but I guess right now you're you're dealing with the world this is one right I and we got seats instead of stockings not a high heels a bummer I guess for you Chris not not so bad -- -- Yes right here at the world business form this is the sixth edition of this global forum which actually ranks -- that.
Top global -- in the United States business conference in the United States -- in a burst and marsteller so we're certainly.
In good company where the only business network that is broadcasting -- -- -- guys are getting a sneak peek at some of the stuff that's been going on it's a two day conference.
And the morning -- just broke got Tracy and Chris and interestingly not the topic.
They topics and that that were in discussion today they didn't have to do -- dollar they didn't have to do -- gold or inflation.
Or the world economic crisis they actually the main topic -- this morning with leadership.
-- kicking things off this morning was -- George he's Harvard Business School -- -- he is a former CEO Medtronic I took some notes here he was talking about.
Saying things like never waste a good crisis now is it time for re invention there a couple of other executives that we're talking about.
Talent management and building winning team says that they isn't there is a belief here in the discussion really.
That people are then being a wheel in the way that we're gonna get out of this economic crisis so an interesting kind of twist.
On the topics that are being talked about here today and -- and -- I'm gonna be here today.
I'm going to be here tomorrow and the only way you're going to see what's going on here thousands.
Of executives and leaders and management goes from all over the world the only you can see it by tuning into Fox Business etiquette sneak peek here.
That should be a lot of fun -- body I do think it's timely that that is the discussion topic this morning because you do have Ken Lewis now Bank of America's.
Seeking new CEO I -- temporary -- more permanent.
And you've got the news -- a Chrysler just four months after the total restructuring -- Marchionne putting in 23 new executives to all the law already gotten so yes.
Yeah I think it's clearly timely.
Yes so great because you know it's interesting here is that we sit there are now looking back in retrospect we talk about.
How the financial meltdown happened who is to blame who is involved what companies how could it how -- -- it.
Then prevented but the people looking on the ground are saying it was a lack of leadership in his it came down to people not knowing the right thing to do in the moment called for and that's why we're in this situation that we're -- How we prevent that from happening -- not talking about big Lockheed principles.
Like interest rates in credit derivatives swaps and things like that confounded people and I think it's really interesting because it is really something.
That is easy to understand -- something that everybody can relate to no matter where in the world you are.
That -- money and I've been talking to people.
-- grad school local grad schools and they are changing the program dramatically to talk more about leadership and how this really the crux of -- off.
Right it starts from the top and whatever you are straight from the top -- -- to be on the golf course -- playing cards in the middle of -- crisis.
That's its own that set all the way on down and that I think this is that this is really.
A good -- to come at this as -- posting regulating.
Thanks you know imposing limits on things and doing doing it that way let's talk about the leadership and what went wrong.
I totally agree and this is something that we can all agree upon as opposed -- regularly -- in Morris.
Oversight at -- -- I kind of the hand everyone has a different opinion but what we all -- Agreed upon is that leadership in the people in the teen issues that -- issues that are out there.
And instilling trust in in powering your workforce that -- in those are issues that.
We often a -- -- -- those are very important no matter.
No matter what sort of crisis that we're in in fact this is more important than it has ever band and we got to start from the ground up and now comes down to people and management and -- people that we all live and work with every single day and that's what they're talking back here -- Somebody great stuff look forward to seeing you and Alexis and Liz and everybody out there yet these interviews over the next couple days and maybe Iraq and -- -- of -- I'll I'll bring out a definite.
Finally Iraq and that night.
We love that in my house infuriated thanks to -- -- -- that I don't want to myself Obama you know you gotta think about the CEOs that have been successful here during this crisis are the ones that are precede this.
As such alma lolly -- Jamie -- As you know -- are they successful because that do you view them as successful because they're companies have done a great job in getting through this whether companies gotten through this because they are so successfully -- it certainly is a question.
Now so it should generate sad thing but.
They certainly are perceived right now because the companies are doing better than everybody else and they're perceived Israeli.
That's coming out is between these guys Jamie -- -- keeps learning I mean this -- from bank one just keep moving up the ranks learning everywhere he goes makes a difference.
An -- -- we come back faces got a market movers the market's up right now 151 points on the day -- enjoyed our second great day.
Live continues burns and Cotter Tracy were up over -- 150 points today second day now at least so far that with.
The couple over a hundred points -- enjoying a nice little rally in the beginning of this week after really seven or eight days to the downside what do you got in terms of what you watch in the.
I have to say -- as far as yesterday's move out volume 20% lower than what it typically is -- at times of mine was pathetic today that we are up about a 150 points.
Miniature system check this out the stock with about 23% earlier they're gonna start selling a fourteen day.
Starter weightless -- in Wal-Mart it's genius.
Scene and noticed that plays can be embarrassed and sit there and talk to -- -- -- go by Taylor fourteen day holiday go all.
And you gotta think the golf -- coming along committed fourteen days -- miserable I hated them and go back to eating cream puffs.
And -- -- also get at Wal-Mart so what hurts when when you're right but it's got to be really cheap I'm sure because wal mart's you know probably tightening the screws on its systems -- I -- margin on that definitely that's for sure.
In retail plays a really instincts -- -- got Tiffany's at a 52 week high.
Really did -- guys Citigroup seems to think that Tiffany is going to return to positive.
Profitability everyone's gonna come back out spend it by those little blue box is a limit placed on the flip side you got TJ -- parent the TJX communities.
There were raised to a conviction by Goldman Sachs -- Goldman says.
Everyone is you know we were cut back still Clinton that Bill -- back -- consumer has changed.
So it happens no wonder people and how to -- yeah.
I believe more word the TJ Maxx -- isn't -- either accidentally got Tiffany and I guess you still have.
Our overseas brother and spending.
Activity -- money big -- today is St.
Jude Medical this is a heart device maker.
And unfortunately they issued preliminary third quarter results and they were not very good and you know what happens when -- results that -- and how scary didn't get clobbered and pence.
That's what scares me about.
Even they form innings but certainly.
Medical device makers is that you -- so much on.
The particular product or particular drug passing trials and if it does and if it fails our best to go back.
You -- a huge hit right at that incidents completely out of your control and completely out of I have it any research you could do or anything.
I'm in St.
Jude Medical -- it much more solid company than most to you Biotech pharmaceuticals but I'm with you don't know what lottery tickets -- levels.
Because many times those -- -- -- come out with one product.
And they just pray to god that the FDA and other tests are gonna go through and it's going to be approved and if not -- right because I see that when I I do seven late movers around.
Ten to four every day they can be up over a 150%.
They can be in the toilet the -- All right Cindy for -- joins us right now director of the center for audit quality crap about consumer sentiment have an investor sentiment as well you're sitting welcome to the show.
Thank you very I SNI tracing the center for audit quality -- C -- -- -- now wants to make it quicker fly you guys release its third annual survey on individual investors in the confidence their confidence level.
Right now and you found some surprising things didn't you.
We really did this is the individual investors that the proverbial man on the street as opposed to institutional investors.
And what we found in our third year is that after -- dramatic drop from.
A most seventy LA.
Confidence has now leveled off so last year confidence in this group was that 70% and this year it's at 73%.
And I do think that's goodness.
And yet overseas were not feeling it only 57%.
Showed confidence in the markets outside the US that's -- is very interesting -- -- -- saying not invest overseas.
That's right and that was the thing that's that the third straight drop so that has continued to drop whereas in the US market spent in public companies.
And in the US markets as a whole it has leveled off so that is I think a significant finding.
Cindy I notice that 61% and investors who responded say they change their investment behavior.
Over this last six months what you fountains -- how they change their behavior.
Well sadly the majority of them about 40% of those that have changed -- investment behavior.
Have stopped investing in the stock market or have and -- not increase that their levels of investing have remained flat or taken some money and found.
That is something that I think as we continue to watch for the recovery we'll have to see those numbers ground.
That more people are investing in surprised if you are.
And didn't yet we're up.
-- -- 50% since our march lows and we've got less people investing in the markets and we've seen that every day with the volume numbers being depressed but that does go to show you.
There's still money out there to go to work if -- are believing in what's going out this market.
And that's why I think our findings were optimistic I think that particularly as we're getting ready to go into the holiday season spending we're gonna have to see a strong holiday.
Season I think before we're gonna hopefully make the recovery so I think this confidence level in this particular group of individuals busters -- is a good thing to say.
But it's saying that because their confidence in the markets if they're not in them.
So I can't get anybody to be company from the sidelines it's not their money on the plane right.
I think that's true but hopefully as they become more confident they'll spend and then now feel more confident and bats and but I do think we're gonna have to see numbers and the unemployment rates.
Decline it's interesting when we first started this and 2007.
Unemployment was at four point 7%.
And we did it and now aid it was a six point terrain and now of course suits them what it nine point -- -- that number has.
Steadily increased over at -- Three years and so I think that's going to be key.
Significant change that's gonna have to currently those numbers leveling off if not declining of that before we truly -- -- Economic recovery -- what are you seeing as far as upcoming retail season are any positive notes yet.
The only thing I can say is that I am heartened by this confidence level I hope that your viewers out there that are confident in the market the seven 3% that we found what will demonstrate that confidence by dialing into retail stores and and for the holiday season.
You -- purchasing so that we can continue to see recovery.
So hopefully you know we have to translate confidence -- two consumer spending.
What -- these individual investors think about the economy in general.
Whether it's governments involved men.
What how how much how we're coming out of this recession and what -- -- general thoughts.
-- that was very interesting we asked some specific questions about the stimulus money.
And there was definitely a split on that about a third found that stimulus spending was a good thing.
And have a positive impact on the economy.
A third it felt that it had no impact on the economy and then 23%.
Felt that it actually.
Had may be economy run too high.
And caused inflation to a real difference of opinion man.
We all fell spent OnStar -- -- finish please.
What we also asked them about how long they thought the economic recovery would take.
And they were almost equally split that.
About -- -- 40% said that they thought that the economic recovery would take a year last.
About 40% thought it would take it a year or more a year to two years so a big split back.
Seven and we don't I mean I think at this point where everyone is unsure -- their hands up and and they're unsure but to your point I do hope for the sake of yeah.
Mom and pop stores everywhere that people get up there.
Confident butts and shot this holiday season city for an Alley director of this that the center of -- -- cloudy thanks so much for sharing your thoughts.
Thanks to you that I appreciate banks come back aligning -- more about those numbers we got its guarantee -- now on new political so weak it.
And -- Dominique she's with its mark in that we wickedness.
You know -- that can't.
It this way comes with that but again did that's not -- literary reference to literary reference to stop doing that to me.
Think everybody on city ghostbusters print is dead believed it.
Lindsay paid guys we'll have gone on.
Kenneth Feinberg is saying to seven companies that I've -- outlook tally got about 700 billion dollars in bailout help from the government.
That happier pay has to come in the form of stock in the idea being that they'll stick around long enough to see their stock.
Increase in value in other words the rest of it being cash so we're seeing it -- the company's -- looking at courses they IG Bank of America Citigroup GM.
GM AC Chrysler and Chrysler financial.
We know he keep has some pretty strong words recently he gave a speech that Chicago bar association said.
Look at if they wanna complain about this they can't -- -- the treasury they can't you know basically write to the courthouse struggle or -- local court.
My decision -- final on these individuals because I got to tell you we've been that down the throat before.
And I've always said that you know it is and we've seen now it's the senate moving and cracking down on health insurers -- write the tax deductibility -- You know be lowered to five her house and in the corporate tax return.
And the third service asking wall streeters have much of their pay is based on paper gains on paper derivatives so.
You know that the question is does it work is just the right way to go I mean it's so easy to do this costly after the fact refereeing.
You know in cracking down on executive pay but it's like pushing on jello because.
Executives always forget that await him to pay themselves to push down on one -- -- you know rise and the other end and the other thing too is it that.
-- one in question is that the cooler talk water cooler talk down Wall Street.
What do resurrect Glass-Steagall -- that firewall I think deposits.
And they risking your casino.
You know down around Wall Street because if you do that that'll naturally bring executive bonuses down and -- also Kurt tell you know the taxpayers paying for bureaucrats.
You know to oversee the banks who basically don't do anything -- -- to grow.
You know back won't have a backbone transplant then Washington.
Really that's the issue you know so -- you know again have that offense at the top of the clip instead of the costly taxpayer paid.
Ambulance at the bottom.
Here's the other thing too that's happening right now it's sort of the timing is perfect with Bank of America they've got to bring in -- new CEO whether it's an Internet feel it's a full time CEO.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- And you know the same time now we are really but what we handcuffing them in terms of who they're able to bring in.
How much they're able to get because you know essentially who wants that job they got -- public hall before congress you know every other quarter to talk about the bank's performance and when -- gonna pay back.
You know the government so it's a tough drug actually right Chris and that's the issue -- who can they learn -- -- Kenya keep talent when you have a pays are cracking down and and picking through the paychecks of you have executives down on Wall Street do you think this has -- do you think this is gonna get anywhere right -- I think it -- company.
Spewing stuff I think he's going to do it I think it will happen and yelling hey he's got the final say shake and he's -- elected he doesn't have to testified for congress he does say look.
We're gonna do it and that's the other thing -- about a pay czar with that much power without much I don't really think that that's right and -- out that's right.
But -- right you mentioned GMG and AC Chrysler Chrysler brands I think we're looking at quite a ways before they were able to pay back TARP money before they really on their feet.
But Bank of America and see -- -- AG a little ways away but those two.
I mean -- they close to being able to pay this bank and get out from you know the pays -- underneath that TARP.
Regularly you know Citigroup is still careening around in a hospital gown on and Bank of America has said pillows for a left there is -- by the end of the -- A city wanna pay twenty billion of the 45 billion.
Before a year and so -- looks like Bank of America would be the better spots and made back in the US taxpayer you mentioned an -- you're anybody.
This content -- quarterbacking now lists.
Wednesday morning quarterback I had a much whenever either way it's mean -- it's my alarm behind me if they're behind it -- regulation too late too little too late.
Clinton -- -- -- to the next and the person in line to -- the bank of Americans the you know I think it's really isn't Donaldson I'll hook.
Dot com you have to read what's coming let me.
Nice people access sweeten its other shareholder return of those I can see him I love that viewers have heard smarts through some of those emails are in the right -- it's really hard but I thanks -- appreciate your having at daybreak we come back who's -- influence -- -- and it -- And -- have friends we'll see today.
Well that the plots of business dot com -- Chris cutter Tracy Byrnes.
Jim I think I -- in the.
House every one that I I.
I do not -- it doesn't matter we started doing good wood on business together moons ago.
That's yes and every month look at these aside before you came in I know I used to love the coming for the cookies just -- if that's why can't you.
And to see you had a significant -- it became -- seconds -- the -- -- I asked today what kind of cookies we had for -- so I do hope that there were potential cookies for a loop so -- -- water right yeah always it's good timing you here today with all of the talk this morning -- report coming out that.
China Japan the Arab nations France Kabul was they want to.
Get loyal essentially off of the dollar denomination they want to have a basket of currencies in terms of the nominating -- what do you make of that movie is is a realistic.
-- -- doubt -- that's going to happen should have some kind of room which is fan but we do know that many currencies of many countries are worried about the dollar I'm worried about the dollar on the head of the World Bank is also Americans worried about the dollar.
I mean everybody's got to do something about the dollar and something will be done what are we gonna do about it.
With him to do about it.
What should we do about what we should do about it is you know lists stop spending so much money -- -- money so much in debt so that the dollar becomes a sound currency again.
Unfortunately that's not in the cards to people in Washington.
Want to debase the currency they think that's good for the country I don't win but they do and but unfortunately for us.
The rest of the world doesn't think it's a good idea either in -- -- February but you're not worried about inflation you weren't that hyper inflation at this point one word about inflation if you we have inflation for -- if we have inflation there were aware about hyper inflated its high coming music.
Absolutely convinced is coming and always has in times like this then maybe it's different this time.
Although those are very dangerous words in the in the economic world as you know.
I suspect we are gonna have moved much worse inflation before this is all over Clinton went -- -- to -- and really -- it's already happening -- you mean you don't.
-- -- -- -- -- -- But the rest Thomas who go shopping -- with the prices are going.
That's everything -- food you're absolutely right everything on everything I mean I could have told him here from the -- from the airport the other day it's eight dollars to come into Manhattan now on the toe and everything is going up taxes.
Insurance entering the entertainment education tell me something that's not going up except.
You price the Chinese are paying for us basically they're paying for our lifestyle here in the United States essentially -- they gonna continue to do this or -- points -- they say -- must stop investing.
Let and let me ask you this question how long would you continue to lend to somebody who kept saying don't where I'm gonna pay you back and I are -- going to be okay.
At that year after year after year.
-- -- there was anybody close that you think.
We're -- and we were obvious threat not a very thing and -- He's the type of statement but yes we're getting closer because -- already starting to diversify away from long term bonds.
And they're starting to buy more and more commodities -- their money because they know that real assets have better than paper money.
So well they go if they want to invest in us that's coming up space -- -- basically if you wait if.
If I with a Chinese -- if I'm not the Chinese myself I'd put my money into real things.
Nickel zinc cotton sugar.
-- -- -- -- -- has suffered years that I know I -- -- the Chinese -- starting to do -- to the Chinese have a 1000000300.
Million people and they realize.
We gotta feed all these people then and the government keeps printing money nobody's printing nickel.
-- -- zinc and -- training content but the guard US government keeps printing money -- pretty well but not golds.
I -- go but I wouldn't buy -- made an all time high today I don't like to get on a movie or no question that man.
I had to buy one of the two advice over rather than go today just because over 7570%.
Below its all -- my goal is making an all -- wireless all saw you.
Yeah I sought to commodities that is I have -- by agriculture than goals making all -- I mean.
Most agriculture commodities is still very depressed on historic basis.
Australia today they're Central Bank raising rates the first -- the -- wanted to do so is this a sign and others are gonna follow suit or they in a unique position because as you mentioned.
They're heavily commodity exports to China partnering with China and things like that -- little bit different situation.
They know what -- known what Tracy doesn't know because of a bunch of prices are going to happen at trying to calm things down -- in in Australia.
Yes they do have a better economy than we do because they have a lot of raw materials and that -- -- it.
But prices are going up all over the world governments around the world -- printing gigantic amounts of money you have inflation in many parts of the world.
Our government lies about it but the rest of the world -- that -- so -- -- so what do you think what they're doing your car to keep it all these programs but waste.
And isn't waste -- leading to disaster for all of us I mean.
I cannot conceive that -- that solution to a problem of too much debt and too much consumption is more debt and more consumption on anyone who who thought of that happening some politician trying to get reelected.
Not somebody worried about you -- me our kids.
It's people trying to get reelected which is going to make things much much much worse for -- -- what would you tell President Obama had -- here aside from south spending.
From -- -- Federal Reserve you know stop taking on the debt.
Get somebody else running the treasury changed to tax system we got to change -- system dramatically.
If we've we've got to stop taxing saving and investing in America we've got -- tax consumption.
We -- the countries it is successful doing a different ways to you you would support consumption tax.
I would much prefer consumption tax at least the stop saving stop taxing saving investing.
That if you cut -- I was spending we wouldn't have much taxes that are on the chances of that and.
Corporate tax -- as -- should be brought down where they should be brought I mean we don't have to spend countless mind and we -- make a camera where the money's going they don't even know where the money's going.
But if we stop spending so much but he -- if we don't do that.
We've got to change the taxes so that we can tax consumption.
And not tax savings and investment if we're gonna tax on wrote to cut -- taxes and that certainly we have to top stopped saving stop taxing savings and our deficit is slow to go on though right now there's no way they're gonna cut taxes that taxes are most likely going to increase.
We were talking about the value of the dollar and what's happening you as you like current countries are getting worried about the dollar what I don't understand why you're not worried about -- -- -- countries all over the world war they see what's going on.
America's -- -- gigantic amounts of money we don't have.
The -- is going up by leaps and bounds not dramatically not rapidly it's skyrocketing now Tom in north Carolina's -- -- a flat tax like a flat tax value added tax.
I would prefer a flat tax 22 what we have mountain we have now is is -- would have preferred I don't know income tax and and have a consumption taxes just abolishing them.
Can you have an income tax holiday a year even two years he does that make sense that we had any time do you have anything you want something this is gonna -- -- north politician.
Look at some of the -- -- ten years ago passed legislation to have a a one year long I think we do.
-- and strange and wonderful things in this country what do you think China these days.
Done well no of course is going is this the next great country -- -- as far as I can say -- hadn't massive setbacks along the way just as all countries do.
As they -- been -- China's.
Trying to save up a lot of money for a rainy day now it's ruining their story it's been some of that money -- invested in China.
I do you have investments in China -- stocks there on the currency there.
-- instance and even Singapore.
Singapore look at on that in my list of best places to live.
There -- a lot of Nordic Countries and here you know and now no way -- -- Iceland is -- -- on the financial system relatives -- -- countries serve you have to have many things going for the -- happen to think Singapore is better the weather nothing else they also a good many of them very high tax rates is Scandinavian countries by the Lyndon neo socialist countries -- -- well as an American who -- -- after pay American taxes wherever I live on -- -- I talk to us pay American taxes so that doesn't matter.
But Singapore as many things going for.
But China in particular you have investments there China doesn't audit their financials I mean it vacant -- they -- -- cricket that with -- Cheney and Tracy Tracy.
Don't you watch -- -- Give her and they don't give her in -- agree if you haven't heard but then event isn't China and the IRY.
What's backs Fox Business time it doesn't know much larger scale that we have the government controlling financial statements have here we just think they have auditors they have.
They have independent auditors have whether whether they're good or not I don't know any more than any more than the same companies -- have you believe the numbers we hear at a time I don't know I don't believe the numbers we had -- anyway we know about America if you believe the government no no I don't let Tracy believes.
Now please visit the town nobody really genetics plays -- -- how do you invest in the country you don't believe anything -- out of I always had to do my homework do when I invest -- that it just kind of all countries.
There's not -- at least here in the states we have some semblance of solid information we can gather.
I'm happy to hear about big things and it doesn't matter that's my guess except when everybody tell you why would I know.
When you don't you weren't married my god you know my it's in -- I think takes it to the addicts team as far as just making stuff up as they go along you have to.
What everybody says you have to sit and do your homework you going to be in the best.
And by the way the best way to invest in -- to invest because what perhaps because what you say at least you're worried if the buy commodities.
Because they have to -- nickel they have to buy cotton.
That if you if -- if you have nickel they will take you to dinner they will pay for dinner and then we'll pay you on time they have to buy cotton if you are worried about corporate governance.
You can buy other things and not buy the shares.
But -- in America you know estimate up.
The SEC -- to -- me -- mr.
-- six times in twelve years.
You know don't speak to me about couldn't come -- and like -- I shot even he was shot that they did not bad at plus.
Yeah they even put down in writing the SEC that we know more about mister Madoff than anybody in the well activate these so absurd that kind of something off the -- -- -- -- the best decision you are the best in command of the quantum fund with George Soros Romans and I go and I really do hope that there cookies swinging for you because it was an honor to have you here I am flattered and delighted.
Thank you and I say this outcome thank you let's take a break we come back Tracy tells what caught her -- against the it is going to be -- -- others.
That's the -- Labatt -- well we're just we're Stan you respondents and obviously parents room appeared just came in few words have meaning that welding -- you -- -- -- -- here was -- anti welcome my time.
London got a lovely -- Forget about all the you know Richard Simmons crazy people that we have in the United States they have gone with wait for -- Homer Simpson to promote healthy lifestyle I swear never gonna do this whole campaign of the Simpsons are -- -- junk food.
There's homer in his -- so we're gonna watch homer get progressively healthy over their -- for life campaign.
First of all its first -- to sit -- right Homer Simpson.
The homer since he gives doughnuts a bad name all right I think that's wrong all right you can have a donut everybody this -- -- They associate fat slob -- -- Homer Simpson with -- all right and that's bad for Dunkin' -- it's bad for crystal -- for windshields anybody on the West Coast doesn't -- -- Well I mean it's.
He's not -- -- it's easy to compete but I doubt so it's you can't will let's see if that works because.
So we'll keep our eye on this for you because it's certainly caught my -- -- -- actually just seen Homer Simpson thing.
Maybe he'll be -- -- started.
And in the UK there is no better place to do this -- in the UK because wells is he any Haggis over there -- the worst food in the world over in the UK.
Now as the best place to do it right.
I have to go to a bad joins us right now founder of the bad -- -- since the it was -- -- -- it.
In the sale what's going on in the real estate market these days -- and specific things you wanna talk to about but I guess and I bought my first question to get wins.
-- also looking at the calendar with this 88000 dollar.
First time home buyer tax credit going away and nobody thinks.
You know post cash for clunkers is gonna happen in the residential real estate market ones that this.
-- yet entirely possible and basically what we're looking at is real estate market where we haven't -- an outstanding contracts.
No -- I mean that the closings is not really much different than it was this time last -- all these numbers we keep seeing I think there's an 8% increase in home sales.
That's the number of contracts that are out there that's what the number of homes and it's cold.
And actually close the deal because -- them the backstop is still in the lending.
In the landing here in I'm not -- -- that 8000 dollar credit is gonna do a whole lot except get people off the -- who were looking at him by evening under the median home park home price.
For first time home -- which now is only about 78% of the market.
Enhancing -- impact is it.
Legitimate to expand that though to all homebuyers not just first time -- and is that too much is that going is that -- we'll talk about.
-- -- -- -- -- much there's talk of expanding its -- and maybe even to open it up to 151000 dollars yet it depends on your -- -- your position on on these subsidies in general on the I think certainly could stimulate sales yes but couldn't artificially inflate the price artificially inflate demand absolutely and so then you you know you may be.
Basically -- kind of problem for two years rather than actually eliminating.
Let you understand that they need to stay in the house for requisite amount of time to pay it back exact -- thin -- fat stats are happening on his.
-- -- the only you can use it now towards a down payment so that's one -- Virginia makes that very point home sales we define their own bodies are not -- artificially inflated bottom of that are we -- one right now with this an artificial bottom facility in history and.
And -- you know let them -- yes you know we've got.
For example is that people in South Florida investors that are coming and buying a thousand condoms at the time.
-- -- for a thousand dollars a square -- these -- -- -- them for sixty bucks a square thing so those are creating artificial flowers but those -- very specific segments of the market there's some that are still really strong Nashville Tennessee for example.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- They have been for closures and foreclosures in my building in midtown.
And they're selling for 50% of what these people pay for three years ago to brand and it is still inventory.
Out there that has.
A new construction that has not been picked up yet -- -- really scary to me TVs and indices that come in and say new home starts are up 3% -- is yes it's free for the real -- market that is not good for the real estate market the last thing that we need is more supply out there.
Now is their problem with -- Putting off for closing on homes -- that sort of -- instant -- deflating the numbers of foreclosed homes that are out there for sale in other words.
They could afford clothes last month they put it off they put off -- put up as they don't want that home.
On their books and having to go out and sell it and dump all these homes on the market and you know bring the price down as -- is that phenomenon going.
On right now it's happening we saw the beginning of this year following for the quarter one of the moratorium the national moratorium that's that that froze.
Foreclosures in many many states Florida was -- you know with the biggest hit by that.
As soon -- that month was over we had a record number of foreclosures in the states and it impacted.
And so basically all we're doing is in this -- -- inevitable when you flood the market like that you're going to get depressed prices and all of those areas and there's no way around.
Our closest make me nervous because to me it is.
It's the frenzy that got us in trouble in the first place all over again everybody wants to go announcement of -- foreclosed property ever wants to know how to do it.
We've typical in all the time on Saturday saying had to -- a foreclosed about anything and I'm gonna get a deal.
Meanwhile some mystical plunge down the toilet right and it pulled -- -- the sync with them on the way out the door like it's not all that -- humorous and yet all of them there are some.
On an example I I was looking -- -- my business officially denied because of California taxes and I know looking at condos there that I could.
How does my my primary residence and keep my home in California for a secondary residence.
-- head there are a lot of homes there that people can pick up for literally less than thirty -- that are had been refurbished by the bank.
So I was looking at a Condo 151000 dollars I was going to be passed.
15100 square feet.
Absolutely nothing wrong with it the kind of had great conditions -- building had just -- the -- -- -- -- the carpet.
They -- more than 151000 dollars worth -- money out of work into the home.
Just to get it off of their books because there's so many and that is that it's now the banks are taking these properties over the last thing they want to do is be realtors.
They don't really they don't have paid it commissions because -- these agents are charging these people -- commission to sell a home.
-- -- of the heavy commission and then they also they don't want to show on the books at the end of the year so they're just trying to get rid of the stuff.
So many people out there its hide the value of their wealth into their homes and lost so much of that here over the last couple years.
-- -- equity protection insurance is sort and you with new.
Product that's out there that doesn't really protect people from the losses in the equity that they've built up over the years in their homes or is it sort of you know.
Funky little run well it's a new product on the market so it's if you you know for example my home in California like every technique and though they have lost -- -- -- are.
But -- two companies once equity lock if they sent Austin, Texas and oneness of my house that's in Charlotte, North Carolina.
And equity -- basically charges that he believes there's a front and and you know -- charges that he over a period of time the -- only one to 3% of the home price.
And what it does is as -- lock -- period between eighteen and 36 months where you can't Oklahoman and use the protection but if you do.
It takes an average single family -- home and if you sell for less than that.
Even if you have a sorry if you sell for less than that index even if you made money on the partition can still collect on management's -- with the Unix based Phoenix is that's a good question a lot of people are asking what they're going to be -- right now they're using the Case Shiller Index which a lot of people like myself has significant question about.
Because of the way that is calculated but this is an interesting thing if you're gonna buy it really risky market like Las Vegas or central California.
-- got to go giving your website -- fast stuck again about dot com.
-- -- founder of the -- group it'll be on us thinking.
Can -- frustrate our thanks -- -- 151000 -- content -- -- that some of the looks yes yeah let me now knows how to watch out for Homer Simpson he's getting than.
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