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They're done new digs -- as an extremely old dates but they're new for us today as it's gonna be here today -- -- -- -- -- -- terribly well tell us.
And he -- -- along pretty fancy stay on I think I didn't I didn't get this used to be.
Are all those that are all these -- studio so probably it's hallowed ground telecoms who will will will do that for now the mom we got -- -- talk about today.
Lot of talk about and got some good guests some strong -- -- demonic.
He's a -- chief investment officer over clear but partners and ask him about the economy the markets -- up again today we'll get to Robert -- just -- second.
A lot to talk about health care when it -- appear -- -- in DC.
Also represented Michelle Bachmann she's gonna chat a little -- -- -- react to the baucus plan that was announced yesterday that proposal I should say but.
Martin -- also would join us from a Dow Jones Newswires we'll talk with him about that as well little -- -- health care there -- kind of keep that go on -- Feingold.
Managing principal -- site advisors will join us a little later on.
As well to talk about the rating companies S&P Moody's Fitch yeah some -- -- talk about seeing a lot of -- anything easy a blame game of course and -- -- Phil Johnson a great story here from Finland India university -- the upper peninsula okay quite that much to this article all right hey I've I would just say the name of the university in the guy that's all right that's all yet they have the states until later on the.
-- -- markets looking pretty good the Dow's up ten points or so but still it's we've had multiple days of gains here.
So obviously a lot of optimism remember September supposed to be a horrible month.
I historically it is a -- -- for the stock market but so far so good with some traders say hey we're due for a pull back here but we shall see.
We've got some data out today -- jobless.
Claims and housing data gonna go upstairs to Robert pray for more on that and Robert -- obviously what's.
But it's keeping gains here in the markets -- Guys -- and I states there.
That the penthouse areas that at my usual her the curtain -- -- -- apple luxury that yes.
Something like that I got -- -- better than expected report zeroing in the gains you know.
Pretty small -- -- -- -- we're at the highest level since going back to October for the major market averages the jobless claims that trend continuing we're seeing fewer -- -- Still big numbers over -- 5545000.
Fresh jobless claims in the past week keep in mind Labor Day was in there so yeah that could skew things a little bit there it was the third lowest reading -- the year -- Really if you factor out one back in July where there were sort of you know this -- Manufacturers -- -- that at a time different than they normally do and that is factored in it really is the lowest going all the way back to January so there that's your rights -- big news did the bad news really.
Is that we're seeing is continuing claims staying above six million it -- rose from a week ago so you're seeing people taking -- -- seeing layoffs basically slowing down.
But still taking a long time for people to find a job hiring has not picked up that's the bottom line -- that soaked you good news bad news from jobless claims.
Housing starts -- -- people say we still have too much you know out there too many houses too much inventory if you will.
We did -- the housing starts building permits both jump up highest level since November for them both.
On a little bit shy of expectations but buried -- -- and last week revised higher -- sort of watch -- you know percentage basis guys and you look at the homebuilders.
They are lower -- you know housing completions at a record low in August.
Could be a good news that I mentioned are people worried about all the inventory that's out there and a lot of homes in foreclosure for sale.
As well also you know these new homes competing against.
Homes that are already out there and in May be going for fire sale prices or on their way.
To lower prices.
-- you get the feeling that -- of this weekly jobs report.
-- it over the summer it seem like it really carried a lot of weight in the market really paid attention to it and any move in one way or another move the market you get a feeling now we're sort of Islam.
I don't know used to seeing 550000.
On the initials -- used to seeing a low sixes on the on the continuous.
And it's sharing with a little bit less weight every week that we get the same numbers.
It is unless we see something big like we saw -- number jump back up to 575 ever closer to six.
That I think would definitely -- investors and likewise I think we saw something.
You know what -- forehand -- coming in below 500000.
-- -- some -- -- big movie either way I think what I think people are becoming more comparable with the trend.
Not helpful obviously -- that and the continuing claims number I think that's sort of what's you know keeping us from bigger gains today if you look at the headline -- we think well let's.
Less than expected why are we going up more I think people realize that here we are consumer based economy and that consumers feeling right now particularly.
You're you're still not seeing people getting back to work -- does it -- still a little uncomfortable that they may not be there that much longer and nets are all -- we saw me -- Philly Fed -- -- report out at 10 o'clock this morning showed manufacturing in the mid Atlantic area.
Much stronger much more robust than anticipated in that -- -- similar report from the Fed in the New York area earlier this week so we're seeing manufacturing and industry.
Coming back to life a lot of that is the -- story but other -- you know -- industries as well.
But you're just not seeing that the strength and stability in the consumer right now a lot of that simply goes back to jobs.
-- -- the -- -- still the big the big question mark when it comes how we're gonna recover how fast we're gonna -- how much we're gonna -- -- great thank you so much of the -- units up in the newsroom so -- -- some of the big -- General Electric Alcoa and DuPont Coca-Cola Verizon but you know lots of concerns -- whether or not.
This rise the last we're gonna see -- pulled back so who better that than -- for -- pick up and chief investment officer over clear back.
Partners can you shed some light on what's going on here everybody warned us that September it was going to be a horrible month historically it's a horrible month.
Appear to be the case right now time.
And that the -- we've done shows that September is not the worst month of the -- here.
And but we we were very discrete and conquered every look that we went from 1980.
Through last year and the reason we went from 1980 through last year.
-- that's kind of a standard career path and roughly 29 yes and investors that were invested in 1945 at the end of the Second World War probably are investing today.
Please say that went so let's look at such a -- -- more relevant and during the time period what we saw was that.
September was tied for third place.
-- -- -- July -- followed by -- -- September.
But -- tied for third with.
With two others to an area three netter in third place but still historically not a strong public perception is that is what I -- it doesn't that way more than almost reality show that that's because in -- Fox Business news and then others are things that picture you -- -- there and it's gloomy so but the other thing is that during the last update this past that it.
We've only had I think one.
September that was really bad and that was the 2000 I'm sorry 2001.
And so is this the two thousands -- actually been pretty good.
OK so do you like what you've seen so far this September do you think it's real because now we know we're getting to the point where you -- on on the floor everybody saying -- 101000 to foregone conclusion that it 101000.
Was it 200 points away from our reality it's still you know now it's almost as it as -- -- -- -- everybody to bullish right now.
The market -- today.
Debt markets up because that's nine out of twelve days of September.
A little much normally you think it's right I think that unit in in the context of other markets and without a lot of people like to say what were fifty some percent from the -- -- that gets us up about 18% for the year.
Is 18% too much.
In a zero rate environments.
So I would say -- given the environment that it should be beneficial to stocks I would say no.
And in in environment where the economy clearly has passed the the worst of the recession.
And we're probably in the up leg of -- V in my opinion.
And given that we have cost cutting.
Measures that have been tremendous in the last six months.
See Tommy sitting up like event v.s you're not -- with the W where everybody says we're gonna have this steep pullback you know are we go higher now say we're on the road to recovery and it's -- -- -- -- where he started.
I think that we there's a good chance we may get a revision to the second quarter's GDP where it's actually flat as opposed to down 1%.
But going from I think we're what minus five -- change in in the first quarter to close to zero in the second quarter this quarter maybe around five or 6%.
That's fairly substantial -- that the term that has been -- now that I find to be somewhat.
Misleading as well.
They defended the new normal.
I was just gonna actually ask you because we're we're talking to Robert talking about still to concerns in the struggle.
Of the consumer but you know a lot of folks are talking about when are we gonna see signs -- life what are we gonna see the consumer come back.
But yet there's a lot of other top that there's a new norm for the consumer and -- they're spending less saving more and they're more responsible with their purchases and their credit.
Are we really going to -- consumer fully come back to where it was before the crisis.
I don't think you well -- because I don't think you're gonna have unemployment go back to its -- so I'm looking for more for around 6%.
Trough level as opposed to a before or were you did three level -- -- do you -- when do we -- that you -- 6% how -- -- to -- -- That's pretty damn good considering where we are right now when we can get their house how quickly we get there while I think that there were probably gonna see that the peak in unemployment.
If not this this month sorting out in early October you'll see it in in November and then we'll have -- I got kind of a gradual dissension in the unemployment rate.
But you -- the areas that that really created the problem force there were three.
-- was obvious that what we know that we're starting to see hiring again in the office because you're certain to the you know more plants opening up.
In particular General Motors to.
We've had the housing sector.
Was a shatter of jobs and housing has stabilized but not suggesting that -- is -- -- increase when things that.
The that that knocked out of Clinton is is going to be diminished greatly in the third is its financial.
Industry which showed a lot of jobs and that -- -- is now I think over.
And I wanna remind everybody that's watching right now -- get questions for -- email us at fox is it at the end live dot com and at the end but -- -- If if the company that is that is it it kind of got in you now send us comments -- this questions for Tom everybody's concern about what's going on out there.
My question for you -- is the commodities.
Obviously oil gold this has become dinner table conversation.
People are calling and they -- up they should be buying gold taxi drivers asking about gold I mean.
You know is commodities a place where investors should be moving into right now and what of the gains that we've seen in those areas where it which we take away from that.
We'll we'll we'll take that something that you said you know we're talking about at the dinner table but we exclude food and energy from from CPI.
Right so we know what we're really the real topic here is global growth away from the US -- How how sustainable listen and -- -- be looking at GDP in China somewhere around 8%.
The most recent quarter do you believe that bite that we do believe the reason I believe it -- -- to have some small statistics that come out every once and while.
For example last month China than the internal loans.
In China -- sixty point one billion dollars now.
There's a local laws that put your your arms around the US having local loans among the banking community of sixty point one billion for the month.
What impact does that have -- GDP sudden that's that's tremendous that's happening we also have a manufacturing globally starting to.
Increased and that review we -- consuming you know hard commodities and materials.
So what you what you really want to think about is what's the driver it's not just expansion.
But it's also the weak dollar and that's a chronic problem.
And as long as the dollar continues to slide lower and with the new.
And the new election in Japan where we have that the -- -- -- the DPJ party I believe if they came out yesterday finance -- minister said.
We're comfortable with the strong yet.
Well that Japan's comfortable with the strong and and Europe's comfortable with the strong hero.
In China is comfortable with the somewhat of a strengthen -- What does that say about the -- as the dollar price going down contest so -- you talked about goal we're should -- be.
Actually got -- Higher in you know we've -- that we think the gold sometime next year will be in a range of 15100 to 17100.
And that's with the dollar reaching new secular -- Hi Tom -- obviously still a lot of a lot of concern out there but who were hired as you said -- -- conversation about it today and that's a good bit and September not so comparable to other September's this year's been such a different ride.
And also the US is you -- quite frankly has lagged the performance.
Many other countries but in particular the emerging markets -- -- what year over year when Lehman Brothers say good bye to the to the universe.
From that date through -- first anniversary.
The S&P is down approximately 12%.
Emerging markets are up approximately 12% so not only do you have divergence but you have.
One positive one negative -- and then there are some strategists that say what you know -- we've been sitting here for ten years doing absolutely nothing.
In terms of market performance and you're right the -- is unchanged since September of 01.
Should you have been you could have been an emerging markets which -- up 300%.
From September of 2000.
One right -- -- thank you so much for joining us see I -- our partners none Peter Barnes and join us when we come back into quick break.
-- and the Washington.
Two get the lowdown on what's going I -- -- here for the Baghdad the end live Chris -- along with -- that don't forget you can email us your questions have conversation with a -- -- at the end live at Fox Business.
Are there watching -- just stand incumbent right on the side -- is greener on foxbusiness.com.
-- -- head out to Washington now Peter Barnes talking health -- not finished product yet Peter.
Nowhere close to a finished product my got.
Job security for me I hope.
There's going to be going out for awhile and in fact you know the big story is the plan that.
Senator Max Baucus the chairman of the Senate Finance Committee dropped yesterday introduced yesterday.
856 billion dollars over ten years it does not include the public option that.
-- on health insurance.
Plan that some not favor it would try to lower costs and increase coverage for the uninsured by.
By a increasing Medicaid expanding Medicaid creating these new health insurance exchanges.
Sales exchanges where people could shop four coverage with the help from the government government tax credits government subsidies.
And right now senator baucus has meeting.
With members of the finance committee behind closed doors to run over the provisions -- over the numbers and this as President Obama is at a rally.
-- on the monitor here right now at the University of Maryland to try to.
Pump up get back in the game here on health care.
Peter how close is this deal all the -- proposal.
To look what both parties need to see it come to an agreement I guess my question is that there -- fifty different proposals out there is this -- -- -- -- one.
That matches what both the left and the right really really want going forward.
While the left of the writer out publicly today trashing the baucus plan which probably means it's a pretty good what if there.
And walked in Washington at that everybody's angry that it found that usually a fair deal.
Is what they say down here.
But the White House.
Definitely likes the baucus plan says its closest to the framework.
That the president outlined and is a speech to congress last week.
The public comments from folks on the right -- the folks on the left to want something different you know a lot of time that -- that's posturing.
Ahead of negotiations I don't pay as much attention to that myself.
Try to hear talked of staff and -- -- what's going on behind the scenes.
But it's still a tough tough haul because the action is in the senate.
They've got this issue of needing sixty votes to try to get debate ended the so called cloture vote you need that I'm pretty much everything you do in the senate.
Democrats only have 59 seats right now with the passing of Senator Kennedy.
And so -- in theory they would need at least one Republican to come over to their side.
But there's some Democrats who are saying they're not gonna vote for this plan so they might have to do this.
Procedural game called reconciliation.
That just requires a majority vote 51 votes.
But when they do that they have the split the bill up into pieces and it really complicates things so it's it's they've got it a lot of work ahead here.
-- I'm sure he'll be out of thanks for joining us and I put fans in DC let's go to represented Michelle Bachman right now she's a Republican from Minnesota should give us her viewpoints.
On the up plot meant proposal on the baucus proposal rather Michel thanks a lot for joining us what do you think about the proposal first of all.
Well it's really a public option by just another name and so I think you're not going to have a lot of support -- -- -- on Capitol Hill.
Because we're looking at putting mandates heavy taxes on individuals businesses insurance companies.
In other words the middle class is looking at up big big tax and I think that's why you're seeing both Republicans and Democrats -- all that all I'm a little bit.
We don't want to go down this throughout.
They're representative Bob Bachmann thank you so much for joining us this is Sandra Smith here.
You know there's a lot of questions going -- with the price tag on this baucus plan you know the Congressional Budget Office had -- -- -- You know it is about seven and a half billion dollars the baucus asked -- that was about 856.
-- concern -- -- you know we're talking about the consumer here what are the price tag they weren't the right now is a pretty big check to swallow -- to listen to right.
Well it is because we have so much money that the American taxpayers.
My far right out there looking at a huge national energy tax.
They're looking at it maybe two trillion dollars in deficit this year.
And now they're looking at the federal government that this thing 850 billion.
People don't believe that because if you look at the cash for clunker program it was supposed to be a billion dollars ended up being three billion.
And -- congress said it.
-- -- 1965 Medicare B nine billion dollars by 1998 and actually turned out to be 65 or 67 billion.
Government always grossly under under estimates that -- and older estimates what they're going to deliver.
The American people are -- it right now and parent buying what government has to spell.
Well represented -- and how do you become deficit neutral here with this because he that you're obviously gonna have to spend an awful lot of money.
To properly ensure all those who are uninsured and all those who want to continue to be insured in this country so how do you get there.
Without increasing taxes without adding to the deficit if you don't increase taxes that -- get that revenue.
Well look look I'm just gonna pull this out because the feedback I'm getting but I just want to tell you we do have a positive Republican alternative.
That hasn't been talked about very much and it's very simply this.
The American people own their own health insurance policy -- band together with as many people as they want.
They can purchase any level of coverage from anyone they want -- where they want in the United States.
That doesn't require a grand infusion of taxpayer money and then have a dramatic overhaul of tort reform lawsuit reform.
Let's try that alternative called freedom and free markets first.
Before we go down the road of government takeover it's a very simple option for us to take a look at and I think we can end up ensuring a lot of the people who haven't had the insurance before.
Of course debt finance chairman baucus assuring everyone that this is just a proposal to mark up.
Representative and that there will be changes made as we go forward here.
I what do you see potentially happening here -- what do you think that success of this what what's your what's your prediction here.
I really don't see a lot of success because I think what we're going to see is the American people again.
Overwhelming numbers phoning their congressman voting their senators saying.
Look this is still government takeover you're not listening to last the American people.
Listen to -- to give us freedom give us real options that will bring -- down the true cost.
And then we'll talk the American people don't want the federal government committing them to trillions in spending this is that will not help them have a long random people are on -- that.
I know you have legislation.
The health care field of choice act that you proposed.
I also know that and -- many particularly on the right.
The Republicans are looking for smaller more piecemeal ways of improving the system that we have now as opposed to coming with one -- -- make Olympic building just drop on -- on the table is there any possibility of convincing those on the other side if that's the route to go.
Let's stop trying to get the one size fits all and let's try to fix certain pieces of -- that are really hurting it.
I think you've got a very good point and I think listening to the American people is the way that we want to golf.
The American people want us to do something about health care that -- in total agreement with President Obama.
We can have bipartisan support -- yes we want to have changed.
And really here's the bottom line.
Will the government have more control over my health care.
Or will the American people have more control over their health care if we go down the road of giving -- American people more freedom and reducing their tax burden.
That will reduce their costs.
Then the American people want to go that route they don't want the federal government telling down.
What health care they have to pay for and again it's 85% of the American people that already enjoy good health care -- They're going to get -- in order to redistribute.
Health care to the other 15% of the population here American people are saying -- the -- Representative -- when we apologize to the feedback but we also thank you for joining us this afternoon -- slot where -- -- Thank you for comedy I think -- Arabs and Michelle Bachmann a Republican from Minnesota joining us giving us your thoughts on.
Auto baucus proposal -- -- he's obviously finally -- today tomorrow throughout this week but early next week as a starts to become the size if you will on Capitol Hill and changed in black line in red line and anything else.
I look at some of the comments and we obvious that a lot of people watching right now are saying we're writing to our representatives repeatedly people feel passionately about this you know continued.
Sending us our thoughts and now we've got more health care that's coming up we do that we'll be shut up -- your questions -- Martin -- is gonna join us in Dow Jones Newswires when we come back to for the talk about.
The baucus proposal.
-- lot of foxbusiness.com.
That's the website that say you know -- a city -- right there were obviously foxbusiness.com.
If you wanna check this out.
And obviously have some conversation to a lot of people are jumping in here really mention before we went to break about how people are upset and they're they're writing to their congressmen and women -- letting them know.
Do you feel though that sense that there's this sense of frustration that they're not being heard that that it matter what they do it's not gonna matter and people -- -- gonna do what they wanna do.
Well here's the here's the thing isn't.
You know most folks that we've heard from out there agree that there's needs to be something done with our health care system in the country and the consumer here he's shown that they're willing to -- -- the tough pill to figure out yet to get the right thing done here.
But as a senator are as the representative Bachmann just -- it.
We saw cash for clunkers program go to triple beyond the estimates there about this all the tax credit for homebuyers the triple I doubled the budget there.
We're going to be united -- -- -- -- here and people all the time Democrats say records were repeat it's just not.
Designed right from a fiscal perspective it -- -- did you say -- simple and it's not working you know -- you have to be fiscally responsible at some point in time so.
My -- that goes what do you think about com.
The sugar tax -- because.
Talking a lot up -- the tax on.
Like so it is and there's even a commercial Neil and I'm sure that -- -- and patsy and they got their lobbyists in there and it they I saw a commercial about this this morning saying.
You know congress think this is the penny here -- -- -- -- looks not to families who are struggling but here's the thing it's not that tax soda.
You're -- tax income -- you're -- attack something else that at least some tax out there that attacks you.
More than you being taxed now it's a fact.
It's going to happen when they take it from this -- -- this.
I know there's a lot people very upset about that they feel that you know their freedom to go diet soda is now being.
Taken over by what about the initiative to go buy a pack of cigarettes sort of go by about bottle of Jack Daniels I mean I know you might feel like you need to go buy a pack of cigarettes in a bottle of Jack Daniels with all this going on but -- those things are tax.
As well above and beyond the -- Addicted to syntex -- in don't know somebody needs to decide who they're going that.
What they gonna decide as a syntax and what is our.
We're gonna head over to -- Martin -- he is also in Washington DC right now Maarten thank you so much for joining us Martin -- Dow Jones Newswires.
Very glad be with you thanks frank thanks for being here let's just get your reaction I don't know if you're able to hear represented.
Out there but aren't we we're talking health care here we've got a lot of folks writing in obviously feeling very passionate about this what's your reaction.
To the baucus health care proposal.
Well I first thought I was listening to your conversation on sin taxes and I totally agree with with your idea that.
American Americans are gonna get taxed one -- -- another to pay for increasing health care costs.
The argument against -- the soda tax.
Just to sort of play devil's advocate is that.
Poor people and lower income people spend a lot greater portion of their income.
On groceries you know including including sugary snacks and and so does so that that would that would just be a counterpoint I guess your point -- -- taxes.
We got to find some.
Way Canadian media -- tax this series so it is that you use some of that income.
To put water and healthier foods into some of the lower income neighborhoods you know we talk a lot about that.
Preventative maintenance I think.
Is talked about but probably not talked about enough in this whole discussion with Health Care Reform how can we not only reform insurance but reform our.
-- practices as Americans so that we live healthier -- -- just costs -- less.
-- take care of ourselves.
That that's that's one of the hardest things I think to tackle as a legislator and they're one of the things that they focused on and you also see it in the baucus bill.
Is the health care decisions.
And not just to consumers may but that providers and doctors and hospitals made.
And you know talking with -- lawmakers.
I think there's a suspicion -- Among a lot of lawmakers.
-- on the democratic side dad -- doctors are warden ordering lots of unnecessary procedures lots of unnecessary tests.
And you know beer.
-- -- some of these proposals they're trying to get a quality of care and what's most effective.
And trying to change the decisions at the provider level.
Changing them at the consumer level.
Arm is obviously.
The best way to go at it but it's also probably the most difficult one to go -- from a legislative standpoint.
Yeah I know that we've got a lot of Martin a lot of comments coming in.
Everybody feels very passionately about the thing that's apparently.
Not no more attacks news -- you know people are saying.
You know syntax is at the lower and come anywhere to remind people about The Beatles songs then.
Anyway enough but -- gonna -- that that's really you know I don't know that we'll stay away from that but -- obviously I mean you know.
This is something that's -- almost inevitable in one way or another.
Well right and but you know.
-- truth the soda tax issue.
You're right the lobbyists are all over at -- running ads about it but it's nowhere on the radar screen and terms of what lawmakers are doing.
I'm not picking up any indication that this is a proposal to pay for health care was something that was floated -- way back way long ago in the process.
But I'm not the first one to.
22 point -- to remind you that.
The chairman of the Senate Finance Committee.
Is from Montana.
A very large sugar beet producing these days and -- and the ranking member Chuck Grassley is from Iowa.
Huge and important corn producing state.
You know some people think for the soda tax was sort of nipped in the -- to -- -- market power -- go ahead.
-- -- SM reading your story here it is about the baucus plan.
The most recent story you wrote here four Dow Jones Newswires.
And I don't confused why the president put 8 September 16 deadline on having a proposal that both parties.
Could agree to it.
If both parties can't agree to it you know it's sort of like -- it shouldn't have locked the gang of six and room and say.
Don't come out until all six of you agree.
You know you hear from.
Senator Snowe saying moves in the right direction with senator Conrad saying it's a very good start what the other forty proposals a very good start.
You know I was just talking to senator Grassley and he was mentioning by his count -- gang of six has held upwards -- thirty meetings I think.
Hunt literally hundreds of hours over the past weeks and months.
In a room talking about the details of this bill trying to come to some consensus.
I'm not real sympathetic to the argument dad you know this is an arbitrary deadline.
Deadlines are -- are useful and important at some point to get to a bill.
The issue of health care is very complex and I think we could discuss it until we're blue in the face -- -- next year beyond and I have been for years and years on and so I think the effort by Democrats is.
To just to set a deadline and to try to get something moving to get input from everyone in the process but not to let the process.
Where -- seems like you know one of the biggest issues is people just don't understand.
If they don't understand the -- get the president's health care I don't understand.
What that the proposal baucus has put out.
I do think it's just the you know the unknown that's bothering so many people right now.
Part of it is the -- no I mean there are a lot of unknowns how these proposals work out how would a public option work how many people would it affect.
How would -- -- nonprofit co -- work like senator baucus is proposing a big question mark.
I'm so I think that is that is part of -- the inability to sort of predict and these new.
And uncharted territories.
How various policies would play out but I think another big part of it is you know you've got to political parties here.
They're under no illusion as to how much is at stake.
And you know the Republicans.
Might see this as you know -- be the big issue that Obama is tackling.
And they're gonna try stop and it's I think you've got two sides bitter bitter up putting out completely different.
You know versions of what's going on -- -- -- I think that has a lot to do also with -- the public is struggling to come to grips with us.
-- now I'm also hearing today you know after the baucus -- sort of been disseminated by particularly Democrats I'm hearing.
It is dead on arrival without a public option do you get that sense as well is that -- the Democrats have -- -- And they're they're not gonna give in on that public option even if it's a co -- which is sort of you know middle ground.
You know some some would say that people are straining at -- at a -- a -- with this public option because.
It is an important issue and I don't mean to downplay it but I think the CBO estimated -- you know what when it when it first comes into effect at least it would be affecting.
Maybe nine million people.
On only the if people in the individual market they don't get their insurance through their employer.
In the individual market or those that work for very small employers would be the only ones initially they would have access to.
The exchanges which is where the public option would be would be offered.
Now there's a lot of resistance on the democratic side the more liberal wing of of the caucus to the idea of a co -- And so that's a tough it's going to be tough sell for baucus and his fellow us senate Democrats to make is no doubt about that -- I think really as precious that it is this plan dead on arrival on and he showed up alone.
Yesterday with this obviously making some key concessions to try to garner Republican support and not.
No I don't think it's dead on arrival.
I think it's still an uphill battle.
I think dad because it is baucus is trying to strike a middle path here it's inevitable -- he's gonna get air rose.
And rocks like Adam from the left and from the right palm.
He's gonna go forward with this committee mark up and we'll see -- folks come down.
-- I'd say odds are that he gets this bill through committee what happens after that on the senate floor is a complete.
Not a question.
But I think the jury's still out.
Martin we certainly do appreciate you joining us thanks for your insight.
But let me thank you very much Martin Vaughan Dow Jones Newswires giving us his insight on -- what's happening right now for health care.
And the ever controversial credit rating agencies are gonna have a guest coming -- we are gonna talk about that a lot of people -- a year ago at AIG and that near collapse and.
-- -- -- -- -- -- -- So -- a quick -- -- as has got to get in touch but we'll be right back.
-- -- live continues Chris got along with Sandra Smith and we were talking just before it went to -- about the rating agencies.
And bill Feingold joins us right now -- you didn't.
What -- pointing at companies.
They write you know what how many years that we've been calling and -- I think you really know what they're not really -- that companies are firm exit or something like that so.
Yes nominations -- -- -- I think -- and Obama bill first of all it.
How much blame.
Should be if anything should be pointed to -- Fitch Moody's S&P for what happened last I think a great deal.
I think a great deal blame because it's partly because it's just the role that these agencies play.
But it's also because of the way they go about doing that work in the way they get paid.
So what's the solution I think there -- there for a reason to try to protect and try to make aware that they are they failed.
They were there for a reason -- that reason goes back to the great depression and that reason goes back to the 1970s.
That was a time when data were much less publicly available when.
Technology for analysis was much less publicly available.
These days I think people can do their own homework and that's what the book that I've written is about.
I don't think they really serve the purpose that they were originally designed -- the book is the undoing of how it is a hole and apparently he take a look at it there it is.
On now is there a conflict of interest here as well because now you have a rating agency going in it.
And -- financial institutions that are paying that agency right it's gigantic conflict of interest I can't TO could be any bigger.
The truth is is that it's like if you'd imagine Steven Spielberg paying the critics to review his movie.
And then most people could only see or not most people but a lot of specific people were only allowed to watch movies that the critics liked.
Because a lot of investors a lot of important investors can only buy.
Bonds and get certain rating.
Only investors you say should be allowed to paint.
For these ratings that's my opinion.
Yes explain not -- well I think that the people.
Investment research takes time and cost money -- you want a second opinion now that's -- lot of a lot of people didn't their -- homework but you kind of want it.
You know whether it's a credit where credit rating company -- except -- -- a couple of that's second opinion somebody -- looked at this as well.
Absolutely but you should be willing to pay for it I mean second opinions there's no reason why they should be free.
The person who's doing the investing as I say investing as a cost it's a process.
And doing your own homework and then seeing what somebody else thinks is all part of the process but there's no reason why shouldn't have to pay for that.
-- -- -- the SEC is looking into forcing banks this year dated night I -- is an attempt to say.
That you all have the same dated look at when you rate these banks so therefore you can be a one can't rate one.
Much higher than another one might because the data is all this -- -- back NC a second opinion you're getting a second opinion on factually based information right put the data out there let everybody use their own model their own approach.
Let everybody figure out what the things are worth -- don't just go off some.
You know letter grade that one small committee comes up.
They think you're saying individual analysts and you don't have a committee deciding how to rate.
A company that you have an individual analysts assigned why what what the differences that make.
I'm not a big believer in committees in the work they usually generate -- theory they're good.
But in practice what happens is -- you know they like group think and they all come they all try to agree with each other I'd rather have one person putting their neck on the line.
What about accountability and -- because that's the other thing you could look at some of these rating firms and say well.
You were responsible or partly responsible by inflating the value of this asset.
-- -- security advocates may be and now on the sudden it's worthless and people -- you -- you know that there are two ways of looking at that you can go back and say you're to blame you're -- only people consume you.
Or the other part is to say.
We just want trusting in the investment community what's fascinating -- animal -- that that poignant.
Right it's it's a good question you ask I think that.
Liability if it turns out that work was done in a way where there was a conflict of interest.
If people applied readings that they knew we're not really appropriate if there were flaws that they intentionally overlooked and that has been evidence of this there has been evidence of -- being changed.
After model flaws were discovered -- big big problem with that I think the rating agencies.
Got away incredibly easy with that.
But the other issue is -- we won't trust you but the problem is a lot of people are almost required right now to trust them.
But what about just public access to this -- -- you know not even paying them you know obviously there's a lot of people looking at these companies begin with why not.
Public access free access will -- One of the things that I am actually arguing in favor of I think all the data.
That the rating agencies use should be absolutely free absolutely out there.
And that the individuals decide what the -- -- and if you don't wanna do the homework then don't -- the boxer.
How much -- there was a lot of an individual investors will.
Listen to company's corporate conference call build they'll get ten k's and ten -- and all the public information at the SEC provides.
I think there's probably a lack of knowledge from the individual investors that how much more information and that is available.
City's rating agencies aside from city into an office across a desk from the CFO and things like that how much more information are they being given than the public is right now.
Brutal force to be given by the SEC well in some cases I you know I don't know the exact answer to that I think that Barry's case by case but with a lot of these structured products.
These special investment vehicles -- they never would have been issued -- the rating agencies didn't get.
Their hands on the data first and say okay we'll sign off on that and so you know that's where you get into some real problem.
Though I ask you a question about these actually the -- and reporting on today's flash trades in the SEC's -- meeting today to discuss this.
Sure this is something that you probably look that.
A little bit at least -- and it's basically did the argument from that's like Chuck Schumer say that this gives the rich people better access to better trades.
And that's the scene is contemplating getting rid of it altogether.
Sort of along the same lines as protecting the investor when you.
What's here and there.
Well I mean if you have a certain group of people who are getting a look at order flow that nobody else is getting a look at.
I mean this is what everybody thought Bernie Madoff was doing -- -- it's just a much higher tech version of it.
If if not sending in order today exchange call somebody and say hey do you wanna.
Be -- seller of my by order of yeah -- I mean if it turns out that this is really kind of front running then it shouldn't be permitted if it turns out.
That there is just a lot of high tech.
You know computers.
That are figuring out this quick discrepancies between stocks and acting accordingly.
I mean that's just not applying technology that the investment process so it really depends on what's really going on -- It's kind of like we've done well health care the timing is always the question are we gonna see something done will something get done here.
It is they're going to be needing done with these rating scale firms soon -- SEC -- in to the American public.
With a global -- investment community I should say.
Really gets a better sense of confidence and feeling of confidence about these -- I hope so I think something is probably coming that'll be pretty significant I think the SEC.
Is feeling a tremendous amount of pressure because of their failures with Madoff and because the failures with the rating agencies and I think they're gonna have to do something chosen to paying attention.
-- so what do you think is the biggest failure this rating companies.
Well I think the biggest conflict of interest clearly that they were getting paid.
By the issuers but I I think the biggest failure was just that the intrinsic way that they are structured.
Their ratings are always.
Behind the -- -- that they cannot respond the way markets in response they're flawed and did these and they.
-- -- -- horrible news.
Is horrible news on the soccer I the company in the all of sudden.
Fitch comes out downgrade is that the way it's working with the equity -- right -- right -- right just in the nick of time having thanks thanks a lot there.
-- you're probably -- be ahead of the game not.
And build a book is the undoing of cowardice here -- you on the cover piece when it covers a sort of like that if you've -- Wall Street this fund managers fund managers or she can keep it -- up.
Quote that that's sort of yeah yeah it's funny I can't quote the movie chapter and verse in the wind -- that a lot of people can although I wish that the guess that is the idea I mean my my premise with the book.
Too many professional money managers not all of them by any means but too many of them are really just trying to perform in line with one another -- their jobs and and you know what if you have one person trying to copy what a hundred were thinking for themselves are doing that's not a problem.
But when you have a hundred trying to copy the only two which we were thinking that's a big problem and I think we see a lot of that Chris so thanks -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- And one trader using the analogy is baseball thank every Kelly seen a lot of home -- that it's been base hits and walks and the writers -- gone around and around.
And somehow this stock market continues to go higher we're watching them in the -- you have Justin quickly just -- -- to that point.
-- of us remember we've only had one day that was actually -- up more than 100 points that was yes it would -- -- -- points but really.
Really all the other days -- the title game plan and we're getting back a little engine that could -- seeing here on the Dow Jones Industrial Average was down 21 points going.
Notable as the Dow Jones transportation average -- getting watered down 44 point.
This despite the fact the run that we see an AMR the parent of American Airlines which has been up.
More than 20% now it's up about 17%.
Give or take and they are getting additional funding trigger lock and it will be even starting -- is -- Bringing that happening to my attention getting two point nine billion dollars in -- did additional funding work on -- -- of buying planes this that my ass that's some good news.
There but also seen an upgrade in JPMorgan fact that the bay coming -- shortly before -- and then stop.
Moved higher on the news as well -- -- -- its price target.
While he's upping the price target to fifty dollars from forty dollars of that is a big.
Move this is -- on a new way to value.
Bank stocks in particular and he's talking about -- the big picture story but he did raise JPMorgan in particular.
So those are few of the names that we're certainly watching discover as I have been doing it's a very well and also Eastman Kodak has come under some pressure that -- We are watching but it's really Dow 101000 -- even.
Whether they're nervous or not they can't fight the trend that we've been seeing really had one day to the downside that we've been on the move other than today -- Really over the past so we more than a week -- -- -- -- last Friday says certainly we are moving back that Dow 101000 mark which -- not that -- -- October of 2008.
That is what we're seeing this as the commodities really have been hovering around you I think really the -- Pull back a little bit today but certainly wouldn't -- golden night as my family as -- Love the small ball analogy that baseball yeah I -- -- yeah yeah.
And he actually got really attack on media and he actually he actually was saying the -- that these is on ball might -- -- I hated than anything because.
-- -- I don't I am I you know I I sports right.
That's another thing -- got I'll start there and now I love black spotted.
Thanks Nicole by the way we get somebody give Martin wanted to know when will the president from so many of the well.
He's going to be on next and it's not a country it's a schools went on -- like what you said really don't give too much away along in Michigan -- -- good guys and welcome back.
Then why India is a school in the Upper Peninsula of Michigan have you ever been up there by the way.
About two weeks ago you were what were you doing up there.
And I go fishing excursion or something doesn't northern Michigan actually -- -- -- rappers today -- do any fishing but.
That anyway that a little kayaking at that everything's outdoors -- it's the people are great it's I mean -- hiking all it's a beautiful.
Beautiful -- it's much more beautiful in September October that it is in January and February and what's your real -- person if you see doors on the second story of -- -- in the -- boggled by that it's because they get so much snow in the winter.
They have not a way to get out of the house and I don't know that doesn't.
Sound too great to.
They hit all Hancock is the name of the town one -- there is a university in Hancock it's called -- -- And -- India need to expand but they where they were all locked in their talent of Hancock this is where was they didn't have anywhere and to expand but it happened to be an open junior high school.
All right it's sort of the campus it's still they exchange essentially with the town the exchange the junior high school.
And that sports facilities the fields and whatnot.
For the students that graduated from that town's high school to come the -- the and it's been a great success so.
Why you know I guess at that high school didn't need to be and I feel that -- building you know -- have to share -- with an incredible thing to liberate from up Philip Johnson himself.
-- -- the Green -- -- Johnson president and landed university thank you so much for joining us.
Thank you -- it's great to be with you Chris -- I'm so everybody got and we Barney piqued everybody's interest we've been sort -- -- -- we've gone through the show.
That telephone what what -- what's happening here and it's a remarkable story.
Well -- -- and we're very excited about it this is what happens when you.
Have a couple of community leaders come together from a private university and a public school system.
And you you look at each other costs the table over some good food and you say we have some shared challenges what is -- that we can do together.
Improve the quality of life for an -- really -- and and the neighboring communities so.
If it -- yeah we were.
Originally was a lunch over a really nice chicken wrap -- -- nationalism and a great finish restaurant called -- restaurant.
And over some good finish pancakes.
-- -- still now when you talk about.
There are skeptics out there because there's skeptics about everything that would say well this has to be for financial reasons I mean somebody is going to benefit from this whether it's.
The town whether it's inland -- How much of it will be beneficial to you and how much of -- was strictly from goodwill to help the people of the town that here you're -- Well it's both Chris it's wonderful opportunity for from land here because.
We want to grow our enrollment that we want to grow in the college health sciences and division three athletics.
And you we had a building basically.
Right next to our campus and we had a field complex.
Couple blocks away that would accommodate the growth that we are projecting for the university the same time.
We have a system.
Historic middle school that is is looking for.
Continuing its educational mission even when the middle school program moves up -- high school so we're very excited to win win win frankly.
Tell you haven't got some very obvious bands coming.
And had a lot within this -- right now go president Johnson we're finally getting recognized off some bell.
Yeah our school in town are gonna finally be on the -- now.
Clarify something when I feathers in the Travers city and I was in northern Michigan -- the UP -- correct yeah.
Even in the UP that was in northern Michigan and not -- -- not going to happen.
-- you know how can you tell.
And Sandra Sandra you're you're forgiven thank you so much we'll -- it like any -- -- student.
These how many students are getting scholarships.
-- -- -- tuition paid as a result of this.
So where were very yes.
Now we're very excited as 25 students that enrolled this fall.
From they have had public school high school and that's from a told graduating class of just under sixty.
And we've averaged about eight to ten over the last.
Few years and so this is.
This is just an amazing opportunity for these families who who are looking for.
Making the number one choice and land DL which is in there in their backyard and we're just delighted to have these 25 students on our -- fall.
Phil you're getting some bump press from us now obviously this deal is giving you some press elsewhere.
Is this gonna help -- -- -- -- beyond that what they ought to know obviously community school there.
Most of your students come from and a forty mile radius so a large portion of them is this gonna help you Grohl.
In 1020 years down the road.
Absolutely you know one of my thinks this is that we need to.
Even as we expand beyond the UP and a place like Gramercy.
We need to fully embrace those closest to us and so this is definitely going to allow us to build the programs we need to build.
Our recruiting efforts regionally and and within the midwest and beyond so.
This is absolutely gonna have a positive impact for us 1012 years don't.
And -- how great is that now we have a comment coming in from Marty Ann harbor springs.
That was the town I was -- at the Travers city when another two hours no -- the harbor springs up.
Marty thank you for -- I got a -- with the name of the town.
-- gorgeous they know also some other folks time.
There you know and -- and and actually sent it.
-- I just gonna say.
That that Hancock is is located right at the base of the Q&A peninsula and like what you experience and Iverson and it's it's the bats and just a whole lot more to be honest with I have other -- It's contacted you about how -- able to get that sounds like it's quite simple yes some good food you shake hands at the end of the deal and the deal is done was it that simple and analysts contacted you to say out.
I'd go for me to be and we'd like to do something like that.
Well there have been conversations.
The story made the Chronicle of Higher Education which.
Has a very wide readership across the country and so there have been conversations about.
And and there are other models out there of course this isn't.
The first maybe it's unique and some of its detail but.
A lot of people are being creative like the good people in Michigan and trying to figure out how can we share resources and under resource contexts.
Like ours so.
Yes we're having conversations with a lot of good people are I think if you extend the table I think if you broaden the conversation.
These good ideas come up and that's that's what's exciting for us.
That's an absolutely wonderful story thought Johnson hasn't -- -- university in northern Michigan thank you so much for joining us.
Now a lot of and hear a lot of a lot of applause.
-- -- -- that I thank you bill.
Let's -- -- that is good senator Chris thank you both very much.
You've got to let's take you make -- money Joshi right now who's got a little bit of the technology still it's it's very distinct to mean I'm sure most of you out there is.
On the valuation of some of these social networking sites and Twitter she's got some news on one of those right now it's funny how are you.
I am I -- quicker write about how because I would probably not be aware at her again.
I swing or is it we we love it.
A million people out -- -- shine on you read.
-- -- -- -- -- whether -- company -- o'clock.
Not being valued at a million dollar and the rumors coming out and tech technology -- saying that the company is out looking at raised more than fifteen million dollars in its latest capital reading it in Michigan.
-- capital raise it actually does happen would value added a billion dollars.
He compared to what it went out and that act.
In February when it raised money it raised about thirty million -- -- February and it's -- -- it was 250.
This company something's going right that should Bonnie the big question and an attack you don't make money you know is it legal right they need to -- company to somebody -- I you know.
In order -- for all these at valuation that you realize they're there.
I think realizing the valuation -- -- over the last couple years has been a real challenge because we've seen some people really get burned.
By thinking that some of these social networking sites that -- up high in the sky that don't have.
That -- revenue stream certainly you know the enterprise value going forward.
Trying to evaluate -- -- getting burned in the long run when they realized boy these companies -- of where if anywhere near where we thought they would we've seen some close the hole and actually suffer from that.
-- you gotta have a viable business model we learned a very harsh lessons of that in that late ninety's I.
However people are learning the values are valuable lesson and that means they -- just days ago said it became recap a positive.
That's not profitable that's one step closer to -- -- ability.
That's focused on and trick is obviously doing what it wedding -- you incorporating advertising trying to do it at the end and we set -- billion milestone this cast could actually help but it also fair to me folks away -- right with.
-- all over the screen.
-- -- -- I got out and hey Jack should bonding.
Thank you thinks that this issue of body ideal -- you talk about Google and YouTube just a couple of weeks ago YouTube announcing it in and start showing.
It decent movies for download because they've got to find a way to make money you know they -- all the movies now -- old TV programs but now they're starting to work in the partnerships.
With some of these up.
You know film studios to show very recent movies you can download -- wanna compete with Netflix now doing that in and now.
ITunes is doing that Apple's doing that.
Some valid points up from some of the viewers you how many people who go sign up for Twitter because they're friends said you got to get on the singing gotta go get -- signed up.
And then they're not using them up late night walk down the -- who was until this seems to be a new one every six months -- -- just came out of nowhere like six months ago in terms of the public consciousness.
-- you had FaceBook.
Was really the right after MySpace MySpace is for everyone is on MySpace civil -- and MySpace and FaceBook cannot it would start using FaceBook -- Twitter people using Twitter more passes and push back on that -- Twitter is just you know.
90% of that is nonsense -- you get all these stats having months and months -- I mean is going to be something in six months that it was gonna gravitate to would start using them.
And in in my spaces you MySpace face but prime examples you know I mean it's it's the next big -- twitters and the next a great question and -- -- you value those have been people who have been burned recently.
Trying to valuing those and it's tough to do no question about it -- way you know as this news comes in in tact while the NASDAQ actually the underperform OKS and 500.
And the -- outperforming.
You know you thought that might happen apple was screaming yesterday -- had -- Cisco after hours yesterday a little bit of a disappointing earnings report this you'll be expected from them their fiscal first quarter but still.
That's a sign that corporate America the IT department still on spending like.
We hope they would so that that is why you kind of thought -- the NASDAQ might -- that hey it just the question here for you will -- of our viewers wanted to know.
Do you think Finley idea would do against LSU.
But you know what -- these plans somebody pretty much like Finley idea this weekend you guys got Louisiana Lafayette or something where we just had better outside plate if I acted -- credited with a lot you knew what you done for the first.
It's weekend of the season so I give you credit for that at a conference you know if -- -- watching mr.
Federline -- university was his name I don't know I.
And find Edison and LSU can take on at all.
You sit at home I while -- tough.
Words to live you know somebody who cheered for his school receiver playing.
And I and I watched the jackets -- Miami tonight we do -- fully dimensional way okay guys thank you so much for joining us from Chris potter Anderson it.
Fox Business live dot com to -- next time.
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