tv The Willis Report FOX Business August 26, 2012 4:00am-5:00am EDT
sandra: that's all that "money" that we have for you today. "the willis report" is next. gerri: tonight, new fox news poll puts mitt romney ahead and a new study on who might win the electoral college. it is a real eye opener. and debit cards for the rich. we will tell you all about it. welcome to "the willis report." ♪ ♪ gerri: hello, everybody. i and gerri willis. it may be the dog days of summer, but there are lots of economic warnings out there for anybody paying attention.
is our economy about to tip back into recession? to me now is john taylor, stanford university professor of economics and senior fellow at the hoover institution. they keep coming back on the show. just this week, the congressional budget office said that recession is likely if the automatic tax increases scheduled to go into effect at the beginning of next year happened. you said the recession is a big threat to the economy right now. what is your latest.? >> growth is already quite low. we are coming into this at the last quarter, just 1.5%, it won't be too much better in the current quarter. already very low. if there is a big tax increase, there is no question but that is a hit to the economy. we hope that won't happen. hope we get over this fiscal cliff. it remains to be seen. gerri: i guess the devil is in the details. one of the reasons the economy is weak is because no one can project where it is going next. as we show right now on the screen, we are going to hit $16,000 in federal debt shortly
this weekend. that plays a role as well, correct? >> that is correct. what needs to be done is to put in a policy that reduces spending gradually. he gets that debt down and keeps it from growing so rapidly. it makes sure that we are not going to increase taxes and a clarity in that sense. the question is whether we can do it politically. gerri: romney today on the campaign trail had this to say about his economic plan. >> i am not looking, as i know the obama people want to say, to reduce taxes for wealthy people. i'm looking, instead, to lower tax rates and limit deductions and exemptions in such a way that we have enterprises, small businesses, able to keep more of their capital, at the same time, simplify their code. gerri: john, you are part of that romney kitchen cabinet --
the economic advisors. giving him advice on how to handle the economy. does he ever right here? >> absolutely. what is holding the economy back his concerns about tax increases. he can put in place a policy that rules out out and actually reduces marginal tax rates and extends the base, that encourages firms to hire, take some of the cash and put to good use, it encourages the things that we want and that is more economic growth. the economics are pretty clear. and i think that the way he lays this out is pretty simple. we need to move ahead with this kind of program. gerri: there are questions about whether romney is being clear about the plan. do people really understand what he is promoting your? the president, of course, calling his plan "romney hood" because it is robin hood in reverse. folks that are in the middle class will end up paying for tax cuts for the wealthy. do you agree? >> no, i don't think that is the case at all. it is basically made up by
somebody else's calculations. they try to make some assumptions, that is not part of the plan. the plan is to reduce marginal tax rates and tax rates across the board. 20% across the board. that will help everyone. most importantly, it will be necessary to do this to increase economic growth, which has been so low the last few years. that is why unemployment is so high, especially long-term employment. it is the right thing to get an employment down. what we have been doing recently doesn't work. >> the pew research had an amazing study on the middle class, talking about not only incomes, but also the middle classes in 20% of the net worth over the last decade. i don't feel like either candidate is really talking about what to do to help the middle class. what should they be talking about, and what do you think mitt romney is going to attack
next on this topic? >> of course come governor romney, when he describes this reform plan to reduce the debt and get our regulations to get economic growth going -- the unemployment rate affects middle-class for lack of job opportunities. lack of job opportunities and economic growth affects the middle class. all of those things that you can do to get a faster growth rate -- like we've had in past expansions and in the 1980s, that is the way to help the middle class. it has helped them in the past and will help again be one john taylor, thank you for coming on. come back anytime. >> thank you. gerri: when mitt romney takes the stage at the gop convention, will i be on hand or on the events going on outside the convention? let's ask doug schon. >> thank you for having me, gerri. gerri: who else is going to get the spotlight next week?
we have a lot of tea partiers, the vice president, as a matter of fact will be there. what do you expect? >> the republicans are going to try to stay tightly focused and scripted on specifics a plan for the middle-class to flesh out what john taylor was just talking about. precise examples, real-life people. the democrats would like political theater. they like the tea party to be fighting with the mainstream republicans and the vice president tends to the pot, so much the better, gerri. gerri: there is another contingency and that is the 15,000 journalists that will be covering the convention. they are also the folks who want a good story. therapy when it's out there, if ron paul is out there, they will definitely be covering in. >> gerri, you could not be more right. there is the tea party effort trying to bring in more antiestablishment republicans. into the process. the republicans led by mitt romney want to keep it tight and focused. the tea party would like the
antiestablishment forces to be prominent. you mentioned some of them. the bottom line is that the press wants a story and the story they want is not inside. gerri: absolutely. you mentioned tea partiers won attention for their candidates. tea party.net has an advertising campaign. they show kerry and to encourage and sir palen. these are people they want to speak and are not speaking. is this going to get traction? will this get some momentum beyond the tea party? this could really make it difficult for the party. >> there will be 15,000 journalists looking for a story. it may not be who is in the hall, but who is outside the hall. newt gingrich, ron paul, sir sarah palin, most especially, is
the story. paul ryan's choice, gerri, at least temporarily brought the party together a. gerri: it sure did. we should be talking about the economy. 85% of people in a pew research poll said you know, we are having a hard time making it. we are having difficulty maintaining our standard of living. our focus isn't even on this. >> gerri, you cannot be more right. this is the issue in the election. obama has talked about redistribution, and until recently, governor romney really has had nothing to say. bottom line, he wants specifics and ideas and programs under one account. gerri: we were talking about a new fox poll showing romney ahead. it is 45244. in terms of statistics, it is not really that meaningful. but it does talk about momentum. would he make of it?
>> the momentum is clearly with governor romney. he has had three or four or five points tops of movement. the convention will give him a few more points, possibly. the real question is where we stand after the dust settles. then we will know where the races. gerri: we have a long way to go. a lot of bad ads hats and mudslinging. americans were pretty tired of it. >> they may be already. gerri: thank you for coming out. if you're at the convention, come on our show and populist. >> absolutely. gerri: president obama and his teleprompter have become one are the least, that is what this picture shows. the president was snapped by a reuters photographer on the campaign trail in cleveland this week. the president had perfectly obscured by the glass of his teleprompter. of course, the president's best moments are when he is off prompter like this one. if you have a business, you didn't build that. somebody else made that happen.
gerri: all right, dc the words coming out of my mouth? look at his teleprompter. that is what i read everyday. of course, we don't always read it. the president didn't read and he got in trouble. see the timeline? we can get rid of it. we shouldn't read it all the time. coming back, will romney win in a landslide? i will tell you why romney will get the most electoral votes coming up next
electors. that means that sometimes the popular vote goes one way and in the electoral college, does it differently. george w. bush won the electoral college, but al gore won the popular vote. in this election poll, it shows a tight race. a new analysis that focuses strictly on the electoral college shows mitt romney is running away with it. if business successfully chosen u.s. president since 1980. the professor's model stresses the economy. state and national jobless figures, as well as incomes, and on both scores from the president's record has come up short. despite emerging from recession two years ago, unemployment, as we talked about many times, stayed above 8% for 42 months. income figures. they are anemic, too. a pew research survey released shows middle-class incomes have
fallen from nearly 73,002 just 70,000 in 2010. worse, median net worth for the middle-class has eroded dramatically. down 28% in the same period. the racing two decades of genes. the professors believe those kinds of numbers impact parties in different ways. voters hold democrats more responsible for on employment rates. while republicans are held responsible for income numbers. that distinction may not matter this time around, but both numbers are paltry. what is more, obama faces the headwinds of history. no presidents since fdr have been reelected with unemployment above 8%. off the electoral map, these two professors as they see it. 270 is the magic number. whoever crosses that line wins. romney chomps obama winning 320 electoral votes to obama's 218. mitt romney takes every single
swing states, including florida, pennsylvania, ohio, the key to mitt romney winning is the economy and it doesn't look like it is going to improve much before election day. in fact, economists say it could get worse. in order for obama to win, according to the very model, it would be down 5% for unemployment at least. for many americans are out of work, that's not going to happen soon. that's what i have to say. now, we want to know what you think. here is our question. is the electoral college outdated? go to our website and i will share the results at the end of the show. 0,=>hoúócr3>
it gives you the exact amount of postage you need the instant you need it. can you print only stamps? no. first class. priority mail. certified. international. and the mailman picks it up. i don't leave the shop anymore. [ male announcer ] get a 4-week trial plus $100 in extras including postage and a digital scale. go to stamps.com/tv and never go to the post office again. gerri: speculators whirring again. worried that the fed will employ a stimulus measures. this after the market rally came yesterday afternoon when the fed said it would take action. what is the real story? let's ask randy costner.
welcome back to the show. it's always great to have you here. but that seems to indicate that we get some kind of stimulus. james bullard, that the president saying, going along at a slow pace is not enough to justify gigantic action. i would like to see some deterioration of the indication that we will slide down further. were they going to do? >> i think that jim made it very clear. speaking for himself, not for the entire fnc. if you look at the minutes, you will see that a number of members.it was pretty close to time to take some action. i think that they didn't take action at the previous meeting, and they are waiting to see how they are evolving. i think the employment report that will come out and about a week and a half or two weeks will be very important. gerri: help me read that. at what level do you think we are guaranteed that action? what would the number have to come in at that the fed would
say that we have to step in? >> i don't think there is any particular number. i was there sitting around the table, it wasn't like, if the number is below this orb of this -- that is the trigger point for action. it is a little bit more nuanced. where is the direction going? looking at a few numbers -- let's say we give disappointing report. the markets are expecting 150,000 jobs created in the previous month. if we don't get something like half of that and some revisions to the previous month -- that makes action likely. gerri: clearly, johns are critical jobs. another thing that may be important, the pressure from wall street and the pressure from all washington. >> there are always pressures from washington and wall street. [laughter] >> that is just part of the job
description i think that the chairman wants to do what he believes is best in light of the economy and he will do that regardless of what pressures may be coming from washington where the campaign or from wall street. gerri: does it ever play a reverse impact where is the fed feels like they're getting a lot of pressure from the white house, they are like no, we're not doing what you want and just forget about it? without ever having? >> i guess it is conceivable that it could happen. it certainly wasn't the case when i was there and i don't really see much evidence of it. i think the chairman just wants to do what he thinks is right. people are saying it's good or bad -- you know, that's what they're going to say. gerri: as a matter of fact, he said open mouth operations may be better than anything else. what is meant by that? >> so when the fed buys securities, that is open market operations. but they can also try to improve the communication strategy could open mouth operations. some things they might do are
extended the time in which they might raise rates. also what they can do -- they could say, if inflation is expected to be under our target of 2% and the unemployment rate is expected to be over some number, let's say 8% or 7.5% for the next year, 18 months -- that would be conditions under which we would act and i think that would help to give some clarity to people to get comfortable. gerri: i don't know how much good that action can do, given the fact that a lot of this trouble is caused by the fact that congress is not doing what it needs to do. there are lots of questions out there and we don't know what our tax rates will be. don't the edges of the come from somewhere else when i.
>> you can prevent a 1930s style deflation or japan type deflation -- you have these fiscal uncertainties and the people in washington are doing their job to try to reduce the uncertainty and croissants sustainable paths. the fed can only do so much. gerri: that can only do so much for this much as we want them to do. the markets trade on this come at the end of the day, they only have so much power. randy, thank you for coming in. it is a pleasure to have you on the show. >> thank you. gerri: still to come, will the markets going down continue? we will have advice. and will ipo investments be made whole again after the facebook ipo john is 42. mortgage. married. two great kids. he wants to protect his family with a $500,000 term life insurance policy.
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♪ gerri: welcome back. nasdaq has offered to settle its debauched facebook ipo coming under fire. the swiss banking giant glass in the settlement offer and as unfair. said the proposed deal was nowhere near enough. individual investors who have already lost half their money in this ridiculous ipo. joining me now, rob morgan from falcon securities. great to have you here. i want to start with this letter, which i have to say came out last night. i was sort of shocked the language. market participants and losses were not caused by a system which. there were caused by grossly negligent self-serving business decisions made by nasdaq to enhance its own profitability. what does that mean? >> well, what's going to make it tough here is the fact that there are two other firms outside, citadel, the hedge fund company is urging the sec to accept the nasdaq.
>> 466 and the nasdaq is saying this is going to cover that. they have some questions. given the fact its citadel and capital is leaning toward urging them to accept. four players here that lost money. four big players, two of them are telling the sec, let's take the money. two of them are unhappy. gerri: we have been all year. the settlement, $64 million, 63. exchange members are reminded that they may seek financial accommodation from nasdaq pursuant to nasdaq room number 4626. >> and other parts of this. emmy, you mentioned the fact that investors have obviously lost half their money, and that
had nothing to do with the nasdaq execution. this was an overpriced stock. gerri: you think it's overpriced right now. >> i think so. sixty times earnings when it came out, half the value, which means it 30 times earnings, and this is a company that has shown declining revenues and the first. if you're 60 times or even 30 times earnings are you better have a hockey stick of our revenue growth chart. this is a company that had declining revenue. gerri: out of the gate at 38. here is what they had to say. nasdaq proposal, facebook related claims to mostly inadequate. ubs on the same side of city. >> granted, you know, i think citadel and the other from that i mentioned to not lose nearly as much money. gerri: critical for small investors. is this putting a chilling
effect on professional investors' interest, not only internet ipo is, but stocks generally? >> yes. and one of the reasons is because social media stocks, ipos last year got way out of whack price wise. i think facebook was kind of the poster child of that. now the recent ipos coming out, they are not a successful. they're cheaper. so i think actually there's sanity would turn into that said the market. it did take long enough. this segment get really out of hand from the high side. gerri: comeback in any time. after being dumped by at&t verizon and limited wireless, the plan and making a comeback. start selling an unlimited data planned again on september 5th that will cost 20-$30 per month. the number three carrier already has an unlimited data plan. sprint's network is showing signs of congested. at&t and verizon both stopped
unlimited plans last year. both carriers offer the iphone which uses record amounts of data, and they cannot keep up with the promises of these plans. it will continue following the story. hard to miss the triple digit losses for the dow industrials. the market's down board is in a row house. that is the longest losing streak in three weeks. other markets correcting? >> first of all, it is confusing me. i have to say. you know, it is one thing to have stocks down. it is another thing to have it related to other markets. for example, if we see stocks down the generally looked set your first. if we look at the pattern of interest rates lower and stocks down cannot normally you see the euro down. i don't think they're related.
and the other hand, with interest rates lower and gold rising, perhaps we could say, well, maybe we are looking at that fed resurrecting quantitative easing, but then we would normally have seen stocks rise. so it seems not only are stocks reversing this course which is disturbing by itself, but they're doing it in no way that is not synchronized with the other markets that i usually find. gerri: none of the usual relationship sold right now is what you're saying, and it's confusing to professional investors to what this all the time. we had a decline of 9% in may. are we going back? >> i don't think so. the thing is, and left without any news, without any headlines, the market does appear to want to go higher, at least on, you know, relatively meager earnings , growth in revenues. analysts are expecting a little pick up.
i think at least fundamentally the trend is probably favorable. all this other stuff. well, you know, normally i would say it could be a scare with israel, what oil was down today. so it looks to me like the markets are starting to change course. i'm just not sure if this is the beginning of, you know, up cold streak for stocks right now. gerri: one of the big things coming up is this meeting in jackson all where bin bernanke will speak, and all eyes will be glued on him. big debate in the market over whether the fed will try to do more to help this economy. what does your crystal ball six? >> well, what that will likely do and what they should do are two different things. that needs to be off the table. let's not worry. we have had a rising energy prices, rising other commodity prices as a result of a drought. we are seeing a slight pickup.
interest rates are at, you know, an all-time low. i'm not sure that we need qe. in fact, what i would hope the fed would do is look to the european central banks and other central banks to take the lead. that said, you know, we saw minutes come out yesterday. perhaps central bankers, i mean the governors are in favor. and so there is a sense there going to do it anyway. gerri: why don't you like more stimulus to make everyone i know seems to be clamoring for more help. >> i think it is just, you know, really just sheer shock. it is like we're running a marathon on twinkies. it is not really -- it is not addressing the long-term issues. what it is doing is trying to solve the symptoms. as we know, the more twinkies we eat the worse things get. gerri: it's fun for a little while. you get that little rush, the sugar shock. great. thank you for coming on.
stock can't hit a dollar on the nasdaq. as we told you that last night nasdaq warning the car battery company a123 systems that the price would be delisted if it does not go up to a dollar. the closing price, $0.30 per share. with more on this, environmental scientist and a ei scholar. what do you make of this? >> we have another great example of socialism. to a taxpayer dollars to cover risky venture by making super batteries for cars that people are going to buy. here, of course, the taxpayer is taking the hit where they're not going to get their money back. gerri: any way this company can get back above a dollar? >> i don't see it. and now wants to buy it for virtually nothing. actually does seem to have worked with to some are in the. gerri: that is there money, investment, proprietary knowledge. >> that is exactly right.
intelligence. the administration continues to claim that all these investments were perfectly fine and evaluated by career, the department of energy, no undue risks taken. this is really crazy. as i said cottages socialism. gerri: i love that phrase. the big winners have got to be the chinese. they get all the work and half-hearted to pay the money for it. they pay some, but obviously not what it cost. >> the chinese are going to scoop up the price year, assuming, of course, there is a future in electric vehicles. so they could just well be that china will buy and sell something that doesn't work very much, but only the future knows. gerri: the federal government seems to be good at picking losers. can we trust the federal government in this capacity? is there any way to have a good influence on r&d? >> they can if they are sticking to fundamental university level r&d and not picking favre
technologies. it's a looking for new ways to improve chymistry as opposed to a company that says we have a great technology. this juices the government r&d can do well the way. when you start trying to do the venture capitalists is developing individual industries cross over the development special the money gets lost. gerri: to you know what i find interesting? we're in the middle of an engine surge in this country, i guess, you name it. we are on fire. the you think a lot of these technologies we are spending so much time talking about, wind, solar, do you think it will go on the wayside? >> i do. unless the of criminalists and administration and manage step over regular to the law with a cycle the natural gas pump the economics you can't get over the
fact the blow or shine at the wrong time in comparison to when the action the the energy. gerri: appreciate time. the latest developments. another great energy disaster. recently the federal government approved a multimillion-dollar loan guarantee to a wind energy company in denmark. two days later that denmark company zaps two-thirds of its work force. the reports show the struggling company got $15 million from the state of arkansas. why is more taxpayer dollars. they celebrated successful partnership. anyone standing in the way of this industry frankly is unamerican. you know what is really an american? a danish company laying off 234 workers in an american plan
marketed to sub prime borrowers, people without a lot of money. focus tonight, talking about that cards. now, slew of card issuers are marketing these consumer traps to the wealthy. here to break it down, consumer education president for smart credit. welcome back to the show. why sell these to overly wealthy people? >> well, it is a segment of the market that has been relatively untapped for prepaid debit cards. essentially what they're doing is going from the hon bank or under banks to the left -- less sophisticated and now the last piece hiding under the rock is the more fluent and savvy consumer that will make more money. gerri: had dirty little secret that americans love these things, but not for any good reason i can find. i guess if you're really wealthy and want to pay all those fees you can. i think you're starting to find that some of these cards they are being forced to drop he's. >> yeah. and the good news is, if you
want to call it good news. i guess it is more of a subtle lining and good news, but these things are coming out of the woodwork. every month some new card is being created in some celebrity is selling his soul to the devil and having his name associated with it. and what that does, jerry, you know, it creates competition. some of these newer cards, while they're still not good products, the pricing is definitely more competitive. had we had this conversation the year ago there would have been extreme overpricing. >> well, -- gerri: well, they must have a promotional budget for this that would fund the war in afghanistan for the next two years. no recurring fees. is that how you say it? adelle 95. the chase card has $4.95 feet. you know, do you think that people who are fluent are smart enough to see through this? >> i think you make a very good point not only about the marketing budget. the smells like a huge margin.
but, you're right. i'm not sure how clever this was to spend a lot of dough going out to the more affluent and therefore the savvier spender and personal finance user. the issue with these cards is that they're not as good an alternative as even just a simple gift for that you can go by at the mall for dollar and that has no reoccurring fee. certainly credit cards, it's not your money. someone else's money. prepaid cards are your money, and i've heard what i think is probably the most disingenuous comment about why these cards are getting more popular by the american bankers association. they said -- i'm not going to get it exactly right. the momentum and driving force behind these products is that they are exciting. i could guarantee, there is not want to sylmar, there is not one consumer in this country that thinks that prepaid debit cards are exciting. that is a joke. i would have intimately more perspective the come out and say, the reason we are pushing
ahead of these is because they are enormously profitable, loaded with fees. we can market them, and there is no cap on interchange where there are dealing with that right now. gerri: is it also the fact that there would rather have fewer bank accounts? let's face it. it is really expensive for them to run all those accounts? >> that is a very good point. it is an alternative revenue source to the traditional relationships that we had with banks. all these new -- all the new rules and legislation, if you love it or hate it, it doesn't matter. the fact is, and they're right, it makes it more expensive to be a bank. they have to figure out otherwise it -- other ways to monetize the consumer. i am really scared what we will see in 12 months. gerri: wow. that means we have to have you back. thank you for lifting the curtains. always showing us what is going on in the background. we appreciate it. thank you. >> you bet. gerri: and speaking of wealthy, combine beauty and hard work and the money is sure to follow.
in tonight's top five, the wealthiest supermodels on the planet. coming in a number five, christie brinkley. nearly every major magazine covers. she has earned -- that has earned her an estimated net worth of $80 million. tayra banks, the first african-american to appear solo on sports illustrated swimsuit cover, and the master of all trades, worth an estimated 90 million. number three, cindy crawford, her iconic vanity fair cover and it appearance in playboy. this model left the runway in 2000. nash's work hundred millions. number two, victoria's secret angel and wife of the new england patriots quarterback tom brady is worth $250 million. that is one with the -- of the household. the number one wealthiest supermodel in the world is, did you think of that? kathy ireland. he probably did not. over 40 tv shows combined with
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- ♪ oh, love and only love - ♪ between your heart and mine ♪ - ♪ between your heart and mine ♪ male announcer: a message from the foundation for a better life. gerri: a new poll says that mitt romney will win with more than 300 electoral votes. these guys in their pool are bringing us to our question of the day. is the electoral college updated? it is totally outdated. just another way that the powers that be make sure that real voters don't matter.
another viewer agreed with him. get with the times already. jimmy writes the guesstimate the electoral college is outdated. we should vote by county is so they're not big cities could make decisions for states. we asked on gerriwillis.com. 46% said yes, and 54% said no. david from california says harry reid says the burden of proof is on mitt romney should sure that he paid his taxes. this is america, and that's what? you are innocent until proven guilty. that puts the burden of proof on harry reid and not mitt romney. and it doesn't the irs pursue federal employees that don't pay their taxes? will prosecutors not felt charges? my are these tax cheats allow to
continue employment? charlie from pennsylvania says i love that you take on republican hustlers as well as democrats. keep on the bipartisan persona red congress is intent and content incompetence and waste of our time. i thank you for that. send an e-mail to firstname.lastname@example.org. we all know washington is a small town, but sometimes it seems tiny. according to the ap, wall street executive who performed an independent review exonerated the obama administration and their energy loan program, it is now a major obama campaign contributors. the former ceo of fannie mae testified before congress that the deal he was not at high risk in more than $23 million awarded the green companies. he testified that he was an independent watchdog. two weeks later, allison began giving money to the obama