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I'm not -- and -- -- burger and then I'm not it that healthy -- from the law center of the settlement are -- and ethics and it's guys you know it's you know it.
Interesting way to -- -- getting to the meeting very productive but pretty broad based rally on our hands a lot of the thanks to Goldman Sachs this morning.
I know we ever have the market up about a 128 points here midday and again you know we're seeing a lot of this sort of moving -- -- and then -- was betting on the news coming in today and -- now competency is becoming back up again -- us from the financials doing.
Yeah they -- Goldman you know getting an upgrade by Meredith Whitney and then at the same time they were out reverses revising upward a lot of their earnings expectations for other banks like Bank of America.
Wells Fargo raising the price target there are so in the financial sort of -- themselves.
In a bit here and we're seeing kind of a broad based on this and the others reporting later today CSX that big.
Well -- company after the -- not faring quite as well that's that's W Goodwin to watch -- -- what people think about the economy and hopefully we'll get some guidance this time around.
I've gotta say overall excited to be what everyone really will be watching to see what these companies say going forward and want some signal or insights as to whether companies are seeing the economy beginning to pick up or whether they're still seeing.
Little bit of a slowdown in how quickly that turns around long.
Determine how much confidence in -- market.
-- confidence well we've seen it ebbing and flowing a lot in the past 54 straight down weeks as we.
Lead in here want to see if -- people get more confident now and as I'm looking online we're talking on an almost -- -- lineup today and in Donaldson -- here is the CEO of trade came.
We'll also be talking credit card crunch is threat they did that cut -- is it good for America is some of these things our own -- file from the F.
Will be joining us to talk about that obviously -- what we're going on the Capitol Hill today that's.
Read the big confirmation -- for Sotomayor have begun that they are under way in Washington and of course I'll -- -- be.
On that to see how that plays out of course she is expected.
I think they're pretty much to be confirmed that's -- and foxy is right now is live on Fox News and expected to face some.
Tough questioning and it certainly from Republicans but them overall.
Be very well like violent and Democrats seems to be yet also -- Where we're alive we'll be joined sucking up.
Fox's Carl -- gonna join us stuff from Fox News Channel talked social about that wolf.
To have some mother analysis were for some guests on that a little bit later on and talk about the IPO market later -- -- you -- -- but I -- that's.
But that was another -- that the much.
That cut top of the conversation about they -- reacting to see some pick up especially from the software companies and Rosetta Stone.
I am with another IPO in the the very strong so.
Some say that may bode well.
Or future appearances here we'll find out we'll find out how things are going in the trading -- -- numbering and -- -- -- chairman CEO of trade king and done.
Up from Florida access some good weather for a change appear and -- -- -- -- -- -- -- -- even having a rough summer it's yeah extremism some sunshine.
They could be campaign from.
Exactly not -- have around here -- -- settle into the car on the way to work and -- would like -- well.
Does the weekends I guess but -- -- which we've talked a lot about volume lack of participation Wall Street how is that affecting business like -- where you are in the online trading business -- and that's.
Who is your basic customer first line in what sort of volumes.
Are you seeing.
Our customer is a self directed retail clients -- somebody who is a traitor not necessarily day trader but somebody who is -- Not always all but a portion of the their portfolio or their assets and decided -- -- his self directed his investments we certainly seen large growth in.
Our company since you -- -- -- September 15.
Where really a bell -- and a lot of clients -- up there and around the country and I think around the world and began -- question -- -- relationships that they trusted for so long and even.
Questions and bedrock principles like leather buy an -- is the right strategy for them they've been -- for so long and and moving to this two firms to cater to the self directed investor like treatment.
Not even if it's a good.
The topic I want to head on -- -- really the profit a lot of people having their financial advisors in fact.
Recent -- to that more than three quarters of individuals with at least one million to invest -- tend to move their money away from financial advisors and more than half intend to lead advisors altogether and -- a lot of people say this has to do the fact they did put trust in them to manage their accounts and they saw them.
Cut in half pretty much for the recession hit and also in after Madoff after the scandal -- People really get begin to question who they can trust.
You know get your friend.
Recommend -- to you or your father your mother somebody said hey this is the person should really be investing your money went and went in the happening you know that turned out to be.
An unfortunate case for a lot of folks -- are you seeing.
A lot of pick up in your business because of that.
Yet that I'm firing my broker sentiment is absolutely something that we hear from you know at least half of customers opening new accounts of us.
A dozen in third and taking all the assets away because that -- in for one more information source of -- in that sense.
At that advised relationship -- -- research reports of them and have another touch point but they're moving firms like -- king a senator I think that trust issues brought up Kelsey.
Really we started the -- just in 2005 but we started with the -- have trust and transparency being.
Core parts of who we are humble blogger I make myself but accessible.
By the -- my clients I interact with the several client today by a private message or email her comments on my blog we make all of our service representatives.
Clearly accessible to folks and and we just we're service oriented we're not giving advice about given great service with a smile on -- face and making sure we help you get the job done.
And I met with our views of taking online and what things that really stands out if people really love your educational tools and I think -- we'll probably end up being another fallout from what we've seen in the economy or people wanna take more control of their finances.
And learn themselves rather than -- handing it off to a professional advisor who again as we said -- there may be trusted to the people want to learn more.
And he really that's a lot in that aspect of your business with the you know maybe for your competitors aren't as strong and right is that it.
Thanks for notice and absolutely we we responded really quickly and as a small entrepreneurial.
You know nimble company we can do that.
We responded very quickly will we -- -- changing the mix of clients come to treat king and one of the ways we responded was by.
Adding a second -- learning center called the -- corner so this is special -- is for folks who are new to self directed investing not necessarily new to the market although we do get a number of clients were telling us.
This season their first entry into the market because they perceive there's historic buying up what sorts of -- have you seen that.
Increasing a lot.
Since say October or January as it is made off.
Came mortal -- on synergistic in -- constant increase in traffic really since that September 15.
Watershed moment he will.
A constant increase in traffic whether it's in -- learning center where we have.
-- educational resource and talked about her also we have -- trader network part of our website where people can connect with each other.
-- clients and prospective clients can connect with other retail investors commiserate share ideas share concerns.
-- reach out for them.
-- there's forums group sponsors a bunch of different functionality people can make trade notes can choose to.
-- the actual -- that they -- which can follow and trader with -- it may raise some red flags or how -- how is this police -- so you don't have people pumping and dumping and taking advantage of the rookies who aren't there yet this would be the absolute -- place in the world to -- pump and dump scheme because we know who you are you may choose to go by displaying and it's an anonymous name is most of our clients do within the trader network.
But you've got a little badge underneath you it's -- taking account holder -- that tells the world that.
-- -- offender regulated FCC regulated firm actually knows who you are -- -- your identity.
And this would be you know the surveillance cameras are on a -- -- to be pretty -- place to commit a crime.
By the way -- -- from -- says he just signed up with -- guys last week so never got at least one fan out there appreciate the business thanks in -- investors who are trying to dip their -- back into the market but don't wanna jump -- the -- full force instead of ate it picking individual stocks Bertuzzi TF are you seeing growth in that area -- -- -- Absolutely we see among our top ten and if you click here within our -- trader network actually conceded trading activity.
Click on the trading activity -- and you can see for yourself what are most actively traded their most widely held positions are taking you'll see.
ETFs moving over the last several months and can sorted -- different time frames moving up into the top ten.
-- are most active -- our most likely help in some cases yes.
Don that let's let's see AIG and big group among most active but -- surprising considering it for quite ahead.
Well our our clients are are are treating not unlike professional traders right now they're treating around news and they're treating things that move.
And they're looking for that visibility you talked about this so hard to find in the marketplace right now so with a lack of long term visibility all that you really have a these short term gyrations of I can guarantee you you no matter if you know when she speaks and and changes her view on Goldman.
You know this is an analyst Meredith Whitney who was at the front really calling the similar debacle yeah exactly -- -- -- -- the front end of predicting the downside of the -- financials.
Folks give a little bit more weight to you know something positive that she says that again.
Folks are starved for for good news and are looking for long term visibility without that they're -- around the news on the things that move a lot nothing Indian city a move allowed any given day.
-- certainly do -- what you say you know you recently you've surveyed your clients.
-- seem pretty skeptical it dean.
First of all why they remain skeptical and if they are telling you that and when did they see -- were emerging from recession some economists that we already have.
Others aren't so sure it was had to really interest being lively conversations going on in a trader network recently won.
Team member a client who calls it goes by name old fart.
With us today it's fine tune in folks that she's thinking back.
There but he's a season's clearly season trader.
Phone's been that's not new to self directed investing.
He posted an article -- was -- journal a week or so ago.
And talking about whether the recession is in fact over and and just post is a discussion topic and -- -- you know or some pretty vehement opinions on.
Both sides of that topic from an economic viewpoint but also really.
Looking not just treatable short term bots but looking long -- the economy there is some -- -- skepticism.
Amongst our client base.
Doesn't mean there walking with -- marketing and they are looking for short term trading opportunities to get back some of that money they lost in that while last year.
But but in terms of long term optimism without seeing a lot there.
And -- investors are Fella just short on country king everything a lot of that activity them moving in that section well.
We see a fair amount of shorting we also cater to self directed retail options traders that we provide the tools and educational resources for folks to be able to trade options and they often do and it's just -- -- five let's.
65 cents a contract to trade options intriguing so if you learn about options treating you learn about how to use them for insurance purposes and -- to use and protect against your portfolio and also how to make directional you know predictions that it if you if that your.
If that's your style and -- the tools that.
Professional traders use to make money not just in up markets but in down markets and sideways markets and we see you know some short selling with a lot more option option trading -- that with the structural question -- -- -- have direct market access we do not we do not permit direct market access what we've learned is that.
The routing technology has gotten so fast for us to be able to route for national -- that are offer which were required to get for our clients.
That there is no client they could click and pick the fastest -- stances are routing technology can and so.
-- that was -- kind of legacy thing online brokers offered some folks in the ninety's when.
He really could spot an arbitrage opportunity between two markets as a retail investor cement and actually trained at arbitrage.
Those opportunities for the marked boxes.
Market was much too quickly for retail -- we wanted to do that now.
-- in and out of there before you can blink yet again I think 24% of the volume I saw that I -- yes and I popping it's really something.
About -- education.
For point because I think so many people out there talking about wanting to -- self educate.
What kind of response you getting from your clients as to the tools that are up there and also where -- would you get all of the research that you pull from to put on the site.
So that your investors can really see what's out -- -- with the professionals are saying about each company's stock.
Sure in some cases we'll partner with third party independent third parties to -- research we have market creator research available on our side and information mighty sea in a number of different independent sources that we provide the love the educational content is is created by our own educators.
We've got -- options analyst Brian overby who's actually written.
A book that's very popular about options trading -- options playbook it's -- the only.
A fun book about options -- I've ever ever cracked open myself pretty proud of that.
We're just -- about that second edition this fall and it just it takes 38 please option plays -- the way we refer to them.
-- -- -- -- out just been in this two page real simple formats you can understand.
You know why would -- put this play on under what circumstances what are the risks and rewards of that the particular strategy and is it appropriate from his rookie year as.
In a mediator -- this little option trader and instead she threw.
The pluses and minuses of strategies and and we have them available online for -- for free as well its options and their futures -- -- you know futures have been here about the CFTC you know -- stepping up margin requirements would be.
Q how strictly your margin requirements for options players on the pretty strict again these are retail clients we need to that we have a responsibility to look out for them in connection -- -- I do entries that are unsuitable for them you you know you mentioned ETF some of the leveraged ETFs have been.
Popular in some cases with retail clients in Finneran has stepped forward and I think appropriately -- expressing some concern that.
-- -- clients may not understand the complexities of how these two and three X leveraged ETFs trade and should not you know -- and we we weren't written a lot about this with special section of the website about this war retail clients not to.
You know these aren't set it and forget patriots these leveraged ETFs are meant to be really things that you -- in -- of during the course of the day and and he stay right on top of so if you see something and says it's.
A three X you know down back on in the financial sector for example I can't -- it today -- wake up you know three months from now on think -- Here thus not a direct correlation not a direct -- a lot of the reset at 3 PM in there don't necessarily the baskets are not quite a 100% correlated to.
The underlying index if you.
They're very attractive and we come Clinton actually attracted to the future looking a lot simpler ways for leverage on him and -- -- learning option trading strategies and shorting strategies and other things these are easy products that do appeal to retail clients.
But they need to you know really understand the complexities of the -- said we need to ask for more thing though IPO in your future.
You know we get that question from time to time -- our our our job is just to build a great business it gives great service to our clients and and domestic -- itself.
Come on to -- CEO from -- king thanks so much for joining us here.
Think -- -- have me counsel Robert.
-- and we're gonna take a quick break we'll be right back in just -- sex.
Then welcome back -- -- -- live I'm Robert Graham and I'm healthy have and I cannot say thanks so much for joining us guys it's.
Quarter past -- we're looking at a rally here fairly broad based off the highs of the session today but a lot of activity with the financials today and and speaking of financial -- we're gonna have rich -- joining us now.
Gonna talk about a little -- -- -- for small businesses.
Robert good afternoon -- I'm doing just behind Robert -- you know when we talk about what's next for -- here we've had some discussions as to whether TARP would go to back peaceful bonds whether it would help housing and now there's some more -- About using some more TARP funds to help small business is -- currently.
The treasury has been working on this fifteen billion dollar program out of chart that would help by some some of the SBA sponsored loans.
-- that's something that really hasn't got off the ground yet the president announced in March and so there's a real concern out there.
That some of the short term liquidity problems of small businesses may be something that that that they could work out with heart the last we heard -- administration officials were talking about this.
Last week but they're still in the very early stages of negotiations and -- on this and they have nothing settled yet.
So say the next deficits still unsettled we're not sure where we're going from -- -- are -- deadline.
There is no deadline and and there's also -- question as to whether or not they're going to wait for this current fifteen billion dollar treasury TARP program to get into effect.
Whether they'll step up SBA anymore it about whether you have direct -- landing.
Four for companies like CIT you know it's one of the biggest small business lenders.
It is having problems staying afloat will -- a winning give more TARP money -- CIT is that the answer here you know businesses small businesses are having a tough time getting short term credit.
There are some programs through the Small Business Administration.
Some set up by stimulus the stimulus -- some set -- -- -- But they really haven't gotten off to the type of -- the administration hopes and now the question is it what -- they do -- -- the issue as it doesn't have to go.
Through congress -- -- -- We've but I tried to save Chrysler and GM through TARP that didn't take any type of our congressional OK once they approved the TARP program -- this is something that.
Treasury the administration can work on behind closed doors and if if they want to do something.
Through TARP to help small businesses they'd certainly be able to set that up you look at the totals for talk right now I mean there's even a fight.
And congress as to what to do with the rest talked as a 127 billion dollars in TARP.
Seventy billion of that is money that banks have repaid to exit TARP.
And Republican senators are saying wait a minute that seventy -- needs to go to the general fund and stay there.
Geithner says while I have -- authority I have the authority to have 700 billion dollars outstanding at any time and invest rightfully so.
There's -- -- bit of a legal fight over -- going on in congress as well.
Rick is somewhat concerned and getting money to small businesses that if they do not prop them up -- -- not extend credit and allow them to continue functioning.
We'll see a big drop again in unemployment of these companies a lot of business and it will.
Really sort of undermine the greens six if you will that they began to see an economy that it it's such a big part of the economy and jobs.
That they can't just let them you know these -- this is -- That's right it all goes back to small businesses especially when you consider the percent of jobs in this country.
That are created by small business all the small business volume in this country.
But you're also hearing it when you're talking about trying to raise funds to -- for for health insurance or health care in this country.
I you've got Democrats a talking about in the house.
Surtax on folks making 350000 dollars a year above -- them real fear that that -- -- small businesses so.
-- -- Washington a -- way has has really.
Focused its attention on the systemically important -- systemically.
Risky companies has put.
Tens of billions of dollars and Citi Bank of America.
But what about the smaller guys and the hole I think was really that you start.
Getting the systemically important companies you get them lending began and that will solve the problem with the equities small businesses but.
That's not quite happening and so do you need to directly -- would cut out the middleman.
And help them set up these small businesses guy and that would that's one less quickly rich -- talked a marathon CIT has allowed.
Two to fail go under without any savings that maybe TARP funds can be directed to other existing TARP recipients to sort of step in and pick up the slack.
That act could very well be what they have to deal with CIT.
We heard from top CIT wasn't one of those establishments are businesses that was going to be considered.
-- systemically important one if you just think of the entire atmosphere around this.
You know the Obama administration it really hasn't let -- -- fail yet and that's something I think that maybe treasury.
Could possibly try to draw the line here you just look at the grander scheme.
We've put so much money to GM we've put so much money into Chrysler we continue to put money on is some of the larger institutions on Wall Street.
You know would the Obama administration make a stand here for CIT.
But then again are you beating up the small guy because they are such a wonder to small businesses -- there's a lot of concerns surrounding what would happen if CIT would have ball and it just continues to be a question about about small businesses.
Small businesses have any ability to get their hands on liquidity so they can function in in the middle of the recession and rich thanks so much rich -- in DC and you're Kelsey at.
Got -- guy weighing in saying see it too shaky for years that they go bankrupt villains get sold off to creditors split supposed to work so -- a lot of.
People do not like the idea of government stepping in popping up all these businesses have certainly been ongoing conversation with Steve coming -- go back to the dog eat dog world of.
Capitalism and stick it -- it.
But we've got Darryl does to pilot the bitter -- bitter pill for us -- pill for the credit card shoppers.
The world -- when I was in high school I played football coaches were always yelling at us no pain no gain.
You know and we were feeling the pain and why they -- -- -- an -- in the -- phase right now and what I'm hoping is that from that pain.
Leads -- to -- down the road in the paint.
In terms of credit cards right now that was a good report in USA today last week which indicated.
That rule the end of April credit card issuers head.
Less chords than they had a year ago.
And the cards that -- issues -- smaller limits so fewer people getting credit.
And those who are getting it.
Are getting less money to play -- right.
But most of us a few years ago -- -- -- -- case clearly the credit card companies didn't get the message until ghastly.
This is part of my point and in in the column I wrote for foxbusiness.com.
Was that all of this is common sense right you know so much.
Of what happened to -- -- a -- -- that brought on this credit crisis was self inflicted the companies -- -- mortgage lenders be they banks either a credit cards.
Gave credit to people who very likely couldn't pay it back so what's happening here is two -- the credit card companies have wised up.
And they're giving credit to people who they feel probably can pay it back gee what a concept of and on top of that consumers are hopefully gonna have to learn a little bit better.
How to use the credit they've been extended.
A -- call when I was in college and I got my first credit card offer I'm not mistaken it was like 500 dollars you know maybe you could do more with 500 dollars at that -- but still was 500 dollars what happened was.
We became as a society both.
On the on the on the business side and the consumer side.
It credit was so we see the people issuing the credit made tons of money off of it.
And the people.
As consumers we just became used to be is almost instant gratification.
Right right you could buy that new car.
You could buy that -- you couldn't afford you could go on vacations that you couldn't afford.
All -- those payments for the Condo in Florida over a book -- that all of this was based.
Falsely as we've come to learn.
On the notion that real estate prices were gonna continue to go up I think by now we've pretty much you can throw blame all over the place you can look at you can do all the reports you want.
I think the crux of the whole credit crisis was founded on that this false premise.
That real estate prices were gonna continue to in the line -- the bills exactly was gonna cover your credit card you never really had to pay anything back.
Because your home was gonna be worth 15% more next year so he can get that home equity -- to go on medication -- -- Expand your credit cards.
And none of it was ever really going to be paid back we've learned how false that -- right and now the credit card companies have learned and it's a bitter pill to swallow but.
I'm hoping that as a nation.
Are going to become a little more responsible maybe I'm being wildly optimistic.
I called around I spoke to several consumer -- last week and -- it isn't a bad thing that Americans are being are getting less credit.
The flip side of that of course is that if Americans are getting less credit they're spending -- try to throw yet.
So we're live so much on the -- -- of similar size and that's out there and -- and her giving up their spend it -- watch retail sales so closely.
And that really bodes for consumer confidence and how quickly -- may get out of this.
Recession in yet.
What we really to be viewing in what you're talking about is being fiscally -- A few months ago I wrote the story on the paradox of saving enough and as many paradoxes sort of built into this whole recovery as we work through it.
The last time I checked saving was a really good thing you know but if you talk to some of the macro economists out there they'll tell you that.
People -- too much they're not spending that's sort of obvious the same principle applies here if Americans are getting all the credit they want to go out and buy expensive cars and gotten by.
The new iPhone whatever it is they want well -- the economy's going to slowdown I think the point of my -- that may be.
The recovery needs to be a little bit slower maybe we need to learn our lesson do we leave -- we need to learn how to use credit responsibly.
Hopefully maybe we can avoid the sort of crisis in the course -- a lot by probably well -- totally why.
Well we're also maybe you know going from from being starvation diet here fit right -- -- somewhere in between there's going to be a happy medium and we are restocking right now.
The question is will -- be painful of people suddenly.
I don't think -- I think and that the that the credit folks I talked to said that there there is a happy medium that -- -- banks aren't shutting off credit entirely their their their scaling back.
It's a pendulum you know and always and you see -- in the stock market -- -- in the in the oil market are we not seeing the pendulum swinging wildly back for.
A year ago where was not a 140 dollars a gallon -- who knows why speculation probably.
Now it was down to 33 or four months ago can anybody really determine why.
Now it's a pendulum and it -- cyclical swings -- cyclically back and forth.
We're doing the same thing with the credit markets here.
We went from giving credit to anybody 98 point six with the requirement.
Body temperature if you could sign your name and lie about what your income was you could get credit.
Court that you know mortgage companies -- would give you money any lender would would we give -- the money.
Now we've swung the opposite direction right and again and probably will be painful for a while and it may extend.
The recession slash recovery.
If it takes that to weed out those who can pay money back and those who can't that it's probably work in the long run well we we will see.
-- and then of course there's a hole -- -- up.
People's credit limits being adjusted that's a different column for different day does surprise -- tonight.
Check out regulation the coming out that exactly since -- was foxbusiness.com.
Go to the website.
Check it out here probably are there any way to get the player up and running so check out -- column slash story today and now we'll look forward to seeing more happening thanks all right thinks does and we'll be right back with you and just a minute we'll.
And welcome back to foxbusiness.com live I'm Robert -- and I'm Kelsey had her poem and -- I think -- today yes likewise -- -- -- Without -- luck I think for the markets into it looks at a record thirteen points on the map now.
So it can present on the -- Jenna and Connell and into an -- -- respectively in.
Anyway I'm worried and I know off the highest it's still up pretty broad.
Pretty broad rally on our hands here in it's good for stocks -- things are so great right now offer what state budgets.
Now it is a big problem and then see if they are really had a good.
Get get it really does mean they have these shortfalls that they really are having to have layoffs across the -- -- cutting back a lot of programs and so into it we really -- I don't know quite got it in the headline but you know Florida New York other major -- to that.
We are reaching far reaching and in a lot of trouble.
Let's Willis -- expert critic -- she's director of the national conference of state legislators.
Fiscal program and Karine thanks so much for joining us here on Fox Business there and basically -- -- started off right there I mean we know the state of the State's balance sheets.
Looking at 281 billion dollar -- -- -- shortfall right now that correct.
That's correct and it's actually going to be growing we already know that the current physically or 2010 -- the most seats at closed with the exceptions of California some other notable states.
Are going to be growing beyond what states -- -- -- forecasted what they've actually closed already so this problem is growing it's gonna last for quite awhile.
Think -- President Obama had an op Ed in the Washington Post yesterday.
Saying that the stimulus hasn't had enough time to work through -- through.
Sort of wade ended the -- we'll get there but in the states have time to -- any -- they need help now and is enough for the stimulus money getting through them.
Well this -- is stimulus money is starting to get out to the states.
And it's been used extensively in this -- 2010 budgets and in fact the problems in states -- haven't been much more severe had it not been for that federal stimulus money.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- I think the bigger concern at this point for a lot of states is once it runs out what happens -- I know that Obama originally set and his aides that they wanted to get 75% of the stimulus that within the first eighteen months do you.
See that being on track and again it the -- worry about that money running out oh what do they think it's gonna happen none of that money is not get through them within that timeframe.
Well I think the money will get out an eighteen month period certainly flowing into state budgets now it's a part an important part of the solution -- had.
Available to them to deal with these massive budget caps -- they've been encountering.
But in terms of you know when it finally runs out and we we expect that most of the money we'll have hit states by December of this year.
Some money again coming out next year at that point the states tell us they're facing a class -- state revenue performance doesn't rebound.
And at this point there's no reason -- think it will recover strongly.
States are facing another round of budget problems.
Yeah and so it was so what's the prescription here who is a political out there to raise taxes that you know where persona it deep recessionary is deep split on how we are phrase it right now.
Are people that got to raise taxes are we looking at perhaps tax breaks -- tax cuts to try and stimulate.
More businesses to hire people and increase spending or what is the prescription from you guys.
Well to get question and the answer is -- -- -- about.
We are seeing an appetite for tax increases and part of that is because -- that spending cuts have been so significance of severe.
But certain lovely start getting to the bone of state programs and you say well we've eliminated -- cut back.
We need some additional revenues -- the budget.
So we are seeing an increasing appetite certainly for additional revenues a lot of that coming from fees.
Motor vehicle fees cart fees licenses those kinds of things that increasingly states are looking at sales tax increases -- -- increases on high income earners.
So we're starting to see sort of that new.
Phase if you will of dealing with the current economic recession.
As this continues I think we're gonna see some additional interest in trying to raise some revenues again because of spending cuts have been -- severe.
Doesn't that race some interest in red flags than anything got Maryland -- -- a millionaire's tax that got fewer than now people move away also after the market's decline.
There are just fewer of them in general on -- -- is that that running the risk to people wouldn't would leave the state.
Later we -- studies have been done -- and sometimes you hear people do try to leave.
The generally speaking it appears that people don't just -- because of a small in the overall scheme of things a small tax increase.
-- when you look at how much impact tax increase happened on a person's income do you really want to uproot leave friendly family leave community.
So some -- that is out there I think I think to a certain extent is perhaps overplayed it's not as much as people would think.
-- where -- -- -- quite frankly in this economy all states have higher unemployment at this point so there's no place to really go and find yourself in a better situation.
-- Willis let's take a quick look at the -- got some full screens here they show.
That largest budget gaps here when they've talked to us a little bit about some of these -- after we get through it and we'll start off of New York with 32%.
Nevada had a thirty don't -- -- point 6% budget gap we're talking.
You know seventeen point 65 million dollars and in the State of New York obviously hard hit.
With that collapse on Wall Street and in the securities at Arizona Florida you've got housing -- in both of those states Nevada as well and then.
Vermont which is an interesting 125 point 8%.
Budget shortfall there what what's the story in Vermont many -- -- familiar with that.
Yeah it's a combination of factors are really you have the same revenue problems at every state is facing and so they're seeing revenue shortfalls that -- -- health reported some.
Pretty big increases in Medicaid and other health care spending so the budget gap is being created by revenues falling below expectations and and spending exceeding expectations.
In categories -- really hard to control spending race craft.
You know had a comment here from one of our viewers -- in Ohio thing -- property tax is up a third and he's leaving -- -- he can sell his house.
They were -- about this issue are people going to be moving out of state that taxes are looming.
Well again it's hard to imagine that there would be massive relocation.
It's expensive to move you have to be looking for a job elsewhere with the unemployment rate being what it is and the difficulty finding new employment.
It's a pretty hard deal to just pick up and -- Now the interesting thing about the property tax is that the economy obviously been suffering but because the property tax assessments -- the cycle that those assessments -- under.
The homeowner may be seen you know -- stable are increasing property tax bill because property taxes.
Don't experience -- quick and rapid decline that other state taxes -- There -- only really be able to fix the budget crisis that that these states are having before we see an upturn in housing or at least the stabilization.
Doesn't since so much to the US property tax receipt pool is linked to house value -- foreclosures.
We haven't seen a lot of the positive.
Data coming from the housing market a little bit here and there but overall we're still seeing some.
Declines across the board a profit the nation so is that bill of that problem.
Well it is a big problem bottom line -- states are gonna have to fix these budget gaps are required to by law constitution.
So it's certainly something have to be done additional budget cutting some revenue increases.
But in terms of the of that magnitude of the housing sector in its collapse on state budget that's been significant.
And as you said earlier in the show certainly what we've seen in Florida and Nevada California Arizona.
That's been a big problem in the states Kennedy part of what they've had to deal -- We're gonna have to see residential and commercial.
Issues sort of bottom out and start improving before you see some real improvement in -- states but at the same time you have to factor in what's happening with jobs and employment.
What's happening to other aspects and sectors of the economy and sort of look at the big picture but housing is a very significant important part of what we're talking about.
-- let's take a look at -- the smallest budget gaps if you will we're talking about well Arkansas North Dakota no budget gaps not applicable to them.
Then you've got New Hampshire -- come out right -- -- -- Vermont if you're in Vermont ten.
Here you're not one of those maybe drawing down on the heavily on Medicare Medicaid maybe you wanna move next door Montana.
Looking pretty good as well and in West Virginia also in the top five with a -- smallest budget gaps.
What -- these situations so much better particularly like I said you've got to you know look at New Hampshire Vermont next door to each other.
-- -- some of the states you listed they have natural resource sector economies of those have been in -- state like Texas and Wyoming and North Dakota West Virginia.
Alaska to a certain extent have benefited.
-- the times when the price of oil was so high so we've seen some benefits there certainly -- the price of oil has declined some of those states have gone into a deficit situation.
That in terms of you know some of the other states there Arkansas has a very.
Limited narrow budgeting structure and while they're having some revenue problems it's not affected their state spending so that's why they follow on to that list North Dakota has had.
Perhaps the strongest situation thus far although we know from North Dakota that they're expecting that overall revenue collections are gonna fall in the current fiscal year compared to last year.
In New Hampshire.
You know the whole different tax structure in.
New Hampshire has neither of those -- the big property tax state.
So you know you might do want to move across borders but you probably -- exchanging one set of problems for another sat.
All right for an apple thanks so much for joining us to discuss the state budget does shortfalls here.
We're gonna move from state shortfalls down to Capitol Hill Carl Cameron for the Fox News Channel joining us we're we're talking about sotomayor's.
Senate hearings -- believe Karl is standing by here -- Carl.
Carl has not going to be able to join us right now so we're gonna keep moving along we do have Tom -- -- partner with Pryor Cashman to discuss.
Judge Sonia Sotomayor is.
Confirmation hearings here and not think so much for joining us first of all.
-- thank you thank.
You know you actually have what -- -- apart what went for her as a is a lawyer and -- tell us what your experience was when you.
Went before Judge Sotomayor.
I was before her on several occasions when she was a district court judge on -- cash and and I guess that the most substantial example.
Represented when the parties and in rather highly publicized trade dress case between two beverage manufacturers and there was -- there was a hearing.
Hotly contested as a hearing -- on on these issues.
My experience with her and that and in other copyright case in which -- appear before her.
She is invariably.
Extremely well prepared when -- to come in for an argument.
She is a very Smart thoughtful judge she shows a great respect for precedent and knowledge of the important precedents and -- She can be.
Very tough on on lawyers if she thinks that you're trying to put something over on -- she's gonna let you know it and he's not gonna buy it if she doesn't like the way you're handling a case she's gonna let you know it.
On on the appellate panel it's a little bit of a different experience -- member in the second circuit she would usually serve is one of three right three judges on the panel.
And you're less of the master of your own courtroom you have to your first -- you're not hearing evidence you're just hearing arguments which tend to be a very brief presentation.
And -- -- mindful of the other judges in the panel.
I've watched it there too and again she always.
Was very very well prepared.
You talk about president is a lot of talk out there are some criticisms and then some not so much so.
About whether or not she would adhere more to precedents or in the Supreme Court whether she would you know rule with empathy years says some are saying -- -- you know maybe try and if you will legislate from the bench.
Where do you see her coming down in terms of that is that something easy to forecast I don't think it is easy to forecast -- looking a lot of the studies that you tried to.
You know you -- today all of her decisions for instance in the business world she has not been predictably.
Pro business for anti business that was in late 2006 there was a big securities class action came up for review.
To the second circuit and which she was part of a panel that said that the district court's approach.
Of using six focus cases in this case that said that a number of a large investment banks.
Had manipulated the the value of some tech companies their initial public offerings.
We distribute -- an acceptable approach that second circuit panel she was on -- now that six focus case approach would not be acceptable.
And frankly the effect of that was to leave a lot of small investors with no practical way of pursuing their rights now.
The panel thought that that was the correct legal approach even though it had a harsh result for individuals.
So I don't think that she ends up TWA it was also viscerally -- correct.
Correctly ruled that it was in was she was saying that it was an international waters all of the panel did come don't think it's US waters of the damage of TV OA flight 800 of them are trying to sue for damages and another example might be I think she was on the Maurice claret vs and -- -- panel.
Which there was a challenge to the NFL's mandatory three year wait out of high school before you could be in the NFL draft.
A pro individual judge might have said now I'm not going uphold this mandatory -- weight and she was part of -- did uphold.
In fact one of our viewers from favorite this go is saying that she may not be as tough as people think but you're saying your experience that -- that.
She's pretty -- and other viewers saying that as long Michigan we'll from the law and hopefully leave out personal feelings and probably yes she'd be a great candidate.
Otherwise -- as they do feel pretty strongly at least -- viewers that.
It's important to keep in mind -- a difference between.
Showing bias because of your experiences and being mindful of your experiences in deciding how decisions will affect.
That the the landscape.
There's no evidence to me that she's going to shelling advised by the -- the famous firefighter case guess one of the -- was Hispanic.
And she's she seems to put me to be pretty -- and didn't in her approach he has the respect for the law.
Do you think that hateful play a big role in the coverage here I really don't think it will the reversal.
First ball was -- a pretty narrow change it was 54 vote.
Her decision which was latest an anonymous for -- -- by a three judge panel on the second circuit.
Was made in light of the then existing -- on the second circuit.
It had to do with the notion that a disparate impact.
In this kind of test for instance wouldn't be acceptable what the Supreme Court really did was to say.
We're gonna raise the evidentiary burden if you're going to go with the disparate impact defense.
And it was really the Supreme Court trauma the second circuit -- -- to make that decision.
There and that no dusk and -- I mean I understand when the firefighters may be testifying.
On the hill today so the lead plaintiff.
Richie I have -- -- gonna testify and I'm sure he's got -- an axe to grind I'm sure that will be interest and we have we heard some analysis on the network this morning some people were saying if they were they would not put him there and we should be -- -- is is that president for something like this there there's there's precedent for going.
Anybody you want frankly.
It is PNAAA.
A pretty wide open.
Rodeos -- since the Bork hearings many years ago or Clarence Thomas hearings anything is really acceptable depending upon.
What side of of the -- you're coming from.
But look I think the ultimate question really should be whether it's it's.
Looking at the general judicial landscape looking at that business judicial landscape the question is you need to look.
At an individual nominee not just in terms of that nominee's past but.
What effect if any can that nominee's going on to court -- expected to have in terms of the ideological makeup of the court.
Given that she would be replacing Justice Souter who was proven most of the time to be a member of the court's more liberal wing even if everyone were correct and she could be expected to be a more reliably liberal member of the court that would mean there will be no ideological change in the makeup of the court.
It would be like replacing.
Rehnquist with chief Justice Roberts one conservative for simply a younger conservative it would not be for instance like replacing Sandra Day O'Connor.
Who was a right leaning centrist.
With Justice -- who is more predictably conservative.
And certainly not like replacing for instance Thurgood Marshall was in the far left -- the corporate Clarence Thomas who was in the far right.
The challenges for a lot of these candidates is to sort of give their opinion but not.
Tread to far into how they would rule in future cases especially when -- asked questions regarding abortion or gun rights those types of things so is that typical balance.
For someone going before in these processing these hearings and then what what -- people be listening for when they watch that.
If it is a difficult balance.
You can be sure that many of the senators especially those are going to try and make her -- comfortable.
Are going to try and probed very deeply in terms of where she will go I expect she will follow the line it's been established.
In all the post Bork hearings in fact I think even more declined to say how he would rule on certain issues.
I don't think she will say how she will rule I think she will give very broad based questions.
And she will not give any hint of house you don't specific case and I think it -- be in improper for her to to do some.
The wise Latina comment we keep hearing that coming -- whatever was it just sort of your comment playing to her audience is that to you know -- some people say it's it's -- putting.
The way it comes across.
How much would that come into play from critics or perhaps from those sympathetic to her I -- heard from one of the Republican senators this morning and you can be sure you're going to hear coming up again.
I think it -- she's probably gonna say it may not have been the best choice of words what she was simply trying to say I think.
Is that people are necessarily affected by their experience and that their experience gives them an understanding of how the supreme court's decisions.
And or any appellate court's decisions are going to affect those people who who reliant law.
I I don't think that -- I think she's probably gonna move off that a little bit.
But frankly it's not much different from Clarence Thomas saying it's important.
Two to have an appreciation for.
Issues that that you've walked in when you make decisions and he was as reliable conservative as you could have -- very quickly here does she get approved then.
Is there a big business case looming on the horizon that we should be looking toward.
-- the Supreme Court is right now deciding since its discretionary view which -- petitions will be granted for next year so I.
I'm not aware right now any big business case that that we should assume -- coming up for argument next year.
And so I was -- -- course is does she get approved I think she's -- -- be readily approved it's not only as of the sixty.
Reliable votes I think a number -- Republicans -- vote for my guess is going to be she'll get between seventy and seventy.
Buy votes -- all right.
Tom -- fervor from Pryor Cashman -- so much for joining us here and I'm so we'll see how that unfolds again it's -- showing on the Fox News Channel right now if you wanna check it out and now we're gonna have an update from the NYC coming up just a minute.
All right and welcome back to foxbusiness.com live I'm Robert -- of Kelsey Hubbard -- -- -- nice to be -- -- this afternoon and well.
We've got the confirmation hearings underway we've got a rally on Wall Street earnings from starting to get a little traction here today I am after -- are really looking to see how companies have -- and also looking for guidance going forward as to whether or not gonna feel a little bit more relief from this recession going forward now.
And that's really the big story than you have going to be watching for some people are watching the banks today because I had to -- -- Goldman Sachs but let's not talk about it let's get go straight to the source and got Tracy Byrnes.
Any -- the NYSE and she's got all the scoop from the floor.
Have read you and I only -- -- -- cameras I know -- on television.
Our -- and I -- I didn't a 117 points right now the Dow at least.
You know surprisingly enough didn't move all that much based on senator Shelby's comments appear Barnes about how Ben Bernanke's worried about a jobless recovery right now we're -- -- on.
Oil basically flat you have the financial let you guys mention of Goldman Sachs -- from Meredith Whitney her first call coming out of her new -- And even the energy stocks they were down this morning oil now pretty much flat trading flat.
Energy stocks have bounced back as well speaks during the day though is CIC and I won't sing this song from meat balls I was already told not to.
But I'm dying to -- -- I'm going to before the end of that.
CIT basically saying that they are struggling with liquidity issues.
Trying to get into the -- temporary liquidity program also hired -- arms.
Teams potentially talk about bankruptcy liquidation.
Either way hired -- as an advisor.
Not a good note -- -- all small business of the world I mean that CIT one of the big financiers of small businesses.
Helping small businesses -- for their inventory and things like that if they go down.
Doesn't doesn't say much about our recovery process especially in small businesses -- 80% of the jobs out there to really hoping this whole thing works out and -- -- down here today that was well craft.
-- at best buy all of upgraded to outperform they're all doing really well that really think about the financial I would say -- volume.
But that it.
At about 460 million shares traded right now -- it's 1 o'clock it's gorgeous out this can you blame him.
-- he had just quickly Tracy what anyone talking about the cubs down there may be filing for bankruptcy the cubs.
Good I'm good I'm up on the big base level flat out they absolutely arts -- it's awful actually.
So lovely winds beyond that -- between the cubs and you lining seeing the -- -- from Naples.
A lot of activity out here on the right and let me know when you get confident that we don't wanna miss that yeah I think it's my -- this morning they thought I had four heads if they never heard of the movie -- and so on nothing.
It's just in my head and -- our lineup and and I was told I was warned that you need viewers.
You cannot be singing and.
I would go for karaoke I'm definitely not -- but anyway thank tonight Tracy -- they New York Stock Exchange -- much.
-- guys we'll be right back where you talk guy he -- yeah just a minute of it.
-- -- -- -- -- I do that in fact check at visitor didn't want to let -- Yes that was it well let me tell us about -- -- doesn't you know have on America -- them in the American League in Europe and I he has so that's good -- it's an effective software industry it was a good money and years ago.
Exactly -- -- I'm not one of those companies may not be around anymore and that's dot com via VA Linux on my man.
Paper money -- it made money -- and -- out something and then somebody did somebody and I -- that now have a sock puppet to it's about it anyway at an event.
No I got a -- before they closed doors of -- the last -- and -- -- act.
Well the sock puppet and excellent -- for my from a -- but my cat.
Once again when rumors and things will be interesting to see happen and I fear but if you -- that it found with a hundred point nine million earlier this month.
-- All that change you from the China so we we have had a few we've got Bob -- -- CEO it.
Baltimore based technology company -- -- storm and now Bob -- so much for joining us here.
Thank you for having me.
So listless start about it -- come out IPOs would you deny you your your ninety company here you're waiting.
Trying to gauge the market.
For an IPO clearly the markets on better footing there was a couple of months ago but is it where you'd like to see it before you mean you're trying to us as a lot.
-- I don't think he's exactly where we'd like to see it before we get back into the waters we we found and that's one back -- May of 2008.
At a time when things are starting to look good and right after that the market kind of went -- the direction.
And rather than continue to have the cost of having the IPO out on the -- we decided to pull it and continue to execute our strategy using private source of capital.
As you said there's been eleven IPOs -- -- twelve IPOs this year.
You know that he talked to the bankers it's.
They make it seem like it's a trend.
We don't really see that yet we're optimistic but that's still pretty cautious it's their job right drumming up business you guys saying they'd like to make it into a trend right.
Yeah absolutely and and you know we're we're anxious to get back in at the right time.
I think that you know a lot of companies are positioned sort of in that hundred million dollar revenue type category.
Really need to be careful before they they get back into it is very expensive to.
To do the filing amended to keep doing the reporting as a public company.
Running everything that you need to do from a compliance perspective is is difficult and and really costly so we wanna make sure that that.
The market is gonna be predictable.
That we can see clear way forward to getting the kind of capital that's going to be any easy for us to -- And -- consider college friend at least we have seen some in the software -- -- cable solar links we mentioned Rosetta Stone.
Do you think we'll continue to see it.
We're software companies and in -- -- a trend yet on this -- in too early to call that but you think that is the type of company that is.
Moving in that direction and will be the other sectors jumping in as well.
Well I certainly think -- this software and technology sectors is gonna see a lot of activity in this regard.
It's key for America I mean our our ability to drive innovation is somewhat tied to our ability -- have companies go out to the public markets -- capital.
Do the necessary -- expand their business models.
We're no different then than any other company in that regard so.
I think I think you'll see a lot of technology companies get out there.
You know companies like ours have.
A lot of recurring revenue a lot of predictability of their models we don't wake up every day and worry about where all of our revenues are come from a lot of it is sticky.
A lot of it is very predictable we can we can use that sort of as a as a way to fuel ourselves into an IPO I think other software and technology companies -- do the same.
Bob talked to us a little bit about -- a stormy not.
That's -- no offense but not necessarily a household name here.
Enterprise business architecture here taught us a little bit about what you actually do.
And they obviously we've seen the employment trends -- -- -- -- when -- in the enterprise space obviously you've you've got a challenging audience they're challenging market -- -- -- It's it's absolutely challenging the beginning of this year January and February in particular.
Buyers of major corporations -- we're in a bunker but they've come out.
-- -- -- storm we provide sort of a framework for companies to manage the overall process for how they do their business so.
Taking their DNA taken their blueprint for how they do whatever they do.
And turning it into a competitive advantage.
Finding new ways to get revenue driving efficiencies.
Reducing cost and in this environment that value proposition resonates very well.
So we've been really pleased with our results.
Both at the end of last year -- in the first two quarters of this year I think -- down.
The overall process management space is something that companies are looking at as a way to do to gain an edge.
Get a comment from Stephan here who says private.
Company is the way to go -- public and got that one from Springfield thing IPO market will stay flat for the rest of this year you agree with.
That -- -- Well I mean you know this the sentiment is OK there's always a lot of sentiment about remaining private and and you know it's an easier environment operating you don't have the quarterly pressures.
-- you do get the capital and you know a company like ours are our strategy is to -- one -- to grow organically above the market rate.
And secondly is to execute acquisitions.
We've been fortunate over the last couple years it to do a couple of acquisitions.
With the private the private the prime deprived environment where that with private equity.
That's not easy it's very difficult to put values on private companies the the public market would give us.
Our currency would give us capital to -- it would go out and execute on that -- strategy.
So I don't think necessarily remaining private is is is the end all as far as the IPO market remaining.
You know flat for the rest of the year.
I don't expect it to explode I think that you know wishing it trickling in now some interesting IPOs a bunch of companies have.
Priced in in the last couple weeks.
I think it'll take a little bit and I think will will continue to evaluate how that uptake happens as to whether or not we put our toe back into the water.
-- Bobby -- is selling it to companies basically they're customers.
What are they telling you how is the real economy out there right now.
It's it's tough I think you know we -- -- to the global 2000 market place.
Our customers essentially don't have budgets.
Typically we would have been able to.
Sell our software into a budget to solve a particular problem within -- within an organization.
Today we've got to prove out the return on investment.
And then our our customer advocates need to go to work within their organizations to find the money.
There really isn't budget.
Within Nike the way that they're used to be.
On this budget for keeping the lights on -- and running the infrastructure and those sorts of things but they've cut back severely.
If you can prove that return on investment we -- of a big willingness to buy.
As good as it's ever been.
But in order to get to that point you really got to do a lot of work to show how you're gonna drive value within that organization.
And I want to bring in another beer chat -- What new innovation is coming online -- -- there.
When -- innovations coming in my life I think you know and in the space that as I see it.
You know the ability to really use process as capital.
Within your company vs data -- in the software business week we talked for a long time about using information using data.
To drive business decision making and to create new products and alike.
I think today the the process that a company uses.
-- data as a contributing element to that overall environment.
Is is something where you'll see a lot of innovation you'll see people try to capture.
The unique human things that they do and and encapsulate that into.
Understandable processes that that drive profitability time and time again.
Bobby a lot of times people like to hearken back to the class of 86 -- -- class I mean look at this class Microsoft sun oracle EMC.
He has SunGard data Adobe all coming out of the that last big recession in the early eighties.
Do you think we could see some kind of Renaissance like that coming out here perhaps including your company as well but.
Really coming out of the that the chaos we've seen in the last nine months or so.
Well I think absolutely there's an opportunity for that.
I think a lot of people have commented on it never being able to to be the same as it was then.
But certainly I think they'll be a resurgence I think as I was saying before.
We need to drive innovation in this country and the only way we're gonna get innovation is to have the capital to do it where you get the capital from the on the public markets the private.
Markets can only go so far generating the kind of capital to drive real serious innovation so.
You know there may not be another class of 86 but perhaps he'll be a class of 2010.
That is as notable as that class perhaps not at the same scale but certainly.
Indicative of power to departure from.
This this recession -- from an ideal respect.
Grooming him a lot of companies actually did start recessionary times if there's a lot of innovation -- one you know we we do see.
The trend happening with so many of the layoff that a lot of people are beginning to start their own companies rather then begin an exhaustive job search and that kind of -- that Republicans need to feel.
Bob Farrell thanks so much for joining us CEO -- -- storm will continue to track Abbas progress and his company and see if they indeed.
To make it to market than we did indeed make it to 1 o'clock come out that thanks for sticking with -- guys there was a lot of fun Robert group here today than it has ever -- so much they care.
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