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tv   MONEY With Melissa Francis  FOX Business  February 25, 2013 5:00pm-6:00pm EST

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lauren: down to miami for a giant food fight. the hosted a tomato fight for $20 people able to throw around 20,000 gallons of unused tomatoes. more than a thousand people showed up. david: and am wanting to watch watch tomorrow is the federal reserve chief ben bernanke testimony in front of the senate banking committee. remember global markets took a big hit last week following the publication of the minutes from the fed is last meetings that could move the market. lauren: tomorrow, liz claman joins us live for this uni the h exclusive interview with treasury secretary. we don't want to miss that. david: but now we have "money" with melissa francis next. melissa: i am melissa francis
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and here's what is money tonight. in the looming budget with automatic spending cuts, some lawmakers are actually giving money back to taxpayers. south carolina congressman geoff duncan is here to explain how he is doing it. maybe the white house should listen up. i don't know. with three days left until the sequester cuts, is the president resorting to scare tactics? joining us exclusively on whether we heard the administration cry wolf too many times. those hoping to cash in and not be making the money they had hoped for. dealers are getting slammed by taxes of all things. some hang as much as 75%. will uncle sam drive it back to the black market? even when i say it is not, it is always about "money." ♪
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melissa: all right, first, let's start with the market moment. a rough day on wall street. worries on the outcome of the italian election and a growing fear the credit sequester driving stocks lower. all three major indices closing in the red. one bright spot, gold made a comeback today. precious metal posted its biggest one-day gain this month rising $14 to settle at $1586 per ounce. our top story tonight, a big turn for the out-of-control spending in d.c. believe it or not, some lawmakers are successfully cutting back on spending and actually giving budget surplus back to the u.s. treasury. it is amazing, but it is true. why can the white house get the budget under control? geoff duncan is one of those returning the money to taxpayers. congressman, welcome to the
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show, thank you for coming on. you have announced you are returning $200,000, 15% of your 2012 budget allowance to the treasury, how did you manage that? >> i came from the private sector, a small-business owner and we did a budget every year. last year we were able to give back about $200,000, was given back about $200,000 this year, but 50% of our budget on top of the mandatory across-the-board cuts the host of the sedatives that happened last year and 11% cuts. melissa: weren't you tended to have a massive pizza party? were you trying to set an example, or what was the idea? >> we should have a budget. 1398 days since the state senate has passed a budget for the station and that is abysmal. i had a ribbon cutting and we have a budget for the office and
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we will operated like a small business. melissa: will impact how much money you will get next year, won't you get less? >> the portion that money out for the district, how many counties, i don't think it will affect the number of people we get, but whether we have another across-the-board cuts or the house. we've operated under john boehner's leadership at a very responsible level, that is what republicans seem to do. we budget and operate like a small business. melissa: senator rand paul returning money. is there a lesson for the rest of washington? >> absolutely there is a lesson, be responsible with taxpayer dollars. under secretary of the department of homeland security today, talk about how they will apply sequestration. applying those to the government. melissa: what do you think of
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that, by the way? we ask them to react to all the different things we have heard this week and this weekend about how dramatic sequester cuts will be. if you listen to the stuff coming from the white house, there will be planes coming from the sky, children, are those scare tactics in your mind? >> this is about 2.5% cut, $85 billion in cuts, discretionary spending doesn't cut mandatory spending. i would like to reallocate those cuts, maintain the level of funding for the military, the constitutional role of government but at the end of the day every agency can absorb some cuts. they have to come up with a management plan on how to activate and manage those cuts and not hurt the most vulnerable. let's say on the border commotion than it those officers, that is very vital component of government but we
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can cut other areas. melissa: congressman, you are there, we are here. will these cuts have been or will there be a last-minute deal? >> they will happen. they are so diametrically opposed the two parties, this is the law of the land. a ratification o ramification ot ceiling bill. i didn't want to see across-the-board cuts, i wanted to see targeted cuts. we will not see more revenue on our side, we want to dip into the mandatory spending and entitlement spending if we are going to reallocate and let's reallocate, democrats don't want to do that. i see sequestration going into effect. it will happen, his plan will be mounted on the first of march and then we haae continuing resolution by march 27. little bit of reallocation of those cuts by they get finished.
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melissa: $200,000 is a tiny, tiny, tiny drop in the bucket in washington. it is something and you are setting an example, thank you for coming on tonight. >> let's do it. melissa: speaking of sequestration, is set to hit this friday, march 1, you cannot go anywhere without being absolutely bombarded with how bad it will be all the way around. economies are saying the headlines you are reading in the mainstream media are all wrong. they say the near-term cuts will only meet half of what we hear about, that's what economist at ubs is saying. let's take it to today's "money" power panel. thank you for coming on. thanks to all of you.
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kevin, i want to start with you because ubs says those headlines that we are watching and that we are being warned will destroy the economy, the country, they are overblown. >> that is right. they are scare tactic, quite frankly. it is not all that surprising government spending will be cut, politicians will exaggerate the impact. if you look at the budget authority, 85 billion cut to the current fiscal year. the cbo two weeks ago came out and said the likely impact will be about $44 billion. if it is currently played to take place beginning on friday. the impact of gdp $44 billion is only three tenths of a percentage of gdp. it is a little bit of a hit to the economy but it is not going to derail the economy.
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melissa: you come from washington, you know better than anybody else. >> i come from indiana. melissa: you spend time in washington, so you know how they fare. talk about laying off government workers, talking about furloughs for 22 days, the same way a lot of industries work. a lot of manufacturers who have to work in this manner. is that what we are talking about, do you think? >> there will be other cuts in addition, but the sequence of events has been a little bit misunderstood. the sequestration will go into effect march 1. under federal law you are not allowed to furlough anyone for 30 days so i did not think the furloughs can take place for four months. in between, there is something called the continuing resolution that has to be dealt with keeping government open. my best guess is what happened over the next three weeks will determine what will happen. something will be putting in to
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give more flexibly to manage these cuts in a way to reduce any dislocations that might take place. melissa: something the senator just said jumped out at me when he said without the continuing resolution we can't keep washington open. oh, no. goodness. >> let's test that proposition. melissa: that would be pretty distressing given how they are operating right now, are not so much? >> it is always a good idea to have washington with a few days off and spend less of our money but that is not the way washington works, of course. if it has a few days off, they will find a way to spend the money. the big picture question here is with respect to sequester and the debt ceiling in overall spending trajectories, what are we doing with entitlement? this doesn't deal with the drivers of our debt, that is the fundamental problem here.
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there may be a short-term in the economy as kevin suggested, i don't think you should shrug that off, but what is happening here, the discussion is focused on things that will not solve the long-term debt trajectory. melissa: we're talking about things that are really distressing. about 10,000 kids in texas aren't going to be getting their vaccines, getting whooping cough and measles vaccine, it is a very scary thing to say to people who have kids about this potential cut. do you think that is true, that is going to happen? >> now. the amount of job cuts that are projected to take place announced with very area varioun government, you will see a reduction in not so much actual layoffs and unemployment going higher. it is clearly a scare tactic.
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how the whole debate was shaped up by the administration required higher taxes, that notable not get higher taxes after the tax break that was put in place by the start of this year. the compromise isn't much. and in fact, that hasn't been really any clear alternative plan for spending cuts, so it has been very disappointing. i would like to see the administration coming out with a budget proposal sometime in march as well, so that is another thing that hopefully we will see some incredible deficit reduction plan because right now we haven't gotten anything. melissa: we saw on that screen, and white house has put out 10,000 kids not getting their shots. ray lahood talking about how we will not have repairs we need on runaways, flights delayed by 90 minutes. we are not talking about tackling entitlement problem. >> that is right. that is the long-term challenge of medicare, medicaid. those numbers explode in the out
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years. not compressing aggregate demand when the economy is so fragile that into place things that will gradually over 20, 30, 40 years get it: to cram down making our country healthier. that doesn't seem to be on the menu right now. the good news is right now this is a lot of noise, medications going on. in the long run, reality will win out in the cuts will have the effect they have, and we will go forward and probably provide more flexibly and how to implement them and god willing we will get a real debate on entitlements but i am not optimistic about that right now. this is probably the last chapter of the deficit reduction saga for a while. the two sides are just so polarized. melissa: thank you to all of you for joining us. we appreciate it. president obama sounding the alarm about the sequester cuts, but is it another attempt to scare them into a deal?
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we will talk with former mississippi governor. and could a doctor shortage caused chaos in the sunshine state? we have the prognosis. more "money" coming up. ♪ ♪
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♪ melissa: so we just heard our "money" power panel weighing in on the headlights you are seeing just a gross exaggeration? who knows. the white house released state-by-state reports on services that would be cut under these cuts. his president obama's last ditch effort to intimidate republicans into a compromise? joining me now, former governor. thank you for coming on the show. >> thank you, melissa. melissa: let me get right to it. the claims are scary to the average person listening to them, i don't know whether it is true or not. leasing new federal land would be delayed, talking about oil and gas production which is
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obviously a big source of jobs and revenue not to mention energy. with fewer resources available for agencies to prepare for and conduct lease sales. the permitting process would be slowed down dramatically. do you believe that? speak unfortunately that was the experience in the first obama administration where they had a moratorium on leasing offshore. there could be some minor effect on this. this is all a big scare campaign to try to scare the american people and to make the republicans, as you said, intimidated. i think it won't succeed. to my home state mississippi you mentioned i put out for each state, here is what they would lose. we would lose $5.4 million of the federal aid to education. but k-12 education budget is
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$4.5 billion. so we're talking about losing one-tenth of 1%. can you imagine? melissa: when i talk about slowing down federal land, right now the wait time on averages 228 days anyway if you want to get a permit to drill on federal land. the threat of slowing it down even further, i'm not sure what difference it makes. they also talk about ray lahood has been out making the rounds at making pretty scary predictions about what would have been in the sector, for example. he talks about 90 minute delays travelers would see, and even scarier than that he talks about repairs on runway vehicles, that wouldn't happen for would have to wait for that to happen. he makes it seem we would all be in danger if we wanted to fly.
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>> flights to major cities like new york, chicago and san francisco and others experienced delays up to 90 minutes during peak hours. because we have fewer controllers on staff. preventative maintenance and quick repair of runway equipment may not be possible which could lead to more delays. and once airlines see the potential impact of these furloughs, we expect they will change their schedules and cancel flights. melissa: so, governor, that is quite a threat. your flight will be canceled, they won't have as many controllers in the sky. do you believe that? >> no, don't believe any of it. the faa alone has $500 billion of outside consulting contracts. they already had established they would have a reduction in their budget to save tens of millions of dollars for that.
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now we are talking about an agency whose budget has gone up 30 some percent, but in the last 10 years american air travel has gone down 20% and they are saying they can save 5%? give me a break, they can manage their way out of a wet paper bag if that was true. here's a real danger of the american people. the obama administration has become so vested, so invested, it is scaring people and having a terrible outcome, now their political interest is for the outcome to be terrible. instead of managing. melissa: along those lines before we run out of time, it is either really scary or really cheap politics. around 9730 fewer children will receive vaccines for diseases like measles, mumps, tetanus, influenza because of cutbacks in funding of half a million
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dollars. will they never get their shots? is it true? >> i will bet you had secretary lahood said these things could happen, that says it could happen. if the administration makes the worst possible management positions, you will have the worst outcomes. if they make halfway decent decisions, the right option will get funded and the savings, there are plenty of savings in these accounts. when i was governor we were spending 9.4% because of the recession. wthey managed it right, nobody ever missed it. we're talking 2.5% in the biggest cuts above 5%. if they can't manage that, they ought to get another job. melissa: to threaten people into doing something is crazy. thank you for spending time on our show, we appreciate it. >> thank you, melissa. melissa: it is day one of the
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trial against bp to determine how much the oil giant should pay for the worst offshore oil spill. in opening statements, justice department lawyers said before people, safety and environment. 11 workers died when the rig exploded back in 2010. the business roundtable offered ways to boost the economy by producing more oil and gas, upping energy efficiency and supporting renewable power. reports also suggest streamlining the process and approval for projects like pipeline. prices at the pump leveled off breaking a month-long spike, today the average price for a gallon of gas hits $3.77, still up $0.44 from a month ago. that is a big jump. coming up, florida residents needing a doctor. your brace themselves for extra long lines. the state plans to add a million new people to the medicaid program, but guess what, there could be a drastic doctor
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shortage. and talk about a major buzz kill. an obscure provision in the tax code means some medical marijuana dispensers are coughing up to 75% of their income to uncle sam. we are not just blowing smoke on this one. can you ever have too much "markets now"? "money"? ♪ [ male announcer ] i've seen incredib things.
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♪ melissa: the newest challenge for the upcoming health care law could be a doctor shortage. here on "money" we told you about the pending shortage in california. now looks like florida is facing a similar situation as governor scott looks to extend medicaid coverage to a million more people. it's like a catch-22. states being forced to increase patient coverage, but there
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simply aren't enough doctors to go around. joining me with the unfortunate diagnosis is rebecca l. harris, vice president of gruntal of clarity of affairs with the florida medical association. how do you provide care to another million florida residents? were they getting care anyway and this just changes the way it is paid for? >> well, i think the answer to your question is that right now florida has about 14,500 primary care physicians, and there are about 13,000 in nurse practitioners also practicing currently in the state of florida, so we believe that the short-term answer to this issue is to be a lot more efficient with how we are providing care to florida's population. how we do that? we do that through increased use of physician-led teams with the patient at the center being cared for, a team of professionals including the
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physician, nurse practitioner -- melissa: so this is what the seven california as well, you have tough three nurses up to do more things and even pharmacists to be able to do more things in order to serve the people. what i am wondering is, how does it change things? if you put another million people on medicaid, how does that change the financial dynamics? because word those people getting health care before? i mean, is it that the people who care for them are going to be paid less? what really changes? >> well, one of the things that hopefully will change for the better is that when you have more health care providers that are working together in teams led by a physician that does population that needs to be served, it's done in a more efficient manner which means that they are not going to be provided care in emergency rooms which are notoriously expensive for delivering health care services. so what we want to do is ensure that primary care is accessible through your primary care providers and not just hospital
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emergency rooms. melissa: okay, but how does it change things? did you had a million people to medicare, how does that change things? medicate, pardon me. a million people to medicate. what does that change? of the doctors paid less? why should our audience be worried? why is it make the doctor shortage more critical? >> the primary reason why we should be worried about it and concerned about it is that -- at this time medicaid reimbursements are notoriously low. in fact and it is not unusual for physicians to lose money in medicaid patients. often more cost-effective for physicians to provide free medical care that it is to provide care to a medicaid patient. so the reason it is cause for concern is that adding a million additional people to the medicaid system means that there needs to be some sort of incentive for physicians and other health care providers to see those additional people. melissa: it makes perfect sense, and when you're trying to dig at the stats for this camino, we
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found that it is anticipated right now that the state is going to be about 752 dr. short in the near term, but i also saw that it is estimated that primary care physicians make about $226,000 in florida. that isn't enough money to attract more people into the field to be primary-care physicians? does that number right to you? it seems like a lot of money. >> that does seem like a lot of money, and it seems a little bit high to me based upon the figures that i have seen. i think there may be some conflicting data on that. primary-care physicians in general are not paid as well as the specialists are. and when you couple that with the cost of administrative costs and overhead of doing business coupled with exceedingly high medical school loans, it quickly becomes a less than rosy financial picture for many of them. melissa: no matter how you place it and another was to you're talking to calm everyone is saying the same thing, as a
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result of everything is going on in health care since -- you just aren't going to be a lousy doctor. you will see a nurse or pharmacist for someone else and be read as a doctor in the background, and that is the reality we are going to. thank you for coming and the show. >> thank you. melissa: up next on "money", an obscure tax code provision means medical marijuana dispensaries could get smoked out of the business. we will explain that one. here comes the taxman. and how did you do in your oscar pool? we asked a mental list to make his pick for the academy when his last friday. did he get in right? and so serious. stay right here for the big reveal. even we don't know yet. piles of "money" coming up. ♪ look, if you have copd like me, you know it can be hard to breathe, and how that feels. copd includes chronic bronchitis and emphysema. spiriva helps control my copd symptoms by keeping my airways open for 24 hours.
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♪ melissa: and going to step back. marijuana dealers in colorado, dispensary and is being slapped with massive income taxes, saying tax rates of up to 75%. how is that possible? extends from the text said more than 30 years ago to prevent illegal drug traffickers from deducting related expenses on they're income taxes. and not sure how that was ever possible. make sense of all of this. i have an advocate -- i am trying to make sense of all of it and i advocate taxing marijuana, but at the rate that
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i wonder if it will just push it back into the black market. joining me now, specializing in medical marijuana taxes. help me sort out everything i tried to just say and even what is going on here. out in its tax rate possibly be 65-75%? i don't get that. >> well, your comment is absolutely correct. it relates to a tax law that was passed in 1986 in response to attacks court case that the irs lost to a drug dealer. they wanted to fix it, so they fixed it with an act of congress , an irs provision called code section 280b, which allows for the deduction of the drugs themselves or, in our case here, the cost of growing medical marijuana, but it denies the overhead costs, such as cell phones and cars and other overhead type costs.
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so what that translates to here in colorado where we have a legal retail business is that all of the costs of growing the plant are deductible which would include warehouse, rent, utilities, nutrients, irrigation systems and the lights, but it denies them the deduction for their retail cost of advertising, retail labor and retail -- melissa: okay. let me back you up just a little bit. how was it that an illegal drug dealer in the past was paying taxes and claiming deductions and was in court fighting a tax felony? was in the illegal drug dealer? >> that's true, but u.s. citizens are all taxed on their worldwide income, whether it is derived from legal or illegal sources. so even if you are in an illegal business, used only to file a tax return. melissa: and people actually do that? image, isn't that admitting you are in of -- in an illegal business? at up the advantages that you didn't pay taxes.
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>> well, sometimes they do it after the fact. melissa: okay. all right. is there any way around this? because to me the problem -- you know, i always thought it makes sense to legalize and tax it. that way, you know, the government can collect revenue and media with some of the other problems because you're not going to make a light, but it does raid you're taxing the planned effective rate of 75 percentage since you will drive it back underground on a black market so that they can avoid paying taxes. >> very true. this industry has a natural color on it if you make it too expensive or too heavily taxed it would go back to the black market. we are working hard in colorado to try to bring it out of the black market and make it safe, legal, and taxed for adults here. melissa: is there anyway to get around this? >> there is not a lot of agreement. i do the tax returns for several dozen dispenser reclines in
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colorado. we have an integrated model, which means that the dispensaries have to grow their own medicine for they're patience. we call it medicine here in colorado. and so they -- their required to do by state law. they are taking the position that this law should not apply to them. the iris is vigorously enforcing this law in colorado. under audits, and i do consult with many of these businesses. the irs takes the position that this law does apply to them. therefore they have to pay tax, sales less cost. effectively puts them in as 65-75% tax bracket. in 2013 there will be cases that go to either tax or or federal district court here in denver, challenging the irs. at this point the irs and this industry agree to disagree. melissa: interesting to watch because if you tax it that much you're going to drive up the
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price so that they can still stay in business. that will drive more people to the black market. no matter how you slice it it's sort of defeats the purpose that a 75% tax rate -- anyway, we will once the story. thanks for coming on. >> thank you. melissa: did our mental list really make the right oscar predictions? we are dying to know, and we are just moments away from opening the lockbox that has had his picks seal the way since ffiday afternoon. look, there it is. no one has touched it. i have the key. you don't want to miss this. at the end of the day, it is all about money. maybe there's money in here. ♪ @í
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♪ melissa: okay. this is all you have been waiting for. last friday show. mind reader. gracious enough to come on with his predictions about who would win the oscars. look, their ceiling it. we lock them up on our set. our own adam shapiro. we put them in the box. now we have the bought back -- the box back. looking back to the show. >> thanks for having me. melissa: let's get right to this
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>> is to make sure no one touched this, this has been with her producer. melissa: nowhere near it. and there was the envelope with the fee that at a murderer on there. and i don't want to touch that at all. melissa: all right. >> and inside is my prediction of a. of one utah open that for the first time. the predictions are inside. melissa: okay. so exciting. i feel like i'm at the oscars. this is like the big winner. >> of take that from you just to show kind of what i had year. a couple of categories. just off the bat i had predicted we were talking about supporting actor. ann hathaway then i wrote down right on top here. not too bad. the next one, supporting actor is a little tricky. a coin flip. it could have gone either way. actually ended up on the wrong side of that. that's all right. as is with the 11 nominations for lincoln, but there would have a really strong chance.
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melissa: that there would get something. >> these are the really important ones coming up. for best actress we actually -- i wrote down jennifer lawrence. that was correct. melissa: did you write down anywhere on the that she wiped out? >> i have a feeling someone might have. melissa: that would of been huge. >> and m1 to put that in case i was wrong. melissa: let's move on to a best actor. >> best actor. a lot of grit contenders in this one. really all five nominees probably could have won this. i was pretty confident that it was going to be daniel day-lewis so that is also a corrected as well. not too bad. not too bad. melissa: you're doing very well. >> and this is not 100 percent. what i do is just -- i know movie expert. at picked good feeling space of a prince and everything like that. sometimes i make good guesses and sometimes they don't have exactly right. and the next category, best director, one of the hardest to predict.
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usually it follows in line with best picture as well. and we obviously know who won, ben affleck was not nominated. melissa: and ready to come up with. >> this is tricky. it was between steven spielberg. >> so was i. >> ipads bill burke. think that is the wrong spelling. melissa: right. >> i was hoping it would give it to him because he lost for brought back mountain. melissa: show me. >> the last one was the key one to win of the oscar pools. i pixar go. melissa: okay. okay. a couple of coin flips. it went awry when a couple of things. melissa: i love you. i did better than this. these movies. what is your methodology? what makes you a mental list? >> it was not just guessing. following trends and everything like that, so trying to find all four.
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it could have gone anyway really. if you think about the number of combinations and everything like that. still pretty spot on. melissa: did you bet? >> all the best picture because that is the one. melissa: and fox business. >> exactly. melissa: you made money on this. thank you for coming on. >> no problem. melissa: coming upon "money," who could forget this scene? amir streaking across teeseven across the skies an exploding of russia. looks like we does a bullet on this one, but neither is as serious plan -- to prevent a big asteroid from destroying the earth. the astronauts did coming up next. you never have too much "money." even definitely have to many asteroids. ♪ [ male announcer ] you are a business pro.
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♪ melissa: all right, it is time for little fun with "spare change." thank you both for joining us. what did you think? >> i have decided i will do a job as a mentalist. i went five for mack six. i didn't see any of the films read doing better than he did.
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melissa: remember the acid that exploded over russia? who could forget this? now researchers are spending $350 million on a project that would shoot a rocket into an asteroid as it passes by the earth. if it is successfully the first time humans not mastered off course. to me this sounds like money well spent. i like to be protected from an asteroid, why not. >> think about it, found those asteroids hit somewhere near the earth, it could destroy a city, a town. in asteroid destroyed all the dinosaurs. absolutely. melissa: or should we get the mentalist to be back and tell us when it will hit? >> is just a bunch of science boys and girls who want a new project. the one that hit in russia,
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nobody died, it shattered windows. the way we respond to anything in this country is in response to a crisis. and then let's do it. melissa: when it is almost here. >> spend the money. melissa: in case you missed it this weekend, check out the awkward moment from the daytona 500. she bumped into 50-cent, take a listen. >> of course, 50-cent here. good to see you. what are you doing here? >> i'm enjoying all the festivities. melissa: he tried to kiss her. i think he was going for the
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lips, but i don't know. we didn't even play the end when she says "did you see that?" i have interviewed him before, he was very shy. >> he is a smart businessman, he really is. it is not like he went up and grab a body part. he gave her this innocent kiss on the cheek. he hurt his image for being a thug. melissa: that is a good point. he has a lot of businesses. he can do worse. next one, in sweden, the hotel is offering $10 per night. so cheap. the catch is no blanket, no pillow, no bed. you're paying to experience life as a homeless person. at least the money goes to a good cause, donated to charity.

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