tv Bulls and Bears FOX News July 27, 2009 4:00am-4:30am EDT
log on to fox n >> stocks soar as government-rub healthcare stalls. the dow back above 9,000 this week, up more than 10% in 10 days. can someone say that is because of this? >> are you going to tell me, an individual, that i have to buy healthcare or else you're going to fine me $2,500 every year that i don't do that? >> over 10 years to create a $6 billion surplus. so the -- it's important -- brenda: americans fighting back. is that why stocks are back? hi, everyone, i'm brenda butter in, and this is "bulls & bears." here they are, the bulls and
bears. gary b. smith, toe bin smith, pat dorsey, and welcome to everybody. government-run healthcare takes a hit, stocks take off. a coincidence? >> not at all. this is absolutely a reaction to people saying, wait a minute, if we don't pass this insane idea and we're not going add 5% surcharges on the people who actually earn the money, pay their taxes to the united states, we're not going to be in a situation where we're forcing millions of people into a plan that already we can't afford and that we were going to pay for it with money that we don't? that is exactly why the market came back this week. brenda: chart man, you always talk about resistance. well, healthcare reform hit resistance, and stocks broke out. is that what wall street is trying to say? >> listen, i agree with toby. in fact, i'll even expand t. i think everyone's kind of getting the feeling that this whole kind of socialist move that the government's trying to force on everyone is at least slowing down a little bit. look, let's -- toby is right about healthcare. it looks like, you know, that won't be discussed until, my
gosh, congress is back in session, and i hope they don't come back in session until october or something like that. we haven't heard much about cap and trade anymore. we haven't heard much about the second stimulus. it looks like, hey, wait a second, maybe the big government tank, you know, moving through our communities has been kind of stopped at the wall. and i think wall street likes that. brenda: is that the only thing wall street is watching, eric? is this really the main reason why stocks took off? >> no, come on, you guys. we were up 12 days before the friday, and the nasdaq had nothing to do with it. healthcare was passing until friday. everything was a go until the blue dog democrats came out and said, hey, maybe slow down a little bit. the market is really ingest ago loft good news. we break corporate earnings the last couple of weeks, some really good, positive confidence numbers coming out as well. and obviously, you know, when a recession is long in the tooth, you know, 18, 19 months, the market will start to come out.
it has nothing to do with healthcare passing or not passing. cap and trade, pass or not passing. by the way, i also think that they will pass. brenda: i don't know, pat, the blue dogs have been talking about this for quite some time, and maybe the miami sun is getting to eric. what do you think? does this have to do with the rally? >> i don't think so. i mean, i am not a fan of the package as it is going through right now, because coverage first, cost cutting second. what reform needs to money is cost cutting first, coverage second. if we don't bend that curve, we're going to have a 100% healthcare economy in about 50 years. but that was not the reason for the rally over the past couple of weeks t. is earnings season, in case anyone hasn't noticed, and we have had a lot of companies beating what are very lowered expectations. i'm not taking a lot of confidence out of this earnings season, but the market certainly is, because you've had a lot of headline beats, companies coming in ahead of expectations, and that is something that gives people a reason to buy stocks. i think it's much more tied to that than what's been going on on capitol hill.
>> listen, we had four weeks of downness as the market was starting to believe that this suspension of disbelief, the only thing i can call, it i mean, americans out there have sort of bought into obamaism full tilt. and all the sudden they started doing the math and said, wait a minute. >> toby -- >> healthcare -- >> this package, whether you like it or not, and i don't like it, this package was on track until the c.b.o. report came out last friday, and suddenly people said, holy moly, this thing is going to cost a lot more than we thought. the market was going up for about a week or so before last friday. so correlation ain't working out real well here. >> guys, the market's been going up for a good part of the last six, seven weeks, eight weeks, and it has nothing to do with healthcare. we all agree. i don't think the healthcare should pass. i disagree with the whole premise of the plan. but it has nothing to do with what the market reaction is. the market is reacting to very, very good -- granted, patrick, lower bar corporate earnings. in other words, estimates were
very low, but they're beating news. >> the bigger issue here is that this was the third leg to fall. i think gary's got it right t. started with cap and trade dying, then the idea that we were going to, you know, tax all benefits, and then that died. you know, i think they're losing a lot of steam and the market loves it. brenda: you should be happy i can't speak so well. >> i love that, by the way, this is fabulous. brenda: gary b., where is the market headed? >> well, it's definitely overextended now, but look, i'm one guy that thought it was overextended four days ago, so, you know, up is the easy direction now. you know, even a day like friday, where you kind of thought, looking at the fruits in the morning, that, really, that was going to be the 300-point down day or whatever. it was nothing. the dow was still up on the day. so it's going to be -- i think we're going to keep going up. >> one thing, though, a little bit that makes me a little bit nervous is we've had some great corporate earnings numbers. i was talking about it a meant ago. but microsoft coming out and
say, hey, you know, we may be slowing down a little bit more than we thought, a little bit of alarm. so if you have money on the table, i might take some off. >> yeah, but microsoft was only down a couple of points open that. >> this have a new operating system coming out, a whole bunch of people quit buying p.c.'s. that's the 23458 thing. the market overreacted to that. brenda: ok. >> i'm give you that. brenda: the reason why -- >> but it always overreacts. brenda: eric has made enough money to have a vacation finally. tell me where the market will be at the end of the year, higher or low. >> at this point, higher. >> it will be higher, 1,100 s&p is our call. >> pat, what do you say? ok, if you don't make a market call, i anticipated this, are you at least finding bargains out there? >> oh, far fewer than i was a few weeks ago. and even if the market is up, i think 1,100 by the end of the year is a big, big stretch. >> that's why they pay me a lot of money for that, pat. brenda: and mr. commodities,
eric? i know you're looking at oil. is that going to do anything to this rally? >> i'm glad you asked me that. i think we'll see $1 hundred barrel of oil by the end of the year. i think we'll see north of $1,000 per ounce of gold at the same time, and that's because inflation is going to come back. >> from where? >> it makes things go up. brenda: and the market, higher or lower? >> i would say 10,000, 5,000, 11,000, great. brenda: toby, are you ready to say over my chair? brenda: someone here says that a new law that kicked in yesterday just kissed any hopes of a lasting recovery goodbye. and coming up on "cavuto" >> take it easy, will you? we just want to talk to you. that's all. brenda: a star says why he thinks the white house is talking like tony when it comes to pushing healthcare in america. don't miss that.
i'm jamie colby. more headlines in 30 minutes. brenda: just as business officer where, they're busy cutting costs, uncle sam creals their costs big time. we're talking about another increase in the minimum wage, official as of yesterday. someone here says that hike means the recovery can probably take a hike. joining the debate, democratic strategist, but first to you, eric, the minimum wage, good
news for workers, but bad news for the economy? >> let me tell you something, you guys. this will prolong the recovery. 70 cents doesn't sound like a lot of money. it's the third increase in three years. and let me tell you, 70% of all jobs are small business jobs, and small businesses have to pay $20,000, $30,000, $40,000 more a year. they're either going to raise prices for the things they sell, and more likely, they're going to lay more people off. that means unemployment numbers are going up. look, these guys are -- small business owners are being tapped on the shoulder to take care of everything from healthcare to increased wages, all the way down the line to revenue shortfalls, tax revenue shortfalls. bottom line is absolutely will definitely prolong the recovery. brenda: prolong the recession, you mean, right? yes, ok. many employees are struggling too, not just businesses. >> yes. why think that this minimum wage hike is really, as you said, is really good for workers, and i think we so
often put workers on the bottom rung as far as priority. we need americans to start spending money again. we need them to feel comfortable. this ised stods a week. i mean, we should be ashamed as a country that our minimum wage is $7.70 when places like canada, it's $10. so i think that this increase is good. it's the third in a phase we've been phasing in for a while. i think we can do both. we can't just keep saying this is going to hurt small businesses. we need to prioritize american workers. brenda: toby, it's a stimulus plan now. >> unfortunately, we know statistically, 3 hundred,000, 400,000 jobs are going to be gone on this, simply because the business owners at the margin can't afford it. we know, bar none, those 400,000 jobs only come back when the economy comes back, and it's sort of a chicken and egg thing so. we are going to lose jobs. i think air sick a little wrong in terms of overemphasizing
this over other issues that may curtail the recovery. but clearly, the message is if small business is the only engine of growth and we continue to pile on, you know, additional weight on their shoulders, it does lower our recovery rate. there's no question about it. >> i agree with a point of that, and i think that -- i want to he will invite this debate to be beyond money, in a way, and to say, what is it going to take to get america back on track? and i think that there's going to be a lot of things to do. yes, you should be responsible for your workers. you should provide them with healthcare. you should provide them with a living wage. and if it's hard, then figure out how to do things better. >> but 5% taxes on top of my income and telling me to pay more is not a way to get us back on track. >> you can't do it at the back of the least of these. i mean, these are people who make $7.70 an hour. that's -- that's $1,200 a month. whfls the last time you made that? i don't remember the last time i made that. brenda: well, i do remember, gary. what do you say here? respond to malea.
>> well, exactly. she makes a good point. it's good for the workers with one caveat. it's good for unionized workers. unfortunately, the fact of the matter is, toby cited one statistic. they've already looked at what happens when you raise minimum wage t. went up 50% from 1977 to 1981, and the economy lost 650,000 jobs at that time. so what happens is, for those people at the company that their unionized, they still have jobs, but what happens then is the company can't hire more people, and even if they can hire more people, they end up passing those costs, those increased costs along to the consumer. the consumer is going to be slammed even more. either the employer gets banged here, the people that are looking for jobs get hurt, or the consumer gets hurt. this is a lose-lose-lose for everyone, i'm sorry. brenda: let me let pat get in there. pat, you've heard both sides of
the story. what do you say? >> it's a marginal effect, at best. to pick occupy toby's point, there is some very, very mild negative effect, but we need to face the fact that we are basically restructuring our economy from one that is overleveraged, too dependent on consumer spending, too dependent on pushing around toxic financial products and construction jobs, and those aren't coming back for a long time. those are the larger issues -- >> are you nuts? how can you call this -- >> actually, i checked my brain at the door before i started the show. yes, i am nuts. >> a small business who has -- 15 or 20 employees, this might put them out of business. this will -- up to the talk about delaying a recovery, you will have people laid off left and right, small businesses going under. we're already tapping them for everything from cap and trade, healthcare, revenue shortfalls. they can't afford anymore. >> we got 147 million people working in the united states. you know, all the numbers say this is going to cost 300,000
or 400,000 jobs t. doesn't kill us, and somewhat small businesses are going to do is what i as a small business guy will do, i will take people who used to be full-time and make them part-time, up wouldn't add additional people. you are correct in that it does slow done a recovery, but it is not a major issue compared to other issues. brenda: malea -- i'm sexaw where do we get the 300,000 jobs number? is that what the democrats are telling us? >> no, that's actually out of the -- >> eric, when was the last time toby cited a number from the democrats? >> excellent point. brenda: hold on, guys. i want to get malea get in. that's what you're hearing from these guys. >> that is what i'm hearing from these, and i think that these guys have -- you know, that they have their own opinion. >> we're cold-hearted witches. >> there's a study. >> they're capitalists, and god forbid, you have an employee who can work for an hour and afford cereal and milk. i mean, they have to work for an hour to afford cereal and milk, like that should be, as
an employer, you should be disgusted by that. and you should figure out -- >> well, malia -- why don't we pay them all $1 hundred an hour? then everyone will be rich. >> this isn't something that's new. brenda: hold, i'm sorry. >> why would you say that someone who's earning minimum wage, that obviously has very little or no marketable skills, why is it my burden to pay that person more than their value in the marketplace because they don't have skills that are worth more than $7 an hour? >> i wouldn't say that they don't have skills that are worth more than $7 an hour. when i think we see the folks who work in certain areas, and it's not just fast food and, you know, industries like that, we see that this is a majority of america, that it's not that we're talking about a few people, we're talking about -- the median income in this country is, what, $39,000? >> no, that was 20 years ago. >> oh, was of it was not 20 years ago. let's run with that, $48,000. as an average household.
told your boss or your mortgage company or credit card company "it's coming shortly"? i love that. gary b., what do you say? >> well, i absolutely agree, brenda. look, this white house is fantastic at setting deadlines for us, you know, to pay taxes and you got to sign the healthcare, congress. you got to do this. but in terms of giving up data, they're a bunch of b.s.'ers. obama is the king of b.s. i think we can say, oh, i dent quite get to my taxes, and we'll just say, you know, when i get to it, i get to it, because that's the way this administration is teaching the lesson. brenda: eric, take it away. >> i agree with gather i b. the nonsense that goes on in washington right now is just proof that they're selling us a load of snake oil. they come out with projections, we're going to save a trillion there, cut back the -- the
projections are all just to get you to sign on the dotted line to agree with them. look, tim geithner didn't pay his taxes. he has the i.r.s., the group that collects your taxes. it's one thing after another. trance pearns a, the ultimate -- i don't want to say what it is. >> no, that's ok. malia, it is just six days over the deadline, but he set the deadline. the president did. nobody forced him to. >> yeah, and i think that's something that we're actual all in agreement income the president has been to be very care informal setting timelines, especially when he has no control over what gets passed. he has to work with a coalition of congress and other folks. and so he's -- brenda: but this is just his cabinet, like his employees. >> yeah, sexenk it's something that the president has to be careful o. he's made a lot of promises. brenda: get to toby. >> this is not helping him out. >> this was a little naive, almost as naive as saying you need pass a $16 trillion
their congress? well, korea has been the one country in asia that has not come back. according to my colleagues over there, a, they're strengthening their economy. so i would buy the e.w.y., their index. they're undervalued relative to asia. i think they come back 30% here. brenda: it bothers me. pat, it's a very focused fund, very concentrated. do you like it? >> yeah, i mean, 25% is in samsung and posco, which are fine companies. >> it's just harder to buy them individually. brenda: your prediction? >> p.k.x. is the ticker. >> you know? you don't want to interrupt pat when he's on fire. anyway, did you see, brenda, things in the news? there's a nonprofit group suing hotdog manufacturers, for crying out loud, saying they should have cancer warnings. i tell you, this is just -- this is what we've become, for crying out loud. i want togget opposite way. i want to buy con ago radio.
i love their hotdogs. i think this is up 25%. brenda: toby, do you buy that? >> it's a really lovely concept, and i'm angry, too, but i think the stock is lousy. commodity business, i don't want to be close to it. brenda: pat, your prediction quickly? >> on tuesday, we're going to get k.b.h. results. they are going to be up, up for the first time since 2006. we have real-time data we track that leads them by two moss. buy k.b. homes for a fairly short little pop. brenda: gary b.? >> i like it for half that gain, for a 10% bump. brenda: eric, your prediction, please, you baseball guy. >> my prediction, true religion. i don't wear those mom jeans that barack obama wear. i like about 25%. brenda: let's watch, and there he is, oh, awesome. >> that it is a strike. that's a 95 mile an hour fastball. >> i don't know if you know, people are buying $2 hundred jeans in a recession, pal, all