tv MONEY With Melissa Francis FOX Business December 11, 2013 5:00pm-6:01pm EST
david: thanks so much for coming on. >> that's a deal. thank you. cheryl: great interview. another deal to watch. hilton ipo priced at higher end of the range. david: a lost buyers. see you tomorrow. >> from washington, d.c. to the west coast the minimum wage debate is heating up. with some politicians demanding dramatic increases for employees but will you be paying the price? the ceo of a major restaurant chain is here to tell you what it means for the price of your next burger. because even when they say it's knots it is always about money. melissa: another stay, another wage war. san francisco is calling for minimum wage up to 15 bucks. they already have the highest
minimum wage as it is. this would have major impact on restaurants including how much they charge for food. to discuss it, fat burger ceo, andy. i was eating some of your french fries in the break. what would it mean for the your business? you have a lot of fat burgers in california. do you have one in san francisco? >> we're about to open in the bay area next couple months. here's the deal. everyone wants more benefits for their employees and want to see restaurant workers have a better lifestyle like anyone else but there's a cost to it. someone will have to pay for it. we need to realize that. we pay restaurant employees already above minimum wage because we don't want them jumping from one job to another. costs so much to train them but there is cost. that is really a problem people need to recognize. melissa: what is starting wage at fat burger? >> $8 would be a minimum wage. we usually start people, 8.25, 8.50 and give them chance to go through steps and get certified
in all different positions they can work. make $9 or 9.50 if they do that. so it is well above minimum waged. the skilled positions make a few dollars more like grill cook and cashier. melissa: you're the guy everyone looks at when we have someone on talking about minimum wage debate and poor workers work for nothing and ceo is flying his plane, living a lavish lifestyle and taking all that money home. why can't more money from many employees come directly from you? >> so the restaurant industry operates on pretty thin margin, right, somewhere 5 to 15% margin depending how well your sales are at particular store, how high your rent is, stuff like that. in this environment we have rising food costs. we have rising rent and wages. wages are generally to 30 to 35% of your total costs of sales. if you have an increase and you raise the minimum wage, a dollar or two, you will see food prices go up. i'm fine with it. i want to know if the consumer willing to pay extra 20% for
their food. if they are, bring it on. i don't think they are. that is the problem. melissa: where do you come up with the 20% number? i was looking at all different estimates. that is actually on the low side. the 20% that i saw came from an economist at the university of amherst which is not known for conservative thinking. i mean it is a liberal university. >> right. melissa: they're saying at minimum prices would go up about 20%. you think that is conservative estimate? where did you get your number? >> well that is based on, restaurant industry, restaurant association data but also has put it out but issue how much is the wage going up? if it goes up from 8 to $9, that's a 20% increase that will trickle down. if it goes up to $15, you're doubling cost of labor. if your cost of labor is already 35% around goeses from $8 to $15, now cost of labor will be 70%. food cost is 30%. you're out of business or customer will see gigantic increase in prices. it is really relevant. melissa: it is robot week here
on money. we've been showing robots already taking away jobs from human beings. whether you look at manufacturing or where it is. look at restaurants like applebee's and chili's they're introducing tablets at the table to replace part of the wait staff. at what price in a fat burger sense do you start replacing cashiers with machines? >> right. well you know, we're using also. we're implementing them in test markets in california and our buffalo's chicken brand as well but that is not really going to lower the labor costs significantly. okay, you may have a couple less waiters and waitresses on dining room floor but you still need someone to cook the food. someone to do the dishes. hostess needs to deliver the food. customer will not get the food themselves a tablet is something efficient to look at menu and see choices. easy to update and not reprint it. it is not about replacing waiter or waitress as much as giving more information to the customer
when sitting at table. melissa: you're sitting there in california. here we have a mayor being very outspoken about the fact that he wants the minimum wage to go up. everyone's first response is, take it from ceos. you already said it is very thin margin. i already made the point your company is franchise. like mcdonald's, people point at mcdonald's but only 15% of mcdonald's out there are owned by the company that everyone says make billions of dollars. the rest are franchise owners who are small business owners. will come in part from profits but also will come from, i would say, would you have a smaller staff? you will see prices go up? would you have people work fewers hours or have a smaller staff? >> right. so i mean, really good question. the problem is, people expect good service and good food. so they're not going to put up with reduction in those things in exchanges for a higher wage being paid to the employee. that just doesn't work. so prices will have to go up. there is no other way to deal with a rise in labor costs if you don't increase prices.
you will not cut service in a restaurant. restaurant industry and brands in particular have standards and customers want service. they do not want to do it themselves and have less people around them. who wants to go out and have that experience if you want to do that, do it at home. melissa: bottom line, andy, what does it mean to you when lawmakers legislate to you what it is that you are going to pay your workers as opposed to, i talked to a number of restaurant owners who think it is perfectly fair to pay $15 an hour. they're willing to do it on their own but they don't necessarily want to be told that is the minimum. >> what is important that everyone, legislators have to understand what a p&l is all about. restaurant owners, franchisees, independent business people have to make money. how are they going to make money they're increasing costs without increasing revenues? that is the bottom line. i want legislators to understand what they're doing when they're changing that dialogue. someone will pay for. >> it andy, thanks so much for coming on. we appreciate your time as
always. >> great to see you. thank you for having me. melissa: up next, more from robo week. today is the 3-d printed robot that could be a complete game-changer for the whole industry. his head, see that head? printed by a 3-d printer. very cool. oh it can twerk too. in case you're wondering what he is doing. melissa: americans are angrier than ever. we're yelling and cursing at everyone. no kidding. from the cable guy to the nice lady that serves you starbucks. we're all at receiving end of customer rage. have you noticeed? what has gotten into us? more "money" coming up. she loves a lot of the same things you do.
it's what you love about her. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet appred to treat ed and symptoms obph, like needing to go frequently or urgently.
tell your doctor about all your medical like needing to go frequently or urgently. conditions and medications, and ask your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or losin hearing or vision, or iyou have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop ting cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. afghanistan in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation because it offers a superior level of protection and because usaa's commitment to serve crent and former military members and their families
is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to ser. >> warning. 40,000-volts now in circuit. i am not jealous. it's a human emotion. >> chilly dogs with the wife. you're the best, rosy. >> you betcha, mr. j. >> feel that way. you will be malfunctioning within a day you nearsighted scrap pile. >> there is special providence in the fall of a sparrow. >> my you are a many splendorred thing. melissa: yes it is robot week in case you didn't notice. we've seen impressive and pricey robots so far but three deprint
something making them revolutionary. it could be a game-changer in streamlining a path for robots to play a larger role in our lives. robots could be as doctors and hospitals, even soldiers on the front lines sooner than we thought. with me is lamar schweitzer with his two robots. franksy and fonzie. what part of your robot was three deprinted? >> this is frankie. he was completely three deprinted. all the structural parts. all the white stuff here is all three deprinted. black boxes are server motors but everything else is 3-d printed. melissa: how long did it take? >> design took nine months. it was an exercise where 3-d technology could have effect on robotic industry. melissa: what is the point of that robot? what does he do? >> the objective was really to
reduce the cost of humanoid robots. humanoid robots, we've been selling them, my company, specializes in humanoid robots. we've been doing this several years. our customers are primarily universities and advanced hobby robotics engineers. we wanted to bring humanoid robots to a wider audience and that 3-d printing has evolved so much in the past couple of years we thought, why not create a robot that is completely 3-d printed and reduce the cost and make it accessible to much wider audience. melissa: how much would that robot, how much would that robot cost to print then? how much did it cost you all together? we had phenomenal robots on yesterday. one was a teacher's aid. it was great but $16,000 to start. obviously cheaper over time. how much would that one cost to get? >> so the main cost is the serve veries. it, servos in this case would be
a thousand dollars. the plastic would be $10. it would take two weeks to print. so you would have costs there in time and there's a lost costs in time and labor. but the overall cost is about $1200 in parts that you would have to purchase. melissa: so what kind of robot could you print? what job would he do? other than that he is cool and fun and could dance and entertain people, what would be the purpose of me printing that robot for myself? >> so the purpose of the moment would be primarily entertainment because it is a, the state of things at the moment are such that you wouldn't be able to do much with him except for entertainment, videogame extension, things, make him do interesting little errands around the house. but the idea is to bring it to a wider audience and get much wider array of brain power and use cases and eventually develop bigger robots that can do a larger variety of things and
eventually may be replace humans in different roles. melissa: like what? what can you imagine over time? some of those thoughts we came up with, boston dynamics atlas robot looks to go out in the battlefield to replace soldiers. >> that's right. so the, boston dynamics have been developing humanoid robots with a huge budget and there are other universities that have developed humanoid, large type humanoid robots with quite a large budget. the small size robots are, are more affordable but they're primarily used by university students, pg students. it is very complicated task. so, at the moment it is really about research and understanding how a robot's can be dexter russ enough to do different things. melissa: before you go. you have another robot there. can you show us what it does? is it called fonzie. >> the robot is fonzie.
his head is 3-d printed but his whole structure is made of metal. originally a robot designed for fighting competition in japan. it is called robo-1 where hobby its gather together and fight, fight it off with their little humanoid robots. so we modified -- melissa: can he move for us real quick before we run out of time? >> yes. just a second. ♪ melissa: [laughter] that's pretty ridiculous. all right. well, i don't know. i think fonzie is drunk. but we appreciate him anyway much. thank you so much for coming on the show. we appreciate your time. have fun with those robots. melissa: thank you. 3-d printer technology has been
around since the 1980s but not until 2010 they were commercially available. the market is looking for cheaper way of 3-d printing. is this the future of manufacturing? we have one of the 3-d printers here on set to speak a little more on this product, is tex expert shelly palmer. we have a nice cup. >> nice cup. melissa: it is lovely. we have a 3-d printer that was working and it stopped. is it typical. >> no. melissa: we're just technologically unsavvy. >> look. 3-d printing has been around for quite some time. consumer based 3-d print something relatively new. probably most popular version is makerbot. they're here in new york. they make a $2,000 3-d printer that is awesome and to use. -@they make a 3-d scanner that shoots lasers and makes the file the printer reads and you can print. what is important about 3-d
printing technology has nothing to do with this cup although this is pretty fun to have and hold. usually they do yoda heads but this will do. melissa: this is more functional than a yoda head. >> not really. melissa: i don't have a yoda body. i can drink out of that. >> you're absolutely right. see the ridges, little ridges? this is low resolution printed company cup. the resolution of the printer causes it to have ridges f it was finer resolution printer it would be smooth. you can print in anything. you can print in wood, which is sawdust and binder together but sands and finishes like wood. print in metal. print in stainless steel. you can print in carbon fiber and print in skeltons to build human tissue on like heart valves and plastic to make custom made cast. any material you can imagine. melissa: that was a lot of different things. that is one of the application that is we hear a lot about. our body parts. >> absolutely. melissa: how far are we away from that. >> you're not far at all. it is happening now. there is some mythology and some
sensationalism about this mostly people talk about 3-d printing they talk about plastic guns and get people excited. if you go as far as you can go, if you gave this manufacturing technology to someone who needs to manufacture rapid prototype, what would you rapidly prototype? i need a hard valve replacement. build a frame and let s.t.e.m. sells build on the frame. now i have a new heart valve that i can go and replace. the technology is in play right now. people are researching it every single day. that is one spectacular use of 3-d technology. that is far from all you wan do with the technology. melissa: seems like it eliminates a lot of jobs. >> no. melissa: you don't need people manufacturing things. how does it not eliminate jobs? >> it doesn't eliminate jobs in any way, shape or form. what it does it gives us opportunity to create new economy and new way to think about economy. melissa: okay. >> intellectual property, open source furniture, open source cup design. melissa: it doesn't exist anymore, intellectual property.
>> it changes. the idea i could copyright this exact cup gets hard when anyone can 3-d print it. we had this problem in the music business. we had the problem in the film business and now we'll have it in physical objects business. there is new economy and whole new way cottage inindustries involve. what is difference between a spare part and replacement part. if i break something, manufacturer made a spare part, store it, insure it, ship it to me. if i have a intremember and get file for replacement part can manufacture it myself or someone local dan do it. more jobs created. not the other way. more jobs, not less. melissa: we have talk about it another time. shelly, always fantastic. the holiday season is time for peace and joy but a new study says consumers are angrier than ever. customer service representatives are getting earful from unsatisfied customer. is there anything that retail
can do to soothe the savage shopper? how about better customer service, right? student club is managing hundred of thousands of dollars and their record is neck-and-neck with the s&p 500. how do they do it? they're here to explain. do you ever have too much money? [ male announcer ] this store knows how to handle a saturday crowd. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools iroduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that'stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy.
[ engine revs ] ♪ ♪ [ male announcer ] the mercedes-benz winter event s back, with the perfe vehicle that's just right for you, no matter which list you're on [ santa ] ho, ho, ho, ho! [ male announcer ] get the all-new 2014 cla250 starting at just $29,900. see who does good work and compare costs. it doesn't usually work that way with health care. but with unitedhealthcare, i get information on quality rated doctors, treatment options and estimates for how much i'll pay.
melissa: so we've all been there. your tv stops working or your bank overcharges you and it seems like there is nothing left to do but pick up your phone and scream at a customer service rep. a new study shows that consumer rage has gotten even worse over the years. so what gives? it is today's "money talker." here small business expert susan solivc, attorney, remi spencer and very own dennis kneale never loses his cool. never seen you throw things and
@et hysterical. >> yes because you don't sit near my desk. i'm surprised this survey says 68% of households felt consumer rage. melissa: rage. >> 36% say there is yelling. 13% cursing. that seems way low. >> i think there is probably more a little more than that boeing on. melissa: consumer rage makes it sound like road rage and out on the road screaming with rage and making people in danger. consumer rage would you quantify it to the point call it rage? >> i would call it rage. consumers love immediate gratification. we love we can do business 24 hours a day, seven days a week but with all that technology comes impersonalization. hence the rage. melissa: yes. >> high-tech but customers craving high touch. that is the problem. melissa: that is lot of it. you feel like you have no control. you're totally powerless. i was on the phone with cookie companies delivered for holiday season. they put me on hold and manager
left me on hold indefinitely. i knew he wouldn't come back. you're powerless. you're on hold. don't mean anything i'm getting all sweaty talking about it. >> a lot of companies are outsourcing their customer service reps to people either working from home or out of country and often times we're dealing with people who don't speak english as a first language. that sort of ratchets up the rage level. i think that when you're not getting the kind of service that you expect, particularly you want to click the mouse to get it done with, it gets people so angry. >> look at survey, turns out they have taken the survey every year since 1976. 1976, 32% had problems. 2013, 50%. yet we thought the online revolution was going to make it all so much better. i think online revolution has spoiled us and -- melissa: right. raised our expectations. >> you feel entitled to something more and faster than we ever expected. >> that's true. we also crave the high touch an
personalization. we don't like getting automated response system. filling out a customer contact form in order to get customer service online. what we've got to do though, i don't totally agree, remi, with the call centers and decentralization i think there are organization that is take that business model approach but who have a really strong customer service. starts at ground up. melissa: you things have gotten worse or do you think we've got enmore impatient and our expectations are higher? >> we've gotten more precious and spoiled. >> i think so too. but i also think companies can do a better job at customer service because this study said, no customer service is better than bad customer service. and they need to, they need to meet our expectations. >> there is important lesson here for marketers. when you screw up, you actually can make for a far more loyal customer if you treat them right. they say that 56% of the people complain got nothing. but that when companies added free stuff, even apology that the satisfaction rate doubled
from 37% to 74%. melissa: even just, even just saying we are so sorry. without giving anything away, what can we do to make this better? coming back with good customer service. does it erase what happened? >> you can turn a very disgruntled customer into a raving fan if you handle it the right way. melissa: can you? i don't know. >> here is thing. social media an on light review site, used to be disgruntled customer would tell 10 people. happy customer might tell one. you magnify that many times over. >> depends on the problem. not just how to handle it. obviously you expect them to be polite and go out of the way to fix the problem but some problems are so important and maybe it is when you're buying cookies. maybe buying airplane tickets. maybe something very personal. maybe health related but i don't think you can recover from it. you have to fix these kinds of internal problems and move forward. melissa: tremendous business opportunity though for someone to come out and provide for nominal customer service? could probably even charge a
little bit more? >> there are some customers doing it. i don't want to promote some companies in my business, my law firm, people that host my website they are extraordinary in their customer service. some companies are doing better. melissa: all right. we've got to go. thanks to all of you. we appreciate it. maybe just a cocktail would help us. that might do the trick before you go online. up next another group of college investors give the pros on wall street a run for their money and beating the s&p. were you that productive in college? too cool for school heads boston college. you don't want to miss it. who lost money today? supermarket founder popularized buying in bulge. his money is disappearing in mass quantities. piles of money disappearing, coming up. [ male announcer ] here's a question for you:
or the u.s.? the answer is... the u.s. ♪ most of america's energy comes from right here at home. take the energy quiz. energy lives here. open to innovation. open to ambition. open to boldids. that's why n york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and ows more businesses... we're open to it. start a tax-free business at startup-ny.com. ♪ melissa: to cool for school.
"money" heads to college campuses across the nation to pick the brains of the youngest funds man -- fund managers. tonight the boston college in messman -- investment club currently managing close to $440,000. here now are two esteemed club members. thanks to both of you for joining us. that me start with you. let's dig right in. what is your favorite picks right now? >> you know, i would actually like to go with a drilling company. the second largest stock sure driller in the world. the reason why i like it is because the company generates an outstanding amount of operating cash flow. in recent years the company was spending it and updating the fleet. however, management has seen this has not been a shareholder friendly strategy and has started to pay out a higher dividend and plans to cut the capitol expenditures going forward. melissa: do you take this was a long-term play?
there is lot of downward pressure on the price of oil. we are seeing more and more production. people are driving less than they ever did before. is this a long-term plan? >> this is definitely a long-term play. the capitol expenditures will be reduced. but at the same time we think that the company is still a very attractive investments. even with a dipping below $000. melissa: i here you're number one pick. what you like that? >> that's right. it's a great company. it really demonstrates our bottom up approach. and so top down, finding the trending, the hon sector. instead, we look at what companies -- in the sector has a great performer, and out performer who has created an advantage for themselves. the aircraft industry is
healing. they have fierce competition. firstname.lastname@example.org that they have compressed margins. because of a unique business model with a source parts from various companies, send it all to boeing, have boeing put together the aircraft. it is a great model. it does not sound like a lot, but it said in an 30%. we have seen great things in the stock. we just got it this year. melissa: it looks like it has done really well. every chart that we look at, you have seen great appreciation. would you add to your position with a profit? >> i think we would look into adding to opposition. we have to no stock -- nostra can have over 10%. so bearing that in mind we could add to it. melissa: what do you have in your portfolio right now that you have been disappointed with? >> the stock and i was going to mention is not exactly in our
portfolio, but one that has definitely disappointed me is another drilling company to read the thing about the company is that it has been having a lot of corporate governance issues. it seems like there is an entrenched board. there are other issues. in general the company has not been doing as i wanted to. melissa: stay away from that one. how about you? >> for me it is in our portfolio corrections corporation of america. private prison system. we got it last april. you know, it has been disappointing so far. this company seemed like a great buy, safe investment. it has contracts with lots of different states. a very dependable income, but the municipality crisis that we have been seeing, detroit declaring bankruptcy. there is this question of our states too big to fail? q know, our state is next. there is really -- we have seen siesta you take it. we are watching and not sure if
you want to pull out yet, but we are looking into that. melissa: i want to ask you, we love to ask the kids on campus about the stories of the date. what do you think about but. it has been huge in the news. do you believe in it? would you invest in it? >> i personally would not invest in it. we are scared about the fact that there is no central agency to my country, central bank behind the currency. you're not going to get paid in decline, but who proves what is worse? melissa: absolutely. that is everyone's concern. let me ask you about coor's sarah, another one that has been a hot topic. talk about a potential appeal. you are in college. you believe in the concept and would it be a good investment? >> there is talk of ipo. and just yesterday they actually released to their application to the iphone. you can learn on the go. it is a great company. what they're doing is great.
online education is booming. we are seeing innovative companies really going in at different direction with that. it is -- everything education. accessible to everyone. it is interesting to see where it will go on all of that. melissa: absolutely. making use news. mobile apps share, now free for users. do a lot of people use it on campus? >> i definitely agree. it is a great company. they offer a great product. i use a lot at home because it is convenient to not have all my songs talking about physical hardware space. now will be able to use it on my phone. i think the company might be a good long-term investment. it will be interesting to see how they kind of man ag artists rights with musicians, but we will definitely have to take a look at it to went forward. melissa: real quick. facebook making news joining the
s&p 500. the stock ticked up about 4%. have you ever owned facebook? would you? is it a good investment? to you think that the time is over? >> facebook had a tricky ipo, as everyone knows. it is an interesting company. it is a big part of our generation is life. we use it on the daily. the honest iran which is huge. they have pictures. can communicate with friends. it is big. definitely something and we would lookkinto. melissa: you guys are great. thank you for coming on. good luck to you. i am going to wish you good luck. up next in york governor wants to give underwater home owners a second chance. is the proposal too good to be true? we have the answer. at the end of the day it is all about "money." ♪ every day we're working to be an even better company - and to keep our commitments. and we've made a big commitment to america. bp supports nearly 250,000 jobs here. through all of our energy operations,
we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger. [ male announcer how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, globalconomy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. with investment information, risks, fees and expenses but with less energy, moodiness, and a low sex drive,y first. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron.
the only underarm low t treatment that can restore t levels to rmal in about 2 weeks in most men. axiron is not for use in women or anyone younger than8 or men with prostate or breast caer. and children should avoido are contact where axiron is applied as unexpected signs of puber in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medication sdecreased sperm count;uld iankle, feet or body swelling; enlarged or painful breasts; problems breathing while eeping; and blood clots in the legs. common side effects include skin redss or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting and incrse in psa. ask your doctor about axiron.
has been flying around the world starting in norway. the country's national library has decided to digitize all of its books so that norwegians can read them online for free. the move will probably take a big chunk of money and of the publishing industry. all the way back to the middle ages. the project could take intel 2036 to complete. and if you don't live in norway, don't try and gain the system. your ip address will give you wait. over to uruguay which is the first country to legalize the marijuana trade to be next year the government will start regulating production, use, and sale. norwegians will be allowed to buy marijuana at pharmacies and grow plants at home. always president says the law is a bid to control addiction and drug violence. call me crazy. i think the government stands to make a lot of money. landing in england where shopping centers are asking children to take a test before
meeting with sandra. there is something to this. telegraph operators are ready to interrogate the kids to see if they have really been naughty or nice. i guess say nec was the trip before he gives you an icebox or ipad. ferber's be where. new york governor proposing to expand the mortgage relief option for struggling under water homeowners. the governor says this is a win-win for both investors and homeowners. i am wondering how that is possible. joining me now to cleanse the numbers, president and ceo of of town real estate. thank you for joining us. what was your initial reaction? >> my initial reaction was, interesting. interesting timing that this comes out now. and interesting as to whether or not it is really fully baked to. melissa: let's talk about the basic principle, he is proposing that lenders reduced the principal in exchange for some share of the upside for underwater homeowners.
>> correct. melissa: how would they work out the math? there were not a lot of details. what is your gas? >> the guidelines so far is about nine pages. what it looks like is that the lender or investor, because it may not be a bank. could be somebody holding a mortgage-backed security would participate in as much as 50% of the upside. melissa: from a new reset position? >> from the new sale, or the lesser of 50 percent of this new sale price or the back principle that was forgiven plus interest. but the interesting question is -- melissa: wait. just on its face, who is that a better deal. >> reporter: the person holding the mortgage with a homeowner? >> it sounds like that is a better deal for the personal and -- for the homeowner because there is some downside for the investor or lender, but there is no real downside for the homeowner. the interesting -- melissa: the only downside is if their house exploded in value out of nowhere. that would have been lost money.
>> the lesser of the mother for a given amount plus interest or 50 percent it. melissa: all in favor of the homeowner, there is no way that this would happen. >> i don't know that that is the case. foreclosure is the last resort. of course, we have seen foreclosure in massive numbers, not in our market here in manhattan, new york city, but all around us. and so anything that can mitigate foreclosure is positive foreclosure is a community destroyer, it is an individual destroyer. i think that there is something in it for the lender or the holder of the mortgage-backed security, but the interesting question is, has all of that been fully vetted? in other words, if it is a bank -- melissa: of course not. this is a politician coming up with an idea. there's no way it has been vetted. >> fair enough. you know, i know that when we have securities that may be have been spread over a group of different stakeholders, warranties and agreements with a
servicer, these are going to add -- permissions will have to be given for them to enter into these agreements. and they're is a question about tax treatment for the investor as well and whether or not any of that profit than is realized until the time of sale is taxable. melissa: i am wondering how appealing this would be to a lender? you are saying that they don't -- they want to avoid foreclosure and no one wins. the average person does not really believe that to be true. they think that the bank of whoever owns the note wants to come in and seize the house back which is not true. >> i am happy to say that when it comes to selling homes there is still a place for us as brokers being the better brokers of homes in banks. banks are not really set up efficiently to do real estate loans. it is not their business. melissa: they would like to it -- ellis, michele and say, we would -- for us it makes the most financial sense to try to keep the original person in town. homeowners don't believe that, but they say that all the time. >> look, we are in -- if you
don't winterize the house is vacant. oftentimes the feed of winterize it on time the lender could explode the pipes. there could be other problems. it creates a diminution in the value. melissa: but that idea of reducing principal, banks have fought and fought and fought against it because it breaks the basic contract award is going on . >> moral hazard. interestingly this argument is a hedge against moral hazard because we are entering into a new agreement where we agree to pay back everything. everything and interest. the interesting thing is that this guidance that has been put out still requires that the homeowner be delinquent on their payments 90 days in or to qualify, and that they have been eligible for any other hand, harper, gse modification, any of those. melissa: to me this will apply to almost no one anyway. thank you for coming on. we are out of time. >> to welcome. thank you for having me. melissa: the most wonderful time of the year, this season for
gift cards. we all get them, what do you do with the ones that you don't want our use? believe it not, you can turn them into cold hard cash. we will show you how to turn your spare change into a whole lot of green. you can never have too much "money." ♪ so i can reach ally bank 24/7, but there are no branches? 24/7. i'm sorry, i'm just really reluctant to try new things. really? what's wrong with trying new things? look! mommy's new vacuum! (cat screech) you feel that in your muscles? i do... drink water. it's a long story. well, not having branches let's us give you great rates and service. i'd like that. a new way to bank. a better way to save. ally bank. your money needs an ally. yep. got all the cozies. [ grandma ] with n fedex one rate,
i could ll a box and ship it r one flat rate. so i kn untilt was full. you'd be crazy not to. is tt nana? [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can ke better health decisions. that's health in numbers. unitedhealthcare.
♪ melissa: time for a little fun with "spare change." we are in the thick of the high-priced holiday season. a major tips on how to turn your "spare change" into big bucks. in a new twist on gift card companies of wedding gift card holders sell them for up to 90 percent back in cash. it sounds like a good deal. listen up you anti get card users because we have consumer money-saving expert andrea here to help us with all the details.
tell us how exactly this works because it's christmas rolls around and people open up their desk drawers and bureau drawers and steal the cars that were given last year that they did not use and are about to expire. what is the first thing that i should do? >> well, if you have to give cards the you are not using, first of all, take inventory of what you have a round. some people have gift cards that they don't even realize still have a balance. take those, gathered them, check the balance. you can do it at the retailer website or go online to a side light gift card granny where they have a balance checker. you enter in the retailer named in the fund it -- in the gift card number. melissa: and from their chances are if you still have a gift card you have had for a while it is because you are not allowed to the store. maybe you were too busy. >> right. obviously during the holidays gift karzai such a popular gift. in fact, we found that in a recent poll 63 percent of
americans want gift cards. people are giving them, but sometimes they are just not giving you the right one. melissa: out the light is cast? >> yes. if you go to sites, go to the cell page, enter in the retailer named in the value of the gift card and you will get an instant "from several different online resellers that want to purchase your gift card. and then they sell them to other consumers at a discount. melissa: what can you expect to get? to say a hundred dollar gift card. >> you can get up to 92 and a half% of the value of that gift card. of course it depends on the popularity of the retailer. say you have one to target. i don't know why you would want to selig, but if you do you can get more bang for your gift card value. perhaps a restaurant that is not as big of a national chain, you might not get as much back, maybe 85 percent of the value. but if you're not going to use it and it is wasting in your drawer the cash is better in
your pocket. melissa: out a you know that it is not a scam? if you enter in your number summer, had you know you're not giving away to someone who will steal it? >> that is why i recommend selling the gift card through a reputable reseller. gift card granny will point you in the direction to sides like abc gift card, a gift card castle, raised that come. all of these resellers have a marketplace for selling other people's on wanted cards. and they offer you a guaranteed to make sure that you get your money back. it is so simple. all you have to do is enter in the value. melissa: we hear you. before i run out of time, plastic jumble. you can turn in your car there and get best buy or cbs or united airline miles. how does that work. >> yes. you know, you just opt instead of getting a check or money transferred via paypall you can get even more value by getting -- opting for those options instead. melissa: thank you so much.
>> thank you for having me. melissa: i am going to run and do this after the show. coming up, who lost -- today. you ever bought a 24 pack of five pockets, you probably shocked at this store. finding out the cost of doing business. can you guess who it is? you can never have too much "money" are too many gift cards apparently. melissa: in is open. open to innovation. open to ambition. open to boldids. that's why n york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and ows more businesses... we're open to it. start a tax-free business at startup-ny.com. does your mouth often feel dry? a dry mouth can be a side effect of many medications but it can also lead to tooth decay and bad breath.
th's why there's biotene. available as an oral rinse, toothpaste, spray or gel, biotene can provide soothing relief, and it helps keep your mouth healthy, too. remember, while your medication is doing you good, a dry mouth isn't. biotene -- for people who suffer from dry mouth. hmm. mm-hmm. [ engine rev] ♪ [ male announcer ] oh what fun it is to ride. gethe mercedes-benz on your wish list at the winter event going on now -- but hurry, the offers end december 31s [ santa ] ho, ho, ho! [ male announcer ] lease the 2014 ml350 for $599 a month at your local mercedes-benz dealer.
tdd#: 1-888-852-213434 tjust waiting to be found. es tdd#: 1-888-852-2134 at schwab, we're here to help tdd#: 1-888-852-2134 bring what inspires you tdd#: 1-888-852-2134 out there... in here. tdd#: 1-888-852-2134 out there, tdd#: 1-888-2-2134 there are stocks on the move. tdd#: 1-888-852-2134 in here, streetsmart edge has tdd#: 1-888-852-2134 chart pattern recognition tdd#: 1-888-852-2134 whicshows you which ones are bullish or bearish. tdd#: 1-888-852-2134 call 1-888-852-2134 tdd#1-888-852-2134 or go to schwab.cotrading to learn how. tdd#: 1-888-852-2134 our trading specialists can tdd#: 1-88852-2134 help you set up your platform. tdd#: 1-888-852-2134 because when your tools look the way you want d#: 1-888-852-2134 and work the way you think, you can trade at your best.
tdd#: 1-888-852-2134 get it all with no trade minimum. tdd#: 1-888-2-2134 and only $8.95 a trade. tdd#: 1-888-2-2134 open an account and earn 300 commission-free online trades. tdd#: 1-888-852-2134 call 1-888-852-2134 to learn more. tdd#: 1-888-852-2134 so you can take charge tdd#: 1-888-852-2134 of your trading. ♪ melissa: i am in the dark here. here is to make "money" today and lost money. anyone who owns a piece of costco. reported weaker than expected quarterly earnings and the stock dropped accordingly by more than 1%. co-founder and former ceo still holds close to a 2 million shares in the company. lost at about $3 million. who is making "money"? the ongoing american airlines
boss is being ended $13 million in cash as a goodbye presenserve airline before its merger with u.s. airwaves. he is also getting more than $4 million worth of stock. that is a severance package worth $70 million. not bad. and not making as much as she used to. britney spears as a new loan amount, and it has given the singer worst opening weekend. your sales are so low that she is being outsold by the stars of reality show duck dynasty, their deck the halls christmas album is selling like hotcakes. currently number four on the billboard top 200. that is all we have for you. al? "money" today. be sure to watch tomorrow. plus, if you like watching a said midnight, you are out of luck. be sure to record as at 5:00 p.m. is you cannot get to us at 9:00 p.m. pacific anymore. we will see you back tomorrow. "the willis report" is next. ♪
♪ gerri: hello, everybody. i'm gerri willis. tonight on "the willis report" the obama administration struggles to defend obamacare in a new congressional inquiry and is now investigating itself. >> i have asked our inspector general to investigate the development of health care. gerri: also, our special series to my user's guide to taxes. we will tell you about the taxes you can cut. a new report turning everything we have been told about retirement on its head. the author of that report is here tonight. we are watching of for you tonight on "the willis report". ♪