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Tracy Byrnes Chris -- -- a market that's up about 37 points it was up a little earlier more earlier in the day.
But it's been in positive territory from -- today so that's something considering we're coming off last week down over 500.
Point one welcome everybody in well yeah the so I had I kind of cut off -- but -- not limited -- describing why that was my -- I -- have got our enough.
Stuff and stuff we want to welcome everybody in the we got a lot of news today -- housing numbers which you know I wish the market wouldn't put so much into this.
I guess it and move all of that much this morning with a number -- on existing home sales.
Little more disappointed people thought -- pricing was higher.
Right -- it was down to about seven point two months -- is as down as we've seen in years.
But -- you know there's always the shadow inventory that's out there that you know homes that probably would have been foreclosed upon but have not been foreclosed upon.
And you -- a great point this morning when we weren't -- -- together that.
Did discrepancy between the December number putts all and this isn't telkom is -- deep down astronomically in December backed up now in January.
Lot has do with that tax credit everywhere -- the tax -- it was going way back in December so they backed up the market.
Credits back in here we are again.
Just that number is so crazy that's why you know you'll -- always look at with a grain of salt even -- the existing homes.
Is -- much -- a much better indicated a new homes.
Starts you know get things like that definitely.
But I still think it's all over the place all he had Ed Whitacre today was in the interim CEO -- General Motors now deciding after an exhaustive search.
Who better to tickle me so it -- is now be permanent.
CEO off General Motors and.
-- took them yet I don't know well Whitaker basically came out and said.
It should be Whitaker I just love that I wanna I wanna be in -- conference human they have echo.
A station this has been and since December 1 that's when Fritz Henderson was.
And had -- we say in this.
Kind of the resigned on December 1 the new entry was probably has to drag out fight -- actually even if officially resigned.
And then you know global view we already have this is it -- former eighteen -- -- -- pretty much said I don't know anything about cars.
Then came -- that.
And now here we are after a long exhaustive search I've decided it should be me.
Is it would it do you see right here.
Com and we also have had an asset Bernanke coming up a lot going on with him today -- -- our good senators left and right announcing his support -- legal support -- gonna vote will not gonna look for weeks that the vote.
Later on this -- so.
Yeah and -- at this point it looks like he will be confirmed but the market of course needs the.
Needs the confirmation come -- I think just for the consistency.
And now I agree with you know a lot of people don't mean Steve Forbes on going company earlier today and he said that he doesn't want you would want Ben Bernanke.
Coming -- he's got his own ideas about -- you forget did not pass but where I mean that's just not gonna happen so -- gonna go and right now it's the lesser of all evils which many will say is not the way.
To elect somebody but a completely bought that thing -- is I look at I say who better.
Do you cannot under any circumstances.
-- -- a talking about a Fed Chairman her head football coach tell me that somebody needs to be fired or not voted and all let out a substitute who do you want to take over this is the thing that's rising -- -- wall.
Is that a terrible job get rid of them a monkey could do a better job normal he could not -- could you by the way.
This is like a plant in this this is a transition out of my house have a -- dinner what do you want for dinner.
Well I want what -- what -- you want I don't know this is the exact same conversation you are something you -- you can now I want -- It's the Bernanke chicken story.
Don't forget about that Bernanke can -- shepherd joins us right up did a great place Tucson Arizona president founder.
Of -- retirement financial services.
I'm jealous of you being redundancies -- what a great place.
-- a great morning here in the only thing you don't see in the backdrop is the snow we have on the mountains.
I was -- this powerful.
Look desert back up I expect to see the three amigos on their way to send the -- in the backdrop there at how great honor them.
The -- David what are we talking about this market today how big solid Ben Bernanke how big is it in your mind that he be voted in.
And I wanna I wanna safe in the short term and the long term of focus on the shorts and -- good for the market -- is it good for the long term also.
Well I think that question we'll have to be answered over several years but I think in the short term.
But everybody wants right now is to know what's gonna happen and they want consistency.
And he's been the man in charge up to this point and we've had a pretty good recovery at least as far as Wall Street's concern.
And you know I think it would be more favorable short term you know if he was -- confirm.
Long term -- just -- we'll just have to wait and see.
I just feel like it's you know it's one of those lesser of two lesser of all the evils kind of thing I mean what would really happen -- we put somebody new -- -- -- -- -- split.
And -- -- to -- you know -- would spring eternal that the new -- and could come out and do something different and get a -- well you know the mess we're in a little better faster quicker who knows.
The it you know with all the stuff that's going on and -- we're in kind of a predicament here.
And my analogy is kind of like that out of a big tub where we found all the excess credit than that.
Debts and bad decisions we've made kind of -- the stopper got sucked down the drain.
And with all the quantitative he's mean and you know.
And governments putting money into the in the economy is you know we're trying to keep that bathtub Fulton by having these fire hoses going there and and -- -- the tub full.
The problem is we still haven't found -- stopper to put in that -- -- to stop the water from going out.
So for the time being Bernanke may be the right choice.
We just have to see -- maybe long term if it is some of the stuff we're doing gonna have -- more problems like it did with Japan.
And then you know when we have a long drawn out recession and -- of taking our medicine now.
And and getting through it.
Dave were up 53 points today -- the midst adult you know we're not a correction yet but we certainly have had we had three of that.
Roughest days last week that we've had since going back all the way to march is is the beginning of a correction in your mind -- a correction be healthy.
Well I think it would be close so many indicators we look at is we are we've had several of them turned down but not all of them.
And so that might be right around the corner but I think.
It's kind of hard to say with the Bernanke confirmation I'd like to get out of the way because he's been you know were re confirming that -- fire chief has put water in that -- -- right now I think everybody thinks we need him so like to get past that.
Then we're either close.
Maybe a little pullback here or correction.
Or we can you don't -- -- the strength.
Has been with money going into the market and driving prices higher.
OK so we get through that.
We confirmation of Ben Bernanke then what happens now where we're coming down on the big banks.
None of the stuff is gonna make the market happy anytime soon not to mention we have this whole you know government that's supposed to be pulling out of the mortgage backed security market.
But just -- sounds like we have -- the next couple months to sound so choppy and uncertain.
I think that's probably true and I think the problem is we're almost heaven a debate between.
The government being in business -- the government even business alone and I think when you have that debate to I think it creates some problems.
You know I think there's a disconnect between Wall Street and main street and all this stuff that we're doing helps Wall Street.
And bails them out but there hasn't been much help for main street.
And you have permanent damage out here with people who've lost.
Everything are a lot of it and they're not gonna go back for the way they used to be any time soon.
So I think it's it's a longer process than a lot of people think.
So a lot of nerves right now on the market wondering where we're gonna go -- obviously starting with Bernanke but.
Their thoughts about China.
You've got these earnings reports coming in expectations are higher we're -- failure to meet expectations.
What are you doing here -- do you would you like certain sectors that you like certain plays within sectors.
Well I I -- do I mean we we have become more tactical.
This last couple years just because the you know the lessons of the past I think for sure we're not in -- bull market like we had in the eighty's and ninety's.
And people still want to invest that way just by -- hope.
So I want to be able to.
With technical indicators being able to know when to play offense and when I need to play defense if you will and and then also which sectors are strong on a relative strength or maybe relative performance basis.
So I can I can emphasize those.
-- -- quickly we have to go to break but what are those sectors.
Well they have been up to this point basic materials technology.
You've had some other sectors in and out precious metals.
Real estate lately but I don't know -- that'll last.
But that that can change -- if we have a downturn here then definitely those we'll probably change.
Right Dave -- senior president founder of retirement financial services out in Tucson Arizona thanks to -- -- us.
Thank you Houston in Tucson as -- the movie three amigos.
Now I'm just saying that's his son and a lot of better.
-- favorite -- -- -- gonna get liked him totally blasted for that but it really is if you look at El Paso is probably there was one CD.
That it might have been filmed and you El Paso city where if you look kind of behind the buildings of this cat die -- back -- so that's where the invisible so it's been.
Might be -- We've got to go.
The -- that we can -- to pick up.
We had a lot of really serious that the thought about today.
Include -- -- -- Bernanke yes more on Ben Bernanke.
So much news obviously these are generally -- well -- stay there.
-- -- What happens and you.
But what about -- Business that country's ignorance Chris -- were up 43 points we move the market baby -- at some time gap and don't forget.
Yeah -- can download -- that was at the iphones you can watch us in the.
Ames Iowa -- you know that Iowa State is in Ames Iowa and a couple very tipping points but I would state.
By one very interesting point the other one is that the first college football game I ever saw I was -- was one of the two teams.
The second point it's more important that the cyclones but -- represented by a bird.
What is that all about if you're from Iowa let me know this I mean the mascot is a bird it's a red birds -- cardinal -- something -- -- the cyclones that's the team name.
C -- to be cyclone -- -- -- -- doubles yesterday.
This cycle arms and legs that cannot run -- I don't in my -- I -- yet again.
Nancy outings here investments long global leader of mergers and acquisitions at towers Watson thanks for being with us and thanks for having -- -- we got it.
You gotta wait a year ahead that you think is going to be better for -- Well we're hopeful about that and one of the key points of our study is that those companies who have been making acquisitions.
Have an outperform the market and we particularly see this in those companies that do domestic deals for us this -- -- -- Was and it's so easy to do you like it was easy for a stock investor to jump into the market in March and April and -- when values -- so depressed.
What and so you so much easier for companies to go out and make those acquisitions when those companies were valued so much -- less than they are now is it harder to kind of we threw -- overnight with so much nervousness in the market.
Absolutely and that's why we really suggest being very diligent about doing to the due diligence work so what we're seeing a lot of our clients start damage due diligence path.
But then date being very -- -- in terms of timing are actually executing on the deal.
Thinking that you say that -- the domestic deals are making money because a lot of people are concerned that we're selling out.
We're selling out overseas you know the -- Budweiser and unless there is an -- list goes on.
But it's more profitable -- what you're saying to stay here in states.
Well -- -- -- not just in North America but in Latin American nation as well that this company since done domestic deals outperform the market by 7%.
For those companies and predominantly we're seeing this in -- -- -- doing cross border deals actually underperformed the market by five point 2%.
So yes he would say that is probably safer to do a domestic deal itself actually less complicated and less complex particularly when you're talking about the integration is as -- -- synergies is flawed tax slow things like that combining financials.
Correct me if you think about buying into another country -- dealing with for example in -- you done with works councils you're dealing with different regulatory issues.
If you doing it for the first time it may be a market that you're not really that familiar with.
-- it in continuation of that -- -- you look at this Cadbury deal with -- for example I mean this is the these are two companies.
That -- it cracked is that cat bird's throat.
They didn't want this deal at all and they made it known and they said some not so nice things about Kraft now on the site somewhere you may not -- -- -- let's get this deal done and it's not as easy -- that there are a lot of very difficult things -- at the way through over the next few months.
Absolutely and and we've seen with other clients and other companies in the past particularly when you have a company.
Where it has a long history and heritage of being recognized in -- market a family tradition of ownership.
A round for a 16280.
Years so the cultural issues become more challenging because so much more ingrained.
But we also -- when you're bringing to organizations together that.
When you have perceptions being formed one company and what it's like in that organization.
Mostly -- have to be out in front of this issue very quickly and it can establish the trust and to make it very clear.
To be acquired employees what it's going to be like to -- in the new organization.
Are we seeing these deals financed ours is still stock and cash I don't know one thing that was interesting with the Cadbury deal her she made an offer and it was financed deal JPMorgan Bank of America actually put money up for this.
Are we can start to see more of that or is it still stocking caps.
Well let's send an area and I -- I'm not an economist -- we are we do see a variety of issues and in.
Clearly that's going to affect the type of acquisition in the type of integration issues that are going to happen.
What we're also seeing a lot of the deals that we don't leveraged deals over the last few years coming back on some of these excellent buying all these companies would debt -- -- They're going into bankruptcy that debt is very expensive has gotten very expensive -- over the last couple years are you seeing a lot of that's -- deals and that have been made for five years ago.
With leverage now it's coming back on some of these people.
Well we are seeing many of our clients who perhaps didn't -- with integration issues up front.
Now going back and looking at whether some of the issues that are are being created an a lot of times for -- -- around some of the people integration issues.
A lot of companies to -- kind of a standoffish approach may -- didn't fully integrate the companies when they were acquired -- when they merged.
And now perhaps since coming back to present a difficult situation.
What sectors -- our do you see any activity going forward.
I think we'll continue to see health care will continue to see signs financial service organizations will continue to see technology.
And in in the energy area if in fact -- research and we looked after a calendar year.
Today we found that the health care organizations health services outperforming the market by eleven point 8% of financial services by ten point 3%.
In a part we we've also seen a pattern with serial quietly.
And and a lot of times in the health care sector and financial service sector these companies have done deals before.
It clearly have learned from that and putting forward better integration plans serial acquirers like them then.
Bank of America -- Newton didn't seem right thanks for coming by thank you -- C on -- principal global leader mergers and acquisitions towers Watson.
All the little discussion on and an activity in the market likes it when we let's have that type the stuff and we like to see -- -- one more often although you may make Michigan -- about.
Financing its assumption has still not there and that's a big part of it arm -- -- this morning if you don't mind sharing.
I -- and you're gonna laugh and my -- sold with us to see his kids and help -- -- to sell them the ever barks about listing calories on fast hands and things like that yeah -- -- now that there's well over one how losing calories.
In your big Mac.
-- to -- and I think we islet Regis but you -- turn a blind yeah.
Luckily but when it comes to your kids you don't ignore it so when there's calorie content on the -- -- it's in the Fries people are making smarter choices on we'll bring their kids.
Not for themselves yes.
I mean this is a small -- they only surveyed 99 parent is not a lot of people on the night.
There's more people my family but they said that when looking calories.
They'll make wise choices for their kids still not for themselves we'll -- the whopper but the kids are getting -- -- that's very interesting I mean it's something.
I like that because is much is obesity among adults is on the rise childhood obesity is on the rise much quicker and -- a month much you know.
-- faster growth rate well.
As a parent and again might well agree you -- parents out there who have these obese kids in this it's their -- let's face it.
I'm sorry my cynical -- -- with a -- senior editor at parents he's got kids.
-- they -- they -- via apple Fries that make their kids.
They get them makes this sit in front of them.
I don't know I think I am sad though living human -- I don't live in America so we we can actually avoid fast food we want -- but I -- I've witnessed in the line of Starbucks.
You can see people look at the calorie count and just say no that's it -- -- -- -- Because it's there's like fifteen zeros at the end of this number right -- them -- and it's on each food item on the window and right outside in Rockefeller Center.
There's a board all way over to the right into the side.
So you're not gonna go there first and sales rate in -- now spread 300 pounds in the stay away from that now you're in line you look at the food looks tasty smells great that's -- you gonna behind.
Bomb or what's going on with let's start what President Obama and last week at the end -- because that.
It's shouted god is going on this downward slide it certainly on Thursday I guess is what it was.
The president came out and said -- be tough on banks they giving up backing down not backing down a lot of rhetoric right and that really sent this down doubted.
What do you make of that.
Well it was I actually it was a gang tackle on the marketplace we can obviously that was an accelerant that was certainly one of them but I do think that the ramping up the opposition to Bernanke.
Can't be underestimated either seem as if every time some congressman came -- I'm gonna vote no we went down a few points but.
I think that the real message the market got out of Obama's remarks in this new policy and the vocal rule -- wanna cause is.
It's not over -- the market wants this whole kind of punitive phase to be kind of passed and they want these banks to operate.
Essentially as so -- independent private profit seeking enterprises.
As opposed to having to ask.
Is everything going to be questioned in a regulatory and political -- so.
Whatever the merits of all the rules I think that it's -- -- the market feeling can -- also though.
The context is the market was in kind of search for some excuses to pull back.
Sort of a lot of the senate measures have gotten a little bit too happy.
I mean we kind of repeatedly went up to this particular level that we -- able to get over in the market doesn't like that.
If you're looking for something come down and -- seems OK so but that being said what happens in the banking industry we see Goldman Sachs going private.
We can't see stuff like this happening just to get away from -- you're right it's not going away -- is a lot to do the fact that they can't get Health Care Reform through I have another cost.
Back in part yet but I mean I do think that -- -- I would if -- musical -- -- private.
Goldman Sachs is a privately -- -- a price cannot run not anything like the balance sheet it does right now it just couldn't.
But what we will see is maybe Goldman Sachs Morgan Stanley say.
While that emergency -- become bank holding company puts undo that which apparently is going to be available to them in which case it's -- when it comes to them.
But I do think that that be the sway of politics in regulation wants the very large banking organizations to look something Wallach of public utility and therefore something more boring and and less profitable over time.
I don't know that these measures are really gonna have -- can get -- in this form but that seems to be the beware the pressures had.
I guess so that was me my next question -- What at the end of the road doesn't look like it did on Thursday when the president released -- spoke about it.
Potentially yes I mean -- do think that he wants to make gestures and you want to send signals about how we'd like the world to look.
But I don't really think in anything like.
Every single form in every single version that he would like to post it's gonna happen now for the long term -- got hurt the market.
I don't know that it's a long term.
Detriment to the market necessarily I think the market can make its peace with whatever the new rules are just usually no -- yet -- What about Ben Bernanke let's -- he's used to this when he gets the focus on Ben Bernanke.
Mean I think it's clear that the market would appreciate Ben Bernanke being voted back in at least in the short term.
But we have some discussion this morning on -- company about how good would be for the long term and the markets.
Steve Forbes -- want to see somebody else there Charles Payne wanted to see somebody else in place but.
The -- when it finds a job.
I don't want I would never take that -- and a million years we can't find the right personality if you want about it's fine -- we want to replace obviously and that's why continuity matters more than.
The little political statements of people are getting.
Look I think people certain.
Party members of each party are gonna be permitted to vote against it if it's gonna help them in their race midterm elections and he'll be voted in and he -- I believe.
And I do think that's probably not positive.
Not only can you say who else would be better but what else would you like that person to do certain what we have -- in place right now is is massive.
Extraordinary measures the Fed has taken on him by securities and -- reserves banking system trillion dollars couple trillion -- -- going to be.
Now the key is.
Let's figure out a strategy for on doing them when the conditions warrant and we don't know.
There's disagreement of how that should happen but what you're mostly seeing his opposition by people who may need.
Didn't want these measures to be taken but didn't say so at the time because we -- know what we we need that -- Well they'll I thought that we don't know what we need to do to get out of this mess and we don't you know some people would say all we -- but Steve -- that stronger dollar policy.
Let's raise rates is get that stronger dollar and place but you know then there's there's just as many people that would say when that would really -- her fragile economy -- haven't really hard time recovering anyway.
Welcome to what caused the second -- down in the depression.
Tighten policy -- -- at a point like this which is exactly what Bernanke would say and so I do think you know -- there if the market this year has to deal with.
Somewhat stronger economic numbers coming through which causes the the worry about how is the -- gonna withdraw that's okay.
It's going to be a turning back and -- 2004 tight market when we adjusted this.
-- -- that the recovery some place and now monetary policy is going to be the new enemy but if it's a matter of the economy is not really.
Doing what we wanted to do and there's pressure on the Fed not to not to keep money money -- Then I think it's a big problem for the market where do you think we -- I think we're I think we're in the former more likely -- a lot.
I actually think that hasn't -- numbers are going to confirm more or less what the markets of sniffed out at least in the first couple quarters that in fact we're on somewhat firmer footing.
And then it's going to be a matter of OK now it's a lot of anxiety about how does the -- react to that what are you worried about this year.
I'm worried about.
-- -- China rolling over and if in fact even if you had just a math major gut check in that market it's so far above its long term trend.
I don't think them that the markets are really the global economy is on -- footing that can absorb that very easily.
I don't know where you know.
A month away from that accident -- waiting to happen to actually happen or two years so to me that's one of the major things out there and I also do think that.
If somehow you know Bernanke's hands are tied.
And we really do have to sort of start to to dial back on the help.
I don't think that will be served very well are -- not paying enough time.
Potentially I I think so I mean I think that China is kind of like that the that that end of the bowl where you know it's like that's it moves that it moves the most whenever there's any stimulus around the world.
And so that's why do you think we would probably aren't -- As such a hard time in China and I said this before -- -- it's.
It's any if anything goes out there that you know -- trust the numbers that come out of China do you trust financial statements that come -- -- China.
Do you tell -- anything he can't just products and kids are getting poisoned well you know also.
And even even the government measures that we do hear about okay this inching up lending standards and ala.
-- I think you can believe that but we don't really know that's part of some longer term -- -- -- just -- around the edges.
You know I think the scary part for a lot of people is -- like playing to win for the next hundred years not for -- 2010.
Are they willing to sustain a certain amount of pain right now for somehow works in the longer to advance so.
These are questions that you know obviously above -- -- agreement something that's that's -- -- -- -- tactic isn't meant to take a long term -- I feel like -- at -- she asked questions later here in the states -- -- the luxury of being able to do that -- nobody's gonna say you know we're gonna watch out for years so but yes I think that's probably somewhat more healthy if you know.
And -- -- in San I have had a job 27 weeks here right I -- no one's saying that on the on the other side yet again.
And I thanks -- -- you -- I say it's always senior editor at parents always good to have a discussion with Mike.
All -- think one of our viewers John -- now you throw it out there somebody knows the answer.
But we we talked about -- our dialogue.
An Iowa you know that there's a lot of -- -- more until the economy can move on our -- I was beautiful parents think.
I would state uses a cardinal sign he is an -- cyclone.
As mascot at seven actual tornado or cyclone so thank you John for that until the very good so it's images into it and -- -- -- Colorado football game.
And that was the first college football game I ever saw Iowa State Colorado at Folsom field though in Boulder, Colorado we got to go tells the house a piece like that on the way that he's different.
Parents won't -- won't want.
But imagine dot business dot com Tracy Byrnes Chris got a market the 57 and remove it.
When -- went -- -- I didn't hit it out right now and Obama as stocks what -- -- on Adam.
Well we we thought it might be -- I think when it happens it's making me -- That taxes might make it those about the -- but look.
We did a little number crunching here -- as you know the president speak sometimes it influences different sectors.
The the stock market -- most of us have well one cage where -- we are invested in index funds that the S&P 500.
To take a look at the S&P 500 up real quick the top five sectors -- -- -- there information technology 90% financials -- -- -- 4% a rather fourteen point 5%.
Help get -- two point 1% and energy consumer staples account for eleven and a half percent individually.
-- pie chart that we created that if you take a look at the whole thing 28% roughly.
The index -- waited.
By financials and health care.
So it only -- goes to reason that when the president talks about raising taxes on you know the health care industry are on the financial industry.
That you might see a negative reaction.
From the the traders and you know not only -- the S&P 500 but you are.
I did you know what to expect is that what you get -- Wall Street I looked at a couple of dates that are important for instance back on -- January 14.
We -- the president talking about wanting to you create these recovery fees for banks.
What's essentially attacks on the large institutions in the S&P did indeed drop twelve points the next day but.
One thing to keep in mind is that it was the same data JPMorgan Chase reported their earnings and people are not happy with what JPMorgan Chase reported.
And you know what was the cause was -- Obama proposing to tax on the banks -- -- a JPMorgan Chase.
You make the call and go back to November when that's representatives passed their version of health care.
And we certainly know that they were intending to raise a lot of taxes.
On the health -- industry that was November 7 remember it happened Saturday.
-- on Monday the -- -- we closed up.
So go figure sometimes you can follow the S&P NC of what the president and congress are doing they're gonna have some kind impact of the times.
It's anyone's guess one last thing Tracy.
And -- landlord if you talk about what went from home yeah.
I'm covenant that yeah -- Yes yes yes remember when we talked about it here upside down here mortgage if you owe more than their house is worth you might wanna consider walking away and you got all angry at me how irresponsible to.
Forgetting that the bank gets -- -- it's part of non recourse loan deal and what do you think about his men in black rock walking away from their house.
Was that irresponsible are you coming down hard on them because they walked away from Stuyvesant -- and -- Peter Billiton.
Really I -- I would.
It's this I know they they they owed more on that -- on those you know apartment complexes than they're worth so what do they do.
They walked away so why should average Joseph or Jane not due to that I'll -- you advance the property.
I'm with the -- the decision that it adds that they're doing is getting as of the date on what's going on with the at a time that president speaks to the -- Adam with him on Alan no he is right who.
Amid say what's moving this market Adam Shapiro notwithstanding.
And hide soup I -- I thought it.
We are DryShips.
I -- dropping favorite he's here that's one usenet group.
You can't FitzGerald raised its rating on DryShips to a buy from -- hold on valuation saying the -- upside catalyst for the stock.
We'll be securing employment and financing for its fifth and six drilling rigs.
It's a good thing because DryShips was sinking -- becoming -- -- -- and underneath the ocean.
-- -- -- -- -- -- -- AK -- swung to a fourth quarter profit up and -- a big a year earlier -- coming so shipments jumped.
Average selling prices fall but nevertheless it was up 7% earlier today to 4% now athletes.
And I like that so -- company's shipments jumped me I don't know positive -- for the economy in me -- -- -- electronics up 7% better than expected fourth quarter profit.
But things to improve operational earnings lower charges and they hope to improve profitability -- top line.
And then I don't know in the end though my moving -- Fun was upgraded and I act like this only because I like to say solar fun it's fun it's fun some -- it's really fun and other days it really isn't really.
It's like a roller coaster accidents it's in it's -- -- make you sick these solar stocks but it was raised to buy from a hold like Collins Stewart.
It is up -- having a very nice day today actually up some -- Finally Medifast.
-- and ED it was up 11% this is a weight loss company they increase sales and said.
Higher same store sales their clinic traffic all.
Came -- well above analysts' estimates so I'm -- -- that means more fat and stockholders making money.
That does mean that we're back with yard and we all because we don't look at it yeah I kind of -- walk and Wendy's we check our children but not myself.
Charles is here -- this show trials.
This morning couple -- you were talking about as well AK -- And dry should don't you think that's a good sign -- AK steel vault when you get a steel company like that it's got to be about it but if orders are up.
And people are building one of them absolutely with needlessly.
Absolutely I mean -- in the you know the earnings during -- -- mostly a game of expectations now.
Than anything else but you can listen I'm happy because earnings really haven't.
They've let it let us down so far this year it's it's sort of was -- sort of got lost in the with all the other big time is out there.
But earnings haven't really been -- okay but that that great you know -- Had heard for the most part since -- cola.
Got us off with him with a bang like they always do.
We mostly banks and tech gamer.
And the banks have not done very well lion like we didn't think they would save maybe Wells Fargo here a couple of buses or ultimate middlemen ultimately it to have ridiculous quarter.
But tech isn't done pretty well being insulted well IBM did well globally even had a good quarter just these expectations seem to be so I -- and they were the.
The -- the stocks I'm in the stock prices were outrageous and there you got to justify -- stock prices but the good thing is.
When they release stocks pull back on on the on good news.
Is typically short lived -- certainly creates an opportunity Psycho elected to be honest with this.
But they needed to really really have incredible numbers to maintain what we've seen.
But this is the second quarter and -- run at that we said.
We're gonna -- top line growth and we did -- leading get a last quarter that's sure we're not -- this quarter either we're still seeing cost cutting beefing -- profit numbers just in to -- Don't let alone get top top line growth that really that I mean you know whether consumers going to be confident low when you know with the credit card didn't cut you have to or they don't have a job in a -- consumers really gonna get so confident out there that they really start to spend and already I'm concerned about.
The savings rate you know what seems to have -- in the house pulling back.
Dancing businesses and other -- on I think that that corporations are sitting on so much money back you know one of the things I wanna see from industrial -- company this quarter.
If -- apostles and increasing capital spending.
Many see capex spending go -- that is really a great sign that means that these guys have confidence of bit and spend money on big time things.
You know the cost cutting -- million to -- -- -- -- Phillips.
You know you don't have of the year because would continue to cut costs.
No this is seems to be so much slack.
Right now that there's there's no reason to spend on you know cap backs right improving machinery improving process sees this and that.
Building new new brick and mortar while they do that when I don't have the demand there for the end brought.
You know hey you know I am kind of surprised about though considering a run of that we've had -- that there are more acquisitions.
You know now's a good time to start looking around then got that cash right or you've got this hockey you've got -- -- you -- you gotta suck this probably up significantly from a year ago today.
You can use that it's a currency.
You know so I'm really surprised at that too because that's also signed -- -- -- -- really big -- consolidation and everyone's getting ready for the next -- -- -- -- -- -- Because we're not seeing financials it could be case of Warren Buffett where people think their stock is undervalued so why give it away why did the farm away for free muscle -- to -- stop comes up.
The job I wanna I wanna tell you that people on the the border saying Charles the president.
And they -- would vote for it.
So here's my question that you want that job that might well my.
My question is what would you do what would you do differently if you're in the White House right now and don't -- change the menu -- -- have had honestly right.
-- I think the one of the biggest things that the president's making a mistake on is.
He's always been a campaign mode from day one.
And his I think it's too much that in terms of divisive this I really feel like there's a big problem.
I want thing that's hard to quantify its confidence -- -- we do have these confidence surveys yeah but I feel a lot of -- -- people just are losing confidence in the system and their country I really want.
I wanna fill when the president finished speaking I want to feel good as an American.
And I don't think that happens right now I just don't think that happens because someone's always default something that -- I you know post election.
And I think that's missing so I would try to unite the country I would say you know what rich poor first of all.
For years who you know poor people looked up to rich people because -- margin for the most part -- there.
You know most people are born with a silver spoon in mouth overwhelming majority I guess like 80% of some millionaires in this country are self made.
-- -- below them which is they -- you do that congratulations by the way you probably created a lot lot of jobs along the way.
You know north south red state blue state all of this stuff but things got -- up.
You write about that he does seem to be very divisive -- if you know always it's always about.
I didn't Heidi I inherited this you know this wasn't here when I I I I took -- over.
If they think that I'm gonna go away you know -- this fight is you know it's not about flight.
Right at its liking video of this making stuff even if you felt like in your heart of hearts that this who you wanted to do you have to have a big huge press conference about this and and and really.
I'm in doubt that this is all about politics but if it's backfiring.
Is back for not told to in the when we first got word this -- -- you don't want I do believe that they're decent more transparency.
With some of these investments at these banks made and their needs to be better oversight -- and maybe the government failed -- -- oversight was actually there are in the first place and they failed -- originally.
But that doesn't necessarily mean that we have to have a fight on our hands.
Right or it doesn't have to be in a public event that you don't have to have a press conference -- morality would you say the word fight lunch one time I'm gonna fight the banks are gonna.
They really try to get the chance against them he tried to get to chant going a Friday did you guys notice.
We want our money back he tried to get -- going and then take -- -- The next -- and money that.
And decided fashion and that's a disingenuous part about it and you know I think that's what people cross party lines I think that's why -- people voted for the first time.
I think that's why get the independents I don't think anyone thought that the President Obama community organizer was a banking expert.
I know you think about this we always talk about the whole thing to happen during the Great Depression.
And then the -- the reality was it took a wall below wall -- to force to come out of this what was that one thing about that that really was incredible the united the country.
We were all together as one nation that you know it would get spending came along with that but it would be united the country I think that's a big big thing that's missing is that bothers me.
Well activists -- my happiness in there and not practicing.
So how do you see the rest of -- playing now.
You know I'm just not sure I really am not you know these guys -- predict stuff so for I give my tip my hat to them -- you know I'm trying to figure this stuff out almost 45 -- -- 48 out of an event.
I think yeah yeah -- they're really I mean we know we're vulnerable.
We know that more likely Ben Bernanke is gonna stick to his knitting it keep interest rates low we know where that leads us ultimately.
So I'm not that he could but I did have from -- regular bullets really nice in a message he's gonna miss the wind and he's gonna have a because he said low interest rates weren't the problem.
So you know it's it's like.
It's like an alcoholic and you don't think you have a problem then you're never gonna fix that you know first things -- the minute and that's the one thing about this new Ben Bernanke does -- vehicle was -- from this guy.
Just like you know what between him and the president taking battles all the time -- you wanna look about the guys look around.
What do you what do you congratulating themselves would tell them what scares you the most gone fine how are you investing aren't.
What do you we've been very nimble and you know we've been trying to be very -- we know we have a lot of this is that right now we're down a little bit we took a lot off the table I mean I since that time of alerts out.
-- take profits over the last three weeks so.
Our subscribers -- have a fair amount of cash to put positions are holding may be up a little down a little right now maybe one or two disasters.
And just sort of waiting for opportunities because I do believe in capitalism -- I do believe in the business cycle and I -- like.
If every what was stay away stop tinkering with this -- -- trying to take credit position themselves the natural business cycle we will come out with a -- poised to come out of this.
Is this something you like that you know if it dropped 2% 3% you say.
You know at dollar cost averaging you don't wait for a big drop on it you you like it enough to Wear a little bit -- that's good enough to get in.
I mean there's certain -- I think it's almost forty years old thirty years on the looking for some in a 401K it IBM you know I don't think it's just an incredible companies are to me imagine.
Any rival taking you know stealing the thunder for a very long time.
When they pull back on earnings that would be a prime example of that.
-- -- who should be then and Ben Bernanke's chair.
I'm not sure that's the 1 question mark and am trying to study this guy Taylor from the Taylor rule.
-- -- -- university professor he seems pretty compelling to me I'm still -- personally I'm studying it and try to figure out.
Does -- mean that because I don't know doesn't mean that there are qualified people out there them.
You know and I think that there might that there are qualified people out there.
It is just that we don't know who they are you know there's got to be talented people with either within the system were floating around the system tough.
Well ahead of the abuse launched off the because all my good you have to be Smart that that I had to have a thick skin I got to be apolitical you do that you you can't be seen as being a puppet for the administration any administration regardless of who it is.
You have to go to convey your thoughts properly yet to go to put into words and talk to the average Joseph on the streets very tough job to do.
-- they are political now ever since.
George Bush senior said more or less that just Greenspan cost him the election.
They've been they've taken great care particularly around key election times not to not to do things and the in and I really believe that said of Obama and Bernanke.
Are trying to you know do they do you have to kind of figure monetary fiscal policy work hand in hand but.
-- they seem pretty charming to me.
We get question from Chad he wants to know if you think it's time to get into the back into the bank stocks or is it just to unknown now because of what they're -- Again you know you're looking for a trade you -- you might win a couple days if you look in the longer term you know I think a good Goldman -- -- -- at that right here and we that's I think it's oversold JPMorgan and the forty now that was a -- -- four point.
I think that's oversold although that's one of these banks are really if if everything that the president is talking about they really have some series unwinding to do it and yeah -- what about what about community banks or not I should think me and little community banks give it -- second reason is still great closing another fifth third really looks really attractive I think we've talked about that once before.
They have to worry about them and repealing glass and yeah I don't.
Right you know right.
Right in -- these other guys have to get smaller the deliberately smaller than that gives them some strength as well so.
But there -- you know that gets the key here is a sense of urgency.
This is their sense of urgency really to be in right now.
And I wait a few more days -- a few more weeks and answers now I don't think so I don't think so we'll let you know what.
We may get 7%.
GDP Friday -- incident back.
And a helpful to even the president makes when they got to take it all back.
And -- I am if they don't let him come out Wednesday -- -- they see you know what do you.
-- I think we did cross the border.
And I'm not gonna try to give anyone out of this though it's shared sacrifice your read about it no factor small business and -- there -- no reason -- Tom Jones didn't let it sound like nothing you -- -- Wall Street strategy in my home maintenance that's right.
On the other party and come night time and we'll see that -- there I would say quick break when we come back whereabouts -- all out the newspaper business is not being good.
Some are making some moves -- to turn around it's painful.
Not welcome back to foxbusiness.com.
Cotter and burns with the -- we talked about the New York Times charging for online content.
Starting in 2011.
-- chat with us about that any abernathy -- -- did you meaty -- economics at the university North Carolina.
At Chapel Hill -- will go to the show.
All right this this idea that the New York Times is gonna charge for online content this has to be not just the wave of the future but the -- the very near future would you agree with that.
Well I think that the in New York Times is finally -- a step -- a lot of people let's hope they would make for some period of time there in a very unique situation.
And if they can charge in it opens up some -- from other people to do that.
-- journalists now I mean is this the way to go there's so much free contact on the web right now why would -- pay for something.
Well let me let me clarify something -- journalists but I also got a a degree in business so I'm I'm bilingual to a degree and a Santa I have a -- work and right well I'm not sure that both sides of America but I can understand -- -- The on the act at the real issue here is that you're getting -- maturity of an industry and as you do you you get certain economic.
It's concepts that come -- debating.
And I think with the New York Times what you got.
A notion that -- -- it just doesn't want to be free anymore now there are several kinds of -- it.
You can charge for -- proprietary content that you can't get anywhere else is one of the things that you can look for consumers to -- or.
Are they doing this the right way panic because at my understanding is it gonna do the similar to how the Wall Street Journal dot com does it that you can read a little bit of every story.
And then if you want to dig deeper that's when you have to have a subscription is that correct.
Actually they're doing it more similar to what the and Financial Times is done on the Wall Street Journal has a pay wall in which shuttle a large number of a part of the content is free.
But -- if you want to go for something else says explicitly that the Wall Street Journal you have to go behind a pay wall.
So you can go to the home page you can you can its -- -- pinging columns which a year times by the charge all our.
Several years it does let you if you want to daily news updates and a lot of other things -- a proprietor -- and Wall Street Journal you have to subscribe.
With the financial terms model that's been up and running for about a year you get access to a certain number of articles.
-- before you have to begin paying.
This is the wave of the future -- are we gonna start to see them all going to a paid content some sort of subscription basis.
Wouldn't it be better on many levels if they all -- it at once who could break now we're saying why -- New York Times when I can get it for free some more -- Well -- -- It did -- certainly ban a growing up chorus within not the last year newspapers in particular.
Realizing that you cannot make it don't solely on the pricing of the ever passing right now -- -- And I think that's -- specially -- given how advertising is developing over the way out.
What we basically had so far to support newspapers until.
The search ads came along was basically a banner ad which was sealed display at -- it was priced anywhere from 120 the 140 of what it would have been on the print.
Version so -- -- have historically had anywhere from eighty to 85% of their revenue coming in from advertising.
Up 15% to twenty on circulation in New York Times has always been unity.
The calls it -- be anywhere from twenty to 30% I was looking at the financials from last year and they actually had about 35% of their revenue.
-- -- -- from mom.
Circulation so -- -- what's at risk by not having that is not having the this circulation to it rip your revenues at risk -- circulation.
This New York Times also gets about not -- -- out of syndication licensing and a whole range of other things which is unusual for you -- That is that re asking and then of course you got your advertising which is eight we cute they're getting 56% of very large base of a couple of billion off -- -- revenue so that's that up when it comes at risk if you're pricing your plant very differently at that much higher than what you're pricing your way at all.
Our advertisers in your mind buying into this new trend because -- -- so many really traditional newspaper advertisers whether it's the car industry.
You know JC Penney -- what have you had been newspapers for a hundred years are they buying into this new.
Wave and and sticking to it.
Well I think you're going for a period of disruption with the advertisers I think the advertisers are.
-- you've only had one that really new form of advertising that has come on the way out and that has -- the the search advertising which it was is like text advertising that comes with the the search in -- has been a city Google fight tremendously that that's the only new form of advertising you pay at.
I think there will be lots of new forms of advertising and new ways of making money off advertising.
Developing as we see social networking rolling out.
And I think what's the real challenge for.
I'd -- papers it particularly but also print in in general is -- make sure you stay on top of where.
Those advertising trends are going and actually create you know capture the bag you picture creating for the advertiser I think there's always a tough for the average passer between.
It large reach and between efficient -- and I think.
What the times is -- -- managed to navigate quite well with this national expansion was becoming a very a -- Targeted market for certain advertisers and that's to a degree what they got to figure out a way to duplicate on the way up.
But we're not finding that right -- -- we got a stock edged down about 68%.
Imprinting your time staff over the last five years so it's not helping shareholders.
We're also seeing that.
Ads on the web are not translating.
Like they thought they would they're not making the money they thought they would -- of ads on the web.
So what does this mean for the model going forward it to me it doesn't sound like a very profitable one.
Are you talking about what does it mean for the model of advertising on the way to get -- -- yes pricing yeah.
Yeah at at it again where you're going for a period of -- -- -- I think we had one particular model that worked.
In part -- caused newspapers.
Most newspapers -- de facto geographic monopolies.
In the past.
And -- now you've got all this competition this coming hand and you're going for a period of disruption -- -- I think it will end up -- at least over the next several years of being many models not one model.
In which you'll have newspapers.
Making money I think that the New York Times is.
I interest in the -- -- them is is begin to try to understand that.
They do have some information that is of baggage that -- audience would be willing to pay for and -- try to figure out what -- is this might not be the model that works.
Just is -- select wasn't the model for the and that worked either.
Then we've got a couple minutes here or maybe just a few seconds but it did so this may be -- The New York Times for the national reach the Wall Street Journal the Financial Times.
But what does it do for the Knoxville and sent -- Marietta daily journal in smaller papers that don't have a national reach.
Well I think we're working right now with several really -- Stellar quality small papers side down in North Carolina.
-- -- which -- won Pulitzer process for public service and I think everyone is trying to figure out what the new model will be having what can you charge on the way up why do you -- information.
You offered people -- getting anywhere else that they're willing to pay for and in how do you didn't regroup the audience how do you put it back together.
In such a way that advertisers willing to export and that's that so I think that it what the I'm -- had.
You know I was -- say that's going to be one model for the New York Times it could be and it very different model for something like that they able observer down here and in North Carolina 65000 circulation paper.
-- which prep sports and military uses very very good morning to that market.
That's see your point that the whole industry is gonna have to reinvent itself and there's not going to be one.
Answer for everybody.
You're absolutely right the newspaper -- industry is going to have to reinvent itself.
It basically is tied to a 200 year old system of distribution and -- -- That they no longer have to be tied to so they have to figure out a way to make that transition into the did you legend someone help some -- some whale.
Patty thank you so much -- abernathy night sharing digital media economics.
At the university North Carolina Chapel Hill thank you so much for being with us.
Thank you payments and it's really interesting actually.
It is the end in the on my point is -- you can bring enough people on the web.
To make it financially viable for advertisers if you have a national reach these people all over the country going to see -- be the Financial Times the Wall Street -- and -- New York Times.
But for the local newspaper is still very tough because are still so reliant on.
-- used car dealership down the road to -- a full page color on -- you don't get online and if that you face cargo ship doesn't buy into what you're trying to do one line.
You know -- even seen the big guys struggle with -- on the -- so they can't do it.
-- -- little paper and Schenectady and off.
Jeff flock is gonna join us when we come -- the -- when he gets -- -- don't go anywhere let them yet.
Welcome back -- -- what.
As -- your questions.
I think that they that if I handle all day on that today still weekend and still in weakened -- bad it's that bad there that I.
I welcome back to Fox Business back on live trees and it's this kind of market up 61.
That substantial -- since we started I know Wimbledon I -- because we got that karma tell us what.
What's your I'll tell you -- call my you know -- about ready to break the record set by Titanic they are at one point 841 billion dollars worldwide.
Titanic is one point 843 billion dollars a couple of days from now.
Avatar will be the number one grossing film of all time it's a good thing is that -- -- half a billion dollars to make.
No I have not seen any that I have to see it though that that's why that's -- that's one of the few movies.
But you can't wait to see it on your TV and I don't look at TV you have you have to see it in 3-D at the IMAX theatre you've got to see it might have to see that all them but.
On the insane if you have to that's where you have to see -- you can't wait.
OK and you know -- -- that half.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But if they look -- why -- acting by the way I'm not sure does avatars that this computer generated understandable that Sandra Bernhard alright here's what we're doing.
-- center for science and public interest but the put out a study a medium sized popcorn and soda.
At one of these theaters -- the thousand dollar butter.
Is this scene is the equivalent of -- three quarter pounders along with twelve pats of butter -- -- hateful.
And putting well I -- and gotten medium popcorn you popcorn soda with butter with a butter on a pop regular soda diet.
Isn't -- regular soda.
All right end of the got all -- the -- of fun and I got but the Diet Pepsi or Diet Coke different.
-- that which by the -- is equivalent of sixty grams of fat that's three days'.
Worth of fat -- the average human.
So going up the popular get some dots those dots -- the Tutsis but -- -- a lot that are Sweeney spent -- out how fat.
No fat I Jeff Flock joins us right now we got housing numbers earlier today that weren't a deal to all over the place these these government numbers are everywhere.
As is Jeff Flock on -- yeah.
-- you're like an urban forests over there what are you what are you doing.
I -- Lincoln Park in Chicago and a beautiful.
-- large yard complex.
We're looking at real estate for you and you know since this is the web we thought it appropriate to show you a unique.
Web tool for you on this day when existing homes filter out the kind of down I got Bryant to pony with me who is a former TV news reporter.
Former political operative.
Came up with the idea persona called block shopper dot com tell me what it is it's an independent local news and information site.
-- states the topic.
It's in the consumers and essentially what they do -- list every property -- -- markets appear in Chicago New York City you can find your own house if you live in the city they are your Condo.
And you -- what information about.
Well -- -- sales price owner history.
Tax information that's bats all the -- the county collects -- we -- altogether.
Clean it up make it readable and adrenaline and then the other thing they do with their little bit like.
I think it's probably too strong -- the paparazzi of real -- journalism but essentially they turned.
The people that are selling homes in buying homes into civil -- and subways they will write a story about them on the ball on the web site.
Right or not Sparky but it's we're humanizing that the -- who buys a home is really important.
She and here's The Who right here.
-- -- Kendrick who actually Kendrick -- You're selling your home and thank you for opening up to us.
But the world was already open to it because you were aboard shepherd we know in fact we have a journalist and -- at a -- paper that.
You can see I'm not really making a profit MacPhail bit at a either but you're OK with that -- you and I see you've got a family here but if you like having more information about the homes both pitchers selling and looking.
I do I mean from the selling side it's been great and and we have two kids now we're having a third so we needed a bigger home.
And that black shopper really helped us figure out -- pricing strategy we look to compare the listings in the market.
And that's how we settled on a price and I think we have it really well because we've been on the on the analysts are over a week and we had ten showings and then on the -- side it's been helpful because we're moving to a new -- the -- short Chicago and -- helped me really researched different neighborhoods get insight on homes that I'm interested -- -- island who -- and neighbors.
Ignorant and that's a doctor next to this is what it also most important meet -- being a mother young children you know I wanna live whether -- other kids and the.
Let let you know I see lovely family that you have right here and one on the way it appears yes that's right although I've I've might know not to ask actually it until -- mostly see the baby actually coming out what should I ask if someone is.
Haven't they -- but their ego too much thank you Jeff for staring us that we appreciate it Jeff Flock.
In Chicago thank you so there.
He just makes me laugh blocked up -- dot com -- -- transparency.
That is something we don't see very often -- you know what actually thanks to the web and I say this only because I was just in the housing market even get a lot of information.
You can you can get it's because that is.
Scary purchase because not only is it then it's -- like -- every penny you -- -- every penny you won't for the next thirty years when you put down money for that mortgage it's everything.
It is and it's helpful to understand everything and -- and so it's helpful for me to know oh well I tell you what so much added it's just really -- out the window.
It -- doesn't matter what you paid for your place -- you never gonna get that again.
If you blood at the height I I can have no I can't feel bad for you you're not gonna see that money ever again so do like to -- care when -- make you an offer nominal global you because you're desperate to sell.
Well of course the -- so that's where we are right now so as much I want it to -- mark exactly and as much environment is a load of information out there it's almost worthless because it really just.
-- -- -- -- to tell you something low one of our viewers as are used to give money to an industry they gave us Michael Moore.
All personal feelings aside with Michael Morrissey Roger and me that was first that movie I believe his first movie's first major movie anyways about done.
His relationship with General Motors and the city of Flint, Michigan yes what a -- Great movie that was plan.
Yes that's when it ended right there Roger and me his best -- so many bands that the first album is the best method that -- -- -- off well was kind of like soft sell.
That wasn't who I was thinking of but we'll go with that we'll feel the mom finally painted --
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