Todd Schoenberger appearing on FOX Business Discussing Market Rally


FOR REAL. TOBIN SMITH, MARY ANN MARSH, MICHAEL REID AND TODD SHOWBURGER. THESE ARE NO MIRAGE.>>ONE DAY IS VOLATILITY AND A DOESN’T IMPRESS ME MUCH. THE CONVERSATIONS ARE STILL IN PLACE. IT IS NOT BRISK OR SLOW. CHINA TAKING THEIR FOOT OFF THE BRAKES. IT IS WHERE WE EXPECTED TO BE AND THE RUSSELL FORECAST IS FOR HIGH SINGLE DIGIT RETURNS IN 2010. WE ARE INCHING IN A VOLATILE WAY WITH AN AVERAGE RATE OF RETURN.>>WE SAW THE DOW LOOKING LIKE EVIL TONY POWELL ON HIS MOTORCYCLE AND HIS BUNGEE CARD. YOU GAVE A NEGATIVE FORECAST, YOU SAW DURABLE-GOODS ORDERS, GAVE A BEARISH CALL. I USED ALONG THAT?>>DEAD WRONG ON THE OVERALL CAPITAL, AND IF YOU LOOK AT IT, IT IS ALWAYS CORRELATED WITH IN OUR RESEARCH AND GDP GROWTH. WHAT IS WEIRD, SMART GUYS CAN, WE HAVE $30 BILLION IN EQUITY FUNDS OVER THE LAST 35 DAYS, 75% OF TRADING IS BLACK BOX GUYS SELLING TO EACH OTHER. HIGH CAN’T SAY I AM REALLY BEHIND THAT.>>YOU HAVE BEEN BEARISH. NOW ALL OF A SUDDEN WE ARE UP 9% ON THE S&P. IF YOU WERE NOT SELLING IN THE BEGINNING YOU ARE CERTAINLY SELLING AT THE END.>>ABSOLUTELY. YOU HAVE A ZERO RETAIL PARTICIPATION. YOU ARE NOT SEEING FLOWS IN TO THESE EQUITY FUNDS. WE HAVE A NET POSITIVE EQUITY FUND SINCE THE FIRST WEEK OF MAY. IF THERE’S ZERO PARTICIPATION FROM THERE. WHERE’S THE EVIDENCE? I HAVE RETAIL SALES NUMBERS AT 0.4% CANCELING EVERYTHING ELSE. NOBODY IS SPENDING ANY MONEY. FUNDAMENTALS AREN’T THERE. HOW CAN THIS CONTINUE? LIZ: MAYBE THEY WERE SCARY MAIN STREET. HERE IS THE KEY. BARKER IS CAPITAL CUTTING THEIR FORECAST FROM THE END OF THE YEAR WITH MERRILL LYNCH ALSO CUTTING THEIR S&P FORECAST. THEY ARE SAYING NO GO FOR ANY TAX DISCUSSION WHATSOEVER. THIS IS NOT A GOOD IDEA. THOSE TAX CUTS SHOULD HAVE BEEN TALKED ABOUT.>>THEY HAVE A TERRIFIC POLITICAL ISSUE. DEMOCRATS WILL ARGUE FOR THE MIDDLE CLASS AND SMALL-BUSINESS AND AND FOR THE WEALTHY AND WALL STREET, REPUBLICANS THINK THEY HAVE A GREAT ISSUE BECAUSE THEY WILL TALK ABOUT — THEY POINT TO THOSE NUMBERS. OF PERSONS PATTY MURRAY, THE SENATORS FROM WASHINGTON OR CALIFORNIA HAVE STARTED TO CAMPAIGN AGAINST WALL STREET. BOTH ARE SUBSTANTIALLY AHEAD OF THEIR REPUBLICAN OPPONENTS. DAVE: REPUBLICAN VICTORY WOULD BE GREAT FOR THE STOCK MARKET. ARE WE BRINGING THAT IT ALREADY? IS FETED DISAPPOINTMENT FOR THE MARKET?>>THERE HAS BEEN A CHANGE — YOU HAVE SEEN SIGNS OF THE OBAMA ADMINISTRATION REGARDLESS WHO TAKES THE HOUSE AND SENATE AND A SIGNAL THAT THERE WILL BE — THAT THEY WILL GET SOME MORE BUSINESS FRIENDLY PEOPLE. THE MARKET IS PRICEY IN SOME CORPORATE SPENDING WE HAVE SEEN IN THE SUMMER. WITH LARRY SUMMERS AND TIM GEITHNER LIKELY TO GO, THEY ARE VERY MUCH FEELING IN D.C. THAT THE MESSAGE THEY UNDERSTAND IS A POPULAR RHETORICAL THING THAT DIDN’T WORK. LIZ: HERE IS THE KEY POINT. IN THE PAST WHEN WE HAVE SEEN GRIDLOCK LIKE THIS WE HAVE SEEN A GREAT SECOND HALF FOR THE FIRST TERM OF THE PRESIDENCY BUT THAT IS WHEN THERE WAS ROOM TO MOVE AND OPEN LIQUIDITY PIPES EVEN MORE. THEY HAVE ALREADY OPENED THEM SO MUCH HOW MUCH MORE CAN THEY DO?>>THE FED IS GOING TO GET THEIR WAY NO MATTER WHAT THE MARKET THINKS. WE ARE IN QUANTITATIVE LIFE RIGHT NOW. THEY STAND FULLY READY AND ABLE TO SUPPORT THE HOUSING LABOR MARKET AND EQUITY MARKET AS WELL. I DON’T KNOW YOU ARE MAKING THE CASE FOR A RAGING BULL BY THE END OF THE YEAR BUT YOU ARE MAKING THE CASE THAT YOU ARE LOOKING AT EQUITIES AS BEING UNAVOIDABLE FOR A LOT OF PEOPLE. BUT THE TIME THE RETAIL INVESTOR GETS IN THIS IN A COMPETENT WAY THAT WILL BE CONTRARIAN. DAVE: WE HAVE 16 STOCKS THAT REPRESENT 90% OF THE PERFORMANCE. THAT IS THE SCARIEST THING. OVER THE LAST 30 DAYS, WE HAVE A LIMITED BOOST. DAVE: WE HAVE A BIG MONTH. WE DO APPRECIATE IT. [TALKING OVER EACH OTHER] DAVE: OUR NEXT GUEST SAYS YOU CAN FORGET THIS RALLY IF THE BUSH TAX CUTS ARE ALLOWED TO EXPIRE BY DYSFUNCTIONAL CONGRESS. LIZ: YOU WANT TO LISTEN TO THIS. CELTS CRAFT A TAX CUT UP FOR DEBATE. GEORGE W. BUSH, AND AUTHOR OF THE BOOK SEASONED DESTRUCTION. WHAT IS YOUR TAKE ON WHAT IS GOING ON?>>WE NEED TO EXTEND THE TAX CUTS UNTIL WE HAVE A SERIOUS CONVERSATION ABOUT HOW BIG GOVERNMENT IS. IF WE REALLY WANT THE GOVERNMENT — WE HAVE TO RAISE A LOT OF TAXES. EXTEND THE TAX CUTS UNTIL WE ARE READY TO TALK.>>I READ SOMETHING ABOUT YOUR BOOK. FOUR MAJOR STRUCTURAL IMBALANCES, OVERS OF A CONSUMPTION, EXCESS GOVERNMENT SPENDING AND CHRONIC DAVE DEFICITS. WHY IS IT EVERYDAY WE HEAR COMPLETELY DIFFERENT SIDES OF THIS ECONOMIC DEBATE. SOME SAY YOU HAVE TO SPEND MORE. WHY DO I HEAR SUCH DIFFERENT THOUGHTS ON THIS?>>WHAT WAS THE PROBLEM IN THE FIRST PLACE? THIS DIDN’T BEGIN WITH THE FINANCIAL CRISIS. WE HAD IMBALANCES FOR SOME TIME. WE CAN’T EXPECT QUICK FIXES. WE NEED TO INVEST MORE. IF WE DO SO GRADUALLY WE CAN DO SO WITHOUT MUCH PAIN. SOME QUICK STIMULUS IS WHAT THE ECONOMY NEEDS. LIZ: THIS IS THE ISSUE. ARE WE PAPERING OVER THE PROBLEM? ARE WE DIAGNOSING THE SYMPTOMS AND NOT THE ROOT CAUSE? WE ARE HORRENDOUS, WE DON’T HAVE AN INDUSTRIAL POLICY. WE ARE NOT MAKING PRODUCTS WE USE TO IN THE PAST. L. ARE THESE BANKS BEING COERCED, ASKED NICELY TO DO THE SECOND LOOKS?>>THEY ALL HAVE ADMINISTRATORS. EVERY BANK HAS ONE OR TWO REGULATORS, EXCUSE ME, MY TIE IS ASKEW. I DON’T KNOW HOW YOU LET ME ON. CHRIS: YOU LOOK GOOD, ANYWAY.>>BANKS HAVE SEEN SECOND LOOK PROGRAMS, GO BACK TO YOUR BOOK OF BUSINESS, DID WE TURN SOMEBODY DOWN A YEAR AGO AND DID THEIR SITUATION IMPROVE TO A POINT WHERE WE MAKE THE LOAN? THE ARTICLES I READ ON THE ISSUE WERE MORE ABOUT COMMERCIAL LOANS AND NOT SO MUCH ABOUT COMMERCIAL LOANS. ON THE COMMERCIAL SIDE, AS ABSOLUTELY IT MAKES SENSE TO GO BACK AND LOOK. I ALSO HEARD THE RUMOR. LIZ: WHY?>>BUSINESS IS IMPROVED. A LOT OF THESE GUYS WERE NOT CREDIT WORTHY 12 MONTHS AGO AND THEY ARE CREDIT WORTHY NOW. PART OF THIS STORY SAYS THE FEDS WILL BUY THE LOANS. NOTHING I SEE CAN SUB STAND THAT. LIZ: MICHAEL, A LOT OF LOANS STARTED BY COMMERCIAL REGIONAL PLAYERS STILL ON A STRETCHER. CAN THEY AFFORD THEM?>>I DON’T THINK THEY CAN AFFORD NOT TO. AT SOME POINT BANKS INTO TO GET BACK TO LETTING CAPITAL FLOW. THE BANKS HAVE CLEARLY MOVED FROM THE LOOSE RISK MANAGEMENT TO OVERLY TIGHT RISK MANAGEMENT THAT GOES ACROSS THE SPECTRUM FROM SMALL BUSINESS TO, AUTO LOANS TO MORTGAGES. AT SOME POINT IF THE BANKING SYSTEM DOESN’T START TO WORK IN TERMS OF, THEY HAVE TO TAKE A BIT OF RISK. I UNDERSTAND THERE IS UNCERTAIN MARKET. BANKS DON’T MAKE MONEY IF THEY’RE NOT LENDING MONEY. AT SOME POINT THEY HAVE TO START LOOSENING THAT RISK. THEY HAVE TO DO IT IN LEGITIMATE WAY.>>ESPECIALLY IF THEY’RE NOT PAYING ANYTHING FOR THEIR MONEY. THEY’RE DOING PRETTY GOOD. CHRIS: WILL THIS WORK, JPMORGAN CHASE, PNC, REALLY BIG BANKS BUYING INTO SECOND LOOK PROGRAMS. IS IT GOING TO BE ENOUGH?>>RIGHT. WELL A COUPLE OF THINGS HERE THOUGH. WHAT WERE THEY DOING ALL ALONG? YES THEY DO NEED TO MAKE LOANS TO MAKE MONEY. WHY WEREN’T THEY MAKING LOANS ALL ALONG OVER THE PAST, WHAT YEAR, YEAR-AND-A-HALF? WE’VE GONE THROUGH STRESS TESTS. WE HAD A BANKING SITUATION. WE HAD SUBPRIME BORROWERS BRING ITS TO ITS KNEES. WHITE HOUSE INFLUENCING BANKS, YEAH, WHY DON’T YOU HAVE A SECOND LOOK AT LOANS YOU TURNED DOWN. THIS DOESN’T MAKE ANY SENSE. THE BANKS ALL ALONG SHOULD HAVE BEEN DOING WHAT THEY SHOULD HAVE BEEN DOING AS FAR AS LOOKING AT CREDIBILITY. AS FAR AS SEEING IF THESE LOANS ARE LEGIT. NOW ALL OF SUDDEN, MAYBE WE DIDN’T DOT THIS I OR CROSS THIS T A DIFFERENT WAY AND WE’LL GIVE YOU THE LOAN. IT JUST DOESN’T ADD UP. LIZ: MARY ANN YOU ARE A SHARP ANALYST. YOU’VE GOT YOUR EAR TO THE GROUND IN D.C. ARE BANK REGULATORS PUTTING ARM ON THEM LIKE CHRIS COTTER VASE?>>THEY’RE NOT DOING ANYTHING THAN WHAT PRESIDENT OBAMA DID TO BP. I DOUBT BP WOULD HAVE COME UP WITH $20 BILLION IN CLEANUP FUND DOWN ON THE COAST UNLESS THE PRESIDENT ENCOURAGED THEM. THE ECONOMY WILL NOT GET BACK ON TRACK. PEOPLE AREN’T GOING TO GET BACK TO WORK UNTIL LENDING IS DONE TO QUALIFIED BUSINESSES. THIS IS WHY VOTERS ARE UPSET. THEY WENT ALONG WITH BAILOUTS BECAUSE IT WAS GOOD FOR THE COUNTRY. NOW THEY FEEL LIKE CHUMPS IT TURNED OUT TO BE GOOD FOR EVERYBODY BUT THEM.>>THIS IS END ARE ISSUE. LET’S KEEP THAT IN. THIS IS NOT ACCESS TO CREDIT ISSUE FOR SMALL BUSINESSES. THIS IS ACCESS TO SALES RIGHT NOW AND PEOPLE ARE NOT SPENDING ANY MONEY.>>YOU’RE RIGHT. BUT CLEARLY THERE ARE COMPANIES ABLE TO TAKE CREDIT ON LITERALLY HAD A CREDIT LINE OF, THREE YEARS AGO AND HAVE ONE MILLION CREDIT LINE. THEIR BUSINESS HASN’T GONE DOWN 90%. THAT’S WHAT THEY’RE LOOKING AT.>>THAT’S RIGHT. LIZ: LET ME TELL YOU ABOUT ANOTHER CROWD WHOSE BUSINESS IS LOOKING PRETTY GOOD TODAY. TIME FOR WHO MADE MONEY TODAY. YOU, YOU, YOU. YOU MADE MONEY. DID YOU LIKE THAT?>>YOU GO GIRL. LIZ: THIS IS WHY WE’RE TALKING ABOUT WHY YOU MADE MONEY. PRESIDENT OBAMA IS READY TO SIGN LEGISLATION INTO LAW THAT STRIPS THE SEC FROM FREEDOM OF INFORMATION ACT VIOLATIONS AND EXEMPTIONS. EXEMPTIONS. I SCREWED THAT UP. THAT’S WHAT I MEANT. PROVISION WAS TUCKED INTO THE FINANCIAL REGULATORY BILL. A STORY FIRST BROUGHT TO LIGHT BUT US HERE AT FOX BUSINESS. WE WORKED TIRELESSLY TO BRING ATTENTION TO THE PROVISION AND HELP INSURE GOVERNMENT ACCOUNTABILITY TO THE PEOPLE, NOT THE OTHER WAY AROUND. WE’RE NOR THE PEOPLE. WE’RE FOR YOU THE VIEWER. NEXT UP, MEMBERS OF THE FEDERATION OF INTERNATIONAL ROBO SOCCER ASSOCIATION –>>COTTER. THIS IS YOU RIGHT HERE. LIZ: ROBO SOCCER. THIS IS YOU IN THE MIDDLE. MORE THAN 50 TEAMS ARE GATHERING IN INDIA FOR THE 15th AND WALL ROBOT CUP.>>15 TEAMS AND ONE WOMAN. LIZ: NOW THE SOCCER PLAYING AND DROIDS NOT EXACTLY READY TO TAKE ON RINALDI. THAT IS NOT LEAVING THEIR ENGINEERS FROM DREAMING BIG. THE CREATORS SAY THEIR ULTIMATE GOAL IS DEVELOP A TEAM OF FULLY AUTONOMOUS HUMANOID ROBOTS BY YEAR 2050 NOT ONLY COMPETE AGAINST HUMAN PLAYERS BUT WIN. THEY WANT TO WIN THE WORLD CUP.>>THEY HAD THAT 1985. REMEMBER JOHNNY FIVE?>>ENGLISH TEAM WILL GET THEM. LIZ: ENGINEERS NEXT PROJECT GETTING FULLY HUMAN GIRLFRIENDS.>>EXACTLY. LIZ: EXACTLY.>>JUST START GETTING ONE DATE. THAT IS WHERE I WOULD GO. ROBOT THAT CAN’T SAY NO. LIZ: NEXT UP, WHO LOST MONEY TODAY, FAILED TELEVISION EXECUTIVES. THAT’S RIGHT. A BIG MEDIA SHAKE-UP TODAY. CNN PRESIDENT JOHN KLEIN AND NBC UNIVERSAL CEO JEFF ZUCKER BOTH FAILING TO GET THEIR JOBS PICKED UP FOR ANOTHER SEASON. KLEIN’S JOB –>>HARD TO BELIEVE. LIZ: AFTER SIX YEARS AS HEAD OF CNN ONCE NUMBER ONE CABLE NETWORK HAS BEEN PLAGUED BY STEEP DECLINE IN RATINGS. MANAGING TO BE DEAD LAST IN THE CABLE NEWS RATINGS GAME EVEN BEHIND THE FOX COOKING SHOW.>>COME ON. LIZ: ZUCKER AT NBC TOOK OVER WHEN THE NETWORK, MUST-SEE TV. NOW NO ONE SEES NBC.>>DO THE “SEINFELD” IMITATION. DOESN’T MATTER DOESN’T MATTER. WE’RE GETTING OUR BUTTS KICKED EVERYWHERE. LIZ: NOW-INFAMOUS CONAN AND LENO MESS?>>CRYBABY CONAN, YEAH. LIZ: CHARLIE GASPARINO SAYS HE COULD LEAVE A $20 MILLION PAY DAY. THAT IS JEFF ZUCKER. IMAGINE WHAT ZUCKER WOULD HAVE RECEIVED IF HE WASN’T A COMPLETE DISASTER.>>TECHNICALLY HE DIDN’T LOSE MONEY. LIZ: 20 MILLION BUCKS. FINALLY SLACKING WORKERS AT CHRYSLER’S JEFFERSON NORTH PLANT IN DETROIT. LOOK AT THIS. THESE EMPLOYEES ARE KICKING BACK WITH SOME BUD. NOT JUST A BEER. LOOK AT THIS. WHOA! OF COURSE, OF COURSE, OUR INTREPID LOCAL FOX TV CREW KILLING THE WORKERS.>>IS THAT LINDSAY LOHAN?>>LOOKS A LOT LIKE MY OFFICE PARKING LOT WHICH IS WEIRD. LIZ: LOOK AT THIS GOING ON.>>THESE GUYS HAD A HALF HOUR. HALF HOUR BREAK. THEY’RE POUNDING 40 OUNCES IN A HALF HOUR TO GET BACK TO WORK. LIZ: LIKE COLT 45.>>NOTHING LIKE, EXACTLY, GOOD CALL THE COLT 45 BY THE WAY. LIZ: LOOK WHAT HAPPENS TO THEM. CHRYSLER ANNOUNCING THE WORKERS HAVE BEEN SUSPENDED PENDING REVIEW. BUT UAW MEAN WHILE LET TO LET THEIR JOBS GO UP IN SMOKE. THEY OPPOSE DRUG AND ALCOHOL USE FOR SURE. HEAR IS THE KEY PHRASE. ON THE JOB. THEY SAY THEY WEREN’T ON THE JOB DOING IT.>>SOBER UP IN THE 15 MINUTES TO GET BACK TO WORK? LIZ: WHERE IS THE BOON’S FARM.>>OLD ENGLISH 800. I HAVE THREE WORDS FOR YOU. CHRIS: GREAT SEGUE THERE. CONGRESS FINDING A BRAND NEW WAY TO WASTE YOUR MONEY. LIZ: A BRAND NEW WAY? A BRAND NEW WAY? CHRIS: NO. BUMP THE HEARING ALL THE WAY UP TO C-SPAN 1. LIZ: THEY INVITED A COMEDIAN TO A HEARING AND SHOCKED HE ACTED LIKE A COMEDIAN. THESE ARE THE SAME FOLKS IN CHARGE OF OUR MONEY. ARE WE TRULY DOOMED? THAT’S NEXT

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