tv Bulls and Bears FOX News March 9, 2013 7:00am-7:30am PST
shot, half court shot. >> wow, no pressure, just your wife's medical treatment, $20,000. >> if you can't get enough log on to foxnews.com for the after the show show which begins in moments. >> brenda: the bulls are off to the races. blue chips, tuesday, wednesday, thursday, friday. new high after new high. and all those records coming despite all those spending cuts, all those lawmakers were warning us about. so are investors buying because d.c. is finally cutting? hi, everyone, i'm brenda buttner. this is bulls and bears. let's get right to it. the bulls and bears this week, gary b smith, tobin smith, jonas max ferris, along with jim la camp and stephen. welcome to everybody. jonas, is wall street soaring because d.c. is cutting? >> no question about it because this year is the year we're getting out of stimulus, the year we're tightening the budget and taxes, everybody knows we were going to cut spending with
the the program and businesses know it and we saw the unemployment report they're hiring people so they're not scared that this is going to cause the next recession. that was the fear lingering in the market, the last year, when the government backs out it's going to come to an end, recession, and people on the show for years. it hasn't happened, and not happening and so the government can back out, slowly, but surely and let things go the way they go. >> brenda: okay, today is the four-year anniversary of this bull market and we sure haven't been cutting until now. >> yeah, but, i mean, given the sequester cuts, the credit for the bull market, i mean, that's a little like giving -- a mom goes through pregnancy and birth for nine months and give dad the credit for cutting the umbilical cord at the last minute. it doesn't seem fair. the fact of the matter is, the bull market with some painful, controversial decisions, stimulate the economy, and the banks and the auto companies.
there's a lot of of hard work and patience by the american people who had to wait too long for this. >> brenda: gary b, i always heard that men were responsible for all the pain of childbirth. (laughter) >> a different perspective, brenda. >> brenda: we are on cable, but, all right. gary b, are spending cuts responsible for this rally? >> i think so. certainly this week. you know, a lot of times we talk about things on the show that, you know, maybe a little bit inside baseball. maybe a little bit a wall street centric or capitol hill, but in this case sequester-- there's not a person out there that doesn't know about sequester, that's number one, people know about it. number two, do people think it's a big deal? absolutely. people aren't thinking the sequester is small even though it's relatively nothing people think it's huge and three, do people support it in the latest poll i saw, two-thirds of the people across the party support the sequester. so if you think, my gosh, d.c.
is doing something that we support and is a big deal, yeah, that's cause for cheer and i think it's reflected in the stock market. >> brenda: okay. >> particularly this week. >> brenda: toby, spending cuts kind of, wall street rally, go together? >> you know, it's part of it. let's look at the bigger picture here, the same time we have the sequester happen we have the representatives pass a six month exexpended spending bill and essentially wipe out many or small parts of that spending. at the same time, you haven't with the pieces-- everybody is excited about spending cuts and six months of outrageous spending. we obviously have another issue here, economically this was an over hang and at some point, i don't believe that people thought it was going to happen, that we were going to go into this lockup. and by not going into the lockup, that did get the marginal buyer off their can and buy some stocks. the stocks melted up, it wasn't moved up, melted up.
and people waiting jumped in with both feet and legs. >> brenda: that's usually a sign that things are going to start going down. we'll get to that in a minute. but jim, wall street watching washington and headed higher? >> stocks don't care about washington. this market's been moving higher for the last three months, the last four years, stocks don't care about the dumb arguments that washington keeps having, if anything, they like them a little bit. i mean, at least you're talking about spending cuts and that's a positive. and the fact that everything in the world didn't fall apart when they cut-- when they put the sequestration in is kind of like wall street giving a big finger to washington, saying, we don't care what you do, we know these aren't real cuts, we know these arguments aren't going to do anything meaningful. we're going to move on without you. and the doomsayers, who say this is going to shut down the economy, they've been emasculated and now that we've seen some cuts come in, at least the notion of cuts come in, and the world hasn't fallen apart. so, the next time--
>> don't you have to be ma masculine to be emasculated? >> and the debt ceiling debates and all that, definitely impacts from the government shenanigans going on and i want to highlight, it's not that the government shouldn't spend in more money than they take in during a recession, it's when you're outside of recession and more or less headed to the balanced budget. that's what the market wants to see, we can do that and not have another recession. otherwise you're japan, perpetually spend more than you take it. this is a good leg to stand on. if the cuts kicked in a year ago or year before, i think the market would have tanked. this year, people are spending and-- >> now, toby, let's take a look at where we're headed because we talk a lot about new record highs, but you know, back five years ago, we were about at the same place and kind of back to the future. i mean, we haven't gone. >> yeah, brenda, i mean, this idea that we've hit this
all-time high and people should feel really good, right? why don't they feel so good? well, you know the people who own stock is a relatively small part of the world. gas prices are higher. home prices are 020, 30% off and we have twice as many, ten times as many people on food stamps and debt per gdp is twice as, and this is a lower high, if you will. you have to put the rest of the macroeconomic stuff in a picture and this is not as exciting as it was in 2007. >> brenda: you must know about lower highs. >> yeah. >> brenda: okay. gary b, what do you think? where is this market going? >> well, i'm going back to something stephan said and he kind of gave credit to a lot of other reasons, one of which i'm sure he thinks is the federal reserve. and i think that's spill propelling the market and i think we're going higher. i don't think all that money they're throwing into the market. even if they stopped tomorrow, has fillered in. that's what i think is behind it. i think stuff like the sequester
helped propel it, but i think that's really the main driver. i think that's still there. i think we're going to go a lot higher. >> brenda: you know, stephen, usually when the small investor get in and try to catch the bull, it's time for a correction, or the markets start heading the other way. which way do you think it's going? >> i think that's what we call the wall of worry. gary b makes such a good point, compare the stock market today to four years ago, bond yields are so much lower, they're so awful, really, and you look at p.e.'s on stocks, meanwhile. >> brenda: the price tag basically. >> the price to earnings ratio. stocks are really cheap, bonds look expensive. that's actually a nice environment for the small investor. yes, it's not a perfect world, but i do think that the stock market is going quite a bit higher now. >> and that's the fed's intention, the first in the first time the history i call the feds and come out and say, guess what, we want stocks more attractive and housing more attractive. you know how we're going to do
it, turn cash into trash. >> brenda: well, and jim, that sounds a lot like a bubble to me. is that cause for concern for investors? >> oh, it will be, but not yet. >> not yet. >> and this is why the market turned. last week, ben bernanke, after the problems in italy, said to congress, well, we might print up to 2016 if the market takes off. it doesn't really have anything to do with right now with anything, but money printing. you look where interest rates are and where the economy is and we have kind of this gold locks evil doppelganger scenario. and the economy is moving where corporations can make profits, but not so hot enough where the fed will ease off the gas pedal. it's a perfect scenario for stocks and you can't get returns on bonds right now. so for now, stocks can get higher up to 20 times earning better look out, but for now the party is still on. >> brenda: toby, is it time for a correction? >> we know we're going to get a correction. straight up five days in a row,
that's not how markets work, so you should expect a correction. let the fed be your friend. when we get 3 to 5% correction, when you have money to put to work. when you feel fearful, do it. unemployment's going down and then we're in bad shape. >> brenda: all right. if the mandatory cuts are making some of you wait for your tax refunds, then why is the tax man not waiting to collect those new taxes from the health care law? the cavuto gang digging into another possibly sequester hypocrisy, that's at the bottom of the hour. but up here first, the jobless rate may be dropping, but someone here is warning, don't throw a jobs recovery party just yet. is this latest number a head-fake or the real deal. td0 like no atm fees, worldwide. tdd#: 1-800-345-2550 and no nuisance fees. tdd#: 1-800-345-2550 plus deposit ches with mobile deposit. tdd#: 1-800-345-2550 and manage your cash and investments tdd#: 1-800-345-2550 with schwab's mobile app. tdd#: 1-800-345-2550
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where two planes clipped one another. we're told a jet blue plane carrying 150 passengers heading to florida was hit by a landing air indian jet. fortunately, no one reported hurt, but both planes did suffer damage. the f.a.a. investigating. how about this developing overseas. soccer fans serious in egypt, burning building in protest of a judge-rendered court ruling. check out the brand new video of smoke and flames pouring out of the headquarters in cairo. dozens of fans setting it on fire angry over the court's decision confirming death sentences for 21 folks involved in a stadium riot last year that killed 74 people. i'm jamie colby. more headlines 30 minutes away. keep it right here. >> brenda: the unemployment rate falling to 7.7%. now at its lowest point in four years, but at the same time big companies handing out pink slips big time. so, jim, are we seeing a real
jobs recovery or not? >> you've got to look at the body of evidence here, brenda. i mean, if you look at today's numbers, they were good, but if you look at the numbers going back to september, october, since then the numbers have been tepid. and finally look at the labor force participation rate at 58%, worst number since 1981, it's terrible. a lot of part-time jobs, a lot of people working two, three jobs and we traded construction jobs, we've traded manufacturing jobs for burger flippers and robots so wages are down as well. so, yeah, we're doing a little bit better, but not given the total amount of stimulus that we put into the economy. >> brenda: come on, jonas, isn't the glass half full? i mean, the jobs market is gaining traction, isn't it? >> definitely, it's getting better, especially given what has run out. part about the participation rate, that's true, a lot of
people were disenfranchised and if they come back into the labor market because they see it's improving they'll put upward presence on the unemployment rate. but people are buying stuff and they're going to be optimistic developing new products and weigh in on that. and is it going to go back to levels it was in the '90s anytime soon? no. and look, when you see a company layoff over a thousand people like motorola, you don't read about the thousands of people also hiring in other divisions. the layoffs get the attention and doesn't mean the economy is falling apart necessarily. >> brenda: but gary b, he makes it good point. underemployment is 14%, the one that a lot of people watch. >> kind of the inverse of that as jim pointed out, the labor force participation rate. it is not improving. in fact, i looked up the data, it has gone down every year since obama was elected. so, it is going the opposite way, so for those that think the economy depends on a few things,
how much money you have in your pocket. how much your house is worth, and do you have a job, that's one indicator that it's going the wrong way, and it's flat, but it's not. it's going down. the labor force used to be in the high 60's in our heyday. now, as jim pointed out, barely around 16%.this a real recovery? >> i think it is, but i also think these guys are right, that there's a little bit to worry about in this. i look in particular at the long-term unemployed, these are people unemployed more than 27 weeks, two years. and there were about 5 million now, there's 5 million americans who want jobs and haven't worked in two years, and long-term unemployment has been proven, it really, it destroys families, it ruins lives. i am worried about how we get those folks back in. i don't think we've done enough for them and so it's definitely a little too soon to celebrate. but i do think it was a good report. i do. >> brenda: toby, what do you think?
>> well, i don't know how 27 weeks to two years, that's not the main point. >> he's absolutely right. should have said 27 months, pardon me. >> and sectors of the economy are absolutely growing. look at automobile manufacture, oil and gas and energy and professional services those are growing and that's primarily college-educated people over 30 years old. where we are dragging terribly and have 25 to 30% unemployment, high school drop-outs, new college graduates and low, unskilled workers and that part of the economy was thriving, when the whole thing was running on a bubble. that's not going to come back nearly as fast and frankly, you know, building an economy on unskilled, nonhigh school graduates is not going to be there. it's getting those people to get more education. >> jonas, isn't this important? aren't we making strategic changes in the jobs market so that we will have a better, basically, labor market in the future? >> unfortunately, i do think that we're getting a little european and which means we
might always have a lower participation rate than in the 90's, a lot of those countries have low participation rates, too, longer unemployment insurance, more disability. and a lot-- people don't think they'll make a lot in the private sector, as wages eventually catch up and weak more or less for the last decade. you'll see people think, oh, i'd rather get the job even though it's not the job i want than that. so i think it will improve, but it won't get back to the super gang busters in america we had in the past, somewhere between old america and current europe, i think. >> okay. but jonas, a lot of people are losing their health care benefits when they go from full-time jobs to part-time jobs. so, even though, you say we're going european and what a great way to go, they're doing so great. >> yeah. >> but a lot of our workers are actually losing their benefits in this whole thing. >> all right. the last word, thanks, guys. gee-whiz, airlines at it again. get ready to pay out more before you take off. are we now officially being gouged? clients are always learning more
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>> airline fees flying high from paying faster forwarding to delivery. airlines are created on new ways to squeeze more money out of passengers, but, jim, you say this is good old-fashioned gouging? >> well, it is gouging, be nobody knows what they're paying for tickets anymore, and there are sem variables you have to put it into the computer and there are a lot of bad guys here. the airlines are definitely playing a game of smoke and mirrors, that's going to cost
us. if you look at the federal reserve board and picking up fuel prices. picking a bad guy is like picking between kim jong-il 1 or kim jong-il 2. toby, nobody flies more than you and we say we're lucky. >> just do this, go on united airlines, to new york today. $249, and get your rental car and hotel at $300. and they now have a business model that works and the model if you want to get on early, pay extra. if you want to bring two gigantic bags, pay extra. it's a great bargain and if you play smart and bring one carry on, great deal. >> gary b, gouged or paying fair prices? >> probably paying below he fair
prices and on monday morning, i could fly from d.c. to l.a. for $190. can you get to d.c. to l.a. at anytime in your life for $190? my god, i remember growing up, you couldn't afford to go from l.a. to the east coast. >> here we go. >> brenda: you were in the model t then, weren't you? >> look, if the airlines were making a lot of money like a google and apple, i would say they're gouging. they can barely get by. >> brenda: but, jonas, basically, they're keeping the air fares low by adding on the extra fees. >> no such thing as gouging if you're an economist. and second of all, the core issue here, which is the consumer bought hotel rooms, what's the cheapest per square foot price i could get. hotels start charging for ice at some point. the consumers, most of them want to get point a to point b and don't have loyalty to the brand or points. $50 less they'll go to that airline. at that point they've got to
start playing the game, that costs, $125, and that's the only way that-- that's the only way they can-- >> if they were 125 bucks. >> oh, pays more. >> the airlines don't reward for delivering good service like the hotel does. >> brenda: stephen, get in there, 30 seconds. >> we're an a la carte society and we like to choose things like the cheap rental car and upgrade to the bigger model or the value meal and then super size it. we move to arizona and which has no taxes and we overpay for private school. this is how things work these days in america. >> brenda: that's got to be the last word. if airlines are charging you more, how can you get in on the action? our stock pros here are going to tell you. and more proof red wine and chocolate may be good for your health and good for your profits. the names to bite into right now. [ male announcer] surprise -- you're having triplets.
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