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Hey welcome -- clashes in -- -- live Tracy Byrnes Chris -- -- in our new digs here in the stands you room.
Like hit some -- back to the fan blows me like great out of my chair but that's OK as long as you're happy it's refreshing hot here as a -- We had a Dow that's down eighty points right now I have a lot to do with well IBM yesterday.
Woman -- mid may not -- -- campers here after here in these numbers Goldman Sachs numbers.
You know they miss on revenue I'm not sure.
Anyone is expecting him to be -- revenue after -- -- -- -- because of charges basically there's it was a bank.
-- they had to paying UK plus the big SEC fine hit their bottom line I will say though that there's still first in the world globally in and the name.
I feel what was interesting and the one -- attempt at me was that their payroll -- and again this is -- on the door and I this is what I do you.
-- -- From the year before so.
Basically -- putting less money aside for compensation and is that because they've been getting attitude from Hamburg street yet.
Don't pay them you know -- oh.
Like since they have been -- a -- to have bad quarter -- or significant reduction -- in -- this is it.
Great time they had a terrible quarter for Goldman Sachs he's under the microscope so much now this -- tell everybody look.
So I'm -- we're not Exxon.
We're not making money hand over fist look where are our income is down what was -- 82% or whatever word we're getting crushed over here.
You know don't -- us don't -- the extra tax on us.
So I think it's a great time for them if you're gonna have a bad quarter make it now because their expectations are low particularly banks.
We know it's interesting -- -- -- good -- Tom O'Brien here to second but.
I looked at some of these companies that reported you know we talk about.
How important growth is whether its bottom line growth was top line growth.
Almost vs expectations mean here you have IBM they still guys made three and a half billion dollars almost 9%.
It jumping come many come from this quarter to second quarter last year.
Pepsi they beat earnings and they beat on the revenue side strong sustainable growth moving forward Texas Instruments.
They just missed on their top line 3.5 billion verses 3.5 two billion dollars but at the -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Guidance for 2010 was good but I think about it like that what we are seeing if earlier.
The markets not to -- up on good news but it certainly will go down and why is that why we always looking for and I know this is your big complaint glass -- and to.
'cause I -- numbers were good and yet.
Then we killed.
So what Tom O'Brien right now -- market insights for his thoughts on this one of the -- Tom.
I curse that -- -- and nice to be with him -- what do you make of this story just even over the last 24 hours whether it's IBM earnings Goldman Sachs Texas Instruments.
Delta Air Lines these numbers that we got last night that on first -- I think.
They're not so bad yet they might have just barely missed expectations on the top line but in general -- you looking at better than they were before that's what they look like to me.
Well when you take a look at it Chris okay.
I think most investors understand that.
All these companies have cut to the -- they've got rid of everyone okay so the markets always looking for growth.
And top line revenue didn't grow you know if top line revenue can't grow -- got rid of all you help you fired every one.
You know that's not business that's not going -- -- and that's what the market's looking at right now and -- These deflation -- it's probably out this slightly.
But the bottom line is that if they don't hire and they keep firing.
The you know that you only get to a certain point statistically.
And that's I think the markets look at that right now you know because if you look at say the bottom line them reverse the top line number yeah you know it's close to a three -- but they can't cut it anymore and if that top line number doesn't come -- That's a big problem going -- -- six months and a year from now.
But that's not -- numbers not going because.
Nobody got their buying -- being we're all concerned about losing our jobs housing market is a big indicator I think of the consumer and if you're not buying catching -- buying.
It counts in new dishes -- -- yes tile on the floor right so then all of that whole economy so we're in this little -- is still yet.
-- -- -- -- -- They're not doing.
And I think.
Are you on a short term basis I'm absolutely bearish and I think the S&P wants to go to 950 okay.
But I actually out on a longer term basis I like the idea right now that every one.
Figures -- -- -- Helena handbag because what normally happens.
Is that that is right before a good turn in the marketplace okay now is that -- six months eight months I think it is and I think it -- -- it's I think it's gonna stop the real estate business.
You know they getting killed again this is -- second dip down here.
You know we get another six months eight months I think of probably problems out there.
But I think little by little that's we gonna see it come back what we did see come back now the stock to get hit Texas who's getting hit Intel got hit.
But the -- -- tech infrastructure is getting built out and that's gonna get productive and then it just -- to be able to get these you know companies.
Off the fear bandwagon without spending money and I think -- well I think smaller companies are spending money right now we have to get a lot -- companies is not spending money.
Almost look at your notes in the one word that kept popping out at me was conviction -- -- we look at it from the technical standpoint.
I Tracy talks about it all the time we have no volume on the way up -- -- -- offered as we saw seven straight days -- while while no volume.
One day here down 215 points and a lot of volume is that what you're seeing a -- cascading down pretty over the last two months.
-- and -- ends up happening.
At at some point that volume will dry up even on the way down but when you look you when you're coming down with conviction are going up -- my definition of the conviction folks is wide price spread accelerated volume.
What ends up happening that that's where the market wants to go so you still have eased out -- funds that are still.
Fear is -- at the fear driven market the other bonds you know 129 today they want to go to 130 for the thirty year bond.
-- -- so that is important as to how we commend.
To the lows I feel that -- established you know even February 5 1010 S&P.
You know they weren't bad season I mean that's the reality -- -- a bad season.
You know so we'll see -- those lows but we could -- those lows.
And you get live on the NYSE of one point 51 point six billion well it's going to be a rough riding sixty to ninety days -- tot.
Look at that this does you blood recently you -- -- -- -- -- -- Yeah I think -- -- -- -- I mean that pro shares ultra short -- that you're making a bet that the Euro going further down.
-- sure isn't the S&P 500.
You -- the US shares ultra short X if you aren't anything that -- -- -- -- number there and then where Edwards really got I mean I think is -- mingle and he's purchase it.
How not how this of a similar played well and -- well I'm do you expect to hold this kind of stop like are you gonna be sure.
For a week a month six month where where you see in this.
Well eleven right now right now the trade the good okay as legal -- -- You know the -- -- S&P levels like today today the volumes already escalating right now OK so Islamic deadline escalates as -- coming downtown.
Will hold those positions the real test is gonna be approximately the 1010 to 121020 S&P number.
As we commit to that number and -- to break that number you need one point six billion shares.
If the volume light is up to one point 11 point two up close those positions and hot seat because you'll get a bounce coming right out of Latin you know it has to be in the -- I get some beautiful oriental rugs and that tape reminds him.
-- how quickly on some of those double.
Those -- -- Well do you recommend those very -- lose the novice traders are guys at home that had had day because those are really got to get a reset those every day don't you.
That's right absolutely not and what do you know whether it's the -- -- direction she has the leverage products okay.
Italian they daily investment vehicles they great vehicles once you get used -- them -- as do.
As they even -- -- -- -- -- don't go shock the market you know you watch the market you know late in it because the supposition that different animal altogether and have to be very quickly -- fingers and you know I like going both ways but the bottom line is that.
As an obvious they shouldn't be going shot period.
Not a separate at Youngstown where -- front.
I'm from Boston yet on my categorize me today it is.
Hey hey hey sandbags I bring -- I am I let those warmer weather.
I live in the Illini is that I -- thank you so much for being with us down in -- editor of market and they -- a great -- Jose and thank you.
Well as outstanding yet that was -- event that was -- -- glad you asked that question that -- give him the opportunity and that even though we all know who's clearly from boss -- We also -- based on that Tandy was clearly living in Florida and -- pop up and I ever did take a break we're only down -- reason -- said as it is it was a lot worse.
Not too long ago so low bouncing back a little billiards on save -- -- accelerates -- -- accelerated.
You know rid ourselves some of these losses could have been an okay days and keep it here.
Welcome back foxbusiness.com live Chris -- -- parents -- in our new -- you can -- on the foxbusiness.com website and Fox News Channel web site in the strategy -- area.
I'm gonna presume there's a strategy room area I keep saying that I haven't actually been to have you they're united on nine well let's say area in the end yes there's one -- -- whatever that term.
I think that's not about health care and thankfully our favorite person is here with us -- quickly executive director.
At Deloitte center for health solutions is here he knows all things.
Health care remember when this bill was breaking going through we had to on -- Saturday -- you would rather off.
It's -- gone on the back burner because everyone's been talking about jobless claims and all the other stuff but yeah well.
Anyway now I'm in right now they're trying to figure out how to implement it I you've got.
Really for big bets in the bill if you look at the bill.
Will people buy insurance when they're required to buy it and when he fourteen -- employers.
Pay the penalty or continue to provide insurance will.
All these delivery system reforms actually reducing cost in.
Can the state survive all the new responsibility they have so it's it's a huge.
Said the changes.
Wanting to it we're talking about running up to the November election and we are literally you know days away from all of these the most and when when congress comes back -- -- that's going to be.
First and foremost talking about the election but so many of these the principles of this.
Bill don't go into effect until 2014.
So it's hard to really throw this into the mix because you don't know what what the end game is going to be there so much speculation about intended and unintended consequence of the bill when most of the mandate -- when he fourteen to one to sixteen so yeah I mean isn't it it's great for punditry.
But no one knows for sure.
So let's talk about your best -- would you bet on in Tampa.
So that -- the first is a big one willed individual mandate work.
I think they'll find that the penalty is not sufficient to get a lot of people to buy insurance early on I think it will not be 2014 a bunch of people buy insurance immediately.
Nine -- five dollars is the penalty for an individual not to buy insurance in -- year.
-- not a lot especially for younger people you're so it's cheaper to not I can't wait to see -- -- penalty waited say.
Right now yes so that's a big -- -- that goes up the debt that now goes so goes from 1% of adjusted gross income to 2.5 percent or from 95 dollars to 600 -- -- five dollars for an individual so.
Technically family would end up spending.
Dollars at most if they did not buy insurance -- 2060.
Now with -- with that said now there's also.
Will be employee years' pay because -- they may look at this we speculate on this from the beginning.
Well they just say I'm gonna pay the fine or whatever that may be -- and walk away and -- my hands of its so I don't have to deal with ensuring that one extra employee over the limit.
I think this is a huge -- to 2000 dollar penalty if you choose not to provide health benefit.
If you're an employer already providing health insurance it's a lot cheaper.
To lose the tax deduction pay the penalty and say to your employees now we have these health exchanges operating.
There is where you can get your insurance and money goes to their bottom lines such a big -- -- big -- Thus -- it's not -- this event.
Supply business and that's about it like the odds on the -- that this path.
And and I think you know and in your next is the states can be able to handle this and and stand up to these sixteen miles.
44 states are underwater on their budgets now and if you think the economy has been down that means their revenues are down -- their dependent on sales taxes and other forms of consumption so.
-- perfect storm you've got declining revenues you've got increased responsibility.
And now you had sixteen million new enrollees in Medicaid yeah.
And those start when he fourteen.
But between now and then you've got to figure out how to get there.
So it's tough the states are on the verge of insolvency many like California and others are just struggling so.
That's a big bet that's a big bad and it affects teacher pay to it it it affects -- -- homeland security and filling potholes on street so.
You don't want to be running for governor right now there.
My -- my parents have always said in my -- it was a great health care you know knock on wood and thank god my father was an idea -- his whole life and they had fantastic benefits.
So now he retires he's getting -- goes to two Medicare.
And they hate.
They hate it now.
How are they gonna -- it in four or five years when it becomes more difficult to go see a doctor because they can't even.
I have a sale are the dot that we always went through now -- -- -- senate because he knows this Peta knows very well he wouldn't take us not taken -- new Medicare.
Patients and we're trying to cut cost them -- what the bill did was give primary care doctors.
You pick up a lot of Medicaid patients Medicare rights but what people don't understand is Medicare rates don't cover cost.
So most doctors have to determine if they can survive seeing a modest number -- -- -- patients at all.
You're gonna see more doctors closed their practices to new Medicare enrollees at a time when the boomers are becoming -- here in -- so it's a problem it's a problem.
Are we -- developed come back and try to overturn this.
I'd be hard to repeal the bill.
Because it's his -- about funding and it would take you know overcoming Vito and some other things I don't think you'll see it repealed I think you may see.
The annual budgeting process modify parts of its implementation.
And certainly you're gonna see things at the state level like we see on immigration.
Challenge aspects of a federal policy so.
This is gonna take four years to implement its not one year it's four years of implementation.
In some states suing saying it's unconstitutional the court sneaky here.
-- and my people certain that you require them to buying Virginia was the first state to pass.
In the senate the law that said you can't impose an individual mandate respects you're gonna see a lot of these.
Actions taken by attorneys general.
But is it plays out long term no one knows no one knows.
Paul when you talk about this all they're gonna have to have you back as we get closer to November we come back sure graves Chris Paul thickly.
Director the Deloitte center for health solutions once again on this huge debatable once again.
Take center stage for sure here in the next couple months and -- last he's safe at home.
Yeah I mean -- how -- recovered real quick okay now doing so well I'm really proud of my hometown.
The pro -- well.
Harry so yeah it's next time tell me.
-- boy you know you're in New York and really all over the country but certainly here in New -- it was talking about the that the mosque the very controversial.
Mosque that video wanna put down year.
The we'll trade center site.
And that is you'll tons a controversy there.
In -- hell I was actually reading a blog in -- Six Flags.
As the Muslim family day which is fun but it's on September 12.
Yes it is on the Sunday September 11 is Saturday to -- wolf is Muslim family days two weeks after Catholic.
Family day at Six Flags now not all of the Six Flags locations as you know their amusement parks all over the country -- all of them are.
Taking this day kind of I don't know celebrating this day are offering it up because I went I went to Six Flags over Georgia.
Yeah and what -- obviously they're not gonna take this day at the Jersey -- is not a -- not.
Chicago is that that's where I sought I sought on the list of of you know the schedule for Chicago so they -- like home school day.
-- -- -- -- -- -- -- -- -- Dashboard Confessional in concert though.
That would be pretty good.
So anyways and it's it's interesting that on the corporate Six Flags they offer this up they say okay September 12.
That's going to be via Muslim family day and if the local Six Flags if you want to take it in.
Offered up -- two people to buy tickets you can or you don't have to a lot of them haven't.
A lot of them are saying I'm not such -- now -- on September 12.
Of all days now here's why it's a -- -- -- there is a legitimate reason.
Every bit while -- is the Muslim holiday and it's based on their new years -- has nothing to do with us -- this -- On.
But I'm notified about this it has nothing to do with the the -- that happened there so at their new year happen to fall on the end of rom and on happen to fall.
Right there on September that would have during that week prior to that weekend.
So that's why they made it that -- after -- and on and you fast for however long you fast and in the observance of Ramadan.
Then you come out and you can have a party and go with your family to sixth place of god with all due respect to yeah.
Here's how another then you should -- to -- -- -- -- -- -- might look -- it but a couple of weeks later that you know outlook celebrate.
Monday September -- And I saw that it's almost unbelievable that you pick that day.
And he he really it's that -- rubbing salt into the wounds of love everybody you who gave their life -- -- sensibly on September 11.
-- -- -- -- and a Catholic days -- weeks before that though.
But I'm -- that come flat.
Chris -- Tracy Byrnes with about our.
Who out -- remembers the Barbara modeling agency I actually.
We do yeah world.
They're people in this building meant on making making fun and they don't know what we're talking their model types in the building that you and assume that at age eleven they were getting their photos taken -- the -- on studio and they didn't know what -- is on one's.
There is -- that is -- the Fannie studios is really hot here.
And it blows Tracy's wind coming -- area blows air out to -- thank you senator photo taken up -- on studio -- They've definitely got it back here that requires that X.
Those guys on the mall I think in Vietnam they I think I like hey -- -- at 68.
-- -- Rich is at the White House right now modeling.
That that wonderful suit there in front of the White House at least you're not wearing an orange vest and construction -- Very well you know gathering.
I've pulled some strings guys -- I -- a -- with today's weather I could go for like it featured some cargo pants and David Cameron is in town and you know the weather and in Great Britain is and always nice but it certainly is really that hot -- sure he's probably a little uncomfortable as well these.
We're probably gonna make -- more uncomfortable is.
Speaking about BP speaking about austerity speaking about all the issues he has to deal with right now -- well.
That's right but I did see David Cameron arrived prime minister showed up from his air -- -- -- seen him on the air conditioned west wing.
So we don't feel -- -- standing out here in the north -- but I yet having it look when you every you have the relationship between the United Kingdom and the United States -- -- host of issues.
Primarily you're talking about the war in Afghanistan are also talking about British patrol in the Lockerbie bomber suspect -- or or persons convicted.
Of of the Lockerbie bombing you've got those three key issues in and of course.
You've got one country the United Kingdom that's enacting its austerity measures in the opposite over here is happening where.
I and a few hours the senate will vote to add 34 billion dollars more the deficit to -- For extended unemployment benefits so when it comes to you like taxes and spending the US and Britain are beginning to go.
On different -- this morning prime minister Cameron however did say.
That the United States said the Great Britain is not the United States in the US has a little bit more time.
Before it needs to begin bringing its deficits down so perhaps to -- not.
Public criticism of the United States -- -- deficits but a governments around the world have been looking to the US wondering.
Why we seem to be in the last one's not.
Aggressively -- cutting some of our programs in fact we seem to be going the other way yeah.
Similar reasoning could bring is like our last great ally out there and -- -- emerging.
In many ways in many different policy areas.
What happens if we just turn the corner and -- kind of turn our backs on them.
But the one problem of course when it comes to our budget deficits in Britain and the rest of the world want -- to make sure that there's a stable US economy.
And a stable US consumer we also are the world's reserve currency so.
There is that special British American relationship and on top of that.
A British just happens to be another -- with in the world that is concerned about the US and about US -- was to be 80 it's it's been said by the -- Otto Von Bismarck back in the nineteenth century that an ocean -- separate us.
But we are we do have a bond a common bond by our language so there is a very special relationship between the United States and Britain and and almost unbreakable relationship with your problems and and we're at a point now -- we may not be at the very heights of our relationship.
-- Hey cool out there and -- -- -- can't read he's right now coming through really today.
-- overall by her we have three of the special -- on the networks that that's a good point listen for the bells and assists off the -- yeah.
Thanks guys extension down.
-- -- ran away and I prime minister David Cameron for us yet there's your blows would be better than -- -- fans you have here.
They ahead at the -- of those horrible.
So actually horrible everything they were -- and -- and I used to paying the bottoms seeds he might outsiders.
Com what's moving this market -- it's -- you know make you pay the bottom you can roll it up would you roll it up so that was kind of no tight on your experience I Alexander -- so -- -- eighties.
Let's -- -- speed eighties were in the eighties the downside minus 87 Madonna he says now that would have been in the NFL about my diet and -- -- -- and.
Goldman Sachs -- talk about we start talking about it earlier second quarter earnings slid 82%.
Basically they were socked by settlement charges they claim as he -- him -- charges.
UK's payroll tax I will reiterate again though they still came in first in at emanate globally and they drop their -- cool 42%.
They base it on revenue and it's now 43% vs 49% last year.
I think there's -- feel the Wall Street you know.
Punches you gotta wonder now we've done beating up Goldman Sachs.
I don't think so and I think would blame -- -- a little bit of trouble -- guests -- was talking about that earlier on the network and then he -- -- -- nice I certainly think he's going to be on there continue to be under pressure.
-- Texas Instruments down to again you mentioned this earlier second quarter profit actually tripled.
None quarterly operating profit set a record 42% jump in revenue I -- -- benefited basically from a resurgence in demand of their communications gear there industrial equipment.
Pretty much everything but it just it's it's down 4%.
Does that stop.
I think my point is this does that just go away this resurgence that we're talking about the tripling of the income does that disappear next.
Clean up behind grand and you came in below guidance it's all about linking him inside and -- -- him -- -- -- and then you gotta wonder why like.
Everybody else manages numbers -- -- -- -- penny amp -- -- thing -- is hog calling these is that on your list it is number one unless they would have been good -- it will come back that have -- happening -- -- camp.
AMD Nvidia all get here as well that you mentioned delta earlier you know lay up.
Unit parent of United Airlines soared key revenue metric -- an up revenue per available seat mile 220%.
Now is that because there's less flights.
-- -- the capacity is way down careful about 85% of their seats apple.
I have not been on a plane that didn't have every single seat full it a year every single one.
And the delta by the way is to say they're gonna raise their capacity so that brought to question you know -- -- supply and demand dynamic -- -- -- more seats available will that be enough people.
Combined those seats and -- at the lower prices and -- price war and sue to get fueled by the.
And they can't blow it we talk as -- -- -- -- all over the place and whether -- make any money in the prices a -- mankind -- it's a biopharmaceutical company so -- market -- but the US FDA accepted -- recent edition of its drug for insulin -- this -- to help.
I -- -- -- and diabetes patients so far so good stuck up 9% and number one.
Chris mentioned Harley-Davidson second quarter profit soared and its because its financial services operation swung back to back.
So it's doing okay because of that it its financing arm was getting killed the president wants some bikes flex their financing arm was getting killed mountains to get financing -- we will get some -- Buyers back.
Because we can finance these things again -- know what's so crazy about this market.
A hog a dead definitely displays it.
Yes -- there earnings were up because they got the finance on the -- But they they actually beat expectations.
But get their revenue was still down one.
Year over year down I think 110 of 1% but it's it's down it's worse than it was well -- bed and then Joe -- thought -- He's a stock up 11% of all because that guy and since it's you know what he.
I need to know what you're telling me tell me the truth may need it beat it do something you -- have -- is.
I don't well I know -- barbecue here and it's not as awesome -- -- -- fault no box.
I don't know what that is a rich.
-- Is Rick Newman a run and we'll ask him he's here this right now US news and world report record I used to be a -- suburban biker I guess that the -- PSV the W that we had I see a bike with a little -- -- anybody in eighteen years annual revenue in the hunt hunt.
Like that's a little while I have a lot of fun SM OK and I never wrote about it c'mon you know looked you know me better yeah you should -- that's so insulting.
On what we talk about inflation -- inflation hyper inflation is gonna get us because of all this spending.
But unless you're a real real DT economists and man you're -- noses buried in the numbers all the time.
Never talk about the inflation should we be talking about the.
Please we never have deflation for the most part we've got -- you know the CPI Consumer Price Index will come down every now and and for a month or two and that's usually because.
You know energy goes down -- one of the volatile.
Six segments goes down.
They're talking about deflation can be a real problem sustained deflation which means that all prices fall over a long period of time I mean I'm getting whiplash from this.
You know we were we heard all through the recession now.
Be careful about runaway inflation and hasn't happened.
Over the last twelve months or so inflation is around 1% and so far this year.
On a monthly basis it's gone down as much as it's gone up and some economists are saying you know we're getting very close to the dangers and -- we actually had real sustained deeply.
It happening right people aren't buying things in order to get them by lowering your prices and then laws on loan -- and lonely yours justices that come by your -- and then next thing you know these prices spiraling down and oh yeah making we'll have done.
Research on this including this -- of paper that Ben Bernanke now the Fed Chairman wrote back in 2002 it's been getting a lot of attention where he basically broke out why deflation happens and if -- happens what to do about it how to make sure it doesn't happen here in America.
So that it deflation and basically is characterized when the demand for goods just ball's way below supply rights and it's basically when demand just drops off -- -- the things that would make demand drop off are things like a financial crisis.
High unemployment and a bad recession I mean we've had the triple whammy of those things in the last couple of years which is why they're saying you know -- and and by the way the way -- combat deflation is you bring interest rates down which is supposed to stoke demand.
Well the -- didn't -- interest rates down all the way to practically to zero there's no.
No place else to go below that that's the so called zero bound problem.
And if prices continue to fall and people just don't.
You know my stuff which which props up prices.
The risky -- get in this cycle where -- as prices fall.
Employers have no choice but to cut costs further -- -- they did where did they cut costs they cut labor costs that's the first place they like which means pay falls -- pay starts to fall across the board people have even less money to spend you get stuck in this cycle it's very hard to get out of.
No -- one of our viewers says deflation.
It I do not see at the grocery Steward and -- so.
When you talk about deflation the prices and everything.
Hats as the driving across the board it's music so BI the CI go you know the price of corn was through the roof and these things a lot of the commodities food commodities of all come down -- I mean they've all -- -- it come down the last three years but I had oil has gone up a little -- you've had some of things that are moving up and something's move up some things -- down well thought.
Is that a lot of the things at the grocery store have come down in price I've written about this too recently and I went I went looks segment by segment for all the categories that make up the CPI gets there more than 200 of them.
If you look at them on I looked at them over ten years and the fact is that many of the things we buy every day have gotten cheaper over time.
We don't notice that they've gotten cheaper because we're not exactly buying the same thing we -- ten years ago we're not buying a nineteen inch TV with a two -- anymore we're buying a fifty inch plasma TV but if you break this down on -- unit by unit basis.
TVs and computers have come down in price by something like 80% over the last ten years I mean it's astonishing.
Anything that's now made overseas that used to be made here in America to basically come down in price that means small appliances clothing furniture you know you just go room by room through your house and the odds are that most of that stuff has come -- -- -- -- -- that's generally a good thing.
That's not bad because that's productivity and that helps him that basically improved our quality of life.
The problem is when you get into a situation -- even staples and things like this yeah start to come down in price and people say to themselves.
Well you know analysts I really need this thing today why would I buy something today if I think it's going to be cheaper tomorrow.
In a perfect illustration of that -- that conundrum -- our housing market where everybody knows prices are coming -- answer anybody who might wanna buy she's sitting on the sidelines.
Because who wants to -- you guests alike that it's going to be worth less tomorrow but Mickey Wright walked into the food store such.
-- -- -- Milk is what has gone up food is one food it has not gotten cheaper by -- most food products have not gotten cheaper so that is an exception and -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- I think deflation is like so many other things in the economy which is you you try to anticipate it but there's never -- marquee -- you know line in the sand that you crises are hot now or in the moment ago -- you have to sort of game the system and you know the Fed there -- things the Fed can do.
And so far they say we don't think we need to do these things it's it's like -- and buy more assets the way they bought you know one point two trillion dollars in mortgage backed securities they say we're done with that we wanna get out of this business.
They haven't sold any of those yet and they can do more of that so -- -- testify before congress later this week and I think we're gonna hear a lot of scuttled.
Hello Rick Newman thank you for thanks guys as always think -- I'm not an open comment she is -- content we've you can use it when -- board and -- looked -- -- to conundrum which it is.
We didn't break we come back tonight as -- -- here Phyllis -- -- all things.
When it's -- Coleman we're gonna talk about Kenneth Feinberg.
Climb back bonuses what back here -- -- Down 79 points right now on the -- -- would just kind of hang in any really over the last hours so try to make a little bit of a comeback earlier struggling right now.
We'll Symbian turnaround by the end of the day I joined right now but when the most amazing human beings on the planet everybody else here at -- no -- we reject you can't really -- what if I.
Everybody else comes into a studio here fox has a huge -- -- -- turn your cell phones off.
Charlie comes in and they say to yourself one on philly's jacket caught in the library.
Not on the list and -- can you can loosen up you know let's go for sure.
Com and there's some traders there's some probably some executives and people at these banks -- the TARP money.
That aren't really loose right now they're a little nervous because they're finding out that.
While they wipe the sweat off their Ralph -- the bonuses they made maybe last year might have they may have.
Get all nervous again about -- -- listen I mean here's what we do know we know that Ken Feinberg wants some of the banks that.
He bonuses in 2008 either executives bonuses in 2008 -- put in context was the bail out here now.
He's you know as you know.
Ken Feinberg had the authority under the under the TARP -- that -- created the Troubled Asset Relief Program which -- it was the bailout mechanism for the banks.
He had authority to basically approve all the the top salaries.
Of the of the of executives at these top firms and that list mainly through 2009 because that approval process and it is soon is.
He the banks pay back their apartment in just about every bank paid -- back any Citigroup was the last bank to pay back and was in December of 2009 or maybe as early January.
But anyway they're all paid back so this though is like this little side thing daddy's got -- little site authority.
Where he's got under the TARP law he's got the authority to look back at 2008 bonuses the year that all the Wall Street firms got bailed out.
And basically if he thinks that they're on reasonable.
Over the top you know these -- firms that were actually losing money they're about to go out of business it was for the government bail out Citigroup would have been gone.
It is Merrill Lynch was completely gone -- -- abide by Bank of America.
Goldman Sachs said you know claims otherwise but we do know they received billions of dollars.
In in direct bailout money when AIG dispelled that because they held.
AIG insurance contracts against their holdings of toxic debt plus they got ten billion dollars bonus money.
He has the ability go back and say if you gave you -- you executives.
But bonuses I think it's excessive I'm sure -- -- a formula.
We we think he should pay it back now from what I understand he he is gonna ask some banks.
-- to pay back some of that money.
I don't think it'll be the executives themselves -- have to write -- check I think the banks themselves look to disgorge profits which means the -- -- money but if they think it's not a total loss.
But he has the authority do that I understand he wants to do that.
I understand that he would like to -- Friday it -- roll -- the Monday.
I also understand that treasury has the some outside often is -- this is the fly in the -- -- -- -- we don't know which thank you look at that because he -- else we've -- we don't know how much he's asking for.
You -- those that view we don't know if he's looking at maybe he'll he'll just went back out and go for the.
You know the sort of regional banks and the Wall Street banks or maybe Treasury's gonna say listen they've paid enough there's finance reform come in just -- Malone.
I somehow doubt that only because -- -- and Feinberg is a pretty straight guy and.
I think he'll probably go if you look at we we should have some charts of how much bonus money somebody's -- firms that paid if you look at something like.
Combined city group and and Merrill Lynch they lost 53 billion dollars in 2008 lost they were bailed out.
And yet they paid -- -- -- in itself paid at least 3000003 billion dollars in bonuses because that's part of the B of a merger with Merrill Lynch.
They were guaranteed bonuses and I remember -- -- the -- listings fasting -- this is where people get.
Get really outrage and I think there's some justification you know -- -- a free market guy but here's where you get justification -- the average.
Merrill Lynch is about to -- -- there.
They do is -- have a shotgun wedding with bank and Malia right right after -- who went on -- -- Meryl -- was gonna -- one they have a shotgun wedding with Bank of America.
Everything's great right they do the deals -- -- -- -- deal.
About a month later Maryland's starts reporting I believe fourth quarter earnings guess what if.
It -- -- that they they find out that Merrill Lynch lost a billion and fifteen billion dollars.
That fifteen billion dollar loss.
I think I think Ken Lewis the former CEO of bank mark Woodward that sometime after voted the shareholders of bank -- approve the merger that's the thing Billy -- us.
-- Bank of America so much they have to go back to the federal government and they need to get bailed out.
Having you -- the billions and billions of of of of the ring fencing of that's -- -- direct money.
Yet that Merrill -- is -- police at the end of 2009.
Get guaranteed bonuses.
I'm here okay.
-- question what's the point.
Is -- just to make a statement is -- looking to raise money.
What is the point about doing this and -- at some point you got to say we -- move forward -- and I and I and I know I agree with that.
Is I think -- I think Feinberg.
Does -- say what you want about him he's politically left the -- and you know with me we might not agree with it you know a sort of you know his view of the world.
But I think he's a fair guy.
Agree and I think he's interpreting the law he's looking at the law and he's saying the law says I have to do some sort of an analysis of the 2008 bonus.
My analysis believes.
That these guys that deserve bonuses or they were paid.
Way too much bonuses yeah.
I think they should give expect I mean I think he looks at it pretty much buy the book.
Where's the money go and if -- caught it goes it goes to treasury because it yet and.
It's the the bigger question I think -- is where the money come from.
I mean I mean does it come from the individuals which I don't think I think the -- the firm's commitment you -- believe it they go to the company the company's gonna go to the individual.
The key that would that he learned through -- because that it Ken Feinberg if you're used question is I think very well put his.
What's the point.
Can find -- punish these banks he -- Bank of America essentially Bank of America is going to turn right around like every bank has always done and and punish the consumer bypassing off any cost under the consumer.
Yeah maybe that's a reason why he won't do it I mean this -- easy as it needs to be approved by treasure I will say this.
-- an election year.
Beating up on Wall Street.
It is you know if you look at you know -- -- they need more -- congress.
Congress is here the most hated his mistress.
Classic on congress Wall -- affiliates to -- -- you don't wanna be your applicability of that -- -- on this a surprise to the banks but not.
Now because we've been reporting yeah.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Blankfein in this -- and CEO of Goldman Sachs I don't know I think if you look at what's what's driving earnings and you know they didn't do so badly and it really comes down to it.
On the he had declined investment banking earnings they're gonna have to be more for client -- firm I think the problem with Goldman Sachs is that.
And Lloyd Blankfein running -- loan bank and took.
Took control of Goldman in 2006 after a banker Hank Paulson went to work for trade and industry secretary during -- ironically your values.
Goldman Sachs became a very aggressive hyper aggressive.
You know sort of Darwinian treating firm where you know they weren't afraid to screw declines as easy as did the SEC case.
What do you think it's Florida or not it clearly people very aggressive with the clients -- to screw them.
Still remember what that'd be the descriptive that senator Carl -- -- the in terms of those types of investments.
You know so I think that's gonna have to change and when that changes.
I think you're gonna have to be more client focus more banker or in the bankers view points all the time.
And I think that's what he's got to give a power and I tell you how -- how that we shakes out I think is number two was already told people Gary -- he wants out.
I think -- I want to leave gracefully I think they'll and we -- -- Louisville welcome.
You know I think he's at least got -- share power and he's -- he's got to put a champion at some point.
Charlie thanks man the decision of -- Italian you know they keep talking about the -- I am now that.
We're in front of a wall might go now I'm moving switching gears -- Tracy's favorite places which wasn't -- Tracy's favorite places until literally just last -- shoppers to buy my ties that Wal-Mart when I was a kid obviously you don't anymore and -- you're looking kind of show it.
That's Tracy went to Wal-Mart for the first time ever ever on Friday when a -- this right now it's true yes.
Co author of cameras follow me -- it didn't really like I was alone in my topic and coauthor of the Wal-Mart revolution how big box stores a benefit consumers workers and the economy joins us right now Wendell how are you sir.
I'm doing just fine how are you.
OK Tracy we've all Wendell you've obviously been Wal-Mart for years I've shot shop in -- must be Tracy first time ever in a Wal-Mart on Friday she loved did.
What does Wal-Mart doing to continual -- he.
In the forefront in terms of what in the retail channel.
Well clearly the the thing that they do is provide goods and -- goods to customers at the lowest possible price and I'm sorry to say that Tracy is not by any means the only person that hadn't been to Wal-Mart well.
Here are literate as there are literally hundreds of thousands of poor people.
In our central cities like Washington Boston San Francisco Los Angeles Chicago.
Who can't go to Wal-Mart because their local city governments won't allow -- Wal-Mart ended down.
And so that means that these people many of whom don't have cars.
Are forced to spend much more than necessary for their groceries and other goods now thank god.
City of Chicago within the last few weeks we all the board of aldermen.
Has voted fifteen to nothing to allow Wal-Mart to come in but the point is that.
Did that that Wal-Mart has done an incredible amount of good in the world.
Not just in the United States but around the world in terms of providing low cost goods that to people around the world.
And our lowest income citizens in the most.
Have oftentimes been denied the opportunity.
To have the low prices that they would have if their communities had wal -- or similar stores in them.
Let me say what other reason that and it makes fun of me that I haven't been Wal-Mart is because.
It's not in my little circle of parents write it you know what if it if it would be great if it was five minutes from me but it's not the closest one is about 1520 minutes away if it becomes an event.
But I will say I was so impressed with the store with -- stuck in the -- certainly with the races but in talking to the store manager.
You know stocking shelves right at a -- school he worked his way up the company transferred him -- great employer as well.
And yet there's some of the backlash that Wal-Mart comes in and killed the mom and pop stores but yet.
So many people to they've offered all these people jobs in all the different parts of the country so why the constant -- and -- with the mom and pops.
Well very simple.
You know all of us would like to have a situation where we don't have any competition and we have a monopoly on whatever it is we're doing.
Mean the same cries were heard.
Back when Woolworth.
Long before any of us on this program today when Woolworth -- with a five -- title fight and -- movement in the early part of the the twentieth century.
The point is we need to step back and understand what the purpose of an economy is the purpose of an economy.
Is not to protect wall worth it's not to protect small business it's not to protect Wal-Mart.
It is to provide the most affluent lifestyle possible to consumers.
And that is where we miss it and if a company like Wal-Mart or target or whoever wants to come into a community and go by the law.
And make goods available and expense salute it and inexpensively to people and then who is any of us including government to tell them now.
And I think what I talk to them about their prices because it doesn't -- great.
But they think crest there you know suppliers may argue that it's -- little too much.
So you supply at a Wal-Mart you kind of like pull it you know you're almost -- today you have no choice but didn't give the then the price is that they are asking for I'm not so that's the best well.
Well not just how many suppliers are there that have been at that point -- -- -- required to sell the Wal-Mart.
-- every one of these why they feel still want Wal-Mart to be liars.
My my point one of these -- if you -- still to Wal-Mart you you're in trouble because they're -- big they had huge.
-- but should we have government in there to save you know we should.
The fact is we all make bad choices and all of us who are in business small businesses and otherwise have to do the best we can with the situation that's there.
No one is forced to work at Wal-Mart.
No one is forced to shop at Wal-Mart.
And no one is forced to sell the Wal-Mart.
Yet Wal-Mart and other companies like it whether they be target in the US or care for him in France or or or or Tesco in the UK.
They go around the world and have the same model -- and have done just an incredible job of improving the affluence especially of low income people.
When -- so great Wendell Cox thank you so much co author of the Wal-Mart revolution how big box stores benefit consumers workers in the economy.
It's -- -- thanks for being with us -- thank you.
You bet thank you get to this point.
You gotta be in Wal-Mart now that you walk you know there's big names -- Molly.
All the big designers are there they they want to -- there now right so just even -- in my Procter & Gamble percentage of Procter & Gamble's sales and income through Wal-Mart.
Now I don't know I had no idea but I think it's huge -- -- -- yeah -- it's either that big this thing you have to do a -- I wrote yes I am.
Vogue Magazine quote it was content area.
But the best part it.
-- -- 100 additional advertising that's -- 3% increase from a year ago so -- have about 529 ad pages and granite in 2007.
It was a 727.
-- needs and I mean it was.
It was -- volume you.
Yeah -- the -- doomed to carry.
But you know I don't know anyone that reads the articles invoke unlike Playboy where you buy Playboy to read be riveting article that's that's that's the rumor.
Well all America team before every college football season and the -- American team that's played by temperature Playboy yeah okay well.
-- I don't know anyone that -- any amateur Internet copy in the magazine I don't have everything and Internet at that you.
You can buy it ready ads and so the notion that -- -- coming back is a very good sign -- that is nice thing that you that it's not just spoke other magazines are starting to see our -- It's based although yesterday we talked about petmedexpress yup -- and they were saying they couldn't get good advertisement we get cheap advertising advertising arm.
Armani -- though apparently is still at.
The ability of -- -- we also had the editor from popular mechanics last -- and you are.
If it he said that I -- or magazines going away.
And he said no contrary to popular opinion.
The ipads in the you know Internet is only strengthening the magazine the actual physical magazine the paper magazine is still strong I don't that the same we -- books.
Ashley Webster might have some insight on that we certainly got news earlier in the -- the Kindle is flying off shelves.
-- the Kindle itself what books.
For the Kindle -- flying off shelves Ashley does this mean the end of the hardback physical book.
-- Chris although it's certainly the times are changing as you just mentioned.
-- sales of Kindle ebooks the for every 100.
Hot couple books that they sell they sell a 143.
-- so analysts say you know what that's somewhat of a tipping point which is kind of interest thing.
And certainly sales of candles of tripled since they cut the cost.
Down to -- 189 from 259 but does happen at the end of last June but as you say Chris really it's the availability of -- books you can download those to us.
Because iPod site.
And so Lonnie -- -- PC so flora Amazon's purposes although the Kindle is good.
Certainly the fact that the -- themselves of being downloaded in greater numbers is also very good for the business as well -- -- actually we're talking -- is a little bit yesterday is.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- That's a very good question you know -- we're not getting -- from Amazon they didn't give any numbers on the paper -- which I still think you're doing very well and in fact the American public Sosa publishers association says sales of traditional books are up 22% this is that maybe just people are reading more but these books and traditional print books.
Actually I conceal it and ask god is smoking jacket and a pipe with that I'm -- in the library reading a hardback.
Boy got physical we have to get to the extent that it's actually great.
I feel good confidence too hot yeah yesterday -- upset about this because if you're a book deal from a while ago then you're -- But don't count.
Hello that's not good -- this music industry all over again.
That yeah AA AS.
To be bigotry and then these people now are actually it's sad that people are just downloading books and not buying.
Now and that's the futures are they gonna have to figure something out yeah.
Actually happened that time that yes that's I remembered it.
I'm very by passing web sit down different year whatever it is you brits do -- -- on that note.
-- -- can't let this and I know that but now -- -- he -- just listening to them talk.
He wants -- accident -- and his wife.
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