Skip to main content

tv   Street Signs  CNBC  September 17, 2009 2:00pm-3:00pm EDT

2:00 pm
fierce but sasha fierce happens to be beyonce's alter ego. >> i think abercrombie will blink. >> should we say holy chicken feet? chicken feet may be behind av t averting a trade war behind china and the u.s. american chicken feet tend to be larger and plumper than other chicken feet around the world. because americans like more white meat chicken, so the feet are bred to be bigger and it costs more to buy them. because american chickens have bigger breasts, so they must have bigger feet to hold them p up. >> time to go. look at the clock. >> senator olympia snowe coming up. i think that will be important. >> she says she's a republican. >> the democrats are holding out
2:01 pm
hope that she'll be the one vote, remember you had ted kennedy's passing meaning they had 59 votes democrats in the senate right now. they would need 60 to avert a filibuster on this issue. she could be that 60th vote right now. >> she was one of the gang of six. >> 4:00 p.m. eastern time, of course, john harwood doing that interview. we'll see you tomorrow. that's it for us on "power lunch." i'm erin burnett. we still have 29 stocks hitting new one-year highs today. a lot easier to do that now than it was a week ago. the good economic news has gone from a trick toll a flood today, including americans finally being worth more and paying down debt. something might bring it all crashing down. a potential war that's 1,000% under president obama's control. that's coming your way. we have other special stories,
2:02 pm
including one particular group who has been immuned to the recession. the group may not be human. we'll explain. some thought it may never happen but it did, americans got richer and potentially less in debt. let's get straight to steve leaiesma liesman. steve, it may be the marginally improving fortune. >> just a change. i wouldn't go much further. it is historic, erin. after two wrenching years that wiped out $13 trillion of net worth, americans saw the value of what they own, minus their debts, their net worth, rise for the first time since 2007. that means they're richer. how did they get there? 1.1 trillion came from equities. that was the best since the second quarter. first turnaround since the second quarter of '07. mutual funds added 468 billion and even real estate helped the party here, up 324 billion. that's the first time since the last quarter of 2006.
2:03 pm
and americans they continue to lay off the plastic. household debt falling 1.75% annualized rate. that's the fourth straight quarterly decline. they reduced mortgage debt and credit card debt. it doesn't mean that national debt isn't rising. household debt down 1.7%. corporations tightened their belt and didn't borrow, minus 1.8%. the federal government, well, they went to town, plus 8%. the total for the u.s., we're still up 4.9%, though a lot less than in normal times. one more piece of good news. with mortgage debt declining and household values stable and slightly rising, americans now own more of homes. so-called your house's value minus debt is up to 43%. you can see that, 41%, that's the first rise since the third quarter of 2005. the american home until recently, a convenient atm for many households, slowly returning to where it has been
2:04 pm
for decades, erin, to becoming a piggy bank. >> steve liesman, thank you. fresh off attending president obama's health care rally in college park, maryland, and also on the heels of good news for the u.s. economy, positive news on residential construction and future residential construction. joining us now is the commerce secretary of the united states, gary loc. good to see you. >> thank you very much, erin. >> can we finally start celebrating and saying misch accomplished? >> no, not at all. the president, while very encouraged by a lot of these leading economic indicators from consumer spending, consumer confidence, manufacturing output, production and housing starts, the president is still very concerned about the high unemployment rate. and for the people throughout america, they're still concerned about their future, worried about the opportunities for their children and their grand children. so our administration is very much focused on trying to reduce the unemployment rate, getting jobs back into our economy.
2:05 pm
>> so you're going to wait, literally until we see a positive payroll number? before you say this administration turned it around? is that the kind of political thing to look for? >> well, we're very pleased with what the president's initiatives have already been able to accomplish. most of the economists are saying that the stimulus package, the recovery plan which did have a lot of government spending was responsible for keeping us from going into another great depression. but the ultimate goal is not just these leading economic indicators and turning things around, the end of the results that we want to see are employment, good employment and people with hope and optimism. >> do you think, this is a fundamental question, the president and his interview with our john harwood made it clear he is for free trade, for capitalism. when you look at the fact that we've lost nearly 7 million jobs since this recession began and people say we need to make more things in this country to get out of this and truly grow again
2:06 pm
and have incomes grow. a lot of those things are made cheaply overseas. it might require some changes in trade policy to keep those jobs here. maybe you don't want to go so far as use the word protectionism, is it fair to say we might have to help out some american industries to get those jobs back? >> that's what the president has been doing with a lot of the funds in the recovery after the stimulus. tax credits, tax incentives for manufacturing, easing up on loan programs through the sba, small business administration for a whole host of american enterprises. but really, tax incentives, for instance, into the green jobs. really the new jobs of the 21st century with great potential for american companies to sell their products and their services and their ideas to the rest of the world. creating jobs here at home, while addressinglimate change, which will benefit us here in america and everywhere else around the world. >> how many green jobs have we created since this administration took over? >> the jobs are just beginning.
2:07 pm
the grants have gone out. we've seen success stories all across the country of companies that are talking about their plans to hire hundreds, if not thousands, of people, for instance, doing research on the advanced batteries, actually building cars and big trucks that can go 100 miles on a single charge. so these are jobs that are there. if we don't do it, china and other countries will. in fact, china is investing hundreds of millions of dollars every month on energy efficiency technology with the biggest wind farms, solar farms and smart grid electricity systems anywhere in the world. so the competition is there. we've got to respond. that's what the president is focusing on. >> you brought up exactly what i was going to say. we've had wind and solar ceos on there. they said china is ahead, not just in terms of making the actual turbine for panels but they're ahead in the technology.
2:08 pm
do we need to be number one in the technology or is it fine if they're doing it right, copy it and bring it here. >> i think we have to be number one. a lot of the innovation started here in the united states. if we don't do it, someone else will and they will end up with the jobs. you really want the manufacturing, a lot of these components and large systems next to the engineers, the people who create it. america is a land of tinkerers. you know, you want those people who are making the products right next to the people who are coming up with the idea. so as they tinker with it, they can modify it, change it, see if it really works. >> a lot of the ceos, when i put the follow-up question to them, right now china is leading in the innovation of alternative energy, they sort of laugh when i ask can we catch up. are they wrong? >> i think china is moving forward on the manufacturing of the technology but a lot of the ideas have really -- were
2:09 pm
originated or germinated here in the united states. so that's why we need to keep ahead and continue to invest in that research and development with tax incentives, focusing on education. to make our companies competitive, we have to address the rising cost of health care. if we don't address the rising cost of health care, it will be hard for american companies to be competitive to sell their products and services around the world. when china and other countries basically have low-cost health care, it puts our products, our services, our ideas at a competitive disadvantage. >> you're generous to china's health care or lack thereof. >> but they still have something that -- where their companies are not saddled or burdened by the cost of health care the way our companies are. in fact, last year, the average cost of health care coverage by small and medium sized companies went up by 15%. i've talked to a lot of companies who say their health care premiums are going up by
2:10 pm
27% to 30% this year. >> that's right. >> that is going to ruin the competitiveness of american companies. >> okay. i have two more questions. one is 60% of the small businesses. i know the study to which you are referring said they did not give pay increases last year because of rising health care cost. the plan the president wants, would that change immediately as people get raises? >> if we can lower the cost of health care for companies or for individuals, it means that as the economy recovers and companies receive more revenue and are more profitable, they'll be able to put that money into benefit increases or actually into pay raises. instead of just putting it into a health care cost. actually for the last ten years, wages in america have been flat, because whatever new income companies get, they're turning it around and using it to pay for the escalating costs of health care. >> 35% tariff on imported chinese tires. that is the big story of the week for the markets on trade. are we going to have another headline like that?
2:11 pm
>> well, china agreed to these provisions where as part of their membership of the wto, they've done this with many other countries, what we were doing was simply enforcing the trade agreements and -- that china made with the united states. it's in the interest of the united states if we are to have trade agreements and if we're making concessions to the chinese and they make promises in exchange for those concessions, they have to live up to their end of the bargain. otherwise we're not getting the value of our bargain and we're giving away the storm. it's important for fair trade to enforce the agreements you have and live by the rules people agree to. >> secretary locke, thank you. kirby daley, you heard from the commerce secretary had to say. what would be your real concern
2:12 pm
right now? i know you've come from china, you live there. spent all your time recently in the manufacturing area. are we really at risk of a problem? >> we are. protectionism is a big risk. simply saying that we're enforcing the letter of the law with these agreements as the copout or the excuse doesn't make it any less provocative. we have an immediate and swift reaction from china. this is our biggest trade partner. we all know the story of the great depression being made worse because of the freezeup of global trade. the problem is, this administration doesn't have a real trade policy. that is because it's focused on one thing. it's not all their fault. they came in putting out fires, cleaning up some messes, no doubt. it's all about health care now to the detriment of everything else. the commerce secretary brought it back around to health care. look at his speeches. he's talking about health care. global trade cannot suffer right now. we cannot afford to start a
2:13 pm
global trade war. this is the first squirmish. this is how trade wars start. >> can he have a pro-free trade policy when his most vocal constituents are the labor unions in the united states where he gave a big speech yesterday. >> you tell me. look at the facts. he made this concession, then gave a speech to him. it will be interesting to see how he reacts with the premiere next week when he has to talk about the other side of it. >> at the g20? >> that's right. this smacks of politics. we all know the financial support that went into the election from the unions. he has to make a choice here. he says he's not going to raise taxes on the middle class, fine. the tires will be more expensive now. the middle class buys tires. it's step by step. again, he didn't have the an overall trade policy for us to know where he stands. we're finding out as we go along. >> one of the other things i want to clarify, part of the reason that chinese health care costs are lower for companies, they don't have, that's one of
2:14 pm
the biggest issues. there is no health care in china. >> yes. this is part of the overall process of the transition from an export-dependent economy to one that's driven on domestic demand. they need to have the social safety net. they launched a plan to start to put that in place with pensions. they'll get the health care so the domestic consumers will unlock their savings. that's a five-to-ten-year process. anyone investing in china thinking about domestic demands is a little bit ahead of the gain. >> you have promises that you're going to have to keep. that could completely change. >> they'll have to be investing more domestically and that will cost the u.s. when they're not there in the treasury mark zblet what are you seeing on the ground in china? is what you're seeing justifying the commodity surge we have seen? >> no, absolutely not. this is why, again, we're in danger. we're using different signals to tell us a global recover is in place. one is high commodity prices, they're stockpiling.
2:15 pm
there's an end game to that. the commodity boomlet that we're seeing is not real. >> it's driving oil to 72. it's driving everything. we've seen it here. >> there are certain commodities that are going off their own fundamentals of supply and demand. overall, the stockpiling is not because of end-user demand. again, producing into surplus and investing into overcapacity, 88% of gdp in the first half of this year was driven by investment in china. they had an overcapacity problem before that. >> 88% gdp in china or global? >> in china. it used to be 43, 45. >> as an investment strategist, what do you tell people to do with their money? >> right now we are running on medicated highs in the equity markets on stimulus. you've got to be careful how to play it. absolutely do not be buying at these levels, shorting it is obviously very, very difficult. we need to come back to earth. we're living in economic disneyland. markets are are reflecting that.
2:16 pm
>> economic disneyland, a term that will probably live. thank you very much. >> good to see you. >> recovering from the jet lag, coming from china. the s.e.c. moments away from changing the way we trade. a live report from the commission where those headlines will cross. even when times are tough, people still pamper their pet. each year, americans are spending more on their pets than on music and video games combined. we have found a truly recession-proof industry. we'll talk about the bizarre pets in this country. we'll be back. national car rental knows i'm picky.
2:17 pm
so, at national, i go right past the counter... and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro.
2:18 pm
2:19 pm
welcome back to "street signs," everybody. i'm hampton pierce, live in washington. the s.e.c. is going it take up an agenda that could provide a lot more scrutiny of the credit rating agencies. they will consider a ban of flash trading, a practice that enables a person that's not -- this is not to be confused with high frequency trading which counts for at least 50% of the activity ongoing in markets. there are a host of ratings dealing with credit rating agencies. final adoption of the rule forcing credit rating agencies to publish their ratings history back to 2007, a proposal to forcing banks selling securities to disclose ratings received
2:20 pm
while shopping around among credit rating companies. a vote on whether to require rating companies to disclose revenue from their biggest client. a proposal regarding rating agencies and the money market mutual fund industry is still very much a work in progress. commissioners want more public comment about those impacted in what is a $3 trillion industry. erin? >> thank you very much, hamp. he's giving you the headlines of what might change. let's get to the trading floors to get reaction, find out what stocks are moving. bob, you've spent a lot of time looking at this in terms of flash trading as opposed to high freakcy trading. as ham sap said, everyone prett much assumes that is going to go away, the flash trading? >> they're closing the barn door after the horse has got out. the major players and the exchanges that have allowed flash trading have said they're
2:21 pm
not going to be doing it anymore. the nyc never did to lou it. it's a little bit after the fact. by and large, the concept is fairness. everyone should get an equal look at the book at the same time. there was question about that with flash trading. so to the extent it creates a more -- the impression of a more level playing field i think most traders would welcome it. let me tell you about a couple things going on with the market here. this is one of the few days this week where we haven't seen real strength midday. remember what's been big, gold, home builders in the last two weeks or so, those are weak groups today. gold hit 18-month highs yesterday, folks. it's down a little bit. gold stocks are notably selling off. some of the big names, 4% or 5%. similar situation. we saw home builders up 15%, 18% in the last couple weeks. that group, again, is on the weak side. when your big leadership groups
2:22 pm
start selling off, that's a sign of distribution. tradertalk.cnbc.com. how are we looking at the nasdaq, brian? >> it's almost like a split decision. we're down 0.3% off the lows of the session. we do have some strength. yahoo! has held up very well, up 2.5%. apple touched on a 52-week high. it's pulled become a little bit. still up 1.6%. the same is the story with google, maybe getting resistance with the 500 level. oracle, the earnings story yesterday. and similar to earnings that disappoint. decent on the bottom line, light on the top line, guidance was disappointing. research in motion, down 2% even though citigroup reiterated a buy rating. amazon.com was up huge yesterday, profit-taking here. the buzz off of dan brown's new book breaking adult fiction sales record, 1 million books sold, day one. amazon, even though they discounted it 46%, a beneficiary. i want to point out the solar
2:23 pm
sector here. first solar and sunpower, barkley's raised the targets on both. both by about 3%. finally, the story for after the close, palm. down 2.7%, erin. they don't give guidance. 24 cents a share of a loss. the ranges are huge. a couple firms have come out in the last couple days saying they think presales will disappoint slightly. back to you. >> thank you very much, brian shackman. housing stocks are among the biggest losers. why in the headlines seem so good on new housing starts and sentiment. let's find out why. diana olick knows. >> reporter: it is about the housing starts. they continue their rise from the abyss in august, largely led by the multifamily sector. single family starts actually fell 3% month to month while multifamily surged 35%. multifamily is still down 48%
2:24 pm
year-over-year. 45% of lenders say they tightened standards for commercial real estate loans over the last three months, according to the opinion survey. single family permits were flat in august. multifamily rose 18.1% from their all-time low in july. >> inventories are down. and they're down pretty substantially. this is a big jump down which means this is bullish for housing prices going forward, which feeds back to foreclosures. that's where i see the real good news in this. >> this is likely why kb homes said it will re-enter the mid-atlantic markets, the nation's fifth largest builder says they will re-enter that market. they will continue to eat into market share. for more, of course, go to the blog realtycheck.cnbc.dom come.
2:25 pm
>> just ahead, it may be the world's most exclusive club, meeting next week in pittsburgh. all you need to do is get elected to head one of the largest 20 economies in the world. we'll find out what is on the g20 agenda. one big change. that's next. ♪ look at this man
2:26 pm
2:27 pm
♪ so blessed with inspiration ♪ ♪ i don't know much ♪ but i know i love you ♪ and that may be ♪ all i need ♪ to know (announcer) customers love ge aircraft engines almost as much as we love making them. innovation today for america's tomorrow.
2:28 pm
the g20 meets next week in pittsburgh. the world's leaders will take stock of where the recovery is and what's next. will it keep gaining speed? joining us now is john lipsky and steve liesman, our senior economic reporter. good it have both of you with us. mr. lipsky, let's start with you. >> yes. >> are we in the clear here? are we growing again? >> we think by the end of this year, global growth will have returned to positive territory and will continue on in 2010, albeit at a gradual pace. >> >> reporter: the. so what's gradual? >> gradual will for the the industrial advanced economies
2:29 pm
still at a pace below their potential with large amounts of slack. in other words, growth is probably not going to be sufficient to stop the rise in unemployment for several quarters to come. >> steve liesman, does that fit with your view of the world? and what the economists you talk to say? >> it does. i suppose the outlying question is whether or not if you do have coordinated or synchronized global growth, whether or not the outcomes, the sum can be greater than the parts. if you look at it piece by piece, yeah, it looks like it's a slow recovery. i wonder if all the engines of the world are fine with it. there is potential for some upside surprise. i also wonder, erin, when you factor in the change in net worth that happened for the u.s. consumer today, it not john sees that as a return to positive net growth sooner than maybe we expected. >> john? >> that certainly is a potentially positive element. for sure one of the lessons learned in the past, during the
2:30 pm
past year is that the collaborative coordinated stimulus supplied by the g20 and other economies, really had an impact and for sure, it's simultaneous expansion will be helpful. nonetheless, it's probably prudent to take a cautious approach toward growth and for sure, the stimulus already in the pipeline in plan for 2010, we think, still will be needed to produce the growth that we're looking for. >> so you think the good20, it's important they all seem coordinated on this, good signs but not time to celebrate and we'll continue on course with the stimulus? >> absolutely. >> what about the u.s./china situation? and do you really believe that the american economy can fully recover without more headlines like 35% tariffs on fill in the blank from china? >> i think there's agreement that an outbreak of
2:31 pm
protectionist activity would be a serious threat to the global expansion. we shouldn't take things out of proportion but i think, i'm positive this will be on the agenda in broad terms, trade -- free trade, vieding protection willing on the agenda in pittsburgh. >> steve, what is your view on that? on our ability to not have more headlines like that and get through this? >> i think there's going to be more like this. i'm interested in the same issue from a different standpoint, erin, which is when it comes to banking reform, it's almost the underside of protectionism. when i hear national regulators talk about the their inability to correct mistakes that led us into the banking crisis we had i hear there are afraid to move because of the fear that they'll make their domestic industry less competitive relative to others. the question i want to throw to john, john, have you noticed this, they won't do things like
2:32 pm
raise the capital requirements in the u.s. because that will send the banks over to britain? they won't do things like executive compensation and also say, for example, higher taxes or risk management requirements on these banks because the other countries aren't moving with them? >> steve, that's a very good point. that's why it's so important that the pittsburgh summit continues to bolster international cooperation and regulatory and supervisory reform. now, the latest signs are good. just a few weeks ago, the bazell committee set principles for regulatory reform. just yesterday in paris, the financial stability board help a plenary session to prepare for pittsburgh. it will be important that the political leaders continue to provide political support for broad agreement on principles and action. the politicians have to make sure that we don't splinter this
2:33 pm
effort an end up with the problems that you pointed to. >> i'm afraid, john, this ending up severely limiting how far they go and doing what i think a lot of the domestic regulators individually feel is necessary here as i hear what's coming out of the individual countries. >> well, the international effort here is new. the institution, the financial stability board is new. what's important is the political leaders put their support behind reform. >> okay. thank you very much, john lipsky, we appreciate it. steve liesman, thanks for being with us. some of the headlines crossing from what mr. lipsky just said on "street signs," that he thinks we'll be below trend for the global economy in all of 2010, and thinks that the economic stimulus plans around the world should not in any way be pulled back. get ready to start trading. jim cramer is next. people are still spending
2:34 pm
money on their pets. 5% of those pets are reptiles, snakes and lizards. we'll be back. aflac!... ...forbusiness.com tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to. tdd#: 1-800-345-2550 when everything feels right though, tdd#: 1-800-345-2550 that's when i get serious. tdd#: 1-800-345-2550 and the minute i get into something, tdd#: 1-800-345-2550 i already know when i want to get out. tdd#: 1-800-345-2550 of course, every now and then i'll talk with somebody tdd#: 1-800-345-2550 who knows what i'm trying to do.
2:35 pm
tdd#: 1-800-345-2550 (announcer) switch to schwab today. tdd#: 1-800-345-2550 you'll get the tools, the technology tdd#: 1-800-345-2550 and the support to trade your way. tdd#: 1-800-345-2550 go to schwab.com/trader tdd#: 1-800-345-2550 or call 1-800-540-7304 tdd#: 1-800-345-2550 right now. tdd#: 1-800-345-2550 but opportunities can vanish like that... tdd#: 1-800-345-2550 ...so most days, i'm right there tdd#: 1-800-345-2550 when the market opens.
2:36 pm
2:37 pm
welcome back to "street signs," rick santelli here. 197 billion, how does that grab you? that's how much supply we have next week. 112 billion in terms of 2s, 5s and 7s, 43 billion, 40 billion and 29 billion. the rest, of course, the 85 billion to make up that 197 is in three and six-month bills. here's the wild card. we'll be over 200 billion because they don't know how many one-month bills will be included next week. that all starts on monday on tuesday, wednesday, thursday. if you look at the charts real quick, the one-year dollar index, another fresh 52-week low. it's fighting for unchange as we speak. ten-year yields, even though it isn't part of the supply next week, we continue to see the slight drop in equities from earlier levels indeed put a bid in tomorrow.
2:38 pm
of course, tomorrow federal guarantee of money funds expires. all these are things to keep attention to. now back to erin at hq. >> i'm at hq at the nyse. jim cramer is at our other hq. you have a lot of good stuff today. let's get straight to it. eastman kodak, can anyone save that thing. >> they have a terrific franchise of printers. the problem here is you're going up against hul wiewlett-packard. be aware they are a force in printers and that's worth backing if you're a private equity firm. >> isn't there still some huge value in the public perception of the company? from cameras to developing. the world changed but they still have that premiere brand. >> tremendous brand equity but you can live off that brand equity only for so long. i question whether the next
2:39 pm
generation of young people actually know that brand. it's not iphone. >> it's a little depressing. >> easy come, easy go. i used to live next door to the polaroid corporation. >> i remember when a got a polaroid. that was a devastating thing. i was so excited, i left it outside and it thunderstormed on it. i got one picture out of my polaroid. thanks for that memory. let's talk about senovis. >> initially they may not seem so. if you can get it under four, it's good. is synovus a good bank? absolutely not. they've been crummy banks. the deals tend to work. if you can get it below the print price, it's worth doing. >> you buy into that. what about genworth?
2:40 pm
>> they happen to be my personal insurer. full disclosure. they offered at $11.75. that stock is $13. deutsche bank recommended today. i think this is an example of what happens, what's buoyant and bullish about this market is genworth. >> is genworth? >> yes. >> it's amazing. >> i took out more life insurance because i was afraid they weren't going to pay. >> now the rates have changed look so great, ge is up 145% or something. >> look. these companies -- >> we're at 16. >> now the stock market is back. it's not as critical. they don't have big withdrawals of their annuities and they have a commercial real estate for the pol portfolio that i continue to contend that is doing better than people want to admit.
2:41 pm
>> what about nucor? >> the stock is up 9% for the year. the ceo is probably the best ceo in the steel business. the raw costs are coming down. the infrastructure hasn't even hit yet. maybe it's not so late. maybe it's a buy. >> all right, jim. thank you. >> i wanted to see if we get through them all. >> we'll get it tomorrow. >> if i hadn't had the diversion into the thunderstorm-ruined polaroid camera. >> that's what the segment is about. >> jim tonight 6:00 and 11:00 eastern right here on cnbc. next, the economy was going to the dogs. but people are going to give up a lot in tough times. but they are not giving up their dogs. find out just how much they are spending. it's not just dogs. i think they're in in country, there are aardvarks and camels as pets. we'll be back. quick reminder, all the recommendations expressed by jim cramer are solely his and not
2:42 pm
the opinions of cnbc and may have been previously disseminated by him.
2:43 pm
2:44 pm
2:45 pm
refiners are trading higher today. a positive note from credit suisse. energy stocks overall are also higher. people have scaled back when it comes to spending on pretty much everything. one thing, though, that amazingly enough they haven't skimped on it actually pets. the pet industry is going to rake in $45 billion this year. up from it looks like $41 billion last year. joining us to discuss is wendy diamond, pet officer for "animal fare" magazine. it's true, people just didn't cut back? >> there's been more dogs and cats being left at shelters than ever before. in fact, the average is about 30%. actually people have to give up their pets, which is sad to say.
2:46 pm
because they don't have the money to afford them. there is still an increase in the pet industry, because more people are adopting animals as well as there's more people working from home. they want company at home. more people are living longer. they want company as well, people are waiting to have children and they're having pets as their children. >> so what is that little -- is that a boy or girl? >> this is a girl. >> is that a snuggy. >> it's a snuggy for the dog. >> oh, my goodness. >> every company, snuggies just launched the dog snuggy. honda element has a whole program for the dog inside the car. every hotel chain from starwood, the lowe's hotel have pet programs. they realize how important pets are. people are trafing with them and want the best for their pets. >> okay. the snuggy, if you're the pet expert and your dog is wearing it, they must be good. i know i'll get them for
2:47 pm
christmas presents. >> not all dogs should be dressed up in clothing. small dogs and a lot of dogs, especially in the wintertime get really cold. i feel personally, the pet industry when it comes to clothes, dogs care about fashion. they're fine with last year's leash and collar. people are going to spend more money on the necessities. when you see purina, iams and procter & gamble, they're buying the necessities more so than the frivolous things. >> you're saying human brand products have taken off and in the recession have held in. paul mitchell -- >> yeah, paul mitchell realized that grooming products for their pets -- over half the households in america have a pet. the industry is increasing every year. ten years ago it was $20 billion industry. this year it's over 45 billion. ten years ago, 12 million animals were euthanized in shelters. this year it's 5 million. so the whole industry's changing. they realize pets are part of the family.
2:48 pm
they're not give living in the dog house anymore. they have their own pets. different companies are launching their own pet lines with bedding, the whole thing. what's happened here, it's a huge industry. it's not niche anymore whatsoever. >> what about the whole issue of health insurance for pets? caring for a pet is hugely expensive. we've heard these stories about how people are abandoning their pets instead of paying for health care. is health care insurance growing. >> in europe, for instance, about 80% of people in europe have insurance for their pets. in america, there's over a half dozen company at least that have launched in the last couple of years that are promoting pet insurance. progressive insurance, there's veterinary pet insurance, vpi, a lot of insurance, especially that are coming out, that more and more increasingly people are getting insurance for their pets as vet costs are extremely high. people really need to realize more so that pets should at least go to the vet once a year. it will help you in the costs for the future.
2:49 pm
>> i wanted to ask you the strangest pet but this question first. 80% of european pets have insurance. >> in certain countries, for instance, england is one of them. >> do they go under the national health care plan is this. >> there's no national health care plan for pets yet. maybe ten years from now. >> i just was wondering. that would be a fun headline. strangest pets in the u.s. people are still spending money on? >> there's a lot of birds. the problem is with birds outlast their owners. some birds can last for over 100 years. >> wow. >> also you have to realize when you get the strink and odd different animals, there's not as many vets out there that can care for them. there's not as many places that you can actually buy the food for these animals. that's an important thing to realize when you're getting an odd animal. >> well, thank you very much. >> thank you. >> i don't know whether you invested in training for your pet or it was born with such
2:50 pm
good manners. >> she takes after her mother. >> no whining. i mean, really. thank you very much. >> thanks. >> the pet industry holding in there. by the way, we'll get to the bottom of this, why the europeans have so much health insurance? can you just imagine if it came with the national institute of help. >> the chicago cubs haven't won a world series in 101 years, the longest drought for any team. the franchise, a money machine, darren rovell. he's going to tell us more about the business of the team, darren? >> reporter: yeah, that's right, erin. you mentioned more than a century, every year the cub fans say this is our year. and it doesn't look like it's going to happen yet again. take a look at this, this 1:45 local time and this is wrigley field, more than 30,000, 35,000 people. this is not summer, i should tell you, obviously. then we're here at the roof top. take a look at the crowd here on this one roof top. this is a big business.
2:51 pm
they're playing the not so good milwaukee brewers. while the cubs are more than recession resistant, it doesn't mean they're recession-proof right now. sure, they're selling 90% of wrigley but the ticket brokers are hurting. here on the wrigleyrooftop, the dunwright, dean bravo the manager said business is down about 15% this off-season. the new owner, tom richts will take over. and as i mentioned, their motto, this is our year. it doesn't look like it will happen this year. will it happen next year or after another disappointing season maybe. maybe not. but the good thing is, the business is probably as teflon as you can get. that's why tom rick et paid $845 million for this team. erin, back to you. >> thank you very much, darren. the clouds parted, too. a little cloudy this morning. looks beautiful. the buzz from beyond. as the dow swings back, we're
2:52 pm
positive, barely. we'll see if we can build it. these days, wouldn't it be great if saving money happened as automatically as everything else? at bank of america, it practically does. use the bankamericard power rewards visa credit card and earn rewards like cash back with every purchase. cash you can put into savings. or even use to help pay down your credit card balance. it's one of the many ways we make saving money in tough times a whole lot easier.
2:53 pm
2:54 pm
2:55 pm
market up about 12 points. across the wires about the imf john lipske, interviewed just a few minutes ago here on "street signs." what he said is advanced economies are recovering but the growth is going to be below trend next year. now, what's interesting about that is it sort of speaks to more of an l-shaped recovery, not that v, which would give you maybe above trend, at least for a little while. let's get the market view, the trader's view of that statement. managing director at wells fargo and warren meyers is here on the trading floor. warren, is the market pricing in a v or is the market pricing in more of what john lipske told us, which would be things are getting better, but slowly? >> i'll tell you, the way you look at the market, the way it's bounced off the lows in march, it's certainly looking an awful lot like a v shape to me.
2:56 pm
i think the markets have gotten a little bit ahead of the overall economic numbers and results that we've seen. and it's been in a v shape, where maybe the economy should be dictating a little bit more of an l shape. i think the movements in the market thus far has been v. it wouldn't surprise me, though, to see that level out and gradually start to, you know, inch back down and go more towards an l shape going into next year. if it's an l, the markets could go down. do you agree with warren? >> i don't think the market is in a v. i think what you need to look at at the s&p down to 666, that was panic. that was the momentum of downside swinging. arguably, let's say the market, in a non-panic environment, should have bottomed in the 700s. you're looking at a u shape bottom. that's what our economic team is arguing at the firm, the fact of the matter is we basically dealt with the shock, 9 treatment of the shock, which is basically giving you the medicine that needs to take place, but it's
2:57 pm
not going to be a quick heal. from the long-term growth perspective, the comments you were discussing, erin, from our perspective at wells fargo advisers, we're not looking at a long-term gdp number. it's more of a suggest of the fact that the american consumer needs to rebuild his or her balance sheet. >> you're saying that lipske's wrong, we're going to get better growth next year? >> no, we think it will be below trend growth, about 4.8% nominal. >> that's below trend? >> that's below trend. >> what do you think trend is? >> 20 years 5.2%. >> you think even though the economies are much bigger than they were then, that is still an achievable rate? >> at nominal gdp, yes. >> what do you say to that, warren? >> i'm a little confused if we're below trend, if that shape is going to look like that. if you're at or above you're more v. if you're below trend, you tend to be more of an l. if you want to extend that, i
2:58 pm
can agree maybe a u over time. i'm a little confused. are we going to continue in a v and still be underperforming? that doesn't make sense to me. >> brian, i don't mean to be sounding negative about what you're saying, obviously as you get bigger, it's harder to grow at a higher rate. >> erin, we're talking about -- we're not talking real gdp growth, nominal gdp growth. >> big difference. i heard you, thank you. brian and warren. coming up, your thoughts from our mail bag. pain, you could end up taking 4 times the number... of pills compared to aleve. choose aleve and you could start taking fewer pills. just 2 aleve have the strength... an eleven sixteenths wrench over here? here you go. eleven sixteenths... (announcer) from designing some of the world's cleanest and most fuel-efficient jet engines... to building more wind turbines
2:59 pm
than anyone in the country... the people of ge are working together... creating innovation today for america's tomorrow. thanks! no problem! so, at national, i go right past the counter... and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro.

172 Views

info Stream Only

Uploaded by TV Archive on