Down the correction has to go, how long it will take and exactly how many more people will be hurt in the process when the market decides, if it decides to turn around. That was then. Back to my hair now, what do you think . You think it cant happen now. You obviously forgotten bumps in the between. The crashette in 1989 triggered by a fail leveraged buyout. 9 11 that stopped trading for a week and brought an avalanche of sales and big sale orders when it did. Financial meltdown four years ago this very month and spurred computer driven trading snafus peppered in between this year. The issue isnt can we have another crash, th issue is how big when it comes. The dow sold off nearly a quarter of its value, wiped out in a single day. That would be the equivalent of the dow umbling more than 3000 points today. Still back in 1987 every major blip and bump since we always heard the same stock song and dance, didnt we. Cant happen again. Wont happen again. Too many protections now. The Circuit Breakers that were supposed to arrest panic but did not. The curbs that were meant to ease us into a freefall and ease us out of a freefall that could not. Try as we might new gremlins keep testing our might. That is one thing we learn from market history, the smartest programs, the fancy evident algorithms and uncanny leverage or daring derivative or i dont know, savvy swap cant prent slop. Bere those who say history cant repeat itself. History proves it always, always does. To former bb T John Allison who was president of that bank 25 years ago today on the very real warning signs it can happen again today. John, a pleasure to have you. You dont look a day older my friend but what do you make of then and now and everyone says, well, you know that is ancient history. What do you say . Good afternoon, neil. Great to be with you. Let me try to give context i was president of bb t during that correcon. It is important to understand exactly what happened because the correction didnt happen on a shortterm thing. It happened on a longterm phenomenon. started with johnson back in the 60s when he wanted a war on poverty and vietnam war and didnt want to tax people to do that, so the feds started printing money. That continued in 1970s that resulted in massive inflation. The fed had to correct the mess it made. Raised the prime rate to 81 . That created severe economic correction and fall in the market. In a way it was short and clean and government didnt do anything. We started on real solid and real growth. Alan greenspan who was the new head of the fed really arbitrarily decided real growth was a bad thing the misconstrued and thought it was inflation. He started arbitrarily raising Interest Rates. Neil just to explain youre an enencyclopedia for people who hadnt be older as we are. Ronald reagan was president and point often missed in history Ronald Reagans response to the crisis was essentiay, dont go overboard wi big fixes and expensive fixes. The famous query when asked about the falloff, i think he said something to the effect markets go up, markets go down. In other words, dont make a mountain out of what could be a comparatively a molehill and overdo it seing up for the next crash. They kept it besides Circuit Breakers and curbs, they sort of limited it to that. Cynics and critics of Ronald Reagan said that set up scandals and everything else. But i really do think it kept theovernment out of screwing up something that they would only make worse. What do you think . Absolutely because the market needed to correct. Resources needed to be allocated. We were misallocating resources because of inflation and they needed to be reallocated. Thats when we decided to have real growth. When the market prevents governments from clearing we dont have real growth and struggling like we do today. This is reality today. Bernanke is printing money like crazy for four years. Stock market is reincoming somehow Interest Rates will be low. Pes are vulnerable particularly in tech stocks or high pe stocks. If we do get growth and fed is forced to raise Interest Rates the market is vulnerable. The vulnerabilities longterm bond market where the fed is arbitrarily buying down the long end. Neil that is the next bubble. Every Single Market selloff whether single day event or dramatic turn down of months or years is triggered by a bubble that bursts or at least pricke and air is colling out. You could argue with real estate in 87. You could argue the mania of leveraged buyouts in 89. Medown of real estate again. Some say it is bond market and art first quarterly low Interest Rates this time around as you were up toing on. Ii this the modern day bubble. I have beenn the banking business 40 years. I think every bubble has been fundamentally created the federal reserve. We had stable Monetary System based on Gold Standard we would have much less volatility. The fed always overreacts. Neil youre right. They try to fix things and make a mess. I don think markets are anywhere near as volatile as the fed is. I think the fed creates a lot of this market volatility by misleading people, trying to do onomicalcation economical class. Neil that is interesting. Fed is more volatile than the markets. Always words of wisdom. Thank you my friend. Good to see you again. Thank you, neil. Neil maybe wall street isnt pulling something fancy or washington doing nothing at all, nothing. Edward jones managing director says congress and cliff almost begs thescal markets fall off that cliff. He puts his money where his mouth is. He is one of 60 bankers that sent off a letter to washington demanding action. He is a partisan barber. Were not blaming either of you guys, do something and do something soon. Have you gotten any response . The response that weve gotten, neil has been primarily internal at our firm. Theyre glad to see us speaking up, lending our voice to the need for bipartisan action as well as esident and congress to come together so the u. S. Doesnt go off a fiscal cliff. Neil getting a pat on the back from saying something bold is a far cry from actually following up on your recommendation and doing something bold. Well, no, thats very edward jones helps serious long term individual investors to reach their financial goals. We work with very conservative individuals who are frustrated, who are fearful right now, who are very concerned the lack of action, gridlock in washington will cause. Neil what do you say to them, to you, to other bankers that signed the letter . Theyre on the front line looking at torpedoes. Talk about a meltdown there could be the same for you, right . It is not reasonable to believe that theres anything good will come out of going over the fiscal cliff. It will adversely affect the markets. Neil what about delaying it . Talk is delaying it . What about delaying it six months . By delaying it what you will do neil is buy some time. You will buy some time regardless how thelection turns out hopefully we can get the president and congress to have an openminded, bipartisan discussion with some longer term perspective that will address both ending as well as the revenue side of the budget. Neil james, youre a excellent read of the markets. One of the reasonshy i respect the heck ou of you. I wonder how the markets respond to a delay with the hope that that delay produces an agreement on a simpler tax system, budget reform, you know, hope always springs eternal b you and i are probably old enough to remember it doesnt always pan out that way. So you get your delay. The markets dont share our collective hope and confidence that you strike a deal. They might sell off, right . Oh, and ageies might say, oh, youre punting again, you washington. And there will be hell to pay, a big market selloff. What do you think . Neil, i think some of the activity youre seeinggin the market right now today and more recently this week may be anticipating the fiscal cliff and the lack of willingnessr, Movement Toward addressing it. There, again, i will repeat myself. There is nhing good that will come out for allowing us to go over the cliff. Neil youre exactly right james, thanks f taking time. My pleasure. Neil what is the 25th anniversary, is it gold, silver . I have no idea. It is not a happy one. Always good having you, james. Thank you very much. Thank you very much, neil. Neil by the way i will be live in boca raton, thats monday forhe final president ial debate. Start things off at 8 00 p. M. Going through midnight. Dont you know the fiscal cliff will come out and romney forces are saying it is Foreign Policy debate they will work like crazy how this economic abyss pthreatens our national security. Watch creative ways they bring all of this into that. By the way, mitt romney is breaking out his swing state secret weapon and his name is paul, rand paul. The senator hitting the road for romney but before he does he stops by here first. Dont laugh, romneys entire campaign could get a jolt because of this. People seem to be very curious as to how we prepare for the debates. Let me tell you what i do. First, refrain from alcohol for 65 years before the debate. [laughter] second, find the biggest available view men and mercilessly attack it. Big bird didnt even see it coming. [laughter] the first time. To investing with knowledge. The potential of Td Ameritrade unlocked. Nyse euronext. Unlocking the worlds potential. To a world of superconnected intelligence. The potential of freescale unlocked. Nyse euronext. Unlocking the worlds potential. Oh, hey alex. Ju picking up some, brochures, posters copies of my acceptance speech. Great its always good to have a backup plan, in case get hit by a meteor. Wow, your hair looks great. Dnt realize they did photoshop here. Hey, good call on those mugs. Cant let em see what youre drinking. You know, im glad were both running a nice, clean race. No need to get nasty. Heres your honk if you had an affair with taylor yard sign. Looks good. [ male announcer ] fedex office. Now save 50 on banners. Syou know, ive helped a lot off people save a lot of money. But today. sfx loud noise of large metal object hitting the ground things have been a little strange. sfx sound of pno smashing roadrunner meep meep. Meep meep . sfx loud thud sound what a strange place. Geico®. Fifteen minutes could save you fifteen percent or more on car insurance. Neil yet another sign of an unhealthy economy, this could make you sick, very sick. More people are collecting full Government Health benefits than are actually working full time, first time in this countrys history that happened. The government is growing, jobs are not and thats got reasons magazine worried. Peter, that is incredible. I didnt know that was statistically possible but i guess it is. What do you make of it . The way medicaid works, as economygets weaker more people end up enrolled in medicaid. Medicaid is the big one. We see rise in medicare enrollment because the baby boom generation is turning 65 and hit retirement age and enroll in medicare. With medicaid, the way the program works, if you fall below on poverty scale, you will be enrolled in medicaid at that point. When we see 10 Million People, additionally enrolled in medicaid as we have sin 2008, at that point there were about 42 Million People on the program. Now there is 52 Million People, that is bad sign for the economy, it means the economy is not producing the kind of ealth, the kind of jobs that we need, ople need to have their own health insurance. Ne you know what i worry about, peter in this debate, you and i chatted about it before, what got to be the distraction in the romney47 thing. A lot of people got upset, noses properly out of joint, that included soiers and retirees many who paid into the system for a lot of yearand they were rightly upset but when you step back, the qution missed accuracy of the percentage. How did we get to 47 paying no income taxes and that many relying on government ben of some sort or another . Not that many deserve it but essentially doubled since i got out of college. As we know that was just a few years ago. All right, im lying about that. But my point how do we get that under control . Th math doesnt favo our contuing to do so . You kw, that is a good question. I think the really worrying thing here is the poor results that we see from medicaid. Not just that the program is expanding. This is a program that has surprisingly bad health outcomes. If you look and compare people on medicaid versus people who are uninsured entirely cancer survival rates for medicaid patients are basically, almost no better. They did a study a couple years back looking at people who had major surgery under medicaid and with no insurance at all, people with medicaid had mortality rates twice as high, more expensive, longer hospital stays. What were trying to do with the Obama Administration wants to do is expand this program. Obamacare expand medicaid by somewhere between 10 and 15 Million People over the next deca or so. Thats really worrying. Rather than trying toare back these programs, focus them on the poor, needy, folks who really need it, what were doing is expanding them, turning them into middle class entitlements. Neil it doesnt address something that goes on behind the scenes. Doctors who cringe dealing with those almost going to pay the bill entirely on the governments dime and that, it is not to put them in sort of evil terms but, that, that expands the pool of available treated out there and theres only so many doctors and there is only so many mri machines and so many available treatments. So by just sheer mathlone were going to spread ourselves pretty thin, right . Medicaid beneficiaries have some of the hardest time finding providers to see them. Neil sure. A big part of that because reimbursement rates are so low. Rather again, rather than scale the program back, focus it on the people who really need it what were trying too is exxand it and were going to be the spreading doctors thin. What we will end up doing paying doctors even less while at the same time expanding number of people who are insured through this program we then expecthem to treat. It will not add up. It will not work. Neil something is very wrong when you started medicare itself, before medicaid, started out as 66 million under president johnson in 195 or 6, my memory escapes me and it last grown to this half trillion dollar behemoth today. It started out with focused attempt for people who really, really needed it as it did with food stamps those genuinely poor and people who really need it. We get to the ballooning figures, some more and more getting in and some dont need it at all and could quite fend for themselves but sets up dependency that is scary. Medicaid when it started in the mid 1960s inflation adjusted cost was about 9 billion. Last year the federal government spent about 275 billion. Neil oh, my gosh. Stat about another 100 billion. What the Obama Administration wants to do is double the federal spending on this the next decade. By 202 the plan is spend roughly 600 billion on a program. This is not the way to reform a program. Theyre expanding a program that just doesnt work. Really a bad sign for the eeonomy. It is a bad sign for peoples health. Is a bad sign for taxpayers. Neil peter, thank you very mu. As i tell on people on the show. T a left or right or green or blue. The green is not there to keep doing the kind of stuff peter was elaborating on. It is not there. It is onestop place we tell you. It is not a democratic bashing, this is not aa3 republican bashing, the numbers arent there to supporit. We better come up with better matbecause this aint cutting it. You remember this doozy from mitt romney a couple months ago. I cant tell you anything about the vp process, neil, you know that. If i did, i would have to, you know, have to come after you with my men in black flashlight and erase your memory. Neil that was kind of funny. But i think he got himself a comedy coach and came up with something even funnier, because last night, this guy, had them in stitches. M going to tell you, the dividends are already showing up. The campaign can require a lot of wardrobe changes. We, blue jeans in the morning perhaps. Suits for a lunch fundraiser. Sport co for dinner but it is nice to finally relax and where what ann and i wear around the house. [laughter] follow the wings. We have big dreams. One is for a clean, Domestic Energy future that puts us in control. Our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. Though all energy developmt comes with some risk, were committed to safely and responsibly producing natural gas. Its not a dream. Americas natural gas. Putting us in control of our energy future, now. So, which supeas4g lte service would yochoose, based on this chart . Dont rush into it, im not looking for the fastest answer. Obviously verizon. Okay, i have a different chart. Going that way, does that make a difference . Look at verizon. Its so much more than the other ones. So what if we just changed the format altogether . Isnt that the exact same thing . Its pretty clear. Still sticking with verizon. Verizon. More 4g lte coverage than all other networks combined. Heartburn symptoms causedelieve by acid reflux disease. Osteoporosisrelated bone fractures and low magnesium levels have been seen with nexium. Possible side effects include headache, diarrhea, and abdominal pain. Other serious stomach conditions may still exist. Talk to your doctor about nexium. Of course the economy is on everybodys mind. The Unemployment Rate is at the lowest level since i took office. I dont have a joke here. I thought it would be useful to remind everybody that the unemployment is the lowest its been since i took office. [applause] he knows how to seize the moment this president. And already has a compelling new campaign slogan. Youre better off now than you were four weeks ago. [laughter] neil well, both candidates trading zinges at last nights Al Smith Dinner. Were used to see the president drop a few fun necessary. But mitt romney hit t stage like Richard Pryor than richard nixon. With recent gains in likeability polls, dont dismiss this. Because it has a rious impact. For a few laughs maybe the governor pushed himself over th