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Look everybody in the week on foxbusiness.com.
Live good to have you on -- this has come -- And there's two huge -- -- -- you think about it once the Swine Flu which is crazy you have more.
I think about the Swine -- are you really worried about it because it mean elicit that.
We -- the media kind of takes hold these things and you're getting that you can -- -- and I noticed yes that's what are you worried that we'll talk about are you worried about the old -- -- and then the second thing.
Is the auto makers spend a General Motors already had the news conference this morning with Fritz Henderson at restructuring -- -- in place and of course Chrysler is the deadline is really counting down to the point is this cheated stories and we are all over.
Both of them -- wants just a moment on the flu -- which is.
He didn't have the flow right well we'll -- -- you know exactly flock is coming up later and we have really a team team coverage of the auto makers and Adam Shapiro beyond with that as well -- a great -- -- from -- -- financial to try to put all of this in context and tell you what it means for investments in your markets and.
You know zone you know the child tax breaks I had -- -- to set sat down for Henderson yeah Jeff and I are so that's great -- -- -- mad.
I get a market that's about 35 point -- way different only started on the air this morning at 5 AM what really the jitters about.
The Swine Flu were spooking the market to receive an awesome here at how many rumored down.
As far as that's in peak now looks like we'll come back a little bit media trying to make sense of all this news hopefully we can get -- for -- Yes people -- to making comments about this.
This flu situation which is you know is is this is definitely what people are talking about this morning and we'll start with that as well Peter Barnes in Washington -- who's been covering all the different angles of -- joins us here to begin the broadcast -- Peter what's the latest here on.
Always picking up there yet arts we'll get to Peter in a minute but we'll start -- -- Monica is with us here in studio clear -- financial.
Especially in the study on top by the way -- -- so many topics that we -- that we can cover here but you know this tennis and we -- on the -- this -- we'll have the markets -- a little bit -- as they often -- when news like this -- over the weekend.
What are we to make -- thought of something like this being in the news -- you know considering everything else for going through the economic slowdown and and the timing of it and.
You could do this is another form of stimulus on most.
Of trying to get this contained.
-- mean this administration has just proven that it is willing to put a lot of money.
Behind it's it's words and I and I suspect that this is that would be great boost for the pharma industry.
-- -- -- for some of these you know smaller Biopharma companies and what have you that are up huge today which.
Which makes sense I guess said and I think we should remind I think it's interesting I was talking about this this morning.
With Charles Payne a little bit -- -- as even as an investor how do you -- something like this because it just says there's a lot being made of it today.
But the same time here in the United States at least it seems like it's treatable you know it is not it is it is it is if we -- still unclear about how quickly it's spreading so you don't -- just -- -- -- -- like this is you also don't want to put too much as as we saw this morning too much.
Meaning into -- -- markets where how we open it I believe late last night either I was dreaming or the market was up around 2% -- could ultra cut.
We're that is an understanding -- Larry Summers has had a happy -- back to Africa.
You're right in and the other things that we have experienced resource.
Right and you know the market back in I believe -- those trying to figure this out this morning and beliefs ours was in.
The summer of those two.
And I think I have this right here right I think 200303.
-- 8000 cases worldwide between 0203.
-- 774 deaths were attributed to this disease but you have to understand.
Fox News mentioned earlier this morning that they're -- 1000 deaths every year just.
With the flu virus with the regular flu virus here in this country it's interesting -- think about it that way and so maybe maybe give us some perspective about.
Getting into pharmaceuticals now that -- seen this that you're the health sector.
And be critical of the recession proof an interest in play here that's a side -- this this is interesting is that this trend again.
That when there's international worries there's still money to construct the US -- yes and so how much at play here.
Want to again I think we want to focus on the fact that oftentimes these big loser during the liquid.
-- to the market meaning when when the US is sleeping yeah a lot of big -- -- -- my greatest we're -- you think everyone else away.
And I think mustered exactly does take maximum -- feature -- and especially this environment volumes offense and that's probably what happened this morning your point and so we we go back and look at you know what was the -- in place.
Prior to his is is a big enough catalyst.
To stop the rally that that we that -- started in in mid march and and my own suspicion is now it's not because so much of what's happened since then.
Has -- the healing of the financials.
Or at least the temporary healing from the financial.
If if I had easily distracted here today feeling -- you document banks you know get an analyst that I had done band like.
-- -- -- -- -- -- I didn't get to that in this yet when the other than the fact that I just on the news -- that he's I think that -- those -- Yeah.
Yeah thank you basically -- -- you've got the whole story.
What can I don't -- Los Angeles brings up whatever what is essentially keep pointing and argument and all of this and you know we bear some responsibility -- have to get a gauge what that -- is we don't know yet what to make of this whole.
Swine Flu thing but it's it's no big -- says or exit the media is making more of the story that is Chris said.
You know hundreds if not thousands of people die from the -- and an ordinary.
Influenza every year more or less what happens.
In this might not -- -- may not measure up to that -- it it's it is that kind of situation where.
-- new thing that the problems that or the self taught prophecy there is that people -- Stop traveling you know whether it's to -- the United States is there was an issue in Europe this morning to cut back on travel the United States -- -- Mexico and and that's the last thing we need is time my.
This but there's also silver lining in that.
Given how although the dollar is.
Relative to a year ago of -- traveling abroad is expensive anyway.
So it and that was approved the beach this weekend and it and it -- a -- that you know.
Maybe the east and West Coast will -- -- again for.
For US citizens so what we may end up having is kind of -- need boom.
To the to the right to the left.
That isn't necessarily mean like air.
Airline stocks we do well aren't carnival -- -- -- -- I had this morning so.
And -- -- their way to kind of been and that's the market if you think that's the trend that you might be seeing that they still vacation right.
But again I know this is one of these these as I understand this flu that is very treatable.
Right it's it's this is not paid that's especially treatable in in -- developed.
Which is the difference -- that you -- a difference between something like this happening in the United States vs happening elsewhere in particular have been in China with SARS -- we're -- we know.
That you know when when the inspectors came into to various hospitals they were moving the patients to other hospitals.
So thanks so that it looked much better.
-- -- -- -- -- -- -- -- What ever way it seems to be taking action on this flu but exactly what's you what's your -- -- story right now.
Well we just heard from a a couple of committees on the hill one in the senate one of the house of they're gonna hold hearings on this but the main action clearly that the government agencies.
Centers for disease control's been having a press -- -- little bit later.
Obviously have the emergency declared the health emergency declared.
By the administration yesterday the president saying today that this is not -- this is that cause for concern but not a cause for alarm at this point.
And as we've been reporting they our government releasing twelve and a half million doses of anti viral -- drugs.
Two states that need them but we have another 37 and a half million doses left in the emergency stockpile.
They've just got off the conference call of the World Health Organization which is now saying that there are forty confirmed cases.
Of Swine Flu in the US that's double the number that the CDC had from yesterday we'll probably get -- the CDC's update.
Little bit later when we get the a press conference a conference call from them.
And also one of the questions on the conference call with the world of our health organizational.
What about a vaccine.
Which as you know was a time consuming process and the official there saying that in fact the Centers for Disease Control have now site.
The -- are now trying to produce the vaccine putting the virus into eggs -- -- how vaccines are produced.
And that drug companies are also working on it but saying that could be five to six months but for there is a drug vaccine a -- Swine Flu.
Vaccine for this particular strain.
Available for -- -- people for protection.
Right so that was a yes because netted one of the company's there was no -- -- actually talked about this morning all of that.
Had said CEO and talked about being able to develop a vaccine quickly was mentioned twelve weeks.
Which seems you know like a pretty -- to -- -- Yeah what was -- -- typically five to six months is what the World Health Organization says but obviously -- it's if there's a really bad problem and a bad outbreak here that they drug companies could try to.
Agent using -- that your time did doctor money for breakfast is my hands talking to him in the wings a little bit and said you know again how big a deal is this and he says.
And to Fred's point Michigan Pennsylvania on this now.
At lest we certainty actual deaths attributed to this and we see death and -- -- large scale even though it's an unfortunate story.
That's when this is -- you know a big effect for the new cycle be a big effect for the health organizations be a big effect for the drug companies.
Still is that kind of what we're waiting to hear and he never want to hear that but is that the weight of this story advances what's your sense of that.
Yeah that's right and and the World Health Organization pointing out that for some reason this strain seems to be hitting.
People in Mexico harder 26.
Cases now confirmed -- three deaths.
So far no deaths in the US or Canada.
Or Spain has won one reported case and and he said he said that for some reason.
The impact here at least physically have people who are getting that they Swine Flu.
It's milder and we don't know what that movie -- -- could be because a lot of attorney backs vaccinated or you know we get a flu shot -- systems might be more prepared.
-- say the average Mexican I'm not sure what their health care policy is down there about flew shots but you know I get a flu shot every year so.
Clearly if your body is that is up prepared if you're immune system is a little bit more prepared it probably withstand it and you're talking earlier about the about deaths from.
The regular flu that we get the seasonal flu we get that typically kills people who are elderly and already six.
You know it -- -- it it it can have a the Swine Flu here.
In more developed countries could that have much less impact.
So that your flu vaccine we know that Peter that's -- me that you gave Mexico City were saying down there and he's got an official announcement.
Hey I think I haven't particularly you get -- general order he would -- the wrong.
Thanks Peter appreciate it without you again tomorrow most likely to Peter Barnes in in DC -- art it's eleven after the hour and -- guys wanted to talk about this at the top because that everybody's talking about.
-- we can continue that a little bit throughout the Arab the other big story that we need to get too is with the auto makers both General Motors and Chrysler we have a lot of coverage of that.
And a lot of time to talk about its -- doubled from an investment point of view.
-- from the worker's point of view and everything else -- -- Thompson wanted to.
Clear book clear -- financial -- with this and one of the things -- I know you've been saying Tom correct me if I'm wrong is that GGM.
Should not survive.
And I don't think it should tell us why.
Well I think that you know that the government should take over the pension plan and the health care.
Mean we're we're taking over lots of things won't take over that.
But stop producing.
What -- we need three US auto makers.
Fighting for each other's market -- -- that's you know the the issue is you know.
In -- in a very.
Cooperative and get competitive environment shouldn't we as an American car manufacturers.
Be making cars that compete with foreign manufacturers.
If we're if we're gonna -- you know nice in this space we would rather than fighting each other.
We we know that this is what.
The third or fourth year.
Of this problem and nothing done to address in in my view nothing has been done to address the -- the lack of of care in terms of the cars that are being produced.
They were still producing suvs.
Up until the point that gasoline became too expensive right well we knew that was the case anyway to wipe -- produce them.
And why not and if you have a -- why let GM go or not Chrysler -- GM and Chrysler could -- as well vocals here are discriminating here I don't know that was the case now listen you know what the the one that seemed to be surviving in this forward.
And then they were very.
Obviously very concerned.
Well before forward before General Motors and Chrysler.
Which is why they got their financing.
Down captain and that was -- that was.
And a new management team that came in my and perhaps they weren't as jaded as -- -- team.
In -- they look under the hood says we really have to work on this has done an in -- up.
Jeremy Graham Mac Canada -- -- and he's saying he's right GM have to go through bankruptcy and it's interesting to see that GM is hitting that acceleration and you know that it had basically stepped on Pavel here.
Trying to accelerate and what they were in do you -- -- fourteen never gonna do about the next at bat in a mixture of Nazi essentially that the announcement was -- sounds like big numbers that -- They're just squeezing it into the smaller time -- As talking to an analyst Kevin -- today this morning about and he said no I'm keeping Cadillac and Chevrolet Buick and GMC.
-- you should keep Cadillac and Chevrolet and that's it I mean.
-- it cut it way down because we're going to be there anyway.
Yes and -- and then for just from a from an analyst perspective.
What happens to secured bondholders.
Mean they're they've become insecure now right.
And the become equity owners -- -- I would definitely want to get to weigh in on that so that that is part of what obviously with the offer was this morning this debt for equity swap.
If you're GM -- there.
-- that you guys are but if you were what what would you make that offer.
I would pass on you said to take my chances in bankruptcy law.
Because I probably get more you -- a dollar then.
Mean one -- as a bond manager I'm not allowed owned stock.
So it's give it to -- sell it right.
As individuals who own General Motors they don't have further dividends.
Those are gone yet and it.
And now I've got the bonds now you're saying and I want the stock.
So whatever you get out of bankruptcy just take that and yes.
Well let me explain athletics I think that the tide had debt holders bondholders all of it to get -- -- -- -- eyewitnesses that have analogy that.
It seems to work with something like that he would be like a person turning to their bank.
And saying I'm -- give -- twenty cents in the dollar the bank is holding the debt just similar to like a General Motors the banks are holding the -- here.
But if you're singing on your renegotiate with your -- utility companies saying I'm an RV fifty cents for the -- and then you're -- Goodyear your cable -- -- -- -- Seve says this guy because you're trying to negotiate a way to senior house.
Well your bank's -- -- -- say what am I getting places but the irony giving you these guys different deal and if so begins the game of chicken essentially with Ashton.
As far as the negotiation happening over the next month or so for General Motors with the likelihood even -- I mean we could focus on that they only have three dates.
What's really the likelihood of that says it's just again.
I don't -- -- it very likely that that this is gonna go through I do think that.
Played a bankruptcy.
Reorganization is is is necessary to win otherwise we're we're.
We're just allowing this game to go into the fifteenth then enter the sixteenth and it belongs baseball game has.
What do you think about the taxpayers -- the treasury actually being in the majority owner and guess we are ready in General Motors that really is also a new planet that we would be a -- it was an additional eleven billion dollars at believe.
-- Q General Motors and the treasury would be the majority stakeholder.
I don't wanna discriminate against the auto companies break but you know the government owns banks announce AIG -- -- -- you know.
At some point you know we have to stop its -- are dollars that are being invested.
In these companies.
Without any not even -- -- not been asking him.
Would you do this on your right I wouldn't -- via the argument that gets brought up we talked about on the show a little bit and then and then when you talk you Detroit.
Seven to -- -- many cases they will say.
Well you know and at least.
Finance guys of these Wall Street guys are quick to say that what the auto makers fail but when it becomes their firms that they want a ten day one of saved -- logic in that but I'm sure you're gonna -- -- you know what.
The stability of the system the banks do -- -- more.
-- -- And I think the stability of the financial system yes the stability of the economy.
And there I've heard many many numbers of people that are.
-- touch not emotionally but.
But physically in terms of the food chain of of working for autos auto companies no weather so the rubber manufactures its.
Somebody who makes.
Knobs were stick shifts or whatever the ship -- are within these days in these cars so the -- millions of jobs that are linked.
But it doesn't mean that you you've.
The patients very -- Yeah I mean in terms of the auto companies think we know that they they have in the past and continue to produce cars that we don't want.
That's the problem great.
-- rhetoric lies the problem their financing -- -- zero winless -- that can be limited -- everything is Jeff Flock is standing by as Chris in Los Angeles Jack says that GM can eliminate about 3600 dealerships that about 40% now.
And that's a big blow to local economies and I and -- -- -- -- there with you that maybe shed some light on that.
About what kind of blow that would be.
Well you know the lowest it's tremendous to -- you can look this is forty Buick Pontiac GMC Pontiac is the emphasis here today -- this is what -- -- probably the most positive.
Dealer in America.
I would say a -- and I -- a lot of car dealers you have probably the most positive attitude of anybody.
Right want to -- attitude today.
I've lived to tell it's gonna be great -- -- -- actually what this for a long long time -- we're talking about a took a -- you know.
It's -- epitomize the Islamic thousands maybe millions upon -- -- on the road.
They're great school cars they're great used -- If plus we're going to be -- nuance for another baby 1214 months they while working here I've got what would you go whole -- you have these out here before you got this news didn't.
We have had a special sale Saturday -- 0% you know it's not gonna last forever people need to understand so I think -- this month that goes away very exactly.
So you know is everything and everything that goes down must go out so people did -- take advantage of these deals right now but it.
People need it culminated dealership and say what an advantage it is but it and then and find out that -- -- by automobile this came as a surprise you the -- business down.
Are absolutely it was a surprise we're sort of count -- lesbian and -- vehicle especially with a party -- GA.
It was very -- want all these awards that she in fact you separate inside the door there and -- 00 this is a junior to -- retina -- -- order -- and ready.
Ballots probably project but she's also read -- in the -- about the -- we're also.
He says -- says still -- fast -- he's about to sell itself if you'd like this car to get to deal.
It's always -- -- that no room and we don't but what's that.
I think if you can write that check right there I don't -- that.
Think that I could write the check what he's got money is -- I was -- do you work you pull money out of your -- what you got there and how much should I got about 68 dollars I just but after it was a little high so I got to sort of do that but I think we joke around about it but what is the financial impact -- on the loss of money yet though they're beginning.
Well in all I really hope not -- I hope what it's gonna do it's gonna make mistake you better look at our business model.
How fast we -- the vehicles that are battle that's been -- really tell that money actually.
I have apparently erupted around 8085 around -- 1000005 in real dollars so.
I think I have about a 120 day supplies under the name openly stars and hopefully if you could say today you know -- got a big sale you wanna -- -- on at this depletion.
-- you heard it.
And it looks and bobbled.
Looks like you like that cartoon looks pretty good yeah after her viewers -- -- Anderson and that I Jeff I need to save this Wednesday and he says he likes Pontiac he'd buy it again.
But semi hard our viewers up about that Anthony to -- -- gonna -- cardiac that they believe the brand is it going to be around would they do as far as getting parts and getting it fixed.
Well I think they got the answer to that what actually you know people ask about what what's gonna happen that there Pontiac they've by what was to be able -- parts like it would get it fixed.
There's no problem that absolutely we're still -- that are not silent -- service and Oldsmobile.
You know then that's been -- -- -- quite some time so.
Absolutely no problem General Motors -- -- -- their cars and both of these cars come with I don't know -- about a 100000 mile warranty so they're going to be guaranteed at least -- released report -- -- become so.
Got absolutely no risk well -- really didn't commit to take advantage of the good deals with every -- -- going to be anxious to turn inventory and get on to the next chapter and that's what I'm willing to do.
That's a good Palin right there I buy a car right for residents -- -- tiny cute yeah defense.
I want you to know.
And he's an emotional scale -- -- Jeff appreciate it is always.
Milestones and have a positive attitude -- -- -- matter what the situation you think about this -- literally shutting down Pontiac they have to say they don't get it next year I don't know I now am I know we're gonna talk more about the subsonic thanks for joining us about the media final word on none at all this is there an investment opportunity and he kind of in the weeds here that's hidden somewhere you completely out of this game.
I entered the -- yeah the totally out of -- -- -- -- -- -- bond holder and they're definitely get a -- really talk macro stuff with you which we wanted to him but the news kind of dominate.
And today in the polygamous and merchants are emerging markets mean the -- Is.
We we think is the is the place to be we we do think that we're.
A decoupling again -- last year was it was this massive.
Without the leverage I think we can start to see.
Countries come into their own end markets come into their own.
The stimulus package that that China unveiled was many many many months ahead of ours.
In some ways.
Will likely be if you look for a country that's been -- Lead us out both in terms of -- market performance and in terms of economic growth I think it will be China will be China because you're still.
That's investor all right Tom thank you very much as always got touched a lot of from -- work with us today.
All right shall separate -- an emergency -- and emerging markets Jonathan was like -- little urgency markets spoke to my work.
Like emergency in general you know he's times -- -- Cessna that -- and it -- on a man.
Now I can read kinda.
Yeah you should take us right Jeff are you never have to be careful what you say to flock by the way my comeback -- one of those for -- Obviously -- -- Jeff Bennett Dow Jones is with us from Southfield in in Michigan talk more about the subtle story which he covers and Bob Jeff it's great to see you again as well I -- now we've we've talked about a little bit about the the nuts and bolts of things but you know quite a day when you think about it.
Pontiac -- -- you -- on the planning for -- if you go away and others differently swap what stands out you the most anything that surprised at today's announcement not really.
I think the the real aggressiveness on closing down some of the dealer network there that was that was pretty high and some some may have expected the Pontiac but still for an automaker to slash a brand -- that's that's pretty you know out there that's pretty aggressive and for them just to say.
Hey look -- We've seen it we don't like it anymore we're getting rid of it by the end of the year that something you haven't really seen an auto maker especially Detroit automaker do that quickly.
Yeah Jeff it's interesting your latest article talking about the unions and it seems like over the last week and a half herself.
It -- -- that news from Chrysler last night about and may be reaching -- -- deal with its unions but it seems like the unions have become a less.
Less of a player and -- negotiations as we move closer the deadlines.
And that they click the case for both GM and Chrysler that the unions may -- have conceded as much as they can and now are really not a big issue and quote -- -- these companies.
Right I think -- right there because the Canadian auto workers the United Auto Workers.
In -- and they're really going to have to give it to these concessions.
They do not want to -- the groups again to say.
-- GM and Chrysler went bankrupt because we wouldn't give them that cost cuts that they were looking for so in the end.
We're still waiting on Chrysler and we're still waiting on GM but the UAW has got to say okay let's we got to keep these companies -- the surviving.
Or our members are gonna have nowhere -- out.
Yet it's and so that brings -- down -- to the bondholders involved situations here.
Jeff we're just talking with with -- somewhat make -- of clear -- -- before you came on and you know Tom although he's not a bottled right now through his career on Wall Street whether it's a Merrill Lynch -- -- is right now -- And then certainly have a mindset of somebody who would and it could have been no issues and was telling us that.
You know I wouldn't take this deal I -- I take my chances in bankruptcy and you have to wonderful if a lot of the the bondholders have a similar mentality about this debt for equity swap that was offered this morning.
We are they hearing that the 90%.
The bondholders to participate that's that's pretty high to trying get that -- put together and again put it all together in a month.
For a company that is so larger -- -- I don't it's going to be a real.
Pushed down the wire for this one just to see our country I mean I still have so many so many things to take together in order to pull -- off now.
-- think -- what do you think the biggest part of this story mean and media work room and we take especially your eyes I run McConnell not going to put back ability.
Yes and then this story is a big one there's so much to -- -- fat in it at -- as in depth -- you are in a daily basis.
What do you think something that made me the public -- saying or maybe the general media is missing when they're covering this story.
I think that big thing and that you see here Detroit is that this is something that attacks the middle class wholeheartedly.
The auto makers -- the middle class they paid workers decent -- wages where they could have a family.
Put kids through college maybe have a cottage up noise maybe have a boat and a TV a big screen TV.
And that's about it and that's the way Detroit has always lived they've had this middle class.
So when you see all of the talk going on about debt holders and cutting in and shutting plants.
You will -- a lot of people are forgetting that these are people that are making 4050000.
And are trying to put their families do the whole whatever life has to -- to give them an if you take these jobs away.
Then what are you saying are you saying that well in the future you have to work two jobs -- to be middle class and so that's the big thing.
And that's what you're seeing here Detroit is you're seeing these these people struggling because they.
Like it or not we're hired at a specific wage and ever since then that's been constantly cutting back cutting back -- back.
And every family and to try to I don't think this is an exaggeration and one way shape or form is an auto family -- -- somebody in the in the family works for the auto companies -- dinner and a dad did or whatever the case Indiana the last time I was in Detroit is probably.
23 years ago and even then it was.
You you felt for the people because the auto industry and -- started to take it.
A severe downturn and how about now I mean I know you know the coverage there locally fox affiliate -- your.
You're there today and other places must be a must be covering this but I don't want that nationally we're doing as do the job of saying.
We're in a recession nationwide we all agree but as it is an exaggeration to say that the threat of quote unquote depression is very real and can someone like Detroit.
No I don't think it is because Detroit Yasser represents those other small towns dotted across the country where you have maybe one supplier and auto supplier don't forget auto supplier plants also are.
-- textured throughout the country.
And if there -- affected at all by the auto makers those plants also employ people in those small towns that would be.
Take take hits that are also financially hard.
So I think it it.
As you see what goes -- the auto industry I think it really tells what's going with the rest of America.
Because this will permeate out it's not about high finance and all of that it really is what's going on in the blue collar -- Network and what's being done in the in the manufacturing plants around the country.
Whether you're building -- not those whether you're producing nuts and bolts.
Whatever you're doing a plants and manufacturing still is the key in the cornerstone to what that the US with a built up.
But cease change and they are -- obviously this is part of it did things are changing in this economy a lot in this the downturn is on probably only speeding -- up and what's happened the auto industry do you get a sense.
Adjusted to that but the city of Detroit the state Michigan that there's any traction for moving in another direction getting other industries to kind of take -- nonstop with.
The general economy being as bad as it is -- has anything catching on besides the office.
Yet the surprising thing here is that the one thing that they are those.
Are attracted to -- Michigan.
Is the the universities and it's funny because you do see Toyota -- Nissan GM all of them have their research and development headquarters here -- a big supplier.
Has it sat has -- -- kind of -- eighteen and that.
Headquarters here as well so.
You are -- with the kind of the brains of the auto industry are still implanted in Michigan and there's talk about you know renewable energy -- trying to push.
For that but.
You know it's still gonna be connected to autos until we see something huge come along I think though it's not -- still kind of -- shot that we were hoping -- Pfizer moved into the state that it was going to be the lead out but.
But that just hasn't happened so.
This is kind of move to to try and attract somebody to try and -- -- new industry and we'll just have to wait and see what happens.
And that's another point that that concessions that the union does make who knows that may open other doors now that the union has dropped -- -- -- maybe some companies might.
Might move it.
-- finishing Jacqui mentioned that you mention that great point about the middle classes which a lot of our viewers respondents in some of them asked for some statistics that I remember seeing this wire across.
About an hour ago and it would be able to find it to see if -- some idea on the number is behind the auto sector and this is given out by.
By Reuters about the auto sector saying that -- contributes about three to -- of percent of the total gross domestic product right here in the United States and that's.
A big percentage ever gross domestic product costs about nine million jobs worldwide or 5% of the world's manufacturing workforce.
Are directly linked to making vehicles and parts and that's us an idea.
At just how big it is right here in the United States Prater says 850000.
People lying in manufacturing jobs at the end of 2008.
Yes but after that -- a lot of the manufacturing jobs and this is add a bit of the canyon Jeff.
You know hard jobs that are filled by men and we look at our workforce specifically -- -- in -- in the midwest a lot of his manufacturing jobs are disappearing in a lot of the men are out of work.
And women are -- entering the workforce -- shifts the way the kind of our job market numbers work.
Eight today as a news at this General Motors acceleration of the restructuring and is breaking keeping should be statistic in the -- 66 in mind.
What is the mood like there.
The mode continues to be one that still surprise one.
Concern about their futures I mean I think that GM did today -- say hey we're gonna -- your plants.
But we don't we're not gonna say which plant yet so now you've got people waiting around for maybe another two weeks to -- side.
I mean a lot of -- is -- need to know the facts so that they can make start making plans on what they wanna do -- -- and everyone's just kind of in this holding pattern and -- for a lot of us Detroit has been in a holding pattern really since January when sales started file and when when things are going bad and when the when the federal loans.
We're starting to be applied -- so it's all been kind of waiting to see what's gonna happen with Chrysler to see what's gonna happen when GM.
And I think a lot of people are just like let's find out and let's get this over went by the end of may -- June.
So we know what to do so -- my plan is closing I need to make arrangements starting now.
There were all right -- right exactly so that at least have some answers he can deal with it.
When you're on my son Jeff you know as a reporter -- Jeff spent by the way -- just as the reporters covering this day -- -- what questions do you still have left.
That and and to whom do you need to ask them in other words what's the next story -- and all of this it seems like we're just marching towards the possibility of bankruptcy filing on both fronts.
And you know it just depends on the deadline for either one but -- what what could happen between now and then do you think.
Well Chrysler may succeed in pulling -- -- -- it's really Chancy at this time we're waiting for the UAW ratification vote which would happen Wednesday.
And the Fiat deal still has to get done so they get those some place there's still likely -- And GM may be able to succeed however it all comes back I know many analysts have said this before it's the pride -- it's what consumers will lie you know are you gonna go to Chrysler to buy some of their products a group that does GM well that still continue to attract consumers.
Or it does all of this financial problems take away from there.
Ability to research and development as it continued to -- the lead to others to Toyota -- -- even afford to you know do they get a step ahead.
I guess it still comes down to the long term will they make the cuts are they really the deep enough that they need to go or are they still trying to just forecasts and say well.
This is our best bet right now instead of really taking it to the hard brass tacks and really cutting it down because you can always build it back but it's cutting it down that.
Most of the automakers have been have gone too slow on and if they're really making the cuts and are sticking behind them then maybe this is the turning point so.
We need to say we need to see it really that financial stability will come back with -- And whether they can begin selling cars without having an -- 56000.
Opt for that off the hood in order -- -- the move.
All right adjustment Jeff Bennett always good to talk to you.
-- Dow Jones in Southfield Michigan thank you Jeff for your perspective they're coming from -- got to watch out for his articles on the Wall Street Journal dot com.
Otherwise keep an -- and that in the meantime Martha watching this story really quick cure of course about Swine Flu in -- developments in this.
And missing some headlines concept for -- Mexico's -- minister saying.
Then they -- -- 149 people are dead in Mexico because of the Swine Flu be heard sevenths -- earlier this but here's some new developments.
Mexico is actually closing schools throughout the country until May sixth that until next week we need to -- -- Tuesday Wednesday -- around there.
So we have a lot of deadlines right yet the automakers and I had the school clothing -- closings and a but keep an eye on the human story Sullivan -- some and somewhere.
Interconnect in the way that people feel nervous a little bit about the market in the future -- -- -- coming -- I am in the meantime I'm stating that I.
Now we talked about a lot of the automakers out and we were at a dealership back -- that GM dealership.
But -- did a great conversation with the CEO that I -- -- -- as CEO of General Motors Fritz Henderson and as I was able to cut catch them.
And it was great what what was your biggest take away from that.
Well I kept asking him to make the argument is if you were one of the people who -- and dead -- -- the institution that holds.
Some unsecured debt -- General Motors why would you do the deal that was offered them.
And it's not a question that he will answer you dodged it by -- -- -- -- and give anyone any advice.
But that is a big question Liz MacDonald back -- FBN headquarters in New York.
Is raised the issue that for some of these a dental vision of the credit default swaps.
It works out better for them so why would they go into some kind of deal with the General Motors to avoid the bankruptcy.
Plus the fact that General Motors has to get 90%.
Of the unsecured creditors to agree to all of this I mean that alone is just a huge stats.
So June 1 is hurtling at us up faster than the winds here in Detroit which are pretty wicked today.
They a lot of work ahead of them.
It seems to be the case that is interesting I was mentioning this earlier you probably weren't on it's Elizabeth Thompson wanna who's our guest from -- -- had been we myths about the exact same question and he just was a flat answer no I wouldn't accept this deal and he was -- -- Not that he has right now but you know having looked at a descent now it just an and it seems like that's the real big fear here's -- GM's -- there.
You've obviously -- what they think is the best they can and then only to come up with what will still be a bankruptcy filing.
Although this is kind of -- bankruptcy by another means right and is still restructuring with the kids.
-- that they've made.
Well restructure but never bankruptcy you know if they go to the Chapter Eleven and they get the judge gets -- really and a lot of contract obligations that they have.
But as far as the best that they can do.
I do want to believe people -- this is a negotiation you never put your best offer out first so.
You know I I think that those who are much better negotiators.
And do it professionally might actually respond that perhaps this really isn't the best.
That GM can do although remember the -- administration.
Has pushed both -- -- a question to be very aggressive any a look at that.
There's a great example the administration was pushing Chrysler.
To offer the secured creditors but what's it no equity and you'll take ten cents on the dollar and already both sides of -- there.
So why should we believe that this offer from GM is the best they can do at this point.
And so what I mean what do you think is -- your biggest question right now I have as far as they fled the rest your data reporting.
-- -- about this negotiation regarding the debt so what else and it seems to be right into the surface here is you've had a good through some of these restructuring plans.
Because I know you love -- -- -- -- It's not -- you know you can't just say we're getting rid of Pontiac which they -- -- production is when he ten.
But you've got.
It's 36 they got a -- -- from 6200 dealerships it 26 at 3600 dealerships and that's not easily done -- that the dealers themselves could refuse to negotiate the General Motors and mr.
Anderson -- -- money to -- Fritz Hollings it's Anderson said in the interview with us.
That you know that could be the Achilles heel as well to this deal so -- General Motors is not out of the woods in any near out of the woods anytime soon.
-- -- does -- -- because we think about setting off some of his brands like it will save money but actually gonna cost money going out the door first.
Set to shrink every yeah yeah you know.
-- -- -- I guess that -- the good news you know Hummer that they they expect to be successful on the sale of Hummer.
And they've got value in the the Saturn dealership network although the cars themselves they will cease production and -- this year 2009.
But -- deal in the works he said perhaps -- so the dealership network.
By you know it's not a done deal.
Well Jeff Jeff Flock offered to buy me a car.
So -- you -- -- -- had a few things.
And we know that you know I'm new maybe we could share what an -- and we need let -- whenever viewers and that -- and General Motors released on these classic cars once again.
-- now -- sales -- angry with them.
You know at 68 Camaro convertible at I'm not sure of the year by Jenna -- look -- I.
You're welcome regardless of the car and a -- -- the capital except.
Thank you -- -- content -- -- apps on here.
Are all right Jeff sexual touching scene and -- -- -- live from Detroit today some -- with a -- of the -- how I.
He's not that you think that you know punt implants and gone but it's not -- to have -- a year and a half we did it is deals.
On your Christmas I previously he's right you would look hot mess in the toilet the sixty can now -- -- -- what we're Jeff from the show.
Yes we do we do in traffic -- with this from the third -- I've just -- barker makes a lot easier on our memories of the law firm to talk about -- another angle of the story.
This is Jeff heads up their employee benefits litigation practice at that law firm and you know it's interesting because we could talk about a lot of different angles here in terms of what war we have talked about a lot of different angles already and now I have just haven't pensions is is another angle on this.
I'm looking at the wrong -- during her act.
Scotland has who.
I fear that the -- gift different -- And tell you that you might have been you know that that's what happens Jeff but we're glad to -- like I said.
You know the yes.
-- -- -- That was really funny with these are we don't -- the dead included a natural process of elimination black person and he can't pictures that you talk.
I had -- perfect strike perfect strike I average guy would you like to ending.
That and not quite ready yet except now seriously it is -- -- the talk about the pitch angle because we haven't talked about it.
Yet today we talked about a lot of other days but now that we know what GM wants to do what happens.
To all these people that have pensions what's your take away from today -- when you can read into what Fritz Henderson said.
Well it's it's kind of unclear but it it seems like.
It might be.
That the pension plans will continue and not be terminated.
At least at this -- Right so -- think it is she your best read on this is that everybody's going to be all right benefit the General Motors employees watching the show an -- about their money.
That they're going to be okay.
If this plan goes forward but what about if -- bankruptcy goes forward.
I wouldn't say it's necessarily -- they're gonna be okay but even think in the case of the bankruptcy.
It's not a certainty that the pension plan would terminate its possible that the pension plan we'll continue following the reorganization.
But if it did terminate.
There will be it.
Reductions for some of the people that are receiving the benefits and access of the PBGC's guarantee which is about 54000 dollars a year.
-- based on age 65.
-- the pension benefit guarantee corporation which a General Motors bankruptcy would.
What is it not to let's say -- nearly bankrupt that the government.
Backed group as well no I mean a woman to do -- -- to the pension -- benefit guarantee corporation actually have GM filed for bankruptcy.
Well I don't think it would bankrupt them because they would get the assets.
Of the GM planned.
If that if if if it terminates.
And and that's an excess of eighty million dollars billion dollars I believe.
In addition to about sixty plus billion dollars the PBGC already has.
I think it would be an -- they would be -- alludes to in terms of operational.
There are a lot more.
Participants from the GM plans about almost 700000.
And that would be more than -- -- dealing with.
Well they have a little bit over.
A million participants right now but it would it would definitely be a challenge for them administratively.
But I don't think it would bankrupt them I think -- would have.
Sufficient assets for years to come to to make the benefit payments that they.
Have to make right now they're paying about four billion dollars a year a little over that.
And of course they have premium income.
And and a over sixty billion dollars of and that's -- so I think down the road may -- is when the financial.
Would get hit challenging financially for dvds.
Korean Georgia one of our viewers wants to know what the 54000.
Dollars a year you time and that's an all in number or you're talking about medical benefits plus what.
The pension that they would get paid what -- -- number.
-- to -- just.
That's just what that.
Guaranteed pension benefit is.
Okay it doesn't relate to help at all OK so that's additional costs for the for the health benefits that's that that you still think it's going to be all right also the matter no matter what happens here -- it's too early to tell.
It's definitely too early just to say I mean come on like the pension.
Benefit guarantee corporation there is no federal backstop for -- for the retiree health.
Right so then what about the other issue here with with Chrysler and it is there and you have a different read on Chrysler -- compared to General Motors sellers of all the same boat.
And at this point is they both kind of approach to get much -- of course is much closer.
Generally my read -- the same I just don't know what to make of what's the little tidbits we're getting in the media about the Chrysler.
Arrangement with the UAW not a lot of details him and and they they they they say that there's some guarantee.
Of the pension -- health benefits but the devils of course in the details.
You just kind of this is a broader question -- you know since you've done a lot of work on our you do a lot of work on pensions in general and you know we have a turning point here where -- that the pension such as it is this is kind of a last stand what's happening to these auto makers with that with pensions in this country generally speaking.
Well I think in general it's it's quite clear that defined benefit plans traditional.
Plans that are guaranteed by the government are on the decline that has been the case.
You know really since the 1980s.
And and the trend is toward.
Type plans which are based on.
Individual accounts where the employee and retirees take the -- the investment risk.
As opposed to the traditional plans where a specific benefit -- promised and the employer.
Takes the investment risk.
I don't think that trend it's going to reverse itself it's likely to continue I think right now with.
Plans of this size that are in danger.
Of becoming -- -- of terminating.
It's sort of a critical point in the continuing decline I guess.
What it and then what do people who are in that situation who think they have a guaranteed pension.
And you know may or may not depending on the circumstances what do they need to go about their legal options and what have you of that -- at one of these companies whether it's one of the auto makers or somebody else.
Where they think their pension might be in jeopardy is it and what questions should do they need to ask.
Well I think they should certainly you know check out the PBGC's website at WWW.
Dot PBGC dot gov.
For general information.
And also you know be in touch with with their employers human relations.
Folks they they can get.
An estimated benefit once a year they're entitled to that under under the pension law.
And I think just you know keep on top of the situation.
And and -- available resources.
To find out how that -- affect them.
But generally if they think they have a pension most people do you have it.
I mean in other words says we had all this sit and talk about the banks.
When when when people are troubled -- and once the FTSE one to two under 50000 dollars was like -- -- no matter what happens I'm guaranteed that money up to 250.
It did you know it pensions and there is there is this guarantee for the PBGC you talked about -- people are generally okay right or is that too much believe -- Oh well I I.
I definitely agree with you I mean that the 250.
Insurance limit is is sort of the cousin of the PBGC's 54000 dollars a year.
Guaranteed pension benefit it's just that because because of the different ages.
And the different values put on the ages people -- They have a they have a floor they haven't a basic benefit guaranty.
And if it weren't for the statute.
That created PBGC.
That would not be the case -- it was with Studebaker back in the sixties.
Went when they went bankrupt and there was no pension protection and not enough assets.
To pay everybody that was entitled to benefits so.
People have a floor which is not -- say the people won't get hurt.
People that were planning to.
Retire early perhaps we'll get less under the guarantee than they would've gotten.
But I think you know the presence of the PBGC.
Means they'll get something.
All right interest exhibition get something Jeffrey Cohen thank you very much Jeffrey we appreciate you coming -- -- this today from from -- -- We're also be different you Jeffrey count -- Phillips and and barker.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- The Dow Jones Industrial Average all live -- before 1 o'clock in New York.
And that's -- the markets are -- we started much lower this morning.
The thin volume of the futures look like we're really gonna sell off on the Swine Flu concerns but then the markets came back we were higher for awhile.
Now moving between gains and losses with the all the talk about the auto makers that -- is right behind me searing yellow she looks great -- an excellent big board on Fox News Channel so she's doing report for Fox News.
You can flip your television on the watch that live as we speak that's what she's -- -- hands she's -- on TV right now.
And maybe -- draw on the big board -- -- be back in just a minute and we are gonna spend the rest of the show or part of it at least talking about mortgages.
You know Scott happens -- -- -- more arrogant guess I've seen why Scott did not want to talk about but -- pensions is beyond me.
Thank you Michelle Obama and I -- -- read it on loan mortgage that they may as well talk about what you're hitting it.
Sorry about that that was so -- actually one of the funnier moments since we started with no commercials here -- -- government.
Yeah -- -- have to get the CEO president CEO of mortgage -- is with us and another.
Great topic to talk about because everybody wants to -- should I refinance.
-- the rates going -- -- any lower than they already.
And you know what -- different opinions on this but what's yours mean it's now the time for viewers who are listening or watching now the -- But I don't know maybe I should just go ahead with this is now the time to do it.
Sure -- target are to argue with the notion that rates are fifty year lows and you shouldn't at least consider sure refinancing your loan so I think the combination of the lowest rates in generations and a lower home prices has improved the the ability to the home affordability and -- and I think that.
I think folks would be well advised to consider refinancing at this point because you don't know if they're gonna take down a few more basis points whatever the case may be just you just know there historically low lowest rates in fifty years and frankly if they go even lower you can always refinance again.
But right because I think the costs are not as.
Onerous as -- wants war or -- sure -- actually I think costs in many cases are -- probably more onerous than that that in the past -- because I used to so why would you go ahead and refinance so many times have -- Palin's well oftentimes when a lender will provider rate quote to you that there may be some fees associated with that.
They'll trade off the upfront fees for a little bit higher interest rates he can often -- do.
Alone even in today's market without paying any closing costs.
As long as you don't have any out of pocket closing costs as rates continue to fall he may be in a position to refinance again.
OK guys by the way if you have any mortgage related questions you should start posting on the on the board now we'll have Scott get to those and animal answers many innocent.
As we can hear in the -- in the next few minutes because.
Again that argument that we've been having is is should I wait or should -- or or or should I go now but one of the questions people should be asking once they once -- having that kind of internal argument with.
So well I think the key is to to arm yourself with information to go and shop around -- -- there are a number of sites that you can go to online today gather information about.
The of the rate in the fees that -- -- and of course it's important to fine.
Mortgage comparison -- mortgage shopping web sites that have good visibility around the fees you pay we've my company is constructed just recently here.
But what we think is a very innovative mortgage shopping website called mortgage marvel dot com -- to actually right.
Connected this system into about a hundred.
Well lenders in the country and into the pricing engines that those -- used to consumers really can get very accurate real time.
And -- -- if he quotes from -- that you can't.
Iraq have I just went out and make sure we keep that -- -- -- -- news because or right now in the news says police still were watching on Fox News Channel.
Mike Bloomberg is going to be addressing New York City because now we have twenty more.
I've confirmed cases of Swine Flu -- the -- total is now to 28 and get this is -- paying attention to Mexico and he's at a Mexico apparently.
There with a powerful earthquake.
That hit Mexico City just within the last few minutes and when I'm getting a lot of data at this time about what exactly you know the size of this is let me see -- -- new.
Yet just the powerful earthquakes you know number as far as richter scale and -- -- -- to it but again.
Just some news that we're trying to take in today and everything else you have to worry about staying in your home as well you know the housing market should not try to -- -- studied at the end of the day he got that you got to live somewhere no matter what no matter what's going on outside that.
Still again mortgage -- Right so I think -- -- just a back up for a moment one of the side effects of the credit crisis is it's actually made mortgage pricing much more complicated.
It's much more difficult for consumers.
To really get a good handle -- both -- rate in the fees.
That they'll pay for further specific loan situation.
It's led to a I think a much higher level of confusion and frustration on the part of consumers.
So that's why we created this mortgage marvel will -- because in order to.
I'll provide consumers with the ability to compare rates and to understand what they'll be paying.
You really need to tap into the engines that are used by.
The lenders that participate on that website and naturally the breakthrough with mortgage marvel dot com.
-- that -- we've been able to tie into.
The lending pricing engines are about a hundred lenders nationwide she get a lot more information there and you -- -- to play quarterly accurate fully customize.
Quotes on rates and fees for multiple lenders in real time in the best part is if you see a lender.
In a -- product that your interest -- and you go and apply right there on the spot typically.
Be approved all within twenty minute message to succeed you if you are you able to -- from your -- side now what people are applying foreign what kind of the trends aren't as everybody it then I guess the follow up question that was is everybody and their brother going for thirty year -- there's there's still something -- -- -- the answers yes everybody and their brother -- -- going for thirty if that's a thirty year fixed -- market again it's hard to argue with rates being less than 5% and not taking advantage of trying to lock.
That Brian -- now we know I've ranked whatever regular viewers and he said that he wants to make a home purchase in the next couple months -- so I think he was writing and saying he's dead twenty years old that is barely any credit as a possible -- to get.
Thousand dollars worth of mortgages -- with what -- -- mortgage.
Wait a minute -- the screen just shifted -- through manual on underwriting.
Or can how can he get more credit being that he didn't have that deep credit record -- -- -- Not having a long credit history is not necessarily an impediment to not being able to be approved by the -- by the lender.
A good down payment 20% down payment certainly will work in his favor.
The ability to show those -- that he's demonstrates an ability to pay they get credit card debt or auto loan -- certainly will be taken into consideration.
I'd advice him to.
Walk into the local banker local credit union tell his story and see if they can come up with some sort of a financing arrangement for a -- half off not impossible and you've got to start somewhere.
Rights of their options out there for for -- for just about anybody -- -- some more news make breaking out of at a Mexico City sought -- stay on top of that as as we move on here as well.
Scott -- thanks a lot for coming away appreciated Scott at the mortgage -- -- mortgage marvel dot com Friday where he normally does sound shop for rates online you -- Scott you know Scott anywhere.
-- -- I got the Christian right and the way yes it is five point eight magnitude -- Mexican city has twenty million people in it so.
It's more than twice the size of New York City show five point eight earthquake got tall buildings a lot of people are -- terrorists.
That's at least the early reading by the US Geological Survey anyways it is five point eight.
-- rock tall buildings and that sent a lot of work presents in street sense a big earthquake in a city.
You know things about -- yeah.
It's a -- I mean that's definitely a big enough earthquake to make you nervous and it depends earthquakes have a lot of different personalities if anyone's been her quickness -- -- you were talking about it.
On the screen.
You know they have a different person now -- how long did -- last -- could tell it was a role any aid or anything like that -- I don't -- I think that's this other story that it with office story within the last hour.
That they were doing a huge kind of photo op.
-- Air Force One around lower man how so that air force that fighter planes with Air Force One taking photos.
And people I was on the phone with that doing an interview and that the whole office with panicky because they thought it was some enough -- -- to -- a lot.
Last -- -- -- money he would have a photo op with planes they'll look at every wine -- tell somebody -- I was nuts Eddie -- so anyhow so that's one thing but you're right so some more details coming across about this an earthquake again five point eight.
Magnitude hitting Mexico City you would probably come -- as you hear that the last thing they need.
With everything that's going on there of course in Mexico with -- the -- blew -- when -- -- -- right now so far no damage people evacuating some of the -- there's some of the buildings in Mexico City but the first reports as they are in almost all breaking news.
Scenarios are often at best incomplete so we will continue to follow that throughout the day here.
And as this earthquake has struck on the same day in -- Swine Flu is all over the headlines out of the same country.
Mexico so it's just an absolutely fascinating.
Data watch that and just much closer to us here at home as -- -- mentioned a moment ago the mayor of New York.
Mike Bloomberg making comments so I hear about the Swine Flu situation in New York City which is now reaching -- -- 28.
There have been eight confirmed cases most of them at a high school in grains and now there appear to be cases that they are added to that -- confirmed to to have Swine Flu here locally -- New York and not Lafayette it's that this is being idea it's the end of the show and that you normally say hey that -- thanks for great have a good day likely act.
Stay inside and it would reflect how people what you know that's.
About -- this is this -- -- -- depends on how -- the earthquake hit it in and of itself is obviously a big story but the that the Swine Flu that's the risk if this doesn't turn it this turns in the less than what we think it might be now the risk in the short term is that people make it into more than it is so you wanna have to balance -- -- Thought we don't treat it like a serious story we are all day long but you also have some sort of balance -- perspective as to what it is.
And you know that so far all the -- is here in the United States as far as we know.
Have not -- many deaths -- -- they've been treatable and yes people have been confirmed to have this but they've also been confirmed to.
Not only survive but to get over it with the treatment Tamiflu and other and and other medications.
Did ten in Virginia's point no we don't know whether these cases were mild or dangerous or whether it as far as that with a more cases in York city.
I'm more cases hearing niceties we don't know any details yet again Mayor Bloomberg will be speaking shortly continue to Fox News for that I can address the -- -- -- -- -- -- -- -- -- -- -- down.
Having the Fox Business Network so -- see you then and we'll see you tomorrow here foxbusiness.com live in this is live at noon eastern time any day can always catch the podcast on iTunes take care.
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