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Are gonna talk a lot about double the market today after pretty nice start to third quarter up the day and about energy cap entry date and as.
Good as idiotic -- So I'm adjusting we had that if there's narrative to -- about all this is less bad things we keep talking about.
Comes up again mean jobs numbers this morning from challenger in -- teamwork and blessed that the house and it was pretty -- -- pending home sales and expected.
-- -- -- -- I don't know I didn't acts I -- ADP numbers.
Has not been so great -- I mean it just depends on how well look at him and then that you -- up mortgage applications down again because interest rates were up so I still think Wednesday.
-- unless the point and there's a lot of this.
Fuzzy gray zone is probably pretty good way of describing to BP -- right was a little bit worse than expected this month but the revision to last month.
The -- is not as bad and the number even though was a little bit worse in some economists expected was the lowest I think since October so.
The idea that we're going in the right direction with jobs -- -- -- that continues tomorrow because you get the big jobs report out from.
Yeah if you went it I mean it's important note that really they only do small medium sized firms they don't generally do -- kind of a large companies that's why there's the difference between needs -- right so.
As is stands right now we're up 98 on the Dow and you know last quarter was a -- -- a quarter for -- -- tough to kind of repeat that -- what you did.
Terms of percentage -- what you are earning season we've been tell -- -- and we talked about that yesterday a little bit about the comps comparable numbers getting a little bit better in the third fourth quarter but the question is how much of that is already priced Denmark paid off which -- -- Cantor Fitzgerald starts us off.
Strategist there to talk about these markets and yeah Haymarket Ed good to talk to again looks like everybody's.
Expecting some sort of a pull back because I said we've had such a great.
Quarter and a run in in the stock market where do you stand and what he -- next.
Well I think first -- I think that part of today has to do with the fact its first day of the new quarter.
So let's -- year fund manager you don't want to show.
Taking a -- position.
Buying it today as opposed to yesterday -- to show for three months so.
What happens is in the first week or two of the new quarter.
Get people that go out on the -- look for more risk take more chances -- -- doesn't pan out three months they can sell itself.
A lot of times you get the you know first week or two looks good so I think that's helping -- -- Clearly a lot of resistance on the S&P at that 950 level.
We could back off and we haven't had a really decent pullback you know quite a -- just these little ones and I think we get a pulled back.
In a seasonal pattern.
In that August September period.
But eventually I think we're gonna move out of it as we get toward the end of the third quarter and start looking forward to our fourth quarter with profits that are going to be as good or better than expected.
Mark can you talk about that pullback as I read that in your talking points you know and I I would be surprised really to see it why the pullback though because.
We've -- done it because you think earning season is going to be a little disappointing I mean we were talking all -- yesterday about how.
You know yet we had this great quarter run up.
Basically -- less bad economic data we really need to -- start seeing these earnings report showing sales growth which we haven't seen we're seeing cost cutting and bottom line.
We're not -- top line growth so.
What what's gonna make the market pullback.
I think you just said it sales growth every is looking for consumer confidence and housing.
These numbers to relate to sales right away.
That doesn't happen it takes months and months.
First we -- inventories to be rebuilt we -- up over 200 billion depletion and inventories over the last five quarters alone.
-- that's huge.
And what we need do -- see that inventory numbers start to to get better.
First sales are going to improve.
We go to the back to school we get to the holidays that's when sales are gonna improve but unfortunately investors are getting ahead of the curve.
They think sales -- gonna improve right away it won't happen until we get inventories.
That's why this number the guys and the new orders index.
Hang in right around fifty its breakeven that's what the Fed said they saw was that sales and.
Inventories were now getting about back even if we want to see that number improved we want the new orders index over fifty.
And that'll be a good sign but that's what we're gonna see in the third quarter I think fails you'll see in the four.
Aren't so that you gave -- -- time on their third and fourth quarter respectively for those things the other.
Inching portion of the economy that everybody's talking about -- housing NASA said little bit better than expected on certain figures today.
I thought -- One other -- comments that -- made lately that I thought was -- thing is that.
You think it's completely false that housing is what leads us out of this so that we need housing to turn around why's that.
Well and when you think about.
Housing in general it tends to be stagnant for for long periods of time 6810.
And then when inflation comes in there's always these spikes and then pull backs and then they settle down.
We're we're going into the settled down phase where home prices are going to stabilize.
And that's what we really need is a stable home market we don't need to see it bounce back.
That whole rise was false in in that banks were leveraging up there were giving loans they shouldn't of people were bidding up the price of homes now they've collapsed.
What we need is stability because people would buy goods and services.
Because they have confidence in the economy confidence that their home values are going to be stable.
And not the -- we rattled that now in the last couple of years.
We're not gonna get into this accelerating home price think this fuel us -- more capital.
It's just not gonna happen banks are gonna do -- they're not going to be landing so to look at that.
Independent and say that that's the reason why the economies can do better I think is in the state stabilize.
The home market perfect.
Will grow because our population is growing as the dollar strong and because.
US manufacturing is gonna come back.
I think -- -- I mean.
Can't you want about having -- have -- -- come into the market they're not going out there to buy a home because they're not confident that they -- at their job is safe I mean -- -- hits on so many different levels.
So I think the housing market could be and I still ancillary to the whole thing but one of the things you noted was that -- sector.
Market is a really good gauge in interestingly enough I mean.
Semiconductor sales are down about 34% year over year and they had gotten hammered over the last year so you're looking for that to start turning.
For us to start seeing some sort of recovery out of this.
When -- when you look -- What it is that the consumer is going to buy in the holiday season it's most likely going to be electronics like tribes in the hot item.
For many years so the first thing that's gonna have to happen if the retailers expect that these are going to be the hot items they're gonna place orders they're gonna have to do that before say August.
And therefore they're gonna need chips to put in those products so if you want -- -- good lead indicator.
-- listen -- the Intel's and AMD's -- and Motorola's.
Of the world and and what they're saying.
They see him in the third quarter for ships sails because I think that that is a good lead indicator.
Of what the retailers expect to see for the fourth quarter so it's just one of those.
Those early items that has to improve its sales are going to emperor.
Or and you see that and you agree with them that that -- on terms of the timing can you mentioned two over and over again and we're starting the third quarter.
Third quarter fourth quarter really gonna start to see that -- is there anything they can get in the way of that.
I you know it right now I think with the Fed being very accommodative and and really taking the right language and not talking about exit strategies in the last -- -- -- statement.
That was really big because people are worried about inflation down the road.
But they don't want to see this choked off and end up with a double dip recession.
So I said -- this is a a gradual process it takes months.
Of improving consumer confidence numbers before you'll see it and sales.
So I think that we're on the right track as you said we're seeing early signs of at least less bad moving in the right direction.
And I think that's critical.
To the consumer feeling like they can go out and shop jobs are important again less bad we want to.
At least have the feeling that our jobs are going to stay intact.
Not necessarily expand got to remember to lag indicator not a lead indicator.
Is important if he can stabilize the currency.
The job market in the housing market and people have confidence that they can go out and spend.
With with what money they do you have an and that I think is going to be what makes the difference.
-- -- -- -- -- -- -- -- But it will be a recovery and be allowed these -- -- write these it'll slap on right in here that you're.
Here's the another key point -- where we're looking at capacity utilization.
-- under 70%.
And also we see the work -- you are right around 33 hours.
That means that companies -- expanding manufacturing.
Actually produce a lot more without taking on much added increases in expenses.
Puts it right to the bottom line profits.
And also increases profit margins so when you buy stocks you don't buy stocks because of GDP you buy stocks because of office.
So for profits and margins improved dramatically in the fourth quarter.
I think that is going to be the driving force for stocks to worry about GDP -- only be up by 2% of these sub -- -- But that sub par growth will be enough to generate decent profits in surprise and.
Outside -- yeah I mean if you're right an -- -- of all this is that we have become more efficient.
At our production.
Products and things like that even though inventories are down the products we are making are being need more efficiently.
-- and it's true I just -- for mark thanks very much for all the time before I let you go let me just does -- to -- we have got a comment or directly yet today -- -- viewers have come in with a number of tough questions and one of the things that they're bringing up -- really -- your comments on the markets we haven't talked about.
Is all the government involvement and or intervention Dylan says I won't be caught dead in this market -- cap and trade public health care.
Our or defeated obviously he's against that -- and North Carolina.
Says -- -- for a drop in stocks in the fall and realize what the government is done mentioning the president and the congress there how much do you think.
Big -- what -- -- -- that the government is involved has been factored in vs you know that.
Maybe causing a problem or the opposite helping the market as we move throughout the year.
What you're saying is exactly true that it's all about expectations.
The market is discounting mechanism it looks six months out.
And what it's done -- you're not telling me anything that we don't know we all know about cap and trade we all know about the health care prospects.
We all -- that they're gonna -- -- try to not that big number down for the deficit.
These should things were the surprises are more likely on the better side because they're already putting -- What what for the market feels is the worst case scenario.
And that they'll beat it back to something more reasonable.
So I think that when you talk about.
The market we're talking about a discounting mechanism.
That knows all of these issues already in this trading where it is based on that I still think we get a little bit of a pull back.
But not a correction and certainly not a test of the march -- that was based on the idea that the banks were all gonna fail we're -- nationalize the financial system.
That series long gone so I think that.
Things can only be a surprise on the up side.
Interstate completely out of it would be to miss the first big move and I think that movie's gonna come starting in September October.
They move -- mark thanks for you have to.
-- yeah right to be -- hours and.
'cause I market data from Cantor Fitzgerald almost -- -- we keep the lower right of 666 on the instant Pete certainly after all we've been through him as well keep -- -- -- -- right -- thinking you know he made a great point like we're -- -- really mean it.
Want to start seeing sales but it's not gonna happen that quickly I think everyone's anticipating a really good third quarter and I'm I'm not sure we're gonna get it right.
And then you know you're getting into the fall may be different picture we'll -- anyway.
We are gonna debate this cap and trade issue and talk a lot -- energy for the rest of the show but also some very -- -- comments about the economy and interest rates.
At a key fed figure late last night -- -- factor into today's market Peter -- we'll tell us about it as we continue on foxbusiness.com.
-- season for -- today -- there's not sure I should point out is doing an excellent job filling in for Jane Skinner on the Fox News Channel.
Cheating on me with Jon Scott -- -- -- but she's doing great jobs -- he's got high.
Floyd and there is always -- Michael and I am -- what she's doing fine.
So I thought you will have her back in a few days she's there for a couple of days and -- has to work for a few events -- punishment for this -- and you see that she said.
Ever or save it for -- -- as -- -- question what idol itself.
I think -- the doctor with the kids actually.
But again somebody's got to I think if you do that when I'm not home when I have three children as I do as well the odds of being at the doctor at least once a week to -- that -- -- -- -- -- higher you know the check ups everybody in all three -- -- getting the check up then -- and shots I don't.
Thinks or at least we'll say they're not in case they're watching and I once they're -- doctor when I was a kid can they -- I wasn't gonna get a shot and then or you know they told my mom then again and I did not just tried -- -- -- My son is -- -- this kid that needs like.
The four biggest men in the room to hold them down might soon I know actually screens on the car right there before -- and the whole I mean the anticipation kills what we talked about this before Robin on the air which means some people wondered why do get out.
Split we both have sons that are got better a little bit or not quite of the girls are tougher and yes and -- the voice.
At this stage I think and speaking of tough Peter Barnes who likes to get shots is down and DC back in DC today aren't just like I -- genie back.
The guys back -- these things yeah that's right Peter was back in -- we were -- Janet Yellen agenda and I when we were still together this morning -- a television talk about these comments -- -- -- on the came in late last night San Francisco fed president.
An interest -- right.
Yeah I mean you know she was very dovish on the outlook for monetary policy here you know because the Fed is trying to figure out okay AA -- the economy starts to recover as they're going to be a threat of inflation and then doing.
After a short term interest rates at -- sector while doctor yellen is a voting member of the Federal Open Market Committee so when she speaks we.
Listen and she told reporters after speech last night that it was quite possible that the Fed.
Could maintain it's near zero Fed Funds rate policy near zero short term interest rates.
Four years in order to help this economy standard path to recovery she said that she felt the recession would likely end.
Later this year but she said the big economic recovery remains tiny but highly vulnerable.
To future shocks such as perhaps continuing downturn in the commercial real estate market.
Which could whack -- bank balance sheets -- that wouldn't be good.
And she also said that she does not think that the unemployment rate.
Well come down any time soon she thinks it -- remained painfully high for several more years.
But just doesn't think there's going to be any real what about threat of inflation here we've heard that from other.
Folks at the Fed about all the slack in the global economy so so anyway as she goes forward this year.
Voting at these policy meetings it looks like she will vote for continued loose monetary policy.
-- But Peter he found that left -- potentially replace Ben Bernanke.
He's saying what's he supposed to say could this common notion that you know there's no threat of inflation impresses me that they say this with a -- -- -- seeing a lot.
-- -- -- civilians get that you can.
-- -- -- -- Got there yeah Allen wouldn't be playing politics -- the hospital opening for the Fed chairmanship next year -- -- and -- no doubt that is a political right.
-- -- -- about yours and you make great.
Tracy raises a very good point here Ben Bernanke's term as chairman of the Fed is up in January 2010 there's a lot of talk around town about.
Whether or not President Obama will reappoint him you know the president has praised this chairman Bernanke.
For all business policy responses to the financial crisis and economic crisis but he is not so far.
Putting keeping him in the job so why looks like there might be.
A little horse race going on here and without Iraqi -- -- BLO was pat has been interested in the job in the past so.
-- would be the first did not get we're gonna win -- -- -- -- you be the first woman pitcher he was if she whoever somebody else.
That Tutsi woman was appointed them raw and we don't get a new animation for our show we already have a great Ben Bernanke animation you proceed.
Now you want to show that yes it up after Peters reports and I wherever we're gonna Peter Barnes and emissions -- after -- -- we can get -- time anyway almost think Janet Yellen said last night TU Peter what stands out.
The most is that the comments on inflation or that you know interest rates much they love for awhile.
Yeah with a -- the two things that weren't listening to me is that she did talk at length about all this deficit spending that's going on all of the billions trillions of dollars that the Fed and the treasury have pumped into the economy and she said that while she's concerned about that.
She's -- that the research.
On you know pumping all this money into the system.
So that it doesn't necessarily mean that it will trigger inflation -- acknowledge that the Fed has a tough balancing act is it.
You know pulls back all these facilities and takes all this money out the system overtime but she says just because the government spending a lot of money and trying to stimulate the economy doesn't necessarily mean.
That we are going to see inflation down the road number one.
She also said.
Most importantly if any thing she said quote I'm more concerned that we will be tempted to tighten policy.
Too soon thereby aborting the economic recovery just that she definitely hit a devilish.
That's the key point for May not just for young but for the Fed in general had this conversation -- you know a number of times -- through this Federal Reserve and maybe I'm wrong about it but it seems like.
And this goes and -- -- obviously not a member of the other sellers are but it goes back to the comments Geithner makes and what have you.
That the inclination here's to do more rather than do grass and to raise rates too -- as opposed to -- -- is that fair Peter do you think.
Yeah and and doctor yelling goes through the history of government responses.
Two economic crises both here in the US for example of the great depression and other times and in Japan.
The kind of lack a policy response there's as you know history shows the policy makers -- have tended.
To get out of the rescue too early -- tightened too early and we don't -- -- make that mistake she's saying so I think you know I think we I think we can bake that in two monetary and monetary policy going forward.
And and particularly since chairman Bernanke himself might like might want to keep his job they might be.
Keep the pump primed for awhile bright -- -- after January to may be Tracy is right maybe there is upon good.
-- I don't.
We have -- -- -- Bernanke dedication by the way because the last probably played that -- started this whole routine that was you know that you he just.
We got to go -- on the White House -- you know secret place supposed to be and and and and Peter started doing all kinds of dancing and everything else that.
I think we -- -- a true.
Fairness fairness there's -- him.
-- -- It's funny every time Peter can kill yourself for and -- -- like that.
Now actually solicited some kind of follow -- he hasn't gone off somehow.
We didn't trust me we don't need to work we're gonna trigger the Peter animation now I'm gonna have you know yeah my don't dunk tank something or other here -- Been there done that right back.
And you felt.
The other night weren't you did you get -- down Robert Gibbs I didn't get to go to the little while I was a congressional.
Lou while and they just let the press.
-- -- but our colleague go Mike Emmanuel from Fox News you know got the throw baseball but I think I believe Rahm Emmanuel and my only he he know we took ten -- -- and then and then somebody else I said Mike.
This is the miracle of television it's called editing right now.
I don't play -- -- -- the baseball and then cut away somebody going into the dunk tank and then to the miracle of editing.
It hit that the -- them but so -- -- but he did he -- I'll start to the bottom.
Now I should consult with you Barnes beforehand all right thank you Peter got good -- -- here tomorrow Peter points in Washington they have -- you know.
In all seriousness we're gonna spend all a lot of the rest the show talking about energy -- -- before we get to that cap and trade and a lot of you wanna debate that what have you.
And consumer finance protection.
-- your financial protection agency that's being set up John Taylor joins us national community reinvestment.
Our coalition out of Boston talk about this and you know I think.
Maybe we shouldn't -- about consumer protection.
Consumer finance protection John seems to me to talk a little bit about the news the front cover the Financial Times this morning -- a decent place to start and -- hit an all the other issues.
Citigroup raising the interest -- and all these credit cards fifty million consumers a lot of people are talking about that today.
What do you make of that move from city.
Will well I think that city is trying to create some profitability that have been long missing from their institution and they have taken advantage of raising interest rates but.
I I'd I'd much rather if you don't mind talk about the actual the consumer finance protection agency which is that proposed by the president right which is broad impact.
Right -- have that this just one specific example of protections that consumers are looking for whether it's credit cards but there's a lot more to it because -- they're looking to -- -- bring all of this under one umbrella all what do you think of the idea of the proposal there there are pros and cons.
Yes no I think it look who we we we tried it the way.
Lax regulation on no regulation.
Or even reducing or eliminating regulation and frankly we all see what -- got us.
There was this period of un bridled.
-- -- and lending that you know.
-- has cost us all -- It's time to take these.
Consumer laws that frankly all the bank regulatory agencies have on the books in -- that required to.
Regulate and oversee those laws but unfortunately.
Most of them like the feel lending laws -- credit opportunity act and CRA and these other things kind of like.
Stepchild regulations for these bank regulatory agencies because they're more focused on safety and soundness and the monetary policy and international finance and other things.
So the consumer the taxpayer really hasn't had the kind of protection.
And the rule of law that we need in the marketplace that keep that healthy balance that ensures fairness and equity in an ethnic.
And strong ethics and ended in the market.
So that's what the president is trying to do with this this proposal I think it's a great idea to have.
An agency whose mission is to ensure the consumers and not taken advantage of and not cheated and and that this transparency in the system but at the same time time allows the free market to continue to compete.
But does it I mean I understand the notion that they're trying to fill in the gaps here -- there's all these ancillary agencies we wanna try to come bring them all together somehow so this.
-- word I guess would be that you know that would be their job but.
They'll be policing products will they be dictating the kinds of products that that go out I mean I know this -- whole push to get out these plain Vanilla products but.
What kind of say will -- -- -- how -- that and then what does that do to cap.
-- -- -- -- Right so the market is still gonna dictate the products what this agency would do is make sure that the products and not.
Predatory or use various are unfair and discriminatory so what they do is.
Did did look at complaints did did study -- and see whether you know the market is in fact treating people fairly and equitably.
And they have the ability issue orders of fines -- penalties but they're not gonna dictate products they can dictate practices that -- that I unacceptable.
Like yield spread premiums -- prepayment penalties.
The president has proposed that those are things they can look at but it's actually not in the legislation yet now be -- -- this this agency to determine whether it's the interest of consumers.
They have the kind of terms and conditions many of which is still legal today they got us into this problem without -- foreclosure.
One of our viewers just rode him that regulators that the SEC didn't do their job -- You know probably talking about the Madoff situation which we talked about in the last week so much.
We're insane this -- -- to add more regulation do you view this as more regulation or just a complete change in.
The existing structure -- -- -- net net more or less regulation.
Yeah I think it's it's it's it's net net net not more it's actually consolidating.
-- the regulatory.
Agencies into one that specializes in looking and protecting consumers and taxpayers.
I think we're looking at bill.
Before agencies actually did read the Federal Reserve.
The for the more than four agencies the the office of the comptroller of currency the FCC the FDIC others.
Having less to do in this area still having some role to play but having it concentrated one agency who specializes.
And has the expertise.
And the enforcement authority to do something about these matters.
So it's it's not it's a new agency but it's it's not it if he added up it may be actually less than the current amount of enforcement agencies we now have -- divided amongst all these different agencies to enforce.
The equal credit opportunity act -- us community reinvestment act.
Rest the real state settlement procedures -- that.
Truth in lending act all these different consumer protections that a designed to ensure fairness and and transparency and and make sure that the market is is not acting and now he's -- way that's not in the interest of consumers invest.
So that alpha bits soup can be consolidated into one big organizing the enemy will we see the demise -- -- those others then.
You'll see if if you're in the regular through the bank regulatory agencies that they give -- the demise in those agencies of those departments that are.
Each of them have departments -- the supposed to be enforcing and -- and these various slots.
You see the demise and the -- but the growth.
In an agency who isn't.
Who doesn't have a a whole plethora of other financially related obligations to a fourth but really has the obligation to enforce -- protect consumers and taxpayers.
In this in it under all these laws so it's it's a demise if you're inside the agency but its a plus I think four for the taxpayers and consumers.
-- just one more quick question because I know we're running out of time at how do you intend to fund this agency will it be.
An assessment on the financial institutions -- -- the FDIC or will come out of some.
You know I don't know the money -- came back from TARP but -- what what what are we using to pay for all of us.
Well you know currently the way it's done is the agencies produce the income -- regulatory agencies -- -- the income to pay for the bills.
And you know -- a lot of institutions have been shrinking over the years people really haven't called the -- very closely because I've actually been building new buildings and growing and expanding.
So they financially doing quite well.
So I I think.
This -- that short answer it remains to be worked out but clearly the agency will have funding.
I would suggest where they look to is with the agencies were currently.
Producing revenue for the purposes and -- they have having departments and enforce these laws.
That that revenue now go to this new agency.
So to the extent that it could be less of a burden on taxpayers and more.
Of of a burden on on the regulators and -- institutions they regulate I think that would be better for everybody.
All right John Taylor thank you -- with the National Community Reinvestment Coalition thanks and don't ask.
For -- that we are talking a little bit there about in broad terms regulation Charles Evans has that the Chicago fed is over in London making comments as we're talking say -- prefer us.
Financial market discipline -- more regulation those comments just.
Coming across the tape as we were talking so.
If he's right anyway cap and trade yet you guys wanted to talk about you know since this climate change bill passed on Friday a lot of people have been fired up both sides of this issue.
We're gonna cover very often just a moment -- the content -- Couple guests here on this whole cap and trade issue and the climate change bill in general as we talked to Patrick Creighton institute for energy research at -- DC.
He's with this as a cent from Washington was -- -- is also from Pittsburgh professor and founder of Carnegie -- electricity industry.
Center -- -- so both of these gentlemen join -- Lester let me start with you.
Captain you know cap and trade gets a lot of people worked up on both sides of it.
But you know the argument against it is as you -- -- is -- raise costs essentially -- attacks I'm sure we'll talk about that in some detail.
Watch flood watch clusters cap and trade in and of itself a good idea -- -- -- the first question is it you need to do something about global climate change.
If the answer to that is yes.
Then some sort of market mechanism like cap and trade -- -- me out here to attack is the right way to do that you have to get to the first question first.
I'm one of the people who think that his -- while.
But other people can disagree with that I don't think what you can disagree with -- If you wanna do something about global climate change then you either want a Cap and Trade System where you want a carbon.
Tony look really hard to Muster for somebody to disagree and we have Patrick to Patrick -- your idea.
The big question that that that professor brings up right there is do you want to do something about quote unquote global climate change so.
He's right I mean you have to answer that first guess -- now and then go from there.
While Kyle thanks for having me today and you know we have to look at this Waxman Markey bill as nothing more than it packs.
Whenever you wanted to.
You know where -- B cap and -- -- renewable electricity and Andy when everyone -- do to reduce CO2 emissions that's what it costs money.
That's gonna cost small businesses asking the cost families.
So if folks believe that that economic benefits of this legislation outweigh.
I'm sorry that -- the -- benefits outweigh the economic medicine yet.
What the professor said said Dennis sacker what are you he had what it can't because -- you don't believe in the science of global warming are you against it because of the economic because cap and trade as it.
You know as it as a strategy to fight that.
Well come on I'm not a -- how the search -- thanks we look at this from an economic perspective this legislation's 15100 pages and one.
It regulates everything from where we can -- electrical sockets on new buildings it mandates a one size fits all national building standards.
And it has a -- of electricity mandate that is that is not only ambitious is practically impossible to meet.
I'm so you have to look at this from from few different angles and we believe that you know the more -- American people learn about this -- -- some point out Dana poll.
67% of American people say they're not willing to pay one penny more.
For their utility bills.
-- energy costs to address global warming well so it's a question the American people.
How do you make a great client I mean I put out enough money fill my gas tank I'm -- on that but.
Lester maybe the question or the problem is that we don't know enough about global warming I mean there's many of us out -- still on the fence about this.
Is it -- is it happening.
I will say that we've had like fifteen straight days of rain here in the northeast seems like Armageddon but it.
Is this it is there truth behind what this global warming theory that we do need to get address.
Now the first thing is that there is no scientific disagreement that the president for greenhouse gases in the atmosphere where near.
If we didn't have greenhouse gases in the atmosphere here if -- be about forty degrees cooler than it is right now.
Those greenhouse gases are mostly water vapor.
But we're putting in additional greenhouse gases in the -- mostly of carbon dioxide.
And there's no scientific disagreement.
That these additional greenhouse gases will warm -- That's going to be a good thing in some places if you live near the North Pole for the South Pole.
It's certainly going to be a bad thing if you live.
Near the equator.
But I don't think there's any scientific disagreement on that fault there is scientific disagreement about how much you earth will warm.
And how fast.
Ride himself we need to take account of -- Well here's thing -- there's -- needs -- money eaten a lot of publicity is economy's recent emails inside the EPA Hampshire both are mostly both you guys have already heard about this but.
You know last night there was.
The person that sent out these emails questioning the science behind global warming was actually on in the studio -- with Glenn Beck and they talked about it.
He showed the charts now I'm.
Like you know -- -- you were saying we're not experts on this kind of -- this guy is Lester you are he was saying.
It carbon as carbon emissions are going up you'd expect that the temperatures.
Would be going up.
As well and they -- -- -- to the temperatures actually have been going down so his point is hey we.
What's going on here this is what what what about the warming it's not actually happening where is it happening Lester and what's the problem with.
As you said we have to look into this -- we know.
I can't think they'd -- you need to go back over a longer -- a time when people try and tell you that the heat tomorrow morning.
He's due to global warming -- a bunch of junk.
We're talking about climate not weather and climate by definition is something that happens over years or decades.
And so what's been going on is that since more than -- -- The that the climate has been warming some downturns in there but the climate has been warming over a period of time.
Whether it's been warming since yesterday morning -- since last year that's whether that's not got to do with what the issue is.
-- the climate has been warming.
Clearly there is global climate change how much of that is due to human actions that's a different story I think that most scientific.
-- -- -- believed that a large part of that is -- to human actions.
But they're still some doubt about how much of that he is due to human actions.
So I don't think scientifically there's really any doubt that global climate change is taking place.
But OK so if in fact this is happening then we come back to dollar value Congressional Budget Office is saying.
By 22 whiny every families look gonna spend about a 175 dollars.
Of course -- Heritage Foundation which is a libertarian organization of course but they're saying though the numbers more like 18100 dollars per family I mean this is a drastic difference.
And -- really isn't taking into account what happens to GDP.
If we are spending more money and electricity and energy and things like that that's less money into the economy of -- So.
I mean I guess Patrick first -- -- -- -- for eager to hear your side of this but.
-- is up clearly don't want to pay this kind of money.
-- -- -- -- -- -- -- What it was like -- air -- this.
-- -- -- Muster little luck Patrick gets into spoken loudly Jim we'll get their way to jump and get Patrick to thank you.
-- -- you point out the CBO analysis and what's important to note there.
Is that analysis only price the cap and trade portion this legislation as I just stated.
This legislation's 15100 pages a month there's something called a renewable electricity and -- in there there's something -- it will require homeowners before they go to sell their home.
-- -- -- federal building codes standards so their -- not green enough.
They're gonna have to pay to retrofit -- that -- has not taken into account when CBO performed this analysis.
There are other provisions in this legislation.
Not such as you know new homes that if you want to build a home you have to.
Meet a standard where your electricity -- -- can be you have to use certain types of light -- as the president pointed out earlier this week.
I think the overarching theme here is.
Are -- American people willing to pay.
You know opposes it the day -- whether it be up 3100 dollars a year -- this that question and -- as I said the Rasmussen poll pointed out of the game.
67% of American people are opposed to that so.
It goes back to the fundamental.
Question of -- -- economic benefits.
You don't make -- there is there cost benefit here that that really makes sense the American people and I would argue that it doesn't.
-- what do you think I mean if this really is an issue.
The postage stamp a day -- in fact that -- that really be that your number.
Back at how -- I agree that this is a matter trying to take a look at what are the costs and benefits of all this stuff.
Have we do the calculation it looks as -- updating.
The carbon dioxide emissions -- the United States would cost about 1% of GDP.
Now if if if you're one can't you say 1% of GDP -- why we can't afford that.
-- another camp 1% of GDP really isn't all that much.
Take a look at what's been going on during 2008.
Where well prices got up 247.
Dollars a barrel.
That's a lot more than 1% of GDP.
But they -- there and and so if you're looking at this new Waxman Markey legislation.
I don't think there's anybody who -- that legislation it's filled with all kinds of giveaways and so on.
I testified before senator -- -- -- committee on on how much of the renewable portfolio standard was justified.
Look we're trying to see whether there's a deal here that can get -- to congress -- that bill that generally the right stuff.
Not -- every point in there he is correct.
I you don't like this notion of it detailed regulations.
On the other hand Americans have been living with cheap energy for a very long time.
Our cars are very inefficient in the world are houses or buildings are very inefficient in the world.
In Japan and in Western Europe.
The the amount of energy per dollar GDP is about half -- what it is in the United States.
You look at energy per capita is about half what it is in United States.
There's a tremendous amount of efficiency that we can get that's justified right now on -- cost basis but we don't do it because we don't pay any attention energy.
Legislation has been afforded us to pay more attention -- and they're gonna be a life savings that come out of that.
Patrick this is something that I struggle with with.
A lot of the stuff that's going on in administration right now this whole notion of just getting something through.
-- doing something just to get it done it seems that -- on some roller coaster to cure all ails these days.
Is it necessary to rush something like this through right now.
When -- you know we're trying very hard to get this economy back to where it needs to be.
You put out an interesting point there Tracy if you look at the house vote last week it passed with seven votes and that was despite all that.
Arm twisting and back and deals professor pointed out.
They're kind of political carve -- -- legislation.
There are folks -- the feeding the trough.
That suited their industries -- -- adversely as impacted as others.
But like I said -- you know we can look an example.
Look at Spain.
You know they had a -- of the economy in -- late ninety's and early two thousands.
And it's it's been proven for every one green jobs created Spain lost 2.2 others.
Nine out of ten of those green jobs are no longer with us today and I think icing on the cake is Spain's greenhouse gas and CO2 emissions and increased 50%.
Since 1999 so the green and the economy in the -- noble.
I electricity mandate that doesn't necessarily cause side with a reduction in greenhouse gas emissions as testing showed it.
And I think it's important and is the president pointed out earlier this week with the carbon tariff in this bill -- we have our large competitors like China and India.
Who aren't gonna hear the same standards how we're putting our domestic.
Industries at a competitive disadvantage when competing in the global economy and I think that's important thing -- know.
I think here we can all agree I like things are we've all have -- -- things in this bill that.
That you know certain groups are not gonna like it you're right the president even who's obviously -- come out against the protectionist measures and our -- that have been.
Pointed out we've got to run here do another guest up but that Lester let me just get the last word you on the idea since your supporter in Kenya in general I know the specifics that you don't like but it.
In general of the idea why -- cap and trade.
Specifically the answer.
-- -- -- Essentially economic incentives and allowing them from a market based system that one of the ironic parts about this is real quick -- -- the sides of the growth of the show for a month or two ago.
Is that this almost seems like.
A market based Republican proposal you know that have happened years ago is that it's it's based on trading and it's and it's funny -- that the idea that he comes up now on it's it's opposed by.
It's like those groups but that said why is that proposal the best way to tackle this -- do you think.
Graphics since the late 1960s we've had a lot of environmental legislation.
Initially it was -- -- command and control regulations you must do this -- in Washington know exactly what you need to do.
What we've been found beginning.
In -- with the 1990 Clean Air Act.
We can lower the nation's unique in that case of sulfur dioxide.
Much less extensively.
By using the marketplace by looking -- The incentives that are in the market by doing.
What Americans are so good at which is to figure out how it is that we can lower the cost of complying with some mandate.
And what we found with -- -- with the sulfur dioxide legislation.
He is that the cost of controls was probably less than 13 of what it had been estimated they.
And so if we're gonna candidate -- very important that we -- -- at the least cost that's exactly what this cap and trade.
Provision is gonna do for us.
And so even though there's all this horse trading even though this -- -- would emerge as something which I I think not even a mother could love.
It's still going in the right direction -- still getting us to there to -- global warming and it's going to get us there at the least cost.
Of the Holocaust parts -- -- -- mark Lester Patrick good discussion thanks to both of you for coming on.
Much of pleasure having.
-- -- probably move on you know this whole notion of pushing it through did you we get to from readers Tim from Virginia -- get a pass now because it won't get past after the midterm election.
Karma -- I think.
And and also John Virginia out of a lot of dissension in Virginia and after I might actually I mean -- -- a -- did -- have to be rest because like everything -- the administration doesn't want anybody to actually know what's going on.
I think there's a sense among the American people that they are jamming.
Stuff down our throat -- descent and I -- stuff.
Have -- I let my morning and yes I -- -- -- but there it is I'm body got I think about it I like it.
Previously you know these other things -- could talk about what I -- -- -- -- We knew anything about could affect -- you wanted to become a board lineup from seeing anything.
Siena Italy and that got out.
Yeah I might help you yeah yeah it.
From that's a nuclear energy so anyway I think on that that was a decision about -- 102 point in the spots this is dot com live free and easy older.
-- -- -- -- -- -- He spent -- but -- but.
I don't know whenever haired -- right when -- -- -- good jogging outside without the typical car exhausts greeted by.
If I -- ran I would agree with you I get it I get -- this -- all this greenhouse stop and clean air and it's but it just seems so expensive I just feel like you wanna substituted another word I do I do and I've been really good about you are you so far.
Would you call yourself.
Sicilian -- the councilman for instance I am not.
I mean you're laughing you Sicilian -- our laughter or not Oregon right there.
And -- redolent George Vander -- joins us president and CEO of units are nuclear energy.
At a Baltimore we said we are gonna talk about some other options here at some other ways to look at this whole -- energy debate.
What about nuclear tell us about the -- what we'll talk but your company.
It particularly -- this joint venture don't know what constellation and then we can talk a little bit -- the pros and cons of nuclear energy in general but.
Tells but the plans moving forward from your point -- Well thank you now thank you -- a pleasure to be here with you.
-- represent a company called units are nuclear energy and our intention is to start the nuclear Renaissance.
In southern Maryland with a plan that we have done it the Calvert Cliffs facility where there are already located two nuclear reactors.
And our intent -- the building new nuclear energy facility.
That takes advantage of French technology from a company called -- -- it's the United States evolutionary power reactor.
And we intend to kick off a nuclear Renaissance with that project -- -- -- stop you right there because one of our viewers.
Name's Edward actually he wrote his name is being Edward scissor hands at some of the story.
Could somebody please explain nuclear energy so he wants.
Kind of a and -- find out a primer on the whole technology because I could see how people can get all this stuff confuse the original and very today Simmons is important going nuclear we think we're gonna implode so yeah what about educational -- explanation to clear.
Well look quite -- We nuclear energy has been around and this country since the 1950s we've been using it to generate electricity and it's just a different way to generate heat.
-- boil water.
Most people are familiar with that about 70% of the energy in this country is generated from fossil fuels mostly coal and natural gas and we understand that those burn and they generate heat and then we generate steam from that -- -- water and turn a turbine turn a generator and make electricity.
The difference with nuclear energy is we just do that by splitting the atom.
Interestingly there's about ten times the amount of energy and then.
Adam that there is in any other form of electricity generation type of energy.
And it tends to be one of the most efficient ways we have to generate electricity in this country.
So now you're looking to get.
-- you have these new reactors and if approved easily could be in effect -- be usable by 2016 can you explain more about your new reactors and how -- work.
Yeah that's that's a great question Tracy thanks for that what what's happened in this country I think that you're aware of and maybe most of the public -- -- as we haven't built a nuclear energy facility in this country for over thirty years.
So for last thirty years we've been working on improving the technology updating the technology and making it much much safer.
Our design in particular the US CPR we believe to be the safest technology available in the world today.
It's currently being built in both Finland France and China so we brought -- the United States that would be the fourth country that would build this technology.
And we've introduced a lot of safety features like 4100%.
Redundant safety trains that allows us to keep the -- cool.
And also things that -- respond to what the American public has become concerned with since nine elevenths terrorism and those types of things right we're the only design that has a dual containment for safety trains -- action for.
Our fuel pools and everything else and we believe it's the safest design out there.
All right so that's one of values.
You know it's -- -- -- Georgia looking up some of the objections and -- -- this is so much written back and forth about.
This technology -- -- one you've already addressed to some degree this in all seriousness is terrorism.
You know that nuclear power plants -- terrorism target for example of what have you you can talk a little bit more about that if you want.
The other one that seems to come up a lot.
At least some people say is that it's not -- cost effective as some of the other alternatives out there when he cigarette.
That that we tend to get tacked on on the terrorism is an issue and ours our safety record is is very good in the United States especially for the last thirty years.
And on the efficiency issues and the cost issues associated with nuclear energy.
Our company intends to build this new nuclear reactor down at the Calvert Cliffs facility with our own money.
And with our own backing and -- not asking the ratepayers for any assistance and and we just want the chance to compete in the marketplace.
Our feeling is and the last thirty years of producing electricity with nuclear energy -- -- out.
This turns out to be the cheapest form of electricity to the grid and thus for the consumers that ultimately -- The cost of this it turns out to be the most efficient way for us to produce large.
Forms of electricity and the advantage of nuclear energy is it's 24 hours a day seven days point three out of the -- editor haven't economics network then specifically because again today -- says ought not its cost effective how do you say -- to being the cheapest.
Well the -- -- part is the people that say it's not cost effective or not the ones that intend to bear the burden of this work to build it.
We are the company that would actually bear the burden of -- -- from our economic analysis of -- a couple of examples.
Is coal in this country you can produce a coal plants for about 3000 dollars per kilowatt installed the -- -- -- About a thousand homes in in in the country.
Nuclear energy on to compare that it's more expensive initial cost it's around 4006000.
Dollars per kilowatt installed.
But -- it's actual production cost what it cost to produce electricity go to the grid is much much cheaper.
And I listened to your last -- and they had it right under cap and trade or any form of carbon tax whatever form it takes in this country.
What we're gonna see is the price of fossil fuels escalate rapidly -- nuclear energy produces no carbon.
When it generates electricity and that's -- we think the real economic advantage of this is in the future so.
Really we wouldn't need this -- cap and trade mess if this if we could potentially figure out how to go nuclear.
And I say that news without imploded -- whole country.
And do it efficiently what -- results -- you have found plants in Finland France and China what kind of results are you seeing over there.
Well those plants are just being built right now it's a matter of fact the one in Finland does not scheduled to come online until about 2012.
And the one in France's likewise not scheduled come until about 2012 so it's too early to talk about.
What they're actually doing from -- production cost basis what we've done is look at how efficient these new reactor designs -- compared that with the current generation technology.
And we -- looked to be about twenty to 30% more efficient so the -- to technology that's running today.
Is the cheapest form of energy on the market that's what we're confident saying the new technology will be even cheaper.
-- -- our viewers actually asked how long does it take to build a nuclear plant.
It is a huge capital investment up front and takes a long time the interesting part is that actually takes us about 45 years to build a nuclear energy facility and get it on the greeting get -- running but before we're allowed to build it.
It takes about four years just to go through -- state and federal licensing processes in this country -- so the total time is about eight years from when you decide to start one of these fraud and one of our other viewers asked along those lines which states do you feel can facilitate more of these plants being built vs -- Susan is the most friendly to.
Well right now offer units are we envision that there will be at least four of these new nuclear energy facilities across the country our first one is -- Maryland.
Our second one is in the State of New York.
We're working with one of our partners called -- in Missouri and we're working with Pennsylvania Power and Light in Pennsylvania.
But there -- other technologies that are talking about in different forms of nuclear reactors in about twenty different states in the country right now.
-- -- of evidence is that OK thank you very much for coming on and and you know that was I just another part of it George thanks a lot.
Thanks very thank you don't -- futuristic George Vander -- at you know start nuclear out of Baltimore with us today it is one more topic to cover on this whole energy.
Issue and it's the chief operating officer of -- for energy who's gonna join us here just a moment on now.
-- -- is the president and CEO of -- energy joins us now from San Diego.
Again another of a whole other host of issues here to talk about with a -- natural gas -- For solar wind power in all these things and we'll let you talk about.
Knew exactly what Samper is in two in particular -- -- I don't know how long you've been -- for we've had a big discussion at this whole cap and trade and climate change bill.
What did you think of the bill that came out of the house.
Last week and maybe the prospects going forward to the senate how to fix your business.
Well it's it's very interesting to to watch what goes on.
In the whole cap and trade area.
More particularly to give you a little bit of background.
Operates in California more particularly through our through our utility San Diego gas electric.
We have a very very good carbon footprint we're essentially.
A company that generates all of its electricity from either natural gas house.
Or in a little bit from nuclear so San Diego gas electric as a as a very very good carbon footprint.
And it's and it's interesting when you when you think about the cap and trade situation what regional differences there are.
California for example.
Is made the policy decision some time ago.
To have utilities produce electricity with very low carbon footprint so effectively no cold.
Used by the California utilities.
-- -- the electricity rates in California roughly twice the electricity rates per megawatt hour.
That they would be in other parts of the country that are that are much more dependent on coal and role in turn.
Roughly twice the CO2.
Is electricity generated from -- is -- list -- -- fact people have that in any actions as possible -- Well no but what -- what I'm getting to is that these facts and sort of set up the political dialogue.
In Washington around this around this whole issue because.
The bill looks come out has tried to accommodate a huge number of interest from.
And the way those interest have been accommodated is through the giving out of free credits.
To a whole lot of -- a whole lot of industries and so forth more most particularly.
Companies that generate electricity from coal and so as as a consequence.
-- -- there's been an awful lot of compromising.
Two to get to where they have to go in this business in terms of in terms of giving out these -- -- other some good things in the bill.
Yeah but yeah it's in your business is in all of that you're you're doing natural gas you're you're solar wind -- -- seeing the most positive results.
Well we are very much a company that's taken a strategic direction to go towards natural deaths natural deaths -- the cleanest burning.
Of the fossil fuels.
It's -- it.
It's really the bridge fuel.
Between the time when renewable stood -- -- large scale -- and more.
Carbon intensive intensive fuels so consequently.
My company owns.
Southern California gas company which is the largest.
Distribution company we've developed a couple of liquefied natural gas terminals.
We're in the process of starting up a large natural gas pipeline with our partners -- connection Iraqis.
The eastern part of the United States -- -- -- a company that's focused on natural gas price the cleanest of the fuels and we have started doing some work in renewable.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Options some for natural gas of people talked about.
It has to be stored not created on demand like electricity dangerous the danger of leaks that are associated with -- it's explosive knob like electricity.
And -- just things that people have brought up that that might not be such a positive natural gas for you since the cleanest why -- natural -- a better option and some of the other alternatives that are out there.
What well wolf first of all the natural -- is the cleanest and natural gas is it is a very save fuel of the of the industry as a very good safety record.
But it's not a question of natural gas.
Vs electricity natural gas is used to produce electricity.
A large part of the the generation of electricity in California.
Is from natural gas fired generation plants and those -- those of the times that we have.
And those plans have the lowest carbon footprint.
Of any of the fossil fuel plants -- with natural gas prices where they are today those plants also are very very economic.
-- then in your living out of wind and solar and you know as far as it.
Solar stocks have gone we've seen a huge run and then has solar run its course and at this point.
We're not moving out of wind and solar and in fact were were developing solar we have a ten megawatt solar plant near one of our gas plants.
Near Las Vegas -- about it slowed the largest thin film photovoltaic array that's been built.
And we're looking at other opportunities in solar -- look we're looking at opportunities and win.
In California there's a renewable mandates of the utilities are required to will be required to generate 20% of their electricity from renewables and -- -- so that's very much a business that we that we are moving into.
-- stock certainly had a nice run up 17% year to date.
Something -- that -- that natural gas.
Had natural got a lot of people like an -- -- thank you very much for coming god.
Sempra Energy against the company -- Molly DC thanks but no thanks am thank you very much nicer you know it's like.
Coming out again I think we -- pretty good job offense -- -- thrown all the issues out there and let people make their minds of themselves he -- to comment or lighting up because people really care about all the stuff in.
New you know nuclear is it is solar wind whatever the case may be but we're moving in a different direction here's just a matter which one yet.
But it -- it's instinct is that you know it seems more and more we learn about nuclear that might actually be a logical way to go I just think they should come up with a different name.
We changed the name going forward and marketed better that's -- actually to play fiddled with the PR for.
-- -- going nuclear if we're going nuclear you're thinking you know Will Smith Armageddon.
There you have it wound not free and easy part thanks Jason good to see him but doctors soon and we'll see tomorrow on foxbusiness.com -- -- who -- injured.
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