weekday from 3:00 to 6:00 eastern time. we'll have another great tv show for you next week. the willis report is next. >> could evening. i am rory rothman. tonight what was the b leon investors learned after the fed took down its steve cohen oneeof the biggest man on wall street? the only way to make money in the market is tucci? also billions of doolars disappearing every year and nearly all ofus are snagged with the unnessary charges hodo you deal with embarrassing many questions with close family members? we have some answers and more coming up to knight of "the willis report."

lori: stocks are up again five weeks in row what a week it was one of the biggest money managers stephen:suffers a spcular fall his hedge fund hit with criminal insider trading charges am pleading not guilty today. but will the case hurt investor confidence? it is cheating the only way to make big bucks? let's bringin the man that millionaires invest their money wth. so good to see you, ed. >> i thank you for having me lori: what is your take on the message sent to sec capital? wh about the percentage returns outpacing the broad

market aerages to push the rules a little bit or a lot? >>. >> you said the word allegedly because notng has been proven there are allegations out there i guantee there will be a vigorous defense coming in there is a lot in the indictment and people assume it is correct butbsolutely not. there are great hedge fund managers and i have been in the business 27 years and it is not easy to get great returns because it is in but if you just compound your money then history says he will earn tenders will% in the stock market over a period of time. lori: but the tally on case and he is behind case right now -- behind bars right now but to hisase innocent until proven guilty but

overall has the same performance lately. >> you bring up a great point because it is definitely a tarnishing going on of the hedge fnt -- hedge fu energy. a lot of people turn to hedge funds for their portfolio and that s&p 500 has outpaced most managers even though there are unique styles they have outpaced that but we never evaluate a portfolio over a three-year period normally fiver tenures it anybody else there that has pulled money away from the hedge fund rethink that because you will need to have alternatives. lori: at sort of allocations? how much should be comprised? hedge funds, priva equity? >> i wl make it simple

there was a stud done what is the best mix to have? of the publicly traded investments with the best return was the least amount of risk. 87% went into henchman's if you ask for the best use or how much money we typically put 20 o 25 percent of our moy in those portfolios with investment with the non correlation and did yowill find the hedge fund managed futures than so 25 percent in altnative. >> if they are underperforming righnow, can yopinpoint the time when that will reverse? >> it has been a long expansion the point looking at that growth cycle so if

you are investing in this cyclical stock saugh a couple years of the other alternative investments. >> my hair is gray for a reason these are only some investments based on the positive economic condition the moment that changes everything goes down together. so i always have things that are not doing well. so you say when will that switch? you should always have many in alternatives are in the equity markets as well because you just never know. lori: the grey hair is very distinguished looking for you. a deal think they care if they push the rules? how important is i to have

a sod reputation for playing the rules with your clients? >> no estion. everybody is out to tarnish every betty and even with our side of the business not hedge fund but the broker market i don't think clients appreciate anyone who is cheating and peoe are disgusted by those people and i am that way as well. so i absolutely lookit this if the allegations are true there will be some truth to this and then you know, the bad it will happen in bet individuals don't want to be around bad people and i don't want to either. lori: we will leave it there. thank you so much. do you care if you're a money manager and the rules to give you a higher return? log on ger willis.com and

we will share the answers tonight. stocks making americans feeling a little richer battle sounds like good news but what is the real state of the u.s. economy? let's bringin peter maurice c.. from the university of maryland. what was your take? people look at it as a lagging indicator how we were feeling a couple months ago but that is the best levels we have seen in many years is it a think -- a sign of things to come? >> that index was highly correlated with automobile sales and there we're lling even more cars with good prices it relates more to of the stock market than it des the broader economy

and er the lt nine months they have been cut in half next week we will find out the economy over the last three quarters and that is not very good at all. lori so do you think there is any potential under that growth rate? is this the new normal? >> no. most econosts do see things picking up in the second half. u.s. economy has enormous potential. looked at the rate of productivity growth in manufacturing. we do need to deal the currency problems trying t grow at our expense of s we could get this economy going on all eight cylinders so we

need to right public policy. >> the economy was critized for lack of specifics. >> i had a comme that was quite critical. his record is a very good and his policies are aut dividing up the pie as opposed to making a bigger this administration is flat out of ideas and then to come with the growth agenda. lori: what else you want to see done? is there a simple solution? we have another jobs report an a lot of talk but little acti in. >> of a bike to see us get very aggressive with china on the curncy.

in to bring down the value of the market is a great idea. >> but then look at that and that is the incentive to cheat even more. >> you have done everything but short of currency manipulator. >> actually we have just called the names and have not and we have done a good job at that but with the exchange ratehat would work quite nicely but with regard to otr pocies with oil and gas of the to coast and the gulf of mexico wehould hold regulations with thefficacy test. lori: a also by our treasuries. it is such a tense

relationship and i am glad it went in that direction. thank you. a lot still to come including aice on awkward many moments to splitting the check at a restaurant and did you know you are probab spending hundreds of dollars a year on nothing? take a look at a new rash of grave charges hit to your wallet. this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had seone go ahead of him and win fiy thousand dollars.

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[ thunder crashes ] it doesn't. stop pretendg. only flood insurance covers floods. ♪ lori: new report says americans lose billions of dollars every year to their credit card and they don't realize it they are called grey charges lling all sorts of unwanted charges with membershipso zombie charges and the fees that won't die. here to help us get rid of themrom smart credit.com, john you put together a list of the most common charges. free to pay? >> that is when you go to

the web site in exchange for the credit scored you are required to give a method of payment normally a credit card if you have signed up for a trial membership if youon't cancel it within a few weeks or a few days then ey will start his tea in your credit card for a modest charges between 10 and $15 every month. lori: it is confident you have achieved cancellation? >> exactly. that is the problem with grey charges you can cancel the subscription but few months later here it is again. lori: you list ofthe newals, give me some examples of the other charges. >> the unintended purchase is one with every by something on the web site -- website tickets to the point

@%u finally by we want you have to say no than and ose gs to cross sell and at south bend you may have thought this colct along the way they use the something on your credit card you did not want to buy. also of a renewal. this is if you purchased the domain name and on the register for one year then after that ddn't what it but then you will start to see that hits the credit card again. lori: is any of this illegal? >> the million-dollar question. it is arguably unethical i some thinking is illegal but so to the companies were nailed with some hefty fines but underscores the impoance of you ian me to become more engaged with our

credit card statements to understand what every one of those line items means to correlate with what we intended to purchase. lori: if you cv $2 charge that is what the bank on you will not waste the time to go to the hassle to track that down or sit on the phone to go through the difficult computer web site how you canceled. day you have advice? >> exactlyight. there is a strategy behind the amount to between 10 and 20 it is large enough to justify i would have used m card for that's but it is also not popping out you need to start using, if you are not going to do a better job at looking at your statement and there are services that will help deal. mint.com they will tell you

this is out of the norm do you reallyntend to make this charge? >> i am not advocating to spend more to make sure you are not spending more. these are freeeservices it is a second and tear of defense. lori: what about the consumer protection ready untilureau? should it involved? >> it is the sleeping giant of these perpetrators that they do not want to wake up because i will tell you if they get involved the fines will be impressive so they want to keep it low-key they're very willing to credit you back if you find someone who will answer the phone to listen of your challenges but remember

you'll have objections from the credit-card issuer to say i don'tuthorize that charge you don't always have to argue with the merchandiser data would to be involved either. lori: news that you can use. 14 billion each year. one of the side effects of the recovering housing market is the return of the house a slap. we have details. how you get through those awkward many moments? next. the boys used double miles from their capital one venture card

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lori: we have all experienced those uncomfortable many moments whether splitting the bill at dner are having a close friend asked for many favors it is hard to about gracefully but it can be done you will never feel it again. with the director of consumer education at credit.com what do you say is the bgest money embarrassment? >> i informally polled people ceainly hing a friend or family member asking for a loan, getting

hit up for many you don't know what to do real encounter this as me time. lori: what is troper protocol when you are approached by a family member? >> this is common. first of all, if you are not willing to make it a gift do not load them into their asking you because they cannot get the loan to somewhere else so they may not be able to repay you so you can't say i have been burned in the past was just put it in writing so we're on the same page if they're not willing to do that then you say i am sorry. lori: wh about assigning the interest-rate? is below market but they have to continue to make a pate made it to set up the

terms but to put the low interest rates on it? >> the irs wants you to do that you can get the rate off the web site so if you do not feel comfortable tell them by law you have to hand. >> you have ith sister o brother constantly asking you for $20 not a big amount of money but if that is getting on your nerves? >> it can happen with the of coworker who forgets their wallets every time at the lunch counter sought some point you have to sa i will say no if i am not willing to give them the money that i will say no and they will get the point. loricharity? >> you are involved to be asked a lot a and we cannot donate to every cause that we care about.

you may want to set some boundaries. let's say you have a charitable budget i will support people that i knew we're doing good things not a lot of money but somebody says i am walking 60 miles for breast cancer you will support them but also select wonder to charies you can say these of the charities i am supporting this year she had a personal story piod there really made me respect why she was supporting that charity that year instead of others. lori: great advice. thank you. though it is a time for the stories you are looking at fox business.. keeping the markets in check the last minute turn helped to but traders are looking ahead to a packed schedule

including the monthly jobs report in the federal reserve meeting and you should not expected to name soon the president will not name ben bernanke successor until the fall his current term expires early next year. the oil market cools off this week oil fell to $105 a barrel marquis the first weekly decline even gas prices were falling with $0.2 and apple sres of the global smart phone market fell to lowest lel in five years. according kirk to the abm research to lois level since 2019 years after the launch of the rst by phone. those are the hot stories on fox business.com. a warning before going back to school shopping it will

cost you more. hoe flipping is back to find out how to get the most bang for your buck when you are flipping a home. ♪ ♪ ♪

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lori: flping a house seems so 2007 and buying a home and selling it for profit played a critical rol of the housing meltdown that catapulted the nation into the worst crisis of 80 years but the market is showing siggs and experts say flipping a home could boost your bottom line. i will bring in our real estate expert, and race to see you is it really back?

>> it is. everyone around me is clipping a home today to me and a and prices are very strong and one of the real reasonit is back because you see a tremendous buying from institutional buyers to buy hundreds of homes we see the low interest environment up until recently they have sted low. lori: will that chang? >> that is the one variable in looks like it is here to stay at a lot of places have hit rock bottom and are coming back so it is a good time if you are a professional you do know we we're doing to get in that business. but a lot of people do get hurt. lori: so let's talk about the pitfalls a into the red flags.

>> if you buy the home from the big remember the previous homeowner could not makes mortgage payments so too does are the houses and not a good repair look for red flags like stains may be that is a problem with the plumbing or a leaky roof had a professnal appraisal in the inspection to make sure you understand what is wrong wth of home understand we can sell it because you could buy it it for cash which is keeping also make sure by ears need e appraisal to make sure that you can sell it if we hear flippers' earning 20 grand? >> it is possible but if you get into th business you have to be prepared to lose money on the first few deals

you have to have the right team and a dusty and tim frames and wait longer if you cannot sell immediately. there are so many variables in you can get ht. normally that $20,000 is the average that pele set the house from the purchase price that may not include profit depending on how much to put into the home. lori: how long should you expect? >> most that do it with the hard money lenders that are set my professional are trying to buy a home in the flip it within six months. lori: tey say most of those markets are in florida? what is special? >> florida is the best day in the country but it has always enjoyed a stronger real estate market bid is a

bellwether because it is a fast-growing state over the past seven decades is the fastest-growing state in the country so it continues to see investment and don't forget we have too good to 50,000 per year moving to this day and this year we will have more than 200,000 that is more than 2008, 2008, 2009, 20 combined so that means more americans are moving as are those who want to live here from other parts of the country. lori: thank you so much. interesting peck. some parts of the country are better than others but the same holds tue with the unemployed in some states it is better to be without a job. that list is the top five

minnesota. the state's low unemployment rate o 5% is why it is on the list. number four, iowa. four-point 5% in the unemployment insance is 43 pcent of the average weekly wage. number three is north dakota the average benefit is $400 and only 800 people received it just about 3%. number two, hawaii thi seems like the best date the average unemployment benefits makes up 53% of the weekly wages and the number one stage is montana benefits cover more than 40 percent of what you are earning iemployment has grown by 2% this year so where are the worst places to retire? tennessee and louisiana. when wcome back a florida

teacher fired for putting on a fire. find out why parentsou are paying more for school supplies this year. how much? and next. announcer: where can an investor ? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. becausi don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: scottrade- proud to be rked "best overall client experience."

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and my cash back keeps the party going. but my airline miles take it worldwide. [ male announcer ] it shouldn't be this hard. with creditcards.com, it's easy to search hundre of cards and apply online. creditcards.com. lori: at time of year as we refuse to an acknowledged back-to-school season but moms and dads are dishing out hundreds of dollars of school supplies and if this seems like you were spending re than usual, you are. welcome. estimatesre putting back-to-school cost of over $600?

july buy school supplies at e drugore no way i would spend that amount. how do they come up at this figure in white are prices goinup dramatically? >> as the kids become older more of them want the latest gadgets and that is driving those members lori: are we including technology? my kids are a little like crayons and pencils not computers or ipads. >> the new books is not going up but its th technology in theegadgets that all the kids are wanting more and mor. so 1200 a another is 600. lori: but it is still the

backpacking index that you put together that is far outping inflation and 7.3% podium -- inflation rate is below 2%? >> the backpack index was put together by someone else but mostly driven by technology allow the school districts are hurting and teachers are passing the burden for supplies back to the kids and the parents that the school traditionally proved. lori: doesn't matter where you shop? all the big retailers try to convince you they have the best prices but actually it pays to shop around starting next week a lot of

states have the sales taught -- sales tax holiiays to shop the weekend for free so that could add up. lori: you put it of list of ideal cret cards can you give me some examples? >> absolutely. in there at the highest point. so the parents can bring down the budget significantly some king give the 400 statement credit for spending $3,000 or depending on the shopping you could get 6% cash back dead even like myself that have small kids. >> the chase card also has

the bonus category. and then this permarkets and department stores from american express. and for the parents better small business owners they can use the american express card or t c from chase to get 5% cash back on office supplies to go and have back-to-school shopping there. lori: it is not even in august. that is ha to swallow. forget the cost. >> figure for having me. lori: a day care teacher is fired for putting out a fire. the school said she left the kids alone.

it is not the hackers who want your reformation but the fed is going after your password. password. next. at a dry cleaner, password. next. we replaced peoplewith a ma. at a dry what?er, 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.

me. lori: u.s. government has reportedly demanded major internet companies direful to the user passwords it could have an escalation of government surveillance techniques that have not been disclosed and elizabeth macdonald joins us with the latest. >> u.s. government has been

asking major internet companies like microsoft a and google's and facebook for passwords according to one websites that quotes to sources cnet gives an even worse scenario from edward snowden that said he is disclosing information that gives federal government access to google's and facebook and other major providers. the companies have strenuously devout -- deny they have given this aess but they're notaying if the government has actually asked for that password information and now if it is able to determine a person's password that is normally in corrected that could be used to long sought -- log onto

the account or set up the correspondence or impersonate the user some details are not clear including when and at the request bbn and if it is targeted at individuals or is the entire database dumped? palace section to do 15 does allow them to get private information that is what these two data mind of those calls and senators are crying foul wll. >> when the american people find out how their government has interpreted thpage redact, they will be stunned and they will be angry. from my position of the senate intelligence committee i have seen government activity conducted under the umbrella of the pager attacked that i knew would astonish most of our people. lori: the oregon democrat

asserts on the senate intelligence committee also said this ek at any event the governme's authority to collect information on law abiding citizens is essentially limitless under the law. know if that company has been accessing your password is set to the internet company to fight to win your behalf of the remains to be seen to be obligated the information they're getting your password information and it is a developing story we will follow it closely. >> internet passwords? privacy is so in question in. one day care teacher is claiming she was fired for putting out a nearby fire to save their lives by her boss said she bre safety rule

should she have been fired? here to duke and ouis our panel. does the teacher deserved to lose her job? >> no questid not deserve to lose her job but when you get intolaw that is not the same way but the at will employee doesnot have a contctual rights and who did be termined for any reason and less discriminatory should have to bring the case as a whistle-blower she did try to protect their children in the workplace than allegedly fired for that. know whether the law covers that is debatable but unfortunately this is the case she could pursue this to see if legislation could be brought'' to find a cause of action. >> the reason there are

safety procedures in place when she went to see what was going on she could have been injured. there is a class of sleepin kids and if that happened under somebody was injured we would say why didn't she followed this procedure? i aid to agree that this is the at will situation but you need to havehese in place you cannot have anybody doing vigilante work you are a teacher. get the kids out. lori: but it is a panic situatn. >> but if children were rned to think she would be held accountable for that. this is why the standards in the workplace don't always match with what needs to happen and there should be a breach of public policy or the exception someone like this would be questioned in

no matter what either way but to say those who are caring for our children and doing a good job suld not be penalized to step out to protect them. lori: i do think thisis %->> regina?tting. >> data know why she would want to go back to begin with but the person who burns the chicken nuggets should have been fired that is what caused the problem. government overlooking the actual cause been going to someone else. this could be set by someone who tried to kiap a child. you just don't know it will be ieresting how this wi play out in court. lori: you have to trust the teacher there put in the classroom and in charge of the students so with her staff judgment decision her

ander thought was that she could take care of that than you have to trust that is our judgment. >> but she is not a fire fighter she is not qualified >> but the fire people said after words she did the righthing she did save people from being bned but the real question ultimately is should she be penalized for sticking her neek out?t? will ultimately the legislature or the judge ruling to have the fortitude to recognize the cause of action could correct tt buthis is a shame. and also t department of education is doing investigions may be something can be done. ♪ [ villain ] well mr. baldwin...

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>> prosecutors aarge volume of evidce including e-mails, wiretaps, and other reporting just act against sac visors. the fund pled not guilty to you care if your money manager is bending the rules to give you a higher return? we ask this on gerriwillis.com. 78 percent of you said yes. 22 percent said no. and here are some of your e-mails. id from maryland rights, it's interesting how the irs expects self-employed business people to know what are and are not proper businesses sections. they can't figure out what is proper for their own business. roberts says, congress should pass a rule that members must submit a letter to congress reached bill written that he or she has read the complete bill and understand everything in it before he or she is allowed to vote on it we sure love hearing from you. send us your e-mail.

go to gerriwillis.com. that is it for tonight on "the willis report." thank you so much for joining us. it has been a pleasure. she will return on monday. have a great night in the fantastic weekend. it. thank you for watching. appreciated. >> droit is now the largest u.s. city to file for bankruptcy it cannot match it -- manages self. >> were at the end of the road. we can borrow any more money. john: detroit was -- now in such a wreck. >> for1,500 you could buy this house. john: for years politicians promised that they would fix detroit. >> detroit show again become the great city that is its destiny. johninstead. >> they turned city hall io a den of bribes and kickbacks making themselves rich. john: is there hope for places like detroit? >> it will turn around the city of detroit. >> the motor city. this is will we do