tv The Willis Report FOX Business April 1, 2013 9:00pm-10:00pm EDT
trillions of dollars at the last few decades with nothing to show for it. >> we have been trying and this doesn't work.evenin you are fantastic. thank you for watching. gerri: hello, everybody. i'm gerri willis. tonight on "the willis report", more than five months after hurricane sandy, homeowners still don't have their insurance claims settled. a special investigation. also, an entire community sucked into a giant ponzi scheme. we will tell you how so many smart people lost some much money. and with the stock market in record highs is it too late to apply? we are on the case next on "the willis report." ♪
gerri: all that and more coming up. first, our top story, more than five months after hurricane sandy destroyed tens of thousands of homes along the east coast, some homeowners still have not had their insurance claims settled. many are now discovering that the real nightmare of sandy was not a hurricane but the mountain of red tape they are now fighting in its aftermath. in a moment we will go -- we will hear from one homeowner who has been waiting months. his story is a lesson for all of us. before that, rick leventhal is in new jersey was more on the slow recovery. to you. >> reporter: so many homes like these and communities up and downhe jersey shore look very much today like they did in the days after hurricane sandy it. in desperate need of repairs or just seein repairs being made for the first time. a lengthy disputes with the insurance companies. >> a very surreal thing.
hard to imagine we used to live here. we had a life and now it is gone. >> reporter: they but this small bungalow near t jersey shore eight years ago just before they get married. >> the water came from underneath, rushing underneath and it hit the top player out through here which was my husband's office. >> reporter: the house was flooded during super storm sandy. engineers say the place must be torn down and rebuilt from the ground of. >> we will be for the night because the storm is coming in never think that's the last night the you will sleep in your bed. that is a last night you will,. >> reporter: even though this couple had full flood insurance and said there were never laid on the payment they have only been offered 28,000, barely enough to demolish the house into a lot. >> dragging their fee, submitting to the point where we're supposed to walk away even though we have flood insurance. it makes no sense.
>> reporr: they had done slightly better with their claims, flooding their home just before does want. they're gonna have their estimated repair costs and insurance money. they say it has been a constant battle. >> to want to put our house back together. we are not looking for anything. we just want to put it back so that we can move back in. >> reporter: an insurance success story sort of. she lost her first floor and basement in the storm. her house was hit by another from across the street. she waited months and recently got a substantial check. >> fortunate to have any settleeent. it is not all the we hope for, but it was enough to go forward. >> reporter: a national insurance trade group would not discuss individual cases buses over all the claims were overwhelming. more than half a million file for damages. more than 90 percent settled for a total of nearly $7 billion. the insurance indusy says it
is not about paying people less than they want t pain people the amount they are actually do on the terms of their contract. in most cases that is less than they want and less, they say, then they need to adequately rebuild. gerri: thank you. well, one homeowner feels he is getting the shaft, maurice. he is frustrated at the slow response for his insurance companies. he called a reporter and his local newspaper, the philadelphia a acquirer, and iran is story to date asking where the money is. welcome to the show. thank you for coming on. it has been six months. you still have not been made whole despite paying for insurance. what is causing the delay? >> there seems to be nothing but a big runaround. everybody wants paperwork,ore paperwork. reports. they don't care about the people who are going to miss -- i mean
they're missing time of their life. i mean, my house is an inevitable. the insurance company has sent there engineer. he has found the problem. he has recommended ways to fix it. no money. call thensurance company. gerri: all right. i was wanting to show the report, one of the many reports that have been made in your house. and it is linked. there is a lot here. you say it is red tape. chris christie says that the national flood insurance program response has been awful. judy you think is at fault here? >> i think it is the government or whoever runs the national flood insurance. the adjuster tells me he sent report sen. i have a lot of reports. i call the insurance company and they said they have insurance.
never talk to the same person. no one has your case. they don't care. they just don't care. i think of our elected officials they have a lot to do with it. senators, congressmen, governor christie but not see anyone else. gerri: no follow-up. you know, what you say is interesting. you never talk to the same person twice. that is really frustrating. i called new jersey's state insurance department and never heard back, left a message. and i'm calling for the press people and i cannot get through. i have a heck of a time just getting through their call center. let's talk a little bit about the fact that this is a second home for you. a lot of the people out there saying that it is second hollanders are really getting stuck. people who live there as a primary residence are getting the money first. is that what you're hearing? >> yes, and they should. i agree 100 percent with that. the people who live there full time, they should get a fixed first.
but five months with no money? what are these people doing? gerri: let me ask you this because i think a lot of people out there will say, here's a guy who's just as his hand out and wants to get money. you paid for your insurance coverage. this is money that you actually have a claim for. money you're actually do, right? >> i pay e everything, my taxeso might not want anything handed out to me. i just want what i pay for. i want -- they give my premium. what they charge me is their problem. i don't know, you know. they asked me for $1,700 in unpaid. now i am asking him to settle my claim in this seems to be an awful long road. gerri: dragging their feet. >> yes. gerri: look, feel that is telling folks that 94 percent of the clans in new jersey have been settled . does that seem right to you? >> i don't know. i guess i am a six percentage, i guess, right?
i don't know. the thing is, there was a complete line. i called the complaint line. they answered it, fema, and said there were not taking any more complaints, believe it or not. now, you know, it is really a joke, you know. very frustrating. gerri: how long have you had the house? what are your dreams when you got it? you had a plan for the house. >> i had the house for eight years. we had hom in the ocean city, different places, condos, moved up a little bit. my wife just loves it there. we've had our children there. now i have a grandchild that is not going to see his first summer down on the shore. anit not for our fault, just because, you know, there is a lot of bureaucrats saying they're giving money out, but i've got no word is that. would like to see the money. gerri: thank you fo coming out tonight. in absolute pleasure talking to you. stay in touch and let us know how it turns out.
if he'd made all we want to know because we want to report it. >> i appreciated. gerri: from red tape-out and out fraud. one of the biggest investment scams in history. at the close it down last year saying it was nothing more than $600 million ponzi scheme. people who make money were ordered to take part in a settlement with all victims having ted tossup belt. investors in north carolina were hit disproportionately hard. based in lexington, north carolina. that town decimated. the company ceo has been ordered to pay everyone back. so far, just half of the money has been recovered. not charged with a crime how did a 1 million people, million people get sucked into this? my next guest says it was easy, and if you think you're too smart to get ripped off, you're wrong. joining me now, author of the new book the ultimate ponzi. thank you for coming on the
show. it is great to have you here. you are an expert on ponzi schemes. how is it that all of these people did do? >> in many cases it is due to a affinity fraud. when you are close to someone, perhaps to your churc synagogue, or a neighborhood group. you go win because you know someone who has been successful and is making money. gerri: i have seen as a lot in all kinds of fraud. somebody takes the of the eyes of somebody that they think they can trust, either because the family or friends or, you know, maybe from the same part of the wwrld that hapns over and over again. tell us about how this works and what made it different. >> certainly. this took place based in a small town, lexington north carolina. the website operated as an
online auction site similar to ebay. then on the investment side of this was the rewards in which returns were promised of anywhere from 20 to 400. and the first red flag with any investment is if returns are promised which are just unrealistic. it. gerri: a ponzi scheme, the old-fashioned ponzi scheme we have seen so often, basically the money that you put into the pot is then used to pay back investors. some money is not really invested to make is just moved around the board. and at the end of the date it doesn't make anything except for the founders to run away from the money and apparently that may be what happened. what i don't understand is why the fellow at the center of this , the sec has left him alone other than to ask for money back. there have been no charges filed why?
>> well, these types of cases take time. this gentleman is someone who is cooperating with the sec. in my opinion he will be brought down sennar later, probably sooner as a result of this crime . gerri: if you could give folks one bit of advice because the thing that caughmy attention in this story was, it was lawyers, doctors, and all of the leads of lexington were pulled into this thing. how you avoid these scams? >> the first and most important thing is to speak with an investment professional, an accountant, someone the you know that does your tax returns and get an opinion, does this make any sense? because these investment schemes that promised returns of party% or more never end up. gerri: you know what it reminds me of?
we have this saying. if your mother says she loves you, check it out. you have to check erything out. thank you for coming on. appreciate your time. we will be sure to follow upon e story. thank you so much. >> thank you. gerri: now we want to know what you think. here is our question. use investing in vice to you trust more. maybe you go your own advice. log on to gerriwillis.com and are on the right-hand side of the screen analysis results of the end of the show. we are just etting started. next, the most popular city in america tough file for bankruptcy. how they get there are what happens now and will anyone be made whole again? tito's after the break. ♪
>> this will take years and years and nothing happens. [laughter] >> amen. good to see you. later in the show cyprus wants to be considered as a tax haven for wealthy individuals will bases private bank accounts? or school kids being over diagnosed with a ph.d.? dr. mark siegel joins me next. welcome to the new new york state.
what's the "new" in the new new york? a new property tax cap... and the lowest middle class income tax rate in 60 years... and a billion dollars in tax breaks and incentives. new opportunities for business. over 250,000 new private sector jobs were created over the last two year and 17 straight months of job grth. with the most private sector jobs ever. lower taxes, new incentives, new jobs, now that's news. to grow or start your business in the new new york visit thenewny.com
♪ right. but the most important feature of all is... the capital one purchase eraser. i can redeem the double miles i earned with my venture card to erase recent tral purchases. d with a few clicks, this mission never happened. uh, what's this button do? [ electricity zaps ] ♪ you requested backup? yes. yes i did. what's in your wallet? ♪ gerri: a shocking new report finds one in ten u.s. schoolchildren have been
gerri: s gary kneweport with the centers for disease control would find the number of kids, children from such hyperactivity disorder is on the rise, up 63 percent of the past decade. also growing concern over the new drug used to treat the disorder. here to make sense of it, dr. mark siegel, a member of the fox news medical a-team. i have to tell you, i look at this and i think, how is it possible that all of these kids have this problem? we had not even heard of this problem 20 years ago. now one in ten kids has a ph.d. >> 6 million, more than of $4 billion industry. gerri: that is the important fact right there, 80's and industry.
>> and by that iean everybody is busy diagnosing it. not necessarily only the appropriat people. pediatricians. gerri: the don't draw blood and find a phd. there is no test for it really. you're just watching behavior. at the end of the day is being over diagnosed? >> i think so, and i have some evidence. hyperactivity, impulsivity. it sounds like -- and why is it? gerri: 20% of high-school boys. >> there you go. and why are boys twice as likely? well, because there probably twice as likely to be inattentive and distracted. girls are taught earlier how to behave, maybe more advanced and actually. gerri: more advanced, i think you know that well. one of the things i think is feeling this is the drug to
treat this like admiral, you can make a market in them in high school and don't have to be a doctor to sell them. the kids trade those. i think that is what is going on. they're creating the demand because they know at the end of the day, if you have a test, >> that's brilliant, here's another way to put it, outcome something i call after analysis. if a psychiatrist gives it to you and you take a test, you're going to score better on that test you have adhd or not, and they say, hey, this stuff is working. this not to say no one has adhd. of course, peopl do, and, of course, people benefit from the medications. gerri: i don't think we know how to put up with behavior and this is a easy way to shut them down, slow them down so they are easier to manage. >> that's right. that's what society's doing, but on a personal basis, someone has a job description, and the job description is to sort it out, figure out who has it, and treat them.
the truth is we don't know what the long term effects of this are. people get anxious, addicted to this. gerri: absolutely right. we have to watch for it. come back and talk more about it. >> i'd love to. gerri: fascinating, a weird disease that you wonder if it's a real thing. thank you. >> great to see you. gerri: lou dobbs talks about the stocks and bankruptcy and investors getting the short end of the stick, and crisis in cypress has many worried about money overseas. is offshore banking a good option? ne, where to put your money. ♪ we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪
the question is how do you make sure you have the money you need to enjoy all of these years. ♪ toa brand new start.e years. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support, we help you shine every day of the week.
wealthy folks who stashed money there will be hit hard. those with savings above a hundred thousand ye roars, equivalent to $128,000, can expect to lose 60% of that, more than half. is your money safe? could this happen in other countries? senior fellow joining me now. welcome to the show. great to see you. richard, you know, i think what's interesting here is that a lot people have been thinking about moving their money overshore because of what's happened with taxes, but is it a good choice now? would the money be safe? >> well, for americans, there's no sense moving your money offshore because you have to pay taxes on the interest earnings anyway. there's a lot of information sharing among many of the offshore financial centers, and the u.s. and u.k. government, so trying to evade taxes that way probably suspect very smart. for foreigners -- gerri: sir, you're saying don't do it? americans should not do it?
>> well, there's no advantage in it. your money is as safe here as it is in most any other country. you've got to pay the tax on the interest of dividend, so why -- what's the adantage to it? gerri: wow, okay, that's fascinating. because we see the super rich have as much as $21 trillion in secret tax havens and offshore bank accounts. people stashed money all over the world, and we showed a map of where the places are. switzerland, cypress, singapore, bermuda, so why do so many americans, if there's no tax advantage, stash their money overseas? >> well, they may want to diversify the assets for many reasons. the cayman islands, little private banking there, but there is a very large hedge fund in the industry, captive insurance, a lot of other things, so there's many good reasons to
invest in those enterprises, but that's not going to save you tax money, and trying to evade taxes, i think, probably is foolish by doing those things. now, if you're a citizen of a country which does not really have the rule of law or there's uncertainty about the own banking system. like the russians, i can understand why russians -- gerri: right, that makes sense. >> why they take money outside of u russia to move to cypress. they made a mistake in selecting cypress. gerri: yes, they did, a 6 # 0% mistake. up believable. puerto rico in the headlines because they are waiving taxes for people who move there. what do you think of puerto rico? >> well, puerto rico, of corse, being part of america, it has a local government, but it's still u.s. citins. there are probably certain advantages for certain people in puerto rico, but as i understand the way their system operates, you're going to have to live
there for a considerable period of time, but for people who like warm weather and nice beaches, it's not all that bad. gerri: ha-ha, wll, richard, thanks for that, appreciate your time. well, you may want to bank offshore when you see what's happening to banks in this country. the great recession has kicked off a huge wave of bank closures as interest rates are low and more customers turn to online banking, and by closures, we mean bank branches. nearly 2300 bank branches were shut last year alone, and the firm expects another 13 # ,000 to disappear over the next decade. look, this is the result of more and more americans turning to computers rather than their neighborhood teller to do their banking. 53% compared to 14% leading to cost cutting measures at the banks. associated bank in wisconsin, for example, says for every branch is closes, the company saves $300,000. that's a lot of money
considering a third of the nation's bank branches are unprofitable. smaller communities and suburbs are hard hit, it's not just the small regional banks closing doors. bank of america, the nation's second biggest bank, closed 200 branches as a plan to shut down 12% of the brick builds over two years. pnc plans to shut 200 more in 2013. you may miss the days when in order to take money out of the account you went to the bank and gossipped with neighbors. this is the new reality as it is for the post office. people bank online as many as they send messages that way. when we come back, our all-star financial panel gives you must hear investing advice. stay tuned, you may be able to make money. lou dobbs is here and on what cities need to do to get out of the black. stay with us. ♪
gerri: a court ruling today made stocks in california the most popular city in the nation o enter bankruptcy. bankruptcy will liely allow the city to avoid repaying its debts in full. for more on this, bring in lou dobbss, host of lou dobbs tonight. lou, does the story just drive you over the edge? >> well, it's plenty frustrating, but imagine, what, if you lived in stockton, california right now. the federal judge today ruling on just about everything except where doescalpers fit in, the california workers retirement program. it's a city so mismanaged, so destructively mismanaged over the course of the last 30 years, it's hard to imagine that responsible people were in charge. in fact -- gerri: well, you know, what i
find interesting is they promised health care benefits to retired employees for life. >> well -- gerri: how do you think they would pay for that? >> well, it's a vicious cycle grown up around the country. that is, you see the city council and the mayor move money out into the public employee unions, and those public employee unions take the deals, whether their health care benefits, pension funds, now, usually unfund the, and then move the money over to the democratic party, usually the democratic party, and that supports the candidates of the folkings going into the city council, those who want to be mayor, embrace each other all on the taxpayers' back. the judge today said he didn't thk that the bond holders negotiated in good faith. there was not good faith in any part of the vicious cycle. gerri: i have to tell you, an unholy alliance with the politicians and unions together
scratching each other's votes, union votes for the politicians, politicians gives benefit, and it's happening all over the country. >> if anybody needs to underline this, the california public employer retirement system comes into the court like a big shot creditor. they are just the trustee, not in line. the judge's already told them to stand back, and they said point bank, you know, we shld be paid in full, as if -- because california state law maintains that you have to pay no matter whether you can afford it or not. by the way, stock ton's tax base dropped 70% over the last decade. gerri: big trouble. we have to ask you tonight, what is on the show? >> focusing on exactly this. it's going to be the, you know, stockton parade day, and aso talking with michael goodwin about all that's happening in washington, d.c., gun control, immigration, and app economy
that somehow ust is not translating into jobs, all of that tonight and a lot more at e top of the hour. gerri: i expect more out of you. >> you're going to get it. gerri: thanks for coming on tonight. great to see you. all right, you have to watch lou coming up soon indeed. other than april fool's days, it's opening day for america's past time. baseball season underway with big matchup, and the 15th year in a row, the new york yankees payroll is the highest, nearly $229 million. los angeles dodgers are not far behind with $215 million. who are the players raking in the money? that's the top five. number five, prince fielder, tiger slugger makes $23 million a year. number four, mark, his eigt year contract signed in 2009, and the first baseman is making all this and not even going to be able to play for the first few months of the season. that's ad good deal.
number three, santana, the all-star mets pitcher in the final year of the contract, but a spring training shoulder injury keeps him out for the season likely. number two, cliff lee, the pitcher is earning $25 million this year, and the number one highest paid baseball plaer is alex rodriguez, the yankee slugger misses the first half of the season due to a hip injury, but rakes in $29 million. he's 13 home runs away from a $6 million bonus. he's a reason the yankees have the highest payroll and the houston astros have the lowest with just $22 millon. there are eight players that make more than that. should have been a baseball player. still to come, my two cents more on bizarre state taxes and most of us try to buy made in america products, but what about made in america stocks? does it matter in investing? our panel weighs in next.
st tuned. ♪ mowing your lawn isn't always easy. but maybe the problem isn't your lawn. introducing the all-wheel-drive mower from husqvarna. we engineered its unique drive system and dual transmission to handle hills& thick grass& and tough terrain& without losing traction or power the all-wheel-drive mower. chalnge the impossible. visit us online to enter the challenge the impossible promotion
american scene, and zeneith of ma capital management. starting with you, zena. we had a rally underway, and by some measures, stocks are cheaper than last year m do you think it's too late to get in? >> well, that depends on what the time horizon is. if you invest for 10-20 years, it didn't matter. gerri: you expect stocks to go down soon? >> you know, there's more likely to have a pull back after a huge run up. gerri: i hear what you're saying. david, do you agree? >> yeah, even over ten years we are cawshesz at establishing a cost basis implies 2% or 3% average returns over the next decade, so very interesting if you consider inflation, it's flat to negative returns. not overly bullish. you can see prices move higher, 10% or 12%, based on fed activity. >> steve, i want to turn to you
for a second because there was another topic to hit today, and it's about made in usa stocks. we're seeing some of the stocks perform better than you know, companies that invest overseas and get a lot of the earnings overseas. netflix up 104% in less than 3% of the earnings come from overseas, and qualcom just the opposite; right? 97% of t earnings come from overseas, not doing well at all. what do you think of this? is it a way to invest? do you like investing in made in america stocks? >> i do. i think there's a wave t buy american. you know, i think that's the wave out there, but i think people are looking for divdend paying stocks, people will be very cautious in this period from june to october where this typically is a flat spot, but buy into the momentum stocks, those who have great increases and revenues and net profits, you'll do well, and ale is a good example because if apple comes out now, bargain prices, really, if apple comes out wit a new iphone 5s ors 6, it's
all over the game again. gerri: fidelity contra's portfolio manager, bull on apple until the last couple months, selling off 10% of the stake. looks like a smart move in retrospect. >> got in at a good price and locking in the profits. he road it up s folks say, but apple, itself, is still a strong company. it's got leeding revenue shares, got stronger earnings. gerri: a buyer here? >> i have a position, but not a buyer here because i have not invested it in. gerri: they are cheaper than they were; right? absolutely true. also, i mean, come on, there's so much competition on the hoer lieson for them. >> yeah, i think you see a lot of competition from other smart phone companies, and that is going to be an issue moving forward, arket share is a major
consideration for them. strong company, great name, i think it was prudent management to trim the position by 10%, but keep in mind, he has 90% of the stake still in place, so, you know, it's prudent management. trimming it a bit, we don't own it, wouldn't buy at these prices. gerri: wow. steve, what do you think? buy it here? you mentioned it before as an interesting play. are you a buyer? >> right. i think apple is investing in one lesson one, gerri, above 700, people should have taken the profits had a stop loss not to ride it down, sad to see how many people rode it down, and i think it may dip below 400 in the spring and summer, time to get back in. gerri: okay. amazes me how these really famous portlio managers get into one big momentum stock and ride it for all its worth. what's the single best idea right now? if you talked about a stock or one sector you think will do
well over, you know, three to six months, what do you see out there? >> one area, not a large area, but frontier markets, nay are not a large part of the gdp, but could be a good opportunity. we're talking about countries in southeast asia, laos, and there's risk. gerri: big growth; right? >> return, massive growth, the companies' actual risk is lower than perceived risk. gerri: david, single best idea. >> focus on gold because the central bank is actively printing again spending 18 months not expanding the balance sheet, and last month rather than 85 billion promised, it was 110. they are back in the money printing business as well as bank of japan. you got a global investor appetite looking at these as good prices relative to two years ago. gerri: interesting. steve, your best idea.
>> canadian resource stock. they have been pummeled, those pulling gold, silver,base metals from the ground, good value plays now. in many cases, growth plays as well. good time to be getting in on a country that's been depressed on resource side. gerri: interesting. you don't think of canada. thank you for coming in today. appreciate your time. thank you. >> thank you. gerri: all right. on to this day in business sty, this business day back in 1976 changed the tech world forever. know why? apple was born. founded by steve jobs. steve wazniak and ronald wayne, first apple 1 computer sol for $466, and years later, apple was the most admired company in the world, second largest pulicly traded corporation in the world. app maintains 394 stores in 14 countries as well as the online apple storend itunes store.
[ garth ] bjors small busiss earns double miles on every purchase every day. produce delivery. [ bjorn ] just put it on my spark card. [ garth why settle for less? ahh, oh! [ garth ] great businesses deserve limid reward here's your wake up call. [ male announcer ] get the spark business card from capital one and earn unlimited rewards. choose double miles or 2% cash back on every purchase every day. what's in your wallet? [ crows ] now where's the snooze button? gerri: paul burke says he master mind behind a ponzi scheme attracting a million investors and 50,000 in one small north carina town. many recruited byfriends and family, so whose advice do you trust when investing? this is what you said. charlotte says, no one, o one manages your money like you will. when mike says, equal parts of fbn, myself, and accountant made me money. love it, mike. we asked the question on the, and 4% said friends and family, 23% said the financial advser,
and 73% what i expected, you do it on your open. here's some of the e-mails. tom writes, i left bank of america last october, able to move checking and savings to the local credit union, couldn't be more pleased. i'm one of all shareholders as a member. my credit union pays me for cash deposited into both accounts, not an unknown shareholder, fdic ensuredded and customer satisfied? yes. that's what we talk about on the show, tom. gayle tells the story, my regional bank required reasonable mortgage payments, didn't sell mortgages, and is in great financial shape. a great story. gene from new york says, if these idiot politicians think they will take my hard earned money out of my savings account to pay for they waste, that's another revolution. jeep, i'll join you, buddy. love hearing from you. e-mail me at email@example.com. we know states are in the red, but some of them pass crazy tax
laws to raise revenue. this is no april fool's joke, my friends. if you want to buy a bagel in new york, a popular treat, no additional tax unless it's slice, toasted, or buttered, or anything that alters the bagel. in west virginia, there's a tax on noise make makers and smashing leers, and glow worms. in illinois, there's a 5% tax on candy, on top of the 1 #% food tax. that's like something mayor bloomberg would do in new york. california charges 3 p # -- 33% tax on fruit out of a vending machine. i guess in california, anything's possible. utah has a nudity tax. any business that hirs nude or partially tax workers has a 10% tax on services. yeah. the list goes on. texas taxes blue blueberries and alabama taxes playing card. states have to balae