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-- hey happy lunch time welcome -- live 12 o'clock here on the East Coast good morning to those of you out on the West Coast watching a -- down about a 141.
We had a load of stuff going on today I'm Tracy Byrnes Chris -- in the house always happy.
Do you and it takes today but this is temporary -- what you are all you know what else is temporary comment you being -- and I am I -- you noticing -- so you little taller than I'm -- get this fixed up here straight.
If you really -- because what's gonna happen is it was gonna write in here and say.
-- you're a major.
You know what -- what -- you about 520 I'm not I'm Paula and Tracy really you know Hughes he was about six and feels usually.
England open well I I get that I have to do I I decided that I need to maintain a certain amount of distance to my son and I saw as -- -- at the airport -- -- heels.
-- -- we have Ben Bernanke testifying in front of the house financial services committee talking about this potential council of regulators.
Rather the Fed going out -- he says there should be counsel it's almost like Camille Little kids still coming regulators -- -- -- to.
-- and then how much is going to be too much regulation Nike obviously doesn't want it a lot of other people that he's talking to right now really want that they wanted to get out of the Fed's hands so low you know let's have their hand in the cookie jar and who -- is also another dollar.
It's in comments about the dollar today that certainly woke up.
A lot of people in the bond market will talk about that and the -- in general right now markets in general right now down 142 points that's about.
At its low of the session.
You know we kind of bounced around a bit like we did yesterday believe generally been low from the started the day we've got a lot of economic data sift through.
Tons of -- right now so much so I can maybe keep a straight what's -- and what's not.
I jobless can -- -- it's disappointing exactly and I think that's the worst part about it is that it.
A lot of it is on the negative side and that's really -- on the market -- you know yesterday we crossed the zero on the Dow 24 times.
Yeah that's how much -- is exact all day long yesterday this seems to me just down -- spark I have to say you know we got a decent -- in the Spartan.
So it's not yet we could you never know what happens in the.
There's there's more pessimism coming in and in the ailments and -- he was with us yesterday.
It is an old adage oh when the cab drivers gives you stock recommendation that's when you sell everything and vice Versa and it's -- you know you -- getting close to that point where.
You're getting enough negativity anywhere anytime you have like he said -- -- 5% pullback or -- like that's -- did in.
You'll see some -- -- fund managers you see institutional buyers coming in.
I don't -- -- mean that it's really wanted to shrug your shoulders type of moments are we gonna continue the slide if we finish Louis we are now even if we're down at all it's seven of the last eight -- down that's you know that was sort of trends in -- How long this -- You know who -- just Christie say you've been saying this week comes down to jobs we get the big jobs number tomorrow today we hear that jobless claims are up that's people going outlook of for unemployment benefits -- that's up.
That's not a good sign that disappointed the market -- hence we have this -- 142 points right now so.
I think I think we wait -- see we we took tomorrow.
It is it is a little bit latency and fifth outing but he wants the -- will hopefully David Huber as the president you were financial group he's gonna join us -- in a little bit he'll give us.
His thoughts about what's going on and you know why don't we go to him right now David thanks a lot who -- joining us today and what do you make of all the just a slew of economic data that we got today.
And really looking forward to tomorrow's big -- -- payroll report.
Airline you know I think that -- don't you know we've had we've had -- obviously quite a year or a year and a half.
And you know when you -- and Hillary session you're gonna hit a lot of bumps along the way in terms of the you know in terms of the recovery.
And dumb you know things like unemployment unemployment is a lagging indicator -- So I don't put as much into the unemployment numbers is maybe you can you know others would -- But certainly you know we've hit it into the markets today in an extreme runoff from from -- the marshlands bottom so.
Any kind of soft here it doesn't take much to have them you know market -- give give back a little and it's it's it's usually -- things so.
I'm not really concerned about this one.
But did it ever -- I know that's the old everybody says -- that unemployment is a lagging indicator but is it if the number comes out higher tomorrow the markets react instantaneously so so much for the lag effect.
If it were truly a -- affect the market wouldn't move so I guess tomorrow is a true tested it.
Because people are still worried about losing their jobs so that's -- is almost forward looking more than lagging.
Well again if you look -- at past recessions.
Usually via the unemployment.
Figures don't begin to turn around to get any better.
Anywhere from six to eighteen months after the end of the recession then that's because.
Employers are you know they -- -- hiring back until things are better.
They don't let people go until things get worse so it you know that the trend it's slowed down it and you know.
-- week to week basis you're gonna see you know variations of the numbers but.
I think we're we're coming to playing words it's gonna do is start the bottom and then worked his way back up but it's gonna take -- I don't expect the unemployment numbers getting much better in the near future.
David do you believe there's a lot of institutional money out there waiting to get -- it.
And if so are you looked at what point time does come back you have you talking about a 5% correction.
A 10% correction is there a number you look at and say oh if I was on the sideline and I wanted to put money the work.
That's when I -- Rule out the numbers we've seen we we're we're -- Schwab institutional side -- permanent custody is that Schwab.
And does the need the cash levels -- -- Accounts -- his down now to about 12% which is around the norm that you you typically see on the retail -- we're seeing the cash levels are still around 26%.
The typical you know investor that navy pulled out who went to the sidelines.
Sometime last year maybe in October November.
A lot of money still on the sidelines and I think they're they're at -- at crossroads because they in this.
In -- jumping back in -- getting back in and in March when things bottomed and of course you don't know on the bottom -- and we look back in the rearview mirror.
But I think that you know that the challenges you know do you get back and now only you know that we've had a 15% drop -- If you wait for a pullback -- I would say if your long term investor.
You know it could all backfire 10%.
It's probably a good opportunity didn't get it and then and establish some position -- Where -- well yet dollar cost average weight back in exactly how about housing values you saying -- we're beginning to see signs of a bottom.
Is that a national statement hours that's you know specifically to certain areas -- we were talking earlier this week new York New Jersey.
I think we've seen anything yet around me I think the worst is yet to come.
Yeah I I I'm in I'm in the Chicago area actually just sold my house a few weeks ago in two weeks which astounded me and maybe have -- to lower something that I.
Yeah we're seeing it well we're seeing we're seeing again -- kind of flattening out prices.
In our area is seen who have had stabilized in terms of you know you don't -- -- -- dropping and activity is picking up way I have a number of friends in the you know in the real estate business.
And it seems to me that the activity -- picking up -- starting to.
-- is a shorter shelf life where you know the real estate inventory and but again it's it's you know there's a lot out -- -- is all we're closure issues and you know.
People are a lot of people are underwater on their mortgages now that the loss event but he so it's gonna take while core real state to unwind.
David Ben Bernanke making some comments this morning bullish for the dollar dollar up big today against the Euro what are your thoughts on the dollar and and inflation pending inflation.
-- -- the dollar you know obviously it is it has been weak and it's I think it'll certainly it'll continue to strengthen us as we go along here I think.
Don't see inflation -- becoming a a big issue scorer.
That had too many forces are holding it down SLR gonna have to deal with a but I think it's it's -- probably.
At least a year -- year and a half.
As far vacancy.
It did and how did the -- about what you like out there in Chicago and we got somebody Olympics -- at the Olympic bid before we leave you like better not.
I love you don't always staying in power until.
I know there's you know a lot of our protest -- Chicago.
Groups that don't wanna see it the other put a big push on today incidents -- -- of the big presentations and you know being being in Chicago and here you know I'd love to see it and and be able experiences.
Yeah there's some concern over the economic costs of putting it together but in terms of the area and should -- order that -- have lived here.
Pretty much an adult -- and host and everything else it could use -- -- revitalization so.
-- if you had a chance to see it see table tennis I recommend it it's extremely underrated all right.
All of that and watch -- you -- -- local where yet does it's exciting.
Just as far as gum stuck and you've really got to tell us what you like -- -- in -- Not small caps emerging markets.
Yeah well this small caps historically and they again you -- we movies and a lot of data coming recessions and small caps home.
Usually -- the layout and if you look at the numbers really salute you know the last six months.
It's holding true -- You look from the -- the market we'll you know march ninth in India through yesterday.
Small gaps are at it in and especially -- that guy has really turned on the the burners.
And we're also seeing sharp recovery in India emerging markets.
Countries in terms of economically.
And this again that's an area where we've got to ever had a big uptick but there's still a lot of love a lot of upside to it.
So small cap value -- like an emerging market -- any countries in particular.
Well no we can't do -- is institutional funds and try to cover where we we don't speculate on an individual individual countries so.
We leave it up to the fund managers and decide where they wanna you wanna be -- -- but we're big real big on diversification.
But the key thing is that -- a certain portion of your portfolio.
-- there and it in terms of you know obviously the expected returns on small ever greater than large -- because there's higher risk.
So I wouldn't advise anybody eagle where everything in those two areas but you want to make sure that your portfolio's -- balanced investments anger.
And you know he wanted to if you want to take advantage of the risk premiums that are involved.
By did we appreciate it thank you -- till next time I.
Great thanks -- -- David Huber joining us -- Chicago uber financial group the other big part of the news today but this Bernanke speaking this morning.
And the the Dow right now down -- -- 35 points is Ken Lewis last night after the bell announcing that.
He's gonna resign.
At the end of the year Jonathan -- joining us right now managing partner -- finger interest limited his family owns one point one.
Million shares of Bank of America Jonathan welcome to the -- Thank you.
I what did you mean what do you think of followed this decision by Ken Lewis the go and resign his post the CO.
We think it's a positive.
We think it's an important first step in changing corporate culture at Bank of America that hopefully they'll they'll be include more -- shareholder value.
A focus on shareholder value as opposed to -- And secondly I think his effectiveness and that that has been limited in about the number investigations that are on going about time having to go to adding to devote to that.
Will that end with a new CEO I guess I should say -- got three more months with Ken Lewis.
But it appears that everything I hear today from those on Capitol Hill and of course you've got you know Cuomo here in the north -- well you gotta swing a lot of investigations.
-- that will change with if somebody knew what the hell.
Well I think -- the investigations are going to be ongoing -- -- certainly the New York attorney general has signaled that they're looking at at the individual actions of the officers.
You know what what I'd like to see the -- -- was actually become a little more proactive.
In determining what could happen.
And seeing that they can't put these these issues behind the companies that that the company can forward.
You know it.
Did they was on Cavuto less than half on and at the end saying at a cloud was.
Hanging over the company.
With Ken Lewis because of all this -- Hank Paulson forcing him or not knowing really knows the true story of what happened with Merrill Lynch.
Buying countrywide it just the wrong time -- making some bad decisions.
The question I guess as we know -- surprise he lasted as long as he did many would have thought he would have stepped down or been asked to leave gently earlier.
I I agree with that at the same time you know I think the sport was very deferential -- him I think they wanted to let him go out on a high note given how long he'd been that the company.
I tend to agree with you I think the -- to buy him for a longer than I would think that it.
What do you think of by the position -- -- days and right now it just you know.
Outside of the issue is now that are presenting themselves in legal issues if you will Ken Lewis and what do you think -- -- -- -- position is in the banking world at this very moment.
Well look I think it's a terrific franchise at the same time this recession has exposed this current management team and talked about the senior managers that are there now.
But not being that great at running the basic business of banking which is making -- -- getting paid back.
In other words their credit statistics aren't near the bottom and door at the bottom and their cooker you know their credit card charge -- ratio as much -- their -- group.
You know their their commercial real estate portfolio.
It got pretty hot levels -- non performers so they don't have credit issues to work through.
That's -- I think they're reasonably well capitalized.
And there and will be apparently through that.
You yeah you're right when we're talking -- 2.3 trillion dollar balance -- that's loaded with unknowns in more dark clouds and anyone can figure out.
You know I was speaking as someone internally though and they all said they would run through.
Walls of fire for Ken Lewis so.
While the outside world -- this out there was a lot of negativity about him the internal perception was that they adore this man.
So there -- a lot of people that were in support of Ken Lewis so.
Will -- -- you know when we look back on its just that maybe he was a pretty good leader.
Well I yeah I think.
I think the last two or three acquisitions were.
Truly a miscalculation shareholder capital in the Maryland Steele in particular with the very aggressive -- debate basically that the company.
On that deal with without having an escape patch without.
Paying a low enough price to build an -- for error no and they destroyed a lot of value.
On a ticket you know certainly not a permanent basis on a very long term basis.
Do you believe do you believe that that he was pressured into making that deal ultimately -- do you believe that again he was he was on board from the start and he did not want -- back out of that -- at the twelfth now.
-- you know look I I certainly think they entered into the deal on their own volition back in September in the same -- that that that -- Elton.
I think after the shareholders voted to approve it.
On the dent in when they try to get out of that the I think at that point I don't think they had a very strong contractual position to get out of the deal.
So as a -- I mean you -- one point one million shares what would you like to see what would you like to tell the new person coming in -- at this point is yet to be decided whether gonna go internal accidentally.
To fill the slot but we want to see you want to see this broken up into pieces.
Or do you just want to see a big better run.
-- -- -- Yeah I I think this company needs to focus -- an operation that need to put all the distractions and that -- behind that.
They need to focus on on identifying the credit risk on their balance sheet that eight to figure out mitigate that risk whether -- loan or closing on property so the underlying property.
We need to focus on running the business.
They've got a terrific deposit franchise.
They often -- it took focused on getting the best people they can't.
And I that I don't think it's been strong it is can lose the managed to.
Eat a lot of people leave the company a year.
Jonathan do you do you have somebody in mind you'd like to see take over as CEO or do you do you can just have a a vision of what he'd like to see come from somebody within the company or -- at this point.
I think we would prefer -- -- an outside person he appointed CEO and and I think that was facilitated greater change in the corporate culture.
You know name but I've seen.
-- -- -- winners that.
They'll have investment banking JPMorgan.
Are out and Alina you know -- -- thirteen 88.
And and a former CFO -- bank.
I think but that is -- -- drug candidate.
Internally you know I get that -- -- -- -- project would -- -- -- firstly.
And understand a lot of that most of this senior management team like at the bank a year ago when the Merrill deal occurred.
And some of these guys would have been in position to.
You know make decisions on disclosure issues I think the -- needs to clear up who did -- -- -- you don't have a situation where where someone internal was still under investigation.
Jonathan -- managing partner of singer -- shares they hold over a million shares this is going to be an interesting ongoing story thank you so much for sharing your thoughts with us.
Thank you very much.
Talking about a guy Ken Lewis who was there for forty.
Years he no -- is gonna go down in flames beat and with the last two years in mind I remember the 38.
That's right in because he did CEO since 2001.
We've been with the bank forever and you think about all the consolidation in the banking industry particularly in the -- the eighty's and ninety's now on the on the -- in so many different versions of his bank and seen it grow to be.
Really what the largest bank in American and taking depending how you look at JPMorgan Chase to a Bank of America so.
It's they feel -- couple Bates who he said that.
I'm gonna find a -- is really powerful quote he said the police said this he's one of the most effective CEOs that any bank has ever seen in this country.
-- that's that's why I was asking there's a lot of people coming out saying he was good.
Blanket right up there of Jamie Dimon and he was voted best bank senior years so I mean this industry thought that he was yet you -- -- this.
Grain of salt let at all get away from them in the last year -- -- mean that little you know I mean it was that Titanic moment where what's his name present -- -- -- can.
I can't Leonardo DiCaprio and by the way don't try and he fooled anybody by saying oh what's his name I really don't know it is and I actually -- cameras that the director do.
Yeah John Cameron.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Welcome back back this -- my turn to do this fire.
I'll look well I think you could you step at a cracked it was James Cameron Titanic undergo this is not stick this is called professionalism here.
All welcome back to fox biz dot com -- -- -- -- and it tells us.
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Right that's that -- that's market -- obviously -- -- the downside down about a 137.
Points right now really flirting with their lows of the day -- though.
Well traces got a few stops to keep and -- -- Yet some big ones today.
You're not happy if -- -- vision shareholder here's why this is a video conference product.
30% of its revenue came from Cisco -- -- largest customer Cisco today decides.
It's not gonna -- -- vision it's gonna -- arrival instead of Hamburg.
-- the stock plummeting down about 34% last I checked.
It's not as that actually that's that's an ugly charge to -- -- right up if you could see that on the site.
So -- -- down over 34%.
And Penske this came after hours yesterday as well.
Penske basically saying they were in talks to buy that Saturn division from General Motors came out yesterday said.
Million sure about future supply of this stuff we're not doing it after all we're backing down.
Penske down General Motors in return saying they're gonna wind down the -- conditions so that means a lot -- percent yeah.
And what saturn's on the road.
Are about 300.
My goodness right 350 dealerships yes Saturn and about thirteen thousand employees.
Additional pink slips in the auto industry -- the last thing we want to hear right now -- cash for clunkers you really hope that -- will be able to continuing to sort of trying to get.
Was it -- -- involved are trying to make those -- but that -- -- And actually speaking of cash for clunkers you could see it precipitous drop that came after.
-- -- Barbara Milledge hit accent.
Note Ford vehicle sales for September so this is after the clunkers.
Vehicle sales for four down eight point 9% expectation was only in fall force a big percentage drop after that -- another stock.
Falling UAL this is the parent of United Airlines these airline stocks go up and down and they're they're more confusing than my children some days.
Today down because they're selling eighteen million shares so that just means they're increasing in number shares outstanding.
Club afloat in the market -- -- when you increase the number of shares it means the value of yours goes down you know and that does not make shareholders at the dilution that's another backward a word of the day and them not to Constellation Brands who would have thunk it.
But a wine and beer company is up actually have a nice day they reversed prior year losses in fiscal second quarter of course it's cost cutting debt reduction but people are still.
Ring ring finger in my understanding C -- they have hard alcohol -- -- Aniston alcohol they do it way up so I've gotten -- and that could run and not.
Mentioned criminally when my favorites with a little line big winner today is cyber attack this is -- data storage company they get their 52 week -- this morning.
Fiscal third quarter profit up.
This is again after three quarters of losses and they topped estimates and CEO actually saying he saw signs of improvement in the O'Connell thank god yeah.
That as -- nationally and yet hit some good.
-- we get too much of the cautiously opt in that -- almonds and CEOs the Disney happy happy happy.
All right we gotta talk about the FDIC you know Ben Bernanke acts -- -- speaking about regulations today wants the Fed to have all the power in the control certainly the FDIC is a little bit of regulation.
On many people would say they've failed over recent months and we -- and Dow Jones is here with us investment banker -- the welcomed the Phillies and you know why has the FDIC failed if they -- -- do you believe that they have -- -- -- Isn't the word if that I think they didn't quite force feed the pace of foreclosures and bank failures and for them.
Under water -- going to.
Insurance deposit finest in the negative now and -- and that they're going to have a liquidity into early next year.
So they have two options really is -- borrow from banks borrow from treasury and they've chosen for his clients.
The blast from banks have quite a lot of people are saying that she'll bad doesn't want to go to Tim Geithner and then there's this -- behind and soap opera going on.
-- like this idea of going to the banks let -- this the banking system work itself out.
Ultimately the banking industry will fund that even if they had gone to treasury and bought from treasury -- -- they would have had their.
The payments from the banks and they've done this once before like he went -- once before in the early 1990s.
And in in two -- time day able to pay it back.
They've always been funded by the banking industry given that that is how -- do you think it's the right way to go.
I would have been a more transparent way to go and borrow from treasury I'm not sure that even this 45 didn't -- ethnic getting from them prepayments for the next three years.
Is actually going to be enough he may have to actually -- treasury.
In the upcoming years anyway they.
They have but he -- that was I thought he said.
Well I don't know I don't I'm not -- because right now they've been very bad about about projecting that estimated losses.
He may they thought seventy billion.
This time they said it's a hundred billion that's a pretty substantial increase in what they expect is -- they're going to do -- from -- resolving all the being failures.
And many analysts say that there's more -- -- com.
Are we just spoke to a major shareholder Bank of America and just the previews alone -- three years -- the premiums is going to end is gonna cost -- about what three and a half billion dollars such as Bank of America.
If you throw another assessment on top of that aren't you really tightening the screws on these banks at a time when.
That lets his face and they don't necessarily need this -- -- -- And that's one of the reasons why -- chosen this option because they already took one assessment this here for about five point five billion industrywide.
And so that's the problem with the deposit insurance fund is an attempt -- pro cyclical went and stale as when used -- industries hurting the most and that's when they need the money.
All right we talked about now bailing out the that the IC insurance standpoint is that -- -- -- got to grow because more banks -- gonna fail.
But isn't there also of regulation issue with -- yet yet seen it they're just grossly understaffed that this -- Absolutely.
So that during the S and L crisis they weren't they had over 20000.
And right now they have about 6000.
So when you consider how many -- Are failing and are projected to fail we definitely need more staff.
The systemic problem within the current government in general I don't think enough staff to do it you're supposed to do but let's talk about now the consumer.
Consumer is listening to they think -- my money's not fake bank and I mean that's one thing they don't have to worry about the deposit insurance fund.
There is a five billion dollar treasury line so the deposits and Sharon this is really a matter of how -- going to get.
Resolved bank failures how will they -- the money come from.
Development -- 500 -- 500 billion and yet yet but it's different hot that I think that's important for people understand that their deposits -- say they're fine yes issues -- worried about how to fix banks.
I think 22 separate fund the fact that deposit insurance fund is supposed to if you unresolved banks but if that -- driver to it has.
And well for the foreseeable for the next couple of years.
All of the other weak points for the government not gonna allow to go back on its -- and -- for deposits.
Well we had the other consumers don't have to worry that as long at the US government is and I found in faith that they -- -- could have.
To that statement and other.
I -- it's you know hiring that's.
I think it's scary to when you see it yet yet see.
As we've -- blood close to a hundred bank failures this year yes.
Yes and they say we have 400 banks on our watch this is -- being conservative or is their legitimacy to those water banks.
You know having to shutter and are -- any major banks regional banks as opposed this community banks and -- 100 list.
-- Issue is that you know when this 400 banks.
On those watch that sometimes sometimes -- get close and I'm not even on that list.
What things that would be nice would be a more transparency -- -- When things are starting to become trouble that's one of the things that investors don't have the market doesn't have -- a better sense of what I think's really really in trouble.
And actually with the question I was gonna ask if I'm -- consumer is their place I can go on the web to see if my bank -- -- fly list FDIC dot dot gov has.
A list of some of the -- but the problem ends.
Is that they don't like to disclose which they are problematic if they don't want to cause a run there so I don't -- Matt thanks so -- that -- -- -- balance with the balance of lead but god like they -- chief and a fourth quarter isn't that you can sort of check out for some banks.
-- wait to find out when something's.
In have problems but if that's not a very they'll bust net that.
Can't leaving town like once again.
If you like having -- deposits.
That's not a real concern in the -- -- that is an important for people to keep their limits to don't put too much if you have a lot of money in the bank.
-- spread it out -- because it's only up to insure up to turning 50000.
Next race is a lot issues with that she's basically got the entire north east of New Jersey and other eyewitness -- and I don't know why don't get.
Lisa thanks for thinking so -- decently from Dow Jones giving us the lowdown on what's going on with the FDIC when we come back.
So a lot to gets it it's an accident talk about -- new rules with the residential lending and how it's affecting some of the brokers out there.
In a negative way and -- some consumer advocates -- saying it doesn't matter.
You screwed -- the first time.
Now I gotta take some at the things into our own hands of -- on time so -- -- back.
Welcome back to foxbusiness.com.
Live Cotter and burns with you Tracy -- of one common here real quick from the -- -- at TJ Thompson.
I wanted talking of the IS about the watch this was too conservative of that many banks on the watch -- wasn't realistic.
And he tells me if I can get this thing -- -- -- -- but -- can't it is -- in my bank Irwin union bank and trust was on a watch -- for about a year before they finally class -- a watch -- is a good thing.
Not too conservative because again as you said you can go to the website you can actually see.
You know they've been like they think that they don't like -- put it out there.
I could if -- banks -- -- watch those aren't you gonna go pulling money.
I would think you'd be concerned about it that's for -- so there's your run on the -- what are you watching today.
-- catch your would you like to go fast I'd like for you to tell me what's -- -- -- one little thing that caught my eye today.
Hold hold me any -- -- other wanted to go for otter Idaho but as I've looked surprised that the you have a surprise to.
Am I -- like the surprise it's it.
First week -- yesterday Michael Vick his agent came out and said that new deal with Nike this really surprising because.
They hasn't been that far removed since Michael Vick was -- -- -- public enemy number one almost certainly serving a 23 month that jail sentence.
I was supply and also he's a third string quarterback who's going to be involved in 86810.
Plays twelve plays -- game for Philadelphia he's not at the forefront.
Well today Nike comes out and says that's not true.
Don't have a -- we have not entered into -- contractual.
Relationship with Michael -- We supply him with product shoes and you know the the you know that's what's where and things like that.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- I turned my Nikes and I'm so over the Scott -- restarted on Michael Vick and I think he should have been like and apply some.
I'll guide you what he paid his pen and -- he spent 23 years in jail lost about a hundred million dollars in the process like thinking pretty much paid the price that you pay the price for what he did you -- -- the punishment fit the crime.
How -- professional athletes literally have killed people in drunk driving accidents there are still playing tennis at any time in jail.
You know this isn't so screwed on these athletes are like an admirable that can do anything inconsistent on blaming one out blaming all of you and -- and Michael maybe all of you Iran you're ready to determine how -- -- I didn't think it with the pirates on -- mind.
We'll get back to -- we're gonna get back to it since that mullets on how does that.
-- a long time ago.
We talking about -- -- Chris happened to have -- I've never actually met someone who had -- I know it's a very honored her you know all of us.
It's so this that's me on the left there that's life and we'll -- on the right that was like high school spring break in there it is the mullet in all of its all right check it out there I don't play -- long time to look in the mid eighties most were great.
Both were hit -- ray Cyrus mean -- -- and all I had a mullet years before Billy Ray Cyrus even dreamt of having a moment and I know you being from New Jersey.
Are extremely familiar with the mullet -- to.
-- how many guys you date you go to guy senior -- of the month.
Yes -- it was -- and excitement it.
It was -- Siegel.
All right we've got to move on right now and that the only -- -- -- joins us right now consumer products leader Friday and institute for business guy if he's an IBM.
Okay does it a more conservative than -- Vietnam all right no bullets and IBM no -- and IBM.
-- you guys did do a very interesting study on consumer behavior in you know that right now with everybody talking about consumer spending.
What direction are we going in what did you find out in this study.
Well we surveyed 4000.
US consumers about where they're spending their money how they're spending their money.
And how in light of the the economic crisis they change their spending patterns.
And not surprisingly 70% of them said that they'd actually cut back their spending significantly.
59% of consumers -- who earn over a 100000.
Says that they had also cut back their spending significantly.
So you finding that.
Across the spectrum people are cutting back their spending that is -- cutting back their spending and also shopping smarter -- being.
A little more savvy about where they spend their money how they allocate their and their money.
And what types of products from what attributes they're looking for products that does that mean we're going for the yeah unknown name labels are we still picking out you know I got the got to Cuba to -- in my behind the -- -- -- -- -- -- ran.
Very difficult to -- with a -- brush their consumers are being very Smart in individual categories.
About what's important to them.
Some some categories yes they're looking a private label.
And switching to lower priced brands in other areas there's attributes that they have a very important to them nutrition is one that -- -- as being very important.
And have a more holistic view of what is important round.
Value rather than just strict price and value was one of the new things that consumers are focusing on what about where they shop especially with you know -- -- earnings coming out here a few weeks and everybody focuses on -- Tiffany the high and consumers doing this or target yet you know the lowering consumer Wal-Mart.
Are they changing -- each other are they really -- you'll trading down so to speak from the -- of the world the targets of the world.
-- more shifting their spend within their overall budget.
They're shifting spends about 40% of consumers said you know I've changed where I -- primarily for food.
Based on a quest for value -- quest for better deals.
So they shape shifting their primary grocery store and also shifting how many stores they shop -- so the more likely to take the list of things that they want to buy.
And and allocate that across stores based on where the value so by shifting food you're -- going from a Stop & Shop which or which is generally.
Expensive to like a Wal-Mart.
Not necessarily shifting all of the spend but some of the -- taking taking a look across the whole shopping list.
And -- some of these items are better off buying at a grocery store making multiple stop making multiple stop shopping at more places yes and the interesting thing is that we think many of those behaviors in consumers told us.
Many of those babies are gonna stick with them even if the economy turns around.
By you guys but at a white paper it's entitled the future of the consumer products industry the end of the world.
Oil world of opportunity so how do you see if on the consumer products company how do you see me now attacking this.
This you know base this economy that might never be the same he may be looking at something completely different from now for the foreseeable future and we -- a couple of things that we think the really important for consumer packaged good companies.
And and retailers and fundamentally they really need to understand it a very deep level.
What it is that's motivating individual consumers to purchase either at a store.
Or particular product.
Or -- particular brand it's always been a key part of what they do but going forward -- really gonna have to sharpen their pencils and take a much deeper look at what motivates.
Each of us.
To allocate our spend differently because -- -- being much smarter we have a lot more information available to us about.
What is in a product what the the comparable prices are where it came from.
When it's on a deal.
That being said someone like myself if I could buy every thing.
Everything on the table lists everything caught my next car if I could do this all off this laptop I would.
Are you seeing more of that more people in because I -- now price value right at my desk and get the best value online and I didn't go to -- stores ever again.
We we are seeing a huge.
Migration to the web.
And web sites social networks online coupons.
As there's greater transparency into things like price.
And availability so.
People are using social networks.
FaceBook and product specific networks to get information about where a coupon is.
And sharing that with their friends.
The power of word of mouth has really changed in the way people shop act as a Twitter and things like that perhaps people are still showing up at the stores you're saying.
And I mean it's very difficult to download -- cannon -- to your phone.
So for the moment I think they'll have to have it delivered you can have it delivered.
And highly appreciated.
On you again you're talking about cooking winning and it could mean you know -- He's a minority against the idea of emaciated over here -- wilting away sky things like that to see you thank you grab a set from IBM my -- a thirty year -- so light and certainly appreciate big blue.
Some people back that -- day and age where -- long time -- members and as conservative as IBM was so conservative -- and he still.
Allow me leave the house with a mullet and yes for those of you really did I did take my jeans since 1986 for the love of god and you would expect -- -- I did not know closure votes membership -- -- -- yeah.
-- -- that gave us that.
133 points right now -- boring as it has also long for the most part close to its -- on the -- -- -- at that.
You look back at Fox Business.
Live at 1240 the Dow on the East Coast good morning to all you West Coast -- Dow down a 134 points right now buying picked up a little bit since we've been on.
Lot of negative news as we talked earlier a lot of economic data that's been down more than people expected jobless claims higher than expected.
You know -- manufacturing numbers come in not as good to that means no one's making product no one's buying product and yet.
The sense that it better be.
That this economic data better be really good across the board because he had one piece that's nice another piece that's good and -- -- one piece -- comes in negative and you sell off.
We're so much different than we were two months ago where any little.
-- of positive -- coming out of economic data sent.
That you know the equity markets higher nowadays do you have exact opposite OK it's fine it's good it's fine it's fine it's not really good as -- consistently good across the board and they get a little bit of the -- -- We've been hearing that we're having this -- you know -- the market ready to -- are we pulling back is this little part of it.
So we'll continue to keep -- -- mortgages are constantly at big issues mom.
Mortgage lenders are getting hurt by the mistakes of the bigger banks or are today that's we're gonna debate right now so we have to fabulous guests for you Matt -- it -- -- -- got partner in the law firm company -- and we also Scott stern in Saint Louis he's CEO lenders want and chairman of community mortgage lenders of America welcome to both of you.
-- need -- to be here it's got like to start with you first or gloves and and -- the country tell us where you stand on all this.
You're defending this of the small banks shouldn't be pulled into this whole big mess.
Yeah community mortgage bankers are really the lifeblood of the mortgage system in America.
Even now we do 50% of all the loans.
And consumers have really benefited from the innovation and choice that community mortgage lenders have provided over the years.
The mortgage industry has certainly.
Done some bad things in the past few years and many things that the mortgage bankers that I know we're not proud of the actions of some of the mortgage industry participants.
And we believe that the mortgage industry of the future needs to be transparent.
And needs to provide honest services to consumers if we're able to participate in.
I did a growth of the housing sector and -- growth of the economy overall more community mortgage bankers must play a role.
But before we have to map for his response to that.
How can we can be so sure that these small little guys didn't get involved in pushing sub prime mortgages out the door -- Well it's it's easy.
I I coined a term called mortgage malpractice and mortgage malpractice has two components the first is bad products.
You should never have a product that -- so much risk on a consumer such -- to be able to predetermined.
That the loan has a high probability of default bad mortgage products were really that.
And also there are bad mortgage originators the same way there -- bad doctors and bad lawyers.
We need to eliminate bad mortgage originators from the system and if you had had good mortgage originators that are well trained.
And safe mortgage products you do -- although a majority of the problem.
Matt back in July 2008 President Bush signed into law the security and -- enforcement mortgage licensing act essentially to -- fact.
Odd -- to.
Tell the consumer this is what you're getting -- prevent a wolf what you're talking about is the smaller banks -- the mortgage brokers from misleading the consumer.
Is this working doesn't unfairly target the smaller banks or the mortgage brokers at work with a smaller banks oppose the larger banks.
Well we don't know if it's working yet because it hasn't been implemented in every state yet.
Most of it will be implemented it towards the end of this year and towards the end of next year but this is a long time coming.
This industry has needed regulation for years it has been the wild wild west over the past few years.
And these mortgage originators.
Have been committing all types of abuses and it needs to be.
Some type of requirements educationally.
And -- seen.
In order to take -- to weed out all the bad apples in this industry in in this bill goes.
A long way in doing that.
But senate where do you stand on all -- -- should.
Big and small banks be included as well I'm -- Little Rock so everybody gets a hand slapped for this absolutely if you I'm -- -- fortunate.
-- -- -- -- -- -- -- -- -- say it's unfortunate that our leaders in congress.
Did not also make banks do this because they should have to do it as well.
These loan officers switch from small mortgage companies to banks in the back and forth so it's the same people.
In big banks and also in mortgage companies and they should have made it apply to the entire industry.
But unfortunately our leaders in Washington.
Allow the big banks to -- this statue which is unfortunate.
Scott what do you see about this a fact that you deemed to be either unfair to the smaller banks of the mortgage brokers out there.
Or it just preventing you from being able to look.
To conduct of this.
Well let me tell you that the woman who cuts my hair in Saint Louis is license and you'll notice no -- by the way.
Or woman who cut in my head Eric is licensed and yet most mortgage originators are not license that's really kind of a travesty.
I believe that licensing and continuing education should be a part of the mortgage industry.
And it should be applied equally to community mortgage companies to mega banks.
Consumers should have an expectation.
That the people handling their financial transaction to be educated and have their best interest at heart.
Continuing education in licensing should apply equally.
To all people who meet with consumers to provide financial advice it should be mandatory and it should be equally applied.
Across the mortgage industry.
And I think that was the problem I think there was a lack of communication and lack of information on both.
The parties unfortunately and it probably does make the the most sense for the consumer.
Scott it this is an across the board sweep we can't exclude small the small guys just because they're -- on the biggest advocate out there for small businesses but.
It's very hard to determine whether or not the small guys -- predatory or not so unfortunately I do think it should be across the border.
-- Think they're that.
A lot of mortgage lenders were predatory and you had convicted felons working in the mortgage industry because there was a lack of oversight.
As -- Matt said it was the wild wild west.
We need to sweep the system of the bad the participants.
Can't make sure that consumers have a a in expectation.
That there originators are going to be well qualified and at the mortgage products that they use are safe.
-- -- -- -- And we really should implement -- as soon as possible and that luckily across so -- it is it isn't -- position that he does support the statute then.
Yeah I think both me -- the clients I represented are really consumer advocates.
In mortgage bankers clothing.
By that I mean we believe and upholding the high standards and high integrity of the mortgage industry.
And the only way you do that is first and foremost by eliminating.
The bad performers to ensure that the people who are left are the consumer advocates and mortgage professionals -- our industry deserves.
That real quick do you believe that this that's safe flaw is adequate or that what we -- additional legislation on top this when it is an -- in all fifty states.
Yes we need additional legislation we need to include.
Every single bank.
That is doing home mortgages there has been abuse on this by small mortgage lenders and there has been abuse by the major institutions.
And all of them need to be regulated there needs to be more oversight.
-- and good partner in the law firm cloud Kaufman and Lynn Lynn Scott certain Saint Louis CEO lenders one.
Thank you both for your thoughts and for not coming on with mohawks.
They've got us.
-- and by the way let me just keep reiterating that picture was taken in 1986.
All right ballots were really really -- 1986.
Them -- Time.
I would never dated -- -- I exit and I'm here Bob from Nebraska actually points out.
Would this mean a creation of another czar if so forget it -- or my card companies are doing right now -- way too many sides I had done I had entering through the issues -- And that's they put the picture up on the web they just in case you missed it the first time is that a lot to get through here we will be joined by rich kids and we do you have.
Some Health Care Reform to talk about not only love from that from these evil and it's not about how Health Care Reform is going to impact.
The small business owner and those who work as well.
Mentioned the Jersey boy so he might have been Ramallah and clearly we'll be back we'll let you know.
Welcome back at the end and I doubt that 142 points it is ten to one on the East Coast we got to -- -- to rich Edson.
Who's covering Health Care Reform.
Round the clock but you know my first question is going to be your.
Did you have a -- Stars are you nuts or.
Yeah this is about as long as it's gone and the back.
Too long for me right now might elect the air force colonel and Spinal Tap dance video shaggy myself and hitting -- -- -- cut it I guess today that it can.
But -- we have to get to -- Spinal Tap and yet all -- it's not Iraq it's healthcare.
Talked about helped -- to talk about Google other than what everybody really believes you and I and Tracy -- -- gonna pay for this thing when all's said dot.
You know increasingly it's it's going to be folks.
And when you look at some -- with the Senate Finance Committee has done.
There's an age ratio that says OK we if you are a health provider you cannot charge an older person more than five times.
What do younger person would pay for an identical plan that was lowered to four some folks are looking to do -- -- one and of course.
The less you're allowed to charge older people the war you're allowed to charge younger healthier people there's also that.
That feed that penalty if you don't get health care.
That even if you're young and healthy and don't think you need health care.
That you still have to pay -- -- so you don't folks are trying to.
-- back some of the costs that they think they're going to get going to hit some senior citizens with.
And shift that cost of the younger healthier folks they raised more money that way and -- they can extend health -- to the thirty million people who are uninsured.
Now what about the concern for these younger healthier folks real quick that are going to be footing the bill for Social Security.
And all these other social programs moving forward is it just going to be too much for it and that there at some point -- time.
Yeah it could be an especially when you look at the fact that it -- has been a problem with social security and Medicare we've known this for years is that the younger generations.
They're going to be too many people out of work -- retired.
And too few people working pain and it's the baby boom generation but -- you know.
You look at the other side of this folks who -- -- on Medicare right now who have these benefits they're on fixed incomes already there health care costs are astronomical.
Their prescription costs are at astronomical want to ask them to pitch in need more could easily break them so.
You know you've got so many different issues here play especially when you're talking about trying to force everyone to have health care.
Which is there any talk about getting more specific.
An obesity tax wants sugar attacks all that kind of stuff -- are we hearing any act as if they're gonna push the cost down to the younger people.
That's got a bit more rounds a lot of younger people are in there are overweight they eat all that garbage so maybe that's the way to get them.
-- -- the only thing that he did the first of all that they preserve ratios that people who smoke people who use tobacco.
It turns companies would still be able to charge them more.
But what it comes to do obesity -- be released some talk about that sugar tax but.
There are a lot of folks on the other side especially conservatives say look you're you're talking about a nanny state where the government is now going to tell you.
How you have to eat by more than you weigh that -- that you get the more expensive it comes.
To treat you and and the folks who support that type of a measure say look.
If you're if you're going to act this way you bring down the whole system because you require more health care you should have to pay more.
So you're gonna see a lot of that argument has been -- the Senate Finance Committee is going to vote on this probably next week.
But then it opens it up into the broader senate and then the house is going to -- the senate.
So there's still plenty of opportunities for folks.
I -- really 535.
Lawmakers to bring up their amendments their idea is there's so much more time and so much longer to go on health care.
Rich we appreciate it widgets and in these seeds onto him and no -- I yeah I now had -- -- and -- up against -- -- -- washed jeans cut off right now back.
Very good in his latest president and CEO small business and entrepreneurship council and here and obviously if -- if you you're at a large company corporation.
What capital -- kind of spread around and spread around cost if your health care costs go up your small business it's gonna impact do you.
A lot greater isn't as these costs -- Oh absolutely it's gonna impact -- competitiveness in the marketplace is going to impact your ability to grow.
The -- the type of people that you need to hire a type of and equality human capital that you want so.
All businesses are looking ways to cut costs right now to remain competitive so in the face of rising costs and makes it much more difficult absolutely.
We talked a lot of small business owners on our weekend show and they're struggling to make ends meet under the current system with current health care costs you raise these rates.
These people are talking about having to lay off people just to cover health care.
Potentially close up shot because of health care and why isn't there a bigger voice out there for the small business community could have 80% of our working people.
Well it's it's not for lack of trying I mean we are up on the hill as well as other small business groups.
You know advocating for the congress saying look it's all about small business if you look at you know who -- in the ranks of the uninsured who needs insurance needs to.
Lower costs it is the small business community.
But rather than doing these minor reforms that we think -- help small business in terms of insurance market reform cross border purchasing tax credit.
They want to overhaul the entire system.
So that means a lot of the financing Mexican mechanisms -- regulatory mechanisms.
Are actually in art and he's gonna raise costs and small employers and that's what that not what they need in this current.
I ever even in the best and I'm I'm not a -- -- -- -- that in the current big advocates like all businesses but it's a lot unintended consequences yet again you know they think they're doing the right thing -- you -- they don't realize how they're killing these guys.
We -- perfect example with cobra when they extended the cobra payments.
These four small businesses had to put the money now.
And now they're waiting for reimbursement from the government looked at the Catalina Island that's going to be taken to get paid right so they can it -- as it is.
Always extra costs of these small businesses there just killing it right and and we feel like we're.
Being -- scraps from legislator prospective.
Yeah you know the tax credits will hurt -- help certain small businesses but they're much too limited in scope in terms of you only helping small businesses with those with average payrolls and 40000 dollars or less.
Mean all small businesses need help.
They're not only limited in scope but limited timeframe you're talking about two to four year time -- and that you can access these tax credits -- reform -- then.
So the don't -- real reforms that we think -- gonna make a big difference for small business.
Are not on the table right now and and it concerns us again that these financing.
Taxing insurance companies who's gonna -- -- that of course is going to be the consumer it's going to be the small group market it's gonna be small business I want.
She loved ultimately like to -- put in this legislation will we love to see.
Tax parity -- self employed we'd love to see real cross border practicing or small business owners and and and self employed.
Can shop across the nation for for their health insurance needs.
Expansion of health savings accounts -- and working beautifully in the marketplace right now.
And our legislators haven't even looked at them at saint -- these are the things that are really working to bring down costs and make the system mark price since.
Actually one of the revenue raisers for it was to increase the penalty.
If you withdraw from the health savings account so there I mean it takes -- -- well they're doing down and and the Senate Finance Committee just invented.
Make it more difficult to -- On your medical expenditure increased from seven point five to 10% they of course.
Elderly but what makes it much more difficult people who don't have insurance so.
Again that is something that you should scratch your head and say what is going on -- I think.
The end of the day.
You know what's gonna end with could continue to keep this thing -- how we can finance you know these 809 point five.
Billion dollar trillion dollar packages as well as -- -- -- on individuals and employers and this.
This these bills do not.
Match the economic reality of the country right now or the financial.
Situation that's going on in our nation they need to be scaled to reflect that and they currently down do you think people should be required to have some sort of health and charts we're against mandates because we think that if you do market reforms if you.
Create true avenues to allow for a competitive environments.
That that would induce more people can -- people want to buy insurance but in some states are California New Jersey these high -- It's it's very on -- portable as you know so we need to create the conditions.
That lower costs and give.
People more options in the marketplace and now buying insurance and this will only imposed.
-- -- now imposed new costs and people can pull.
Real quickly about 32 little preventative measures -- -- small business it would be easier to love to put into place programs for preventive medicine health you know concentrating on including eating and taking care of yourself and things like that.
What about incentives for small businesses to do that.
I I agree and actually in health savings account that's a big component that I win the individual -- -- -- count.
When you know the out of pocket expect -- they are shopping around for the health communities are being.
More careful and paying more attention to their health because they're controlling the money the money is there's the insurance is there it's.
And if you look at the stats and the numbers in terms of how this is -- Palestinian count.
Accounts in that regard.
It's been remarkable but certainly wellness.
We go along way and you'll have the choice -- there's news.
And he could not -- concept afterthought and unfortunately it's talent we have right now Karen thanks for sound like I say thank you can't carry concealed small business and entrepreneurship council it's gonna wrap it up for us.
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