♪ ♪ imus in the morning ♪ >> the president faces big questions, do not expect answers today. good friday morning, everyone. number one, will he out the now bankrupt detroit? 20,000 unionized retired city workers face massive pension cuts. the white house says it's

monitoring the situation. will the president now address directly the irs scandal? it has reached his doorstep. the man who knew about targeting the tea party is a white house political appointee. here is a question for investors, will you buy microsoft, please, or google? their stock has been clobbered, they both delivered bad news. summer doldrums get out of here. "varney & company" is about to begin. to generate income? with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filts and strategies... to get a lis of equity options... evaluate them with our p&lalculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

>> our people in overwhelming support of this president and there ought to be a quid pro quo and you ought to exercise leadership on that, not just that, but why not? after the election of jimmy carter the honorable coleman alexander young, he went to washington d.c., he came back home with some bacon. that's what you do. stuart: that's what you do. you heard it.

bring home the bacon, that from detroit city council woman joanne watson last year, suggested president obama use your tax dollars to bail out detroit. that year old suggestion hangs in the air today. the city filed and what it owes and cannot repay. the pension benefits for unionized emplretirees, 9.2 bil dollars. and there's another 9 billion owed to creditors. the white house says president obama is monitoring the situation. bottom line, detroit's at the end of the line. what will the president do? here is another issue, knocking on the white house door. more developments in the irs scandal. this is the man irs chief council william wilkins, a white house political appointee revealed yesterday to be directly involved in the targeting of tea party groups and this man ties together

political intimidation and politics. this is a very important development and we are on it. about two big names for you, microsoft, oh, dear, and google. their stocks will be down and i mean down big at the opening bell. you can watch them drop if you want to. should you buy on the dip? that's the question though. and please don't forget, yeah, we're still on royal baby watch, waiting for the arrival of the next heir to the throne. will we get the news alert on "varney & company"? oh, ladies and gentlemen, we give in hope. i want to make things more secure.

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you never miss the fun. beard growing contest and go! ♪ win! what's in your wallet? ♪ >> well, yeah, the truth, there's a link that brings the irs scandal closer to the white house, an appointee knew about and monitored the conservative groups during the election. will the president address that? coverage all morning long. we're a minute from the opening bell, larry levin, you're in chicago and looking over your shoulder at detroit. seriously, larry, are you beginning to get nervous in illinois and chicago? are you? >> the issue is that people are kind of, almost like they don't pay attention and that's the issue.

certainly professional traders and investors out there that are serious about their investing, they're paying attention, but for the most part the public don't care. they're almost numb to it. that's the issue. they're numb to the detroit situation and numb to the bailout and we've become numb to that stuff and that's not a good thing. i think for the most part people don't pay attention because our city is in big trouble, also and trying to fix it with casinos and maybe fix it a little bit, but it may not be enough. so, agaii, people are numb to that. stuart: look over your shoulder and start trading, larry, there was a roar behind you. we're off and running, the dow jones industrial average opening after the first 20 seconds, down about 30 points, still above 15-5. and 30, 40 points and 15,516. i've got to take you to the big board because i've got two stocks that are indeed moving big time. i'm going to start. i'll start with microsoft. everybody knows it, i own some of that stock and this we think, it's going to be down, and i

want to know how much. and the new tablet didn't bring in as much money as expected. come in, nicole, i promise not to kill the message injure, where is the stock. >> it's down 9%, worth negative 24 dow points. specific crest this morning, the analyst said it's the biggest miss we've ever seen from microsoft. it looks like everything was weak and the chief financial officer said we have to do it better. that's why we had our restructuring recently. they know this was not a good quarter. stuart: that's true, it's killing me. john laafield, you're in bermuda. you've got the palm trees and the sunshine behind you. would you buy microsoft at $32 a share? >> absolutely not. about a 300 billion dollar market cap right now and the problem you have with microsoft, despite the restructuring, you can't restructure the dynamic and the demographic of the world

and it's shifting away from the pc. this is bad for microsoft, because they've not been able to diversify enough away from microsoft word where it doesn't become a big problem for their company. >> you're killing me, jon. i own it, do you? full disclosure, do you? >> no, sir, i don't. stuart: moving on, nicole, google, another miss this time because of ad sales, the money per ad click down 6%. so where is google stock? >> that's the first thing i noticed when i was reading that report. right now it's down 3 1/2%. obviously, the below the 900 mark when we talked about the analysts having the price target. at 880. there are still analysts who kept their 1,000 price target and may have come down, 10, 20, 30 bucks and there are analysts such as wear and j.p. morgan above the mark. stuart: john layfield still there. would you buy google at 880 a

share? >> no, i like google, i love google, i think they're becoming the new skunk works, the old government planning in moon shot factory. they're doing wonderful things. you've got google glass coming out. you have the map program of google. you have so many different things going on good with google and they're having a bit of a problem with the mobile integration away from the pc. how do you sell ads on mobile and how do you price the ads? that's a bit of a problem. i think that google is going to figure it out. i think they're one of the best tech companies in the world. unlike microsoft, they are the future, but i would not buy the price and i do not own it. stuart: we hear from you, john. we'll be back. ge, clearly a bellwether for the overall economy. it did make more than expected. apparently demand for jet engines and oil drilling equipment pretty strong so ge is up 2 1/2%. that's a figure move for a big stock like that, ge though still at $24 a share. come on back in again, john.

the dow is very close to record territory, 15-5 and change. do you see 16 k anywhere near? i've asked you this before and you've said yes. >> yes, i still do. i think that bernanke and the administration is not going to stop this bond buying program anytime soon. i think this has become political, i really do. i don't think they want the economy to go down on their watch. i think they're going to keep this crack cocaine on the market and if they do, the u.s. market is still the safest place to be. remember when interest rates go up, and the market has gone up, but when interest rates go up here, it's two emerging markets and u.s. markets will still be the place to be so i think that 16 sometime in the next 12 months. >> all right, john, back to the beach for you. thank you, indeed, sir. appreciate it. >> to nicole and chipotle. selling more burritos, look at that, whoa. nicole: google, microsoft, not good news.

chipotle takes off, it's above the 400 mark again, 6 1/2% to the upside, it has great sales and may have to do some price increases because they are facing price increases themselves and they may inturn go back to the customer and raise the full year outlook and opening new restaurants, and just have a burrito. this is great news. >> i mean, look at that price movement. that's huge. i mean, up chipotle, way down for google and microsoft. when you start talking in percentage terms and ge, you know you've got real movement there. nicole, i'm out of time. thanks a lot. and to clem chambers with us today in new york, a fellow brit. still on royal baby watch, aren't you. >> i knew it. stuart: municipal bonds, we've got the bankruptcy of detroit. is it possible that the jitters spread to other cities and that people become reluctant to lend other cities money for municipal

bonds and therefore municipal bond prices come down? do you see that happen? >> i think that uncertainty makes prices go down and there will definitely be uncertainty. everybody knew that detroit was going bust. it's priced in and what happens next, it's what happens yesterday and tomorrow. and that's all in the lab. >> that's the point, isn't it? do you think there's even a remote possibility that the president would bail out the pensioners in detroit and if he did, what happens elsewhere? >> he'd be mad to, but it would be difficult for him not to. and these are pensioners after all. and if detroit is not too big to fail, why are the banks too big to fail. so, it's a whole city here, but it feels like a historical movement where the city is back into the desert, you know, detroit is just going away, isn't it? >> so you think there is a chance that he'll do it? a chance. >> very difficult for him not to. he's going to make enemies anywhere he turns. stuart: wow, move on to stocks because guys like you, you can

put your money anywhere you like, bonds, municipal bonds, stocks, are you into stocks big time? do you see dow 16,000? >> absolutely, in fact, i wrote an article for forbes nine months ago saying just that, they told me off because they said it can't happen. stuart: that's a british expression, they told me off. they don't like-- >> what, what, what are you talking about? and here it is. bonds are going to be weak for a long time and if you've got money in bonds you're going to lose them somewhere. where are you going to move them? not into a banquetbanquets. in a bear market you've got to take your money out and put it in equities. stuart: i see you shaking your head with microsoft and google. >> google, everyone is going to be suing them, left right and center is going to sue them. eu is suing them and got away with it in the u.s., but they're now the big company which everyone is pointing a finger

on, you're a monopolies, you're cheating just like they did to microsoft in '98, '97 google is now that company. never meet up with the governments, they'll break you. stuart: and clem chambers sounding like the bbc. all right. everybody, wait for this. i flew in a private jet and here is why. is it worth it compared to flying first class commercial? the owner of the jet company makes his pitch as we fly. that will be in the next hour. to the big board this friday morning. eight minutes into the trading session, we're down 37 points. not bad, when you've got the microsoft weighing against the dow to the tune of 20 odd points. what about questions for president obama today, if we could ask him. will he bail out detroit? we'll raise that question all through the show and with a michigan lawmaker next.

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>> it's a modest loss being weighed down by a big drop in microsoft. which is a big stop. and the dow is holding right there at 15-5. the price of gold this morning, give us your gold report. 1292. just below $1300 an ounce. here is the market that's moving. oil. 108 per barrel. did he touch 109 earlier. up again today. and that is going to have an impact on the price of gasoline as we head right into the middle of the driving season. what's the price?

the average price today for regular? up again at 3.67. i think we're up roughly 20 cents a gallon over the past two weeks and with oil, 108 and 109. you can expect that price to keep on going up. i tell-- i say it again. fill her up now. we're following three big names that you know this morning and most of you, many of you, i'm sure have an investment in them and start with google. down 3%. $34 lower and google back as we speak and microsoft having new trouble with the new tablet and with windows 8 and microsoft has just dropped below $32 a share, it's down real close to 10%. general electric, going the other way. big jump there, up 4 1/2%, a long time since we've seen a move of 4 1/2%, in a big company like ge. industrial companies good, technology companies not so good. detroit made history yesterday, the city filed for the largest

municipal bankruptcy ever. 18 1/2 billion in debt can't repay. here is the question, will president obama make any move to bail them out? representative from michigan, republican, joins us now. i'm taking this as a remote possibility of a presidential bailout, but a possibility nonetheless. how do you judge it, co congressman? >> i think it's a possibility. i think there will be some people calling for that, however, i think the likelihood is pretty low. >> now, you're in the detroit area, i believe. you represent the surrounding part of detroit. is that correct, sir? >> and actually i'm on the other side of the state about two hours away. however, i was in the state legislature for six years and dealt with-- dealt with detroit extensively of chairman of the commercial committee. this is an issue 60 years in the making, this is not something new and it's time that we deal

with it. >> whose primarily to blame? i'm hearing that the unions get a lot of the blame here. so, too, does the decline of the auto industry. so, too, does population decline. where would you put your finger on blame? >> yeah, it's all of the above with a lot of things that have happened in detroit. you know, this is a city at one point was 1.8 million people. it's now 700,000 people. and you could trace it way, way back. and this, this failure unfortunately has a lot of fathers. stuart: what does the rest of michigan think about this? >> well, that's a great question. yeah, it's a frustration for a lot of the outstate people and make sure that those of us who are not from that direct detroit area aren't doing the "see we told you so." this is a time to stand with detroit, but it's a frustration over the years and glad that the governor and emergency manager are moving ahead with this and it really can be viewed as, i think, an opportunity. you know, the phoenix can rise

here. this is a fresh start for detroit and i hope the people in michigan look at it this way and the people of detroit as well. stuart: you say you're going to stand with the city of detroit, but there's no way around it, creditors to detroit are going to take a massive loss. >> yeah, they are. stuart: and so, probably, are those 20,000 retirees. not much you can do about that, is there? >> the important people to think of here, stuart, are the citizens of detroit, the surrounding areas as well and the citizens of all michigan. again, when i was in the legislature we would pour millions and millions of dollars into detroit trying to rhesus state it, trying to improve it. you know, but when you've got 40% of all the street lights out. you've got 58 minutes for police response, you've got all of these other infrastructure things that have been crumbling over the decades, you've got to go in and fix those things. it's going to take some tough decisions from everybody, the unions, the employees, the citizens, and the people of

michigan. stuart: congressman, clearly, the city's reached the end of the road. it's hit a brick wall. but here is the last question. if you were to vote on a bailout in d.c., a d.c. bailout, would you vote for it? >> a direct bailout, which i don't think it going to be mapping, i couldn't go along with that as it's currently structured, however, i think there's a difference between bawling out a state or a city like this, versus trying to add some help to them. that might be a possibility, the way to structure and ease the burden. stuart: some help, financial help is not out of the question. the congressman, republican michigan, thank you for joining us, sir, we appreciate it. >> thanks, stuart, appreciate it. stuart: yes, sir. another question for the president. where are you? scandals, crisis, they're laughing at us overseas. they want to hear from the chief. nowhere to be found. that's my take and that's next.

>> i don't know why i'm latching. look at microsoft, i own it. biggest loser on the dow. phe big reason why the dow is

down today 52 points. microsoft taking about 20 out of the dow. two out of the box stories for you, bringing it to you in the next hour. first up, have you heard of some of the most popular songs out there now? very sexually suggestive. does sex sell in music? of course it does. we're talking about it. plus, go on a ride with me in a private jet. is it worth it? compared to flying first class commercially? i will have an answer for you. and where is president obama i don't mean physically, where is he on the issues, scandals and challenges this summer. where does he stand? here is my take on leadership. you've got to get out there. get out there in front. we shall the people want to know what the chief executive's position is. when a corporation is challenged by events, the owners expect the ceo to tell them what's going on.

same with our government. but our chief executive, president obama just hasn't directly faced the people. yesterday, the irs scandal went straight up the chain to a presidential political appointee. that's a bombshell. and a direct connection between intimidation and politics. the president says nothing. it's under investigation. the same with benghazi. our ambassador is dead, nobody accountable, it's under investigation. obamacare is collapsing and the president touts cheaper help in new york state. 16,000 people will get that lower insurance rate. he has not addressed the revolt by unions or businesses or the chaos that's developing in the system. edward snowden, spying, contempt from russia and china? can you tell me exactly where the president stands? how about syria, crossing the red line using chemical weapons. has the president done anything? assad is winning.

we've promised to help the rebel, have we? the aim takes power in egypt, what's our position on the muslim brotherhood? not sure. the economy is weak, unemployment rising again? worried? no, the economy is recovering says the president. now, that's spin. not terribly convincing spin either. i think we need some mid summer reassurance and i think it should come directly from the president, not spokesmen or surrogates. i'm not holding my breath. even when the president does speak he's a master at running out the clock with very long answers to any and all questions. i started by asking where is the president. literally, literally, where is he? well, today i asked and this is what i found. i found out, i found out where he is. 10:15 eastern, he gets the daily briefing in the white house, closed doors. 2:45, meets senior advisors, closed. 5 p.m., meets foreign diplomates.

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we replaced people with a machine.r, what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally. stuart: it is a red hot frying and 100, topped day for news. look at this. the irs scandal exploded. the president's political appointee is involved, and arrived at the white house door. monica crowley is here. low-wage people the president's supporters going backwards

financially. they are stuck in obamaland. sexually suggestive music sells? you will hear it. the private jet competitive with commercial first-class. you decide. i am going to fly. look at the stock market performance. it is not all about detroit. the dow down 46 points. checking the markets, big names are moving big time in technology. look at that. i own microsoft. it is down 8% at 32. google is down, way below 900, 880. here is charles payne. come on, help me out. you are going to buy microsoft-32. charles: i don't think steve ballmer would buy microsoft at

32. stuart: is that the best i can do? charles: they have been pc centric, same with intel earlier this week, got to turn this should. like the big giant oil tanker in the middle of the ocean that can turn fast enough. stuart: google if dollars and $0.80 a share. charles: they missed two quarters in a row. it is a great platform and a great company but there's no urgency to buy it. stuart: 100 degrees in new york city, the sun is shining, a beautiful summer day and you are negative on two big stocks. you know what? if we were to put microsoft on death watch. no laughing matter here. we are going to washington. more details in the irs scandal. house testimony revealing a white house appointee, political appointee, a irs chief counsel was involved in targeting tea party and conservative groups.

monica crowley is here on fat. i am saying that goes right up the food chain and a direct link politically to political intimidation. i say it is a bombshell. >> absolutely. two critical pieces of information in these hearings, the targeting of conservative tea party patriot and religious groups or originated in washington. they were not up rogue cincinnati agent who refused to be thrown under the bus. originated in washington. number 2, what you point out, the president can only appoint two people at the irs, the commissioner and the chief counsel. we learn from yesterday's testimony the chief counsel william wilkins who you mentioned, who is a longtime democrat partisan and activists was in the chief counsel's office. what we learned yesterday from carter holt's, 15 years that the irs, said that most lerner directed him specifically to turn over the tea party files to

the chief counsel's office. what we have is the missing link between the irs targeting and this white house and indeed perhaps even all the way to the president of the united states. i don't think it takes a brain surgeon to figure out where these orders came from but what the republicans are doing so well, they're slowly and methodically building their case and building the evidence to go into the heart of this white house. stuart: i want to bring in congressman mike turner who was in the hearing where all this information was revealed. i am saying this is bob bombshell. it has gone up the food chain and there is all link between the white house and political intimidation and political appointee at the irs. what is your take on this? >> you find a great summary you gave of what occurred yesterday. the democrats were saying this

was not politically motivated, these were rogue employees that happened to target conservatives on their political beliefs but that was not political. and now we know that is not true. it did not originate out of cincinnati. the data line has been made, the direction was from washington and as you describe that dotted line leads to a political appointee and that means when politics are involved there are certainly culpability. stuart: listen to this exchange between darrell issa, russell george, let's roll that. >> this is unsubstantiated nonsense. it undermines the committee's integrity and every member of this body's integrity and destroys the committee's credibility. we never treated and ig office like this. if it were an allegation of wrongdoing on my behalf or my organization's behalf that is one thing but to try to suggest

that an audit could have been done differently, this is unprecedented. don: what do you make of that exchange? >> it is shameful by mr. cummings. he wanted this investigation stopped because he said publicly targeting individuals was not political. he said we have the answer this doesn't need to washington and we know it does lead to washington. this is very clear he has been trying to thwart this investigation including releasing testimony prematurely to get all the other witnesses to cooperate, testimony to prepare for hearings, this is an effort to thwart the investigation. ask why that would be? i think it is because we are making headway and going through this and a lot -- automatically through now, that means culpability. stuart: thank you for joining us on a busy and to important day, thank you. let's get back to the market. nicole petallides has stocks hitting new highs. we want to hear about it.

nicole: we don't just deliver bad news. how about general electric, energy realm, 4% after the numbers, costco all-time high and so many others including the serialmaker general mills, kellogg's, a lot of names hitting new highs. stuart: keep smiling, we love new highs. the headline story of the day is detroit. file for bankruptcy protection, jeff flock is with us in detroit. give me 45 seconds update. what is the mood? you are there. you can feel it. >> this is the very libertarian city today. traffic lights, stop signs are suggestions, police are not to be found in many areas of the city. many people are armed.

you could say this is the very libertarian detroit. don: did you say many people are armed? >> that has been true in this town for a long time but that is true and that hasn't changed. that is not new this morning. that is the way it is in detroit. stuart: what is next? >> they have got to decide whether this bankruptcy is legitimate which means is the city truly out of many. i show you the detroit institute of the arts. the city managers said there are 60,000 works of art, some of them priceless but everything has a price. if you are truly broke maybe you need to sell this off. is the choice truly broke? he has to prove that monday to a bankruptcy judge. stuart: thanks for joining us, right in the middle of it. let's move to the company because last hour just a few minutes ago, congressman from michigan said he is open to

federal money helping detroit. he is a republican. balks at the word bailout, but he said he would be open to financial help. >> did he explain why? stuart: you are going to. >> for political reasons but republican governor rick snyder doing great work in terms of reducing the size of government, lowering the tax burden across the state, lowering regulations and bringing business back but deflate stands on its own and needs to go through this process. there should be no federal bailout. our tax money is in new york state, should not be going to detroit. the choice has not had a republican mayor since 1961. you are talking 60 years of liberalism and union control that has led to this and as painful as this is the voters in these cities that keep voting these people in and these bad liberal policies they need to feel the pain of what happens.

every vote as a consequence. charles: progressive liberal policies drove it to where it is. as margaret thatcher said sooner or later you run out of other people's money. but this is what happens. it is not just about bailouts. is like european countries, greece, portugal, greece, half of the people have never been on the internet. i could bail you out but if you don't have the intellectual tools or the schooling to take the money you will need a bailout later. you can keep giving a man a fish but unless he learns how to fish 47% functional adults, 47% functional illiterates, 47%. getting them money no matter how nice you think is or how humanitarian you think it is only prolongs the problem like the building jeff was talking about, to really fix it the mindset must change. when i say dramatically,

dramatically. stuart: the news we broke this morning is a republican has said he is open to the possibility. charles: what is going to say? don't bail us out. won't get reelected. stuart: he is not from the detroit area. he is open to it. charles: if you cause of your leg the rest of your body -- >> there have to be consequences to choosing bad governance. charles: going to the consequences there has to the stipulation for this money, that is not economic stipulations that personal responsibility stipulations. this is what we are going to do, sends your kids to school. they are not going to drop out, you will pay your property taxes, put some skin in the game because i can tell you right now half of the people who own property. stuart: 47% of the properties in detroit do not pay property taxes. they are in total delinquency. you can't raise money. we got the story on "varney and

company". big name tech making headlines today. not google or microsoft. i will talk about amazon next. the next great tech company is already there. the next apple may be. clayton morris, king of the techniques is next. >> i think they are talking about us. >> no way. [ male announcer] surprise -- you're having triplets. [ babies crying ] surprise -- your house was built on an ancient burial ground. [ ghosts moaning ] surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises?

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stuart: we don't feature this company very often or look at the stock very often because it doesn't go anywhere normally but today it is, 5% up on a company the size of ge, not bad. and industrial company doing well, 24 and change, we are highlighting it now. trying to make some money or so he says with charles who is following up on american rail car industries. charles: i don't know if you caught it but a communique out of -- at this stage even if you got the thumbs up would still be delayed bbcause it waited and waited. at the same time csx, big

welcome the reported numbers, the sweet spot carrying these chemicals, fracking sand, petroleum oil, one of my disasters, the stock really looked good, hit bottom, it is turning back up. going north after 30, it is shocking that it was down this much but when it was time i would add to. the biggest loser, the ambulance chasers we bit the bullet, that is my biggest loss for the year but this is what you got to add to. stuart: you called it a disaster but you are not prepared to bailout. charles: you buy on weakness. the numbers look too fantastic. stuart: you were braver with microsoft. charles: under 30 is screening. stuart: under 30? oh man. can we look at amazon? that it an all-time high of 300

plus earlier this week, 304-96 up 20% since april, the shares tripled in five years. is amazon the new apple? here is our president tech watcher, clayton morris who joins us frequently. amazon, the new supertech company. >> on its face two companies, apple is a hardware company, they are selling at as a loss. they don't have -- make money off of their kindles. they want people to buy the books. from a purely specific standpoint, they are not the same company, apple makes money on itunes and take money from apps sales but the main crux of their business is the hardware. when they make an iphone they are profitable. amazon is still not profitable. i don't know how they make money. this is a company i love, i use amazon products all the time. i don't know how they make

money. not concerned about making revenue. stuart: they make money but they put it back in the operation. >> and drive mom and pop shops out of business. going to a market and run small bookstores out of business and then they drive a price down on book to $9 and say -- stuart: kind of populist here. >> i like my mom and pop bookstore and browse through books but when you see borders folding up as a result of not being able to compete with their own e readers they were trying to partner with sony and barnes and noble suffering -- charles: this end user has benefited and that is creative destruction. there are mom-and-pop stores to figure out. i want to specialize in one particular area because -- >> they will have consumers benefit from lower prices. when authors find a middle incentive to go into writing and actually putting out a book and only make less than $1 per book

because amazon sucked the profits out of that 70% -- stuart: i am man end user and my wife tells me how to order books and we do. at half price. much lower than the hardcover price if i go to your famous neighborhood books. >> because digital goods are cheaper to produce, don't have the trucks or infrastructure to all these around the country. i will say i love amazon. amazon with their clout services, a lot of business using their clout infrastructure, certainly all the goods and services being able to ship toilet paper around the country i buy everything on amazon. if i need a camera lens. stuart: when you are not prepared to say amazon is one great tech company going places and is the world leader? >> it is a great tech company but it is not apple. stuart: running a couple bookstore's out of business claim more says i am not sure.

>> the kendall makes the money. if they say we got this new hd kindle that is beautiful and is making us a huge profit margins on every piece of hardware we sell land fix amazon's phone we have been hearing about becomes a bit of a profit center for the men they start to challenge the avalon hardware the way samsung has i will grant you that but it is a different ball game. stuart: show me the stock. $305 a share triple in five years up 20% since april. thank you for your time. okay, excellent. thank you very much. president obama's economic policies are hurting the very people he says he is helping, low-wage workers. suck in obamaland. why are they making less under the president? we will have an explanation next. i want to make things more secure.

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stuart: low volume and not much movement for stocks, 15-5 to the dow. let's go to microsoft, because it is not a good day for my retirement but it is coming back a little. nicole: viewers will be happy you are going to be here forever

and ever reporting and doing your extreme, high-quality journalism on "varney and company" if microsoft continues to do this, down 9%. the tabloids just didn't sell. a lot of inventory. not seeing sales overall, worrying on the dow 24 negative dow points. stuart: an unsolicited compliments and i will take it. you look great today. a follow-up on the zimmermann acquittal. the department of justice will hold under zimmerman's gun as it weighs civil-rights charges and there is this from attorney general eric holder taking aim at florida's stand your ground law and then the jury, turns out florida taxpayers paid $33,000 while the jury was in sequester. on what, you can ask, pedicures, state dinners, trips to bowling alleys and ripley's believe it

or not. we are calling the stock in obamaland, wages down 4 now.1% among low-wage workers since president obama took office. his policies were supposed to be helping. we have someone from the group that released that study earlier this week. he blamed it on the low minimum wage. he wants the minimum wage to go up, that he says will help out all workers. from the heritage foundation, james sure, you have a different explanation as to why low-wage workers are losing ground. go. >> it is hard to blame the minimum wage when we just increase the minimum wage a few years ago and it wasn't successful. the problem the economy is so weak right now, the best thing for workers, particularly low-skilled workers is a strong job market and low unemployment. look at the late 90s with president clinton and the tech boom. up and down the income scale

wages were rising but president obama's economic policies held the economy back. he pursued longstanding ideological goals but hasn't pursued goals that would keep the economy moving. wages are stagnating. stuart: i read the original report from the center for law, i forgot the precise name but it is the leftist group out of washington and i read the report and it was saying basically you've got an influx of eleven million illegal immigrants and they are working hard and taking these low-wage jobs -- low-wage jobs from americans. >> this shows the immigrant groups, most compete against tend to be fellow immigrants who are already there but it is an effect and this is what the congressional budget office found, there is an effective lowering wages of existing workers particularly those without a high school degree. there is going to be some effect but how do you deal with that problem? through a strong job market and

companies hiring, low unemployment. that is what obama's policies haven't delivered. stuart: how would you reverse this backwards movement for low-wage workers? what policies do you think we should employ to change course? >> the first step would be do no harm. obamacare is leading employers to cut hours and making businesses reluctant to hire, polls showing enormous numbers, 40% of businesses decided not to hire because of the mess of this health-care law. you shouldn't have done that but now that you made the mistake get rid of it. stepped 2, boost the overall economy. why are we allowing more investment in oil and natural gas extraction? this could be a booming industry that could employ hundreds of thousands, millions more american workers and lower the energy costs, heating costs that every american has to face. why is the federal government throwing up their arms?

why did it take so long to install the keystone pipeline. stuart: we haven't approved it yet. looks like the delay may cost the pipeline overall. thank you. i want to segue to the dow jones industrial average because they are going nowhere here. it is dead static, the volume is very low. it is friday morning in the middle of summer and not much trading activity going on. 15-5 is where we are holding and harry reid blames wildfires in his state on climate change. that is one of several examples of the politicization of weather which we will deal with next.

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stuart: headline story of the they will be detroit filing for bankruptcy. mark asher, a former adviser to detroit is with us in new york. welcome to the program. at the end of the day, bankruptcy judges made the decisions that had to be made, give your best estimate on how big a hit the retired city

workers, 20,000 of them, will take their pensions. >> back to the comments you were making, with microsoft stock declining it is not good for your retirement. when an organization doesn't perform well, that affects people's pensions. stuart: you know the numbers. >> they have to make changes. stuart: a bigger hit. >> the idea of a public pension is to prepare for your golden years not to be gold plated at taxpayers' expense. there need to be changes. stuart: i got out a number here. i am hearing the retirees may get $0.20 on the dollar if they are lucky. that would be an 80 in their monthly checks. is that bad? >> i will give you a sense of proportion. the average benefits for public employers 35%. in detroit this is 90, that is 3-1 so use that for your math

and figure out what might happen with pensions. stuart: that might happen here. >> 30% across the country, 90% in detroit. stuart: the creditors at the end of the day the bankruptcy judge makes the decisions. at an end of the day how big a hit this creditors take? >> look at that different from the pensioners, most of them live there. the creditors are different plot. you have to look at those handled a different way. there are 100,000 creditors. the list is massive. you will see them take a huge hair cut. stuart: if you're talking a two thirds hit for retirees creditors take a bigger hit, how much bigger? >> it will be appreciably larger. they were offering pennies on the dollar. stuart: you think that is all they're going to get and no one will bailout the creditors? >> you could see 90% losses. stuart: when you got a history in this. you once ran public

transportation system in rochester, new york and turned around? >> it is possible to run a public agency with a private sector might set. we ran a public agency, cut fares, multimillion-dollar surplus, reduce reliance on taxpayer dollars and took that to detroit, saved $39 million on their transit systems so it can be done even in a community as challenge as detroit. stuart: if you wipe out this $18 billion worth of debt, take it off the books, detroit starts again, it could work? >> there is a culture of corruption in detroit that needs to be dealt with. i will give you one example. we found one employee we were working with across the country, that job would pay $80,000 a year, she was making $450,000 a year. stuart: a government job? >> you bet. you got to get to those issues that are at the core of corruption. stuart: you know what you are talking about, appreciate it.

back to the markets. the big winner on the dow, general electric, selling more jet engines and the oil-drilling equipment, up $24.74. another winner not on the dow, big beat on earnings for jacoby and that stock is up 7% above $400 a share. three fresh headlines on the climate front. first off, senator harry reid is blaming climate change for fueling more wildfires in his home state. he wants to spend more to stop it. spending is all president obama wants to do on climate change the ground bleeding study reveals federal subsidies for grain energy do nothing to lower greenhouse gases. then there is this. in a report warning against the rising sea levels, but some scientists say they have been rising since the 1800s and nothing to worry about. the weather is politicized here. >> has been for decades.

what the left sees in climate change, global warming, whatever the buzz phrase of the day as a secular religion and it is a way to do massive wealth redistribution not just within the united states, harry reid is talking about but globally. this is why the un has the climate change bureau which has been under attack the last of lawyers for corruption, this is a massive wealth redistribution scheme from the wealthy countries to the poor countries and they settled on climate as a lever to try to make this happen. now we know there are all these scandals and so much of this is bogus so they lost a lot of their leverage and public support. stuart: when you won't let them get away with it. charles. charles: i wish i could say they lost a lot of public support. i am not sure they have. average people have bought into this. they bought it to the point where it typical heat wave that come every summer people say climate warming. they brought it to the point when it snows or supposed to snow in winter time climate change. people the, part of the lexicon

of vernacular, people are buying into this keep pounding away because there is a grand scheme them ultimately will disrupt all the wealthy nations and any opportunities our kids and grand kids have. stuart: the climate change people have political clout. charles: they got a lot of clout and won't stop. >> public support is slipping. stuart: market is coming back a little bit, 19 points lower now, 15-5-28, 20 points. have you heard the songs blurred lines? we are playing it right now. the best-selling song on itunes, raise the video that has gone viral and sexually suggestive and it sells. we will deal with it next.

stuart: chicago public schools laid off 2,000 employees last night. thousand of them were teachers courtesy of chicago's $1 billion budget deficit. new york attorney general says

non-profit charities are withholding money from sandy, the storm. a few john amount of money around two thirty million still not in the hands of hurricane sandy victims. they arrested six people after being hit with rocks and bottles at a protest over george zimmerman. the arrests occurred in san bernardino. the summer's hottest songs right now. we are going to discuss this. sex cells in music? of course it does. watch it. kp our commitments. commitment to america. kp our commitments. bp supports nearly 250,000 jobs here. through all of our energy operations, we invest mo in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger.

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what's in your wallet? stuart: calm down. if you are not careful you will be on camera. that was a clip from the video blurred lines, quite sexually suggestive but something that has been around a long time. sex cells. of course it does. justin timberlake asked television, punks get lucky. two more examples of popular songs that are racier. and with us right now. decide to be here. we have a video which is quite

sexually suggestive and you are not -- >> there is a fine line, the video was too sexual but it was a good sentiment. and that looks exactly sexual. and power about this line? i know you want it. you are a good girl. i know you want to. that is what you were dancing to. do you think there is a role for me. stuart: do you think -- don't know how to put this, if you had the song which is a good song and all the rest, no 6 well

money whatsoever it wouldn't sell. >> it would be harder. the songs are deliberately sexual? >> not deliberately but most have an undertone of sensuality. >> you don't send out your store to be sexually suggestive in these? >> people are sexual people. stuart: is the human condition. you reject the charge that you are exploiting human sexual already. >> absolutely gorgeous. unless you're doing gregorian chants you can't go onstage dressed like a nun. those pictures -- >> definitely a statement.

>> big acts doing this sexual routine like justin timberlake, you do have to put it out there so you get the attention so people will listen to your art or your music. >> people all over the board, prince, madonna, celebrated for the most artistic people, but it gets people talking which is good. there is a fine line of the artistic body, dancing and this. >> blurred line? back in thh day elvis presley caused a scandal because he swiveled his licks. stuart: hips. >> the net works with alisha in for the waist up because it was so suggesting. from elvis presley to what we have today. stuart: when you should have heard the comments of my parents about mick jagger of the rolling

stones. you are absolutely right. sexuality became a feature of music and videos in the 1950s, progressed into the 60s and reached its height may i say with your generation. >> media in general everything is so in your face and everything so blonde. things before used to be just masked and poetic and undertoned but now that is just the nature of it. stuart: what is your method of distribution of that video? facebook or the internet? does anyone golan and tv any longer? >> it is not my video. i was in it. he is a major artist. it is huge. stuart: did you make much money out of it? i wouldn't ask how much. i am not going to ask. you are the top of your field but it was a real pleasure

having you with us. will you ever come back? >> i would love to come back. stuart: you are on. thank you so much, a real pleasure. private jet companies trying to convince you that flying with them is worth it compared to applying first-class commercial we. i get the pitch directly from a private jet ceo flying in his private jet. that is next. you will provide me with food if i want it, drink, alcohol, water. >> 25,000 feet, 500 miles per hour. stuart: the $64,000 question. itd one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason

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>> mission to the moon, speetwo risen, companies competing to be the first back to the surface of the moon. the mask -- the last man to walk on the moon, former astronaut gene cernan shares his thoughts on america in space at 7:00 eastern. stuart: i had a chance to fly a private jet, the ceo of the company in the hot seat tried to sell me his service. is not as expensive as you might think if you compare private jet

to commercial first-class. look at this. >> welcome, the plane is very new, brand-new interior. nothing like it in the world. stuart: get me on. i didn't have to dock that much to get into this private jet, just a little. it is very comfortable. this private jet versus flying commercial first-class. >> you have been on the airplane five minute than just showed up and you will be in the air instantaneously, this plane can climb faster than a commercial jet, stuart: you provide me with food if i want it, eat and drink and alcohol. >> 45,000 feet, 500 miles per hour. stuart: the question is the price. you got to be more expensive

than first class. >> you will pay $10,000, fly commercially, $7,000 or $8,000. stuart: we are taking off now. here we go. >> these fly above the law weather. about 30,000 feet, and picked up for a lot, 50% higher, if you change your mind or get a phone call, a business deal in north carolina. stuart: i am looking for a smooth round, not bad. >> good luck to you. stuart: that was jet sweet, by the way. charles, were you watching? charles: i was watching. stuart: the financial comparison was interesting. $10,000 for the plane, seat 7 from newark airport or close by down to florida, $10,000. you do the same trip with 7

people on commercial first-class you are looking at $8,000. charles: or maybe more. it is going to be this way. everyone is getting into this space, warren buffett, a lot of people, it democratizes what was only for the very very exclusive. i am happy about it. a couple more years i might be able to afford one. stuart: if you can log onto jet sweets and you can get a direct quote instantly on how much it costs from here to there. charles: lack of hassle. >> stuart varney. have you been watching twitter at all? i am here to storm it yourself. no idea what i'm talking about? show him what we are talking about. this is the all-star game at city field where fans rushed the field. he was taken out by security guards, he did it because he tweeted if he got a thousand

three tweets he would storm the fields. if i get a thousand re tweets i will run on to stuart varney's set in the middle of his show. thank you all for that, she years. your fans taking over. i am here forever. just kidding about that. that was not funny. stuart varney did not think that was funny. your fans have spoken. i am storm your set. stuart: this is a complete surprise. >> i thought they might warn you i was on your way or your twitter fans might have warned you. you have been busy working on a bankruptcy idea. stuart: when you can storm this set any day you like. did you see the private jet? melissa: i loved it. i like your dancer you had on before. got your going to get up and dance. stuart: next private jet flight i take you are on it. melissa: i would love to.

are you paying? you are moneybags. i would love that. that would be fantastic. stuart: a fine storming of the set but we are out of time. come back soon. more varney of you can believe that in just a moment. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪

stuart: to recap, a guys runs onto the field in the all-star game because he got 1000 retweets. melissa francis picks up the idea. neil cavuto gets in on the act. they all retweet. she stormed the set. melissa: it was a lot of fun. i thought you might have guys waiting at the door to drag me offset. stuart: did you know that guy was arrested? handcuffs, right outside. melissa: i brought you coffee,

that should count for something. stuart: no, it is empty. dagen: quoting the lyrics felt like watching an autopsy. stuart: okay. dagen: it was great tv, just disturbing, very, very disturbing. thank you so much. and then there is this, the motor city goes bust. the largest in u.s. history musicality. some detroit creditors are not sure they will ever be paid back. that could be dangerous implications for borrowers and lenders across this country. peter hayes at black rock, he will explain. a business owner in detroit making custom vehicles too much success. and why this is a good thing for businesses