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tv   The Call  CNBC  July 7, 2009 11:00am-12:00pm EDT

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cecesse speculation. > > d the american bankers associatatiosese dedeliueuey on edit card debtrose to a a all-time high h riring the firs quarter.r. theirs our n ns w. i'i'm courtney reagan.. good morning,elcome "the call." m trish r reglive inn t the heartff nyse w whe wre 9090 miminus s to today'y'ssession.. off 82 points right nowow investors gear for second-quartrterararnis rrorort. more importantly, thehey care ababt t wh the companieses h hao say.y. what their progresss knowses ar for the third ququarrromingp p in today's kwlwlalallor action" two totopnvestors of how to plpy this ararke >>larry?y? >> i'mlarrykudlow. the g-8 i i conveneng g tomorro. they want to get tirir b bksks lelendoror in order to g usutut of this gloloba reressssio we, , e call of the wi, will dete, are the nks s stainin an ececonicic recovery? did anyone say "h"hp binesses
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toto create jobs?" oh, my gosh ioo i thinknk you said it. i'm melissa ffraisis. llion-dollar homescrcrs the cocotrtry. what are they tells us abobo t e market.. we'll tell you. >> stocks falling as traders ntinue to w wor about t global economy a andemain utious ahead of the upcoming earningseason tomorrowow. on the plus side,heheth care costs rise. here's h howheheow is trading g dolmlmos 80 points. extly 1% the s&p tradidi d dow by 9/10 of percent andoooo it wi nasdaq.q. dodowny a little moree thanhaha, just morehahan 1%. trish, h he' t the floor like? hehey, melissa. > wt's going onowown erer >> ddp.p. >> 's only down 83. leles s ke it alln
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perspectiviv we have lots ofof e enings newe coming outeginning tomomrorow when alcoaicks it ff afterer the closing bell. people are aitite hitant ahead of thatnews. th eespially want t to see whwht companies are going toayay about third ararter. it's built i that m may it wowot be so terrific of second ququarr. but the e rkrketalways l loo ahead. trtrads s nt an incation that things are going t t get betttt down t t road. they're looking f for thatat. thotothe talk is secocond ststimus plan. larry, i know wtt you have to y about ththat right w,w, people are just oking at itss tata, really. yove heard from b ben and tyson andd t there saying at ths pot, maybe iss justttal not t to mh concern at tss stage about tt.t. we're off 81. i ntnto geget over to bertha couples who is herere. there's weariness ahead of earnings and aalshe treasuryy oponon this afternoooon. >> the treasury opopti this
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afternoon, the tererms are supposed t to good. it's expepeeded to gowell. ate get further ut, wah. wel get more appetite f stuff that's near term, further ou that's when thingsweakness. y weakness this afternoon, that couldld b negagaveve. we're watching the s&ps s ll which h is a a a criticalevel a 89890. 8888 i i the dowownse.e. if we break thth w we could s s llllin prprsusure >> is there anany bright s spo ththe?e? whenen wlolook at the s spefic sectctorwhwhattands out? what is surviving? >> chip s sckcks e doing well. bank of america, merrill lynch, grgrou grading. they upppp intntel and others.. they seee a an opportunini t to continueue owning these i int t third quarter amaybe a21% improvement t erere ere before, the scks movedaybe 14%. that's chahangecause they alreadyovovedup. the other i intesting thing is that health care. the mos a on firee a and in rtrt
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becaususe t the talk cominggut of washington. we're heariringhehe esident and saw a couple o oeadlines wherer he sasays there n nee to be public plan.n. but rahah emanuel an i was taing withohohn sullivann dd i wa saying, w wtt about this talk about the stimulus? is that potentially positive?? in s see ways it is becacausifi eyey ph for stimumulu th puts real rrorm, perhaps, clerer to the back burner. so apart f froeople looking forea safe haven,ththe's positive talk coming t.t. >> also,,ee should pot out th commodities for the trd straigightayay of tding not doing very we.. commodity stocks getting h hur oil is down a 1... bertrt,, thank you s so mumuch appreciate i it. we'll heheadacack over toto lar. lalarr you're looking tan. did you go away for t the hh? i i w playing a lot of
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ftftanded tennisis. my right tenenn n isusted, trtris thanks for skskin lelet return t to our cocontt.. presididen obama sitting dodown withth n c chu todd earlier this morning toalalk about the economy,y,specifically, vice prpresent biden's rarar that ththe a admistration sread how bad t the economy i hnhns allvever this story. out the prprididens thoughts s on the economy. good morning, jn. >> ododmorning. before i getet to that,, got t say i'm impressededyy a leftft-hdeded nnis playeye >> a loll pro is teachingge hohow play lefefhahand because itit'sararof my fe. got to getxexerce so i can do al t tss cnbc rk. >> verery imimprsisi. ce president joeoeididen fllll thedebate overwhwhetr or not ththe ama administration acaccutetelyead the economyvever the weekekenwhere hesays,ee misread the signals as eveverye el did. esident obama sat down th chk k ddff nbc ws this
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mornining dd sd that,tt wasn't relyly s much thathe admiminiraraon made mistake.. it was thatt this economic c st wa much bigigge tnn anyone expected. we haven't always gototn n th numbers right but i think the general overviewew is ririgh we wentththugh a economic tstsami that was f far woe tha anything we'veve gone through sinceherereat depression.. even early on i think we did not see the full maitite of whatat was going to happenen >> now,ofofcourse, theherelso en a aebebat o orr the sizend shshapand content of t t obama stimulus packagege and whether not it's been successful. the president didn't'tivive grod ononhat front saying that wiououit, th economic bleeding wououldavav been mumuc worse. >> there's a massive a amott o damage that's been d don to the nknkinsectors. totohe individual homemeowrsrs.
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people's 4 401)) a a lof weaealtwawaremoved out of thehe system a what we have successfully d de e is too sunc ththebleeding. >>ow the issue as we go forward, larry, ishether or noththers going to be aececd stimulus planan i can tetellouou having talked whwhithohoe offificis,s, there' not a desire thehite house go there. they're only goingtoto d it if they deemmtt tbebsolutely politically anand economicallyly necessssar they're very ncncerd about thee potential l fallout from spendi by this cocongssss a by the adadninisttion that the puicic benning to react tt >> a we'venlnly used 10%0% of ththe rst stitimuss paage.e. whyy wod we brbrin out second one?e? way too early. >> that's part ofthth ooment. >> jojohn iotot t ask you. front page,wawalltreet joururl.l." a new ti-trust j jih against busisineeses. it's's businesses thatt create
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jobsbs ii assumee all t t smart peoplen thwhwhithouse know that. phone companieies,drdrug compan, google, airlinene multininatnan firms and a hi in the minimum wage, john,, w witut bubusissss u u cat have the ww jobs. why areheyaging hads against businene?? >> i think thehey' argumenent that m movgg on anan-t-tru issues, creates comompetiti which will, in t t longrun ll duduce costs even i iss uncomfortable e r r the existing sinesses. >>ohohn, loved your answer o on the fl thksks for indulglgin arry. > heher an rising unplploynt we have aotot to ght about. what has actually chahang f f the worsese about thehe economy? have things a aually anangex joining us to discus the economx is the chief e ecomimi and dean baker, center fororconomic and polili researchch. ane, i was readinghe "wallll street journal" thisis morning, chchriian cooper fromrbrbc capital markekets said that t t evevoration of optimism is
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palpable.. it doesn't seem like thattnn the past couple days. is that rereal the ca? that thereality? is it justthth optimimisr have things really chahaeded? >> you know ihihi things really haveechanged. we talkedbobout this bebere. th higher enengygy prpres. ththat o one of the firir tngs consumers rereac to.o. they don'tave much scretionary income t to bebegi withthndndhat was one of the problems in the first arter. we're flatltlingg on enendi but it's not goioi to derail t the recoveriry but i itatakesteam out of what was a alrdydy a ver frfragee sisituioion. >> i want youu to joinnee in congratulating d dnene w just go remarrrrd.d. a sawwhe wedding picturures it was inn s souern gegermy. sheooked e eve bit as beautiful as aride asshshe is this mnining diane, i give you multipipicte. thee pictures are beautifuful. i tried so harard to bebe optimc and i think some leading
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didicars look good. butwhen i looked at thejobs' poport onthursday,, unemployment may be a laggggin indicator but employoyme jobs, thee most imrtrtt iicator, th economy, t there still fafaing. e e ofhe things that bothered me and i want youou reacacti,, wages have flattened t.t. but private-hours worked are owowin rkrkedly. thisis h gottoto b a bad signal? > aaolutely. i i waone othe pessimists that joe biden didn't w wtto listen to backinin januarynd february because isasaidhihis s a biggerr dodotuturnhen they envisiononed andhehe stimulus package wasn't big enough. none of thiss a surprpris hours fefell 8/10 of a a perce rate in the moh of une. at's incredible. if that were expressed inn term ofof jobs thahat uld be a loss over 1 1 mlilionjobob >> how to tuturn that ararou, diane? how do we rnrn that around? can we helpususins to make it easier to hire becausese i'mana olold fhioned guy.y. i thinink 's's b bininess that create jobs and tse jobs
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create income. i don't t tnknk it's government. don't t tnknk it't's government right n now its government. > how can turn thisis earns problem ouou? >> unfortunataty,y, ion't think ththerarar any s silrr bulletstt there. that's o onef f thbiggest hurdles thehe boib a admisistri is facing. in fact, we'rere s sti f fining loloof huhurdssss inerms of businessncncerinty and investment and g gting things up anand going. is is reallyy comommeiaial real tata. the commmmeralal real estatates e e neegeg down and the frastructure spendingg wot cocomenn ti to fill t p.p. alththghgh wmay seeee posititiv growth a i think w w wiwill it's going to be a tougugh,upupllll . if y believe thaha how do uu inveve from herere? we tched the tips' auction. itas fast and rious. notececau of inatatn, but beususe ople are thking that stocks are not a a great dl rit t w if f th economy iss gogointoto recover moree slowly
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than we ouough atat'she way tonvnves enen >> i wouldld p thiss o out thehe e e ofhe thingng the flip see ofhe economy i is that costs are going do. wawage costs one of thth b bigs cos and p pductivity growth iss cocomi up. l lonas we flatline or getaa littleprofit,tt willrecover.r. people a are f fling the fincials are short. the finananalal tutuion, bass though they're not lendining enououghoror a of us out thther the loansshey are making they'll makeome momoy.y. >> but,t, we ted govoverenent transfer payments to dividuals. th s seed not to be wwkiking let pose the qstion. i i wa to say. we tririedherarafers to individuals. ititin't wworng, not fafa why don't we jt try something -- - how about a 6 t 2 momoh holiday fo p payll tax rates? at would make it cheaper to hire?? and couple thatith a 6 to 1212-mthth holiday for t t capil gains taxx f thesset markets? why not try something that wi
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hehe t invnvesrsrs and bunesses? we've e ginn everything to dividuals. all l thee raransrs. itit not working. why don't w whehelp busisisssses why donon't we helpp investsts?? >> i'll tellyoyo wh.. w w abt we give a t t cut busisineesesmaybe 250000 or $3,0 toto gee workers id time off. give t tm paiaid family l lea we paid vacacaonon,hahaver they wa t to . we'l'lpipickp the tab up t $3,000 a yeyear >> that'ss n not easible. w why not? >>ecause in this economy,y, i x speaking from a position w whe just d our owncuts and boss g gav everyononn exextr hax daoff.x withth that said, we're x privataty-y-he company and he'sx doing itit f moral purposessutu in general, thahat' not t w way to getet businesses t tore. >> we wouldoo itit we w wld take advdvangege of it. 's's mey on the tae. >> didie, i appeal to youtt former chaiaiomoman of the national assssoctitionf bubunens economists. weust do something to hp businesseses. it looks like wasasngngto is
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wawagi aholyihih against businesses. >> i don't agreeee. thatat the wrong language. i aeeeehey hire. i'momore in favor of yryrol llback as- believe it or r not, i agrgree withou sort oo bubut think t ttt o one o othe biggest cocoererns have is t th first thining atat tse rkers are e ining their hours ee gogoindodowns c ctiting back on thr cerage of alal care. so even though we cacan debate about who's insured. there are a t of peoplele unde insured. ththei biggestost ishehe health care covevegege a they're cutting it o and that's a bigger expense for t t governmentnt se really nd to deal with th. >> ththksks for j joingng uand congngralalatis, diane. >> andetet me ad my congratulations to diane. coming up, it isishehe mt critical eararniss season i years anan it is kicking upp torrow. we're gogointoto discus t thi exextltly w you needoo positionn
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yo portfolio ahead of the second quarter nbebe. lay? first upup, odod news outut america'suto dustry.. i i sa "good news." and sililva will joininext she e that, trait straight ahead onon here on "the call." wheaeas i did not have it,t, w wou, uh, like this, oh-ohoh-o only two aleleve n s. that w wldld te six tylenol arthrititis inin thisis flsls gd! ( laughing ) herere y g g eleven s sixenens... (announcer) frfromesigning some of the e wod'd'cleanest to building more ndndurbines than anyone in thcocotry... creatingng iovovatn today for amerera'a's morrow. ananks no problblem
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check out o oilrading down more t tha$1$1 at a almtt 2%. regulatoto are e nsnsiding a clampdowown t t trading in energy and othercommodities.. not sure how they'llll do at.
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>> $20 barrel is coming up. intntesesti with. > trere an ovsupply o of oil. > don't believee thth. . >> we have progrgramngng note. the commissionener o o thesecc l live on th "closing bell"l" this afternoon t to lklk about e new rules. trish? >> melelis,, it's likike y got the anut gallery next tyou in. > ilolove the peanut g glele too. ththatasas anteresting point about t $2$20 oil. we'll move on to chslsl. whatat dyoyou know? there's some good news h her fo chsler for a change. ththresale value onon its carar have irereed from may to june. bankruptcycy mhtht create a hol o big to tt outof. il is in chicagogo wh allhehe details on ththis hi there, phil. >>hihis the kindofof story larry l lik because he getsoo sepeople like m meaeat owow a lolot people, includining me ididif they go into nknkptcy, r resee vavalu, residual valuesilill take a hit. look at theatest data from
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automotive.. this is aninice ebound for jyy anand aaugt, compared withmay anjune, between 3.5% and , depending onon whether i is dodge, jeep or cchrlele a couplele thgshappened. e residual value rebounddrorom may r refctct t fact wh we'rere seeing i is strongerr used car maet. that's'serertaly has helpedd ou. also, keeeen ndnd when youou'r lookingat chrysler thihiisis a company that broughtht dnn inventories dramatically.. manufacturing was s ttn hohold esseseiaiall while they were in bankruptcy. that shut down and b brohtht do inventororieasas result. lues went up. ththechrysler plants, ey are nonow running after b beihut down for rohlhl eightweeks duduri bankruptcy. ththe ttom line is th. ththeytiti have aonong way t tgo to catatch up with thehe re ofe industry but w whe you lkk at residualal lues, this isis encoururagg.g. it shows peoeoplarare going o o anuying t the vehicles. they're nottatang aw from them, whicich s s e fear bore
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they wentntnto bankruptctc >> it's fascinatingng stuff. philil, t't'talk abouthese redual values. how dohrhrler residual v valss cocompe e to other autotomarsrs >> still lagging. it ndsds to be up around 41 or 42% and d isis ia projection from automototee ase guide, ththre years ooutwhat they'll be rtrt the hondaa andnd toyota, they'y really . >> how h much does babarurupt andd consumer perceptionof the company i imptt residual vvues? i would think h has lot to o o with it? coumumer perception has a a lt do with it butut this filters into the sed-car rkrket ififeoeopl think a brand i terrible a a wt to stayy aw, used car prices will fall ofoff. as a result, residualalals haveve imprpreded a tttt bit. >> gm. expect the s sam boboun in residual values forr when it comes out ofof bankruptptcy >> iwowoul't besurprised. sales haven't llen a as much a
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pepeop expected beforehe bankruptcy. ththiss a good iicicion that we'll likely s s the samee thin from gm.m. >> kay. phil leau, there might be sosome more out o ere. >> i i d d't want phillelebe to eat crow.. he was ahead othth curve on the rming up of used car bryceces which s sho the bottom of c car sales.s. wawas ahead of the curveve on gm bankrurupt.. but i don't wawa phill toatat crow. >> phill lebeau is goooo man. say that publicly, eqequically and publicly a on theheair. >> wn we come back, under fire for n not l lenng enough t pr u up c conmers in the ononom >> i havavnono ctrol over you today. >>re the banks to blameoror stalling econonocc recovery acacro t theglobe? we'll debate i it next in toda "call of the wild."
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>welcome baback off 73 pots. isis ithe course as weeavav bebeen sying ahahea of one of te biggest earnrnin'' seasons i decades. ch a critical timims so many investors areelolookg for a k to recoveryinin t mbmber d d ey're looking foptions toetetr resultss under t t
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thirird ararr and we'llet t ttt arard tomorrow with alalco after the llll >> okay. nonow,heeaears ofof t group of eight nationons convenenn ily totomoowow they'reexexpeed to touchch on longer term reforms oforld finance. ththe rld bankin a letter t to ththe 88 nations are clln global banks to stepep up l ldi to r reve the global economy.. in our "calall of thewildld" ar the bankses stalling the economic recovery by t nding ouou?? let'ss a ask rick santellin chicago and weention matt mccororckck, nking analyst. hello. matttt,t't's easy to blame theh nks, but the reality in a a reressssiodon't you have a slslking off of loann demand? you can't make a a loan where t demand is ltlterg in the global rececessn.n. >> absolutely.y. i agree wh you. i think whatat's happening heres the nknk and ththei activitiess right now en't the reaeaso for isis, w shall we call it,
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prolonged recovery. i believe their past s sinare whwh's's gng to be to be adjuststedyy t market ngng. it w wiltatake while to get out of this mess. ththeye past detrimental activitiesre the slowing down th recoveryry. >> but, rick,erers one of the thgs. there e e e a t of people who ntnto take advantage o ofow prices in theousing market. maybe get aececd home orr vavacaon home. ople that can actually afforor it. but when they go to get a lo they want themoo pup 0, , 5050% wn. isn'n't that overkilill? i can undedersndnd understata w don't want loans whehere you d t t anything do, but han'n' we we're inn opposite direction. >> if these are conforming nononjbo loans i t tnk 220% dow d beingmpmpyed auauall g goes a long way so i sagree. ifhehere bierer than jumbmbo, maybe t the institutition are rara. don't foforg,, f fddddie and f, even though ththe prime momortg areeeeein rising defaultsththe
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govevernntnt w wilacacce even lessss 125% loan to value. the questition is, s shodanks le more? hehehould only lendndo people that can pay back. if numumbe o o peoplee or businesses theyy perceive the paybybkk is getting ssllllerthey ouldn't lend. isn't that coress's jojob? to lend money to people wh n'n't y bacac >> let's focus onon melissa's point. th goes tthe heart off it. substandard lending is whahat t us into thisis mess in thth fir placace. 2020% wn should be a hard and faststulule th documents -- >> but not 20,, 40, 50 there's lots of lendidi o there. you haveve put soucuch down t get a conforming lo and we can't arart the c cyc of housig mamark r rovery because- - >> w w doesn't didd government it lending 12 loan value and allllff these crazy program
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and actually, instead of wasting taxpxperer mey, look at the redefault t tetes, why d d't ty pu it wawa those thatt are, once again, ablbleoo pay ack. hahe right nunuerers. cann put 220% down.. whwhy don't they focus on e good side? >> but people like thahaararen getting loans t pendndulas swung back.k. the peoplethth can't a affd it and can put 0% wnwn, still cacan'geget ln.n. >> matt,his is uttererly shkikingrom messa but i g g to d deawiwith it. i got t to play t the hd that's dealt me this morning. want to a askou this. why notot let market pces in these housing maetets jujust ththeyavavtoadjust.. they're gogoin toind their level and let't's not t to have gogornment interventntioanand let's not t yy to have a whole lot o of anti-markeket. if theydjdjt they'y'llbe yeye. we're alalreyy seeing a rise i sasalein somef f e h harstst hit
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places. >ut you can't buy i if y y can't get t a lo. . >> calilirnrnia prices aree jum plus, rit? >> seses are goioiup. talk to mebobout this. >>lay,y, what yououee seeing is babasilly, a step off t bottom.. you'll see sosomenventory rebuild here buthehe cenentr fact isis, i donon'tsese theogo of l lningtoto aeaten up consumer who islmost bkrkrup hoping that the nn that is wewe did d fofore will suddenly magigicay,y, f thselves. 's not goingoo wo.. it didn'tt workefefor and it n'n'work now. >> melelsasa h has herleeding hearartuiui and she wants peopl to have more substandard loans we can have - -- with z zo inintest rates, this is the problem that got us into t thi n the first ple.e. >> it's tfafa the her way.y. >> she's goingg to slug me lett me clarify urur position. i don't nt to distort your popotion.
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whatat a y youay something. >> my opinionon,if you c afford it and it's a coorormi loan d you put 2020 ddow u should get t e e lo. you shouldn'n't veveo put 40,0, 50, %% do. . >> can youauanty whatte'e' seeing in nuerer a llion? aaousin you don't like? >> i i'm g gng to hit y you ovee hehead >> we're out of f here. thanks, gs. memessa, i know diana is n t rere t i'll doowhwh i anan. you'u' right. a lolot o of peopleow alolo of banks are reqequeining 30% dow. 're going to dm up the numbers s on it. it's absolutely true. >> acdote is s t t tr. second q quaererearnings, w have those kicking off tomorrow. coming up next,owow you ne to position your portfolio.. this is critical. itit a ctical time with ese rnings coming o out so you n ne to knonow exactlyhahatyou want be in and whatyoyou n't want to be in.n. the ininsi into t theouousi
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market. totop alal estategents callingng bottom. th's'soming up.
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>> okay. lclce back. ththiss s ou "call toaction" eaings seasontatart tomomorr.. todaday t "call of action" whwhat companieses s shod be onr radar r anwhwhat compapaeses sh you avd? joins us scscus thehihi rkrket strategisttoror lp
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fincnciaand barry james, president of jamamesnvestment research.. great to see bothhof yoyo jejeffy, i know y y'r're bullish thanbarry. i'll kicktt off with you. as we gontnto thisrirical period, what is ithat you'ree okokinfor? have you sort of d disssed seseco q qrter ssayg,g, mamaee t th hot? u want to hear w wtt companies arar sayiningbobout theththir ararte are are y y relyingn d daa from ththeasas three momohshs? what's i imptata to you now? >> thehe are certrtaiyy some important cpoponts that w we want t see o othe second ararte did business improrove we know sosome e ecomic ta proved. soso m mart conditions certainly imimpred over theouours of the sendndquarter. we want to see t tha reflected n bubusiss reltlt buwhwhat f marimportant is, do t tt give businessseaders ththcoconfence to hold or even inincrseseguidance as it relate to the third andnd fourth quartr of this yearar last quarter, the babar s s t veryry w. yohad to meetour mbmber and hang on.. not gigive guidadaee and thahat good enoughgh.
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nono it's s hiererhis season. rprpore leaders need to raise guidananceo o ha ontoto gains. otherwise e thrr stocks may suerer >> barry,, fundamentally, i'm worried ababt t th oror recoveryryayay b denveredbased on louou j job numberers. let's look at profit.t. suppose we find outt businesses arroductive. productivit hashehe up. they'ree ccoscucuttg and they're veventy-cutting. willll tsese fundamentntalenerae a better profit s pererrmrman in q-2? >> t ty y might. people s seehrhrou that. we've seen it with a cououple companies inin t l lasquarter. >> what do youeaean ee thrhrou it?" see throughh whwh?? the e e key fdamentals that generateprofofit >> ghght. bubut uu can only cost-cut so much and only f firo many peoplele uililou runouout and yu have to actually get n business in the door andnd get revenues.
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what we've seen in this partrticarar lllly is you t thr earnings out the window. the worst performingg stocks di thth bt.t. the whose earnings wewe down 100% were upp over 30% in t the lala three months. those that hadhe worst earningsgs revisions downward we alsoso up very stronongl we'ree c comg out aerer a jumbld time where qlity is goingng to behehe name of f ee ggam those cpapani that h h their earnings and t tho that excxcdd their earnrninill do wwl.l. ososthat miss will be punished because e th'v'vead the biggest run-up in ththlalast threemonth. > jeffrere ist the ideaahat you want to g gn as an ininveor ead of the curve? you don't want to bu a aft t t ct? e e the reasonss y e ings like financialssunun up ahaheaof their earnings roror is t ttt everyone is anticipatig that with tetes as lows ey've been, these banks have got to be minin moneysomehow? ththe's aececery in ore? now's themoment of truth? these banks havaveoo comee roroh with somom decent numbers a a
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some k kinofof strong prognosis fofor e future or else? w wel that's righght. you hit thehe nl the head with the financials.s. here's a sectorhere we haven't seen mucuch in ththe way of upw revisions. wee seen the ticic debt ththe banks hold. tutual rise in vaation or the course o of e e arter. thatat dn'n't show up in earnin exexctctatns. we've seenen se e rong revenuee gagainin the kp tall mkekets ararea a mortgage prprocsisi. we're likely to see lesess loss reserve building this quarterer. i think financials s cod d one of the key sectors that will exceed expectations. ybybraise guidancece i in e ququarrsrsahead. that's what investsts s ar goin to react to. >> iagagre with you. i keke that story. even aanker canmamakerorot at a zero interest r re browing anloan it out at 6 bubut wawa to ask barry memes, babarr y yterday defensisive shares did very, veryy well. consumumer staples. alth care, prenationalization health care and utities.
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ishaha the wayay to go? if you'r're inin to have too vest and commitasas to the market, dodoououtay a awa from the cyclicalings o on a swewer grgrthth recovery a a go in th fefeives? >> yes, i think so.. what we'e're seeing issaa marke that's probably y in a toppingn phase.e. it won't probably be a rapid decline asas w saw in ththe prioious cycle.e. but it's gngng to have a a hard time makingngmuch progresess ae don't see arere earnings recovery in the e newo quarters. >>o what do i buy? >> well, y you go withh utilitie highgh eld. gogoith things keke gold, cocoanies - -- >>ou buy corporate bonds? >> not soucuch right now. especially not l low qualitity corporate bonds.s. stay with ththe highest qualityy jeyy mays. i think the treaeasu,,ith all the supply coming, ty have a littttlerebound. soveveigignonds from oerer countries s atat a t trie-e-like the netherlands orgermany. placesesikike at. think theyy offer good
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opportununieies. it will be sluggish. sellining omom insiderer and ahe inincrsese i supply off ock that just came out. it will be a aarard ing for the mamark t t make progresess but we'll move to quality.y. yoyodididn have it in the last three months soo if you stayitih gogo qualitynd good rnrnin i think youou'l do all righght ine ne quarter. >> we're running o out of time. final word,hahat are you buying right now? >> w we keke technology. i m menonon financials. thing they'll do w wel over the eaeaings' seasason i think k 'l'll get 1,1,0 on e p p by year-end. not a huhu rally bubut we enter the year defensively. now we canan add risk bk to portfolios gettingbabackowowds ththe ngng-tm asset allocation tatargs s ana great way to do that is touough technology, financials a and smaller-cap u.. stocks.. >> all right. ank you very much. good ideas from both of yoyo messa back to yyou what canan a million dollar buy you his ecocomimic
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imime? a whole e lo more whenitit come to real estate. >>e'll show you u llllio dollarar homess acrososs erera whwhathey're signalling about the bottom in ththe ususin market.
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welcome back. check out shares here. theyey a off aost 5% at$256 a share. the company cutting i i ararrly dividend by a a nickel. e 20 cents shaha.. the cocompyy lostorore than bibilln n llars last quarter,r,n part, because nononeotothe than ee weak h houngng market.t. first thecompany, s stos trading do,, aboveve48. melissa? >> thanks. what can a a million dollars bu you in today's's r rididenal re estate marketet? more ste, more land dd amenititiebubuit's relalati t t the market y y'r'ren and t t differences mighttolold e key to cliling b botm in the ususinmarket. we is twoopop real tate agents here. wewe have michael h he and mattw garrisonon,anaging dictct. ththan for joining us.. miaeael ll start witit you. are we ba twhwhat million cks could gegetouou in 2 200r
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2004? atat a we tatalkgg ouout. >> pricicgg as f back asas 2001 anand 2002. ally? >> ablutely. r r $1.7 million you c cou get 6,6,00sqsqua feet of waterfront ininhe seattle ar and nowhahat sameme housese is selelli f for $95,000 today.y. >> matthew, do yoyouagrgr?? >> a million is whatused to be 1.1.4 or 1.5, partrticararlyin construction, 44oror 5,000sqsqu foot s sinee fily homomave been hit hhar p ptiticurly in e emerging mamarks. >> i havee t t say, this is go. prpres hee to adjust. we had t thebububb and now they're adjusting dodown michael, missa f fncnciswho was chch senatorer than i smarter . she s say you have to veve 4 45 5050 down. for a miion bucs do i have to have this that much dn and
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ererany mortgage credit to buy the house?e? >> it is crazy. ultimately y youonon'teed to have 40 or 50%% own. there's still greatt credit ailable inhe ery level market.. bubut u do need 10 to 20%. >> yououcan't get loan with 1% down. >>what's wrong with 20. > i w wt 20%.%. we'v'vgogot t to veve clear andards. these e arnonoonly ndndin standards, theheserere ral standards. ththiss very important. that's parart of the dft in this country.y. moral standards. i am tining is to a highehe lelel. tthew, is m missa right? you have to hahave40%owown or can you get itt for 20 dn? >> if you canffffor the use, i ininin a l of cas you n n t it for 20% down. thtime to tighten creditasas the e orour yearsago. we have aig problem now of yeye that aretuck in houses they boughtt in 2005 and 2006.
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ey are real p pplple in a bad situtuioion. to the extent ththatomomne can't me in to buy eououse with 15rrven 2 2 down payment in me cases itt w wl spepend exten the problem. we have toto eee backnn t titer credit esesictions. obviously that's not ppppeng right w.w. >> a lotot of peoplpl w wan to a second homom because they think pres are so low in vacation areas ararndnd t coununtr this is s ancnce in a lifetime oprtunity. isishahat smartovov rightnow? over are those priceces s sti fl sosothing. > ihihinkhey're still falllling. i'm not surere wll hit bottom until as lateteas 2011.1. i think t market has long way to op. homeowowne a are beginning to alize, i'm upside down i inhiss and d ov 50% in lotff cases. mymycredit will r rover fastete an the market will. whwhy t just let it go? >> matthew,how's t the local markrk?? us theplay. i had dininne with dololly lent rere in new york k city.
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> nee dropper. hehe's so famous. shshe'here all the time. she tnknks new york in trouble anddhe thinks there's still bigg problemsms herere. let t me a askyoyo your l loc maet. where are e yoyo chicago?o? >> yeyeah m inchicago. what's it doing ininchicagag take me thrououghhe ci.. 'r'retalking million dollars. let's go thugug northmichigan the lake. whwh's that like? >orore downtown n chagago mamarks,s,hey're theeast hard-hit. ababoua yeargogo i was o on the ow and i said i dndn't think they were hit.t. they'r're stst starting to t ta hit. i saww a foreclosure e in one o the nicest b buiinin in chicago in the parkk hyatt tower a few months ago. wetarting to seetrtres in the lesseieiborhoods. >>owow aut t buburb >> as yget fthther outrom e e core, andnd the sameme thin with suburbrb the worse i it et. if you'ree in thehe highgh end rtrtshore suburbs, kind o o clclostotohe city, onong the ma t tnsit, it's bad but notot
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ththatad. ththe further o outouou get, if get out to suburbs where a lot of t tcommodities are, is not a goodsituation. . >> what about atattl michchae >> igree with mt.t. ifeaeatt were a pd and you drped a rock,hehe further o o th ripple goess the worse it gets thehe we're justnono startg to see c conss and pperties in city limitstatart to suffer. ststsi, beevev, rededmo is starting to o se decline in icicin >> is thathiteollar job losses? a big factor in this down snurn. >>tt startededff being th blue llll jobs but now 'r'reeeing a lot oththe white c clalar job plplayg into the lele fortunately, we don't s a bottom. wee e out 10 to 12 months bebehi t t rest of the cotry. it's r rlllly arting to become succinct ass to theagagtude the problemem >> really dedeprsing. thks for joioini .
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apeciate it. trisish back to you. "power lunch"h" i coming up at the topf the hr.r. bill griffffet w wt you got? > we're l loongng at million dollar homes in miamam hello jane. hi,larry. just a little over an h hr r aw since the mememoalals supposed to start.. we have a a huge l.a.olice presencece inside they're ltiti people with tickets startoo trickckle
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in up nexte'll talk about thee cost and theheenenefs after the brbrea not long ago, this man had limited mobility.
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last month, this woman wasn't even able to get around inside of her own home. they chose mobility. and they chose the scooter store! if you or a loved one live with limited mobility call the scooter store! no other company will work harder to make you mobile or do more to guarantee your complete satisfaction. if we pre-qualify you for a new power chair or
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scooter and your claim isn't approved, the scooter store will give you your power chair or scooter free. that's our guarantee. they were so helpful and nice. they filed all the paperwork, and medicare and my insurance covered the cost. we can work directly with medicare or with your insurance company. we can even help with financing. if there's a way, we'll find it! so don't wait any longer, call the scooter store today. > you're lking at aive picture of e e bi board.d. markets arare losing ground. off98 poinintsasas investors gr up f f a couplee of tngngs. thth treasury actition this afternoon anand cocouauart rnrnin results.
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that willlststar totorrrrow in t theeantime p prite funeraloror pop staricicel jacksoson u und way a a abt t hourromnow, mumultillion dollar memorial event takakeslace at the staplps center i inos angeles. family, friends andd thohousdsdo jason fans are expected t to attend. cn's's je wells i is there. she's live w wit more d detls o ththis jane i heard ts ispwards of m milonhat it's costing losos gegele >> that's thee uerer endf the timates, trish. right now we'e' show you a live aerial shot of t the hollywoooo hills where the family havingg the funerara service at forest wnwn. we're told chplosed dodo portions ofhe 101 freeway during rushh h hou to escort tm therere. i have beenold thatat jackson's casket with his remains will then be broughtere to thee staples centerfor the merial. estimateddosts range fr $$2 million n to$4 million for the city. th bigger t crowdhehe more the hundrededs of lala offffic that will l veveto stay dodown hehere
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i gotto telll you,u, i'm f fm h wn, coveredvery moror story ov two decades anand i've nevevr seen soo my lapdffffics in ee place. thevisitor's b beaeau estimatat today's event codd pump $2 llion into the economy. but that's not nearlrlynonoug t recoup the projectctedcost. we spoke with aeg, who donating t the stataeses cter a l.a. live propererty a and stst but thee c cy attorney rnrns tt aecocoulbe liable f forhe city's costs. >> y yes that's's h his opinion. we didisaee. ththiss not our servrvic itit the families. wiwithhe city a attney i respect him. he's n new i'llll chk this up to being maybe in h hisirst week go but not on the yyf f th fufunel.l. that's veryinappropriate. >> as for the secondada rket ininhe freeicicke to the memorial, auauthitits are thatening to arrest anyone buyingng osesellg the tickets. theyey wee on ew and craigslistt foa time butt they're ov.. ci i isetting up a websbsit
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asask ople to pyy up the ststs. ask fofor those benenetitingwe' loloing the stapleses center, yearssgo boughght ee naming righgh t to this cility for 2 years f for ababou6060 mlion. nothing may comomrere t tayay how many times have w w said "staples ntnter in the ltt week. they s sayouou can't bubuy exex staples is going to get tayay and ereric wright, who evuauate spsponrship, sayay this memoror could d benynywhe between $65 million and$7$75 millionnn free advertising to staples. we hear the family is running late. melissa, back to you. >> we e veve a quick bbre. and then financial ordrder >> even the p pop i is ighing i t theinancial crisis. mymy bgege pain's really inin mloloweback.
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feels kikindf f ke knives. ale e wos all day on my baba p pai only two aleve liquiuigegels . that would take twicice m man advil or ibuprofof.. aleve alallo m mto get through my w wordaday. mrevans? this is ninicerom onstar. i veveeceived an automomat s sigl u've been in a front-end c csh. do you need help? ? yeyeah i'i' c conct emergency servrvic a a stay with you. yookay? ye.
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even the pope is weighing in on the g gloll financialcrisis. a documentwowo years in thee makingngasas releasedhehere pop benedict proposos t theew financial l orr r ided by ethicscs. here's one ofofisis xcxcers. anany thougughts? he says---- it provides a sense how tororoce itndnd how to keke gd use of it. he's s sayg that greed isbad. >e'e's echoing. adam smith wrote thisisin 1756 and 1776, the theory off moral sentiments, , maetet mumust havn ethical centerer shouldldn'ththat be engrgraid?d? >> no one wl ever t tra with you againff you don'tononor


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