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tv   Street Signs  CNBC  August 11, 2009 2:00pm-3:00pm EDT

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you know what the best selling book in america is? mastering the art of french cooking. julia childs because of the release of julie and julia with merrill streep and amy adams. a terrific movie.
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now everyone is paying attention to this classic cook pook. 752 pages that came out in 1961. >> both of you ordered copies. i will google it in and come up with recipes and help online. >> i love cookbooks. >> you especially are a foodie. you must see this movie. a lot of fun. >> i will bring a steak with me in case i get hungry. >> the t-shirt is $250. that makes $4700 suits. a sign of the times, $250 t-shirts. >> why not. read julia's books in your $250 t-shirt. that's it for us on "power lunch". thanks for joining us. see you tomorrow. >> president obama a new hampshire town hall they are not out of the woods yet, but he is seeing signs of progress. the u.s. economy has bottomed
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and the current quarter will see growth. the fed is beginning a wo-day policy set to release the latest on the economy and interest rates about 24 hours from now. that's c nbc news now. i'm jan epperson. >> i'm erin bush et and here's what wall street is talking b. american workers doing more more less and the market is down about 83 points on the numbers. america is still number one and stilt biggest manufacturer. the ceo bringing work back to shores from china. why is he doing it? reports greatly exaggerated. then gm's chevy volt is 230 miles per gallon. too good to be true. camel, the new cash cow betting on a massive new market here with us.
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>> stocking pulling back one month since the the rally. president obama in a town hall meeting in new hampshire sees signs business investment is coming back, but the economy is not out of the woods. let's show you the market as we see it. all 10 s&p 500 sectors are moving lower today. the best of the worst, health care and consumer staples. the only one to post growth in the earnings in the second quarter. financials are take the brunt and aig giving ground after four days of frankly tremendous gains and heading down to the trading floors in a couple of moments. more on the town hall meeting in new hampshire. everyone is talking about the anger and debate that has gone along with that. the debate sparked a lot of protest and the president tackled it head on. john? >> a different atmosphere in
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pennsylvania today, a newly party-switched democratic senator got a lot of angry people yelling at him and he will do the best to manage that. he and two others will regain control of the debate. turn the temperature down and he directly addressed the tone early on in the session when he said let's argue about thing that is real and not made up stuff that has been exaggerate and is not part of the legislation. he got a good response so far. he is just getting going. we will see how the famously independent new hampshire residents treat him for the rest of the day. since everybody is deferential to the president, he not get the same treatment that members of congress get. >> fair point. a little bit different of a reception. thafgs very much. the sale of american companies
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may feel like a come back to some, america has been number one in manufacturing for more than a century. we still are the world's largest manufacturer. china is closing the gap even though they are losing jobs to places like vietnam. we want to focus on carlisle today. a mafring company in the u.s. that consolidated plans taking some jobs and a plan out of china and building a new state-of-the-art facility in jackson, tennessee. what does it mean and why are they doing it? will others follow? chairman and ceo, dave roberts. good to have you with us. dave? >> thank you and glad to be here. >> what you have done in a sense is a consolidation and bid consolidation of u.s. plans, fundamentally, why take production out of china and bring it back? >> what we find is that workers in the u.s. are actually more productive than workers in
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china. we can produce as many pieces or tires with fewer people. frankly we would rather be here in the u.s. than in asia manufacturing for the u.s. market. that plus the fact that it actually proves our cash flow. we no longer have inventories going back and forth it and it leads us to the philosophy of manufacturing. >> saving about $25 million. >> that's correct. we will save about $25 million just in the tire facility consolidation. we have other consolidations under way, but just in the tire area, we are having the work coming back from china. about $25 million cost savings annually and working capital will be reduced from 15 to $20 million. >> so when you did the math, most people would say all right, so you can do fewer workers with
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the same amount of work and they are trained better or more automation, but people in china earn a lot less. we are used to hear together go the other way. maybe it takes five people to do the job of one, but the wages are cheaper over there it makes sense. obviously is it just the wages have gone up? what makes that part of it not work? >> the wages have gone up in china. over the last five or six years. there has been wage inflation in the country and it's more expensive while still cheaper to manufacture in china. it's more expensive to manufacture in china compared to what it was four or five years ago. we will see the gap narrow and people making a fewer number of tires, it's as economical to produce here as in asia. >> one other thing is you want to produce the goods near where you are selling them.
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does that mean right now you see more growth and demand in the u.s. than in china? >> if you look at the product line we are bringing back, they are designed for lawn and garden tractors and agricultural equipment. the biggest markets for those kinds of productions here in the u.s. what it does is put us closer to our customers. if there any problems in manufacturing, we were able to react to those. we can actually react much more quickly to the demand changes with our customers. that was a compelling argument to get the production back. >> one final point chi think will capture a lot of people's attention is that part of the reason you were able to bring it back was the real estate here. values can come down so much. you got a state-of-the-art facility. >> absolutely. we ended up buying this manufacturing facility down in jackson, tennessee.
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it's probably a 5th of the cost it would have cost to build. we actually record it by a number of states and found that the incentives along with the cost of real estate in tennessee was much more attractive for us. had we built this plant it would have been at least five times the price of being able to buy a factory. this factory is like brand-new that we are buying. >> thank you very much. we appreciate t. good to speak with you and thanks for telling the story. ceo of carlisle and you heard their story why they bring the jobs back. here are the numbers. america manufactures and this is the latest data. it's the end of 07 and changed a bit. manufacturers about 20% of the world's goods. china manufactures about 12%. that will change, especially given the slow down and a drop here. probably by at least 2016 and maybe 2017. you could see china top the u.s. s. that a good or bad thing?
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research fellow at the united states and business counsel and daniel griz wald for the kato institute. >> i want to make sure i note here that china is also -- wie talk about losing manufacturing jobs for years and china has also been losing outsourcing lower and manufacturing and places in southeast asia. it's not as simple as our loss, their gain. do you think we should care? >> it's pretty close to our loss, their gain. if you look at u.s. manufacturing markets, you see products made in china making tremendous inroads over the past 10 years. that even includes the overall growth of the u.s. manufacturing markets. in fact there is no doubt that chinese production has been taking market share from u.s. production and that chinese
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workers have been gaining jobs at the expense of u.s. workers. no question about that. >> that may be partially true, but china is also losing manufacturing jobs. it's a point we can't ignore. >> you have to recognize also that china is losing manufacturing jobs in large part to productivity gains because -- not because, but even as the manufacturing sector is growing by leaps and bounds. the united states is losing because of productivity gains and in large part because manufacturing growth in the last roughly 10 years has been absolutely stagnant and we know that most of that was bubblized. it was the result of a u.s. bubble economy. the records are totally different. >> what is your view on this? is this at a high level that we should care about whether we are one or two? >> this is not like a football match where we keep score. i think this is a win-win situation.
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it's inevitable that china would become the leading manufacturer. they engaged in significant economic and trade reforms. the same report also said that u.s. to value added is going to continue to increase and look at what we manufacture. we have the higher end of the manufacturing spector. it's the united states that leads the world with jet nnls and civilian aircraft. semiconductors and computers. sophisticated medical and scientific equipment. chemicals and pharmaceuticals. we continue to be a world beatner manufacturing and all the r&d that goes with that. >> what do you think of that point? >> what is fascinating about every one of the examples that dan just mentioned. it's striking coming from somebody from kato, the great champion of free market. every single one of the industries from aircraft engines
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to pharmaceuticals to semiconductors receive very substantial u.s. government subsidies during the early years. they continued through the present. we used to take manufacturing very carefully. for the past 15 or 20 years, we haven't taken manufacturing seriously at all. don't just take my word for it, listen to what we have been hear for example ge's ceo. that's the same thing. >> is there a point we don't have a manufacturing policy and maybe we should? >> we don't need a manufacturing policy. the subsidies don't explain the u.s. advantage. >> how do you know that? you have no business saying that? >> the head of the manufacturer so association which is bigger than alan's, he is not worried about this. he said it's inevitable that china will take its place.
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we continue to lead the world in the more sophisticated areas of manufacturing. at the same time let's not worship at the altar of manufacturing. we are a middle class -- >> we have hardly been doing that, dan. talk about a red herring. >> they earn their keep in the service sector. let's not get hung up on that. that's over the time for middle class people and middle class incomes. >> whatever the economic decisions were, there was demand here and they will bring the manufacturing back when they have the right workers you heard him. i could get more. we didn't need anything from the market to get there. >> it's an encouraging anecdote and china remains the number one destination for foreign direct
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investment and we also know that because china outtraded the united states by trillions of dollars over the past decade, the chinese government not free market forces, but the chinese government has a very powerful cost control tool in the name of the lavish subsidies it can provide. >> do do you the same and have a trade war? we will wrap it up and continue. >> thank you. >> let us know what you think. whether it means something from carlisle or not and whether you think we should care in the form of a specific manufacturing tell us about being number one in manufacturing. next on the show, happy anniversary to summer rally. up 13% and 47% since the march low. straight to the trading floor and get an update and keep you
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posted on more news. a live picture with the president speaking in portsmouth, new hampshire. we have all heard and seen the furor of many of these town halls. this one perhaps the president has been much more civil. we'll be right back. >> if we can set up a system to give you security -- these days every penny counts with everything you buy. every head. every bite. every gallon. every shoe. every book. every cereal. well, maybe not every cereal. but every stem. every stitch. every tune. every toy. pretty much everything you buy can help your savings account grow
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because keep the change from bank of america rounds up every debit card purchase to the next dollar and transfers the difference from your checking to savings account. it's one of the many ways we make saving money in tough times a whole lot easier.
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did you read into the improvement in the trade? >> not a lot. the big thing is the volatility index measured at the highest levels in a month. they led the market and are leading the sell off and it's a modest sell off. more importantly, look at the financial outliars that were a mess a week ago and moved up on better than expected and it essentially doubled in price and the last two days, we have been seeing profit-taking. a same situation. 60 cents. went to about 1.60 and down to
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cit. a lot of comments and work out a restructuring. >> there is a huge story and that's what you wanted to talk about. if the auctions don't go well, like a two-year or five-year or a couple of weeks back, all markets pay attention in a big way. when they go well, there is a chance it doesn't interrupt trading at all.
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equities are going down. >> as we focus on one trade, cdc estimated 40% of americans can get swine flew. perhaps not so much. there is a trade. >> the largest distributor of generic and pharmaceutical products in the united states, canada and mexico is poised to be a beneficiary. over 90% in the northern hemisphere, everything we heard about h 1 n 1.
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maybe not a deadly virus, but over 40% can be affected by it. it's important. yesterday they signed an agreement with cdc to provide us with over 90,000 outlets here in the united states. >> thanks to all three. you have a trade and markets and you will have a get. see you back. thanks to all three of you. next on the show, the president is mentioning health care to the people and a stock market with a different message on health care. jim cramer has specific names on that. it may be the ultimate market and if it's an indication of that, one man's multimillion-dollar shopping spree can drive it higher. that story is next. i'm racing cross country in this small sidecar, but i've still got room for the internet.
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bringing a much-needed boost back to the track in a high end market. darren has that story. darren, we know the man loves horses, but has his own plan. >> loves horses and you get by the amount of money he spends, erin. he has always been the most powerful man in all of horse racing. they have spent $1 billion on horses and wondering if it's one of the biggest auction nas received a big boost. four of the horse were sold for more than $1 million each. three were from him, including the 1.5 million sales topper, a filly by the way. they were brought by the sheik in attendance for the first time in two decades. in part because of the sheik's presence, the growth sales were up more than 40% over the last year and the average sale was 11%. is this a good indicator and
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things were turning around. indicators were pointing out this was a talented crop and others pointed to the crop that the money paid was a sort of shell game. he pays for the horses and the top two were sired by horses he already owns the breeding rights to. by paying more money, he helps boost the stud fee. pay work hard for the actual sale for obvious reasons. a horse sale is a horse sale of course. it might have not turned out that way. >> it's not market manipulation.
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that's just transparent. here's what brian is watching. oracle a lone gainer of the big gains up 24%. whole foods is up and jet blue up and echo star turn for example a sale to a buyer. cumberland pharmaceuticals at
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the low end and they are in positive territory. we'll be right back with erin burnett and a lot more of "street signs." when this hotel added aflac to compliment their benefits package aflac! it made a big splash with the employees yeaaaahhhh! find out more at aflac!... ...forbusiness.com (laughter) [ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check
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thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you. introducing hotel price assurance, where if another orbitz customer books the same hotel for less, we send you a check for the difference, automatically.
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>> welcome back to "street signs". we are checking the place and the trade on the citizen. up for the 4th day and lows of the month. the real movement is the price with the reformulated gasoline. for all of the sessions in the face of what i'm told. the weakness for oil and natural gas. the stock market is one of the factors and the currency markets are looking like we are going to the losses. and we go it up a little bit, but still down over a dollar. that's it from here. back to you. >> thank you, matt nesto and jim
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cramer hoo here for stock trading zeechlt to get through a punch of names. citigroup's latest tarp report. there is interesting nuggets in here. the bottom line is that they increased lending. the stock has been red hot. i recommend the stock. i believe this is an important pr initiative. when your citigroup that is public enemy number one, we need to see it and the head of the fdic from remove together which i don't want and the government, we want them to register their stock on september 10th to clear the overhang. i think citigroup has a terrible pr problem. everyone knows it and the mets play at city field and feel
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strong 3 this is smart. you have to issue these things. >> stocks are going to be within the next 18 months. there is jim on the record. clearly you go on the other side. >> let's catch it. >> we were just looking at the president. he is in a town hall. much more gentile than the other ones we have seen. your point is if we look at cigna, we have a signal about where health care reform is going.
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unitedhealth, cigna, well point. u.n. h. they were doing really well in the dow 100 market. the answer to that is this is not going to be hurt as badly as people thought. if you feel i'm wrong and obama will have a late surge in the house bill, the house bill is pretty scary in a lot of places. you want to sell humany and if you feel like i do that the medicare advantage will be cut back, these companies won and you want to buy well point. i know i think president obama was talking about and saying moderating. >> if there is a public auction and forget what you believe whether it turns into something bigger, but a public option. >> i think that's not going to
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and what the stocks are telling you. i know that the white house will say what are the stocks doing? the stocks knew in 1992 to 1994, stocks are smart. federal realties took a secondary market. a lot of people with a lot of chatter on the web. people who want to buy this are wrong. how about this. 57 1/2 with the operator run by don wood, a terrific ceo does a gigantic secondary. . you were almost $2. in a nanosecond, these are coiled springs and everyone said the commercial real estate market is from hunger, how do you justify the company and making so much monoit. this is how you can tell.
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>> it's interesting when we had dave roberts, one of the reasons he brought the plant back was the real estate was so cheap here. he was able to get a good deal. >> the mall real estate hasn't gone down and they are going into a lot of kwebt. the players are really getting a lot of great properties. when he said that china was more expensive to make stuff than the united states. we all feel that china had a variation of slave labor. it looks like they are paying them. >> the workers here are more productive and get more done and better trained. >> i know you have been on morning joe. most people are shocked when they hear that. they keep hear being it. >> we're never talk about t.
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that's what was great about having the guy from carlisle. >> one final trade. there is all these ipos and that said something about the market, but will the real point is there was something who would profit from it. >> the stock keeps moving up. take a look at the attic and they are not even big anymore. this is really a play on the fact that we have the dollar general and this market is heating up. i know people don't want to hear it. the ipos, this is august. there shouldn't be a single deal. they are moving up to the listing fees and they won this battle over a flash. they feel it was a good thing and they made a stand and it worked for them. i thought it was terrific. >> thank you, mr. cramer. see you tomorrow in person.
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tonight you can see jim at 6:00 and 11:00 here on cnbc. coming up, the new cash cow is not a cow at all. the milk is so healthy some call it liquid gold. it could be coming to your super market and could be worth billions and billions of dollars. that's next. >>
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there is a new cash animal in town. mo from morocco to north carolina they are looking to cash in on camels. why camels? camel milk is tastier and healthier when you look at three times the amount of vitamin c than cow milk.
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the woman bringing that to the u.s., millie hinkle. good to have both of you with us. we appreciate it. i would like start with you. the united nations said the market for camel milk alone is at least $10 billion around the world. you run a farm and are doing a lot of research. what other products are we looking at? >> good morning or good evening from dubai. it is true that it always had a lot of medicinal properties. the problem in the moment we are facing is we are not allowed to export camel milk to other
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countries. this will change in the near future. the problem is mainly -- >> that's where you come in. on the milk itself, this is something that you can think about the population of people around the world, right? cow products are not encouraged. india, 17% of the world's population. there could be in the market. in the u.s. there is a market? >> a tremendous market here at this time. from countries all over the world, i get e-mails begging me for the milk and begging me to help them set up dairies to get it into their countries. y that are want together for medicinal purposes. it's a big market. >> it's healthier. can you give examples of how camel products are healthier? >> they are so much healthier. there is an anti-that am camel milk has that others don't. that anti-body has the ability to penetrate the crevices of a
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cancerous tumor. to take that to a prearthritic joint is amazing. the ability for diabetics is 52 units approximately of insulin per liter of the camel milk. what this would mean is unbelievable. for autistic children, we are doing studies and there have been sfds done. it's amazing how they perform and progress on the camel milk. >> are you able to sell this in the u.s.? the video that people are seeing is of a camel farm in north carolina. where can you buy this and how big do you think the market is? >> the market is tremendous. you can't buy it in the united states at the moment because we just had the federal law changed. we are doing the test kits to be able to test the milk like the cow milk. when we get the kits, the dairies will be up and running. we look at it within the next to
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10 months for the dairies to run in the u.s. >> it's not just milk, but milk-related products. was it camelicious and you may want to be the go diva of the mideast. what other products are there from camels. are they equal to cows? >> i can't understand you because somebody is talking in between. >> i'm sorry. can you get as much from a camel as you can from a cow? >> what? >> i'm sorry. sounds like we are having an audio problem with dubai. thanks to you and thanks for coming on. i have been working on this for quite a while. >> you're welcome. >> coming up, are you looking for a ma market catalyst. we will tell you what to look out for and a couple of trades and talking about the miles per
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gallon number. you plug in your cell phone, but would you plug in your car. if you did, would it save the environment?
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we have to screen up. these are four of the that are higher today. 3 m and alcoa and the dow is down 79 points. none of them are huge in terms of size. that could pick up bite end of the day. this is the one-month anniversary even though we are down today. as we head to the closing bell, all three are lower. let's get names as we head into the final bell tolling. david, we talked this morning about applied materials and there is a trade there. >> absolutely. he will be reporting after the bell and i report a little bit of caution and the stock is up 27% over the last month. one thing we noticed over the past week and a half, stocks have been used as a source of funds. they are underperforming by about 3% since the beginning of earnings. people are selling the stocks that moved very well and starting to buy the riskier
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assets. i point out that last may, the stock lost about 10% over the next week and a half. we are a little personed or i am concerned that it might be a bit of a sell, given the move it had. >> and one other thing that you focused in on. people have been e-mailing and the index, the measure of how much it costs to ship stuff, not always a great indicator, but none the less, something worth looking at and not something  nice. >> at the end of the day, what we are trying to find out from everything we are taking in, is there economic growth going on? you would see it in a lot of the shippers. see together in something like the baltic dry where there is n speculation. down for the 9th straight session and 40% off of the high and i can tell you as a guy that is out on the chesapeake bay often, tankers have been sittin in the same spot and they are not moving anywhere.
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no trade in and out of the bay  of substance and that is being  reflected in indeces like the d. today we're seeing the vicks jump up, the s&p trying to hold 990 and getting a little bit of a move. the shanghai composite, a lot o guys have been looking at this because it has been leading the market. it's but the in a candletop. if it doesn't hold $31.75, we could be in for a sloppy session as far as equities are concerned later down the road. >> david, thank you. we'll see you again very soon. >> thanks, erin. >> david lutz. he likes that boat show in annapolis. general motors announced something today, the chevy volt will have a fuel rating for 230 miles a gallon. that is not a typo. is it too good to be true? brian moody and publisher, auto week magazine. a couple of question questions,
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brian, too good to be true or not? >> yeah, it's definitely too good to be true because this is really an electric car. the way they're measuring it is not exactly accurate in terms of how you're going to use it every day. some people will get great gas mileage no, question about that. but 230 seems a little high. >> what do you say, dutch? >> i think brian is some kind of seer because this is what the government has said in terms of the epa. these are the kinds of requirements that are asked of electric vehicles, and they said that they followed the epa rules. hey, don't hate the player. hate the game. >> i'm not street enough to go along with that. the ruth is, the testing method probably has to be changed a little bit. this car is basically electric and you will use very little gas. i think what gm should have done was come out and said, 70, 80,
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90100 so the average person would say wow, that's good. the average person looks at 230 and says that seems too good to be true. they're not lying but it's kind of a trick with the testing method. >> you couldn't be more wrong. 75% of the people drive fewer than 40 miles. >> that's true. >> if this is going to go 38 miles on a charge, that's more than average. >> the more you drive it, the worse it gets. i'll give them the 40 miles. you have to have no hills no, cargo, no passengers. the perfect situation to do those 40 miles i'll give them most people drive fewer than 40 miles round trip to work and it will work out great. how long to make your money back from the $40,000 price. i'm not sure. >> i want to have you weigh in on something. last week i had a conversation with one of the largest auto parts companies in the world. his biggest concern was that this huge push to electric vehicles is missing a crucial point which is that electric
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vehicles emit just as much co 2 actually more than a gasoline-powered engine. there's all sorts of ways we could change it. that doesn't mean electric cars are bad, but it does mean this whole -- they're so environmentally wonderful thing that the american public is buying may not be true. >> they're only environmentally great when you measure it where the car is moving. the batteries and all the components were built somewhere else, is it environmentally great where that was happening or where the electricity was generated? probably not. >> the coal fired plants are going to put more sputum into the air. would it be better if we had nuclear plants? probably, but we don't take that into effect. >> they're only talking about the car, where the car is moving. i don't know, it's a little bit unfair. >> okay, but is there something else that you all think would be better? what i hear from car people, experts, right? all of them have a dog in the fight. i'm not going to deny that.
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they say a much better solution is clean diesel. >> absolutely. >> that's probably true. >> diesels are the short and near-term solution right now. in fact, probably the long-term solution is fuel cells, the kinds of vehicles that honda is putting out with the clairity. that's another 30 or 40 years away. >> are you worried about the public excitement about electric cars is going to make us go down that path. >> it seems like it's propping up a system that isn't working. with the chevy volt, great effort. miles per gallon doesn't mean free. you've still got it pay for the electricity. a lot of people are looking at the big number and thinking it's going to be so inexpensive to operate. but the power is not free. >> that is a really good point. each of you, one final question, and that is what do you think the most exciting new car out
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there is? we've talked about the taurus 2010. any make, any type, any country what, do you say. >> i think the diesel powered volkswagen is probably the way of the future. fewest compromises, actually kind of fun. >> diesel powered volkswagen. >> i just saw a brand-new ferrari that i know i could get very lucky in, almost anybody could. i will tell you that the taurus, the 2010 taurus is a car. >> it's spectacular. >> i'm not going to ask you to compare it on that measure to the ferrari. appreciate it. all right. bad news for the bricks or for one of the bricks. to get kicked out of that exclusive club of up and comers. i'm racing cross country in this small sidecar,
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