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Every lap -- the foxbusiness.com.
Live good to see you on it Thursday -- -- it feels kind of good you're that much closer to the weekend anywhere we woke up this morning that's right knock you off tomorrow.
So in my -- -- -- my location out of like this Alan your -- you know tomorrow goes along way when your women men don't seem to understand that.
While we're starting up again you know it's adjusting.
We could talk about the news if you like do you wanna fit that in a little -- today the markets off to the races -- about 135 points on the Dow right now many to a five.
So I'm kind of -- Xenia tell us why that's the case he's here compelling capital that we're gonna talk a lot about.
Housing was Jonathan Miller -- John -- on -- while we're happy to have him on.
If you're seeing because normally -- done East Coast there's so many different stories about the Hamptons real estate going into.
The summer season there were -- most of them -- more negative than positive but.
Jonathan Miller had a handle on exactly does not and really the East Coast market an otherwise it'd be great get questions about.
Here or in other areas the country go -- Florida right minutes.
Yesterday -- so we'll get to that and it's in the come along with the health care explanation of the day it will in the later on -- -- to -- that soap opera I mean.
Yeah it's a great job that he does he acted as a world turn we have is that this person in the -- because you can kind of have an in depth conversation about it I was on Twitter it posts and articles on politicos actually read the story.
Today on Politico with the headline was something like does anybody really understand what's going on -- -- a -- -- -- actually is a fair question because.
Everybody has an opinion on it everybody cares about it because they they want to know how can affect their own health care.
But very few people actually know the inside intricate details of exactly what's being proposed -- -- did everything.
We talked about this morning health care yeah I want to act this is how well anyway it actually going to not feel what you bring back the markets because if you look at the markets yesterday really a few days this week you saw last week.
That the health sector healthcare sector was strong sector so when we talk to him a little bit about how what's going on the markets overall.
It's in that intervening at halftime I didn't -- introduce Stephen Kim what do you look what do you make of that first -- -- may -- just have a reaction overall.
-- the dialogue coming out of DC regarding Health Care Reform.
And whether or not you include that -- consider that in your investments.
Yeah I think.
I am I -- the long -- to health care right now although I think the markets in general of gotten a little illogical and the wind -- it's benefiting all sectors.
I would use an opportunity to lighten up on health care.
I think most of what's been driving health -- although there are a lot of very case specific.
You know good stories out there but the broader health -- picture especially hospitals.
HMO some of the insurance -- some -- the ones that really -- Medicare reimbursement have been strong and that's because you know no offense meant to Barack Obama but.
His agenda here is how overplaying his hand congress put it in his hand.
Because they had really incinerate a lot of their own political well.
You know six months ago you -- -- -- that we would have to be hearing from Nancy Pelosi.
And her agenda in health care but you know it was painfully clear -- even her supporters.
And in -- -- -- the Democratic Party that they didn't have any more political well left to advance.
Something as strong as a Health Care Reform package even Hillary Clinton when it was on her play.
You know along time ago -- -- ran out of political will really drive this agenda I think it's become clear that even Barack Obama can advance this plan.
You know a lot of the Democrats don't like to tax package that's tied to itself.
The strength and and that not too -- a political rants but that the strength and this is a player.
But -- we have to strengthen the in in the health care -- is really -- The inverse of the trajectory of the likelihood of any kind of strong reform coming through.
Especially the public option for the reversal don't worry about this -- the president I don't think he's watching today.
I have done that the severe meaning there now going on later in the day since probably busy -- -- -- -- that he's added that -- at the White House yesterday in addition to that -- mentioned it.
One of the first things we talked about was the deet -- or try to figure out the compromise on Capitol Hill that was reached yesterday with this so called blue dogs right and it.
That comes to you know.
Apparently the house side it's still -- it's just kind of watered down a little bit when you look at health care companies and or stocks.
They get public -- very important part of it right that's for the competitions in the company a 100% and so I wonder that you are you making assumptions then -- that it's going to be taken out.
Or that's not going to be include it's not going to be close.
You don't think -- do you think -- I don't think it'll get and still win by the way it's still in just about every -- except for that Senate Finance Committee let's just doesn't doesn't.
-- it doesn't matter why does not gonna passes and.
I can pass in that it's not gonna pass.
In this form I don't think that anyone think this -- sit well I if we look we need Health Care Reform but.
What in what goes on in congress even even the -- gets passed is not.
Going to be what we ultimately -- come down so.
I don't think the public option will be in the version that passed the house however if it is it won't look like diversion alternately passes in this.
OK so those -- the assumptions you're working that's interesting because there than -- and it and it's not because I'm -- Health Care Reform expert right.
But it's -- Qaeda is.
I feel like other.
Reasonably good handle on the the power that the Democratic Party currently has in congress and whatever they want to advance.
And right now.
They just don't have the political world events this this strong reform package and not necessarily united front which is the other part of what's happening there because they they make these.
Concessions that one incident -- -- the middle of the road in the blue dogs and now you have every liberal on Capitol Hill this week if the -- You know screaming bloody murder about this is saying hey wait a minute we need this public option so they're gonna.
Is he sees is this a lot of infighting here so no matter how big the majority is -- all business a huge democratic majority but there's a lot of infighting and differences within that party that's right to -- there's going to be sure there's going to need to be more creative solutions to this problem it's not just gonna be.
Hey let's impose attacks and everyone makes over 750000.
-- million dollars and let them find the entire.
Of course there's been so much over the last couple months -- anything right now besides Health Care Reform that you're keeping an eye on again as far as your investment goes on Wall Street sense.
Probably tied to what we're gonna end up doing in mortgage securitization and mortgage lending and again that.
Impacts the fact that -- can get a Jumbo mortgage that Jumbo vs conforming is still upside down we don't know what's gonna happen.
To Fannie Mae and Freddie Mac and how much more money they're -- to need to become a useful arm of the government.
Com which Democrats would really like to see.
So that they can you know once we stabilize who knows when that is and what it'll feel like.
But to get people kind of back under the you know that this 60000 dollar household.
Into the housing market they're going to need you know a stable lending and and right now there's still a lot of -- I'm uncertain future government needs you more as well as the mortgage modification we had -- -- those meetings this earlier this week to -- -- to to figure out awaited move speeded up what's.
And some lenders really does have to do with the fact that they're so overwhelmed by applications that they don't have the people across the -- Yeah maybe if I guess that TV.
To be more clear at least from my own position I don't think the government needs to do more of this.
I just think they are doing more and and I fairly good yeah I don't think it's a necessary thing for them to perform it's kind of what got us into this position.
I think -- lenders are comfortable.
Lending money on Homs two in a lower credit quality individuals.
They'll do it on their own and they don't need help from the government OK fair enough parts for those of you watch his live by the way just a quick little -- that this does not apply to anybody may be watching Hulu or.
ITunes or anything else -- you're watching us live right now 1208 in New York refresh your screen because it was a little bit of -- filled with a glitch.
At the beginning that didn't a lot of chat to work I didn't do this myself and that's why wasn't listening to listening so I really enjoy it we're going to -- herself yeah it's lucky.
Don't have somebody who can feel free to chat with us because we don't get lonely and not chat by the way we haven't talked we will bring up the market here full screen if we -- Dow's up 145 points right now.
Tim and you know.
We had this great couple weeks look like hey here's -- inevitable pullback last couple days but the pullback just did not want to capital markets keeps warning -- -- -- strengthening economy every mean we have like five days of kind of flat finish with ten dollar moves in the S&P.
But the inner -- reactions to things in the after close reactions -- we had.
Microsoft have a terrible number Amazon terrible number after the close they were both down.
And and you know the NASDAQ was down fifteen after the close we opened -- -- next -- flat.
Yeah right -- is down 5% right down it was on early on that.
Over -- gotta intra day it was just -- off in the morning.
And in grind and -- are having -- -- that what's going on on there's definitely light volumes by a different light behind the last three Monday you know have raised and these are traditional light July volumes.
It I don't really make a lot of sense that I remain rather skeptical and would rather be.
You know 70% invested if I were a fund if I -- an individual you know I would look back -- your iris and your 401 -- in your real investment.
I don't see reason to be.
You know fully invested in the seats -- are -- in in this -- rally right now in other words are added that the big funds start to chase the performance that date because they're looking at -- and may be like you were not convinced but saying I still need to outperform and I can't -- -- on -- is that what -- -- what's happening now remember the big funds as they were like we're talking about Boston funds right you know those -- people -- hit.
That's just what your parents are doing it's not what they're doing so -- when Boston comes in decides those mutual funds need to buy.
Futures and baskets of stocks more -- It's because you decided that you wanted to buy so it's not just -- are those are and you are seeing that the retail investor that was.
And as you saw strength transports and we saw strength in the Dow Jones.
All the little theorists are all the little you know technicians that are looking for indications of safety.
They're chasing this market here earlier question what phase are we in in hit it.
It depends what -- it is in my view that it is it's somewhat irrational react were rally off the bottom.
A little over exuberance we -- over shoot.
The fair value of where we are in the economic.
Recovery cycle which is I think.
Still very early.
So if it is this balance I would say that were in the seventh inning and it's probably time be a little more cautious so what do you do with your money will be doing with with what how -- will play yeah market I am.
Things and I'm very confident investments individual companies or sectors and I'm very very confident in like -- You know health care semiconductors.
Said happy those -- -- areas that I you know that that are done incredibly well in some areas asset management broker dealer investment banks those areas that.
I was overweight.
Stayed in bought individual stocks -- ETFs have done very well I'm taking off some but not all I remain confident in them.
And other areas where I'm just kind of punting and little individual stories to get huge hops and completely getting -- And to that but that's a very short term.
A very short term so we know my days tending to that finishing his Charles Payne was undated the show earlier this week and he we actually know what's your average -- holding stock we know it's hard to move to -- shower popping he's they'll really.
Three to four days into the -- it would have been three to four weeks -- right.
It's it's like health care services.
You know like cardinal in the tests in like those guys they understand the general story understand what's going on Washington -- -- earnings if they don't know -- really well.
So you Biden and earnings the market's up you know 400 points and you're gonna sell them.
Semiconductor stocks more of a long term secular and economic cycle call when they outperform.
I may be adding an up here I may take off a tiny bit.
Yes it's like it's like relationship between investors in the market like.
If you still wanna -- -- so that they see in the relationship right for the market to keep going up but there's no real commitment to any real move took a break up and tell him.
Exactly how to get -- again I think you're exactly that love and I'm not I'm going jump on the -- Yeah yeah.
Very user I'm just play your game that it's easier she said -- been -- and I think our viewers will support me and some of these medically seem to always support you.
This is why we love the -- until all of the talk a little to tell us what -- -- a little bit about it handrail all airline.
-- whenever -- you know whether -- think it's him.
I I wanted to talk about energy a little bit because we did this -- story this morning and then risen all the profits are getting hammered -- on the but it certainly big oil company because -- return with -- different world that we were last year.
So -- stocks.
How do you look at them some to -- -- -- oil companies whether it's Exxon or Chevron Conoco I have been looking at the energy.
-- pretty closely.
I don't look at the giants but they do.
You know they do fare very well in this market because they have great balance sheets they have great footprints no they're not over leverage they're just not gonna have tremendous earnings.
Calm -- crew gets back up above the six and sixty level they do actually start to do pretty well the smaller ones I've looked at what should be the large -- more natural gas focused guys.
I like if they have good balance sheets like.
I you know Chesapeake was a disaster bad balance sheet people worried about the stock in the refinancing the CEO now I think it's in a better position CHK.
And you PL you know Baltimore petroleum again great natural gas footprint natural gas is.
You know really on its lows and so much -- he's been taken off line they have a great balance sheet.
And and they'll continue to plod along right here I think it's a safe stock to own.
But if we get.
Now a hurricane or any type of real industrial recovery right and and week or it finally gets hot in New York which it looks like it's starting to win the coolest July 2.
And coolest July since the civil war.
And that's reflected in the -- levels natural gas because people use less energy.
School their homes which uses less natural gas so we get a recovery in natural gas.
Up through the four or five level you'll see the larger natural gas guys like Apache.
You PL SW and all these stocks we'll start to behave very well you can only hear even a natural gas looks terrible because they're just they're they're decent -- Real quick you have to renovate it because the -- is an emerging markets we -- talk about that much.
What is just overall your bet on now and -- considering that philosophy on natural gas yeah month.
-- You know I had a little foot in NASA in in emerging markets.
I liked mostly.
You know Singapore and South Korea because of -- technology.
I think emerging markets gonna continue to outperform.
But I'm completely flat and a little short China right now so I think -- would be -- -- -- and their thought a big correction neither started yesterday in China when the Shanghai's composite sold -- the cents a year percent ended up down 5% -- less than one up against -- I don't know that we're gonna get a big correction so I think there is.
There's still enough.
About what really went on in China in terms of reduction of inventories and what they're really doing it wouldn't be shorting him here because they can be irrational for a lot longer.
I think the other up 30% across most of Asia it's probably decent time to take -- profits.
Good enough -- good to see again thank.
-- -- thanks thanks for hanging in there that attention to the public capital.
Fund -- -- I think we are but it never you know you.
We don't having an argument that's right now because they can't -- back actually excellent.
-- that's right I'm we will get to comment -- about the way it was a slow start today -- -- -- -- covers an adrenaline now and then every now and again I think that's the other pluses and -- minuses of technology Jonathan Miller is great Miller Samuel on the real estate market knows it very very well.
It's coming up next and so is Peter -- you know that AIG we've given them a lot of money and you say that's the biggest bailout ball.
Maybe not says Peter we'll tell you what might be the -- this stuff.
Really going on this real estate -- we get these data points almost every week and it's a little tough to make sense of them because it kind depends on what.
She gets the glasses are rose colored and are otherwise that's right -- luckily neither one of us Wear glasses made out but it probably -- Sunday -- assuming that he's looking this kind of thing I don't.
That in Miller is joining us -- the president CEO at Miller Samuel.
Doesn't -- -- world broad -- what is going on with this housing market right now.
Well I think.
Everybody has been looking at very bad conditions for the last a couple of years so we're sort of stretching to find anything that -- -- positives aren't.
It's not real.
I think there's a big distinction -- between rounding the corner and finding the bottom.
And and and just like with the Beige Book results that the Fed released yesterday.
Depicted the economy -- not contracting as much as opposed to stabilize.
-- some key distinction good point between rounding the corner and find in the bottom right you say -- justices really should not real.
But that the rounding the corner part of it.
Could be real absolutely that that did that we're not declining as much much.
But -- I mean my point isn't trying to put together some sort of a narrative for people to understand and we get a lot of talked about this yesterday a little -- when his back and forth on action on Twitter about it where people were weighing in because we had a guest on yesterday said.
The end of capitalism -- to build a whole new system this and at the end of the day we've had some tough times right but we're turning -- you say some sort of a quarter that doesn't mean we're gonna be off to the races anytime soon but again.
Into the larger narrative are things.
About two or close to the point will -- be getting better even if not you know tremendously better are we at that point.
I still don't know a little early for that I think if you haven't gotten there -- the rate of descent is what is he okay and and there's been a lot of this interpretation of that.
Detergent of every month you have four key housing metrics that come out in the big when they got a lot of attention -- -- -- -- of which was a front page New York Times story yesterday.
And essentially could be the emphasis was even though we're down 17%.
From this time last year and we've had four consecutive months of an easing of that decline we're going up monthly that the month they were going up but if you if you.
Pull out and adjust for seasonality.
It actually we didn't grow up.
The whole assay the -- ask about that also -- -- was on this morning with -- with Alexis click on the opening -- the case educational lecture and he said that the monthly.
Com reports more important than the than the yearly now because this is like may to mid April to April you're just not gonna see much difference -- -- If we had a terrible year of course last year -- -- and everybody knows prices are down but the seed going up monthly he says makes him.
Now -- he was two days ago before this report came out that he's turned more optimistic because of those figures and he says even when you adjust for season out we still seeing a slight.
Move upward -- is not huge but it's encouraging now.
-- I don't disagree without -- mean that that's that's certainly realistic but I but I think that it to sort of say that that means we're at the bottom because that's how it's being.
Being phrased -- -- is really -- -- there was another metric that came out also new home sales 11%.
Increase month over month.
But that's a seasonal number and actually if you -- if you look at it the actual raw numbers it's the second lowest number of sales and history.
So thank -- so it.
You know we're getting all the -- information I think the key ideas that were not in a freefall and that's and that's really what keeps -- at night about -- market.
Well I I think that you.
If there's nothing that keeps me up in the sense that it's now were we had a very sharp correction last fall.
Now what we're we're seeing it's a slow erosion and I think what concerns me is that.
If people take that sort of this positive spin especially sellers and lenders that are behind new development projects.
And they all of a sudden have sort of a false sense of confidence.
It'll actually choke off.
The demand for property or or real slow down the demand -- then they can make -- prices higher right.
They're not willing to come off of that right so -- and that's one of the reasons why transactions across the border very low relative to historical norms.
Is because there's a void between buyer and seller.
So if you get this.
This emphasis on positive that the market is turning around you're -- -- see a bigger disconnect between buyer and seller and you could see another drop in.
Everybody just getting to the point that people war.
If I'm hearing you right feeling comfortable or more comfortable saying I'm going to price my home where I didn't think I was going to I was gonna keep it up a little bit higher -- and maybe you -- -- settling into that.
And now we're getting a little bit different framework for some of the information enacted -- that.
That is exactly what I'm saying and and if you think about housing one of the problems we had during the housing boom which are really characterizes a credit boom.
And housing was a symptom.
The credit boom.
Housing led the economy most of the job creation and occurred during the housing boom was in the housing sector.
Now you were sort of back to old fundamentals which is this idea that housing should.
We'll follow unemployment unemployment is still rising -- it's determine it on credit credit is still very tight.
Especially on the new development side and the Jumbo mortgage.
Gotten -- a little bit because makes -- get mixed messages on the credit market as well about how easy it is to actually get a loan.
Today vs you know let's save last year at the same time.
What is it like out there -- The key difference is that lenders look at look at the lending community right now they're looking at falling housing prices rising unemployment increasing layoffs are not really that thrilled about landing they are going to put it that way and -- by -- the -- But the underwriting guidelines -- the key so for example now you pretty much have to put 20% down which is an historical norm.
But during the housing boom 5% was a very common thing so.
-- -- a lot of people out there not unable to refinance there's a lot of stress created by that.
If you go to the higher into the market meaning above a million dollars Jumbo anything that's not financed through Fannie or Freddie.
Which is ten the emphasis of the stimulus and bailouts on the federal level.
You're looking at.
-- an average of 35% down payment requirements in a market that required maybe ten to 15% that was the norm.
So what you do is you knock out a lot of people that -- computing -- That got a bonus last year right they -- Can't they can't they don't know -- Our home is that the Denver -- -- 50000 dollars and you won't admit it was a two million dollar home you don't put 700000.
Down on average -- a million dollar home you beat sort of borderline conforming.
And you might be able to put 20% down -- still even if it's 200000 it's still a lot of money even if you're making good nothing -- that have now.
Absolutely and it's all that does is his his restrained the level of activity.
And you have to remember that sales activity leads prices so when we sit here and talk about prices prices prices.
You know we're seeing an up -- it's really the cart before the horse you've got to see transaction activity right.
Improve to see long term price trends and we're not seeing that yet but.
-- we're we're seeing at least you know less of a decline.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Did actually get this question -- -- -- -- the best I'm every never issued -- timing your pilot again got -- to get.
For inventory and pretty.
The -- -- looking -- -- and so expect we'll leave it on its -- percent in the.
I -- why you -- that's the problem with it's it's up.
Problem meaning it's it's just different than it was overcome stuck them in a lot of ways because you know tennis -- about getting -- 200 grand for a million dollar house or.
-- a lesson that perhaps the console but it -- a 20%.
-- -- -- systems -- when you had a house to selling your bank and huge profit on it.
And you return over that.
You know that money that you waved his housing always went -- and housing always welcome and never stopped going up we -- know that's true but -- That it was so easy and now that's -- now we're stuck and that's it doesn't go back to transaction volume when she said is the key.
Right now we're stuck in this -- we can't get transaction volume move and that's why in the coming -- you a little bit more difficult on this whole narrative of what's happening in housing because this is the most skeptical thought I could have for someone like you coming in -- but here comes Jonathan Miller he's just he's talking down market a little bit because he's need to get this transaction volume up to help his business.
Because an edit this narrative is true -- to start to turn everybody's getting positive.
That's not gonna help according you know well -- that going around in like three circles and well.
We don't -- yeah I think you're saying that it becomes a -- -- process prophecy everybody's positive different things turn around right but the but the reality is that credit is still constrain that.
That that doesn't impact the underwriter that sitting they're -- declining alone.
And that's that's holding back the flow plus you have to have a job and you actually have to prove.
That you having -- which is up a whole new concept and.
Markets either way evidence he's going at wait and -- sell and that's it never -- which is the way it used to be.
You know so you know an all time meeting again today -- sort of immediate gratification mode.
We're gonna have to rent it the health care that's going to be our next topic but because I mentioned it before I want to ask but -- I think it is said that you really didn't matter where -- the country's one of the top luxury spots that your annual and -- flat out their -- you see any still they do amazing you know fifteen room homes and that.
Kids that you are filled with people actually what you are seeing sales of.
Million dollar properties yeah.
Is still Wall Street -- but but it's.
-- a much lower volume man and that's sort of the characteristic is.
You still seeing some of those price points off -- where they may have been but they're still big numbers.
But a lot less of them and makes you wonder why we're gonna get get that -- we're gonna be appropriate to do this big house tours again.
You know -- could actually show people don't look at how amazing it is betterment you know NCAA has these days right because who have been conspicuous consumption of the -- I.
Right right do it yet but we're already time and we're gonna come to you for that fits -- trying to get her real CN rather than later this is only fun but yeah.
Good way to start off the springs -- yeah -- Right we'll take -- comparable to the hole and the story.
That's it started in every year.
Things out of -- -- -- and Fletcher it's always a great perspective in all seriousness on the on what's happening in real -- argues you mentioned health -- rights we -- talk about that.
Yeah and we will have a couple different angles here and certainly on the costs and on the debate that's happening down in Washington -- -- that is.
Coming up next the health care debate much more still to -- as he continues foxbusiness.com.
You know -- this dimension that.
I see some of our Twitter followers.
-- -- -- -- What city is great says welcome to send -- people because we do actually feel like it's no you welcome this -- always like you felt we're glad that you're joining us.
And Rick says it is always one that also -- -- and can quote.
A myriad of different films at any given time he does and -- -- -- and every day.
Analysts worry too much about health care you know it's interesting rich but you probably you obviously -- listen when we started the show this more work this afternoon for a half hour ago.
I -- -- enough -- notice is for the lead story on Politico right now maybe not right now but it was a couple hours ago was about how nobody seems to understand this healthcare thing.
So it's everybody's interest -- it right.
And we all talk about it and it could affect our lives but very few people understanding intricate details which is one -- -- -- we have you on every -- and this is actually -- not -- And because there's so many different bills.
To keep track of -- next impossible.
It is and what each Phil does sometimes the one bill that comes out of the house so our house committee goes.
Up against another bill and house committee now contradict each other they're overlapping each other want to have provision in the dozens of it's it's really if it's incredibly difficult thing kind of wrap your head around everything.
That could happen because so much could happy -- the house.
-- a bill that's a thousand pages long that's not split into three separate committees to get three committees kind of -- -- -- build one committee.
Will encroach on another committees territory it and by the end.
In the house they're gonna have to come up with a one bill same process in the senate -- -- dealing with two committees and they'll have to come up with one bill and then -- they passed a separate bills.
They've got to go to a conference committee and come up.
With one bill.
And don't you write and -- so -- -- middle this -- this all this nonsense which we always -- we used to talk about the financial bailout as we find out how.
The sausage is made in Washington and sometimes -- -- really -- this is how it gets -- so now they're there in the middle of this to get a market the bills and as you say work their way through it.
Let's try to get through the latest details of it.
Odd -- the house side I guess is more interesting because of the blue dog compromise yesterday as I mentioned earlier it seems like.
Yesterday at this time -- -- saying oh wow and lose and you reported on a compromise with the middle of the road blue dogs today the story correct me if I'm wrong in Washington seems to be.
The liberals can't stand this deal with the blue -- struck now.
The liberals can't stand it and then there -- blue dogs who also can't stand it -- blue dogs on the energy and commerce committee -- signed on to this agreement.
I did some of the highlights -- this is there used to be that business tax where the business -- -- had a payroll of 250000 dollars or more it would have to provide healthcare to its employees.
Or pay a penalty.
They upped that to a half a million dollars in payroll they trimmed about a hundred billion dollars off the bill.
A couple of other provisions in there but the bottom line is it doesn't go far enough for a number -- pretty much most.
Of those conservative blue dog Democrats and then for the liberals.
It goes too far I mean there are plenty of Democrats who want that single Payer system that the system -- -- there is pretty much exists.
Or -- spinoff of the system that exists in some of the European countries where you have one health -- government health care provider.
There on that end of the spectrum and then you have these conservative blue dogs who want to scale back this government option as much as possible.
-- -- got something kind of in the middle right now we have a government run plan it would still have to negotiate with health care providers as far as how much money they would get paid so I think government.
Would set those rates there would be negotiation with the health care providers but it's kind of in the middle and it's not far enough for some on the left and it doesn't go far enough for those on the right so.
Coming -- Health care before he -- on Q we're getting -- that some comments coming from.
The House Minority Leader John Boehner talking to Chad her grim anniversary Susanna in DC this is what he has to say he -- is criticism of this is what we're just speaking about about this new blue dog agreement.
I says he'd -- thinks the deal cut by some of the blue dogs doesn't make it any better any us decision the committee chairman writing -- had no experience.
In the private sector although he also says.
That the health care companies are not Lily white into this fight that's another one of -- quotes.
And just finally he says in short it's -- -- government run plan they've been training crammed down their throats their likely to have a very hot summer.
John Boehner had a way with words doesn't need.
Yes yes you guys and it's actually -- -- -- no big view Jenny did a fantastic job agreed -- to do here Boehner actually say that stuff and he's got some of so the most cynical deliveries in congress and company -- set standard stuff.
But you know I mean for the Republicans -- mean they voted.
Lockstep against the stimulus -- lockstep against cap and trade.
They will probably vote lockstep against health care -- to have their own health care proposal out there and deals mostly with tax cuts and that cost cutting measures and things of that nature but.
You know the Democrats right now -- that the Republicans right now are more than happy to see this infighting among the democratic and the Democrats mean they're there they're hitting each other on this that.
Liberals the conservatives those in leadership.
-- it this is really a democratic fight the only -- really have Republicans involved in the process is over in the senate and then you really only have about three there.
So you know the Republicans are -- sitting back and watching -- the poll numbers -- watching these folks yell at each other and and and then they're smiling a little.
And they hope the recess so will have even more of that if you're if from the Republican point of -- -- obviously this infighting continue and the fact of the matter is the politics of Washington such as they are is that.
Asked to be the way this is the Democrats all -- they have the majority to slam this through.
Without a problem but as you say rich they don't agree so leave us with what people should be thinking about going into the end of this week in the August recess in terms of what are I go back to my original point that people don't at NASA understand the intricate details what are the big bullet points.
In the Washington debate that people that are watching it should have a month.
I think what you need to have in mind over this break is that there is such a long way to go and while congress isn't filling this -- of health care debate.
You have the special interest groups and we need this type of care when he got type of care this shouldn't happen that this that this passes it will allow.
It will ruin your life I mean we need to realizes that we are so far away from reaching any type of acceptable consensus on health care in congress.
That this is going to pick back up again in September and still.
It's going to take months.
Work all of this out did it seem like that president has the political will to push it through and wait -- was months out potentially even -- could be as you mentioned along.
-- -- -- Yeah yeah he does because I think he's all in on this already he's talked about it practically every day of the week and going back a couple of weeks he will continue to -- -- because again.
You've got other Republican National Committee already targeting sixty Democrats in congress right now with radio ads in 33 states they've got television ads.
Both sides have TV ads going both sides have phone banks going calling.
-- the best asset for the Democrats right now Wallace poll numbers are still.
Is the president.
-- thanks so much breaking it down we really appreciate it.
Hopefully get a bit of a break thank you -- -- she got vacationers of them as the -- congressman that he's on the little late August was.
Late August and I'll be back before they get -- -- -- -- nervous you know you're nervous we know your -- I don't know about that.
It's tough decision rich thoughts -- Dennis Smith at The Heritage Foundation senior fellow in their center for health policy studies to see what he makes a -- -- through that again this is what we were talking no -- what should people take away in terms of the debate here.
What they should be thinking about going into what is going to be a recess for congress with no certainly no deal done.
But some talk of compromise.
Well there certainly is a lot of confusion out there and it's going to be hard to sort out.
Oh really where things stand.
But the compromise so you just mentioned.
A lot of this does not lend itself to compromise -- -- Washington likes to split the difference -- -- let's meet each other halfway.
So many things cannot be met halfway.
There is quote from a a congressman from New York on the more liberal side of the Democratic Party this morning saying we don't want any these public subsidies go week.
To a health insurance plan.
So there there's no splitting the difference or finding the middle with that kind of that the position on the left.
-- where senator Grassley senator Snowe and senator Lindsey are.
-- who are saying look we we aren't going to be led down this.
To simply have a vote in the senate and that it all gets tossed out the window they're not gonna go along with that so those that.
Critical issues are still very much right in front of us and nobody is really coming up with -- they pathway to resolution.
You know this rating your article that you wrote recently and -- and we reduces it.
Coming onto this health care statement saying it's very hard for really anyone involved.
Or -- -- to make sensitive all of this and it that you broke down really nice to be relieved line you said.
I -- the house and senate bills taxpayers are going to pay more for health insurance.
Period here -- It is that really they take away for all of us no matter what this plan looks like no matter really what happens.
Weren't going to be paying more taxes -- services in general.
That that's exactly right because when you look at -- legislation and when you look at fit the issues about.
They need the budget.
They're talking about the federal budget they're not talking about the family budget.
And -- the Health Care Reform which started down this path it was all about.
Finding -- ways to lower health care costs for the average American you won't find this in this legislation.
Substance subsequently the costs for the in the bill of typical -- is going to go up.
That's what CBO has not said very clearly this is not bending the curve downward in fact health care and -- costs are gonna even lights.
So if we don't have a bill yet we don't have any kind of we have what we have a bunch of bills -- -- an agreement yet so.
If that's the case it working assumption here that you're right you've read you know the -- is out there and it's gonna raise our -- in one way shape or form how we do differently.
What could be taken out and put it as a result.
And that is an exchange actually accomplish that goal of lowering cost long term which was as you said you're right that was the stated goal going into -- this.
Well we have lots of good models out there -- -- question is.
Will we stick to what we know it works or we gonna toss it all out the window.
For something that is -- Completely.
Run by the federal government -- the things they can be fixed.
-- Fixing the tax code leveling the playing field so individuals buying their own insurance on their own let's give families.
Their own money back.
So they can buy health insurance on their own.
There are different models through what cooperatives really are again from the midwest we know what cooperatives are and the federal government doesn't run them.
You know it's interesting will it -- let's talk more about -- isn't just a moment the John -- as the board and he said he has solution is simple increased competition lift the state to state carriers allowed the average American to shop.
And -- group for insurance but.
Innocent doesn't we say things about what Americans will do.
In -- and they don't do it they're not motivated to go out and shop for insurance and quite frankly it is easy when you're if you're employed it is offered no matter what the option is just to see if I hear you -- it let's just get get off.
Think it is confusing even on a personal basis so what do you think -- John's comments is that something that we that you think would happen and Americans -- actively shop.
-- that the competition works or you think that might not be the case.
I think that it'll be a mix.
Some Americans will go out and if you open up the markets.
Given the access to information through he -- that sort of thing some Americans will do that.
That's why we've seen consumer directed health care HSH two those that it does the health plans that are growing faster than any other so.
There will be a segment that will simply stay exactly where they're -- that's their decision.
And that's a large part of this leaving that decision up to families to make those decisions for themselves rather than the federal bureaucracy.
Making decisions for them.
All right final thing then is this -- mentioned co -- a moment ago and he knew we were talking about this and trying to get a handle on exactly how it would work vs the public month.
-- -- model and and then obviously did some work on -- you said did that there are benefits what our day and how how would this work on a national level.
Having these I -- state operated cooperatives that wouldn't that would provide that alternative to actually having to pass a public option.
Well they work because we know they work based on experience.
Tennessee farm bureau.
Has a cooperative.
That -- been running for about forty years from now.
She covers almost 200000 lives.
Do you love big -- county chamber of commerce in Texas put together a purchasing cooperatives.
For their small employers covers about 101000 lives.
So it's those.
Pieces that will head up together to solve the problem.
But to do that the first rule of medicine applies here the federal government should do no harm.
Are able we're gonna see and actually -- what happens comes at it but it would you what will happen anytime I come back to talk more about cooperatives their kids as it being on them.
Packed house from New York I'm from California and it's nice -- -- -- that's familiar with so we hope to talked again about that -- -- -- sure that's not gonna be off the table.
-- really any time since the dollar was ahead about -- said desperate said this yeah take a while.
It's gonna take you can't make you laugh so obviously you're talking about for a while that's.
-- -- -- -- -- -- -- -- -- All right you want to talk about we're gonna move from healthcare to banking in a moment and this is kind of -- gimmicks but every other hand there's a gimmick if wanna call that it works we don't wanna save more money.
We hear about the way one bank is.
Customers to do that this is foxbusiness.com live the stories coming up.
It is interesting we talk about motivation to shop for health care Yost had to consider motivation to shop at all or to save it -- that's a little something and no matter what economists say about.
American people we tend to.
That's the respectively lack motivation.
And we're not gonna do in the us or something and for us what we -- -- news and a half minutes -- a little incentive that's what behavioral economics are all about really -- the -- -- this incentive for people actually.
What do something hit an artist -- right capital of the lot plus I felt like we did yesterday the end of capitalism as we know -- that was yesterday's story.
This is today's story OK David Adams.
David Adams David Adams is the CEO of the Michigan credit union -- And Ned Davis Love to hear what are you doing here within the credit union to promote business for yourself -- to provide some savings -- the individuals.
We are absolutely right that we need an incentive.
To say it.
Everybody knows that we should say we should exercise we should do a lot of things -- we need incentives.
So here in Michigan we have about eight credit unions that are piloting a program called save to win.
And the kind of links think it's called prize linked savings what it does that it gives people a chance at winning -- cash prize every time they deposit money at a credit union.
OK so I was reading about it -- -- it seems to work him you can correct me if I'm wrong or add to it and then tell us how it is working see you put.
-- money and you -- point five dollars in that in in as a deposit.
And you can get up to ten chances every month to win how much to win a prize and -- that keeps going up to the more money you put in the greater your chance of winning.
This prize is how much is the prize and that and when people are actually doing this to us.
Well that's right I mean in Michigan where we're piloting this state credit unions piloting this just since January this year.
Close to four million dollars has gone into savings accounts close to 101000 savings accounts.
Over half of these people are people who have never saved before -- people who like to buy lottery tickets -- like a game of chance I suppose we all do.
And so we're finding this to be a great novel way.
To do two things one appeal to people's desire to gamblers participate in a game of chance.
While doing it in a productive way so people aren't buying lottery tickets are going to casino and squandering money rather they're putting 25 dollars or more.
The average deposit here is 300 dollars and for every 25 dollars deposited.
People get a chance to be in a prize raffle.
Cash -- 500 dollar thousand dollar every week had a chance for an annual prize drawing of a 100000 dollars so that's a pretty big deal.
Why -- in the Wall Street Journal did an article on -- I just want to give people an exam for -- example of -- sticky show was this done.
Dispatcher for at valley parking lot and say she had just a little bit of money to put into savings you put 25 dollars and -- that's what she says her ceiling had ten dollars to put -- -- no I'm very 25 minimum did you with 25 dollars -- the next week she learns where she winds 400 dollars an issue with that 400 guys back into the savings because.
-- -- -- increases your chances to win again so that I am I mean that would make a believer idea fueling a 25 dollars and he put it in and then he won 400 the next week.
-- you know what this is really all about back in the eighties as a society we were saving 10% of our income.
In the ninety's it dropped to 5% in recent years -- drop down to the negative we've been borrowing too much we've been saving too little.
So credit unions are not for profit cooperatives were experimenting with these creative incentives to help people.
Safe and our society economists will tell us that the more people who say if the more we save as a nation.
The better prepared we will be to address future events like we're facing now.
-- you hit on the key issues which we just.
Talk about health care not for not for profit cooperatives was your credit -- credit unions are.
That said what is the incentive for you did you decide you know it's not profit but what I mean aren't you losing I mean you're -- -- all this money prize money out of it what might edit it.
Credit unions are tax exempt not for profit cooperatives and they are thriving.
In this financial services meltdown and it works for -- economy the reason they are.
Credit has -- ninety million Americans.
They offer great -- some low fees and they are providing a level of service that others are not providing -- -- senate.
Credit unions grew out of the depression era they exist for two reasons really to promote draft which is what they're doing -- -- when.
And to encourage responsible borrowing -- -- landing in this economy.
When others are not when others are unable to land -- the incentive is to help -- members and to help the communities during tough economic times.
But it's not gonna cost it's not a money doing -- double I mean -- maybe it maybe just not that much when he had enough for well.
You know credit unions -- or 7800 credit unions in this case we have -- credit is in Michigan -- taking advantage of a unique provision in our state lot.
So the credit unions pool -- resources to come up with the cash prizes and so all the members who participate.
Credits are able to do this cooperatively and and offer -- program that they might not be able to do on their own.
Bruce says he's been -- Nebraska office says that he thinks the idea has merit if -- front another state can you jump into your program.
Not currently what I would say if there any state lawmakers listening half -- staffers.
Michigan has a unique provision in our state -- that allows for this type of prize raffle to be offered most other states.
The only way to do this would be through some type of sweepstakes.
And a disadvantage to a sweepstakes is you can't tie it to some -- some activity.
You have to offer a chance that a prize can't be tied to something like putting money in savings.
A provision in Michigan law specifically allows for a prize -- associated with saving in a financial institutions -- other states need to get their laws updated.
In the state of Michigan were piloting a concept that we think.
Will be a novel and -- of a novel idea to help people save more money.
-- well have we appreciate the idea a lot of our viewers did as well dead David we'll keep up to date with his dad goes from here.
All right moving on -- from that stuff from the banking we talked about health care we're gonna type but the auto industry and move on a much cash for clunkers to talk to talk about that program.
It turns out it may be a victim of its own success to some degree and Jeff Flock has the story coming up Fox Business don't come -- They can have a -- success hunt well some people do and it then you wonder if they're going to be able to pay for a -- -- that cash for clunkers yeah thanks to be specific Jack is standing by Jeff Flock with said the story suggest what exactly is gonna what do you mean by that.
Well you know I -- I can be honest the -- -- on the web and you my own real opinion I really like this program I helped.
You know they have -- -- -- -- tell the story today in the fact that yes here's the here's the headline on today's story look at all these cars that lined up here.
These are all clunkers that have been -- -- and at harbor.
While the harbor auto group -- -- different dealerships but does that GMC Buick and Chevy dealership here -- you got here you suspect.
About a 2825.
Or so at this location markers now they've already sold the they've articulate clunkers in they've already given the rebates they delivered the new cars the problem -- they have got their money from the government yet.
It is possible we've been doing the math on this there's a billion dollars in the program but.
If you do that.
The math then divide 20000 nationwide dealers buying it -- billion dollars you get about twelve cars to dealers so theoretically we could have already exhausted the program at some viewers are saying wait a minute the fight.
If I don't know I'm gonna get my money I I don't know that I should be selling car right exactly adequate concerns as -- cash -- there was a big issue him.
You know -- -- -- -- paid for the car that's a big -- to drive the -- out of business I would just say if you got twenty -- you get paid for the twenty times 4500 dollars is you know it's a lot of money and it's just and that's cash to -- not credit means cash it makes a big deal because these are treated all people watcher but this let's walk -- here's what -- -- cars.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- And that's in cash so he can use that as a down payment or whatever once -- we have that mean what we have the -- -- the new car to the for the finance agencies you know I'm saying -- the original report.
But we have to hold on this -- we get paid by the government so you know -- it's a lot of money 4500 what you say times twenty you're 25 -- a lot of money.
And what these cars have to be done after this is they have to destroy them and so once they destroyed them.
And you're already doing that you're already shut them down.
Then they got nothing that if if they didn't get the money from the government now I say this.
Believing don't -- to get in my arms and take on it -- it's it's really spurred sales of minutes it's tremendous yourself.
Yes it really have -- absolutely a lot of people come get your money yet it's and it's different kind of customers to its people who ordinarily don't think that they're gonna -- -- -- car and they go way.
This is this is the best effort to never ever -- -- carmody got on him by now so we're excited about it yet we we talked to somebody here talking about you know somebody who would not Dicey I don't buy new -- I don't buy new cars is an -- it's a good value.
But if they give you you don't -- that you had worked 3400 bucks and you get 4500 for -- the other rebates right now.
I mean you could almost not afford to not buy a new car -- this is the two sides of the story and I know it's government taxpayer money but it's.
You know we've got a lot of crappy cars off the road ahead is this one here I don't know I think the talent to grant him.
-- -- a grand am but this thing you know I mean holy crow this is -- last legs and I don't suspect they're getting great mileage on this one either another batch of F 150 truck over there out of what you mileage is on that but that's probably -- it's probably sixteen or so what you think it's as -- 1616 on the -- probably around twelve or so on the you know in the city baseball tires on their two -- at the and I says that they good time yeah reported 500 you would you give -- 4500 for -- -- there.
I don't match and I what I like -- I like it if somebody didn't make any deal.
And I couldn't now I can't say -- have to scrap this current I have to blow the motor Bennett and I have to Georgia -- crushed and that's the cool thing about Bryant's shot it's he's the guy in charge of blowing the motor up and -- and they've had volunteers have got to see what your -- drain the oil out of that Jenna knows about car she's kind of a motor head.
So she knows that your -- -- -- oil out of it start run in the car really fast eventually you throw a rock right.
-- that makes me to be really cool to do that.
And that car is very easy Jackie doesn't matter -- that's down the whole thing had hit it gets its way you want agents are working on that sweet sound of it working.
And so and designated makes me nervous.
I know -- yeah.
-- themselves and yet here eight years ago I wanted to ask -- this question because we've been listening to your reports and you know that the half truths -- he reports on the fox aren't going to be honest performing on the fox this is dot com the real deal for the real duel Jeff Flock unplug.
Com earlier you were talking about.
-- -- we were all talking about.
What happened in Europe particularly in Germany vs what happened here in the United States and they had a similar program.
And it I don't know I hope I have the numbers straight -- -- -- -- they spent five billion dollars actually -- actually spent five billion dollars in Germany and then this huge influx.
And in the money in terms of it influx and sales.
Now here in the US apparently we've only committed what is it a billion or something like that.
And we have 31 billion -- -- so for -- is the -- we have what 300 million people in the United States we committed the billion dollars this program and people are that it's it's working great as you say.
In Germany -- tonight eighty billion people they committed five billion dollars to the program.
So that's that that's the deal right -- this is gonna cost us a ton of money if we go through with it right.
Mean a lot more than a billion.
Well I have right now.
No I mean theoretically that big the congress has appropriated a billion dollars the -- -- cut off and that's why we're out here today because we don't want -- money runs out there's no guaranteed it would be any more committed to it and what happens if in fact more cars are sold than a billion dollars worth I -- -- you know people potentially are holding the bag that's what they're a little bit concerned about but at this point.
We're only doing -- and it's a short term stimulus it was designed is a very short term stimulus.
And it's not as extensive as the programs in Germany or England so it's true we could be okay on this unless we go back to congress and somebody says -- let's give us some more money which.
I should point out they're already doing and today I did this there's -- vampires to do the right isn't it the end of November they had seen until the money runs out.
Or or the end of -- the beginning of November it's actually the end of October they -- -- so it's very limited in scope similar and that's all they can get through the congress and.
I'm sorry could be pretty covered this but how quickly -- What I did the other six should they expect to get their compensation for the cars that they are.
We -- When asked Brian that I think it's ten days eventually once you get an approval you're supposed to get your money in ten days from the government I believe side I believe tonight let's Tucker part of -- -- equation here but.
I believe it's within ten days but here's the deal here and a lot of dealerships they haven't got any approvals yet they've said it again.
But this is a government computer system that's been set out and you know no offense to the government which has.
It has really never made a mistake to my recollection or at least not -- that they've admitted to.
But it's -- slow it's going slow job.
Themselves thank you Jeff.
Very very good I was actually very that's very seeing very good -- girl stuff Jeff Flock has always I think it -- isn't the problem that we're seeing not only with the mortgage refi is for example or even unemployment claims concerned points in certain weeks and there's been a lot of that deep -- governments including New York.
Has shut down the sixth sense because there were too many applications to actually -- for itself.
Interesting it's great on -- he had to see this type of reaction but hopefully.
It can be accommodated -- so let's talk more I was that national auto dealers association and I talking to us now on the phone is its chairman.
John make clean it Mick -- -- -- I had read that right had a better regulated Jenna can't remember when I know I appreciate it.
I nets treated -- is on the phone and it's great to have your perspective because it seems like ten days.
Windows sounds reasonable what it even hearing from Europe the auto dealers one about the success of the program -- -- About -- -- that they're actually going get the money that's due to them when -- collect these clunkers.
Well the program has -- -- success beyond I think my expectations and and I think most people and most -- and most people in the industry.
-- there's been such -- recession sales for so long that I think there's a lot of pent up business.
And people are recognizing this is very.
A great opportunity to -- the government money into the manufacturers' incentives and there's a lot of urgency because of the now the concern that the money will run out much sooner than was originally anticipated.
So what -- reduced to commit more money to it like compared to Germans did is we referenced earlier or.
Don't just call today and say hey this got things started let's hope that -- starts on himself by themselves now without this happens enough.
The welfare and certainly I feel a bit more money should be allocated it's doing exactly what was intended as it's getting people back to work it's helping.
The auto companies helping dealers helping customers so Florida new car -- gonna get better mileage -- cleaner in terms of emissions.
Getting a lot of older cars off the streets I think it's it's creating revenues for states and municipalities in terms of taxes.
And and there's nothing I agree points especially now considering what's going on the industry in fact -- rob really invested a lot of the automakers as well as taxpayers but.
You know it brings up another question of stimulus and yet another government plan that is stimulating an industry.
-- and it extends an artificial way because it is something that is not normally very sparse supply and demand it's an incentive which again.
There's a lot of positives to that but just overall your thought we -- trying to get this auto industry to recover.
So do we really want to extend this program longer even even on these early estimates or we wanna see the auto industry -- -- get back to.
What we could -- the norm once the planes man -- and survive on that.
Well certainly are creating more sales -- quickly I think benefits.
Everybody -- -- you know a lot of government programs like it -- the financial sector.
The TARP money it's hard to measures the result of of that investment how well it's working there's a lot of questions about that this is a program where you can -- -- direct result.
Of the government's investment.
And even a billion dollars is a tremendous amount of money.
If you compare that you said to the money that the -- taxpayers invested in the auto companies sir I think it's a great way to get a return on investment.
Right and that well.
That it I guess that is the sad truth that some people say well we have to draw the line somewhere and you wonder whether or not the political will will be there to add this money -- it without that.
Let's just say -- -- -- -- -- that it's not that that did the auto sector has to suggest what kind of survive on its -- and and get things going where if from the view as you speak junior group.
We're we -- do you think we are in that.
Process -- -- now as -- are probably still really really hurt and without something like this in place or you start to see any signs of the turn that would.
We are starting to see I'd say since the middle of may there's been a slow improvement it's kind of like a recovery of a U shape -- -- that trough and we're just beginning to come out.
On a positive end what we're still running I think without the stimulus.
We're still probably gonna be -- met -- at ten and a half million rate which is you know 40% behind yeah historical levels so.
Who would edit the worst is behind us I believe -- this program an extension of this program would certainly help to.
Clear things up more quickly.
Page I would love checking with you and a couple weeks just to see -- -- think the program's going -- looking ate at a camera next time we appreciate you joining us platter at that it's great better prospective senate if I don't I did not say and they have video thank you.
John actually any fraud money NA GA the auto dealers.
Tell our viewers have a question -- humor.
I didn't know that so that we feel we think it's a little bit then notice -- laugh so we get fat content and -- we think the funny except and -- thank you at John Q.
But I'm John from Dallas rudin said how about getting -- 4500 dollar rebate for trading in your congress.
-- -- practice I don't think you get that much for some of these people that's another story altogether.
I don't it's had to go there and bad blood gets it to take a poll of which Emerson and a woman would most likely -- to have the most traded value I don't know.
Anyway -- well yeah another day yes and this shows available all the time on Hulu and you can download as a podcast on iTunes -- just can't get enough community -- will be back at the same time tomorrow noon eastern.
Thanks for your.
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