Also in this playlist...
This transcript is automatically generated
Are welcome to -- foxbusiness.com live everybody good to have you with us for another day we are -- the markets doesn't have much direction today although we have some.
Economic data we'll talk about of course the death of Senator Kennedy seems to be topping the news all around the country today so -- -- -- like -- -- what was the most to be kind of a quiet week with the president on vacation and you know most people taking a break before.
Labor Day and when Wall Street hitting while getting back in action would you say after that.
I've ever -- -- talk a little bit about some of the economic data that we've gotten today that really hasn't they had been that -- -- in the markets are down but.
I know you are so we've seen -- stocks up for six straight days so -- -- -- very light -- he did mention you know this these two weeks a particularly in this area.
A lot of people on vacation now the last two weeks before the kids go back to school.
I have post Labor Day but -- what we'll start with that new home sales actually out that 10 o'clock eastern time that was a market -- Sort of added a little -- we did see stocks higher after it cannot initially at least.
Fourth straight month of gains four new home sales keep in mind it's only about 15% of the total housing market still.
-- seem to look at nine point 6% gain month over month.
Way higher than expected 433000.
Annual rate there.
The June number was revised higher so we're starting to see a trend where some of these economic data.
Are being revised higher whereas we had seen prior reading skating revised lower and now a lot of bears -- had been particularly winning today accident that's an interesting trend change.
-- total sales though still down thirteen and a half percent vs a year ago.
The story here guys the median home price continuing to slide down 110 of a percent from June but down eleven and a half percent.
From a year ago it's now the -- -- 101100.
If you look at her pocket to street clearly it's in the northeast up the 32%.
The midwest still seeing decline of seven and a half percent south up 16% the west up one point 2%.
Also they the number availability of homes down a little -- -- we talk about this inventory getting worked -- houses -- is not seven and a half.
Down from eight point five is the lowest level since April of 07.
If you look at home -- there -- there's ETF that tracks -- -- looking at just before I came in XHB is the ticker.
It's at its highest level since -- last October.
So -- it's sort of breaking out to new highs bucking the downtrend.
Durable goods though that's what sort of weighing on the market here we talked about it came up before market open it was the headline number biggest gain in two years after I grabbed everyone's attention.
But when you drill down into it a lot of that was we're sort of orders for planes -- a 100%.
To -- some sort of skewing the numbers automobile activity a little bit -- spurred on by cash for clunkers we talked about that.
When you look at this sort of -- -- non defense capital goods excluding the aircraft is basically a measure yeah measure of capital spending by companies it was down.
And that is not something a lot people are joined on to company still not going on spending a lot.
That doesn't necessarily bode well yet because these are very -- numbers keep in mind in -- I can see a 100% increase for.
Aircraft orders every month -- people aren't going out buying refrigerators computers that other goods.
Yeah he's white goods is a lot of people like to -- and -- last three years or more so yet.
You on the sustainability of that is is what's called an.
Western exactly as you say the capital spending number was actually down and even the simpler number that -- lot of headlines and we just simply take out transportation we weren't up even close -- as much as we were.
If you looked at him but that prior number was revised higher so sort of when you look at percentage basis that it's a little bit skewed -- about -- that is -- fairly positive signs and I think that well.
Last month was revised higher so I'll let you know it's it sort of makes it harder to do apples to apples comparisons with that -- on a number of them.
Apple aren't if it.
This lunchtime thank you Robert I guess you -- -- Robert -- with us here with the top stories on the economic data art Hogan now from Jeff -- is with this and from here in New York City I believe this the first time mark's been on our on line shows we look forward to having -- takes questions from our viewers and what have you.
Good to see you aren't what do you make of the market he said we're not only today obviously -- looking for some direction but what's the next phase of all this after the big rally we've had.
Well I think that's I think that's the 64 I thought Marcia -- we've.
Seeing three phases in this bull market they get off of the lows in March in the first phase is really backing up from the abyss where we if you look at the realization that the world -- -- gonna fall off a cliff here.
And the pricing and stabilization I think we've successfully gone through that phase.
The phase we're in now it's trying to look forward to growth and what we haven't seen as top line revenue growth the F from corporate America that didn't reflect itself in the second quarter earnings we still it cost cutting -- the bottom line numbers commitment.
Much better than expected so as we look at this economic got a strange things have been more good than bad but I think that market participants are waiting for a -- to put new money to work we've the other.
The school of people that feel that deal too much too fast is that.
-- the modus operandi here and waited for some sort of pull back with marketplace get the lyric opera that we're we're working with you know.
And basically -- AS Dalton threw in terms of the number of them.
Players right now and probably next week as well also the volumes are going to be light so it's hard to put any real.
Conviction in any of the moves overseeing until we sort of get everybody back in the game after Labor Day.
Well we're glad -- part -- that skeleton they got to prove your vacation request this week what happened and I forgot to put in the they're.
The Buick is yeah both have all here apparently that's good news Peter we would -- economic data -- -- the Robert -- mentioning and the headline looks.
You know fairly positive compared to the economic data -- the past several months both on housing and durable goods -- -- the question that we keep hearing.
From not only are our morning show but also from a viewer is whether or not -- can be sustainable yet that first time.
Home buyer tax credit expires at the end of November yet with the cash for clunkers program that might have actually been a little bit -- durable goods it's a little bit of that line.
-- -- make -- that you think any of this economic an economic data site you think any of that.
Quote unquote better news is sustainable or is this just kind of a seasonal and -- I think that the two things yet to think about especially as it pertains to the housing market is.
We've seen a couple months in a row now -- we're seeing improving data on that on the residential real estate front.
-- obviously that's gotten some stimulus helpful but I think in the real sense what you need to look at and bigger picture is two things are happening we're finding a clearing price of the average prices have come down.
Two where were clearing out inventories we've gone from eleven months benefit.
Nine months down to seven and a half months in terms of overall inventories of that -- we've been.
That would be concerned about is is working its way down regardless of whether that's being spurred on -- low interest rates availability of mortgages or or access to credit.
I -- certainly government stimulus for the first time buyers.
All -- all of that gets us at the end of the day to working up inventory which is you know I played a major necessity here we're still at seven and a half months have been the -- which is twice -- historic norm.
So we have more work to do but I think it's very encouraging to see a couple months in a -- better than expected.
Housing got and I think that's -- something -- -- who worked -- within the next couple months.
We're all trying to figure out -- you can take that into.
Reasonable case for -- the market having really really turned.
Some some something of a corner we had Bob Schiller on here yesterday and he still seem to -- to be rather cautious even though the numbers and his index.
-- there are starting to look pretty good the last couple months you know the seasonal factors may be the -- end of the year won't look as good as it does now for one thing and -- tax credit that Jenna mentioned so you mean can you make the case for this turn -- or -- you still need some more about.
Well good citizen -- show quickly you don't have really authentication -- study.
It's one of the things we -- having too much that are on positive territory you know that's that's something we haven't seen in three years -- we're we're talking about a trend that could turn very slowly so that that they have to look -- irrelevant freeze.
You have to go back to 2006 to see that -- the magnitude of difference.
Meaning that average price is about you know literally have -- -- about 60% from two to 2006 level so.
When we say we're seeing the clearing price I think that's the imperative here.
Where you know that when you when you say you're seeing permanent residential real think that's great because -- were -- inventory.
Let's at a much lower right a lot of the sales were -- a foreclosure sales of extravagant prices as well.
And you don't needless to say that's important right now because that's that's part of the process to get out of the mess that -- weren't but clearly it's going to be a slow process turning this around and and you know some of the things that make up that that homebuilders index.
The robber was talking about earlier.
That might -- got a -- -- of -- is the operative that's a sort of look at that and accident take out the folks that focus on the high end.
With -- you were David Torre isn't moving as quickly so that the electrical Brothers on the higher end that the -- sort of focused on the average price of you know about 400000 dollars.
Is probably a bit ahead of itself and look at the folks at focus on the lower end where things are moving.
If you if you -- -- make a trade I don't think buying the entire mess with the right thing to do right now.
You -- our viewers is asking good question you were mentioning that need their -- professional investors still waiting on the sidelines got a lot less volume of course of Alaska lack.
Couple weeks maybe next week is well.
If you're and -- here in the age range and play five to thirty this is the question from TJ he wants to know is now a good time to still go out go shopping for stocks.
I had the -- he missed the window as well as far as holdings have been -- some companies and holding a long term.
It is is still good time to go -- that.
I think it's a very appropriate question if you look at the market we know thousands of marketing databases and -- tees were up forty or 50% from a march -- -- that still doesn't bring us to where we were.
Did at this point you know the the month before Lehman one of the waves -- -- Well below those levels -- if you're the expert about a personal bad Adrian that demographic is looking at investments in the stock market at the long term Verizon you have to ask yourself this question only needed better position two years from now.
-- we are today -- -- if you're gonna buy stocks and hold them.
You know for 234 in my ears then yeah obviously there's the opening of upside for you if you give -- we'll put -- at this point.
Estimates for the S&P 500 for for 2010.
Have gone from 63 dollars at the 72 dollars.
And it averaged just sort multiple and that is something like sixteen and a half times.
And I -- a 15% upside in the next twelve months on the S&P 500 if things remain the same if that's just.
With the conservative forecasts and and and in those efforts are probably conservative with the with the beating that -- particular -- month.
So I think -- of you know there's a modicum off site right now but understand.
As a long term investor you you can't look at -- -- -- that the fluctuations that you're invariably get a -- You know from now until that you have at the end of the year there's going to be a lot of volatility -- market -- is going to be some things.
On that -- because you know price price action as we've seen over quite a bit -- it's probably fair to point.
-- are on that they would you suggest then buying sending more general like an index argued it Cubans still alive and it was heard stock -- -- so much of the last couple days.
It it it it company specific.
I think it's company considered the Caribbean in new environment -- 2010.
Or have economic growth but it's going to be slow it's going to be slower than normal growth so.
As -- -- three to 5% GDP growth rates -- gonna have one to 3% GDP growth for -- and you have to look at what.
That's gonna mean in terms of your investments so what's gonna play out of a slow growth economy technology obviously plays into that because that's what's gonna make it's more productive.
Obviously I think it's true in the health care a lot of that Health Care Reform.
Cloud that's been hanging over that space is probably gonna remover and have a lot more clarity and that and the folks in health care -- that save the healthcare industry money.
Are probably going to be winners in this in this debate at all so we're gonna have we're gonna inflation at the port dominant -- probably a pretty strong way it's gonna manifests itself and sometimes.
In 2010 so look at companies that will benefit in inflationary environment for companies that have hard assets like energy companies early cycle industrial materials etc.
But just as you -- saying that art it's funny one of a classic question came in for -- -- about inflation about your views on it.
Over the next year to eighteen months so you say it's gonna manifest itself sometime in 2010.
To what extent and and you -- how do you expect that the -- -- there's others who say well we don't see any signs of it yet we may have some more time that we think how do you see playing out.
Well more -- we think probably plays after them throughout 2009.
Because we haven't seen their presence felt -- the CPI and PPI as it gets better back.
We're in deflationary period that that -- I think comes that you know as we look at food in the for the major inputs but away from now I think if you look at.
The -- -- the US dollar by the amount of money -- printing by the amount of monetary fiscal policy there were were involved -- they might -- -- that's probably going to be with us through.
At least the first half of 2010.
It hit it makes us just for the dollar to basement basis to -- the commodity.
Complex across the board.
Rise up and an -- and constant sort of dollar -- -- type of inflation.
What's the timing and that probably the first -- 2010 what's the magnitude of that it's hard to say we've never had this much liquidity being put into the system.
On a global basis.
So I -- I would I would see you know I would think that things like energy based materials commodities things of that nature of -- probably a fare pretty well.
And that's what they -- months.
You know whenever February -- -- asking the -- some great questions today by the way.
You makes you know going into September going into the anniversary of Lehman Brothers collapse and really this sets a time -- -- Anniversary of that time.
-- question about commercial real estate and what kind of threat commercial real estate.
It -- still today's economy -- to this market.
If you could share your thoughts on that -- thought from the reached the actions we've seen -- recently because that's -- -- off -- Yeah absolutely I would I would have to say that -- everything that we look at right now and we try to look at the -- say what's going to be the biggest Earl brushed the move toward what you know what what it took over the apple -- the success we've had this market.
-- your your basis the one thing the 1800 pound -- that that's in the room and consistently -- -- conversations whether it's with.
You know clients are your -- coworkers.
It is exactly that commercial real estate that you know that's the one thing that sort of hangs out there as as you know if there's going to be a double -- at W.
In terms of recovery here that's going to be a bit the one thing that -- that we'll have to see how that plays -- don't understand the dynamics between good.
He had a commercial real estate are much different than being on residential real estate.
We talk about residential real sit a little bit more in the marketplace because it's easier it's this idea that then it would be -- That that sort of under the commercial us they are completely different and then that that's also something that you know it's -- in a large since his own mind.
Where -- residential real estate about 80% of that so -- you and I and we actually do something -- to relive that regardless of you know what we think about our promise so it's yet that's that's that's one of -- major concerns.
You know on this and as you said you made a point guard you're right it's a concern of a lot of people and the know how that plays -- the economy may be.
Something serious but often there's a disconnect between how you invest and how the how the economy ends up playing out -- the long term because so many people are concerned about something like commercial real estate I don't think the various markets -- our our pricing.
The instruments that are related to that in other words is Armageddon -- in and in some of those markets where we might not get it at this point three.
Well I would say this anecdotally we look at New York City -- -- a great example commercial real statement.
So we you know we're we're looking at thumb on the on the commercial real -- -- pricing per square foot that's -- something and -- -- in a year's time something like.
On average 85 on the square foot that point five dogs were put so I think that the reality of what's being priced in this on the reits that represent that and that.
In the office we re complex art art -- don't really reflect again -- net asset value basis so to the extent that yet.
We were certainly staring at Armageddon has a market rationalize that we think that depends on how bad things -- I think there's look at some point and time again we'll plant finally clearing price.
For commercial real estate and now play itself out but that's.
It is a major concern and it's certainly something that.
I think your everyday investor your your -- and mom and pops that they should probably avoid it at all.
You had -- -- an unnamed company don't leave home without it related to credit card.
Is there one thing you would leave home without meaning with the market right now is there one thing that you.
And you are yet to give any have been investment advice for just the average investor out there that you would not leave home without that you need to have your portfolio during -- time like this.
But the article like this the most important things to be diversified.
For example if you sort of look at and not a lot of people look at their investments on -- sort of quarterly basis negative that the average investor tends to look at it either quarterly statements but really attacks time and they say you know if I sit -- -- -- -- what is -- that I -- again what we're looking at.
In the end and that in the three things you need to think about -- hey -- -- that investment time horizon right.
You know the shorter that is the last explored -- need to be equity markets in the U regardless of what you think is going to happen that we've markets or what -- forecast is for the next two years.
You really need to pare that back.
That said if in fact you've got a longer term investment -- -- -- under exposed equity markets.
This is -- this is that a point in time we need to make our decision and that our decision is am -- going to do better.
In the equity market or a way to do better and at some other investment vehicle whether particular bond market -- Over the long term idea I think the diamond dynamic there is playing pretty poorly I think that.
You're gonna see the United States continuing to have to issue debt and I think that's gonna continue to put pressure on.
A lot of investment vehicles away from the equities markets -- at the seal that plays -- over the -- few months but my guess is.
If you had a if you had a portfolio -- be more balanced equities and needed to bonds.
You -- to the ratio of something normalize the 65% exposure in a diversified portfolio of equities you know 30% 5% cash.
Thank you are.
Everybody gets made vacation connected whenever you -- -- -- went birdie on the beach hopefully with the finish up from there.
Apps aren't -- -- -- appreciate it think that the point.
Art Hogan from Jefferies answer your questions and hours I was -- now.
There was this few stories that got as much attention in the newsroom on the last few weeks really than when word broke.
The beer prices for yeah.
Thank you very very there's -- Harder by some and other so centrist biffle come along cover that who better and then we've I feel like margaritas that around you and me.
Not afraid we're -- that -- look at the the restaurant industry also -- a lot.
A lot more still to come -- this -- dot com -- keep the questions -- Advocates -- fading cell.
The higher beer prices higher your pride and that's what we hear from the companies and found Sanders -- -- if you're atop a little bit about.
What exactly does this week means -- -- as at Wendy's near -- maybe it's smaller version of this.
Things are huge and -- -- and -- okay.
Didn't bring -- I didn't get it that the niners and the ounces and everything colony for poll results.
QB I can read it says that right there is that the a year.
-- not been I guess what it's not because demands that a group which is the obvious when it comes to economics and then.
Demand goes up and obviously the price and go out -- not because demand actually dropping.
That the two biggest.
Boom -- in this country Anheuser-Busch.
You know bad habit and Miller -- I jacking up prices they announced today they're going to be raising prices come fall and don't think that.
Because -- often hear the -- if these guys that you're exempt from -- they're raising prices throughout the country really following in the footsteps of the trend.
The beer industry that we've seen.
Hi nick and has its namesake Heineken brand of -- and style light.
I recently -- -- the price of its peers globally.
-- that it really boosted profits.
For that and his people stumbling to pay for.
-- the people are still willing to paint or inning and you know the price of commodities.
For these guys has been going -- as while not as high they were last year corn.
We for example but I and the price of the commodities that -- -- things happen.
On the rise a little bit this helps them off some of you went so that we've talked -- -- experts before and that when the reasons why I'm here companies can get I -- from this is that if you like -- like for example.
You're not going to be in your neck and back run right right that's right.
-- -- -- -- -- -- -- -- I hope it's not popular -- and and that they must -- -- I mean you can really work and some of the brand loyalty some of them you know keeping people and it -- -- and -- -- cases because you know prices are gonna -- what's really interesting we've already been getting word from some did the other topic a GG or is that food prices are going up and we've been getting word.
From some grocers.
That folks are running in and they're stocking up on chicken has -- cart pricing buttons that stick it in the freezer right so he can't exactly act that they have the born on date that's that's exactly right somebody's gonna have like two cases of -- to -- exactly I don't know he can keep this in your anger oddly shaped you -- -- Is certainly it's the case of people are thinking -- -- you cut back but beer drinkers -- beer drinkers.
The NASDAQ mentioned you've got your -- you know I think -- -- Miller Lite whatever it is.
People have their brands and they stick with -- so.
In what's also really interesting -- what we've seen.
The cost of -- like the basket of consumer goods measured by the Consumer Price Index -- actually come down a couple of percent over the past year.
Beer prices guys have gone up four point 6%.
While the cost of everything else is gone down some people are actually still paying these prices.
Despite the recession despite their -- -- -- -- -- -- pain so it's theory leading inflationary indicators and you know I'm not gonna go there a bit.
What's happening right now is -- Department of Agriculture is looking at that basket of a consumer goods including food prices.
-- and this isn't gonna last much longer the price of a gallon of milk for example.
Right now the a national average two dollars 99 cents.
That's about 25% where it was last year and the USDA economists are looking at that thing.
We're gonna start to have to see inflation kicking here -- -- start to see prices of some of these -- go higher.
Like be like eggs like milk which we've seen big price declines during -- so expect food prices to go out.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- natural light he literally mean no need -- laugh at.
It's just not here right may be added only one that I don't at times and then bring them here -- it would be -- -- light reference.
That's -- well here here's the Louisiana -- if I actually met you know this is the auto accident Uga.
I -- with the school in Louisiana and I think the true case of a good Patrick you know I'm not appear I don't mind Avant Kuroda are Miller an effort.
I don't mind but I -- but there appears to be done pretty.
Certainly got the Israelis and Chicago but -- -- -- Got.
-- I'm beer drinker not an ever have a Margarita I fear I do like that you have to talk a little -- -- -- the -- you.
-- a bad idea I think you -- you know I agree with TJ and -- Divx is a good Irish woman who died he's day carrying points here on the board.
And how you know.
Because this is not a -- and happy to be 100 survey question one do you hear him -- more we -- -- to the beer companies -- watch out you know raising of.
Prices -- after the first pitcher all the Beers taste the same -- the -- President I'm not gonna pay more than it was in the back movie back to school Rodney Dangerfield -- -- -- -- here every ten minutes for someone passes out.
Then burn one every seven minutes actions the opposite him Evan -- goodness how fair -- Center.
I don't you can enjoy that now you're here okay I'll return it to Robert great ally and certainly and I could not out of the -- -- You hit on beer in his office and -- -- that we let that when -- man.
All right that's what's next we do we're gonna focus here the restaurant industry a little bit putts really joins us next at IDC I think your favorite beer at first question.
I think can -- it right.
Yes OK what do you -- -- -- -- -- -- and -- it being a trade association official with the best that I don't -- environment you're right here and I think I was playing along I appreciate that aren't doing really well.
This talk about -- -- for the next few minutes doing this through -- couple guests lined up to talk about the restaurant.
Industry and how the economy is impacting thinks.
Have a couple other questions as well about.
-- especially small businesses it is doing in this particular sector but let's start in general terms and work our way down I mean this -- got to be still tough times I would think.
The most they have a good -- to get in there whether it's discounts or or -- something else.
In in the dining sector what's the overall state -- thinks.
And basically that 20082009.
Time frame is the most challenging period for the restaurant industry in several decades.
That's -- through the first seven months of this year compared to last year's sales are up 2%.
I and that's performance is substantially better than other retail industries.
But compared to historical performance it is week.
So consequently the industry being extremely competitive.
There are lots a great values for consumers now to obtain in the restaurant industry.
The value good value -- all across the board pretty much.
When you think about the restaurant industry sales this year will reach a record high despite the environment.
Billion dollars that's an average of one and a half million dollar today.
Even -- a weak economic environment so.
Almost half of all spending on food and America is currently allocated towards the restaurant community.
Sit -- on now it.
That's kind of stuck there there economist mark Lieberman mentioned a couple I think it was last last week or so with that it's actually becoming just about as cheap to eat out as it is to cook at home because of some of the prices that we seeing a lot infuriated that.
And -- that part.
What do you attribute that -- the fact that via people still go out to eat is it is that the price the price -- out -- -- just because they don't like to go out.
Well basically -- -- America today there are almost one million restaurant locations.
In the industry even in normal economic times is extremely competitive.
And it suddenly become much more so in this environment.
So savvy restaurant operators know that in addition to focusing on on prize they still have to deliver a quality food and service experience.
So when one looks -- American consumers today.
Well over a 150 million individuals will still be going out to use restaurants.
But in terms of cash on hand.
When that gets -- as it has over the past couple years they do become much more discriminating and thoughtful.
As to how they patronize different establishments.
And how well.
Those in the restaurants that are part of your group -- that would likely be even more importantly to become part of your group that are thinking about people.
Starting a new restaurant in this environment now that particular part of it must be very tough -- it and -- just.
We've been talking to people even -- the lending environment overall is improving.
Credit conditions small business lending middle market type of thing especially with the trouble that been well documented at a place like CIT.
That's still seems to be a tough environment now for a lot of people to get access to credit.
What about for restaurants are you hearing -- -- -- that still.
Yes obviously credit conditions for the industry are much tighter than they were a couple years ago.
We are picking up on reports that there is some -- -- in.
But the important thing to remember about the restaurant industry is is extremely entrepreneurial.
And with the national employment situation.
The way it is now you actually find many individuals opting to start restaurants.
And the industry has always been Abbas -- -- entrepreneurial list them.
And that currently is it still the case even in this environment it's just a much tougher.
Our road to hollow considering.
The consumers cash on hand position but a lot of them can't borrow the money right that the -- Well I mean entrepreneurial.
Out -- basically 70%.
Of the industry as small mom and pop operations.
And when one looks at the traditionalists.
Sources of financing for a smaller operations.
It ranges from family and friends to small local banks two national.
So what you have in this environment is these entrepreneurs really if they are set on getting into the industry.
They still really can go around and and get the money it's just now.
That real challenges for existing operators.
In terms of expansion.
11 thinks about the restaurant industry average annual sales per unit.
Are just 800000 dollars.
And so when one looks at startup cost at that level it really isn't that formidable.
But in terms of new operator is getting in and in this environment it's certainly have been dampened.
What our viewers you're in an interesting that.
Question are -- trend he said this is -- to get that gas prices really.
Are indicative of what goes on the restaurant industry to -- -- that we know that gas prices have dropped considerably since last year despite fact we are in a recession.
Do you think that had a connection at all.
Oh that's -- that's correct there has always been a very strong correlation between what goes on.
With retail gas perhaps these prices and consumer spending in restaurants.
As you would expect to last year when those prices were elevated it really did have a substantial dampening growth.
And then -- that eased off it did help consumer spending.
And then now earlier this year when you saw that up -- you did dampen again.
-- but by and large Americans love to use restaurants 90%.
I agree that they enjoy going to restaurants and as you know it's hard to get 90% of Americans can agree on anything.
Yeah I -- I wouldn't be curious to find out a midnight present what they look at restaurants they prefer resist the fact that you know we like going out and I wind that's my next question for you we had a -- really find -- small business story.
On her show yesterday about how restaurants are moving to and at what -- what how would you contracts is that the rest contracts -- that I have food truck track said they weren't doing different things to get people into the into the restaurant they're brick and mortar restaurant.
By driving around trucks -- -- -- cupcakes or copier even French friends for example do you think any interesting trends like that -- restaurant owners.
I'm being really innovative during a -- -- that's.
Absolutely as you can imagine this time there's increased emphasis on marketing and promotions.
And what's happening for the restaurant industry is the basic paradigm of restaurant marketing is changing.
You see -- rapid evolution to electronic medium ranging from electronic newsletters to cell phone text messaging -- specials.
And you know historically restaurants that recommendation is used to be word of mouth.
In this environment that word of mouth is now moving on line.
So you just -- many more savvy restaurant operators happy union immediately to these new electronic medium which are available to them.
I know you're trying to put the best that I think Hudson but at the same time -- and you know and this is your industry and obviously care a lot about it but at the same -- the numbers it seems to me -- there.
More optimistic or or more optimistic.
Outlook on that I've been here from a number of analysts we speak to and what have you -- looking over some report that was written in connection to.
The company Sysco the food company as we -- Cisco with -- -- it's the latest earnings report worth there was numbers in the restaurant news that -- talked about people dining out much less than they had the prior year restaurant -- Traficant says.
Down 7% of the total sector 6% decline in the quick service segment 12% decline in mid scale down -- 13% down.
In casual dining -- I mean these are bad numbers and in this this idea that that people are kind of still withstanding it seems to me to be a bit.
That Rosie now.
Well basically when you look at the restaurant industry we actually tracks sales in seventy unique segments of the industry.
Even though -- -- this juggernaut number of 566.
At any point in time there's certain segments that are underperforming and certain segments that are over performing industry growth rates.
But in terms of same store sales and traffic for the two largest segments quick service and cable service.
Even our own restaurant performance tracking index.
Confirms that those same store sales and traffic has been.
Under a definite pressure for the past year.
But our index tracking shows it is no longer -- an historic low it has moved up.
Since the beginning of the year and even though it is below.
Historical levels it is moving in the right direction and everything -- goes along with a lot of the economic data we've had you think that the trends have now even though things are tough the trends now.
Had started to move in the right direction the bottom is in the worst is over that's the case you're making.
Sure I mean if if you look at the newest consumer confidence numbers which just came out yesterday.
It's important to focus in on what happened to the confidence in the higher income households those households with 50000.
Dollars per year and above.
If you look at it on that break out.
Those households had the highest jump in confidence in the highest confidence levels.
And there's always been a very strong correlation between.
What happens with higher income households and sales growth in the restaurant industry so that's definitely a good harbinger of looking out six months it.
In terms of how those higher income households confidence.
Is heading in the right direction now.
-- and we appreciate your diplomatic answer on what your favorite beer is.
And I -- your perspective as well on the industry at all it's on entirety thank you very much has -- we're talking NCAA -- -- -- that -- continues.
Thank you -- and now try staying with the top really guest on back in the spring has sent 20000 restaurants are gonna close down.
Over the course of the next three years we don't that's a big number well he's actually coming on in just a moment again to see if he.
Exchange as much -- number and on gets more insights from Bob -- next -- this stuff online.
Well I think -- told us it will look.
Like a pretty rosy outlook at least for the industry.
But for other investment industry overall.
Well yeah and I was it's our assistant trainer to see whether or not.
You know admitted his point I think that is try to make it the end is is could be a valid one and that.
Hey we've come through a tough time and we're starting to turn around because outsourcing in the overall economic data I was just making sure that we were accurate in the most recent numbers we put I'm not trying to.
That's been things that's -- when asked about you know some of the declines of restarting -- -- -- now restarted turned maybe.
-- and that's why it's it's good to have a little bit of a different perspective here from Bob gold and he's been coming to us from Chicago I tech -- makes.
I say he's and -- talkative about the restaurant industry body of the different view on exactly the health of not of this sector what do you think's going on there.
I think were really in a pretty.
The industry I kind of disagree with Hudson's.
Spin on things I think were wearing the decline I think this will be the worst year.
In and modern era for restaurant performance and I think virtually all the sectors are struggling some -- -- others and I think we are still not out of the woods on this and.
All he said I mentioned before the before we came -- you that -- -- -- -- this back in the spring and mentioned this number of 20000 restaurants closing down over the course of the the past thirty years -- people who weren't watching and go back in the year.
Your thought process and coming up with the number -- made you change your mind since then the ball what's the prediction.
Yeah I have changed my mind I've actually.
We actually up.
An update -- forecast we now think it's good weeks probably a little worse than 20000 over the next three years were thinking somewhere in the 2224000.
Quite frankly we just don't see consumers spending -- restaurants.
Traffic seems to be -- came by and large it is down but.
Consumers to Hudson's point about consumers do want to eat out -- they do enjoy eating out and they are taking advantage a lot of the bargains that are available and they are.
Fantastic bargains across all segments of the industry but there just.
Tight yes I do -- Before you -- -- -- I'll ask you that a key point here is brought up by one of our viewers.
Which is a good question that 20000 restaurants around the country doesn't seem like a big number if you consider how many are opening but you're talking at a net number when you say twenty some -- thousand -- that's number -- -- the -- -- that -- that didn't factors -- than ones that would be that would be.
That would the -- the new opening so to speak.
Corrected if you take our number twenty.
We think Indiana by in -- in three years they'll be 2224000.
Fewer restaurants open so.
The actual number of closures will be greater than -- -- Because there will be some opening some very modest number of openings and openings are have slowed down dramatically even with the change -- -- the major change or not opening units.
I -- that -- actually goes whenever questions live our viewers asking a budget questions about the specifics I think when the wife is there any specific type of restaurants.
That you see.
Not growing or declining more than others.
Whilst we think the independent restaurant it was Hudson called the mom and -- but the independents are the ones who are really struggling the most.
And in some of the aggressive discounting in dealing on the part of the major -- Is putting a lot more pressure on them.
I would be opening a restaurant that the so -- -- aggressively doing it.
You know quite frankly we just don't see there are some independence and some small number of you you restaurants opening but we just aren't seeing the number of restaurant openings in this kind of environment.
There's just no credit available right now the risk profile -- gone up dramatically.
In a business that is a pretty competitive wanted in its best of circumstances.
So we're just not seeing it there are some great real estate deals to be bad.
But by and large we just don't see a lot of stomach among the lending communities have to -- restaurants -- -- I think it was only a few -- are not a great.
Place to be -- from -- that he's a good one of the issues that we're hearing is well and that the credit markets overall we look at all these.
-- spreads and what have you that have improved to a premium Brothers levels on just about all the the big macro picture numbers that you look at with the lone exception of kind of the middle market and -- the small business market which is really CIT's action right -- that.
That that that that's still that's what you're talking about when you say people can't access credit yourself watching that say wait a minute we're back to.
Back to -- before Lehman Brothers went bust it can't be that hard to get credit that did the small business and and the middle market.
Businesses are still having trouble accessing credit aren't that.
We'll certainly got can only speak about from yes from all indications yes but certainly the restaurant space.
That there's been from all accounts of big pull back on the amount of lending available to franchisees and independent restaurants so to answer your question no there's no money out there to be.
I think it left you are really really it's -- quote unquote safe dad.
What effect on that.
Given the landscape of America I think.
I guess is a good news bad news the good news -- from a consumer point of view.
There are great -- there it's great discounts -- -- the restaurant to have sharpened their service they realize how important customers are.
To service the customers well but from it is a struggle margins are under a lot of pressure and -- gas prices and food prices.
If and when they start heading north again it's gonna put a lot more pressure on.
We're gonna talk and and and just a moment Bob about.
-- some of the options that are out there for consumers about the economic downturn affects them especially people who have children but I just wanted to mention real quick before we let you go that's economic survey that was out that showed.
That 70% of people finding healthy foods more difficult to afford.
Lot of people saying that they could they often purchased less healthy foods because they they cost less so this is that idea of people.
May be would be eating healthier if they could afford to that's got to -- -- -- -- one of the big effects of this economic downturn not just on the industry but in the consumer side effects.
Absolutely it's look kind of -- disturbing statistic in light of -- The the obesity in the diabetes and all the health problems that we have is is a country and it appears that consumers rightly or wrongly.
Believe that healthier eating -- or at least the way from home is is more expensive.
And they feel that a lot of the lower priced options are less healthy.
And therefore our -- they're saying in these times I have to give something up I don't have a lot of money to spend.
And when I suspended its going to be unfortunately unless healthier foods.
The end of -- -- your army perception the end is less healthier foods you taste little better.
I'm on the way.
And had a perfect.
-- in the checking with you a couple weeks and to see how.
Either you know the dead -- -- in the -- in the year just gonna how your forecast might shift or might not so if they get your perspective and I look forward to talking and soon.
Sure any time Bob -- -- us from Chicago okay.
Next topic is this sort of along the same lines here about how whether or not we're eating healthy but especially.
How our children are faring in the fast food restaurants -- -- children's menus.
Won't -- a little bit to be desired you might say but we'll talk about that we have a lot more still to come on foxbusiness.com.
Live including -- shift to technology a little bit later on.
Cool new laptops coming up we'll talk about -- He just assuming that it says it's cheaper -- is -- Less healthy.
You have -- be always has been trying to now what we mean when one would be to believe it -- -- -- get into thinking like the dollar menus are like cheaper and yeah like you mentioned it.
It is spying going down -- present real value you get that -- -- I'm.
It from from as far as you know putting your money to work it doesn't Philly up I was at the French Fries and -- cost analysis I.
And I -- it isn't me would be cheaper.
Yeah I don't Taco Bell and have by -- you -- you can be having breakfast breakfast burritos that talk about you can pipe -- left the dollar form.
Oh that's right and then you make it halfway through our morning show -- -- know that started healthy in the aftermath.
India you know I'm yeah I'm spending -- -- it.
-- -- You I don't either I didn't I don't know I this think that -- it even though it seems -- buy cheaper and I understand that Anderson you can feed a family for a for a lot cheaper and I now I think it's Friday always keep it doesn't feel.
It's horrible I we don't go either to an end it's a halfway serious conversation to you know McDonald's or Burger King with our kids that often -- -- The other -- that the grandparents take -- about the injury isn't at Augusta this entry but admits is also like -- is a question -- socio economics have degree and people that can't afford to eat.
You know more expensive foods -- will go to those restaurants more and -- and then then that leads to the problems in this whole bigger question of obesity and what have you as well.
Yeah well and that and that could excellent precaution as a fishing with the health costs that I'm Maria Carey grant by exactly -- -- for Chicago's about at.
New film that many says that they say Maria.
-- -- -- -- And to -- what exactly are you looking at there.
As far as just menus in and children's eating habits and when he gets you over -- -- top.
Well what I really -- on the menu now with children's menus is a real lack of variety.
So there's really -- call -- action for restaurants right now TA increase variety and to increase.
Healthful options on children's menus.
You know it's interesting because we had this big push him years back and now it's it's -- out for now you get a salad at McDonald's and all these other things where the parents I guess -- -- and indeed when they bring their kids there but you also have to think about what the kids are reading.
And you know a lot of times it was -- said it acceptable that the kids beating Catholic junk but the the variety should be there for the kids to to have options now I mean maybe they would pick them because they -- taste as good that they should have.
Choices and they often don't is that the point.
-- right they often don't have the choices but.
We really do see that kids and parents I really wanting more healthful options and -- kids are really willing to eat their fruits and vegetables real an Intel found that yes not my finger underneath -- Yes -- found that 80% about 80% of kids I'm willing to eat -- with -- and over 70% of kids are willing to eat foods went vegetables and it.
Mintel organization has not been our dinner table and -- Throw down fights we've had over as Lisa say it's the -- would love vegetables but anyway.
-- some rest -- they -- they -- you add those things like I trying to compensate for.
Fresh fruit for example and -- and it's -- it's more expensive is that often the case -- -- I mean is that really the reason why we don't see -- as healthy items.
-- necessarily on some of these men.
Well -- isn't really picking health over price.
Or porch and so parents will will limit what their pick what their kids -- eating.
If whether it's healthy or not overpriced or question.
Hard to believe I really -- because in this economic environment.
But tell -- the numbers behind a country residence and work on the -- I'm just anecdotally I find it hard to believe when the economy -- it is the people wouldn't just say whatever the cheapest is the best for me.
And and you and you're saying that there in that that's not always the consideration for -- for people.
Right it's not always a consideration.
It's meet -- parents -- younger children saying 125.
Where they're really looking at health.
Beyond price -- portion so they're really taking consideration -- why.
Their children's need to to -- -- so why aren't the restaurants responding more to that because I would think they could make more money and selling some of these items are supposed to be cheaper items that -- -- You know that may not be as good for you would think if you're right if if parents are thinking that way at the restaurant -- much more responsible and what's -- On what the rationale for not being.
Yet -- what -- do you see the wheels of change starting to -- a bid -- restaurant menus and I'm just within the last two months for major restaurant chains -- added a completely.
New menu to their restaurant kids' -- to the restaurant concept.
Or had it has switched out many of there.
Quote unquote I'm healthier menu items.
For healthier items.
So we did see some change happening and -- in -- new menu -- the new menus really healthier.
Yeah and then new menu items -- really inherently healthier and then.
Then than traditional items that you will find on the kids' menu.
We really see an increase.
Paso with marinara sauce right simple Turkey sandwiches.
And healthier versions of kid friendly -- like grilled chicken strips instead of -- And a -- -- -- -- that is a really good question -- a -- because I who have been with my kids a lot of times to get some heat and you wanna get the salad.
Right and -- ever look at it usually the -- I'm glad it turned the stupid thing over and and then the the amount of whatever fat calories and everything in the dressing final season I was like I imagine that.
Yeah I want I don't like these Salvador -- have about -- they just get a big Mac about politics about it that's -- -- that's -- to let us.
Say yeah that they I mean I get anyway that feed your kids have done and in their eating 2000 calorie salad who do the salad and.
Go to south of salad and have a -- thank you anyway I'm Maria coming out -- thank you -- Thank you Maria thanks for not okay would never do you think I am thinking in various respect you you like the netbooks don't you know me I love that I'm still mentality I talked so much about it well -- have went and I think what I says that's not so pink.
Which I'm very excited about -- hitting is about function without a little bit about that that's right but you won't believe what they stay on the -- number you buy one yet self one point KT Bradford from my.
But it is gonna show us.
If you guys -- in the market like Jennifer news.
Laptop or netbook will have a -- next foxbusiness.com.
Mary -- -- -- -- here from laptop mag the last hop magazine if we'll have that -- It's right at 5 AM -- and sensors in the day get a little bit edited -- -- all come together.
We haven't said.
This -- -- is the Lenovo S ten netbook it is pink it doesn't only come in pain becomes another colors like that and nice for the image McConnell yes -- the standard white and black and I brought it because this is one of the netbooks that AT&T is offering with its three G.
Service so I believe that's -- that has no card and it just miss Hilton.
-- like Eleanor what dean of the AT&T one should this one is is one a day anyone can buy it does not come with the PG card.
AT&T is offering it as well with.
Integrated think he'll go into an -- he started at this -- you go to computer store and then to an AT&T sort -- get this netbook with.
It will review service with the -- -- their website and and you may have seen the commercials of bill Curtis where he's advertising the other netbook that is available the Acer Aspire One.
He's and that eighteen to get to AT&T is still isn't good is it better to go through every -- they AT&T -- a Blackberry service is it better -- -- you -- that the deals through that cellphone carriers are really good deals for computer and a new computer data verses.
Going out and buying a computer and getting your -- card whenever that is given -- -- month you know for something like that -- -- like this I believe it is forty to sixty dollars a month you I think I would be any computer service and your home right and it's kind of it's right -- cellphone service -- a lot of.
The -- anyway right as you have that you you most people have.
Well I guess I guess you're right you wouldn't necessarily needed if you're gonna have a three G but that at the end of the day seems like we're moving more in the direction.
Correct me if I'm wrong after that there's there's a word for -- -- -- -- I'm thinking but no I was an involvement in the way we're moving definitely but I was gonna say using your phone as.
To get online with your computer -- itself tethering -- a tethering right so.
For they iPhone for example I don't think tethering is available although it's supposed to be with the -- served with the new software so that you can tether with your phone.
Take it out plug -- into the -- -- of your computer and then you get three G anyway right you'd only be paying the one data -- should shouldn't people just wait for that.
To have that because that would be you know cheaper more efficient -- right.
So that's really how we're feeling -- laptop I mean basically these netbooks one of the biggest things about them is their price.
This -- right now is selling for -- a little over 300 dollars on Amazon com.
Yes -- and other netbooks between 300 to 500 dollars usually in the range of 350 to 450.
And you know you get a deal with AT&T didn't you know hundred dollars offer more because ATT subsidizing the price than that but.
But then you're also getting -- thirty T sixty dollars a month and -- two year.
I guess they have locked in -- new technology comes out -- -- -- at the end up costing you over a thousand dollars likes.
That's a lot of that seems more like a lap I mean that investment at the laptop with for some lightning and looking to cut -- -- They've got I guess my look for something to do email did it with some -- -- research at home yeah limitations in this these new devices -- they come out and they found that they look they look nice as well look our set.
Can -- and if you know we had a high on the wrong when you get and I had -- it it was like it would give me everything that -- back -- any limitations to what.
What they operate out yet Netflix tend to be lower powered they had Intel atom processors and tonight as topples processes that you find in regular -- -- without enough I was lying to edit video or something right here.
And it wouldn't any.
It would be very very very slow.
Or or probably not happen at all while at the funny thing is that it Jenna brought up a good point and it certainly mind you but you -- talk about.
Talking about talking -- -- -- -- -- the idea that we're going towards everything being Internet base which is essentially what cloud computing is right you don't need.
Peter's big memories anymore.
At some point right I mean you can have -- everything's gonna be stored on.
We Google's gonna start off for us so -- so without a sub in that he's making that case a netbook is a pretty effective.
Substitute much cheaper and -- effective in some ways is a laptop and use that logic right.
Right if you're if you're going for cloud computing netbooks are are made for it essentially.
You know even though they are low -- they handle you know working the crowds are taking your email doing -- processing even you know watching videos on Hulu.
They handle those fairly well.
Any fears that you're looking for like you know a secondary laptop right turn around with you during the day when you come home -- more powerful laptop we desktop.
They're perfect -- a lot of people.
Depending on their needs may find that netbooks aren't just completely what they need they don't necessarily need to be your laptop and some netbooks or even like that -- there -- ten inches some of them are coming in.
Eleven and twelve inch sizes which are bringing them closer to -- like.
We should talk about -- by the way I was at the bottom are screaming at a lot of headlines and their booklet.
-- this week getting into the laptop business and Nokia phone company so that's kind of bridging it all together like we just talked about with the tethering process but what about Nokia's foray woody has a laptop -- that.
Well we haven't actually seen the system yet and I'm very excited about it because it does look like -- offers you know a lot of really cool stuff it has.
-- integrated into it also has GPS integrated plus the -- It looks very thin very light it has it isn't like really well designed so it's everything that we kind of look -- In netbooks.
And but they're not calling and netbook if they're calling it a -- laptop.
Which is something day you know along the lines of what Sony did when they brought out there and yet look like tiny computer.
And there's a rumor that the price of their new Nokia booklet without being subsidize it's going to be 799.
Which is really high for -- like I said 350 to 450 is about the range.
That you see most netbooks sitting.
That this I explain it on and think wow that sounds expensive and even a year ago I don't like that and -- -- I think that's not right.
You got so that has been -- about that Sony coming out with a new.
It's hard to know what you really want to invest in because it -- at a netbook for a couple -- he's got my Kindle.
That -- -- a lousy.
Mean you're gonna get my books online -- on -- -- but it's hard to make his decisions as you navigate through these different devices is anything stand out to you is such as -- The netbook is maybe the right investment now he pulled off and other device or maybe invest in an e-book reader now on hold off on a computer how would you sort through that.
Well it's just -- depends on what your primary needs if if your primary need really -- to read books on you know your commute on the subway or -- like that you're not so much interest in doing and the computing.
Any readers great and they Kindle has a three G connectivity -- you can download.
Books you know over the air and you can also do a little bit of web surfing is -- great web surfing but you can't be sun and one of the new Sony readers the Sony.
Who did daily edition for its -- is and is also going to have three G and they're gonna be hooking up with some content partners to bring you you know downloadable you know newspapers other content like back so.
If those -- needs then you know an.
It's okay think right now at this generation to -- -- -- -- brighter and better coming -- six months from now.
But a tablet.
And Apple Tablet is is very exciting and done it's it remains to be seen whether or not yet -- going to be something that you can do real work on because it's not gonna have a physical keyboard is just going to be.
A touch screen but.
I think -- Probably waiting until Windows 7 comes on October might be a good bet for anybody looking to -- new -- if they don't seriously need one right now.
Because they're going to be a lot of really great systems coming out there can be optimize for Windows 7 you know that but -- this can probably upgrade but.
The new -- netbooks have come with that are going to be optimize for it.
In -- -- you know hopefully some better battery life and better performance.
It's that it that's -- that is a good point -- -- the people who use Microsoft they would wait for for that would make sense I guess logically speaking.
About the app that we should just another word on apple because you know the biggest story in the journal wrote it up.
It's this Steve Jobs is hands on.
-- -- Yeah I think he's always -- -- -- -- -- the idea that he is to have really working on this project you mentioned that the questions about this new tablet computer tablets in general you part touch screen that you -- the option of key -- not been apple took that away from us with the iPhone and of this that this will never -- and it -- -- will will -- be right again this time around.
I I think so I mean not knowing too much about there aren't any details coming out but it.
Seeing what's been done with the iPhone the interface on it I'm very excited to see -- Apple's gonna come up with with the tablet because.
You know they have a history of being very careful you know Steve Jobs is is in there and making sure the all the ducks are in a row that makes me very confident.
So I I think the double -- could be something really really special let's not only touch me tablet that that's coming out I know that.
The crunch pad is also you on the horizon they're looking to get -- -- first -- from the same company would continue and that's that's.
It was designed -- conceived by Michael Arrington of techcrunch and he wanted you know I need cloud computing tablet that you know basically -- -- city.
To the Internet mostly web.
Apps things like that and and they're sort of you know in in a bit -- race with apple to see who can come out with the first and then who can make the best day tablet but.
But as assailant looking at what they -- the iPhone I'm excited for what's coming with a tablet.
Yeah I'm always the rumors around apple and seeing how it actually plays out is also very interesting for all all the tech people at the tablet you can think that yeah.
Yeah right that I I casino and that it did you selected HP one to right it's Lenovo -- one and one a lot of the other.
Have been -- good to see -- thank you for coming getting thrown back and get information on what's happening there are so.
One of these days you can show the woman's.
-- -- you know and not tops on -- -- -- like all right guys thanks for joining us today I checked out this beacon technology on Hulu anytime mountain.
Apple would mention them on iTunes download this podcast we'll see you back over Apple's Steve Jobs is that -- -- -- about that he's he's very hands on the.
Filter by section