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tv   MONEY With Melissa Francis  FOX Business  June 21, 2013 5:00pm-6:01pm EDT

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her glove to their face. currently selling for $1500. david: it looks like a joke, but it works. liz: "money" with melissa francis is next. melissa: i am melissa francis enters what is "money" tonight. crisis management for the fed. they said bernanke never should've opened his mouth this week. with the fed making a financial mess, how to prepare with what is coming next. and surviving the apocalypse in style. california developer opening the world's largest doomsday shelter and resort. where do i make my reservation? the man behind it is with our spirit and who lost money to a? so much money it would make john b rockefeller cry. even when they say t is not, it is always about "money."
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melissa: it is the end of a very tumultuous week on wall street and it is time for some street crisis management for the fed. you are entering the spin zone. ben bernanke getting flight for statements he made about the possibility of using off the bond buying program coming two days of the fed chairman was basically fired on the charlie rose show. i don't know if you saw this, lots of moving pieces but we want to let you know what you have to do to protect yourself in the midst of all of it. welcome back to the show. jack, let me start with you. have the wheels come off the fed here? it had been quite a week for those guys. >> i don't know what the dissent is about. i was supposed to keep interest rates near zero forever? at this point you are trading off this much improvement in the
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economy versus this much distortion of every kind of asset class investors have a choice of. it is time, isn't it? melissa: that is not really what we're talking about. we're talking bu with the chaos that ensued this week. for example, let me play the sound bite president obama basically fired ben bernanke and charlie rose. we will get both your reactions on the other side. president obama: i think ben bernanke has done an excellent job. he is like fiv bob mueller. he stayed a lot longer than he wanted or he was supposed to. >> but if he wanted to be reappointed, you would reappoint him? president obama: he has been outstanding partner along with the white house. melissa: what? that is nottreally a ringing endorsement. that is like somebody saying how is your husband? that is like somebody saying he has been outstanding partner
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until now. >> anybody can be a loose cannon, it is just odd it is the president of the united states? melissa: was that a loose cannon? >> he is not going to jackson hole, that was a little odd. he has been telegraphing things and a lot of people say he is tired, this has been exhausting, and this is not what he had in mind when he became chairman of the fed. >> he was looking at his shoes when he said that. melissa: he stayed a lot longer than he was supposed to or wanted to. that is pretty harsh. not surprising ben berranke rocks the boat and little bit. then coming out today saying maybe we will have more accommodation down the road if we need it going against everything ben bernanke said, which is sort of all over the map. where does that leave investors? >> it is unusual to see a press
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release like that, it already is a tumultuous time for the market. i don't think there's any kind of financial armageddon. keep in mind the market is double in about four years, treasury rates are up, were two and .5% for the average over the past 50 years, so we don't have skyrocketing interest rates. melissa: the whole point is we need these guys. they have done policy we've never seen before in our lives. we need them to dismount in the cleanest way possible to get out of it. so far just this week it has been utter chaos. my favorite comment with all of these different things during the week. lawrence mcdonald tweeted if somebody a lot of us follow, on tv, portfolio manager needed
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$3.570 trillion-ton hedge fund unlimited, no marked market, key federal reserve. does not inspire confidence? everybody is joking about what is going on. it does tell you don't have a lot of confidence of what is going on. >> it is so much better they are telling us this stuff, we don't want to invest blindly. melissa: they are telling us all different things. ben bernanke says we are getting out, president obama says he is fired, telling us what? >> bernanke started on the 22nd of may giving us the first inkling there thinking about it, and the comments this week really dealt with the fact that we are creating a plan to taper. this is a very good thing, so much better to have a plan meant to be shooting from the hips. melissa: it means interest rates are going up, my thought is give anything interest-rate sensitive
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whether it is an adjustable mortgage or credit card rates you want to keep an eye on that, maybe it is a great time in real estate to transact. this is probably as good as the rate are going to be. it is the most money that a buyer is going to have. >> buyers may rush and because they have been waiting to see what will happen, now they have a real choice of interest rates go up every point that goes up they lose purchasing power or borrowing power. you can push the real estate market up in the short run. melissa: in the long run it is bad for the real estate market because higher interest rates make it tougher. >> i'm on the fence looking for a little less of the mortgage rate before they buy, that ship has sailed. investors hold onto extra cash because there's a possibility both stocks and bonds are weak at the same time. they said rice now inflation is coming down, interest rates are going up, which is a rarity.
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at that time tech stocks outperformed, utilities got hurt, recommending the same thing right now. melissa: good stuff. time for the fuel gauge report. china and russia signing $270 billion oil deal, one of the biggest in history. doubling supplies to china. could reach up to 900,000 barrels per day. the 25 year deal makes chin chie biggest customer for russian oil. u.s. gasoline demand for may fell to 13 year low, demand served by 3.3% to about 8.7 million barrels per day. oil futures getting smacked for a second session. a stronger u.s. dollar largely fueling oil decline post in the biggest two-day drop in a year. crude settled $93.69 per barrel. up next michael dell versus carl
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icahn. the face-off only the power of money could create. how does turning personal now. plus reason the government has gotten so good at spying on you is because it is coaching top talent from silicon valley. maybe you didn't know that. a stunning revelation in the nsa scandal. more "money" coming up.
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melissa: the battle between two wall street titans is getting bigger and personal, by the way. michael dell launching a personal pitch to buy out his ubiquitous company, but will it deliver orwell carl icahn when out? is all about the power of money. great to have you both on the show. this is battle of the titans, these are two enormous egos out there, how do you size of the whole think which mark >> i see delwin, icahn losing. the best way was to get a
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private bed from the equity. carl icahn can do a lot of great noise and smoke and a lot of activity, but when it comes down to it the shareholder will have to say that he wants to take this offer or do we not? given the market where they are, they will take the offer of $14 per share. melissa: his basically saying silverlake will win at the end of the day. >> people would rather side with the guy that started the company in his dorm room then the wall street raider. melissa: he has kind of driven it into the ground, right? >> by that logic every tech ceo who isn't apple or samsung should be fired because they all missed the smart phone revolution. go down the line, everybody screwed up. that was original cornerstone of the business. that is a dying business and it is easy to say he won the smart
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phone and pad revolution, but it is hard to compete. melissa: dennis, here you have michael dell's goal plan how he will turn the company around. we were talking about if he has this brilliance, why hasn't he done it already, why doesn't he do it while the company is public? >> i agree with you. if you read this, and it doesn't take long, you will be relatively uninspired by what wh michael dell has to say. it is generic, it does not say anything. whether he says anything here or not or if carl icahn is the right person to be a part of dell, there's only one thing that matters, to shareholders want to accept the price for dell right now? the price of the stock is below the $14 offer. it will probably be accepted, although it will not be easy. melissa: are you a shareholder? >> we all own it through mutual
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funds indirectly. the public only owns apple directly. melissa: so give me the $14 get me out of the stock? >> i think playing a proxy movement, executives try to pretend the company was worthless to buy the stock at a cheap price putting the bad ceo in. that is what the spin is here, down talking the stock to take it private. melissa: so you think it has more value. why, what is so valuable? >> it is a longshot, but there is still an angle to be some sort of ibm ask type of software company. it is not a huge growth opportunity, but i think there is something there that is more valuable than the current share price. a lot of non-apple, samsung companies today. melissa: is that possible?
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>> it is certainly possible. what does the guy at the top of the letter know that i don't and should i trust him, or should i not? >> j.crew, it went private after the ceo basically forced and offer down his shareholder's throat. making a fair point in that those dynamics. but as it stands now, roughly 15% or so of shares. melissa: other than him knowing something we don't, what would be his other reason for wanting to take it public? >> vanity. it is his business, you don't want it to die. it is called dell. there's a certain element you want it to succeed. melissa: so vanity or he knows something we don't. what is your bets? >> i think it is still worth
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more than it is. we will go private at some point. melissa: dennis, what do you think? >> the answer is both. melissa: how can it be both? pick one. >> they can both be motivations. in the end, the shareholders are going to bite. melissa: you are fantastic, thank you. if you knew facebook former chief security officer but feel like he has dropped off the radar, here is why. he is now working for the nsa and he is not alone. we will tell you how silicon valley is getting help to the government's prying eyes. and former enron ceo hits 10 years. and it could be a dream come true for white-collar criminals. stay right where you are and find out why. can you ever have too much "money"?
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melissa: weather is on wall street or main street, here is to make money today. i can start with who made money. larry ellison, ceo of oracle, lost so much money i have to do that one first be at oracle's latest earnings were a big disappointment on wall street as a result the shares plunged more than 9% today. so larry ellison owns 1.1 billion shares of oracle many he lost $3.4 billion today. i had to put that in perspective. he bought the whole island of lanai last year for $300 million. when you lose the equivalent of 11 hawaiian islands today. wow. trying to make money today, starbucks raising current costly first time in almost two years. average price hike will be about
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1%. starbucks blames rising rent and labor cost for the increase and the miami heat championship when proving a ratings gold mine for abc. nearly 18% of you at home watched game seven last night according to nielsen. the second highest rating for an nba game in 11 years. a sign of the times and congratulations. so have you been following the nsa scandal you may wonder how tight the government really is with big tech companies like facebook, for example. a shocking report shows facebook former security chief max kelly left to go to work with the nsa back in 2010 and he is not the only big tech exec make the move to government spy agency. bringing up a lot of questions and concerns, namely what kind of info are these employees bringing to their new job. with me on this development managing director of techno- buffalo, welcome back to the show, roy.
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>> thank you. melissa: should we be afraid of this? this is a guy who was in charge of protecting our own private personal information on facebook and he eventually took the knowledge and the keys of the kingdom and went to go work for an agency that is now spying on us. >> i think we have to assume that employees as tech companies like facebook, google, skype, they have this information and they're going to go somewhere and may beat the nsa and feed that. melissa: we have to assume that everything we put online could eventually be handed over to people who are spying on us? and you just have to be satisfied with that? >> they have policies in place, but when you turn into reality you will see that information isn't always word is supposed to be. we will claim it is 100% locks down, but how may times have we seen leaks weathered his credit card information or online
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information leaks either accidentally or a hole in the security software or malicious hackers going in and getting the information. i can't say that people are always going to be secure. i think people are under the assumption that put something online it will be there for public consumption. it is beyond that, it is the metadata, stuff you don't necessarily see. melissa: what will be his motivation a place like facebook. you have to imagine at the level he was at he was making a lot of money and owned a lot of stock and did really well. why would you leave and go and work for the government? >> maybe it is a greater challenge, facebook has been a huge supporter of helping fight crime a couple of years ago. i ammnot saying this particular security official but the most recent security official actually implemented a program where they can search through content, so there was anything that is a sexual predator
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putting in language that would be a little worry some for law enforcement, they would openly give that i out and they have actually stated their policy is as long as there is a court order or any type of subpoena they would hand that information freely in order to protect users and at that point they were under a lot of pressure to help especially with lots of sexual predators lurking on facebook. melissa: when i have asked the hackers and the like going from the private sector to work for the nsa or any government agency for a lot less, they say they are allowed to do things when you're working for the nsa that yoyou're not allowed to do in regular life, you can spy in a way that you can't do for a private company so you combine that ability and ambition with somebody who knows the instrumenintimateins and outs of
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google and a powerful an entity that can spy on us or than ever imagined. >> definitely. in terms of national security, in terms of our own security, privately, you are going to see the internet as the next for him. whether that is in a proactive manner or a reactive manner. so for someone to leave from silicon valley, the constraints of regulations and whatever else, maybe you go to the nsa, maybe you go to another government agency, but you get that level of freedom to go out and use your talents to make your mark. melissa: thank you so much for coming on the show, appreciate your time. on "money." he committed one of the worst acts of fraud in u.s. history. the former enron ceo is now getting out of prison 10 years ahead of schedule. we will explain why this is
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music to the ears of white-collar criminals everywhere. and senators wanted to block the u.s. military funding for rebels. but we have to spend even more if we don't act now? breaking down the numbers for us. "piles of money" coming up next. . copd includes emphysema and chronic bronchitis. spiriva is a once-daily inhaled copd maintenance treatment that helps opemy obstructed airways for a full 24 hours. yoyou know, spiriva helps me brehe easr. spiriva handihaler tiotropiumbr does not replace fast-acting inhalers for sudden symptoms. tell your doctor if you ve kidney problems, glaucoma, trouble urinating, or an enlarg prostate. these may worsen with spiriva. discuss l dicines you take, even eye drops. stop taking spiriva and seek immediate medical help if your breathing suddenly worsens,
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melissa: new developments in the case of white-collar felon, former enron ceo has served six and half years of 24 year sentence so far for bringing on the world's largest energy trader. one of the worst acts of corporate fraud in u.s. history but today his sentence was dropped by 10 years. so what does his short and sentence mean white-collar criminals? here with the dish is our go to lawyer. >> "dish"? is that a legal term? melissa: it is, you should know. what is the deal? >> he gets convicted, gets a huge sentence. melissa: he did not kill anyone. >> $60 billion in enron stock rendered worthless.
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$2 billion employee pension rented worthless. that is a lot of money going on. more importantly, it is a lot of people who got affected. lives were ruined, lives were destroyed. so he gets a really rough sentence, supposed to get sentenced, he dies so that wipes out his conviction. he appeals all the way up to the supreme court, and the supreme court basically rules in his favor saying one of the convictions against him was improper, they go to a lower court, should there be a new trial, the bottom line is they say that he was sentenced to nine years too many, and for them not to re-appeal, because he could have, the government said look -- melissa: in what? >> the guideline tabulations. a very competent way. they applied things the wrong
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way, in federal court unlike state court to figure out a sentence you need a small calculus degree, it is crazy. the judges said you did this the wrong way, can about this the wrong way, therefore at least nine years he has tacked on that should not be tacked on. melissa: the scuttlebutt on this all week long had been the sentences are up late. has been very stiff. is this the beginning of a reduction in the sentences, which ruined a lot of lives. many businesses are longer than murder convictions. >> correct. literally a murder conviction in effect one person and one family, this affected. melissa: as opposed to i don't have money. >> there are these charges on the federal law that when you commit a crime you start off at
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below baselevel, and then depending on how much money was stolen or how much fraud or how much tax evasion, that is what you come up with the numbers. just a minimal amount like 100 million you are at one level, when it is at 60 billion, you are at the highest levels, literally off the charts. a state supreme court said the way they convicted him was not done properly, so yes, a door has been opened to criminal defendants to tell government you need to prosecute us in this way, not in that way. it might have late and the load on them. they did some bad stuff, they heard a lot of retired people. you go from thinking i have a half a million dollars in the bank and i'm 80 years old to i
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have nothing in the bank and i am 80 years old we had hello. melissa: you did a great job. there is smoke coming out of your ears. >> thank you, folks. melissa: the unsettling situation in syria, all eyes are on the reports of chemical weapons use and frightening images escalating violence. now some lawmakers here at home are trying to block any u.s. funding to armed rebels. of course we know the stories about a lot more than money. an enormous human toll, but we're going to focus on that angle. a closer look at whether or not it would cost us more to get involved now or not. joining us now at his take, president of the american islamic form for democracy. always great to have you. >> it is great to be with you. melissa: we're trying to break down the cost as we said huge human toll.
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for humanitarian reasons you may or may not want to get involved but looking at just the dollar part of it, what is the cost of doing nothing at this point? >> we have two and half years of the revolution to know what that cost is. from the university it looks like in jordan cost $335 per refugee to hel house them per y. millions have been displaced in syria. jordan is paying for some of it, but we are paying a lot of it, over half a billion dollars into the region and it is looking like the refugees will reach 6 million by the end of the year and our money will be in the billions whether we do nothing, it will be a part of the region if we continue to maintain stability the humanitarian aid is not only the commissio compae thing to do, has to be done militarily, or else the entire
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region will implode with our ally in the region israel will be threatened. melissa: if we do something, that will be expensive. and no-fly zone would cost $1.4 billion. and it expands from there, right? >> the no-fly zone, libya was a bit cheaper, but more like iraq, syria has a more sophisticated option that would have to be taken out. still they say the cost and a lot of experts have said the cost will be less, it is a bargain if we can and this war earlier because look, two and half years have proven this war is going nowhere and maybe winning as far as militarily, but the attrition from the syrian army continues, only how long, how many months or years
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it will fall, for he wants to have a play in the region and be involved in the right side of history and move them, first as a strategy and second defeat al qaeda. we have to be on the right side of history to fight against the iran. not with troops. melissa: some are arguing it is too late for that. early on we could have been fighting against hezbollah and the sod. we first saw pictures of children being slaughtered, that was a ime to be involved, but we didn't. at this point al qaeda and extremists have gotten involved. it is not our fight, neither of those folks are our friends, we should just stay out of it. the last word on why you don't agree with that, if you don't. >> characterized the opposition is just not correct, the syrian population has become more radicalized and more chaotic and
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committing atrocities but that is because we have done nothing. if we come to the side of helping the millions of syrians in this opposition we will help defeat the ultimate source of the radicalization which is a sod. the forms of terror in the middle east is iran. they believe doing nothing will allow al qaeda to die actually they are thriving without our involvement so the question is which side has less terror? melissa: thank you for your thoughts, we always appreciate it. we have some breaking news on facebook. fox business with the latest. what do you have? >> facebook is confirming on their website a security breach has exposed 6 million e-mail addresses and telephone numbers. let me tell you more of what they are saying on the website. they found through the security research and program that they
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use that may have allowed some person's contact information e-mail or phone number to be accessed by people who either had some contact information about the person or some connection to that person. so they are saying 6 million e-mail addresses and telephone numbers were shared, but facebook was very quick to note no other types of personal or financial information were included and only people on facebook, not developers or advertisers had access to this information. so certainly a very alarming security breach has happened at facebook and we will continue to bring you more later, melissa. melissa: jo, thank you very much. surviving the end of the world sounds tough. indoor pool, bowling alley, maybe it wouldn't be that bad. california developer opening the largest doomsday shelter.
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he is taking reservations. he joins us with all the details because at the end of the day, the end of the world, it is all about "money." ♪
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melissa: talk about surviving in style. survivor shelter and resort is the largest doomsday shelter out there. for a few thousand dollars you can be safe from any number of impending disasters. nestled 100 feet below, and you can live in your shelter in your very own rv for up to a year. there is big money to be made in the bunker business. founder and ceo and the owner of the fabulous shelter, thank you so much for coming on. >> my honor. melissa: i understand this is a space the army previously used, they auctioned it off. what made you the idea to turn it into a doomsday shelter? >> we have been in the shoulder business for the last five years building vivo shelters around the world.
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whenever a government facility comes up we try to buy it and retrofitted and convert it into a modern day blast shelter. this one was auctioned and we jumped on it. melissa: what happens when i arrived there? >> it is a turnkey four-star underground hotel/cruise ship. it is everything you could imagine. it is truly a destination resort where you and your family and your children would want to go too many times per year, perhaps in the middle of the winter where it is 70 degrees inside this mountain year round, so you will be very comfortable. melissa: two people come even if there is not a disaster? can i come and hang out? >> you cannot permanently live there, but it is open 24/7 forever. you buy your space and park your rv there. and it is a one time charge, and
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it is yours, you are a co-owner. melissa: does it cost me a million dollars? i read it is $1000 per lineal foot, the average rv is about 30 feet, so that is $30,000, $1500 charge per person, but i don't know what time. how much would it cost me? i have a husband and two kids, what would you charge me? >> you are the perfect nuclear family, and would cost no extra charge for any of those family members, the only thing you're paying for is the rv itself per linear foot. for people for food, that is a one year food, another 6000. $36,000 you've got yourself an investment and a life insurance policy. melissa: how many people have signed up so far? how much money have you made? >> not enough.
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we have had 25,000 applications. the primary problem has been the cost, people cannot afford our other shelters where it is per person as much as $50,000. melissa: how many people have locked it in? >> on this new one, we just announced it last week, we have a few million that have already signed up to it will happen very quickly. about 5000 people, which i like to say is one in a million people on earth. melissa: i am in new york, for example. what kind of doomsday disaster would come my way that i would have enough time to get there? >> say a nuke went off, where about to see a major economic meltdown, which could happen any day, as you know. say the earth was rumbling or an asteroid was on its way.
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it is time to go. you may go and nothing happens. it could be a false alarm, but at least you have somewhere to go. the other 7 billion people will have nowhere to go and they will be scrambling. you want to go, you want to have a safe haven underground effectively a fortress. melissa: thank you for coming on the show, i will be interested to see if you sell out because there is a lot to be afraid of these days, people want an insurance policy. here is our "money" question of the day. how much would you pay? not surprisingly i got a lot of funny responses including less than zero. i would rather die than live in kansas. , on, that was mean. wthey want to hear from more of you. follow me on twitter.
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all right, coming up on "money." bless you, kanye and kim, you gave your baby a name even crazier than we thought possible. and what the middle name is. you can never have too many insane celebrities.
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melissa: all right. welcome to "spare change." reared joined by jarrett guy randolph. thanks to both of you for coming on. a little "spare change" fun on this friday. first, we are going to look at some bark is a work. if it is not already bad enough that you're in the office for your birthday, check this out. this birthday card from a literally just check the box next to your name. can you imagine that? you can add even sign your name anymore. what would you do? you check the box, check, you know, best wishes, happy birthday, get hammered on us. that no. >> this is actually and mastercard and i receive from most of my family members. melissa: you need a new family. what is worst in this car? no car and all? does it have someone else's name? what is worse? >> i misspelled name.
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melissa: he said. >> no one could really spell their names either. melissa: you will be in therapy for a long time. >> i don't think there was follow-through. it was supposed to lead in the something else. melissa: like what? >> a birthday card, i can only imagine what the annual holiday bonus looks like. so for me i would be upset. it. melissa: this is the new case for your iphone that doubles as a stun gun to prevent any accidental discharge users have to put to switches before activating a gun. the case sells for $140. the co-founder says sales could exceed a million dollars this year. is this iimust have wore a lawsuit waiting to happen? what happens when you're absolutely -- at 65 accidentally but dial? >> not only is it a lawsuit, but
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a disaster. i can't tell you how many times i get ms. dialed phones. also, if you are getting -- why would you want to on latch something and security check this. wouldn't you want to go for it? >> i see it value. you will buy a $50 million apartment. i don't see why not. if this actually became an approved apple accessory. melissa: what? >> it's kind of amazing. melissa: a breathalyzer attached to itt >> there will come up with that. the pink ones are the ones that have sold out first. i'm waiting for the camouflage. melissa: how much? >> about $140. melissa: there is your christmas gift. the big baby news of the week, kim kardashian and iraqi -- rapper big daddy have chosen the
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name north for their baby girl. the baby's name is northwest, no middle name. they are running this child's life. or giving it direction. >> not a fan of one direction, the band. melissa: i like that. that was good. >> it is north, south and east, west. i cannot believe we are talking about this right now. there were other names that you could have come up with. lampshade, soda can. they could have named it anything. melissa: one of the worst names ever. as we wrap up the week, our own %-the direction of our economy. take a lesson. >> something is not right about the economy. i am trying to be positive in the economy has expanded of record going back to 2009. but it has consistently weak growth.
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the job market is improving, but not enough to soak up all of the new people coming into the market. jan graduates and democrats. housing seems to be doing better in some places there is another price bubble. it is because there are too few homes for sale are silly because 44 percent of homeowners are either under water or don't have enough equity this celery letter that the same number that there worse off economically than compared to one year ago. a huge portion of the country is still hurting. the market's nervous about the fed slowing down. i did that, but even though i don't like what the fed is done, i don't see them making any big changes, and i do not see his friend our economy jumping out of its bed anytime soon. melissa: that's true. be sure to watch that tom sullivan show this weekend.
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on sunday at 7:00 a.m. and 7:00 p.m. happy friday. thank you for joining us. have a great weekend and i'll see you back here on monday. ♪ gerri: hello. i'm gerri willis. tonight on "the willis report" the banks are at it again. they figured out another way to squeeze you, at the atm. also, the best way to travel with your pet. and in fashion tonight, the unique way for consumers to try and get a little back. >> they are just so cute. gerri: watching out for you tonight on "the willis report". ♪ gerri: all that and more. first, our top story. is t

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