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tv   FOX Business After the Bell  FOX Business  July 30, 2013 4:00pm-5:01pm EDT

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a russian company pulling out and forecasting 45% loss in pricing, all those names moved lower. david: well, talk about a wild market, today we had some big swings, and we ended up in the positive territory. it could have gone either way for most of the day, but it looks like we're going to edge out ever so slightly with a win on all of the indices as we look up and down for the dow jones down to the russell 2000. biggest winner today, nasdaq, but that's still up just less than half a percentage point. but, still, it could have been a lot worse. there were moments when it looked like the market was going to swoon, didn't happen. liz: after touching a five-year high, consumer confidencc fell just slightly in july. the index dip l to 80.3 from an upwardly revised 8 be.1 -- 83.1 in june. david: jpmorgan is setting accusations that traders at the bank manipulated electricity
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markets. the firm did not admit any wrongdoing as part of that settlement. we'll talk more about that to come. liz: home prices in the u.s. continuing to rise. the s&p case-shiller index jumping 2.4% in may. prices in each of the 20 cities measured rose at least 1.2%. prices are now up 12.2% year-over-year, not bad. david: and we're going to talk about cps and time warner cable, they've agreed to extend their negotiating deadline until 5 p.m. on friday after a short blackout last night of the cbs network in some markets on time warner cable systems. liz: eurozone sentiments picking up in july reaching the highest level since april of 2012. sentiment across the 17 countries rose to 92.5 from 91.3. david: also a pennsylvania judge has ordered three former penn state administrators to stand trial in the jerry sandusky child sex abuse scandal. the judge ruled prosecutors have shown enough evidence to warrant a trial for ex-president graham
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spannier, former vp gary schultz and ex-athletic director tim curley. busy hour coming straight up, "after the bell" starts right now. ♪ ♪ liz: let's get to today's action. we head to the pits of the, with me with larry. is everybody talking about this fed meeting, waiting to hear what ben bernanke and company say, not necessarily dosome. >> you know, i think they are. they're thinking about that, also what will carney do, the bank of edge bland, what will happen with drag by? we have pmis and job, so there's a lot to talk about. people haven't packed up for the jersey shore yet, but they are getting ready to after this week. david: well, larry, i have never in my lifetime, and i'm thinking back to paul vocker and before, i've never seen a fed chairman who is more afraid of spooking the market than ben bernanke. it seems to be the utmost fear in his mind, he'll do anything
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he can to avoid that from happening. so don't you think nothing is going to happen tomorrow? he doesn't want to spook the market. he's not even going to to have a press conference. >> yeah. he's been the most overly transparent fed chairman we've ever had, at least in my history as well. i don't think -- it's going to be very antiicallimatic. i think traders are looking beyond this, more are worried about who the next fed chairman's going to be, not what the fed's going to come out with tomorrow. that said, the drama seems to be more about summers or yellen, who's it going to be? is. liz: we won't know that nor several months, as we know, but take, for example, what's on the screen. the dow winners were the big names, intel, and then the lag a asker, verizon, at&t. can you distill anything from the movements of the stocks you saw in the pits today that tells you how stocks will move in general in the next couple of months? >> yeah. i think we're surrounded with all these vague generalities in
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the marketplace whether it be global growth. it's kind of, sort of okay. valuations are far from cheap but far from expensive, and will the fed keep rates low for as long as possible? so with that said, people are realizing different sectors in the market have undervalued. there's a financial repression system where people have to take risks somehow, so now they're picking up on more of a tech sector which has been the red-headed stepchild for so long. that's what everything's going to happen over the next few months. david: okay. hold on a second, larry, we're going to come back to you, but dennis kneale has the earnings on buffalo wild wings. >> reporter: a big beat by buffalo wild wings coming in earnings at 38 cents a share -- 88 cents a share. wall street looking for 79 cents, and that heenes earning growth was 42% instead of the 27% growth wall street was hoping for. that's a great thing. on revenues, though, only a slight beat. david: well, and look at the
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stock going down after hours, dennis. we're seeing a big drop in that stock. perhaps it's revenue, perhaps it's something else. >> right now same-store sales up only 3.8%. at the start of the quarter they were oning up 5.2% and a year ago same-store sales were rising 5.3%, so that's a market slowdown of 3.8% for buffalo wild wing, and that might be why stock's going down. got to see if the company's put out some revised or downward outlook. david: one of the things investors were hoping for was more growth on the bottom line because they're paying less for chicken. the price per pound has gone down quite a bit, and yet that is apparently not helping after hours. >> actually, it has helped with their earnings, 88 cents instead of 79 cents, so that probably is entirely because of that lower cost base, but wall street wants to see really good revenue growth. across the economy. you kauais have cut your -- guys
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have cut your costs, but we want to see top line growth. liz: and then when you don't get the bottom line, you want the top line. listen, i know, but this is the first beat for this company in five quarters, larry shill very, not getting any love or credit for that at the moment, the bid, the ask around $95 when the close was 97.69. >> yeah, you're exactly right. it seemed like wall street had all these great expectations baked into the stock already, so this is a accuracyic case of -- classic case of buy the rumor and sell the fact. where else can you go in america where you walk in and it's like a party? you have half the room of kids and adults, the other half is a sports bar. the food is, well, that's a different story, but people tend to really like their food. it's a very, very i yahoo! anemic atmosphere, unparalleled. is it a hundred dollar stock in i'm not sure, but they've baked in a lot of expectations going
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forward. it was 35 restaurants, now it's 940 in 49 states including canada, so how much more room for growth is there? to she's crated a great, great business model. david: larry, this earnings season we had a little improvement on the revenue side than the first quarter. certainly didn't hurt stock valuations as they continue to rise no matter what, but are we as we look forward, are we looking to a a point where investors be they don't see revenue growth, they're not going to put their money in the stock? >> picking that point is impossible. i wish i could do that. but at some point if revenues and earnings per shares don't continue to go in lock step with the price of the stock, there's going to come a point in time where momentum takes over. we don't know when that's going to be but, yes, eventually that's going to happen. we'll have to have a healthy correction. 14 times earnings per share going out in 2014, we still have room for a negative shot in the market, so we still have some room to go if things continue to
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go status quo. liz: let's give a nod to our commodities viewers because you're right there in the seat of what's going on. i know that floor, and i know that the soy guys are around the corner, but let's talk about most of the precious metals and base metals moving lower today. >> yeah, they were. gold's had a really good short-term run, a little bit of profit taking. india came out this morning making it more restrictive for them to buy gold. that's a negative tone. especially in gold was due to the fact that china just lowered their floor or eliminated their floor on interest rates making it a lot easier for import of gold. when it comes to aluminum and copper, it's really about the emerging markets as the output gap continues to shrink. we're not seeing the fundamentals to support a long-term bull market in any of do -- david: larry, we've got to talk about oil. that was a big move to the downside. is it going to continue? >> i by it would, but my -- i wish it would, but i still like brent over -- i'm sorry, texas
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over brent. i do think we'll continue to move down. it seems like japan's not going to import the oil that most of the world thought they were going to, and that goes along with the emerging markets inside of asia. we're seeing less andless demand right now, so we're going to see a little bit of a reprieve in the oil price. liz: larry, thanks, and we'll see larry when the s&p futures settle. we'll be watching off of this. david: thank you, larry. well, the president extending a new offer to republicans proposing an overhaul of the corporate tax system in order to generate revenue for job-creating programs. so that's his formula. will this finally break the impa pass that we've seen on capitol hill and lower those corporate rate this is and does that lowering go far enough? glenn hubbard is the former chairman of the council of economic advisers. glenn knows. he joins us in a moment. liz: plus, some recent economic data suggests that europe may be
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turning a corner, and it's not just european stocks that will benefit, in fact, it might be stocks here that move first to the upside. up next, we break down how to play europe's recovery with u.s. stocks. and we would love to hear from you. a new job posting on twitter's page, and that posting is for a financial reporting manager. well, that has rumors swirling that an ipo might be around the corner. would you buy shares of twitter? log on to facebook.com/afterthebell. we'll read your answers later this hour. ♪ ♪ [ male announcer] surprise -- you're having tripts.
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liz take two interactive just came t with numbers, let's see what the narrower than expected loss was. dennis has it. >> yes, take two interactionive coming up with a beat on the downside. this was a company that was expected to have a loss of 54 cents a share -- no, expected to have a loss of 57 cents, and it comes in at 54 cents, better than expected. a huge plunge in sales. sales come in, though, better than expected. wall street was looking for 125 million or so, down 44% from a year ago. instead it comes at 144 million.
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but that is still way off the 26 million. these video game software companies live and die by product cycles and compares -- comparisons to when you had a good product the year before. we're burrowing through the rest of the ruttings. david: problem or not, the stock is up after hours about 50 cents. liz: david -- david: they're coming out with grand theft auto number five, there's a lot of anticipation about it. could that be one reason? could there be some indication that grand theft is going to do well? >> yeah, i think so. you're waiting for that next big upgrade to come out there just in time. they want to introduce it by september, just in time for the new microsoft xbox i and the new sony playstation iv because new engines end up driveing purchases of these upgraded games. liz: yeah, and by the way, 17% of the float is being shorted, dennis, so this is maybe a
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little bit of a short squeeze here. thank you very much. take two interactive trading often. s&p pits closing right now, let's head back to larry shover. >> ended between 1680 and 1700 for a week and a half. look at the u.s. dollar, six weeks on a tear only to give back 50% of its wanes in three weeks -- gains in three weeks. decoupling, rebalancing,sition. we have lot of news coming out with the fed, bank of england, mof -- i'm sorry, ecb, jobs report. we have a lot of things, and i do believe the market's being a little casual, maybe even naive about what could happen. i'm not calling for a crash, i'm just saying we have a lot of information, and we just don't know what's going to happen by the end of the week. david: p be e for the s&p going forward is still not overvalued, so people say there could be room for growth. >> yeah. david: larry, thank you very much. pharmaceuticals, we haven't talked about them today.
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two big giants reported earning3 earlier. let's head back to nicole petallides on the floor of the new york stock exchange. how did they fare, nicole? >> both are dow components, two huge names in big pharma, pfizer a winner, up about half a percent, merck down about a half a percent. both companies have tried to keep their costs down for marketing and such, but also they both have the same situation which is generic competition. having the patents expire. merck, for example, for singulare lost 80% of sales because of that. when you see that these companies don't have the big drugs to get out there, that, obviously, gives them some intense competition from the generic market, and that's something they both have noted. and that's what we're seeing. and merck also talked about research and development, a little weak in that area. david: thank you, nicole. appreciate it. liz: thanks, nicole. europe's battered economy may actually be finally showing
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signs of life. here's what happened, because we've heard those headlines before a couple months ago, but now we got better than expected economic data hitting the markets. we've got someone who's got two important ways to play europe's recovery without even buying european stocks, and he says you need to focus on u.s. companies instead. joining me now is steve, webbush security's equity analyst. let's go macro and find out why we should believe now just from a couple pieces of data that it's really a true turn around here? >> right. certainly we're seeing just early signs right now, liz. you know, europe has been weakening from a demand perspective since mid 2012. you know, q2 is probably too soon to see any real improvement there. we've tracked the pmis, the qloabl pmis like everybody else, the european pmis, recently those have turned up really since may we've seen a bit of improvement in both
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indicators, both their leading indicators and could translate into better demand conditions later this year. liz: steve, i think you make a great point and that is just because it's tentative doesn't mean that now isn't the exact time people should be coming in. you do want to be maybe a little early and ahead of the curve certainly. so if you are, let's talk about your theory about buying u.s. stocks and what to look for before we get to your names when it comes to picking a stock that might benefit from the european recovery. >> right, okay. well, the two important ingredients there, liz, are the more cyclical the stock, the more rev language it's going to have -- liz: define cyclical the way you see it. >> yes. so certainly in software we have two types of growth, we have secular growth from technology transmarket adoption, new types of computing, we also have cyclical trends that stem from demand conditions. you know, in cases it's enterprise buyers being more or less willing to part with cash and open up their pocketbooks to
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buy. liz: enterprise, for those of you don't know the lingo, really means corporations and businesses. so you gave it away, you said software. let's get to your first name, that is autodesk. this, of course, is a huge company in the united states doing architecture software, so i am guessing there are huge operations in europe that really like this stuff. >> yes. autodesk issalmost 40% of the revenues coming from europe, and they are, as you correctly identify, exposed to architecture and engineering services. also heavily exposed to global manufacturing. so both of those being very cyclical components of the economy. liz: see, this is -- i'm liking this story a lot was what you are, in essence, saying is that this is an opportunity to go for companies, the exact companies, steve, that lot of people have said stay away from over the past year, right? >> well, certainly people, you know, autodesk is a very cyclical name, and, you know, people are more willing to play it when we start to see signs of
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economic conditions improving. you're right, if we do see outright improvement that then translates into good fundamentals, in some cases it's too late if you've got purely a cyclical play. autodesk does have some secular drivers as well in terms of their growth of recurring revenue in their mix and their growth is up, revenues from their suites. but heavy cyclical component, and if there is an upturn, you know, you want to be buying at the front end of that. liz: and it is up only about 6% over the past year. your second pick is called ptc. explain this one. >> that's right. so ptc is also like autodesk, they sell design software. and in ptc's case, it's design software that helps engineers create product designs which then become the basis for manufacturer products. so ptc sells to large global manufacturing companies that design products.
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and so in that market position they are haley exposed -- heavily exposed to europe. certainly it's another case of near 40% of revenues coming from europe and another case of a company that does have a strong cyclical component to their growth because of that exposure -- liz: we should also let people know if the s&p 500's up 22% over the last two years, which it is, this company's started to do pretty well. steve, it's great to have your ideas. thank you so much. >> thank you, liz. liz: we've been having a lot of wetbush people on, they are very creative. david: because they're smart and make money. well, another bruise for apple as the company faces a class action lawsuit from its u.s. employees now. details straight ahead. liz: and the president calling for a restructuring of business taxes as he looks to offer fresh economic ideas that could possibly pass the gridlocked congress? what does it mean for the nation's largest companies who are looking for some release? glenn hubbard, dean of the columbia business school and
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former chairman of the u.s. council of economic advisers, knows. he's going to join us next. ♪ ♪ [ male announcer ] if you're taking multiple medications,
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david: that's right. it is time for a quick speed read of some of the day's other headlines, five stories, one minute. first up, samsung looking to raise its bet on next generation screens. the south korean company is reportedly in talks to buy german lighting specialist for more than 200 million bucks. the digital camera is fading in popularity. according to a report by the camera and imaging products association, global shipments of these cameras plummeted 42% in the first five months of the year because everybody has a camera with their phone.
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apple retail workers in new york and l.a. have filed a class-action lawsuit claiming lost wages over bag searches at the end of shifts and meal breaks. the suit claims apple's policies amount to $1500 per employee per year. thomson reuters twitter account was hacked by syrian activists. a group of hackers calling itself the syrian electronic army post ad series of political cartoons and depict the war in syria. company announced plans to add a button to report abusive tweets following an online petition campaign urging twittory make changes. that is today's "speed read." liz: who will decide what is annoying. david: good point. one person's annoying is another person's exciting. >> securities & exchange commission chair mary jo white getting grilled by congress. the senate banking committee
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questioning her progress writing new financial regulation and commodities trading by big banks. david: peter barnes joins us from the nation's capitol with all the details. when everybody said she was appointed. she would be controversial. indeed she is turning out to be so? >> she is getting good start out on this front. the sec is looking to update insider trading rules for commodities markets, david and liz, in that hear today. this follow reports that jpmorgan chase and goldman sachs had large holdings and copper aluminum in warehousing operations they own and operate. critics say this distorts supplies and increases prices and also may allow these banks to trade derivatives on those metals based on their own internal knowledge of the size of their holdings. now that's not illegal but one senator today asked if regulators should update their rules to limit this kind of activity. the chairman of the sec said the agency is looking into as well
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as disclosure issues around this kind of trading. >> i think it's a subject matter that once it came to my attention, that is fairly recently, i've actually asked the staff to examine, you know, that question. i mean are those series of questions. i can't really respond further at this point. >> now separately the cftc said it already has new rules in place to prohibit fraud and manipulation in metals trading. it report he had is looking into this issue but its chairman warned that banks are not only holders of commodities who may want to trade on inside information about their holdings. >> a grain elevator operator a farmer, rancher, may know something about their crop and want to hedge that. we would not want to diminish that farmer, rancher, grain elevator operator to hedge that risk. >> separately chairman white said the sec is perhaps a month
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or two away from issuing a proposed rule requiring public companies to disclose how much their chief executives earn compared to their workers. it's a prounion provision that was included in dodd-frank financial reform. david and liz. liz: peter barnes, thank you very much. david: thank you, peter. well there's a new study out suggesting that the affordable care act may force nearly 800,000 low-income workers to quit their jobs but the author of that study says that could actually be a good thing? quite a flipside. we have the author for a big flipside you will not want to miss. that is coming next. liz: plus president obama has a new plan to spur job growth by reforming the corporate tax code. will his plan work and how will it impact the nation's largest corporations? glenn hubbard, former chairman of the council economic provides source weighs in on this next. ♪ ♪
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♪ ♪ ♪ [ male announcer ] if y can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. liz: time for a look at today's market drivers. the dow jones industrials end ad teeny bit lower as investors
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turned cautious ahead of fed's policy decision tomorrow. the second day in a row where the dow moved lower. it is longest losing streak is two days in six weeks. telecom and energy were the worst-performing sectors. we have u.s. home prices posting their largest annual grain since 2006 rising 12.2% in may compared to one year ago. case-shiller 20 city index is up 2.4% month over month. consumer confidence is close the highest level it has seen in five years. conference board, sorry. david: she moved the earth. liz: conference board reported index fell to 80.3 from 82.1 in june. don't push the desk. david: president obama, calling on washington to work on some kind of grand bargain that will be focused on reforming the business tax code, specifically lowering the corporate tax rate. so is this a step in the right direction? does it have a chance of passing? liz: joining us glenn hubbard dean of columbia business school
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and former chairman of the president's economic council of economic advisors. his latest book, "balance, economics of great powers from ancient rome to modern america." david: wow. liz: which would be appropriate sort of segue here. will the plans that were announced today help to bring us to great economic power once again? what do you think? >> thanks the short answer is no. the good news the president is talking about tax reform. that is probably the best thing the government can do however the president's corporate reform would actually raise taxes on multinational companies on top of tax increases we've already seen on small business. so it's the right conversation but not a great start. david: well you know, a lot of with their feet. we had three mergers announced yesterday between u.s. companies and foreign companies and in each one of those, the u.s. division was moving to a foreign country, most of whom, i think all of them have much lower tax rates. in the case of one moving to
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ireland. corporate tax rate in ireland is 12 1/2%. isn't that proof positive if we don't lower our rates jobs are going to go overseas? >> we definitely need to lower our rates and the president's proposal to move to 28% is a good idea. keep in mind, small businesses outside of c corporate status just had their taxes increased by the president earlier this year. we need to think of business tax reform as a whole, not just corporate taxes. liz: let's put out some of the ideas that the president has proposed just to make sure we clarified that. as you said, lowering the top rate to no higher than 28%. some of the other ideas, simplifying tax filing, increasings incentives to invest in small business. manufacturing tax rate no higher than 25%. the manufacturers are getting even better deal here, glen. >> they do under current law. we don't need special preferences for manufacturers. we need a tax code that makes sense for all business and let
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business and investors decide what's best. the idea of lowering the corporate rate, great idea but i don't think the president has put out any specific proposal on how he would get this done. david: weapon, here's the extraordinary thing we all have to keep in mind. effective tax rate after all deduction counted in and all those millions of dollars paid for lawyers and tax accountants, the effective corporate tax rate for most companies in america, the amount is about 13%. why don't we just lower the corporate tax rate to closer to that, effective tax rate, maybe to 15%, which would draw businesses back and get rid of all the deduction? >> we might not be able to get all the way to 15 but really cutting deep and knowing that we would have more investment, more money, more income being repatriated back to the united states -- david: dean, let me argue with you for a second because you are the dean of a business school and i am a lowly business tv anchor. i will argue with you. if the effective tax rate is
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13%, why not say lower it to 15% which is actually higher than what corporations are really paying? >> i don't think the effective tax rate on all corporate income tax is anything close to 13%. david: according to "the wall street journal" that was the amalgam. >> i don't think that is quite right. david: you're the professor. >> we could really get the rate lower. the spirit of your question is absolutely right. what is a little concerning about the president he would simultaneously raise taxes on our largest, most successful global companies and he already has on small business. sadly think is more theater than tax reform. liz: can i ask you how you get to that math of raising corporate taxes on the bigger names when in essence he is saying the corporate tax rate would be reduced to 28% from 35%? >> well, but there's also special provisions on multinational companies and minimum taxes on overseas earnings. so one has to be very careful and look at the fine print. the president really hasn't put out a proposal at all. he is rely restating a plan he
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made months ago from his own treasury department. i think we have to wait to see a plan. real tax reform has to be led by the white house. not an idea, not a trial balloon, a plan. david: glenn, some people look at regulations and they see regulations as another tax, particularly for corporations. we just had the jpmorgan hit with a 410 million-dollar fine by the federal energy regulatory commission. they didn't agree they did anything wrong but kind of these sort of regulations that very often corporations will just pay off. that's an expense that has to be taken into account. is that expense going higher? >> well, that expense has drifted higher and add to that litigation and policy uncertainty, all of these things are dampers on investment. to come back where we started, this tax reform discussion, absolutely the first sort of one to have and the president needs to go further. liz: then looking forward i want to go back to one thing you quickly said about whether manufacturers should not have a lower rate. i talked to the head of ford,
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alan mulally. who feels because manufacturing jobs are so tentative here in the u.s. you would want to incentivize manufacturers to bring jobs here and by doing so, by lowering that rate to 25% that would be certainly something that would do that. that's what, actually former treasury secretary timothy geithner told us a year ago in may. that the manufacturers should get a good deal there. >> i'm all for lower tax rates on anybody. i don't believe in industrial policy we shouldn't pick winners and losers. let's get the rate down. if you lower tax rates in @anufacturing in revenue neutral reform, you have to raise them for somebody else. why? david: bottom line i don't think we'll see the change. we're pretty far apart. >> this discussion will lead to something an president has to go further. david: dean glenn hubbard, columbia business school. wonderful to see you. liz: thanks very much. david: a new study says the health care law will cause 800,000 low income workers to ditch their jobs.
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our next guest says, believe it or not, that could be good news for the economy. that's a tough sell. he will be here to make it next. liz: two reality tv stars getting a serious dose of reality, facing up to 50 years in prison on fraud charges. we'll bring you all the details next. ♪
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>> i'm dennis kneale with your fox business brief. factory outlet posting better than expected second quarter results the company beat estimates by a penny at 18 cents a share. revenue also topping forecasts at $91 milllon. pfizer agreeing to pay nearly $491 million to settle accusation of off label
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marketing of its kidney transplant drug. it ends a long-standing probe pfizer inherited when it bought wyeth pharmaceuticals in 2009. pentagon reach as 7 billion-dollar deal with lockheed martin for 71 more, f-35 fighter jets. this was include ad 4% differs count. this al louis them to produce all the jets intended despite budget cuts that took effect in march. that is the m latest from fox business, giving you the power to prosper only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. they help save you up to thousands in out-of-pocket costs. call today to request a free decision guide.
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university kellogg school of management. craig garthwait. at the time let's take this step by step. why would obamacare cause 800,000 workers to quit. >> what we have in the united states we're sort of unique in the industrialized world, we have a scrounge link between employment and health insurance. the affordable care act will weaken that link by allowing people to purchase health insurance at a fair price outside of the health insurance market. david: there are tax reasons for that. but go ahead. as a result? >> as a result some people who are working solely to get access to health insurance will choose to leave the labor force. think about people like older individuals who are retired, who have not quite old enough for medicare. who are working just to be able to buy health insurance through their employer because there is no way they can buy on the individual market. david: okay. why would that be a good thing? >> well, i don't think it is necessarily a good thing but not clearly a bad thing. what we'll allow, we'll allow people to make their employment decision, sort of unrelated to
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the health insurance decision. health insurance is really the only good in the united states that we require someone to be working in order to purchase regardless of the amount of money they have. that leads to a lot of inefficient decisions by people. david: all right. but there are some people who say that actually could be a good thing if these people quit but would i think doesn't that assume that no good actually comes from their work? if it would be better if they quit? >> no, no. you can think about individual who is have worked their full career and want to retire at 63 but just can't get access to health insurance. more importantly think about people who would like to leave and start a small entrepreneurial venture but they can't, there is no way they can get health insurance for themselves and a small number of employees. this would allow more economic freedom. david: i understand. but this economy where unemployment rate is so high, if anybody is working without creating value, value that they could be better placed in another job, wouldn't they be out of work? >> not that they're creating no
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value. they could create more doing something else. you have to think with so many jobs compared to, so many people compared to the number of jobs that are available, if some people want to retire you will create room for other people to move into their jobs. >> all right. now, your study was based on stats from tennessee's attempt back in the mid '90s. tennessee attempted to expand its medicaid system and your study is based on the results of that. in the end, wasn't tennessee forced to abandon that model because it was unprofitable? >> yeah. i mean, well i don't think we think about health care wanting to be profitable. it ended up being very costly for people, to offer it -- david: it has to be profitable if any of it is in the private sector. >> correct. we don't think the government is trying to make a profit on health care. what we want here, we want to talk about what some of the benefits are of the affordable care act. it doesn't mean there aren't going to be costs. the sense of the bill as a whole, looks like things based on our study and other people that the bill will be more
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expensive than we thought when it was padded. we have a make a decision as a country whether we want to pay those costs. we want a good sense of what the costs and benefits are so we can make that decision. david: unintended consequence, my god, there are some in this bill. >> i do agree with that, yeah. david: professor, great to see you. appreciate you coming in. >> thank you for having me. david: liz? liz: two stars of the hit reality series, "real housewives of new jersey," face real life indictment after getting charged with fraud. we have got the details next. ♪
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liz: well the reality tv business got a real jolt of reality today. it is quite unbelievable but the fraud indictment of two stars of "real housewives of new jersey." david: i shouldn't laugh because we're talking about real jail time here. dennis kneale is here with the real-life plot twist. dennis? >> david, two of the highest flyers on real housewives just got shot down to work. teresa and joe giudice, making their first court appearance after getting indicted on 39
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counts of mail an wire fraud, bank fraud and making false statements. so i'm sorry for their pain, guys, but i cover media business and the first question that arises is, might this actually be good for the ratings of "real housewives of new jersey" on the bravo channel? i'm thinking so. now the new jersey chapter is the fourth version of franchise and also may be the most obnoxious. theresa, who is kind after famous table tosser, releasing this statement today. today is the most difficult day for our family. i support joe, who is wonderful husband and father. i know he wants only the best for our lovely daughters and me. she goes on to say she looks forward to resuming her career, such as it is. the charges sound curious. it makes you wonder whether prosecutors themselves are trying to steel reality tv limelight. the prosecutor put out this finger wagging statement. everyone has the obligation to tell the truth when dealing with courts, paying their taxes and applying for loans and mortgages. that's reality. get it?
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the indictment alleges the couple submitted fraudulent mortgage and loan documents to lenders from 2000 one to 0before the show began but thousands of people, maybe millions, gleefully signed up for liar loans in the housing bubble. have you seen any of them get charged with anything? and when the couple filed for bankruptcy protection in 2009, the indictment alleges they concealed businesses they owned, rental income, teresa's fat check from the reality show and joe, the feds say, failed to file tax returns from 04 to 08 even though he had income of almost one million dollars. so how is it that he raked in a million bucks but had to lie on their mortgage application? you got me, guys. if you tune into the next season of "real housewives of new jersey," you just may find out. liz and dave? liz: we shall pass but i know some of our viewers will watch and let us know. dennis, thank you. >> okay. david: thank you, dennis. at a whopping, i will not tell you how much. this is the most expensive hotel suite in the entire world.
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big names, bill gates, rihanna, richard branson, have all stayed there. we'll give you inside look at the glitzy room. oh, there is the price tag. 80,000. we'll show you inside coming up. ♪ (announcer) scottrade knows our clients trade and invest their own way. with scottrade's 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 real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."
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david: time to go "off the desk." you already know the number. talk about a room with a view? the royal penthouse suite in the hotel president wilson in geneva, switzerland. this is said to be the most expensive suite in the world. let's show us pictures what it looks like. this is $80,000 a night. $80,000 a night. you stay in 18,000 square foot suite, it features 12 bedrooms, gymnasium, jacuzzi, own personal chef and butler and security. beautiful views of lake geneva and alps. a lot more celebrities. bill gates, rihanna. you can afford something like that. liz: do think put chocolates on the pillows? david: good question. liz: i will be live tomorrow grand opening, jobs in america, dow chemical new research and development facility. this is in college iville, pennsylvania. we'll bring everybody exclusive
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interviews, ceo of dow chemical, andrew liveris and pennsylvania governor tom could be bert. what did he do do get the jobs? very cool demonstration like bendable paint. david: i bet they want the corporate tax rate to go lower. melissa: i'm melissa francis and here is what is "money" tonight. it may be the biggest energy game-changer through fracking you probably have never heard of it. it is buried in the bottom of the ocean with more energy than anything on the planet. we'll tell you all about in just seconds. plus, who calls the financial shots in your house? oh, you think you do? your spouse probably thinks otherwise. a new study says that the divide between couples is wider than the grand canyon. we have details on how the power of money is impacting marriages anywhere. "who made money today?" there are not any roadblocks in their way to make profit. not sure who it is. stay tuned to find out.

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