>> it's not working, mr. president. who is saying at that? the president's own core supporters. good morning, everyone, the urban institute is unhappy with unemployment, with jobs and the real value of wages. it's a liberal group and joining the chorus of dissent for president obama's economic policies. the right is chiming in, too. t the cato institute says welfare may pay better than working. and three out of four high school grads don't have what it takes to go to college. we're looking at people who won't find a job or repay their loans. the dow may drop below it this morning. "varney & company" is about to begin. which would be fine if bob were a vampire. but he's not.

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>> good wednesday morning, everyone. eye opening comments on the

economy from a liberal think tank, the urban institute. they say the number of people who have been unemployed for the long-term is unprecedented. they've got the numbers to back it up. nearly 5 million classified ads long-term unemployed. another 900,000 have just given up looking for work altogether. according to this group, which is politically aligned with the president, the tax be and spend policies of mr. obama are not working. but, remember, please, he begins a speaking tour this week where he will call for more of the same. and then there's this, a new study by the libertarian cato institute reveals that in 35 states, welfare benefits pay more than minimum wage jobs. first, let's start with hawaii, it's a glaring example here. you could make up to 30 bucks an hour on welfare. 60,000 a year, that's in total, untaxed welfare benefits. hawaii is not the only state. coming up, we're going to show you all 13 of the states that pay more than $15 an hour in

welfare benefits. and let's get to the markets, because we're about to open up the trading session. it's janet yellen, versus larry summers, this is an intense and public campaign over who is going to be the next fed chair. both parties lobbying hard. personally, i've never seen this before. it's become a political and, yes, a personal battle. we're on it throughout the show. as for the market itself. it's going to open, we think, below 15,000 this morning. however, hold on, we've got a money manager who says, don't worry, the dow will be above 16,000 by december 31st. stay there. this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had someone go ahead of him and win fiy thousand dollars. congratulations you are our one millionth customer.

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i'm, like, totally not down with change. but i had to change to bounce dryer bars. one bar freshens more loads than these two bottles. i am so o gonna tell everyone. [ male announcer ] how do you get your bounce? [ woman ] time for change! ♪ hey, big spender, spend a little time with me ♪ >> big spender, you get the point i'm sure from the music. despite positive news from a few retailers the past couple of days, you're not spending as much as you used to and that's a fact. we're going to discuss that with a leading economist in just a couple of minutes. now, we're very close to the opening bell on wall street. before we get there, come in, scott shellady, who joins us from chicago. i want to know what do you make of this public jockeying to be the next fed chair. i tell you right up front, i

don't like it. i don't want a politician, i don't want a nice guy, i want somebody who's going to handle the financial affairs of the country properly. how about you? >> i agree with you. it should be a policy decision, it shouldn't be a personality decision or a political decision. 100% policy and right now this is not good for the country. now, as we go forward, would i like it to be-- not because i like qe and the way we're going down the pipes right now, but listen, we can't afford to have a change to ruin anything else we've done so far. i think that mr. summers is a little loose lipped, but the inner circle wants him, but outer circle would rather have yellen. as a trader, it would be fun to have summers, but i think that yellen is the right choice. stuart: how about this, i like paul volcker back, i know low to mid 80's, but give me volcker every day of week. >> i've done doing this for years and i remember paul

volcker. it would be nice, but we can't. right now the kid gloves choice is going to be yellen. stuart: we've got it. thank you, scott. we'll see if you're right. [bell ringing] the opening bell is ringing and we closed yesterday at 15,002. you're on cusp of 15,000. we're at 14,993 in the first opening minutes of business and the opening trend is down a little this wednesday morning. got a big name for you that you know. home depot's rival lowe's. they put up pretty good numbers this morning. nicole, the stock price, please. nicole: looking good. up almost 4% for lowe's and home depot did well. we're seeing the home improvement retailers doing well on the idea of housing recovery, people briefing up their homes on the inside out and lowe's certainly displaying that with the latest numbers. >> i think of lowe's as a housing stock and i think that

housing is a bright spot in this economy and lowe's shows it. how about target? that's an indicator of the broader spending numbers in america. nicole: you see here 2.8%. and they talk about the profit near the low end of the view of the analysts, cautious shoppers. we've seen some of the other retailers, talking about weakness and so many people still think this back half of the year is going to be great for many of the retailers, but for right now, you're not seeing it. >> interesting subject. by the way the dow is down 37 points, now at 14,966. some people say we spend too much time talking about apple, but you know, it is very much the stock of the last couple of years and i've got to tell you that the ipad losing momentum in china and its share of the tablet market. and samsung built on its lead. and apple's performance in china interesting. remember, they will introduce a

cold color on the ground that gold sells well in china. apple stock is up 2 bucks this morning. 503 the is price and mark zucker berg setting sights on 5 billion around the world who are not on facebook and do not have internet access and calls connecttivity a human right and he's announced plans to bring the web to parts of the world that do not have it. nicole, facebook is this morning-- >> parents promising food shelter and internet access, right? and facebook is down 1/4 of 1%, but mark zucker berg did come out and note 5 billion people mo didn't have access should be be able to go to a store, talking about a child growing up in rural india, for example, go to a store, get a phone, get on-line and access doing this through an internet campaign and led by facebook and mark zucker burg himself. stuart: no impact on the stock, 38.37 this morning, nicole, thank you. this week, our market watchers have been throwing around some

pretty wig numbers where the dow jones average is heading. do you remember that super bear looking for 5,000? ed butowsky is looking the other way. let's bring him in. ed, you say 16,000 by the end of the year, make your case, sir. >> well, first of all, 16,332, to be exact, okay? but the reason is, stuart, stock price is based on how we evaluate them, our chief right now based on expected earnings where interest rates are. that's not a negative for the stock market initially so i believe we could go from this point at least 6 1/2% higher by year end. it should be be higher than that and anyone who thinks it's going down to 5,000, i don't know what is supporting that, and you know, but i just think it's silly talk. at this point, people should be very comfortable. stuart: as your 16,000 forecast anything to do with the federal reserve and whether it keeps on printing or prints less? >> no, nothing to do with that,

because the printing as i mentioned many times doesn't have a direct impact on e. stock prices moves on interest rates and earnings and forecasted earnings and right now based on forecasted earnings to go up 6 1/2% where we are from here is really a no-brainer, it shouldn't be a problem. stuart: this is interesting. >> unless some macro thing happens outside of our borders, that could happen and right now based on what we see fundamentally, we're going higher. >> so you're looking at earnings, profits of american corporations. >> that's right. stuart: they seem to stand in contrast in the performance of america's economy. >> i know. stuart: earlier, there's a liberal think tank that the president's economic policies are not working for regular americans. >> yeah. stuart: so, it seems to me you've got this divorce between the performance of wall street, the performance of profitability for corporations and the performance of the overall economy and the two don't jibe, do they? >> no, but you have to remember a majority of earnings for our s&p 500 companies come from outside our borders. now, things are better, but they

should be a lot better. that's what's getting lost in this, stuart. people, yeah, things are getting better, but we should be significantly higher than we are if the policies in this country were better, because the united states is the pied piper of the world economy. we're the largest economy far and away and if we do well, the rest of the world does well. sometimes people say the rest of the world isn't doing well as a result we're not doing well. it's the opposite. if we do well, the rest of the world will follow and we're not and that urban institute policy i think is brilliant and wonderful and finally explains to people who maybe aren't watching the show, exactly what's going on in the world and we need more reports like that. >> so, i could leave it at 16,332 by december 31st, 2013. yes? >> exactly. i'm working on the decimal, but that's where i've got it now. >> i bet you are. >> ed butowsky, thank you very much indeed. let's stay on the economy and i want to bring in michelle girard, noted global economist. michelle? yeah, you are, you are, i've

known you for a generation and i know who you are. settle the argument, please. we have been talking about it all week, all month, actually. are we spending as consumers in america the way we used to before the great crash? >> no, we're not. we're definitely looking at a much more conservative case of spending. you know, a lot of what drove the spending through many of the boom years was, you know, people spending on credit and this is a completely different environment, so much of the down turn was about deleveraging, consumers shedding debt and having done, i think, a good part of that work, you can see there's just no-- nobody has any interest in going out and spending and putting debt on credit cards. we're living much more within our means and unfortunately, our means aren't growing very rapidly because employment growth is still pretty subpar. >> that's at the heart of it, isn't it? >> yes. >> it's payroll, how much are we bringing home in the paychecks.

i think if i'm not mistaken, we're now 1.8 million jobs short of where we were, i think, in '08 or late 7. >> we're not to making up from where we were from the peak and then the other thing is, when you look at-- for consumer spending as an economist, it really runs very much in line with wages and salaries. i mean, we talk about how the rising stock market, rising home prices help the wealth effect and people are spending based on their income they're getting every week or month. and unfortunately, that's only growing in inflation adjusted terms. like 2 to 2 1/2% of pay and really, that's right now what we're looking at in terms of consumer spending. unless that picks up and start to see job growth. 250, 300,000, you know, we're not going to be able to expect consumer spending to grow more rapidly than what we're seeing right now. >> but do you expect that kind

of pickup? >> i don't. >> no? >> no, i mean, i just don't see what the impetus would be for businesses to go out and hire more aggressively. i mean, even some talk, and i think there's some support for this, that some of the numbers that we're seeing now in terms of job growth at 180 or 200,000, may be somewhat overstated and may reflect part-time workers as opposed to full-time workers. if you look the at the number of full-time workers or you know, employment is not even as strong as what we're seeing right now. i just don't see in this environment why businesses are going to stop hiring. >> can you explain why wall street is doing well. 15,000 on the dow is pretty good and corporate profits are holding up very well indeed. how do you explain that when you've got a ho-hum economy. >> well, certainly, because there is he' been some benefit from the fed's stimulus program that that's on equities. and corporate profits have been helped by the fact that companies have been able to cut costs and reap the benefits of

the efforts that they made during the down turn and profits are better in a slower economy. stuart: thanks. and everybody does it, right? you shop in the store and buy it on amazon for a better price, unless, you shop at bed, bath and beyond. they're beating amazon in the price wars before the 20% discount coupon that everybody gets, certainly i do, in the mail. full disclosure you have to go to the store to get the discount, but looks like bed, bath and beyond is bucking the trend. bricks and mortar in this case cheaper than on-line via amazon. >> it was my take yesterday, the culture of the college cocoon. $60,000 a year for luxury living. dr. keith ablow will be here at 10:00. he disagrees with me, incredible. 10:16, the doctor puts me on the couch. to the big board, we're parring the losses a little bit and an

extremely slow trading session and the fed comes out with minutes around 2:00 this afternoon. find out what they're thinking. you may see the market move at that point, but right now we're down. let's call tax reform what it is, a tax increase according to, well, that would be according to harry reid. he wants a trillion dollars in extra tax revenue. higher taxes. that's not really tax reform, is it? or is it? the big battle coming up on capital hill and we've got congressman kevin brady involved in this. he's next. ♪ (announcer) scottrade knows our clients trade

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>> we are indeed parring the losses, down 11 now, 14992, very slow trading though. look at the price of gold this morning, where are we? 1362. we're down 9 bucks. yet another unintended consequence of obamacare, ups drops health coverage for employees spouses if they can get it elsewhere, they put most of the blame on obamacare for that move. no real impact on the stock which is dead flat, but ups at 86 this morning, and here reacting to obamacare just like a lot of other companies. and for harry reid and the democrats, cash reform is another way of saying, tax increases. they want to cut deductions big time and add an extra trillion dollars to tax revenue through the next decade through higher taxation. come in, and congressman kevin brady, republican from texas, i think we're abusing the word tax

reform. tax reform to you and i i'm pretty sure means lower rates, fewer deductions so you grow tax revenue. i think that's what tax reform is for you and i. for senator reid and most democrats it's a tax increase and i say despite your good intentions and your star power in congress, congressman brady, you haven't got it prayer of getting real tax reform through this congress. what say you? >> strongly disagree. look, i think, it's been about halfway through 30 down haul meetings focused on tax reform. people had enough of the irs and this tax code, for families and small businesses, you know, they want simpler fair tax codes that protects them, the taxpayers, not special interest and they want a tax code that helps america compete and win. what they don't believe is that tax reform should bail out washington's spending problems,

like harry reid suggests. what most of us believe is that spending cuts get us about halfway to balanced budget, but strong economic growth through tax reform, gets us the rest of the way. so, we think strong growth through tax reform actually is a very strong force towards balancing this budget, tax increases actually harm the economy. >> i don't think there's a single viewer of "varney & company" who would disagree with you, congressman. i think you're in lock step with our viewers, flat-out. but in many parts of the country, tax the rich is a political winner. >> well, it maybe a political winner, but the truth is america has now the most progressive, if you call it that, tax code in the world. we're hoping more and more taxes on fewer and fewer people and you can't continue that and i think that we ought to let the constitutional process work. the house is going to deliver the first real tax reform since president reagan. the senate says it's going to. they've got a lot of work to do

to deliver, but my point is, let us both deliver our ideas out of our chambers this year and then let's go to work to resolve the differences. >> reporter: is that how you see the timetable progressing, the house will do something concrete, real tax row form, the senate will have a version, all of it this year. do you think that's going to happen, really? >> i never want to guarantee the senate, but in the house, the chairman dave camp, is leading this on to a first full reform draft. when we return in the fall, with committee action in the fall as well. we're hopeful we can move it through the house. what the senate does in their timetable, you know, is anybody's guess. stuart: so we're on the same page, tax reform to you guys in the house is lower tax rates, fewer deductions, grow the economy, grow tax revenues that way. that's what you call tax reform, correct? >> it ought to be built for growth. for families, for our companies,

for our economy. we know it can be done. it can be much simpler, much fairer, much flatter, without all the loopholes and deductions and exemptions, we think that's the right way to do that. stuart: congressman kevin brady, we had 'd appreciate if you camk and told us any progress, most of our viewers are for it. >> thanks, stu. stuart: the traditional end of august, the lazy month of relaxtation, i think it's a thing of the past and i do not like that. my take on august is next. ♪ ♪ ain't no cure for the summertime blues ♪

♪

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>> i've got to run through some of the big name stocks that are moving. staples down big. and dismal sales in europe and australia and cut the outlook and look at the 13% down. that's a big drop. american eagle. that some hitting a new low is making a whole lot less money. store traffic is down and it's off 8%. i've got big news on housing coming up at the top of the hour and here is one of the bright spots of the economy, one of the few places we're spending money.

i've got the numbers for you coming up and plus, get ready for the list of states where you do not want to die because of high death taxes. we're going to tell you the one state that's the worst to die in and get this, nearly a quarter of german men don't want to have children. you know, it sounds strange, doesn't it? this is a huge economic story, major implications throughout europe and the rest of the world. all of that lot coming up new at 10:00. and here is my take on august. what happened to it? i'm talking about the traditional august, that lazy month of high summer where you really get away from it all, that month when it's okay for kids to do nothing. where a youngster could be gloriously inactive. seems that month has disappeared. one of my daughters was already-- she's already returned to college, college classes, already gone there. another moves back to campus

tomorrow. most summer camps have already wrapped up. the students who were camp counsellors had to leave and across the country, k through 12 classes fire up well before labor day. i don't like it. not because i want the kids out of the house although that's an advantage, but because i think that august represents summer and summer means less pressure. it means doing something different. it might mean lazying around on the beach or working to raise money, but little by little, we have changed what august used to be and i don't think we've changed it for the better. why are we doing this? do we really believe that more time in school means more learning? how is that going? do we think that more scheduling is good for us or produces a more nailed down population that could compete with china? that's laughable. you really can get a way from this new august. you cannot take that family vacation, that stretches over labor day. you can't step away from the rest of society, that's a

strange. by curtailing, cutting short and changing the feel of august, we've lost a lot. and i don't think we've gained very much. do you? you know throughout history,

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>> wednesday, august 21st, welcome to the second hour. look at this. attorney general eric holder joins the wall on wall street attacking bankers may be a political winner. don't die here.

that's the sign on some states -- or should be the sign an states with higher tax classes. optimum death location. more than one in five german men thinks zero is the optimum family size. sex good, children forbidden. american colleges extending childhood, delaying becoming an adult. i say it's bad. dr. keith ablow puts me on the couch. realtors, the home sales report is moments away. ♪ >> existing home sales numbers, important not housing market. 6.5% increase in home sales and 5 -- sorry, a 5.3 million home

selling number for the entire year. that's the pace of selling of existing homes. 5.3 million a year. come on in, team investments, you know a thing about this. say that 5.3 # million homes a year is improvement. what say you? >> this is a great improvement. we went down a little bit last month, and it was a little bit disappointing, but we have to realize invenn story is tight. it's the lowest since 2002. the fact that people are buying what's out there is great. this number is a positive sign for housing, and there's volatility, but with new home sales up, existing homes sales, up strengthening in housing. >> of 6.5% increase. that's the absolute number. again, that is -- how would you characterize that? it's not exactls, but it's solid, isn't it?

>> it's solid and stable. that's what we talk about all the time is stabilizing housing. not big uptakes. we don't want downturns, but stable housing. >> i have to take a break a second to go to nicole to check the home building stocks for me. back to you in a second with a word on pricing. nicole, home builder stocks, please. >> i was looking at them, they jumped. even kb home, positive territory, they have been negative. one was down over 11%, all moved positive territory, but this is a 6.5% jump for the home sales. >> thanks very much. i got a number here up 13.7%, the price of the homes, existing homes sold. i think that's year on yearment i think that is. 13.7%, that's good. >> that's excellent, showing

strength. what we have to understand about the existing home sale number is that we don't have numbers from the tick up in the interest rates because people who locked this rate and closed on these homes locked back in may and june so it's interesting to see if it affected the existing home buyers. we know it affected refinancers, but the existing home buyers. as far as pricing goes, we'll continue to see the rise a little bit just on pure supply and demand. >> yield on ten-year treasury, not to be technical, is 2.85% after the number came out. that implies that mortgage rates will be up a fraction from where they are now, but nothing serious. you're on record on this program as saying that even if the mortgage rate goes up to 4.5, 5%, doesn't make that much of a difference. >> it really doesn't. when we see that 6 and 7%, we're going to see a pullback in housing. >> all right. stay there, please. i know you got, what is it? the house of the week for us to tell to us, perhaps, later on in

the program? >> i hope so. >> we'll be waiting for it. the big board, down 26 points. no impact from the housing numbers, at 14,000. that's the important number here, 14979. look at lowe's. that put up strong numbers this morning. rival home depot put up good numbers yesterday. now, this is, i'm calling this a housing stock, a housing renovation stock with home depot, and it's doing very well, thank you very much, indeed. 46 on lowe's right now, up 6%. very nice. housing a bright spot, but you, nope, you are not spending money like you used to. four big name retailers who are losers. go. >> take a look here. a bunch of losers to talk about including american eagle, staples, the number one loser on the s&p 500, down 13%, staples had dismal sales in the international markets, lower revenue in american eagle, and

store visits dropped, fewer people coming in which i think is a be deal, and target's annual profit and jcpenney done again. >> we have housing indeed, a bright spot. people spending money in the entire housing arein ya, got that. overall, we're still not spending money like we used to. by "used to," i mean back in 2007-2008. overall, spending is not robust. housing the bright spot. that's where we stand at 10:05 eastern this morning. a study by the cato institute reveals that in 35 states, welfare benefits pay more than minimum wage jobs. hides, look again, you can make up to 60,000 a year in welfare benefits that's tax free in the hawaii state. out of those 35 states, where

you make more than minimum wage on welfare, 13 of those states pay more than 15 # -- bucks an hour. charles, you talked about the welfare trap, and that's it. >> that's the trap right there. you know, i talk about it all the time because it's disingenuous of politicians to talk about defending welfare, all these different programs, and the idea of making poverty is not global poverty. our people are sitting good compared to the rest of the world. the incentive to make moves is a transition makes you have to take a pay cut. you got to take a haircut. boss says, i like you a lot, i'll move you over to xyz department where you can grow. you go home, crunch numbers, and guess what? someone says i got a job for you. you don't have to sit on the sofa. it's more profitable to be on the couch. get up when you want, play video

games all day, eat cereal, smoke a joint, and i'm not dissing everybody on welfare, but it's a deliberate trap. i think it's a deliberate trap. they crunch the numbers. it's a trap to keep people enslaved to the mentality that makes them servants to the government. >> because you will vote for the government keeping benefits strong. >> for the people ho care about you, not the mean people who want you to work and, by the way, take a pay cut. >> you are mean, charles, you are. >> i know. >> you got that look. dow down 24 points, a stable market, and we'll probably be that way until early afternoon when we find out what the fed is signaling. that's the big date this afternoon, about two o'clock #, roughly. taxes, you cannot get away from them, but states are much worse than others with a state inheritance taxes. look at the map. these have death taxes of 12% and up to 19%. here is our tax guru, 35

financial planner, al. all right, al, welcome to the program. >> thank you. >> in those states we listed on the screen, you pay 12 to 19% in estate tax. what's the cutoff point? you pay that on above what level? >> depends on the state. some states, for example, like new jersey, $650,000 exemption. the first $650,000, you pay no state estate tax. after that you do. new york is a million dollar exemption. >> a decent house in new jersey is probably worth $650,000. >> this is what people don't understand. the push in the media, especially, when they talk about estate taxes is the fed level. when you have a 5.2 # million exemption, people say, well, i'm not paying tax, i don't have $5 million, but if you live in new jersey, you don't pay federal estate tax, but you pay new jersey state estate tax. >> now, in these states, their

own estate taxes at the high level, you pay the state estate tax on top of the federal estate tax with a sizable estate. >> absolutely. looking at the tax system, there's the federal state tax, the state estate tax, the inheritance tax, and gift tax. now, if you add up all the taxes, there's not much left after you paid income tax, sales tax, property tax, ect.. >> what's inheritance tax? >> that's with the beneficiary. estate tax is based on what you are worth, inheritance is when you give the money to. if it's not a parent, child, grandchild, but a cousin, nephew, you pay an inheritance, or they pay it when you let them inherit the money. >> -- back to the state estate tax. >> sure. >> only way to avoid it, i

presume, is to move? die in florida or something; is that right? >> why do you think so many people move to florida? >> is that right? >> other than the sunshine, absolutely. we have many people who make decisions on where they live at retirement based on economics. based on what they are beginning to pay or not pay upon death. >> now, you're a financial planner. >> correct. >> you know the story here. i take out a life insurance policy, don't i? when i die, the life insurance coughs up money and uses that money to pay the estate tax, that's how it works, isn't it? >> many people who do a bunch of things including various trust, ect., still have a potential tax liability, they take out a life insurance policy, make sure the policy is owned by a trust, okay, outside of the estate, and that only pays a tax, not going to avoid the tax or do away with the tax, it's just going to provide liquidity to pay the tax. the government loves it because they are going to get their tax money.

individuals kind of like it because they never pay the full freight, only the premium, and it seems to work in many cases. >> i shouldn't, perhaps, ask this, but i'm going to anyway. you know as well as i do that a lot of people buy gold coins and gold bars. they don't put them in a safe deposit box because the irs looks at it, but ruer ri them i- bury them, don't they? >> they might. i have no evidence of that [laughter] >> leving it at that. >> very good. >> we appreciate it, thank you, sir. >> thank you. >> the college cacoon culture. as you know, i hate it, kids in my opinion should strike out on their own, not be enveloped in a post adolescent lifestyle. dr. ablow disagrees with me and so does imus? the the doctor responds to this after the break. >> no, i agree, you have to develop a work ethic with kids and discipline and structure in their lives. no, you're right about that, but

you're wrong about the college thing. that's just a mean old base toured who wants his kids to be miserable.

>> time for money, charles payne, he's revisiting taser

from last friday? >> last friday, i mentioned this, broke out, up a little bit, fallen back a bit, a human breakout, las vegas, florida, rhode island, the state police, the forest service, all just for the tasers, the weapons, but a new interestinggthing is the cameras. in a post-stop and frisk world, that doesn't exist. we'll see how it plays out in the courts. what you see without court development is police departments with cameras, glasses, or whatever. they sell those as well. orders booming for those. international growth, one in two police officers in america or the departments have tasers, but one in 50 internationally. there's tremendous growth opportunities around the world and a new niche booming in the particular country, stock is breaking out. i like it. it goes at least to 15,000. >> i didn't know they were in the camera business of police departments. >> yeah. >> inevitably, i guess, but a good niche to be in. >> smart for police officers

because that saves them a lot. they spend $2 billion just on lawsuits, you know, he said-she said, that saves a lot of money. >> taser held back because of the lawsuits they face because tasers are said to injury people. >> but it's better than the alternative, and execution is not great. management has a great product, but not executed well. >> still like it? >> i do. hard to mess it up. [laughter] >> oh, man, there's a recommendation for you. [laughter] listen to this then. according to data released by the act, that's a testing system. just 25% of high school grads who took the test have skills needed to succeed in college. even worse for black high school students, only 5% are prepared. how many of the grads get student loans they cannot pay back. charles, comment on this? >> two things, a, stop grade inflation. forget about the political

correct, but if kids can't read, hold them back. i do implore us to have a knowledge base. we have to embrace knowledge. coolest kid on the block is the a student not the kid who dunks a basketball. i believe in higher education. there's a big ground swell, people shouldn't go to college, but to compete in the next century, asia, need as many kids in courses or we'll be a second rate country. >> could have a disagreement there, but yesterday on my take, i talked about a tour that i was given at one of the private universities i visited last week. a good name academically, but the college was offering, giving students a luxury extension of home life. this is what i said. >> hey, send your kids to us, and we feel them make it home. it's like they never left. is that what college is really all about? my answer is no. becoming an adult should not be postponed. it should be embraced. >> yes, i mean that.

this is the viewers reactions. cat says, not only is this college not preparing our adult children to be real adults, but they won't be ready to be americans. well said, cat. sarah adds this, under obamacare, you can stay on mommy and daddy's insurance until 26 years old, no wonder colleges treat students like young children. a lot of reaction on this including some that didn't agree with me, like dr. keith ablow who joins us now. all right, doctor. where am i wrong? i think an extension of adolescence into your 20s is bad. you disagree with me? >> well, i would disagree -- i wouldn't disagree with that, stuart. i disagree with is this. i don't think colleges need to reflect every reality of the day. i think it's okay if it is an enclave of scholars where kids are finding their way. their real way, though, to becoming real people with plans, with goals that are embracing. that can take some quiet, some

focused study, so, listen, i think that that's what college is for, the best of them. i think that the problem is with public education that proceeds it. >> with you on that, but, look, if you provide this lux ri lifestyle, that's home away from home. it's not just the food, the maid service that do the laundry for them, but the whole atmosphere. you've not grown up yet. you're not ready for the adult world. we're going to cacoon you and shove you through the four-year system at a cost of well over a quarter million dollars a year. i think, doctor, that is a real problem. suspect it? >> i don't think that's the problem. i think the problem is that the rest of us outside the fortresses that represent this, the rest are lost in falseness in trying not to see things for what they really are.

perhaps in these enclaves of scholarship, kids could really focus if they are dedicated saying, wait, what's happening in egypt, that is a mess. let's study that. let's find out where the pir hes went wrong, and so, listen, if i pay $250,000 to a college, i'll be honest, i want that dorm room to look grand. i want the food fabulous because, you know what? otherwise, i feel gypped. i wish colleges and universities compete more with each other because, frankly, a lot are sorry excuses. go in the dorm rooms, hey, it's 50,000, two kids in the 8 by 14 room, that's an embarrassment. dress it up. >> no, that's wrong. >> no, it's right. let me help you. >> oh, oh, hey, here's what i'm happy about. my daughter took the tour, had a look at it, didn't like it, doesn't want to be protected in a cacoon. she wants to get out and live in

the real world. i am truly thank fl she feels like this. is she wrong? >> well, listen, there's a lot of ways to be in the real world. you can join the military. you can start a business, but if you choose to study for four years, i'm not sure, frankly, going back to a dorm room with nice hardwood floors and well insulated windows and a good cook making delicious meals is so terrible. a lot of these kids, by the way, the serious ones, they are up all night. i mean, my daughter's in secondary school now. she asks for lights on after lights are to be out at 10:30, whatever it is to stay up until one to study. i don't think them having all the bells and whistles and some comfort is such a bad thing. stuart, you pay good money. why should they be using that money to send the faculty off to africa to have a little tourism

experience because they spend it, brother, might as well be on beautiful, beautiful, fixtures for your daughter ice private bathroom, that's nicer than the public communal bathroom in most schools. >> you shocked me. you really have shocked me. >> i'm healing you. i'm healing you. feels shocking, but it's good for you. >> well, we will no doubt continue this. believe me, you'll get facebook reaction to this, ablow. >> i can't wait. just what i need. >> nice, doctor, see you soon, thanks a lot. >> all right. >> check this out. a mere 9,000 square foot home in tampa, florida, eight bedrooms, ten baths, 13 years old. might be time to buy it if you're in death tax minnesota. no tax in florida on estate. we'll deal with it next. ♪

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>> breaking manning sentenced to 35 years in prison. dishonorable discharge, he must forfeit all pay. 35 years, bradley manning. a market check, the big board,

same old, same sold. this level is below 15,000, maybe this changes around two o'clock eastern this afternoon when we see what the feds' thinking. we love the pets, we, we do. petsmart taking in serious money, but tell me, nicole, why is the stock down? >> interesting because the revenue number that came in, 1.71 billion matched the analysts' expectations, didn't beat the streets, and it's been a winner year to date. it's interesting people are taking money off the table, growth margins was flat, but they did, the good news here is the retailer raise the its full year outlook so that's good news, ultimately, i mean, i, for one, can tell you a big chunk of my paycheck goes to my pet. >> i don't know, a big amount. >> 3%, 4%, that's a loss for a company that comes in with good numbers. nicole, thank you very much indeed. one of the stories we cover frequently here is the way we perceive of wall street. in my opinion, it is very much under attack.

lead story in the "wall street journal today, attorney general eric holder is going after wall street, five years after the crash. charles is with me. i see this as a war on wall street, and it's not over. >> no, it's not over. it will never be over with this administration. here's the way you do it. first of all, make him a demon. when president obama talked about is wall street and such a negative terms, right now, at this moment, millions of people went to work, inside a factory that was financed on wall street. they will never know that. the hatred, the venn -- venom, this nature any time we speak of wall street, it's always negative. they are evil. they are greedy. they are out to destroy the country. now you set them up for any kind of punitive punishment that you want including stuff that's stupid. hey, they hire influential people in china. are you kidding me? okay. you mean to tell me that the chinese premier's kid goes to the most elite schools in the world, greatest contacts in the world, and i'm not supposed to

hire the person? are you nuts? of course i'm supposed to hire that person. that's against the law? that's something you want to go after me for? get this one. someone doesn't pay the mortgage for three years, we mess up the paperwork trying to foresloes on them, and now i oh them money? are you kidding me! only in a world where you make wall street the most hated entity on the planet do you do this, but here's the irony. we keep bailing them out. you keep them alive. it's like the matrix. you keep them alive to fund your agenda, but you keep pounding away and pounding. this is petty. what they are doing now, they are out of every charge in the books so now it's this stuff. >> you know, charles, i think you should do a my take or two because that was very, very good. >> thanks a lot, thank you. >> all right, tonya with us from phoenix has what we call the home of the week. i believe it's in tampa, florida, in an exclusive area. why don't you describe -- i know you are trying to sell it, so, go ahead, give me a selling job. we have the pictures too, go.

>> well, this listing is my colleague's from scoring the deals home, and it is exquisite with a grand "gone with the wind" staircase, on the water. it's in davis island, amazing. 9,000 square feet, eight bedrooms, ten bathrooms, which i don't want to clean any of the bathrooms, but this house is unreal. it's listed at 5.4 # million dollars. that's about $600 a square foot, and when you look at the location of the home and where it is, that really isn't a lot of money for this home. >> quote. quote, that's not a lot of money for this house. >> for this home. for this home. >> you think it's a bargain, seriously, do you? >> yes, i do think it's a bargain. we'll see that price go up. every single county around tampa, other than one, has increased in price over the past year. >> now, there is -- this is in

florida, of course r obviously, no estate or income tax in the state of florida, is there? >> well, no, but there is huge property taxes. >> oh, well, that's, you know, can you tell me the property tax on a 5.4 million home? >> $64,000 a year. >> oh. >> you can buy animal entire house in phoenix for that money. >> glad you told us. this house has not yet been lived in, i think, is that correct? >> it has been lived in, but not ever been sold since it's been built and remodeled. >> you want to sell it, and you are charging commission, and i'll charge you commission if it sells. >> i knew that was coming. >> it was interesting, a beautiful house, 5.4 million? not sure. come back soon with another house of the week. we'll list it for you. okay? >> thank you so much. >> sure thing. now, something much more serious. europe got a problem. big problem. it's all about the birthrate.

what is the ideal family size for a quarter of all german men? i got the answer for you. zero. that's what they think is the perfect size. mind boggling. find out what's going on here in a moment. ♪ ♪ the boys used double miles from their capital one venture card to fly home for the big family reunion. you must be garth's father? hello. mother. mother! traveling is easy with the venture card because you can fly any airline anytime. two words. double miles! this guy can act. wanna play dodge rock? oh, you guys! and with double miles you can actuay use,

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stuart: bed, bath and beyond beating amazon and the price wars. as i understand it you go into the brick and mortar bed bath and beyond store and the price you pay is cheaper than if you bought the same item from amazon. charles: there are some cubans involved but bed, bath and beyond was a big hit last year in part because everybody said they are eventually going to lose this battle but it turns out there fighting the battle pretty good in the stock is considered by a lot to be cheaper but they're not the only ones and we are seeing a lot of these brick and mortar companies, best buy, addition stop, the internet has posed a challenge that the coming back.

stuart: look at that chart. charles: some scuttlebutt about being up for sale, the co-founders are 75, 84 years old, they may want to get our tax guide and get out but even without that some think the council which to compete with amazon which was big. this sales-tax on the internet could, but the placing feel even more. amazon has been pushing for it which i am not sure what the angle is. stuart: they want to get their warehouses built. the is your speculation. german men, having a family, a new survey finds 23% of german. deuce 80 ideal family size is zero, no kids. that is the perfect family. no kids. i say this could have huge social and economic repercussions for germany and the rest of europe. a former state department adviser and author of smart power joins us on this subject.

23% of german men say no kids, don't want them. any idea why they are saying this? >> it is a combination of cultural and economic things. fertility drops when economic prospects dim. it has dropped in the u.s. since obama took office that healthier here and in the you can t germany. german fertility only 1.4. in need more than two to 16 with a massive influx. and known as a basket case for fertility. don: stuart: i thought was the story about guys in labor but -- this has serious economic repercussions. if you don't have replacement fertility, your population falls and as it falls your population ages. i would think that was a huge

problem, isn't it? >> you need a broad pyramid of working people if you find people not to work in the german welfare state more generous even then, a lot more pension funds that saddle companies with expensive retirement program so as the pyramid gets more natural it makes the euro look more vulnerable than it is and currency will not last a thousand years. charles: also want to talk about the fact that you need immigration to make up the difference. let's be honest about europe. immigration problems are a lot worse. the fact is christians in the great to america, a similarly pretty well, second generations learn english and they do pretty well. that is not a case in europe. we could see a massive cultural meltdown, in fighting, civil

confrontation. they are looking at a serious problem beyond economics. >> right. the chief rabbi in london recently said the multi-cultural listen doesn't work and muslims in particular are not assimilating. for problems we have in the united states we at a melting pot and that is something that remains somewhat alien to old europe especially has yet immigration of people willing to work, younger workers in a broader middle east timor social tension and there is not good integration going on so in addition to the economic squeeze there will be a cultural one too. stuart: i don't think anyone has replacement level fertility. through of every single country the birth rate is lower than replacement levels required for replacing the population. population declining throughout the continent. i stated that the vance veazey era is finished.

anna going too far? >> i don't think so. the closest is france, a major country, in germany frankly, pretty relatively low unemployment compared to the rest, of economic growth, going down from here what this says 4 u.s. power where the world map is economically, politically europe will continue to become less important and higher growth, yonder regions like the americas and free parts of asia where the future lies. stuart: thanks for joining us, got it. the inga attention to the stock market, holding its ground, there will be some said minutes released later this afternoon, roughly 2:00 eastern, use a market movement at that point but right now stable, down 35. critics say fracking pollutes the ground water, fracking supporters say it is clean. which is it?

we will talk to the ceo of a fracking company in just one minute. right now, 7 years of music is being streamed.

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stuart: wild fires could run up the total cost of $1 billion coming from the national interagency fire center. that agency says the top priorities a burning in idaho, one in the sun valley region forced the evacuation of 1200 homes and already cost $12 million to fight it. more proof that we are not spending money like we used to, weak sales riding stables second quarter earnings down 15% and stock getting hammered as of now down 13%. got some positive news on the housing front, home sales up 6.5% in july, 17% from a year ago, median price on the rise up 14% from a year ago. up next the ceo of one of the biggest oil drillers weighs in on the fracking they day. do not miss this. tly how they w. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login...

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stuart: the chairman and ceo gary evans rushing the opening bell on wall street, this company is planned natural gas production company, ed does a lot of fracking. gary evans joins us from the floor of the stock exchange. welcome to the program, get right at the issue. i am very much pro fracking. i want to produce all the natural gas and oil weekend which is ours but the other side of the quote keep coming at the same it pollutes the ground water. what do you say?

>> absolutely hogwash. there hasn't been a documented case in the united states of where fracking actually contaminated ground water. the former chairman of the texas commission sits on the board of directors in the state of texas did a study of every crack in the state of texas and couldn't find a single case. is impossible because we are tracking in ground waters, 400 feet so so many layers of strata behind the casing, physically impossible. stuart: if we were to go gung-ho fracking in the marcellus field in pennsylvania and new york state and north dakota, and forgot the name of it. if we went flat out and did it could we become energy independent very quickly? >> we basically are flat out doing and unquestionably this country can become energy

independent. the month of man was the first month in twenty years that we imported less oil than we produce. in the next week to ten years the country can become energy independent and think about the political ramifications worldwide, to produce sufficient quantities of oil and gas and not import that and the trade deficit as well. stuart: can you convince environmentalist's that fracking is safe? >> we are already doing that. there are thousands of wells being done every day and age you don't hear about problems with those wells but the a few you do hear about are typically done for hollywood. it is not something that has any basis of facts behind it. bring me the facts and we will defend ourselves. we believe this is the technology that is changing the entire country for every citizen that lives here and for us to turn are head away from it when

other countries around the world are coming to get this technology so they can become energy independent as well. stuart: thanks for taking time out, we appreciated and we are in the middle of the fracking debate and we wanted to hear both sides. time for charles to take a victory lap. liquidators, he liked it several times and still likes it and it has gone up. charles: we have subscribers, a big announcement of a gigantic facility on the east coast. we hear politicians defend capitalism and free markets but they say the government needs to move out of the way. the government needs to move out of the way so a guy like tom sullivan who in 1994 began to sell building materials and gone to develop the liquidators of the world. they need to say government needs to move out of the whistle a girl named esther in queens and build a company called esteban daughter after she changed her name to become a

global powerhouse. this is what these politicians need to do. put a face to capitalism and american success. this is a genuine american success story and that is why i love it. stuart: who started? that is a great chart. charles, thank you very much. former intern for pd finding a class-action lawsuit saying she was taken advantage of. we continue the debate after this. it intends be paid in cash or experience? that is next. should intends be or experience? that is next. you know throughout history,

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neil: coming up on lou dobbs tonight, one arkansas school district spends thousands of dollars training and arming teachers to secure the safety of their students until one overzealous attorney general changed everything. meet clarksville, ark. superintendent david hopkins tonight at 7:00 eastern.

stuart: a former intern filed a class-action lawsuit against pd's record label bad boy entertainment for not paying her. she says she believes she was -ptaken advantage of. this was an unpaid internships to get coffee for the staffers and phones and the lawsuit accuses the company of violating minimum-wage laws by not paying interns for the work performed. here is the debate. you get paid with experience, foot in the door or do you have to have financial payment? charles: people should get paid for their time and effort no matter what. this is confusing. after her first week they didn't give her a check did she not realize i am not going to get paid for this? after three weeks it would dawn on me daily gave me at metro card. i think the lawsuit is frivolous in that nature but i believe in paying people. not necessarily a lot of money for time or effort or whatever. i don't know what the agreement was between these parties. stuart: you don't think it is good enough to get your foot in the door and get experience in

the industry might want to join? isn't that worth something to give the fourth human beings put out effort, my son is working for me this summer and i am paying him and he is working hard. this work thing is attractive to him. his first real job. getting up in the morning is eating them up. stuart: more varney in a moment. [ male announcer ] these days, a small business can save by sharing.

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and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account. stuart: paul bunyan and his big blocks been selling obamacare in minnesota. the unofficial mascot and a new ad campaign in debt getting residents to sign up for the health-care exchanges. what is the cost? $9 million. any comment? charles: i don't even know what it is for. if there's ever a case to delay or defund. stuart: earlier i gave my take how disappointed i am about what

august has become. lost its lazy high summer feeling at least to me. that is mighty, here is your take. ryan says there's more to learn about life than can be taught in a classroom, you are so right. suzanne agrees with me. school should start after labor day and go into june. and said the kids are out before memorial day and back at their desks by mid august. we love this stuff. keep the conversation going on facebook. that is it from me. it is yours. connell: getting rid of things none of us are agree about. the college thing was great, terrific appearance. if you thought the matching brothers looked like a geek in their latest ad for the nfl sunday ticket, you are right. also we have a great story for you today. you will hear about the company that wants to get in on this so that is coming up. and ups planning to stop

covering employee spouses as part of its health-care plan. one mess as to why they're doing it. here we go again, more buzz about a twitter of ipo and what that will mean for the markets. we will talk about facebook and the theory of the housing market in the hands of ben bernanke. and what type of fed chair real-estate needs known. and get started on markets now. and make it to the show by joking so reason to stay tuned as we continue on markets now. the nfl story in a second. big money, sports. and below 15,000 as a matter of fact, we'r