tv Bulls and Bears FOX Business December 29, 2013 8:00am-8:31am EST
it's been a rockin' year for stocks and signs the economy is starting to pick up, but are they both about to get socked when the ball drops and the new obamacare taxes and fees kick in? hi, everyone. this is "bulls and bears." get let's get right to it. we have gary b. smith, tracy burns, jonas ferras and david mercer. welcome to everybody. tracy, new taxes and fees from the health care law hitting in the new year. will they hit the market and the economy? >> they most certainly will. what a culture shock this is going to be. first, when you sit down to do your 2013 tax return come april, you are going to realize there
were 13 new taxes in 2013 alone. we are talking about increasing dividends, medicare, payroll taxes, you name it, you were clobbered in 2013. you will sit down and do that, mentally you are already psyched out about what's going to happen about 2014. plus you have the obamacare fees that are going to hit coming in 2014. everyone is going to just be thinking about these things all day, all along, that's going to hurt consumer spending, it's certainly going to make you not want to get out there and boost the economy. >> we're just learning about some of these fees. there's a 2% levy on every health plan, a 3.5% user fee for insurance companies just to go on the online marketplace, increases in medicare part a. there are some studies that show that for every american, in addition to premium and deductible increases, you could face about $0 more in taxes. >> possibly a year on average, 23 a month. but let's look at the bigger
picture which is that overall costs on health care are growing at a slower rate and likely to come down with the premiums to all the customers that are coming into the insurance market with access to affordable health re. that's the whole principle and purpose, with more customers, you have lower premiums, lower costs, which the market is both going to factor in, in addition to the fees that you alluded to earlier. so i don't think -- i think we've discussed this enough for three years about obamacare. it's alrea been factored into the economy and the market. we had 4.1% gdp growth in the third quarter. i don't think it's slowing down because of the fees associated with the affordable care act. >> but we have been talking about it for a long time and yet the market has kept going on through the whole website mess, you know, and now all these new taxes and fees that keep going up. but what's going to happen when they actually kick in? >> well, i think david is right
out the fact that it's not going to cripple the economy. the economy is doing quite well. we've seen a lot of green chu shoots, could see a lot more. obamacare wasn't around in 2009 so a lot of democrats who support this or quote that very often as any politician would, it's a number that favors them but what happens was the slowing economy curbed health care costs. about 80% of that studies has shown has nothing to do with obamacare whatsoever. you are seeing a lot of taxes here. 3.5 user fee from insurance companies to be on healthcare.gov but the 2% tax, you mentioned already. the $2 per policy user fee. 7.5% threshold n goes to 10%. this was supposed to be free. it was supposed to reduce costs. this is being paid for by taxes. when you say the young are getting a subsidy, there is not a subsidy tree in washington, d.c. that's free, by the way. that is taxes that are coming out to pay for this.
this is what is really happening here. >> i know that you don't believe that new taxes will help the economy, but what about the market? are these new taxes going to hit the market? >> you talking about the stock market? >> yes. >> you know what, well, we're going to talk about my market prediction later but yeah, i think they could but not in a big way. but not for the reason you think. it gets back to something david said. he said we have been talking about obamacare for three years. i had to chuckle because i was thinking which obamacare? you mean the one where you can keep your plan, th one you couldn't keep your plan, the one where you get one extra day? i don't know which obamacare he's talking about and that's the problem. the registrations, even though they have been ramping up, are still under the level that the administration said they wanted or needed. and you take that and there, they keep talking about registrations, as people paying. the usual conversiorate is about 20% so all these
registrations might only be, you take 20% of that number, those are the people going to be affected by the taxes. my point being i don't think a lot of people are going to be affected by obamacare taxes because i don't think obamacare is going to be successful at all. people aren't signing up. look, i got a chance from blue cross blue shield to just extend my policy until next year. i know my daughterisn't even signing up for health care. the irs has no way to go out and garnish wages and collect that money. so yu're going to get to the point where we have all these taxes and fees and i agree with the other stuff that tracy said, those are always going to hurt, but the obamacare specifics, i don't think it's going to affect it because i think the whole thing is a big bomb. >> jonas, tracy made a great point about how many taxes we got hit with this year. now on top of that, the obamacare fees, what do you think? >> i would agree that 95% or more of the dollars of new taxes, whether hidden in the -- in this affordable care act or blatant tax increases on capital
gains or whatever, it's already happened. maybe there's a 5% more but we got most of these taxes, we are already paying these taxes, government revenues are going up because of it and the stock market was up, what, almost 30%? the best year since '95. >> exactly. >> at some point you got to say it's just not going to hurt the stock market. it's already happened. it would have happened already. the stock market would have already tanked. >> there are so many people out there relying on refunds come april, and you add that 3.8% on investment income, that .9 on payroll tax for people making over a certain amount of money, you have a phase-out of personal exemptions. you don't know that yet. >> they are getting refunds on premiums because health care providers were spending money above 80%, they are getting rebates on their premiums because it is in the law of obamacare and the affordable care act. they have to spend 80% on service delivery and not over that. when they do, they have to offer rebates and they have been providing --
>> you are talking about different income brackets. talking about low income people getting refunds, high income people paying more so the lower income people can get the refunds. that's what you're talking about. >> no, i'm not. i'm talking about anybody whose premiums -- >> i've got to go with her. let me ask a question. youid make a great point that the stock market has been running up. is this going to hit it? >> i agree with gary. i just don't think this is going to hit it. the market understands politicians lie to get things passed. look, obama is not the only one to have ever done this. obama is t latest one to have done this. look, you can keep your doctor, costs are not going to go up. taxes are going to pay for this and what david was talking about with this percentage of profits, think about the world we live in. under obamacare, if these insurance companies make money, they have to give it back. that happened in russia. that didn't work out so well. >> they have to give it back if they don't spend 80% of it on delivery for coverage of health
care. >> how dare they make money. >> that's not the issue. that's not theissue. >> you're all saying it's going to be paid for by taxes. how could that not hurt the economy? where's the money coming -- there's less money out there. >> you're saying it's being paid by taxes. it's not being paid just by taxes. >> most certainly is. >> it's being paid -- >> maybe not yours. >> -- by those coming into the marketplace and there are more of them and we're covering more people. >> who pays that? >> that's what dris the market. >> who's paying for that, david? >> the individuals that are insured. that weren't insured before. >> okay. all right. we've got to go. thanks, guys. obamacare's employer mandate doesn't kick in until 2015, so why is the cavuto gang saying the job hit's coming in the new year? nd out at the bottom of the hour. up here first, when your christmas gifts arrive late, that's bad. when you shop at target and your credit card gets hacked, that's really bad. but is it about to get much
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first, the ups mess. now the meddling after the big christmas delivery delay, democratic connecticut senator richard blumenthal immediately calling for ups to give customers refunds, and the target hack attack triggering this. >> i also want to know if the federal trade commission has the teeth to hold retailers who fail
to protect the customers' personal information to account. >> democrat new jersey senator bob menendez suggesting new regulations may be needed to protect consumers. but john, wen the government gets involved in the private sector, is that when the consumer really pays? >> you think? this is like going to the town drunk and asking him how to get sober. otis campbell doesn't teach sobriety campbells. a government that can't build a website, you want to talk to them about hacking? 47% of the fraud in the united states is despite 24% of the usage. computer chips would help that. that's what we need to go to. as far as the ups, they hired 55,000 part-time workers, 23 extra jets, they still underestimated demand. the market will deal with them. congress dealing with them, god lord, get your own house in order, guys. >> all right. what do you say to that, david? >> i think it's ridiculous, a company, target or ups or any other, has to wait for a
congressman or senator to say hey, how about tend to your customers, protect them against breaches on private data and give them a refund when you don't deliver on the promises that you said you would commit to with your customers. so go ahead and be like amazon, give your customers a refund and then work to protect your data. then we won't need government to tell us what to do or to tell them what to do. just do it. >> that's not fair. that is not fair. target responded right away and ups is responding aswell. that's not fair to make that statement. >> it might not have been right away but it was a corporate decision, david. if target wants to go down in a pile of flames because they made a mistake, that is completely their prerogative. >> let them go down. >> this is not the government's business whatsoever. >> it is their business. they are public servants to customers who are also voters. >> john made the best point that privacy issues on obamacare will blow your head off because you might as well hand out your social security number on a street corner.
yet you have the ner to say -- >> look at what target did. >> i'm saying the government is not the answer. that is not the answer. >> but the issue is -- >>ou're right. they're not the answer. >> if uncle sam comes in, more regulations, what does that do? >> it increases prices to the consumer. look, target as we have kind of implied, has already paid for this. they lost a substantial amount of business in the height of the christmas season due to this. but if you're going to have the government come in, it's essentially an extra tax. there is going to be extra regulations, extra thing target has to do or ups has to do. for example, in order for ups to absolutely 100% never mess up and always get those gifts in by christmas, they would have to hire a bunch more planes and people just for that one peak period that happened, by the way, once in the history of ups. what's that going to -- and ups is not going to say you know what, we'll just take it out of
our profits and charge the same. no, they're going to increase prices for everyone. when david goes to send his fancy legal document tois other colleague across the hall, it's going to be extra. david's going to go geez, this used to cost $12, now it costs $20. well, that's what you get for having the government meddle in these affairs. >> the government doesn't need to get involved if you deliver to your customers. >> they do deliver to their customers. they are not allowed to mess up once in their history? >> they are. and -- >> who would you rather have an important package send, ups or the united states postal service? >> if i payor extra charges to get it delivered at a certain time, i would expect a refund if it doesn't get there on time. >> you don't think the u.s. postal service ever screws up and misses a delivery date? >> i didn't say they didn't. >> jonas, is this needless regulation? >> i feel like we're arguing over the paint peeling off our yacht. most countries would love to have our problem where you can't
get the gifts delivered in time, we bought so much junk at the end of the year. look, i'm all for government when there's no free market solution. in this particular case, since there is a ups and fed ex and the post office, this will resolve itself. if there was only one shping company, you would definitely have to shake them down and put them in front of congress. this is not that case, i don't think, and i think the target thing will work itself out where visa will get on their case for all the fraud stuff. if there's no solution, that is when the government needs to look out for the people but if the free market can fix it on its own, there's a path where consumers will change their behavior and punish somebody, you don't need to. >> last word. thanks, guys. so so much for shelling out for those grandkids after they're born. young couples hitting up future grandmas and grandpas before junior arrives. who's crying now? ♪
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oh, baby. more young couples shacking up with their parents so they can save cash t be parents. is this new trend a troubling sign for the economy? >> it is, brenda. i was just thinking when i moved out from my parents', all the expenses i had forgot about, including utilities, renters' insurance, food, all the things that my parents provided. so yeah, it's goingo be a drain on the ecomy. good for the families, though. it allows them to save money. bad for the economy. >> tracy, babies are expensive. >> yeah, come on.
you know me, they can live with me. look, you need emotional support, financial support. not like these kids will be in the house forever. they just need a little help. in this day and age, why not save it as opposed to waste it and have the kids in bankruptcy before the kids are in kindergarten. >> david, is this good or bad? >> i think it's good. i agree with tracy in that rather than taking out a loan and running the risk of ending up in bankruptcy or foreclosure, better play it safe coming out the biggest recession we've had in years and to be a little prudent and save money to later buy a home. play it safe now and husband your resources for later. >> of course, the parents won't be saving for retirement, though. they're paying for their kids and grandkids. >> i would rather see these kids borrowing money to buy a house and having lots of kids, because that would be the best for everybody. but unfortunately, i'll take the kids over the house even though the housing market needs it. when i see these babies, i see that kid paying my social security some day.
we need more babies. the country is getting too old. it's bad for the economy. >> young people in the house is much bter for the economy. this is a sign of the times. good thing to have a family to fall back on. a lotf people don't. >> thanks, guys. thanks to tracy and david for joining us. so the gang's in the hot seat. their best and worst calls in 2013. see how you can still profit from the good, the bad and the ugly. and put down the noisemakers and pick up some money makers. it's a new year's party bulls and bears style. (vo) you are a businespro. u can separate runwayridicu. seeker of the sublime. from fason that flies off the shelves.
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it's the most fair and balanced way to make money on . our gang's best and worst calls of 2013 and how you can still profit from them right now in the scoreboard. we do the bad andgood here, saving the best for last and starting with the best of the worst or something like that. jonas, you're up first. in september you said go long with vanguard extended treasury index. since then, it's down 4%, just a bump before the boom? >> yeah. especially the 2% or so dividend. that's my worst pick. i would say buy more of this. my clients own it. it's a great insurance policy against crash. >> on to number two. john, back in march you said strike gold with dld but it's been more like fool's gold since then, it's down 24%. time to dig up more o dump it? >> absolutely dump it. i was completely wrong.
>> okay. w for the worst call in 2013, gary b., last january you said it was blackberry's year to bloobut instead it left a big bruise, falling 8% since then. still a believer? >> no. i thought it would get bought out, do something different. it was a horrible pick. no. they probably won't even be around a year from now. sell it, please. >> now to the best calls. jonas, you are going to kick things off again. your best stock to buy in 2013 was i-robot and boy, were you right. if viewers listened, they cleaned up 70%. time to buy morer take the profit and run? >> take profit and run. >> okay. on to number two, john, you said to friend facebook in june. it's up 126% since then. you hitting like or unlike now? >> i still love facebook as a company but it's gotten a little too rich. take your profits. >> okay. now for the number one call in
2013, gary b., you had the worst and the best in january. you said netflix would deliver and boy, did it. it's up, get this, a whopping 271%. stay and enjoy the ride or quit while you're ahead? >> i think if you have netflix, i would stay in it. i still love it. i still use it every day. but i would not buy any new. >> okay. thanks, guys. that was then, this is now. time for the best name to own in 2014. gary b., your prediction? >> i am betting on health care, regardless of what happens with obamacare. aetna i think will have a big year, up 40%. >> john? what do you like? >> offshore drillers, i think it's up 25% for the year, not counting the dividends. >> jonas? >> gold's going to lose even more of its luster in this next year and the highly risky etf will go up 0% just like it did this past year. risky but a way to play it.
>> all right. where is the dow going to end in 2014? gary? >> right where we are now. >> jonas? >> >> 18,103. >> okay. happy new year. will it be a happy new year for jobs? hello, everyone. i'm in for neil cavuto. call it the health care elephant in the office, because even with obamacare employer mandate pushed off until 2015, companies are preparing for it in the new year and they are preparing for the worst. to our panel. gary, employers are ready now to start doing things that maybe the administration thought they would put off a year from now. >> well, charles, it has been a problem. it is a problem and it's going to be a problem for the simple reason you add the words uncertainty and higher cost to the equation and businesses pull back. there are alad