tv Markets Now FOX Business July 19, 2013 1:00pm-3:01pm EDT
asking your classmates to check a box if they like you. now a new app helps. dennis: time for stocks now as you do every 15 minutes, let's go to the the new york stock exchange with the great nicole petallides. what do you think? nicole: that seems like a lot of pressure. i like both of you a lot. seeing an little bit of a pullback today, dow jones industrials down 28 appoint 28 . the s&p virtually flat. this is a winning week on wall street, four straight weeks of gains on the dow jones industrials and many names hitting new record highs, multi-year highs. the dollar pulling back as gold gains. a winner and a loser, general
electric, we have seen a lot of orders, up over a dollar. on the other hand, microsoft is adding not only down 11% but also adding because it is accounted for 29 negative dow points. they have had a buildup in the surface tablet, but they have been doing restructuring that could help them going forward according too many analysts. lori: really a drag on the dow. talking commodities, oil struggling for gains but crude hit a major milestone. phil flynn joins us from the cme. we have been watching them cross today. what is the significance in this? speak of is the day many traders never thought they would see. those who did not have a lot of faith in the u.s. oil industry.
while in the future would be in europe, rent crude, forget about wti. nobody is forgetting about wti anymore. now that it is above, it is because of the u.s. shale production. u.s. oil price out of whack with the global marketplace. it is back in whack now, because we're exporting more product than we have in 15 years. u.s. energy refiners are on fire right now producing more gasoline than they ever have eighandit is going to other cous and that is a good thing. lori: gold historic because it is coming back toward the $1300 level. jeff: big bad ben bernanke. people were buying gold for disaster insurance but other reasons to buy gold. we have a record speculative short position in the futures market and i think people are
covering their shorts going into the weekend. if they all decide to get out of it at the same time, you could see a major run on gold to the upside. keep your eye on 1300. i wouldn't be surprised to see a lot above 1300, 1310. we will watch that today. lori: thanks as always, have a great weekend. jeff: you too. dennis: fresh numbers have stocks pulling back so will this be the tone for the rest of earnings season? joining me now, chief market strategy, thank you for being with us, jeff. for outlook isn't that good, but haven't within a bearish outlook kind of term or positive as more ports have come in in recent quarters? >> taking a look as we have evolved through the earnings season. tends to get an upbeat tone past the first couple of weeks and a lot of the first reporters out.
this is a fourth or fifth quarter in a row of pretty light revenue and earnings growth and i'm afraid we have more that's too calm looking at the second half. expectations still in the eight to 12% range. dennis: something happening more broadly is all of the savings and the cutbacks the companies went through in the downturn was raise productivity and raise their earnings. now they have to see more demand, what do you say? speaker that is the key. they can only take you so far. unfortunately what we are still seeing a number of areas is a focus on austerity. jpmorgan still looking as they try to make their bottom line look a little bit better on a relatively light complex. this is a problem across corporate america. one of the things holding us back. unfortunately outside the u.s. we cannot count on much growth
they are either. not just with microsoft, but you are hearing it in other places as well. oracle not a lot of great demand overseas and some currency issues with the rise in the dollar. dennis: some had blockbuster huge earnings up. what is not to like? is this a sector by sector thing? or do you see a general malaise around the country? are you being too pessimistic? >> listen, financials has a good quarter. what they did is they took down their loan-loss reserves and that juiced the earnings. you can do that and it might be able to do that for another couple of quarters but the reality is there's not a lot of loan demand, net interest margins are rising, they are not making enough loans nor seen the transaction revenue to turn
things around in a big way. dennis: 30 reported last week, 80 or so this week. what is a consensus estimate on combined earnings, and what do you say will come in instead of earnings? >> two to 3% growth, maybe more around five. they're counting on something a little bit stronger and maybe so is the fed. listen for the share buyback. corporations have been the big butters of the stock, that is just the earnings per share numbers. we will see how much they additionally add to that. a new buyback authorization program getting positive numbers again listening for those looking to the second half. a pretty good strategy for those companies buying back their own share. dennis: $300 billion announced
buyback even though we are near all-time highs in stocks. is that a good idea for companies to be buying back so much stock with so many are at all-time highs? >> that is a great question. where were they when they were at all-time lows. you cap say stocks are overpriced yet. not overvalued. valuation at maybe 15 to 16 times earning, not expensive. a forward-looking basis, it is not a bad idea for them to buy some shares but i would rather see them do some capital expenditures. dennis: the stocks are overbought but not overpriced. i like the idea. thank you very much. >> my pleasure, thanks. lori: one of the financial stories rocking the nation today. detroit become the largest city
in the nation to file for bankruptcy protection. jeff flock spoke with the governor and emergency manager. where does detroit go from here? jeff: more bad news in the last half hour, more for the debtholders, the bond debtholders for detroit. the s&p just downgraded further the sewer bond debt. they thought that was safe because that has a revenue stream. the problem is i'm told people have stopped paying bills for the sewer, for parking tickets, for water because there is no enforcement apparatus. that has been collapsing as part of the rest of the government collapses. talking live on the fox business network trying to put a positive spin on this, listen to what he said. >> it happens in detroit is unique. $18 billion in debt relationship to $2 billion in revenue. it should not generalize to other communities.
the other part of this is about solving this problem. this is a huge issue, these are sophisticated investors. detroit has been on a downward path for 60 years. a downward path for 60 years and other fact of the matter, this is something didn't we know at some point things have to get resolved in detroit? i am proud to say we are not kicking the can down the road anymore. it is time to step up. jeff: and kevin orr asked him about the impact on the municipal bond market. he also downplayed it by think the truth is we don't know. speak of these unsecured lenders can't invest in municipal bonds, do you have some expectation the municipal will cover that debt? >> we have heard that. that is why people invest. detroit's problems are so long-standing, we can't raise
taxes, for instance. we are at 19.95, there's no place else for us to go. jeff: it is true, some point there is no good answers, almost like a divorce. you figure everybody will get the short end of the stick and if they do, that is perhaps the fairest it can be. lori: so why now are the rating agencies, and forward and downgrading? jeff: they have taken this to beyond junk status now and put it on credit watch. this has a revenue stream and just like some of the bonds up against the casino revenue, those are the secured lenders. this one they thought was safe, but apparently this is not safe either. lori: i agree with you across the board, really affecting all of us. thank you, jeff flock, as
always. dennis: a popular index for muni funds down 1%. keep that in mind, maybe it will spread. rick snyder says it is time to stop the downward spiral for detroit. coming up next, a former detroit budget analyst for what it will take to turn around the motor city. lori: we go to washington for the battle over sequester cuts that ben bernanke hopes democrats will win. dennis: cbs telling time warner to pay up or payout. the latest on the fight between cable and broadcast. as we had to break, take a look at metals. my mantra?
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home, you think of whirlpool. great news for whirlpool jumping on the second quarter earnings the stock at the moment 128.79. sales on the rise. raising their full-year forecast. advanced microdevices, a different picture. under pressure. the chipmaker, pc demand has been dwindling, they are changing what they are doing going into gaming councils. that will cost them. stocks down 15%. back to you. lori: nicole, thank you. dennis: fed chairman ben bernanke has high hopes for fiscal restraint. for the sequester and raising the federal debt ceiling, is this guy dreaming, will congress get anything done? rich edson has more. rich: as the federal open market committee determines when the economy will be strong enough to reduce the monthly bond
purchases known as tapering, ben bernanke suggest it could begin later this year as part of the justification the fed chair says the u.s. should see a pickup in growth in part if fiscal restraint becomes somewhat less pronounced, he says. though folks on capitol hill control the restraint and washington will continue its cost-cutting. >> it comes to fiscal restraint at the end of the year there are only two big options. continue sequester, the most likely option, the other would be a grand compromise, a slim chance, but not out of the question. either scenario needs fiscal restraints to stand place for at least another year or so. reporter: the fiscal year ends in september, lawmakers have you figure out how to spend taxpayer money within the spending cash they upset over the last few years. by this fall the government has to raise the debt limit. the latest estimate says
congress has until sometime between mid-october and the middle of november. something republicans have demanded cuts to entitlement programs in exchange for a debt ceiling increase among other. the second year of the sequester hit, automatic spending reductions began about two weeks after congress adjourns. currently that is new year's eve although that date can change. it appears a calendar suggests uncertainty or perhaps tighter fiscal policy right about when the fed could be making its decision. back to you. dennis: wonderful timing. thank you very much, rich edson. cbs's morning channels can be pulled from time warnerthe compw agreement. the sticking point, the fees cbs wants to charge for programming. cbs says that the mac the cable company will not negotiate. they want fees in certain big
cities 30% more than other big cities. if no agreement is reached, possible blackout will begin july 24, next wednesday affecting subscribers of new york, l.a., dallas, 12 million homes we are talking. lori: why doesn't it make sense to streamline those fees across the board equal? dennis: and local station in new york maybe should get a little bit more money than a local cbs station in florida. lori: if you're looking at different market sizes, the has to be a percentage that would work out that would make sense for each size market. dennis: cable channels have always gotten paid a lot from cable operators. espn gets $5 per month. cbs the is less than $1 per month because broadcasters used to be free. time warner, cbs has pulled 50
channels in previous blackouts, but hundreds and hundreds of channels. is it that high of a number? lori: the red dragon no longer breathing fire. the impact of china's slowdown on american companies. dennis: the congressional cuts, with means for jobs and government. lori: i adore you, but don't. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪
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>> 23 minutes past the hour, this is your fox news minute. stand your ground laws of the focus of the senate judiciary hearing in september. florida is one of 30 states that have some form of the law which played a key role in the george zimmerman trial in the shooting death of trayvon martin. long individuals use lethal force i as they believe their le is threatened. in bosnia police photographer has been released of duty after this and photos of the bombing suspect without authorization. the sergeant says he released the photos to counter the "rolling stone" magazine covers. listen to this one, the government will give residents the weights they lose and cold as part of a one-month challenge
which offers 1 gram of gold for every kilogram they drop, but $20 a pound. part of united arab group. i know you like that one. dennis: i do. lori: if mayor bloomberg could pitch that instead of banning soda many more people would do it. dennis: so we have slowing growth in china weighing on companies here at home. >> china has been a major source of revenue for companies but as it flows down 7.5% the credit market is overheating and tightening up the money flow decreases among 18 s&p companies with major exposure to china, 12 of them have been underperforming. the index year to date so take a look at some brands.
kfc has had a big presence in china along with pizza hut. they have been affected by avian flu outbreak earlier this year. they plan to bounce back in china and say they expect to see a turnaround, which is good news for them to that actually happens. look at intel. some businesses would be wise to ship the way they invest in china to revise a slowdown. rather than focusing on export oriented industries, start targeting businesses that are funded or collaborating with the central governments which aims in the five-year plan to lift another 5% of people into the middle class growing the number of middle-class from 40% to 45%. collaborating with central government is very difficult thing to do. dennis: thank you. the u.s. we kill for 7.5% gdp
growth. lori: let's talk about nasa for less out of this world spending. -@for introducing mother spendig for the space giant. the bill is also a blow to president obama's human space expiration program. stopping all spending for mission to an asteroid, centerpiece for the president's plan. cost and 16.8 billion is $1.2 billion less. dennis: step one, file for bankruptcy. what is step two? a former analyst for the city of detroit is here to explain how the tax base is the key for the motor city. lori: delta airlines is able to create jobs. and, as we head off to break a check of what stocks are up, what stocks are down. there you see it. we are back in a moment. if you're serious about taking your trading to a higher level, tdd#: 1-800-345-2550
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and learn how you can earn up to 300 commission-free tdd#: 1-800-345-2550 online trades for six months with qualifying net deposits. tdd#: 1-800-345-2550 our trading specialists are waiting to help you get started. tdd#: 1-800-345-2550 so call now. tdd#: 1-800-345-2550 dennis: time for stocks now. as we do every 15 minutes, let's head to the floor of the new york stock exchange and the fabulous nicole petallides. nic? >> thank you, dennis. we're looking at something else that is fabulous at least for shareholders and that is, chipolte mexican grail. the stock is soaring hitting new 52-week highs. i is up almost 8% at the moment at around $406. it traded above 410 earlier today. they have done well with same-store sales though the current, the current obviously restaurants that are open, very good news. expanding to open more. they're seeking higher costs for pricier ingredients. they may actually consider some
price increases going forward. boosting the full-year sales outlook. that helps everything along as well. as i noted trading as high as 410:12. year-to-date, a real winner, up 36%. back to you. dennis: thanks very much, nicole. lori: the city of detroit filing for chapter 9 bankruptcy making it the largest city in u.s. history to do so. they have 9.2 billion in pension obligations alone. what caused this huge fiscal dilemma and where do we begin fixing it? former detroit supervising budget analyst joins us with her insight. betty, welcome to you. let me start big picture. will this ultimately result in detroit needing a federal bailout? >> i think that city would love to have a federal bailout. i don't think that will happen, however. i think there have been communications with the federal government and, the sentiment now is that is not a likelihood. >> okay. thanks.
it is dennis kneale. i have a question longer term since you were a budget analyst inside city government. we know the car industry went through huge changes and jobs left. all that time, as you could see that coming from miles away was the city doing anything to try to cut back on pension payments and union contracts? i know unions are supposed to get every dollar they can but at some point did the politicians ever push back and say guys, we'll go bankrupt if we keep this up? >> i think there have been name before factors have come into play. if you look what the city government has done, it has tried to shrink its expenditures. unfortunately revenues have been falling much faster than the city has been able to control the spending side. for example, if you go back to when the city was at its largest population, back in 1950, city government had over 29,000 city employees. now there are fewer than 10,000 city employees. that's a huge part of the problem. it used to be a very large municipal organization.
now, there is twice as many retirees as there are active employees in the city government pension payments are huge. lori: so sorry to interrupt you, but the number of retirees is jaw-dropping, and pensions obligations owed to them. is it possible to restructure what is owed to them and help get detroit out of this fiscal mess? >> michigan is one of those states that has a very strong constitutional, state constitutional protection for public pensions. dennis: wow. >> our michigan constitution makes state and local public pensions a contractual obligation of the local unit of government. that doesn't mean that the state will step in and pay but it means pensioners -- lori: we have to interrupt you. breaking news. president at the white house for a press briefing. let's go to him now. >> i want to make sure once again i send my thoughts and prayers as well as michelle's to the family of trayvon martin.
and to remark on the incredible grace and dignity with which they have dealt with the entire situation. i can only imagine what they're going through and it's remarkable how they have handled it. the second thing i want to say is to reiterate what i said on sunday, which is there will be a lost arguments about the legal issues in the case. i'll let all the legal analysts and talking heads address those issues. the judge conducted the trial in a professional manner. the prosecution and the defense made their arguments. the juries were properly instructed that, in a, in a case such as this reasonable doubt was relevant and they rendered a
verdict and once the jury has spoken that is how our system works. but i did want to just talk a little bit about context and how people have responded to it and how people are feeling. you know, when trayvon martin was first shot i said that this could have been my son. another way of saying that is, trayvon martin could have been me 35 years ago. and when you think about why in the african-american community at least there's a lot of pain around what happened here, i think it's important to recognize that the african-american community is looking at this issue through a set of experiences and a history
that, that doesn't go away. you know, there are very few african-american men in this country who haven't had the experience of being followed when they were shopping in a department store. that include me. there are very few african-american men who haven't had the experience of walking across the street and hearing the locks click on the doors of cars. that happens to me at least before i was a senator. there are very few african-americans who haven't had the experience of getting on an elevator and woman clutching her purse nervously and holding her breath until she had a chance to get off. that happens often. and, you know, i don't want to exaggerate this but those sets of experiences inform how the
african-american community interprets what happened one night in florida and it is inescapable for people to bring those experiences to bear. the african-american community is also knowledgeable that there is a history of racial disparities in the application of our criminal laws. everything from the death penalty to enforcement of our drug laws. and that ends up having an impact in terms of how people interpret the case. now this isn't to say that the african-american community is naive about the fact that african-american young men are does proportionately involved in the criminal justice system. that they're does proportion
that thely victims and perpetrators of violence. it's not to make excuses for that fact although black folks do interpret the reasons for that in a historical context. we understand that some of the violence that takes place in poor black neighborhoods around the country is borne out of a very violent past in this country and that the poverty and dysfunction that we see in those communities can be traced to a very difficult history. and so the fact that sometimes that is unacknowledged adds to the frustration. and the fact that a lot of african-american boys are painted with a broad brush and the excuse is given, well there
are these statistics out there that show that african-american boys are more violent, using that as an excuse to then seasons treated differently, causes pain. i think the african-american community is also not naive in understanding that statistically somebody like trayvon martin was probably statistically more likely to be shot by a peer than he was by somebody else. so, folks understand the challenges that exist for african-american boys but they get frustrated i think if they feel there is no context for it and that context is being denied and, and that all contributes i think to a sense that if a white
male teen was involved in the same kind of scenario, that from top to bottom both the outcome and the aftermath might have been different. now, the question for me at least, and i think for a lost folks is, where do we take this? how do we learn some lessons from this and move in a positive direction? i think it is understandable there have been demonstrations and vigils and protests and some of that stuff will have to work its way through as long as it remains non-violent. if i see any violence i remind folks that that does honors what happened to trayvon martin and his family.
but beyond protests or vigils, the question is, are there some concrete things that we might be able to do? i know that eric holder is reviewing what happened down there but i think it's important for people to have some clear expectations here. traditionally these are issues of state and local government, the criminal code, and law enforcement is traditionally done at the state and local levels, not at the federal levels. that doesn't mean though that as a nation we can't do some things that i think would be productive. so let me just give a couple of specifics that i'm still bouncing around with my staff. so we're not rolling out some five-point plan but some areas where i think all of us could potentially focus. number one, precisely because law enforcement is often
determined at the state and local level, i think it would be productive for the justice department, governors, mayors, to work with law enforcement about training at the state and local levels in order to reduce the kind of mistrust in the system thht sometimes currently exists. when i was in illinois i passed racial profiling legislation and it actually did just two simple things. one, it collected data on traffic stops and the race of the person who was stopped but the other thing it resourced us training police departments across the state on how to think about potential racial bias and ways to further professionalize what they were doing and initially the police departments across the state were resist
taint and but came to recognize if it was done in a fair, straightforward way and it would allow them to do their jobs better and communities would have more confidence in them and in turn be more helpful and in applying the law. and obviously the law enforcement has got a very tough job. so that's one area where i think a lot of resources and best practice i think could be brought to bear if state and local governments are receptive and i think a lot of them would be, and let's figure out are there ways for us to push out that kind of training. along the same lines i think it would be useful for us to examine some state and local laws to see if, if they are, designed in such a way that they may encourage the kinds of altercations and confrontations
and tragedies that we saw in the florida case rather than diffuse -- defuse potentialtercations. there has been commentary about the fact that the stand your ground laws in florida were not used as a defense in the case. on the other hand if we're sending a message as a society in our communities that someone who is armed potentially has the right to use those firearms even if there's a way for them to exit from a situation, is? really going to be contributing to the kind of peace and security and order that we'd like to see? and for those who, who resist that idea, that we should think about something like these stand your ground laws, i just ask people to consider if trayvon martin was of age and armed,
could he have stood his ground on that sidewalk? and do we actually think that he would have been justified in shooting mr. zimmerman who had followed him in a car because he felt threatened? and if the answer to that question is at least ambiguous, then it seems to me we might want to examine those kinds of laws. number three, and this is a long-term project, we need to spend some time thinking about how do we bolster and reinforce our african-american boys. and this is something that michelle and i talk a lot about. there are a lot of kids out there who need help, who are getting a lot of negative reenforcement and is there more
that we can do to give them a sense that their country cares about them and values them and is willing to invest in them? you know, i'm not, naive about the prospects of some brand new federal program. i'm not sure that's what we're talking about here but i do recognize that as president i've got some power and there are a lot of good programs being done across the country on this front and for us to be able to gather together business leaders and local elected officials and clergy and celebrities and athletes to figure out how are we doing a better job helping young african-american men feel that they're a full part of this society and that, and that they have got pathways and avenues to
succeed? i think that would be a pretty good outcome from what was obviously a tragic situation and we're going to spend some time working on that and thinking about that. and then finally, i think it's going to be important for all of us to do some soul-searching. you know there has been talk about, should we convene a conversation on race? i haven't seen that to be particularly productive when politicians try to organize conversations. they end up being stilted and politicized and folks are locked into the positions they already have. on the other hand in families and churches and work places, there's a possibility that people are a a little bit more honest and at least you ask yourself your own questions
about, am i wringing as much bias out of myself as i can? am i judging people as much as i can based on not the color of their skin but content of their character? that would, i think, be an appropriate exercise in the wake of this tragedy. and let me just leave you with, with a final thought. that as difficult and challenging as this whole episode has been for a lot of people i don't want to us loose sight that things are getting better. each successive generation seems to be making progress in changing attitude when it comes to race. doesn't meep we're in a post-racial society. doesn't mean that racism is eliminated but you know what i talk to malia and sasha, and i
listen to their friend and i see them interact, they're better than we are. they're better than we were on these issues. that's true in every community that i visited all across the country. and so we have to be vigilant and we have to work on these issues and those of us in authority should be doing everything we can to encourage the better angels of our nature as opposed to using these episodes to heighten divisions. but, we should also have confidence that kids these days i think have more sense than we did back then and certainly more than our parents did or our grandparents did and that along
this long, difficult journey, perfect union, not a perfectore union. but a more perfect union. all right? thank you, guys. now you can, now you can -- >> mr. president, have you talked to the martin family? lori: okay, the president, president obama saying president obama could have been me 35 years ago. addressing the george zimmerman trial, the outcome and issues of race in our country. the president making previously unscheduled appearance at regularly scheduled press conference briefing that happens friday afternoon. dennis: we'll see how the coverage follows up. this could be a extraordinary moment in the obama presidency. some people said they hasn't talked about more race relations. but he came out today directly and honestly than he many other cases. he saiddit could have been me
escalation it could have been my son. he tried to put it in context black america is angry about the verdict. very few african-american american have not walked into store without being watched or for shoplifting. woman grabbing her purse when a african-american man comes on an elevator because proportion of african-american men are involved in crimes. to show up with the washington press corps with this announcement. does it increase or lower the chances they will try to file federal civil rights violations against zimmerman who was acquitted in? lori: you buttoned it up beautifully. we'll pivot back to business news here this afternoon with the dow jones industrials up 29 points right now. we want to talk about the job situation specifically in the state of texas. of the 2.27 million jobs created
since president obama since he has been in office, 2.3% of the them have been created in the state of texas. what are they doing right? larry temple is the director of the state workforce commission. he joins from us austin. larry, what are you doing right? >> well, it's, the businesses in the state of texas are what's being done right. they're taking advantage of a great business climate and a great workforce and a great place to live and they're confident to invest their hard-earned capital in the state and so we're seeing the benefits of that. lori: and there are vast natural resources in the state of texas that texans have been able to take advantage of, dissimilar to states like state of california which has rich natural resource, and california has not had such luck capturing job creation from that. what are you doing there in texas in terms of that industry? >> that goes back to an environment in terms of business, in this case
particularly the energy sector, feels comfortable in invest into the state and in developing those resources because they're long-term. it is not just a, well doesn't last a year or two. those are long-term production decisions that have to be made to build, not only drill the wells but build the pipelines and production facilities, refineries. so we do have an abundance of energy but we also have a good climate to develop that energy and we're seeing that with the capital investment that the energy industry is making and our petrochemical down in the southeast part of the state, beaumont, houston is incredible. lori: high-tech is also thriving in texas. number two in the country if i'm not mistaken. you've created 10,000 jobs over the last two years if in the high-tech industry. how is that flourishing and continuing to grow? >> we just had apple, amazon, we
have a lot, this has been a great dot-com area particularly here in austin but all over the state. the technology industry, that sector is one that too has a really talented workforce to tap into. so we're really excited about those opportunities that we've had and been able to capitalize on but also ones that continue to contact us. lori: what are some of the challenges, larry, you may be facing although things are going well now, improving your unemployment. it is better than the national average. it is 6.5% in texas. i know it is really hot. i can only speak from experience, it is sweltering in new york city. people can't function when it is 100 degrees. in texas that is down right balmy so i was it typical to lure new workers in the state? >> not in the winter time if they're up north, they're looking for -- we have enough sun to go around, that's for sure. it's a good climate though. there are a lost expenses that go with variations in the
climate. so you can plan on what it is going to be in texas pretty much. so i think that makes a big difference. lori: larry temple -- >> we have v. seasons. we have football season, we have deer season and we have summer. lori: texas a&m, where do you fall on that question? >> i love them all. lori: the education, that is another huge industry for texas. can't forget that. a lot of awesome institutions there. larry, thanks for sharing your story with us. >> thank you for the opportunity. dennis: detroit goes bust filing for bankruptcy over $18 billion in debt give or take and detroit's chamber of commerce president shares his biggest concerns next with tracy byrnes and ashley webster. we take you through the next hour on "fox biz." don't moist miss it. announcer: where can an investor
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tracy: welcome back. i'm tracy byrnes. ashley: i'm ashley webster. motown city singing the blues. detroit filing the largest municipal bankruptcy in u.s. history. now its employees, retirees, creditors, so many more are bracing for the impact while other cities in trouble no doubt are paying close attention. we'll the very latest on this mess ahead. tracy: the obamacare shift. restaurants, one of many industries hiring more part-time workers and fewer full-timers all because of health care. andy pozner, ceo of hardee's and carl's, jr. parent cke says the government has given american business little other choice. he is our special guest this hour. ashley: financials are under pressure but having a positive week on solid quarterly results. anton chutes tell us which banks are still in good shape and what
is ahead for the entire industry. that is all straight ahead. with two hours to go the market averages head are to the fourth straight winning week although there is weakness on friday. nicole petallides on the floor of the new york stock exchange. nicole? >> tracy and ashley we're now looking at the dow jones industrials down 24 points at the moment, 15,524. you mentioned four straiiht weeks in a row, ashley and you're absolutely right. the level that we closed last friday, 15,464. so obviously we're not near that but does look like a winning week indeed. we're watching earnings so closely as ge has been a stellar performer and microsoft has been pulling back so earnings have been driving this market here. let's take a look also, there it is, general electric up nearly 5%. obviously a huge conglomerate. they have seen a lot of orders that helped them along with great sales. as a result, ge is hitting a 52-week high by the way, that
chart really shows you that. look at some of the other names. there are six names on the dow 30 that are hitting some monumental highs today, 52-week highs. look at other names, johnson & johnson, 3m, united technologies, unitedhealth and exxonmobil. back to you. ashley: nicole, thank you very much. tracy: okay, so we've been talk about this all day. detroit has taken a stand on its $18 billion debt hole and filed for chapter 9 bankruptcy. this is the largist for a city in u.s. history. jeff flock has been in detroit reporting on this jeff, what is the latest? >> stop the presses, we have breaking news at this hour. a judge in one of the detroit suburbs has stepped into this. it is unclear whether or not she has the authority to do so. but a judge, who was about on monday to hear a lawsuit filed by the pensions, two detroit pensions that were opposing the bankruptcy filing, she has stopped in and said that the
governor doesn't have the constitutional right to call for bankruptcy. potentially throwing a monkey wrench into the whole thing. i want to get instant reaction on that from sandy, who is the ceo of the detroit chamber of commerce. you have been somebody that has supported bankruptcy despite the negatives of it because you think that helps business in this city. what's your reaction to this latest news? >> we're learning it along with you are. we're not quite sure what the impact is. obviously this is something that has to be reviewed by a higher court. i think everyone is very surprised by this. this bankruptcy, kevyn orr has proceeded the way bankruptcies are supposed to proceed, dotted every i, crossed every t. >> it is supposed to stop any other litigation. this judge is not supposed to step in once a federal bankruptcy file something taking place. >> that is the point of bankruptcy. that's why we have bankruptcy protections at the corporate and municipal level. so, if this judge is overstepped the authority i think it is a good question and how it is
resolved will be another question. >> i want to get to the question about the impact on business. i'm now in the downtown of detroit. and this is vibrant area unlike pictures we see in the neighborhoods where we see tremendous blight. this police has been revitalized already. why do you think bankruptcy is a positive for the city right now? >> the one thing that devote is missing outside capital investment. michigan, yeah, quicken loans, blue cross-blue shield, general motors. 12,000 new jobs in downtown detroit over the last three years. over $10 billion, billion with a b, private sector dollars, private investment in detroit in the last five years. so what's missing? it is outside money coming in. that will not come until government fixes -- >> but if bondholders i don't know what better way to say but screwed on this bankruptcy, what does that do to the municipal bond market and the ability of not only detroit but other municipalities who are in
trouble to get financing? >> steve rattner, former auto czar, been reading what he is saying about that. he expects very, very minor impacts in the municipal bond markets. those cities with severe financial distress, yeah, they will pay a little bit after premium for borrowing. >> that's you. >> listen, how many people will loan money to detroit now anyway, regardless? our bond rating is important but not the most important thing right now. >> gotcha. i leave you with this pick of downtown detroit and you came here and you are only here this looks like any other thriving american city. but if you go too far you will see another picture. to me the headline is this potential monkey wrench we're getting from this judge who acceded to the wish us of the pension fund saying this is not constitutional, that you've got to stop. we'll see what the governor has to say. tracy: wow, this is really a fluid story. jeff flock, thanks so much. ashley: for more on what is next
for detroit and who knows what as employees, retirees, creditors wanting to know, we're joined by a public finance analyst, senior fellow at manhattan institute. steve, thank you for being here. interesting development jeff flock told us about in detroit, that a state court judge is trying to issue essentially an injunction the pension funds were trying to get yesterday before the city went ahead and filed the chapter 9 and beat them to the punch. this judge is saying you overstepped your bounds, governor, you can not do this. a, what do you think about that and b what do you think will happen ultimately? >> just a test of how nasty the situation is getting in detroit. officially detroit emergency manager kevyn orr tried to reach an agreement with creditors outside of federal court appointed in march. he failed. the only way to bring the debt down to manageable levels is the u.s. bankruptcy process. there was this mad dash to the courtroom, yesterday afternoon
initially they thought they beat the pension board to the pun. apfainterly new developments suggest that may not be the case. inevitably it is very difficult how this will be resolved outside of bankruptcy. ashley: everyone is accusing each other overstepping their bounds. ultimately it will be played out in court. regarding the big picture was there any other choice for detroit if. >> no. this was a problem building for many decades. detroit is a perfect storm. every problem a major american city can suffer from detroit has suffered from. >> sorry to interrupt. breaking news for. tracy: we got word that sec is charging hedge fund manager steve cohen with failure to supervise. charging the hedge fund manager failing to prevent insider trading by two employees. charlie gasparino will join us with all the details. we wanted to bring that breaking news. ash, it is all yours. ashley: steve, i apologize for the breaking news. get back to what is going on in
detroit. chapter 9 is reserved for municipalities as opposed to chapter 11 which companies go under. what advantage does the chapter 9 give the city? >> city has a lot of advantages. the city government will remain in charge. there will not be a trustee or receiver appointed to take over city operations during bankruptcy proceedings. the debt reorganization plan, that is the city's privilege to put that forward. so in some ways the city government, the emergency manager his hand has been strengthed by going into bankruptcy if he gets in than it was outside of bankruptcy. ashley: so who will be the big loser? obviously the retirees, pension funds -- >> shared sacrifice. ashley: shared sacrifices okay. now there are those who say according to michigan's constitution you can not order or alter i should say the pension setup. that will obviously be debated and fought out in court as well, right? >> very much. the emergency manager believes federal law will trump state constitutional law that he can achieve cuts in pensions which
would be a very, very rare development and one that state and local governments nationwide will watch closely. detroit is not only one with the problem. ashley: appears there are some legal challenges on some different issues this could be in the court as long time. meantime detroit i guess it is still in chapter 9 but it can't be good for the city? >> it is not great for the city, according to the emergency manager filing for the bankruptcy is in the public interest. the debt is strangling the city's budget. has no money to pay for basic services to reinvest in the future. first things first you have to get the debt problem under control and we can talk about the many problems detroit faces. ashley: certainly not an easy fix, is it? i was reading stats about the city. it is amazing. 40% of the street lights don't work. the average response time for the detroit police, national average is 11 minutes. detroit it is 58 minutes. huge neighborhoods have been ban dodd. -- abandoned. looks like a third world city
any way when you look at some neighborhoods. we knew it was happening but it has been ignored for the long time. >> highest taxes in michigan. high property tax delinquency rates. detroit taxpayers are fed up because they're not paying taxes because they don't think they're getting anything in the way of services. ashley: self-fulfilling prophecy. people leave because the situation. tax base goes down and spirals to this point. so how do you turn that around? how did you get people to move back in? how do you get businesses to move back in? >> these are all very, very difficult questions but in some ways the task is very simple. get the debt under control. get some handle on the finances. it is amazing it took this long. ashley: yeah. >> that is testament to how deep the problems are. we need to manage expectations here. will we see revitalization of detroit new york experienced over past 20 years? probably not. there will not be a wall street boom to save the city like it
did for new york city in the 19 '70s. this is very low standard, solvency. that all they can achieve in the near term. that will be hard enough. ashley: could this lead to domino effect in other cities? >> in the case of pensions people will look at that very carefully in case of borrowing cost because of tough negotiating stance the emergency manager taken with certain bonds, general obligation bonds, other michigan municipalities are worried they will be punished essentially for detroit's collapse. ashley: steven, from the manhattan institute thanks for being here. we appreciate it. >> thank you. tracy: get back to the breaking news. the sec charging steve cohen with, reasons for exercising -- not exercising appropriate supervision basically over his employees. charlie gasparino is here with that. >> like a broken clock. tracy: i know. >> fox business network last week pointed out that this was the charge that was being focused on steve cohen. that he would get a failure to supervise charge.
that it would be as we reported last week along the lines what they did with corzine. tracy: right. >> failure to supervise an try to bar him from the industry. that's what they're doing here. i have to read this release. it just came out but what is interesting about this failure to supervise you don't even have to show he committed what is known as fraud, okay? you don't have to hit that bar. that is what makes this a very deadly weapon for the sec. it is civil charges. he is not going to jail but he will be, what they will probably seek out of this, it is my bet, i have to read this from what i understand it is modeled after the corzine example, they will seek to bar him from the business. steve -- ashley: win for cohen ultimately? failure to supervise suggests he didn't know what is going on but should have as their boss? >> this is the toughest -- ashley: this is the worst. >> the easiest thing you can do to him. he is out of the business. ashley: okay. >> steve cohen's career as money manager is effectively over right now. now, we should get comment from him. he can fight these charges in a
civil proceeding. we should point out that civil proceedings are all about the preponderance of evidence. not beyond a shadow of a doubt. so chances are that he will lose but i think, you know, what we are seeing now is probably the end of a career of, at least on paper, one of the great money managers of all time. he beats warren buffett. we should point out that why are they taking are they doing this? i get into this in my book okay, "circle of friends." they believe he set up a system, a compliance system that essentially protected him but allowed all this bad stuff to go on around him that was, that is the essence of these charges. now we should point out, this doesn't mean he's out of the wood with the criminal authorities. preet baja a was on brand x talking how they can extend the statute of limitations essentially do a rico case but this is pretty, this is pretty interesting. this means that the sec wants him out of the business.
now, theoretically he can manage his own money, run a family office. steve cohen as a money manager is done. tracy: this is precedent-seting. >> it is. tracy: we're seeing this, take fabrice tourre, why are not coming on his superivsor? because shouldn't someone there have failed to supervise. >> you could make the case. this is apples and oranges, maybe this is unfair comparison but i will tell what you is in the minds provestores and regulators. what's in their mind steve cohen created the perfect crime. that's what they believe. i'm not saying believe this i've been on record about, you know, i actually yenned defended him. they believe he created -- ashley: set up a system. >> a system which insulated him, allowed stuff to go on around him. there was compliance there but essentially to protect him not catch guys doing stuff around him. that's what they believe.
okay? you have to prove that case the easiest way to prove it for them because of just, it's a very high bar for criminal charges. ashley: yeah. >> is to do a civil charge of failure to supervise and you know, we should read this. i mean, obviously steve cohen has maintained his innocence throughout all this we should also point out this was the last day for the statute of limitations. very good reporter. i don't tout other reporters. very good reporter at bloomberg, sheila cohtart, i think that is how you say her name, she pointed out this was last day of statute of limitations for civil charges. i was thinking three days ago, maybe steve cohen will get charged today. bingo. tracy: we're getting announcement from the sac advisors that the charges have no merit and cohen will fight it vigorously. >> they will fight it but my guess the bar is much lower. ashley: on the civil side. >> on the civil case. ashley: we talk so much,
charlie, about his lieutenants turning on him. they never did, did they? >> mathew martoma, the portfolio manager manager at heart of lean trades, trading stocks based on inside information. right after he had a phone call with steve cohen, has not turned evidence. michael steinberg who is still at the firm. on leave obviously, also indicted. has not turned evidence against cohen. ashley: that is difference between criminal and civil? they couldn't get them? >> if either of those guys turned evidence they would have indicted him by now. i think they believe those guys hold the key. listen, it is perfectly reasonable they don't have anything on him. i'm just telling you that what the government, see some of this is, i don't want to put myself as, this is what i believe and i say. what i'm doing here is simply pretty clear. telling you what the government believes. i wrote a whole book on this, it is called "circle of friends," i hate to keep touting this, but
lays out their rehelpless pursuit of him. they think he created the perfect white-collar crime. he is insulated. stuff goes around. those guys get caught but he is kept -- ashley: out of the mix. >> he would tell you, his defense, go through in the book, massive compliance. few bad apples. by the way if you look at all the trades he's done, isolate trades problematic government brought it's a fraction. that is what he would say. tracy: if they get him on inappropriate supervision, that is so blanket, they could across the board on everything? >> he is out of the business. tracy: right. >> listen, we did a story last week, i would like to pull if i could, the videotape. what did i say last week? this is the toughest easiest charge they can guesstimate they don't have to prove fraud. except for like criminal charges where you go to jail, this is pretty nuclear. you are out of the business if they're right. that's what they're seeking. and this is pretty, pretty tough. the sec, there was a great story in the journal about a week ago,
it was an op-ed about the sec's expanded powers over the years. basically, start off as a sleepy agency. fine you, slap you on the wrist. now it can do stuff bordering on taking criminal action. when you throw someone out of the business, who knows what type of fine they will seek here. tracy: right. >> if you can go not just before a jury that deliberates on the the sort of, beyond a reasonable doubt, right, shadow of a doubt, when they just weigh the preponderance of evidence, that is tough stuff. tracy: i'll tell you, charlie you have been all over this. i know you will keep following it. >> this is great on fox business. the other networks keep you what is happening now, as we are, we told you this a week or longer. tracy: read his book, "circle of friends." thanks for jumping on. ashley: there it nice keep that up. ashley: shameless, charlie. great stuff. it is just gone quarter past the hour. keep a tab on these markets.
the dow is still slightly lower. let's go down to nicole at nyse with the latest. nicole? >> i want to take a look, ashley and tracy, at some names that have reported and take a look how they're faring particularly in the energy realm. this is markets now as you get a broader picture of the markets. dow and nasdaq to the downside. s&p slightly higher there. that is obviously a big deal considering we've been down all stay. look also at both schlumberger, baker hughes. one is going one way, one is going the other. schlumberger up 6%, baker hughes down. that is beat and a miss. schlumberger is the word's largest oil field services company. better-than-expected profit. drilling activity outside of north america hit a 30-year high. stock hit a 52-week high. lower than expected profit with baker hughes. tracy: thank you, nicole. we'll see you in 15 minutes.
on deck, one ceo says president obama's health care law will fundamentally change the workforce. andy putser in, chief of hardee's and carl, jr.'s parent kke will tell us how. ashley: the market is just slightly flat today. the u.s. dollar has been strong of late but somewhat after mixed performance overall. as you see a little weaker against the euro, the pound, the canadian dollar and the japanese general. just the peso down against the dollar today. we'll be right back. [ shapiro ] at legalzoom, you can take care of virtually
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tracy: all right. this week president obama again defending the health care law. now republicans again trying to scale it back. it comes as one industry though is shifting more and more toward as part-time workforce in the wake of obamacare. restaurants. and our next guest has been one of the industry's most oatt spoken ceos on the issue. andy pus der runs carl, jr.'s and hardee's. i you been talking about it pretty much in the the past when pelosi said we have to read it. part-time workers are up but
part-timers are not turning into full-time employers are they? >> if you look at numbers the bls released numbers early they are month and we had twice as many part-time jobs created as we had jobs created overall. there were over 400,000 part time jobs and just under 200,000ful-time jobs. we lost a -- full-time jobs. that sun fortunate. that is not a positive comment for american workers or american workers. tracy: that is why you think the traditional model of the full-time worker is totally changing because of obamacare? >> normally the metric in american business was full-time employees are your most valuable employees. they're experienced. they're loyal. they know the customers. tracy, in the drive-through line, you like the regular, makes you feel most involved with the business. that is true in all retail, and not just restaurants. now the aca increases so
substantially the cost of full-time workers that it really enhances the value of part-time workers. so you see more and more part time workers being hired, either to replace full-time workers and move on or you see, part-time workers with very few hours getting their hours increased. that's good for the part-time worker who is getting his hours increased. good for a new part-time job created but i think it is damaging to the full-time workers. and in a sense that is damaging the way we've done business for a long time. tracy: you make an interesting point in your notes. when the cost of something goes up, businesses use less of it. interestingly the cost of employment has gone up for an employer, right? so the more the costs to have employees goes up, the less they're going to hire them. >> that's true and particularly in this case, it is not actually hiring less people. it may be hiring more people because you're hiring four part-time people to fill three
part-time jobs. american businesses are not all like apple with a big corporate reserve. there is not always some big corporate pot of gold you can go to. most american businesses generate revenue to pay their expenses. they use it to pay down debt if they can. they use it to reinvest in the business which is how we create jobs and prosperity. hopefully you have something left to distribute to the shareholders. if a cost goes up it decreases one of those things. you have to keep your cost down, pay less debt off or don't reinvest in your business or distribute to your shareholders. when costs go up, american businesses try to deal with it first of all using less whatever went up in price. in this case full-time he labor gone up in cost under the aca you. you will see retail, manufacturing people, people will use less full-time labor. tracy: doesn't do much for the business as whole, does it? >> no. tracy: you rather have all the same people all week long. they know what happened. we can refer to the person who was there on monday on friday.
when you have part-timers coming in and out, takes away continuity of the business, doesn't it? >> it makes it much more difficult to run. there were some unions, some very powerful unions this last week that wrote a letter to the administration complaining about the aca and in particular the loss of that 40-hour work week. i agree with them. the loss of the 40-hour work week is not good for american businesses or american workers. it certainly worked worse for the workers full-time and the business that has to manage a larger labor force. i hope we can do something about. i know there are proposals out there. i hope one will be sincerely pursued. tracy: not often we agree with the unions. andy puzder from c. e. thank you for -- cke. thank you for taking the time. >> thank you, tracy. ashley: find out whether you should undergo genetic testing. tracy: first let's take a look at some of today's winners and losers. the dow is is up 14 points.
>> more on breaking news we told you earlier. charges against hedge fund management steve cohen. the fcc filing civil charges accusing cohen to prevent insider trading saying cohen ignored red flags of insider trading in the firm. the fcc is seeking up specified damages looking to embargo from overseeing investor funds, but fcc capital advisers say the charges have no mart, and cohen will fight the charges vigorously. >> not a surprise; right?
>> no. >> charlie followed it and will continue to follow it. 90 minutes until the close. nicole on the floor of the new york stock exchange. dow's not doing much, is it? >> well, it's not. we had back and forth action. that's exciting. it's a winning week on wall street, and if you're a bull out there, you're loving four week straights of gains, and all-time record highs this week. it's a moment, there's been push and pull, but we have had stellar week. talk about the names related to aerospace and honeywell. we had the fire on the boeing 787 last week, looking at the battery, was not the battery, and looked to honeywell's beacon, the emergency light, the beacon determining where they are saying they would likely have to turn those off. there's a numbers, quarterly report, second quarter, all did well, net up 13%, reached the full year view, and moving to a
new high. that's it. back to you. >> thank, nicole. see you in a bit. >> even with today's slight pull back, the next guest says the equity market rally has legs offering value to investors throughout the rest of the year. we are a senior economist and market strategist, and he is joins me now with the investment strategy. you believe we have more room to the upside, milton; is that right? >> we do. the market shows good value. the federal reserve promised to pull liquidity on market that supports asset prices. we think the rally has legs. >> so, with that in mind, what areas in particular do you like? >> well, right now, we see the best opportunity in more economically sensitive areas, technology, industrials, consumer discretionary opposed to safer areas where people have been in the market. we see the opportunities in the most economically sensitive. that's where the upside surprises, where the best value is. >> well, we're looking at the
chart of the tech charts, not performing, misses on microsoft and google, disappoints, and amd also falling on their latest results. does that not concern you? >> well, it does to an extent, but just because we like the sector, that doesn't mean we like every name in the sector. there's names in technology that really are no longer cutting edge, and in that respect, they may not represent the best opportunities. we're -- we see ourselves as stock pickers, picking tte best in a sector that we think is better for that kind of selection. >> fair enough. what about financials overall being a good earnings season? >> well, it has been, and we think the financials are going to benefit going forward because a lot of their assets are going to be revised upward. the improvements in the real estate market are improving debt that has been underwater for a long time. that acues to the earnings numbers, accruing to the
attractiveness in general. there's opportunities there, and they are effectively very economically sensitive in this environment. >> how do you see the overall economy, milton? you're an economist as well. we get a lot of conflicting data. sometimes, yes, the housing market is doing well, and them there's really poor numbers. what's the take overall from now until the end of the year? >> i think we're going to get what we've been getting, a very sluggish economy. we like the market despite that because of the value, but i don't think we're going to see any, really, any great strength in the market. in the housing market, for instance, the builders got a limit ahead of sales so there's a correction here. the net, bottom line is there, slow, sluggish growth, it's what we got for years, and everything is in place to continue that indefinitely. better than recession, but it's hardly the stuff to get excited about. >> are you concerned of the numbers we're getting from china? difficult to know what's going on, but by all accounts, it's a
country that appears to be slowing down. what impact does that have on the global economy, more important here in the u.s. >> i think that china is slowing, and that, of course, net-net, is not especially encouraging. we have to keep in mind when china slows, it goes from double-digit real rates of growth to p 7.5% rates of growth, faster than what we are growing. what's positive is one of the reasons china is slowing is the reorienting their economy away from strictly exports, which is the way they've been towards domestic developments, so even with the slower growth environment, that, over time, maybe not tomorrow or next quarter, but that over time is going to present opportunities for all producers to sell into that domestic development. >> very good. thank you so much, milton, for joining us. have a great weekend. >> you too. >> thank you. >> all right. when it comes to your health, early testing can lead to early cures for diseases like cancer, mental illness, and these tests
can be costly. in the final installment of the users guide to health care, gerri willis looks how to decide if you should have genetic testings. i'm a total chicken. [laughter] >> i did not expect you to say that. >> really? it's painful? >> i don't want to know. >> you don't want to know? >> i just don't want to know. >> people feel that way, what i have i have early alzheimer's. >> i'm forgetting stuff now. i would be self-conflicted. >> that explains it. if it runs in the family, it can help get you ahead of what -- >> true. listen, back up five paces here. [laughter] we got talking about this because of angelina jolie who had a test leading her to have the decision of a double mastectomy. she had the gene, a faulty gene, and so many people who have this develop breast cancer, so she took radical action. point, number one here, is you don't have to go this far.
after the age of 40, the doctor recommends a number of tests that are not dna tests or get you in trouble, but check for, like, cancer, the third biggest killer of men and women in the country, and if you find out early, you are 90% possibility that you will be cured, and you won't get that disease. that's a good thing. i have to tell you, if your family has signs of breast cancer and women do, you want to be tested, be dna tested because that is a marker that you need to pay attention to. the other thing to do is there's companies out there now that map your entire personal genome. at 99 bucks, online company does it for you, spit in a cup, send it off to them, and they will look at, i mean, it's not everything, but what it boils down to is a handful of diseases, but there's more and more opportunities out there for people to take control of the health, see around the corner, have the right test, and that's
a great idea. >> are you doing it? >> i am right now. >> really? >> really? >> yeah, i don't have the results back yet, but i'm curious. we have all kinds of wonderful diseases in my family, and i want to know if i'm prone. it's a good point because a lot of the diseases that people get, especially heart disease, lung cancer, these are things that a gene doesn't cause you to get, but environmentals. you make choices. you smoke the cigarettes. you eat cheese burgers every day, and, therefore, you get the disease. not everything is preventable by looking at your genetic code. the money side of this, your insurer may not cover it. if you can prove you got a predisposition of it because of family history, yes, maybe, but the test we talked about earlier is very expensive, thousands of dollars, so i think we're going to see numbers come down over time, but it's something people find intregging and want to know. >> not convinced, are you?
>> i don't know, i don't know. >> i am. >> yeah, i know. willis report tonight at six and nine eastern, talking all about this, maybe we'll have results by then, will we? >> no. >> oh, bummer. >> next week. >> next week. >> she's like, it's not your business. financials on a tear this year, talking about this, s&p 500, and big banks with quarterly results, but raising rates and new regulations damper the rally? financial fund manager weighs in next. >> as we do every day at this time of day, look at the 10- and 30-year trash ri. ten year down, 2 #.94%, and 30-year is down five points, 3.75%, dow's down 19. we'll be right back. ♪
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of retailmenot jumped more than 30% on the nasdaq debut. the coupon website prices ipo in the midpoint of the expected range at $21 a share. retailmenot has more than 450 million visits to the site on iphone apps and website last year. that's business from the fox business network, giving you the power to prosper.
>> so look at the banks today on the heels of a busy week for earnings, major wall street firms posted solid second quarter results, and we are going to talk more about them. shares a 52-week high after profit rose 35% from last year actually beating expectations. joining us now, fund manager, president of capital advisers, and antan, you know, banks, like
a lot of people thought we would get the numbers to see that a lot of it had to do with mortgage, and that was not the case at all, was it? >> well, it really, you know, goes back to last quarter, a good pipeline of mortgages that they still had to close, so mortgage did not hurt this quarter. going into the future, it could certainly pose head winds for guys in terms of new origination. what mortgage helped with, though, is those that had a lot of concentration in reality had credit performance, things getting better, housing market is stronger, and so if they have to solve for bad credits, they are solving for them. they don't have to put aside as much reserves for a rainy day helping earnings. >> morgan stanley, in particular, blew it out of the park; right? saying it was the equities trading revenue. a bunch of banks said that. morgan stanley made money in japan. it's more about the guys trading than, really, doing a whole heck of a lot else; right?
>> the big banks, the big uglies as we used to call them, not ugly anymore. they are attractive with good capital, stock prices strong, but, yes, they really had a very good quarter on the trading side, and those that had more banking operations, obviously, great on the credit side. good stock price performance from all of them. >> you know, i know citi is one of your picks for the day. their earnings released in supplements as we talked about this. it was over 100 pages. how does anybody read that, and better yet, how does the government think they regulate that? >> well, it's pretty tough to regulate, and especially since citi has so much international exposure, and, obviously, during the bottom of the crisis, you know, people were trying to figure out where the exposures were given how many countries citi operated in and how money moved. lehman had trouble in terms of paying creditors simply because of what was going on with england. >> right. >> think about the puzzle for citi. tough to regulate, but one of the things the entire industry
has that solves a lot of things is it has a lot more capital, and what led to the failure of bear, stern, and lehman, you know, other than stupid ideas, is they didn't have the capital. if you have capital, you can make mistakes. look at jpmorgan losing $6 billion, and they didn't miss a beat. >> yep. >> having a big strong balance sheet is critical, and they had it, building up nicely. >> as a value play, you like morgan stanley, citi, but talk about bank of america, though. there was a time where this stock price was more expensive than a pack of gum. it's come a long way. where do you see that bank right now? >> well, we still own it. we still like it. we think it can be in the upper teens, low 20s, and multiples put on the types of companies these days are anywhere from, you know, 10-15 time, and they can earn between a dollar-50 to $2 # on a normalized basis. we're starting to get clarify. the real lever exists on the expense saves, and i think they
are making good progress and cutting expenses, selling branches, and less profitable markets. they are trying to right size this company. >> very positive on the financials, thank you, sir. >> always a pleasure. >> i should have said, actually, that the stock was less than a pack of gum. >> that's right. >> because it was. >> it was. it was right down there, wasn't it? >> i know. >> just quarter till, time for stocks, to the new york stock exchange with our friend, thank you for joining us. you know, we had pretty high profile misses. microsoft, google, the tech sector not doing so well, but we're all being flat today, not too bad. >> not too bad. let's look at the positive things as tracy said last week on the glass half full guy. ge today really helping our markets. it's been keeping the strength so far of the markets not going lower, and now we are starting to see moe -- momentum move. the this weekend, investors are happy to have the week behind us, looking forward to next
week, earnings coming out, apple, haliburton, mcdonalds, and okay, you know, economical lar, -- collar, not a lot of stuff, but consumer sentiment at the end, and in between, couple here and there, and i think the momentum seen in the market is going to continue here. i don't see much derailing it now. >> good as always. thank you so much. have a great weekend. >> thank you, sir, you too. >> the busiest week next week coming up. stay tuned. we have a new high stakes class between cable and broadcast. which channels might get yanked next. >> yikes. first, today's winners and losers. we'll be right back. ♪
>>s nation's number one network, cbs, about to go dark in 12 million homes in another fight over cable fees? we have the latest, hey, den. >> looks that way, tracy. a cable clash of titans, cbs with shows like "big bang theory," and "survivor" pitted against time warner cable, the nation's number two cable guy. cbs will be dark wednesday and in 123 million homes unless they concede to a fee increase. ugly spat is public. cbs plans to run this new full-page newspaper ad blasting time warner cable and current contract talks paying itself saying time warner is blacked out some 50 stations over the years. cbs is running this tv spot on its own stations in a few key markets. give a listen. >> >> your favorite shows held hostage, threatening to drop cbs, and it's not an empty
threat. >> now, this jousting becoming almost common place as cable systems and direct satellite services try to hold down soaring programming fees. dish kept the amc channel off for a couple months a year or two deeing, cable vision, abc, had a momentary blackout, settled before the oscars telecast, but this spat with cbs and time warner cable may be more bitter. i'm hearing twc began talks with a price cut, but for cbs to fight, it gets more than five times as many viewers in prime time than espn does. why is it that espn and espn2 together get five bucks a month per home from cable systems and cbs gets less than a dollar? cbs, cbs sports, show time will be likely dark, but within weeks, this gets settled because both sides have far too much to lose and need each other. >> they do. you're right. this happens time and time again. >> if they keep messing up, congress will intervene.
you don't want that. >> thank you, dennis. all right. well, supporters of hydraulic fracturing or fracking as they call it causing a scuffle at times. an energy department found no evidence that chemicals used to extract natural gas contaminated drinking water in a drilling site in western pennsylvania. the chemicals stayed thousands feet below service, the study is ongoing, but it is an important development in the fracking debate, of course, between the natural gas industry and environmental groups. by the way, all next week, we are taking an in-depth look at america's shale boom and impact on the economy, your money, and your investments, and who better to kick off the special series than legendary energy investor himself, t boone pickens, chairman and ceo of an energy hedge fund. we'll have an interesting chat with him next week. >> i'm excited about this. everyone's saying there's an energy revolution going on in the country right now.
>> they say it, but we got to get it to reality, i guess. >> exactly. >> there's signs of it, but the debate over fracking, between environmental groups, and the industry, that's also a very hotly contested one. we'll get into that next week. >> yeah, good stuff. stay with fox business for countdown to the closing bell. we have a great show. first of all, we are talking about the fcc civil charges against steve cohen, and, plus, exclusive with the exof athena health providing online services to doctors and hospitals, companies' big earnings miss. huh, find out about that. what's next for the business and the entire health care industry? "countdown to the closing bell" is next so don't go anywhere. which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on hisortfolio. and with some planning and effort,
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house call in order after athena health misses big in the second quarter? we'll ask thousand they plan to reinvigorate the health. it's a fox business exclusive. no one's feeling the heat more than some of the nation's power companies as they strain to keep up with demand, but one startup has the solution that could save us from the unthinkable. a major summertime blackout, "countdown to the closing bell" starts right now. ♪ cheryl: hello, i'm cheryl casone, last hour of trading, and you can bet everyone on wall street is closely watching someone known for making big and usually highly profitable trades, billionaire steve cohen, the man who started sac capital has just been charged by the fcc with failing to supervise two senior employees and prevent insider trading.
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