london. so you or a loved one is looking for a new job. beware of scams. they lure you into thinking you've found a new career. what to watch out for coming up at 2:00 p.m. and measles are making a comeback. stay with cnn this afternoon. "your money" starts right now. we are not headed for another great depression but can perception equal reality? welcome to "your money." i'm ali velshi. 48% of americans say another great depression is likely to occur in the next year, that's the highest that figure has ever reached. steve moore is with us. can the fear of a depression whether it's warranted or not cause consumers to behave in a way that actually really does end up threatening this recovery that we're in? >> first of all, i'm with you. we are not facing another great depression, thank goodness. so those people are thinking about walking into the ledge of

their window and jumping out. we don't need that right now. the truth is, people are in a state of real fear right now. if you look at the statistics on the economy that have come out in the last month, they've almost all been negative. but sometimes the things are bleakest before the dawn. and i think that's the case right now. but you're right, the big problem is because people are in such a state of fear, they're not spending, businesses aren't investing and that's actually -- so it's becoming a self-fulfilling prophecy. people -- the economy shrinks as people become more afraid. >> and we have all sorts of examples of people who otherwise would know sounding afraid. federal reserve chairman ben bernanke expressed optimism that the recovery will gain some momentum in the next six months. >> growth seems likely to pick up somewhat in the second half of the year. overall, the economic recovery appears to be continuing at a moderate pace, albeit at a rate that is both uneven at across

sectors and frustratingly slow from millions of unemployed and underemployed workers. >> bob herbert is with us. ben bernanke acknowledges that the job situation is far from normal. those are his words. americans are telling cnn that just under half live in a household where someone has lost a job or are worried that unemployment may hit them in the near future. bob, americans are simply afraid right now. what role does that play in holding back this recovery? >> i don't think fear holds back the recovery so much as the problem that we're talking about. and that is employment. not enough americans are working. what we're finding out is since the -- corporations in america are now producing as much as they did before the great recession hit. but they're doing it with 7 million fewer workers. corporations don't need as many workers as workers need jobs in

this economy now. >> that's a trend that's been going on for years. >> yeah, but we need to have a conversation and figure out what our policies are going to be going forward because even if we have modest job growth and the economy recovers, which people seem to expect, a lot of americans are going to be facing what is an extended recession and we don't have employment for those folks. ultimately a consumer society can't work if the consumers, if so many of the consumers are tapped out. >> chief national correspondent john king joins us from new hampshire where he's going to moderate monday night's presidential primary debate which is right here on cnn. john, voters are giving president obama low marks on his handling of the economy. what do you expect the republicans to offer to counter that? >> reporter: the republicans are blaming the president, number one. now president obama makes the case that he inherited a horrible economy from george w. bush and that it is better now. that's the president's case. the republicans are saying all the big spending in washington,

they think the obama administration has too much regulation on the economy. most of them don't like the wall street package that was passed by the congress and sign by the president. it was an anti-obama, anti-democratic message you get from the republican candidates. they say they would cut corporate taxes and dramatically cut federal spending. there's a big debate about whether cutting spending is the right thing to do when you want to increase employment. but deficits and debts are driving the economy right now, not so much employment. an interesting thing, the early contests are in iowa and new hampshire, two states that have an unemployment rate well below the national rate. >> bob, this debate is going to hinge on whether or not we're talking about maybe another legdown in the economy. there is some talk that things might weaken a little bit, this idea of cutting spending right now really flies in the face of what many democrats are trying to push. >> most of the economists i talk to are not just liberal economists, think that's exactly

the wrong thing to do right now. where the economy has weakened, employment has not picked up the way people wanted it to. if you don't have spending in the private sector, you need to get it from government. if government is going to cut, it's just going to depress the employment statistics even further. >> steven? >> i don't agree with that at all. i think we've had this kind of giant keynesian experiment where we've flooded the u.s. economy with government spending and the economy is still really flimsy. it's been an anemic recovery. the republicans are going to make the point that we need to get back to the kind of reagan formula. i think this is a very good analogy. the last time we had a horrible, horrible recession like we do right now was in the early 1980s. reagan didn't flood the economy with money. he actually slammed the brakes on the money supply, got inflation down and we did tax cuts. by the way, over the next 20 years, we created about 35 million jobs. we know how to create jobs in

this economy. and we did that even as employers got much more productive in terms of their producing of goods. >> john? >> reporter: well, ali, look at the reality of it. you're having a great debate about whether to cut spending or increase spending. here's the political reality. it's not going to happen. the house republican majority just elected because of the tea party support which is cut spending and shrink washington. the house republicans are not going to go along. you may get a payroll tax from the president that he thinks the republicans might like but it will be mostly small ball. i talked to the president's top adviser, he said that's why you have elections, to debate these ideas. we'll have a big debate about these issues in the 2012 presidential election. but what about the millions of americans who are unemployed and underemployed in the meantime? >> let's talk about the president's opinion -- the cnn opinion research poll shows the

president's approval rating has dropped since late may. it's down six points, now 48%. we were talking after the killing of osama bin laden, john, about this bounce that the president got. and people saying, well, he's walked into his next election victory. nobody thought it sensible to predict in may of the prior year whether that was going to be sustained. but the reality is it does seem to be coming back to the economy. >> reporter: it is all the way back to the economy. there could be some world event, there are global challenges, afghanistan, libya and beyond that could come into play as we get closer to the election. but without a doubt, everybody is serious about this race. the president's team, the teams around these republican candidates who will debate here. believe the number one, two and three issue will be the economy. the employment rate was 7.2% when ronald reagan was reelected back in 1984. he was able to convince the american people that things were getting better. you go back to 1992, unemployment got up around 8%.

it started to come down steadily throughout the election year. you mentioned perception of reality, the voters here in new hampshire and across the country didn't believe it. they didn't feel it. didn't think they were getting better. they said, good-bye, mr. president. >> john, stay where you are, bob, steven, you, too. the top five most important issues to voters have one thing in common. i'll tell you what on the other side.

the economy remains issue number one to voters. the only one that more than half of the public says will be extremely important to their vote for president next year. but look at the rest of the top five. unemployment, health care, gas prices and the federal deficit. they're all about your money. you need to go to number six

before you get to terrorism. and down even farther than that, we're showing you to find hut-button issues like abortion, illegal immigration and gay marriage. bob, what exactly can a voter reasonable expect in terms of lowering gas prices? >> well, nothing, hardly anything at all from the president. but i think john was correct in the prior segment when he said we're not going to get much in the way of investment before the election next year because the republicans hold the house and they're just not going to permit anything like that. so i think we're going to continue to have a stagnant economy. employment is still going to be depressed. and ultimately i think that's going to be harmful to the president's reelection efforts. he's not invulnerable. i thought it was really interesting the reference to george h.w. bush's reelection bid.

>> steven, give me some sense of whether or not we have unrealistic expectations of the presidency and from government when it comes to the economy. >> well, what's the hold saying, sets it's the economy, stupid. that's going to be the theme of this election just as it has been almost every presidential election that i can remember, ali. for better or worse, presidents get blamed for bad economies and they get the credit when the economy does well. look, after four years of a president not turning the economy around, i think it's time to fire that person. if the economy is better next year f we get that employment rate down to below 8.5% or 8%, i think the president is going to be in much firmer footing. but it's going to be hard for president obama to make the case if we still have 9% unemployment and running the $1.5 trillion deficit. >> stephen forgets the last time we dangerously pulled up on

spending in the midst of a great depression. that was an example of place where we didn't spend the right way and we pulled up a little too fast. republicans have scored a lot of points with the tea party by advocating trillions of dollars in cuts as part of a deal to raise the debt ceiling. this recovery, the way it's going right now, do you expect any of the republicans in monday night's debate might back off the idea of severe and deep cuts to this economy? >> reporter: no n a word, no. why? because it's an old rule in politics. you wage this campaign based on the last campaign. remember, these republicans are competing in a primary first. we're not in the general election. they're not appealing to all of america. they're appealing to conservative voters in iowa and conservative republicans and independent voters here in new hampshire. their lesson is in 2010, they were concerned about spending deficits. that's where they're tracking their appeals.

in terms of any stimulus to the economy, it would come through cutting taxes not government spending. they believe they need to frame themselves as against president obama. >> stephen moore is nodding his head in agreement with you. stephen, you're a died in the wool fiscal conservative who is not running for anything. do you think it's reasonable for somebody who's running in the general election, forget the primaries, for a conservative republican in the general election to say, maybe we shouldn't be as drastic as we're suggesting being right now? >> you know, first of all, john, i think you nailed it. i think you're exactly right. the republicans are going to be talking about which one can cut spending the most and which one can cut taxes the most. that will be the most appealing candidate, i think, in this republican primary. i just think that this model of spending, spending, spending hasn't worked very well. i think if the president and this congress could come forward with a credible plan to bring this enormous debt down and these $1.5 trillion deficits

down, i think that would unleash the animal spirits of this economy and we would get growth. i'm making the case the debt and the deficits are holding back this economy. they're not stimulating it. >> bob, can there be something that unleashes the animal spirits of this economy? that is exactly what we need. >> yeah. it would require investments. if you had a business and you wanted to grow the business, you would have to make investments in that business. and we're doing just the opposite. so i think your reference to 1937 when fdr and the congress pulled back prematurely on spending is a terrific example. we're in danger of doing something similar. we're in danger of making the same mistake again. >> guy, it's a good conversation. thanks for joining us for it. bob herbert, stephen moore and john king, of course, our chief national correspondent and the anchor of "john king usa."

john is moderating the republican presidential debate from new hampshire on monday night. how much money is your friend making? you know you want to know. from engineers to teachers and everything in between, we'll reveal what you and everyone you know is getting paid. prepare to ace your dental check-up. fight plaque and gingivitis and invigorate your way to better check-ups. new crest pro-health invigorating clean rinse.

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how can you cut 10% of government employees without handing out any pink slips? i'm joined by christine romans, host of cnn's "your bottom money money money," chrystia freeland and pete dominic. slashing the government workforce by 10% over the next

five years without laying off a single employee, how? for every three federal worker that retires, the government is only allowed to replace one. chryst chrystia, does this give the private sector the green light to react the same way? >> the private sector doesn't need the green light. that's what's happening. one of the things we're seeing in the economy is another jobless recovery. and in some ways, that's great because it means the private sector is becoming ever more productive. people are investing in new equipment in technology. it's good for american companies and great if you're a shareholder in those companies. but the devastating consequence is the job situation is really, really dreadful. >> what do you do about it, christine? >> they're paying for new equipment and not new employees because they know they need the new equipment. in terms of the government and this massive attrition program,

republicans would like to do this swiftly and quickly. they would like to get the federal workforce whittled down. but it's not so different from what the president's deficit-cutting commission recommended, although on a slower scale. the bottom line for the big federal workforce is that it's going to be -- the belt's going to be tightened. >> the way you look at working for the government is entirely different in 2011 than it was 30, 50 years ago. pete dominick? >> let's think of some other great and catchy-sounding names. i had a congressman on who said the fda is inefficient. it's because you're gutting it. it's a narrative that government is the problem. let's have that discussion. let's focus on where government is the problem. but the intelligence analysts analyzing bin laden's thumb drives, i don't think we should remove all of those guys right now. >> point well made, pete. let's talk about what your

college degree is worth once you're actually in the workforce. let me give you a sense of it. we've got a chart here on the wall. basically that yellow -- that orange line through the middle is $55,000. these are various different occupations. the red part at the bottom of each one of them is the 25th percentile of what you earn once your in that profession. the blue bar at the top is the 75th percentile. computers and mathematics, move over to education, talking a lot about teachers. not big earners in this society. christine, we talk about engineering all the time. $53,000, right on the line. 75th percentile, $102,000. and health care, an industry that's been growing despite the recession we went through and

the recovery, $45,000 is the 25th percentile. $80,000 is the top of that. >> it tells you a college degree is not treated equally in the workforce. to get that degree, you're going to have a lot of debt and you might have diminished job prospects. look at education versus engineering or health. their top earning part of that field is at the bottom of some of these others. i look at social sciences, this is one that surprised me. inside social sciences, there's something called economics. this economy is rewarding economists. $87,000 is the top earning quarter of that profession. why? companies and industries have to figure out how to make money in a difficult economy. that's another interesting place, economics there. >> chrystia, does anything on this chart surprise you? >> what i think is really striking about it is the winner-take-all phenomenon we're seeing within each profession. so if you take out, for example,

education where you're going to lose out no matter what -- which, by the way, isn't that devastating? isn't there an education crisis? shouldn't teachers be not only honored and respected but well-paid? if you take out outliers like education, the biggest difference isn't between the different degrees but between the top and bottom of each degree. this reflects what we're seeing across the economy where the winners in every area are doing tremendously well and the people at the bottom -- >> pete, what's it like? >> ali velshi, all your charts and statistics about how much money you're going to make is all great. if you're taking into consideration that money is what makes you happy, that money is what provides you with personal satisfaction. >> hold on, there's one up there -- arts, the second one. there are a whole bunch of people going into that, not really thinking they're going to be all that prosperous. but they're doing it. >> right. that's the idea.

you can go into investment banking if it makes you happy and if money makes you happy. but if you think you're going into a profession just so you can make money, you probably are going to end up unhappy. i have a two-year liberal arts degree, cnn contributor, has a great family life and a really big gummy grin. things can work out. >> all we're trying to do is give people some information. i think there should be lots and lots of teachers and we should show that we respect them. we're just giving people an outlook. i'm glad that teachers in training ignore that kind of thing and go into the profession. >> that's the idea, that teachers have such -- they have such easy jobs. teachers don't go into it for money, clearly. they go into it because it's a calling. enough with the bashing the teachers. >> it appears regardless of this struggling economy, americans are sometimes glass half-full

kind of people. many of those glasses are half filled with alcohol. alcohol sells grew by nearly 10% over the last 12 months. pete, surprising or predictable? >> i'm actually intoxicated right now because i just saw your charts and graphs. totally predictable. i want to throw you another curveball here. the thing we're not able to measure is how much illegal drugs people are using, specifically marijuana. if we were able to tax that and not spend so much money to fight it, you'd be able to bring a lot more money -- >> here we go. pete, are you a legalization of marijuana man? >> who isn't at this point? >> chrystia? >> as it happens, i am also and vicente fox is in favor of that, too. but on this alcohol consumption, ali, you know as well as i do that this is the classic recession phenomenon. they call them the sin

companies, the classic was lipstick, liquor and cigarettes which i guess speaks to pete's drugs category. and clearly when things are not so great, we turn to those small comforts. >> i think it's interesting that now you can buy a beer or glass of wine for cheaper than a gallon of gas. >> hold that thought. when we come back, if you're ready to pay an extra dollar for a gallon of gas, that's the idea that one ceo has, the ceo of general motors charge you an extra buck a gallon. we'll find out why and whether it's a good idea. coldwell banker. we never stop moving.

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check that out. $113 a barrel. that fueled calls for opec to boost production, boost output of oil. over the past few weeks, prices are back down, down to just around $100 a barrel. another three months before opec considers increasing output again. this is tricky for them. if oil prices go too high, people pull back. if they're too low, opec doesn't make enough money, according to them. where are we in terms of oil? >> i think the arab cheap oil is over. the single biggest reason is china. china is getting rich. india is getting rich, as the emerging markets start living more like people in western developed countries, they are consuming more energy. and fossil fuels are going to run out at some point. so prices are going to go up. it's your classic supply and demand. >> or look for them in places where it's more expensive. in the united states,

consumption of oil has been relatively flat over the last decade. people say if you conserve, it will bring prices down. it's not about us. >> right. and we've been more efficient in our consumption of -- not alcohol but of gasoline -- maybe alcohol, too, over the past decade or so. but whether you're a company or president of a company or the president of your household, emerging markets are on fire and oil prices are high and could go higher. if they go low, good, good. but if they don't, you need to be prepared for it. i think this is the theme song of the next decade. >> it's the new normal. >> it makes me want to pull my hair out and yours when i hear people angry at this president or the last one about gas prices as if somehow the president has some ability to do something about this. >> right. that's absurd, of course. summer 2008 is the last time we saw these really, really tough gas prices. but chrystia freeland is spot-on about the rise of the rest, china and india. but the fact of the matter is we

can complain all we want. the saudi prince admitted on television the other day he needs oil to go back down. we're not looking for alternatives. we are spoiled. we are wrapping a rubber band around our arm and pumping crude into it. we are addicted to this. we have to find alternatives and we have to start finding them now. the idea that we can find more oil is the solution, come on, let's be honest with ourselves. >> which is why high gas prices do the job. they spur that innovation. one person who might be happy about gas prices rising is general motors ceo dankerman. ak ackerman said he'd prefer a $1 a gallon gas hike as opposed to tighter regulations. i've said it over and over again. the answer to high gas prices is high gas prices because it causes people to conserve and look for alternatives. i didn't really think i'd have the ceo of gm on my side in this

situation. does this makes sense? >> it's clear he means instead of higher fuel economy standards. automakers, ford, for example, a lot of these automakers are doing whatever they can to try to find the new normal for the kind of cars they're making. are american consumers ready for that new normal? you have to start thinking like high gas prices and roaring emerging markets are going to be here with us to stay, even in your family, you have to make these kinds of choices because you don't want to be paying 70 bucks to fill up a van. >> people who are listening to this are saying, do you understand what i pay to fill up my tank? times are tough and we have way more unemployed people than we can handle in this country. it's tough to suggest that an increase in gas prices might be helpful in the long term. do you think it could be? >> absolutely. and actually, as you say, ali, it's a great paradox. but higher gas prices. and i absolutely agree, a gas tax is the way to do it.

much more than fuel efficiency standards because what it will do is create an incredibly powerful incentive for detroit to produce cars that are more fuel efficient and for all of us to buy those smaller cars. and guess what? in a few years, people may find, okay, maybe their gas bill isn't smaller than it is now but it doesn't keep on going up even if the price at the pump does keep on going up, which it will do. >> whether it's a tax or the price just keeps on going up, from the consumer and manufacturing perspective, it has a similar effect. ford, you mentioned, christine, is boosting its production by 50% over the next four years. i sat down with ford's ceo alan mulally and asked him where on earth he's planning to sell all these cars they want to build. >> we're at about 74 million worldwide in vehicle sales. that's going to go to 112 million over the next few years. tremendous growth industry. as you pointed out, ford is really positioned well. for example, to your point, in india, we're going to go from

three models up to eight models. and in china, we're going from five models up to 15 models by mid decade. so we are going to have a 60% to 70% of the entire coverage of the market with ford. >> pete, general motors sells more cars in china than it sells in the united states. ford upping its production of cars in india and china and brazil. is america no longer the land of opportunity when it comes to an iconic american brand like ford? >> yes. and that's because in america, you'll never see a large man get into a small car. in all those countries you mention and in europe, they do. goi to italy every year. you have giant men getting in tiny cars. why? gas is so much more expensive there because of the taxes on it. it's interesting to hear the head of gm whine and complain and say, i want a gas tax. learn how to compete, be innovative and compete with your foreign competitors with those fuel economy standards that should be even higher in the law of the land. americans, i know you're big, but we have to get rid of some

of our comforts. >> ali, isn't the biggest profit center still the united states for all these different manufacturers? think of the biggest growth is in emerging markets. but the cash cow is still, for most of these companies is here. >> chrystia, what do you think? >> i agree with everything. i think that the mulally point about the growth being in the emerging markets is really significant. this is a wider shift. american business and ford is the perfect example. the ford motor company was built on the u.s. middle class and was built on the notion, henry ford doubled the wages in his factories because he wanted the workers to have the money to buy his products. >> they kept the middle class going and they sold their product to the middle class. >> and there's a really important shift happening right now, which is american business has decided, rightly, i think, in terms of the numbers, that the u.s. middle class is no longer its base. it's the middle class and the emerging markets and rich people in the united states.

that is a sea change and it is having political consequences that i don't think we're talking about enough. >> which is why i'm working on a book called "capitalism is not patriotic." chrystia is right. all these companies are doing all the right things so that they compete in the world market. they don't need to be selling their products whether it's automobile manufacturers or anybody else to americans. >> somebody can buy them. pete, good to see you. thanks, chrystia and christine. do cell phones cause kanser? the government says there's no evidence. the fine print on cell phones says be careful. my next guest says there's reason to be seriously concern and she can prove it. we know it's intimidating. instant torque. top speed of 100 miles an hour. that's one serious machine. but you can do this. any socket can. the volt only needs about a buck fifty worth of charge a day, and for longer trips, it can use gas. so get psyched.

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can your cell phone kill you? the question on everybody's mind after the report from the world health organization that cell phones are, quote, possibly carcinogenic, end quote, meaning they might cause cancer. there are no independent government tests. and the cell phone industry remains quiet. they were thought to be safe by the fcc but not anymore. debra davis is the president of the environmental -- thanks for

joining us. what is it that the industry knows about cell phone that is you say they're not telling us? >> they know that cell phones are two-way microwave radios and you should never hold them close to the bodies. they also know that these radio frequency signals from cell phones can damage dna and in animal studies show damage to the brain, liver, eyes and skin. >> not to be naive, but it's f it's true, what you're saying, what would it do for the cell phone companies not to tell us? i say this because it's not the same as cigarette where is when you find out they're dangerous, the only option is to stop. with cell phones, there are alternatives, things you can do to mitigate having a cell phone next to your head. why wouldn't they tell us? >> because there's a general sense, if you understand you need to be careful using a cell phone, some people might decide not to use them at all. that's why right now in europe they're resisting the idea that you can have on/off switches very easily.

we need the ability to turn phones off very quickly so we can turn them on quickly. >> a solvable problem. those who claim that cell phones are safe say the sort of radiation you're talking about that's being emitted is not dangerous and not cancer-causing. you've found other cases. >> well, as a matter of fact, the radiation from a cell phone is too weak to cause damage like x-rays do. it's called non-ionizing. but it's digital and it's pulsed. studies conducted in europe in 12 different laboratories have shown that the weaker signal from today's modern phones can actually be more damaging than the signals from the earlier phones because the pulse digital signal disrupts the membranes, weakens the blood brain barrier and can damage dna. >> one thing you point out in your book is that the cell phone industry is issuing warnings about this. but they're in very fine print.

take a look at this one from research in motion which makes blackberries. it says, use hands-free operation if available and keep the phone at least .98 inches from your body, including the abdomen or pregnant women and the lower abdomen of teens when the device is turned on and connected to the wireless network. the industry is obviously aware of the effects. why is the u.s. government, for instance, not getting more involved in putting these warnings out there and regulating it? >> the government right now, as you well know, is overwhelmed with so many things to deal with. and they've taken advice that's been provided over the years from committees that have been dominated by industry. i think those days are over and that's why i'm really glad for the attention that you're bringing to this issue and that cnn has done a very good job on. my book "disconnect" makes it clear. we know enough now to take simple precautions and we don't need to stop using phones but be smarter about how we use them. >> which is why i think this can go the wrong way for the cell

phone industry or the right way. if they know something, tell us. we can figure out ways to use cell phones more effectively. the studies that have been conducted so far are based on the adult male brain. your website states that children absorb more radiation than adults do. the reason i talk about this is because millions of kids are using cell phones. i'm guessing the penetration for kids is greater than it is for adults. and yet there is not a single peer-reviewed study looking at the dangers of cell phone in children. why? >> because a way of looking is a way of not looking. we've not wanted to think about this possibility. because, again, cell phone radiation is weak. so it doesn't work with the power. it works because of the erratic nature of the signal. you take a rubber band and pop it once, it's fine. you keep popping it over and over again, eventually you'll break it. and that may be why 3g phones look to be more dangerous than 2g phones when tested in

laboratories. >> what do you recommend people do? >> i recommend they use a headset. use a speakerphone. don't sleep with the phone on your body. don't give phones to young children to use as pacifiers. think about the fact that distance is your friend. you can use a phone safely if you use it with a speakerphone and earpiece. and don't give phones to young children as toys. it's a bad idea. >> thank you for joining us, devra davis. when it comes to wall street, there are bears, there are bulls and then there's the man who says the dow is going to $20,000 by just 2013. but he says you maybe shouldn't be invested in it. a tank. one of our 9 models over 30 mpg highway. fuel up, rock on.

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take a look at the dow over the last year. look at your investments, your 401(k), your i.r.a. might look a little like this. up 20% this past june, but this week the dow fell below the closely watched 12,000 mark. our next guest says don't worry about it. by this time next year we could see the dow close to 20,000. james, make your case. pure simple terms. why do you think the dow is going to go up to 20,000? >> well, there's a lot of reasons. i mean for one thing stocks are dirt cheap. you have a company like apple with 100% earnings growth that. now, typically that's almost as cheap as utility company.

that's never been seen before. microsoft at 10 times the earnings. intel. these are are cheap stock. another very important reason. everyone's talking about quantitative easing and federal stimulus. the fact of the matter is, that $600 billion in federal stimulus has not even hit the economy yet. it take 16 to 18 months once the dollar bill leaves the printing press before it even touches the economy. so we won't even be seeing the effects of the federal stimulus until the end of 2011, 2012 at the very least or the end of 2012. at that point, i don't know, we might start seeing bubble-like proportions on the stock market. >> let me ask you this. whoo is it you're suggesting that investors stay completely away from stocks. >> you have to figure you're not buying stocks yourself in a little arcade or whatever.

there are really violent people out there who want to slit your throat on the stock market. people like warren buffett will want to take every dollar you have. he's a very smart guy. you can't go around day dreaming and investing and buying stocks. if you're going to buy stocks, don't do the same thing that 95% of the people do, buy high, sell low. the psychology makes you sell when you panic. basically close your newspapers and stop picking up on the panic that that's out there. hold only your stock like warren buffett. buy when the headlines are the most scary. when you see an outbreak in japan, that's when you want to buy stocks. a pandemic, buy stoxx. buy every single time you panic, otherwise the psychology is going to make you go broke. >> james, good to talk to you. he's the managing director of formula capital. well, ditching your mortgage

just because you can, more and more people are saying that's a good idea. i'm not one of them. [ male announcer ] built like a volkswagen. the 2011 tiguan. [ grunts ] we share. shop from anywhere. and are always connected. we live in a social world. isn't it time we had a social currency to match? membership rewards points from american express. use them to get the things you love from amazon.com, ticketmaster.com, and more unexpected places. they're a social currency with endless possibilities.

time now for the xyz of it. i know it is a roughhousing market out there. we track it every week right here on this show. prices are still dropping. nearly 11 million americans owe more money than their home is worth. especially tough for people who took out second mortgages. nearly 40% of them have mortgages worth more than their homes. these dismal numbers have more people opting to walk away rather than keep paying the mortgage on a home that has lost value and may still lose value. fannie mae reports 20% of homeowners would consider this. that's up from 15% last year. if you're one of them, i've got to be honest. i can't even see that this is a legitimate option for people who are not in dire financial straits. i get it if you can't afford to walk away from your house. to walk away just because you want to is rep prehencible.

we often buy things that decrease in value, a tv or car. making a commitment to pay is the bedrock of our capitalist society and, yes, i know that you've seen businesses walk away from their responsibilities but that doesn't make it right either. and if you don't want to hear the moral or legal argument. let me give you a financial one. walking away can have disastrous consequences for your pocketbook. first your credit score will take a huge hit. we're talking more than 200 points in some place. second, you won't be able to get a mortgage again for years. if you're thinking, that's okay, i'll just rent, don't you think your landlord is going to see your credit report? might not be so easy to find a place. bad credit can hurt your chances to get credit cards and auto loans and even hurt your professional life. you could lose your home and not get the job you need. and it doesn't just affect you. it hurts the value of your neighbors property. it hurts those who take our lumps in the market to get property mortgages.