Transcripts For FBC Varney Company 20130722

Celebrate the birth. That is why were covering this event and believe me, were on top of this. President obama is going to bring us a financial story. This week, hes going to plug or more spending. The big speech coming wednesday, help for manufacturing, help for housing, help for students, all will on a Campaign Style address on a college campus. In a moment well show you the president promoting the success of his economic policies. Varney company is about to begin. Weve completely integrated every step of the process, making it sier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelis options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Whats at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, secure their retirement, weve come a long way over the last four and a half years. Our economy is growing, our businesses have created 7. 2 million jobs over the past 40 months. Of course, weve still got a long way to go. Stuart all right. Now, that was the president , you heard it, that was the president s announcement via youtube over the weekend is the president pushing to polish his record on the economy has just begun and so has his push for more spending and dan pfeiffer blames all emails. And what he has to say is that the president thinks that washington has taken the eye off the ball, its not us, its them again. The president is kicking off a series of speeches on wednesday this week with an address to the nation from knox college in illinois. His pitch will include new efforts to expand manufacturing, sounds like more spending and investing and signing up the uninsured for health coverage, broadening for preschoolers and more spending and plans to revitalize the already comeback housing industry. So, while the president s aides are busy blaming everybody else in washington for the troubles the president is revisiting poles hes pushed for in the past and may be about to deliver another series of Campaign Style speeches. All right. If you want to take a look at the action on the market this morning, its all in gold. Thats where the action is. Gold is up 28 right now, firmly above 1300. Weve got a weaker dollar that often helps gold. Gold is up 6 this month now, however, its down 23 this calendar year. Then weve got detroit, yeah, gone bust and here come the demands for a bailout. Will president obama balk at that or agree with it . Well bring you downtown detroit, show exactly what its like with the pawn shop in downtown detroit. Were also, of course, watching your money. Several big names you know are making moves, amongst them are mcdonalds, down by the way, and netflix, apple, stay right there. Youre about to see the money and how the markets open monday. Peace of mind is important when youre running a successful business. So we provide it services you can rely on. With centurylink as your trusted it partner, youll experience reliable uptime for the network and services you depend on. Multilayered Security Solutions keep your information fe, and secure. And responsive dedicated support meets your needs, and eases your mind. Centurylink. Your link to whats next. Well, it may be upbeat music, but mcdonalds really disappointing Financial Results today. That stock is going to be down big, its a dow stock so its going to drag the index down as well. Seconds to the opening bell, here is tres knippa in chicago. And going to keep printing be and do you guys figure that in, do you care about japan at all . I care about japan because i have a fund that i manage that is short japanese government bonds which i think are one of the riskiest assets in the entire world and i think that the chance that the japanese are going to have a painful restructuring for a default, i think the chance of that happening is a virtual certainty. Lets put into perspective what hes doing. This is the same thing that japan has done for 20 years, hes been pushing the button of spend, spend, spend, fiscal stimulus, they think the guy will push the button harder, but they may so some gdp, but thats not an economic plan. Stuart thats why you care. Im not sure the rest of us do. Tres, thank you. And the dow is up 15, 550, i should say, a slight gain, but the Trading Volume really slow in the middle of july, in the middle of summer. Weve got disappointing profits and a rather luke warm sales picture at mcdonalds, so, nicole, tell me how far down is it . Well, its down 2 1 2 receipt n right now. And obviously, on the dow jones industrials, they talked about falling sales and thats the challenge for them Going Forward and also the competition that theyre facing, you know what, stuart . I just checked being mcdonalds, its up 13 1 2 . Burger king is better than mcdonalds . Chipotle, better than mcdonalds. How about jack in the box, better than mcdonalds and wendys better than mcdonalds, i dont understand. Its underperforming this year. Stuart okay, we understand that one, thanks, nicole. And we have apple kind of playing catchup here, theyre testing larger screens for iphones and ipads like samsung already has. Nicole, have you got apple for me . Nicole its up higher. 427. Stuart thats it. 427, thats stable pretty much. Goldman sachs, according to a New York Times investigation, theyve been manipulating aluminum. And charging a higher storage fee, nothing illegal. Unintended to consequence of dodd frank, and 5 billion, goldman barely budging on that news. To nicole, netflix, it reports after the bell. Its a tear recently. Its doing a whole lot of nothing. Is it waiting to see the numbers . And i have to say one other thing, stuart. I have to take one moment. Im so happy, maybe, just baby, will and kates baby would be born during your show. The first thing i saw that at 5 a. M. She went to the hospital. Stuart you know, they have Martha Mccallum over there for about ten days waiting, finally. And all right. President obama is going to call for more spending in the face of this rather slow economy and thats the call later on this week and theyre going to help the economy and lets ask david kotak. Looking at the wall street journal, Growth Outlook stuck in neutral. I mean, the Second Quarter of the year, april through june, theyre looking at a miserable performance. Do you think it would help if the president calls for more spending . He can call for all he wants, stuart, its not going to happen. The political construction in washington is not about the change, the republicans have control of the house of representatives. Theyre probably going to pick up a couple more seats in the next election and a couple more in the senate. Obama can make all the speeches he wants, its not going anywhere. Stuart is that the problem with this economy, Government Spending . Well, i dont think so. I think we are recovering slowly from a big shock. Weve had huge monetary stimulus. Its slowly working and weve taken Interest Rates way down and weve come through the gyration of fed speak and backed up the Mortgage Rates and slowed the housing sectorment its a slow recovery, we need to accept it. Accept it . We cant accept a new normal between 1 and 2 growth four years after the recession ended, surely . Well, but stuart, we are at 1 and 2 growth. We have a huge negative output gap. 20 Million People in the United States are underemployed or unemployed. Putting them back to work is a slow process, thats the nature of our system. We went through a financial crisis and a stiff cyclical down turn and were healing from it. You heal slowly when you have a big wound. We had a huge wound and thats the way it is. Stuart if we cut taxes to individuals and corporations, wouldnt that help . Yes, it would. We didnt do that, we raised taxes. What are we doing now . Well, because its not going to happen with dysfunctional washington. We raised the payroll tax on 135 million americans and asking them to pay more and raised the Interest Rates. And this is not a good way to run the railroad, its the with a way we do it, its a shame. Stuart we hear you, but a lot of us dont like the new normal, but i guess this is reality. David, come and see us again real soon. I know youve got a lot to say. Thanks so much. Thank you. Stuart i want everyone to look the a the price of oil. Up at 107 call that 08 a barrel and has implications for the price of gas in the future. We keep a close eye on gas in this program because were in the middle of the summer driving season and look at this. The National Average for regular is now, 3. 67. Weve got two states in the lower 48. California and connecticut, they are paying more than 4 a gallon. We did say this, the spike has arrived, not done yet. To detroit. Would even the most bullish of real estate bulls buy or recommend that you buy property in detroit right now . Theres a loaded question for you. Why dont we bring in tanya who knows the answers to the question. Would you recommend at any price any purchase of any home in detroit right now . No way. Stuart why not . Theyd be bargain hunting and get something free . What do you do with free when theres nothing to do with it. Stuart sit on it. Absolutely not. 78,000 properties sitting there vacant. They want to tear down at least 10,000 of the properties. When you look at property taxes, they are four to five times higher than property values. What do you do with that. 50 of that population is on government assistance. 44 of them have a record. And what do you do . Youve made your point. But i believe there are some pockets in detroit is a huge city, geographically very, very large at least two pockets of what we would call middle income, middle class housing. Yes. Stuart you know about this. Yes. Stuart youve got example of a house from one of those distr lets look at it. Sure, its in woodbridge, a gorgeous home one of the houses that he is abouten completely redone. Granite counter tops and wood floors. Going for 432,000. Four bedrooms, 2 1 2 baths. Its fabulous and you can with aing distance to the Entertainment District right near the ballpark, its great. Stuart 400,000. 432,000. Stuart you would say dont buy it. No, 432,000, you could buy four 100,000 houses that are going to bring you income in arizona and make money on it. Go rent in detroit if youre working there. If youre one of the lucky ones working there because most people arent. Stuart your point is that you can in the rely on basic services, you cannot rely on safety in detroit, therefore dont touch it with a ten foot pole . 40 of the street lights are out. What do you do for work. If youre on government assistance, is that who youre renting to . I wouldnt touch it. Stuart stay there, at 10 00, we have the existing home sales and thats the realty biggest numbers. You got it. Stuart check the big board. Middle of july, late july. No go market in the early going and the volume is extremely low. Coming up new at 10. Phil michelson wins the british open. Mariano rivera gets a standing ovation. Two iconic athletes over 40 years old. Highly respected and all around good role models. The question, for fox and friends host, brian keilmeade. Any nice guys next . Were still on royal baby watch, the duchess of cambridge still in labor and to some degree a money story and people around the world are betting on it. Girl or boy, what name . We go to london after the break. Ive been waiting for a girl like you to come into my life ive been waiting for a girl like you a love that will survive announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. To fly home for the big family reunion. You must be garths father . Hello. Mother. Mother traveling is easy with the venture card because you can fly any airline anytime. Two words. 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I tell you, theyve got a deal with disney to make more super hero toys. The world is waiting for the newest addition to the royal family. Joins us from london is rory scott with the book maker patty power. Theres a delay in hearing what i have to say. Ill keep it short, sharp and to the point. And favorite girls name and odds, go. Favorite girls name, alexandra has been the consistent front runner 251, heavily backed into 74 ahead of victoria. Cut in recently, a lot of money there and ahead of charlotte, pippa middle name. Down to about 61 at the moment not long now. Stuart yeah, really. Favorite boys name and the odds thereon . Yeah, george, the regal george, 51. Been again been a connistent front runner ahead of 81 james, which is pippas and katherines brothers name. And then weve got henry, obviously, harrys name and again, thats late charge, hadnt been in the betting at all until the last weekend. Weve taken over 50,000 worth of bets in the last day alone, in the las few hours, a lot of money on harry, henry. Louie, albert. And 5001 hashtag and pay for the summer holiday. My favorite hoping to see henry the 9th. There are potential for bets down the road and bet on the babys first words, is that correct . Yeah, were taking bets on everything, were british, this is the royal family and royal baby, this is a double header for us, and betting babys first word. Who is going to hold the baby outside of the house. Which magazine will have the pictures. Jump forward whats the name of their first girlfriend or boyfriend. What nightclub will they first be seen leaving, a journalist, a book maker or represent team gb in the olympics . Outside the world of betting, i believe its a huge excuse for a huge party with an awful lot of drinking in britain, is that correct . Yeah, i can confirm that. Were on the roll. And murray won wimbledon and the royal bump is about to pop. The sun is shining, were all suffering from sun stroke and this is a great time to be british. Stuart okay. May i point out to our american viewers that, in the entirety, the ashes is something, is a cricket game between england and australia. And last one for you, rory. Im told that william hill, had a huge book making operation only took in about 150,000 in royal baby bets. That doesnt seem leak like a lot of money. Were a better book maker, paddy power. William hill had their day. Come to paddy power. You dealt well with the awful delay, better than anybody ive seen on television recently. Rory, thank you very much indeed. You know its a historic day, and yes, we will have a new prince or princess today. Almost certainly today. My take on the royal baby and the worlds fascination with it later today. I want to make things more secure. [ whirring ] [ dog barks ] i want to treat mo dogs. Our Business Needs more cases. [ male announcer ] where do you want to take your business . I need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, Small Business solutions from at t have the security you need to get you there. Call us. We can show you how at t solutions can help you do what you do. Even better. Oh, please Pay Attention to this. What is the best performing stock in the dow . Its microsoft. I was in tears last week when it fell out of bed. A modest bounce back higher. The microsoft would be higher if it were not for mcdonalds. And the existing home sales report. Here is the question, will higher Mortgage Rates cool off the housing sector . Well get the biggest and best read in housing in minutes. Were talking about detroit and less gold among those joining us. A detroit native pawn shop owner. How does business do in a pawn shop when detroit goes bankrupt and how does he feel about the shambles in his hometown. We will ask him. Because i have a british accent i am asked frequently what i think about the royal baby. Well, i guess its time i answered. So, here is my take. No matter how americanized an immigrant becomes, no matter how long you live in your adopted country, you still have strong feelings for the country of your birth and im no exception. man monarchy works in britain, it clearly didnt work here. But in that sense i follow the royals with affection. What i dont like is the class system. Make no mistake, the monarchy sits at the top of the social tree and the baby will sit at the pinnacle. And in america its different here, you can climb up the food chain, there, youre stuck in the social class of your birth the way things work out in britain. Very different from here, i like it here. By the way, its no surprise to me that americans are fascinated by royalty. Celebrity watching is huge and the most watched, most powerful and most important monarchy in the world is celebrity of the highest order. Of course it is. Its of great interest. Of course its of great interest in america. Better to be fascinated by the royal rather than the kardasian baby. And finally, there is this, the coronation of Queen Elizabeth was in 1953. My family bought the first tv on our street to watch and the whole street came to look. Shes been queen for most of my life. So of course, im interested and, yes, delighted to see the arrival of her great grandchild who will take her place many, many years from now. Americanized as i am, i shall offer my very best wishes. That is my take. Now, how about yours . Please join us on facebook and give us your all american opinion. Keep it short, to the point, please, and we will read what you have to say one hour from now. July 22nd, 2013. The birthday of a future monarch. Is there any show on television that did not lead with this . Well, we also have. China, its those foreigners who are corrupting us, beijing goes after the western Drug Companies. The left wants a bailout for detroit. There have been talks, but dont call it a bailout, its just a helping hand. And here is a successful business in bankrupt detroit. Les gold is here, he runs a pawn shop there. Phil michkelson wins the open and Mariano Rivera retires. And believe me, the moment the birth announcement is tweeted out, you will know. All right. Here we go, weve got 6 or 7 seconds and well look at the big number on housing. It is existing home sales, how many. Up or down from the month before, the year before. Interesting. Ive got the number. 5. 08 million. That is the annualized rate of selling of existing home sales in america. 5. 08 . It is down just over 1 , month over month. 5. 08, down just over 1 . Month over month. Tanya, own real estate guru is here. Its disappointing. It is, because of the lack of inventory and were going to see that go up as the release of inventory, but we did expect it to be at 5. 28 so thats a disappointing number for housing. Thats interesting, because you say its because theres not enough homes for sale on the market. And a lot of people will be saying, wait a second, Mortgage Rates from 3 1 2 to 41 4, 4 1 2 . You say no . That doesnt matter. Thats a good realtors negotiating, 10,000 on a 260,000 home at 3. 5 , only goes up 10,000. So, a good realtor could negotiate that down for you. The adjustment of rates right now should not matter in housing. I truly believe its because inventory hasnt come back to the market, but were starting to see it. 5 million and 80,000 homes sold in this calendar year. Thats what the number is telling us. Yes. Stuart whats a really good dynamic year like back in 06 or 05 . I think its 7. Stuart around 7 . Exactly. Were not close, but were moving upwards. We would have liked to have seen this go up 1. 5 in the Realtor Community and it did not. And what was the low . Im thinking probably 2009 would have been the low . I donten the low. Stuart it would have been more in the 4 region . Yes, it would have. Stuart were back to 5 million and 80,000 and thats all weve got. Exactly. Stuart your characterization, its disappointing . It is disappointing. Banks need to let the inventory go and there are buyers out there. Stuart theyre holding on to why would they hold on to them. Prices are going up and good old americans bailed the banks out and theyre making. As the price goes up, the banks make more money. Stuart really . Its the banks fault. I truly believe it. Stuart truly . Truly believe it. Stuart thank you indeed for the expert opinion. I know the dow has done nothing. We know that ben bernanke has two mandates, jobs and inflation, but this housing thing has been more important to him than anything else. I think theres still a question mark as to whether or not the spike in rates are hurting and what that means for the Federal Reserve and their policies. So, but what youre saying is ben bernanke, he wants a vigorous housing recovery . Absolutely. Stuart why hes chucking the money around. Charles if you talk about the wealth effect, the most places people feel it, if the price of their house is higher. He said he would not increase rates to hurt housing. He said that. Stuart he did, but okay, do you think that is he going to take away a lesson here that all of this printing of money, when he got the Housing Market started, but now, its stalled . It is stalled. Stuart is that a lesson . It will rev up again eit hasnt started on main street and my argument has been. I want to go through the numbers and see the First Time Buyers and that ind coo kind of thing. Ben bernanke, as far as getting everyone enthusiastic, the animal spirits, people would rather rent than buy and and lending, well have lending conversation another day. Although there are new programs coming about. Stuart well see. Tanya, thank you indeed. Look at the big boardment we were down 20 before the housing name came out and had no impact thus far today. The price of gold, weve got Real Movement there and now were up 33. 50 an ounce. You wouldnt touch gold. Charles have gold coins somewhere. When we were at 1200 number and i thought it was an inflection point. And now everybody likes the gold miners. Buy yourself to metals and put it away. Stuart its an Estate Planning tool. Charles some people think its an armageddon planning tool and i dont think you want to do that. Stuart you bury it. Charles youve got the money buried, the gold buried. Thats stuart. Stuart ive got a big mattress. [laughter] i keep saying this, too, were waiting for word on the royal baby and here is a look at the London Hospital where the duchess of cambridge is in labor right now. Here is what were waiting for. Somebody is going to emerge from that door with a letter encased in an envelope, and that will be carried by helicopter to the palace. And the queen must be the first to know who is the heir the sovereign must be the first to know. What names are the favorites . Alexandra for a girl. George for a boy. Victoria for a girl. And please remember, the name of the heir must be approved by the sovereign. So, dont expect to hear a formal declaration of what the name is going to be for some time. Okay . Thats the british. To nicole, the Home Builders dropping on that existing home sales disappointing number. Give me the numbers please. Start with the Home Builders to the down side. Lennar down 2 . All of the Home Builders are pulling back. Those existing home sales came in, they were disappointment. There were some who would argue and be on your side and say obviously, Mortgage Rates are on the rise and the seasonality, its the spring selling season not the summer. How about mcdopnaldcdonald think thats down. Nicole mcdonalds came out and maybe under pressure, european sales. Can we talk about the baby for a moment . Youre going to. Nicole pedestrian its beautiful how you gave your take and understanding roots and im fascinated by them. I cant wait for this baby. Ive been watching every single day and i think that it will do wonders for england in addition to all weve seen and the morale is improved. Stuart youre right on all coun coun counts. Nicole and andy murray. Stuart will you shed a tear . As a young mother, its beautiful. Young love is something to admire and if it happens, well have the camera on you. And charles. Charles its too you were the guy who always says you use mcdonalds, you like the product, buy the stock . You like mcdonalds nuggets anylonger . I think i go to mcdonalds once every two or three months of the if i have 25 family members including kids, were having mcdonalds. A good emergency outlet. Stuart you wouldnt buy it . No, it seems clear that americans are casual and last week, Kentucky Fried Chicken says theyre going to attempt to do that, but this pure fast food thing. I think theres a pushback against that and carbonated sodas add, a push back. Stuart detroit mayor dave binge is leaving the doors open for a bailout. And some say theyd be open to some federal help. Here is what g. O. P. Congressman told us on this program on friday. A direct bailout which i dont think is going to be happening, i couldnt go along with that as its currently structured, hough however, theres a difference between bailing out a city than providing help to them. The basic question, should president obama help detroit . Joining us now for more is liberal radio host, nancy skinner, nice to have you back on the program. Great to see you. Great to see you, sir. Stuart im not going to fight with you. Im going to ask you a straight forward question. Do you think that the president should bail out or help, some way or other help detroit . Yeah, a direct bailout, i agree, is not in the works, because the city is it not like the auto companies. With the auto companies, we had a recession and knew they would once again have increased auto sales and so thats a model you can work with. This city needs restructuring help. I do think because of the situation as it is, that there are very some avenues they can help in terms of the federal programs going on, and the system plus programs and getting the city on its feet, not a bailout. Stuart some kind of help you would approve of and you think its likely. Ive got steven raftner, the car czar had to do with overseeing the bankruptcy of chrysler, negotiation. Help people are detroit. The current residents are no more responsible for the hole that they are in than the victims of sandy were responsible for the storm and its the victims of sandy who got helped big time to the tune of 60 billion dollars. So, he is making almost a moral comparison saying youve got to do this, what do you make of that argument. There are a hundred cities behind us ready to file in Bankruptcy Court so the president has to look at that. Its a disaster, an Economic Disaster and steven is it right in that record. The bondholders are crying and screaming and refuse to take a bus tour. They want to recoup their entire environment. They are getting 46 cents of the dollar and only 54 cents goes to the other services and Everything Else to the citizens. We dont know yet what the bankruptcy judge, when and if they get control of the case, who is going to get what. You wouldnt give the creditors and a couple of european banks in there, you wouldnt give them a dime. They dont get any help. You would maybe put some money into basic services for the city. Here is my last question, nancy. Do you expect this . Do you think its likely . You know, here is why i do. What people are not reporting in the National Media is that we have billionaires like dan gilbert who bought 29 buildings and they have already gotten entrepreneurs there, we have all kinds of activities going on in the downtown area, casinos, mgm grand and entertainment and a film tax credit that our governor killed off when we had movies all over, george clooney, Clint Eastwood and our governor stepped in and cut that off. What would they have done to the city of detroit. Diversified from the auto economy and what didnt they do. The federal government should look at whats going to imagine. What can we do and recreate this city that rebuilt the american middle class, i would say, stuart . I hear you nancy and glad we didnt indulge in a nasty political fight. Thank you very much indeed. Okay, charles, come in for a second here. Because you dont think that they i was grimacing at some things she said. First you have to take responsibility. To fix the problems, you have to acknowledge how they happened. This is like grease, didnt become the greece we know overnight. It started in the 70s. With communist socialist rule. The detroit we know is 30 years ago, culmination of years of bad policy. Stuart lets get real. Theyve got no money. Got 18 billion in debt. Now, what happens . Do you just totally, no services, no police, no fire, nothing . Do you do that . Do you do that . You dont do that. Thats what youre staring at. Youre staring at a lot of things, okay . But were looking at a city thats the selfinflicted wound. Stuart yes, youre talking about pouring money in there this month and youve got to pour in money the next month and the money after that and money after that. Its a terrible thing and we have to acknowledge how it happened before we fix it. When it comes to detroit. The issue comes unions and pensions, too, and a lot of other things as well. Now one judge says a bankruptcy finding is unconstitutional. All rise because our judge on that is next. [ male announcer ] at his current pace, bob will retire when hes 153, which would be fine if bob were a vampire. But hes not. Hes an architect with two kids and a rtgage. Luckily, he found someone who gave him a fresh perspective on hisortfolio. And with some planning and effort, hopefully bob can retire at a more apprriate age. Its not rockescience. Its just common sse. From td ameritrade. Dead flat market, but charles is going to make us money with federalmogul. Auto parts company, classic turn around. Reported 57 cents this morning. A year ago lost 60 cents. Beat the street by 18 cents and the business up all over the world including north america, and china was up 30 . And theyre going to buy a lot of cars around the world. 30 million cars and 31 million cars in china and 3 million in europe, 5 million in brazil. Theyre all over the world, a great company, a great turn around company. A 26 stock in april of 2011 looking for it to go much higher. Stuart dramatic. Charles its a dramatic day. Stuart in more ways than one were not going to ask the judge about this. Oh, no, no, the judge is here and ive got the question for judge andrew napitano. Only bankruptcy can get cities and i guess, justice just cities out. And the answer from judge andrew napitano. The answer is question, not only cities. Only bankruptcy can materially change pension benefits between the government and the pensioners. Okay, so, detroit, lets focus on detroit. The city of detroit. The city of detroit, to get out of the union contracts, the health and pension benefits which they cannot pay, which they cannot afford to pay, the only way out is back were talking about two sets of contracts here, current employees of the city who have health and benefits packages that the city cant afford. Right. And were talking about retirees who pension checks came from the state. So, the Bankruptcy Court can interfere with both and yes, only a Bankruptcy Court can interfere and yes, a state court judge cannot block a Bankruptcy Court from interfering because of something in the constitution called the supremacy clause. When they clash with state proceeds and the federal states are superior, and theyre saying they better get on with the bankruptcy because thats the only way that we are going to get out of these unpayable contracts of their own. And unpayable, this must be a true bankruptcy, you cant go into bankruptcy because you think you gave into too good a deal five years ago and you must truly be bankrupt and your obligations must materially outweigh your assets. I dont know what the assets are, and i know theyre 20 billion, but their assets, city hall, if there were a buyer at a fair market value, judge could order is sold. Charles some people argue the art that they have. Stuart theyve got a lot of art. Charles but that would be a one time payment. With were talking about cash flow obligations with pensions for years, the judge would take that under consideration. Et cetera not clear who is the ultimate obligor. I think its the state of michigan, and the state of michigan has not filed for bankruptcy, but they would love nothing more than to reduce their obligations to pay the debts encouraged by those folks. And detroit put this off too long. They should have declared bankruptcy a long time ago. Stuart hold on, ive got a News Announcement for everybody. Food stamp recipients apparently buying groceries with their ebt cards and shipping them off to relatives in jamaica, dominican and haiti. And food lines the walls in caribbean cities. Judge, thats legal, nothing illegal about it. Its unusual, the recipients of good stamps are supposed to be those who need food. Theres nothing wrong taking the card and buying it for somebody else who is a needy. Could be a neighbor across the street or a neighbor a thousand miles away. Ten seconds. Your thoughts on impending royal birth . What impending royal birth . I wasnt expecting that. Thank you all weve got. Are we looking at something . St. Marys hospital in london waiting for birth as we speak. Were talking china, bribery. Western Drug Companies. How widespread is the most populace country. And is it limited to foreigners there . Thats next. Wedays are for rising to the challenge. Theyre the days to take care of business. When possibilities become reality. With centurylink as your trusted partner, our visionary Cloud Infrastructure an solutions and responsive, dedicated support, we constantly evolve tmeet your needs. Every day of the week. Centurylink® your link to whats next. Help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. I can tell you safety is at the heart of everything we do. Weve added cuttingedge technology, like a new deepwater well cap and a stateoftheart monitoring center, whe experts watch over all drilling activity twentyfourseven. And were sharing what weve learned, so we can all produce energy more safely. Our commitment has never been stronger. A dead flat market. And were down 13, 155. And we have the home sales numbers. Down 1 compared to the previous month. The annualized rate is that we are buying, selling existing homes to the tune of 5 million and 80,000 per year. Thats considered disappointing. Down go the Home Builders. Red arrows for every one. Nicole another losing, yahoo how bad today . Its down to 3. 7 to the down side. 2803. Its bad if youre hoping its going up and youd rather be up close to 4 . In the middle of a repurchasing program and dan you may remember settled in battle with yahoo and theres been resignation is of people on the yahoo board and whats happening now, yahoo is buying 4 million shares that were owned by third plain and buyingbacks and this is part of it. Stuart china, feeding the public debate on corruption by saying, its the foreigners who are corrupt not us. David asman has been keeping a close eye on this for us and this concerns Drug Companies and chinese saying, its not us chinese. Shocked to hear that pharmaceuticals would bribe foreign officials. It happens. And ethical standards in the pharmaceutical industry are not to be extremely high paying doctors to use drugs and the fine line what is helping doctors and what is a bribe. And many times, china is a problem and sellers and buyers who deal with china have to beware. They want to clean up the pharmaceutical industry and time to put bribery in the medical system to the knife and they kill people who are convicted of bribery. You dont want to mess around with chinese officials if youre caught. On the other hand its the way you do business in a communist system. In communism are promoted not on the quality of goods or services, but on the basis of your connections and many times, those connections are solidified with bribes. So the chinese have to once and for all decide, are they going to become a part of an active free Market Worldwide Economic System in which you have to adhere to specific legal rules and regulations or are you going to continue with a communist system in which legality is out the window. Charles isnt that what theyre doing. What theyre trying to. Charles a couple weeks ago they hit the baby Formula Company and smith field foods with when china does the things that we say they dont do, like make it harder to make and lend bad loans which we probably should be doing. Which way do you want . You have to pull back and see at the bottom of the system its a communist system and communism at its base is not a legalistic system. Its not based on legalities that we recognize. This is moving them toward a legalized system. They still have a communist stem and still look, bribery as long as you have a communist system its endemic to the city. The only way to outbribery, have a free press able to report on bribery, they have neither, neither a free market or an illegal system nor a free market or oriented journalistic system in which all of these actors would be outed in the free market. Glaxosmithkline is the first and astrazeneca and a lot of others, merck and p can company and novartis, if youre caught redhanded in china, you can be jailed under harsh conditions. Stuart david asman on top of it. Question, does detroit going bust mean its more expensive for other cities to borrow money . We will have the definitive answer for you in a moment. This is your hometown this is your hometown this man is about to be the millionth customer. Would you mind if i go ahead of you . Instead we had someone go ahead of him and win fiy thousand dollars. Congratulations you are our one millionth customer. Nobody likes to miss out. Thats why ally treats all their customers the same. Whetr youre the first or the millionth. If your bank doesnt think youre special anymore, you need an ally. Ally bank. Your money needs an ally. Is it speak true will detroits bankruptcy make trouble for other cities . Ed, you say it will make it more expensive. I can give you some examples. This did not creep up on us all of a sudden. This week alone, stuart, 9 billion of new enjoyed this are coming. Next week, 7 billion. Stuart when these bonds are issued, we are lending money to other cities and municipalities. We will get a higher rate of return for taking more risk. That translate into a lot more money and repayment terms down the road. A lot of people are buying those bonds. This is not a bad thing. In fact, it is a good thing. Obviously, other cities in michigan, this is a huge problem. It will get worse. Stuart we should remember that there is talk of a bailout or financial assistance. That is only help for retirees. You never know what this president or this administration will do. You should expect to get anywhere between seven cents on the dollar and 0. 45 on the dollar. It is just pure speculation. Stuart that is a haircut and a half. Thank you very much for doing the research on this. I am tryyng to get hard numbers. You have them for me. Detroit native and friend of the show joins us now. You run a pond shop right in the middle of detroit. How is business in the pond area . Our normal customer is not affect did buy it. My palm line is shorter and my redemption line is shorter. That is good things for the population of the city. Stuart you are a detroit native. We want detroit to come back. We believe in the city. We are Firm Believers in the city. This city will come back. Downtown is being renovated and it will be restored to the beautiful city. Stuart you have to have a bankruptcy declaration. They cannot borrow more money. They cannot repay. Everybody loses. You are saying that you have to have a clean slate to start with there is no question. You start rebuilding. I believe, and i truly believe in my heart, detroit will come back bigger and better than it ever was. I hope that they make the right call. I do believe that the cause that they have made will rebuild the city and make it a better place. Stuart where will the money come from . Tell me. That is the question. I wish that i knew the answer. When you declare bankruptcy, you do start with a clear slate. I wish that i knew the answer right now. Stuart tell me what people think. People hope that we get help. And every problem, hopefully there is a resolution. We are hoping that the government comes in and gives us a little hand. We can be stronger than ever. Stuart right there in the middle of the action. Thank you. Stuart we have Phil Mickelson winning the british open. Mariano rivera ovation. Who is the next star . In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. 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If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reacactions such as rash, hive, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. Stuart an important number. Existing home sales came out at the top of the hour. The supply of homes remained somewhat frank. We have more coming up in a little bit. We are now selling 5,000,085 homes per year. Look at this. Japan. Stuck between a gap and a platform. After an eight minute delay, the train was on its way. More wasteful spending. And likable star. Who are the of and comers . Stuart give me the good news. Microsoft. Nicole it is up 1. 6 right now. It is adding three hole positive dow points right now. Stuart sarcasm is a low form of wit. Do not do that. Nicole i think that it is good. Make donald right now is negative 23 points. That is not good. I am happy for you that you are doing well. Stuart thank you very much, indeed. Good guys do finish first. To class action athletes making the news. Phil mickelson taking the british open and Mariano Rivera now getting an ovation in boston. Question, are the good guy athletes a dying breed . Have you got some suggestions as to who can be the up and comers . The good guys . The role models of the future . You look at tom brady. You look at both manning brothers. They are tremendous. On the other side, you have not hardly. He is a standup guy. I look at tori hunter. He has a Million Dollar smile. Be anyone exactly like Mariano Rivera. People say that this guy is tremendously lucky at times. He is the most cooperative with the press. At fenway park, a team in first place, the red sox against the yankees. The red sox are trailing, obviously. Incomes rivera. They stood and cheered. I never thought that we would see that. It is not just because he is good, it is because he is a good person. Stuart Mariano Rivera widely liked. Even off the field, the man is a good guy. That is worth a ton of money. You are a good guy in your sport, you make so much more money than some guy that maybe top of his game, but not a great guy off of the field. Alex rodriguez, 19 years old. One of the best in the game. Here he is at 38 years old. The yankees want no part of him. He will retire a guy that is not looked up to. No one will be emulating him. Mark maguire. You have to be a good guy, number one. You cannot cheat. If you cheat, you are done. They want to be a part of you when you are at your best. Stuart you know what soccer needs, american soccer, a good guy, a brilliant, great player. That would be something that would get your attention. I know you do not like the mls. I will give you one guy and he is not new, but he can still do it if he chooses to. He is 30 years old. He is 5foot 8 inches. If you watched him over the weekend, you know he still has a lot in the tank. Landon donovan. He does not have the Stuart Varney samples, but he does have the look and charisma. Maybe that kid is 12 years old. That kid is usually scooped up and put into the Academy System early. Stuart ten seconds. You really do care about the royal baby; dont you . Are we out of time yet . I want everyone to be healthy. It is just a baby. Let the water break. Stuart i wish i never asked. We are totally out of time. Thank you very much, indeed. Excellent stuff. Charles almost everyone he talked about is over 30. Kids are so spoiled in the process. Stuart very well said. We were asking where the president was. This week we have an answer. Sounds awfully familiar. What ir this will be a country where working people can earn enough to raise a family, build a modest savings, building home and secure a retirement. We have come a long ways. We still have a long way to go. Take theseags to room 12 please. [ garth ] bjors small busiss earns double miles on every purchase every day. 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Charles the president is supposed to lead the nation. It is frustrating. Stuart he will help manufacturing. Help housing. Help students. Sounds like another planned to spend a lot of money. If you get off your butts and go look for the job, you could have a stake in the economy. Stuart still on royal baby watch. You heard my take on it last hour. My take is next. Peace of mind is important when youre running a successssful business. So we provide it services you can rely on. With centurylink as your trusted it partner, youll experience reliable uptime for the network and services you depend on. Multilayered Security Solutions keep your information safe, and secure. And responsive dedicated support meets your needs, and eases your mind. Centurylink. Your link to whats next. This is a test. Stuart i hope you didnt miss it, but i said that i was following the events of the royal baby and i asked for your take on the royal subject. Jean is following the story and he said there are negative things that have been happening in the news and i wish the royal family well. However, a majority of comments on facebook and twitter totally disagree. Donna says i hope he has a healthy baby and i dont care at all about any of the royal family. I dont think they are more royal than anyone else. Well, they are. And tammy chimes in and says, sorry, i really dont care. I am happy for the british and the birth of their baby and i dont believe on anyone being royalty. We have a profound royal audience. We certainly do. The difference is that anyone can become royalty. That is what we are trying to hold onto. When you are an immigrant who country, and matter how long youve been here or americanize you have become, there is a part of you i think some of this interest is waning a little bit. Dagen that is nonsense. Are you coming back tomorrow . May be. Stuart all right, thank you very much. Are you for a boy or girl . I am interested and i am following it. But i dont care if its a boy or a girl. We will talk about that and we will talk about detroit at this hour. Joining us on markets now, working quickly to try to solve that financial problem. The emergency manager says that it needs to be done fast. We have mcdonalds taking a beating, falling short on earnings. Even while people in here is a sore spot. Fewer buyers are young people. We will get into all of that and maybe more this hour on markets now