"money" with melissa francis is next. melissa: i am melissa francis and here's what is "money" tonight. mortgage rates are soaring, it will be the death of the housing recovery. lendary bank analyst says that makes absolutely no sense. he joins us exclusively to explain why. plus a colossal wildfire in california is now the size of chicago. san francisco power and water supplies are under threat. we will go live to california for the battle and the money to fight them. and who made money today? they are shining bghtly today. keep it right here to find out who it is. even when they say it is not, it is always about money. ♪

so we kick off tonight with housinand a new opinion on the impact of rapidly risg interest rates. bank analyst dick bove says it makes no sense to think it was any effect on the housing market so why is lowering his rating on one of the major mortgage lenders just today? joining me now is dick bove. always such a pleasure to have you on the show, thank you for coming on. >> thank you, melissa. melissa: why are you making this about mortgage rates? why will it knocked the legs out from t housing recovery? >> think about it. during the housing boom, the average mortgage rate was 6.5%. if you take the average mortgage rate, it was 6.75%. the average rate since

freddie mac publish the figures in 1971, 8.6%. the current mortgage rate up a lofrom the bottom is somewhere around 4.35, 4.50. way bew what the average has been for any period in the last 30, 40 years. it is pretty hard to believe an increase in mortgage rates causing a slowdown in housing. there are other factors, however. number one, last year roughly one out of every five houses were being bought the pension funds, hedge funds, one out of something like every eight. they stepped away from the market because housing prices have jumped summer between 12-20% depending upon the market you are looking at. the second thing that is gnificantly different is the underwriting standards. melissa: that makes a really big

difference. go ahead. >> if you are low income household you simply can't get a mortgage. there is no about it. if you are very high income household you also have difficulty because the capital has to be put behind your mortgage will be very high. all of the mortgages which are going through the pipe, if you will, or conforming mortgages and the problem is the standards have gotten so much more difficult, you can ask people who listen to your program, it will take three months to get a mortgage. melissa: it sounds like you believe the housing market will slow down for different reasons, and they are still mortgaging area did >.>> right. housing prices have risen to rapidly, to quickly because the speculators are leaving the market because the processing problem is becoming bigger and

bigger in something that will hurt over time. if you ask me the next two to three years of housing will go up a notch, the demographics are very clear housing demand is going to increase and therefore housing should increase. melissa: why would those people not rent? it is so hd to get a loan and rates are rising, but those people may find it is more compelling to rent. >> it has been, but rental rates are going up pretty rapidly also. rental rates are going up much faster than housing prices in many areas of the country therefore the good deal you got by renting is not coming up in terms of the down payment and having to deal with what is a higher housing price you could avoid. but i don't think at is the situation any longer. it is better to buy than rent. melissa: what was behind that?

a little bit of this, or something else? >> it is the government. the government has made a strong decision that it wants to break up this bank. you have eight agencies of the government, six lawsuits supposedly in the justice department against it, to countries want to sue the bank so that is 14 to 1 16 lawsuits they will face in the ne-term. in addition to which on saturd the company indicated it was going to pull away from providing payment services to banks around the world bause of one of the losse coming in this direction. so what is basically happening is the actions of the government are in fact change in the business of the company and i would expect investment banking business to get hurt, i would expect it to get hurt and legal expenses will get at least two to two and half onion dollars

per quarter which is way above what they have reserved for. the earnings will run into real trouble because the government is out to get it and the government is going towin. melissa: so you downgraded them from a buy to a hold. do you think it extends to anyone else, to goldman sachs, or this is jpmorgan specific? >> we went through a whole bunch of quotes, a whole bunch of board members, quotes from senators, quotes from people at the fdic, attorney general's office, they all said the same thing. we want to big to fail banks to go away, we are going to sue these banks. i think over the next six to 12 months you will see lawsuits coming out from just about every part of the government after some banks somewhere, to think it won't hurt those stocks would

be a mistake. in the short run you are looking at that money in bank stocks. melissa: they were announced and they are laying off part of the mortgage unit, do you feel the same way about wells fargo? >> wells fargo has had five layoffs in the past six or seven weeks in each case it is because mortgage refinance activity has come down substantially and therefore they are separating themselves from people involved in that activity. wells fargo eaings should be decent over the next couple of quarters but i don't see how wells fargo is going to step aside and not get sued along with everybody else. bank of america got hit last week, citigroup is being looked at obviously we have mention jpmorgan and everything you can think of. iizm think you're going to havo see housg bank stocks will react to these lawsuits which

will be sizable in number. melissa: thank you for coming on the show, we appreciate your time. that everybody agrees with the rising rate will not kill the housing recovery. the other side is founder and ceo, welcome to the show. what did you agree with and disagree with what you just heard? >> i disagree with the notion rates will not have an impact on demand. but i agree with the concept that overall housing is going to see a decline both in prices and demand overall. melissa: why do you think that? >> there are several factors at play. if we look at the interest rate factor we first had addressed, the interest rates while looking at it the past 30 years for example there is not a direct coelation with interes rates increases and a drop in demand. however there is a correlation between the affordability of a home, if for ability index, and

homes at various price levels. as interest rates go up people delay their decisions, not by it all or they buy something much cheaper than they would have in the past. for examplof a purse was buying $200,000 home in may of this year they would have paid about $875 per month, today they would pay about $102 $1025 per . melissa: one thing that could happen is as interest rates go up, a.b. prices don't rise as rapidly. we have seen a big move up in prices, so maybe being the devil's advocate, maybe the rates rise a little bit that will stop this from becoming another bubble. that could be a good thing. >> i agree with you that you need rate increases to find an market equilibrium. whait has been happy wi four months of inventory, some would argue three, the area that has

been hit hd by the bube last time i being hit by a potential bubble this time. we are seeing the 200% in one year, that is a significant problem when you have a lot of cash coming in from asia. overall wenew the rates to increase, the fed to bu less $85 million for bond, the rate to come up a bit so the market can return to something healthy. its going to mean a lower price and it will mean less demand overall in the market. melissa: that isncredible. strike a lot of fear in people's hearts when they think of the fed getting out of this situation, there are a lot of concerned about the housing market. why should we not be wried about that, why does the fed began to exit not spell bad for the housing market? >> i think it will. if we are going to correlate the death of the housingmarket, we will see a significant drop.

it is a good thing long-term. if you have been an investor and you're going to try to get out of the market, it will not be positive for you but overall housing to return, that is what we have to have in the market. melissa: exxon's "money," is it better to shut down the government? one of the commerce and leading the charge here to make the case us you and investors reach the fight of his alleged chemical weapons attack in syria. battling snipers along the way. latest news from the middle east. more "money" coming up. when we made our commitment to the gulf, bp had two big goals: help the gulf recover anlearn from what happened so we could be a better, safer energy company i can tell you - sety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap

and a state-of-the-art monitoring cter, whe experts watch over all drilling activity twenty-four-seven. and we're sharing whate've learned, so we can all produce energy more safely. our commitment has never been stronger.

♪ melissa: given the choice, would you encouraga whole government to shut down or fund obama to get it started? millions of americans are signing on before the health care law. georgia congressman is one of the backers d he joins me now.

congressman, i want to ask you, if you shut down the government it does not defund obamacare. you would be hurting other programs, wouldn't money still go to obamacare? >> shutting down the government is not the issue here. obamace is already killing job production in america. obamacare is going to shut down america. we've got to stop the movement tian and by defunding it and continuing to fund the entire government exct for the mandatory as wl as the discretionary spending, which we can do in the continuing resolution voting on in seember, it is absolutely critical. just this week, sorry, just a few days ago delta airlines in atlanta annound obamacare was going to cost them $100 million. it will hurt their bottom line, it will hurt their ability to be able to function economically. we must shut obamacare down to keep the government running and that is what i'm doing.

meliss without question. i have saithousands and thousands of their emploes will kick their spouses off t health care, many different players have come out and said theye cutting people to 21 hours per ek. is this the best way to go about it? is it realistic to think somewhere down the line there will be legislation repealing ts going to sign? this is his signature thing, so why would he sign anything that would repeal obamacare? isn't that your goal? >> eventually, yes. i have t solution, it is called the patient option act. i introduced in this congress, freedom works in dorset alas congress, putting patients in charge of health care decisions. it'll ma health care ceaper for everybody proving access to good quality health care for all americans and my patient

option act will save medicare from going broke. that is a kind of policy we have to put in place. melissa: i hear you. without question obamacare will cost a lot of money and the burden on the lot of jobs and theconomy and everything but i want to look at realistic solution to stopping it in its path. even your own legislation, do you have support to make that happen and do you see the president signing that at the end of the day? >> what we need to do, melissa, take the funding away from obamacare delaying implementation be it is supposed to start on october the first. it will just dela it being put in place. it will not repeal it, it will just delay it until we can do something about it. obamacare, if itoes into place october 1, is going to destroy everything america is built upon. melissa: what would that something be?

delay it until what? >> put in place my payment option act. melissa: or we need somebody else in the white house, what is another eventual solution down the li that would stop it in its tracks? >> hopefully get controlling the senate in next year's election and hopefully we can go further. i have no illusions about the president signing my patient option act into law. unless there is enough public pressure put upon him in congress to repeal this abomination of obamacare. it has to be delayed and that has to be the reason we must defu it in this resolution or it goes into effect october the first. it is already destroying jobs, already hurting our economy, it will destroy the quality of health care and dr. -patient relationship. will destroy up to the federal budget. we have to delayt by defunding it in this continuing resolution

and that is the ultimate solution before we destroy america. melissa: thank you for coming on, we appreciate your passion. next on "money," the u.s. has the nerve to say the attack on syria is undeniable and they face cyber fire on the wake of the sin of where it happened. the developments how this can advance an attack in the middle east. latest details. more "money" straightahead.

>> the indiscriminate slaughter of civilians, the killinof women and children and innocent bystanders by chemical weapons is a moral obscenity. by any standard it is inexcusable and despite the

excuses and equivocations that some have manufactured, it is undeniable. melissa: remarkable acknowledgment by secretary of state john kerry confirming horrifying reports syrian government did use chemical weapons attack its own people. of course this takes things a whole new level in the foc will be turning to what the u.s. reaction should be and how this will affect aid to the middle east. with me now is president of the american islamic forum. family and syria, doctors located close to the capitol with the nve gas attack happens. i hope your family is okay. >> they are, melissa. every week that passes we keep thinking can't get any worse than this and when we talk to them by skype or by phone with all syrian american families we just pray for them and we just never thought. we knew the regime would not

stop at doing this, but we didn't think it would gon this long and they are just trying to exact the worst possible punishment to break the wilof the rebels. melissa: why is your family saying after all this has happened? with people sleep at night, women and children, creeping in with u.n. inspectors nearby, why are they staying? >> this is their home, where gerations of our family has been and nobody's going to leave their home to the monsters of the regime, and they have no place to go. now with the refugees, it is impossible to get people out of syria and they are going to stay. if they leave their home, they can never come back, their homes will be taken over by the military or rebels, so label stick it out and hopefully the bombs will not land on their house. the chemical attack that happens happened at 3:00 to 4:00 in the morning. the heat is unbearable, the windows are open, thoroughly they want to infli amuch pain and damage and it was women

and children sleeping with the windows open that had the nerve gas come in and that is why so many including israel and others are clearly saying this is undeniable because injuries were nerve gas injuries. melissa: how do you know it was the asad regime? people say it was the rebels. why would they do this right now with weapons inspectors right there in the country? >> the weapons inspectors were sleeping comfortably 5 miles away when it happened. it shows how callous they are, the reason they do it is they don't feel anything will happen to them. they feel no accountability. th rebels cannot weapon eyes chemical weapons. they have no delivery system, and the scale of this attack is such that has to be done from the air, know it could be done byow movg forces. this was clearly done by the regime who knows how to move them, knows how to weapon eyes them and deliver them.

melissa: what you think the u.s. response is going to be, where do we go from here? >> where we go as we're trying to make up for months if not years of lost time so finally we are hearing the right language from the administration but it is more than language, they nee to not only do cruise missiles which is a start to begin justifying targets of the military that needs to be bombed th tomahawk missiles, but we need to get arms. it has been two months since i talked about arming the rebels and they have not seen hardly anything. we need arms on the ground to them because what is goi to happen is when we start bombing the sites, if u think it is unhinged now, they will do everything possible to bring a quick end to this and scare us away and demolish the rebels so they have to be armed, we need buffer zones more capable, trained rebels at a rate we haven't and get them resources, sh, and help increase influx of refugees that will happen.

we need to lay out a strategy and not rush into this. now that they are starting to move the chips in the right direction in the mediterranean hopefully not too much laid out over the next few weeks so we do it right. melissa: thank you for your time. next on "money," san francisco's power and water supply is in jeopardy. the city paying hundreds of thousands repower on the open market. we will tell you the story that you have not heard anywhere else. us, who made money today? they may finally have a reason to clean themselves off. "piles of ney" coming up.

melissa: the matter what time it is, "money" is always on the move. shares of jcpenny getting hit after hours. dumping the shares in jc penney.

ackman has been the largest shareholder. he resigned from the board earlier this month after a very public battle with other board members and you can see the stock getting hit. internal pictures of the raging wildfire in california, probably have not heard what is being done behind the scenes to keep the area out of the dark. reports that san francisco so far have lost $600,000 worth of power off the open market to ensure the electricity stays on. that is after having to cut more than 12 miles of power lines because of the fire. they are very worried about the water supply being contaminated. all that on top of the fact the sequoias that bring in millions of tourism renue are at risk of serious damage. here to give us a first-hand account of on the ground, scott. thank you so much for joining our show, we appreciate your time. wwe're talking about the fact

they are potentially losing power and buying power the open market because the publ utilities commission has shut down a couple hydroelectric stations that are fed by water at the reservoir which is the reservoir that is being threatened right now. how close is the fire to there? >> right now the fire is half a mile awafrom the reservoir, it is consistenconsistently withine boundaries of yosemite national park and provides about 85% of the inking water for the city and county of san francisco. we are doing everything we can to assist the command team with the firefighting efforts and certainly with the fre near the area. melissa: obvious everybody there is very concerned if they are cutting power and going out and buying power on the open market. i know you have 12 helicopters, fixed wing air tankers dropped in water, 2800 firefighters, 8300 firefighters battling

throughout the whole state. it is obviously an enormous fire. and the national park is threatened as well, these are trees that have been around for almost 2500 years, why have they survive this long but ma maybe threatened by this fire? >> it is a fair dependent tree. they need fire in order to open up for the seeds to open up. we have three here in yosemite. i want to emphasize on one of th the growth is 7 miles away, and 50 miles away. so we are not feeling the fire is an immediate threat to either of the groves but these are majeic, beautiful trees. we are certaly concerned about the giant sequoia growth.

melissa: tell us about where you stand in containing the fire right now as it gets closer and closer to the servoir. >> right now we're working with a command team, most of the fires outside of yosemite national park. only% of the total area is within the park, the northwestern corner as we have talked about. sos of this morning the fire was about 15% contained. we got almost 3000 firefighters from literally all over the world that are battling the fires so they'r they are doing n incredible this fire, and we are very confident in the efforts being undertaken at this time. melissa: best of luck to you, thank you for taking time to fill us in. >> thank you. melissa: next on "money," did donald cost thousands of dollars at the university? it is an all out war. we have two top experts to weigh

in. plus, one woman comes up with one of the most ingenious businesses i have ever heard. you have to hear this one. at the end of the day, it is all about money.

♪ melissa: who needs to do a book tour and you can use the worlds best pitch man instead. janice dean has a new kids book out, it is already a bestseller with the help of one very outspoken fan.

this charming child is lance of france's young son. melissa: that was my son. janet will be on "money" next week to tell us about freddie the broadcaster and making weather fun for kids. donald trump under fire again, this time for supposedly scamming students. but he is no stranger to scandal. this is earlier today firing back against the $40 million suit. >> i have done really well in real estate. i a imparted a lot of my real estate, and we have a great school, it is a great school, they have done a fantastic job. when you get 9 approval ratings and you get sued as rather shocking.

melissa: employment attorney to talk about the donald and what kind of colleges are really worth the money. welcome to both of you. do you think he has a case, who wins this one? >> interestingly enough i don't know why he is that shocked because there's a similar case like this in california in 2010 brought as a class action still proceeded through the courts. the bottom line is the statutes brought under anticonsumer fraud statute aced upon deception and fraud essentially based upon complaints that were made, people got eight by 10 glosses from trump no advice that made them rich. there is a shot. the case could have legs brought by the attorney general as opposed to a private citizen in california. melissa: do you believe with what he said, they want to settle for $5 million, does that sound right to you, he didn't

wa to go in with it. >> he cnterclaimed for $100 million. basically when the attorney general brings a case you have to think it is based upon actual complaints and there is something behind it a different in the case brought in california for which he was very surprised about. it will likely settle, that is my opinion. melissa: this shines the light a very important issue. for-profit education, a lot of people are signing up spending money on something that doesn't nessarily have a great return. the cement did an investigation spending two years to work on it, they found 30 of the largest companies. they spent more on advertising than they did on job placeme. if you are somebody who is trying to get trained in a new

skill or a new profession, how do you know what is worth your money? >> you have to do your due diligence. that is what it is all about, find out if the references check, you probably have testimonials and fairly credible people especially trump university. check with references, check with people who have gone through the program and find out is it in fact what is says it is? melissa: anybody can put up testimonials on the website or have it on their brochure. should you be looking at things like they have published statistics if the graduates have jobs in a field in which they are being trained. >> my guess is they are not going to put a testimonial up for somebody who is not happy. but check to see if there is any complaints from the better business bureau. there are probably complaints as

there is ver for any business bt are they resolved or unresolved? you can confirm if there i complaints still open. >> i think in the end it will settle because of the publicity. not talkg about a school going to get grades, this is a three-day seminar, you are supposed to walk away to be able to engage real estate deals and things of this nature. that is a very quiet, quantifiable and definite requirement. melissa: how is it quantifiable? what do you think you're going to get out of a three-day seminar? encouragement, tips? i don't know what they expected. >> they certainlnly went for tht purpose, spent a lot of money, saw themselves getting on "the apprentice" or whatever he had good basically saying enough is

enough. theyame back and said he brought the case becse he did not get enough campaign contributions when he ran for attorney general. the publicity is not going to be good, i think he's going to have to pay something. melissa: gentlemen, thank you to both of you onto a business that gives new meing to read before you own. even expensive clothes, handbags, did you know that? renting a wife. the concept that made me stop to say it is genius. joining me now, juliet. thank you so much for joining us. is this rent before you get married, are we misinterpreting the idea? my clients are mostly married, some are single, some are married, some are divorced, they are all professionals, very busy professionals. i have a lotf things they need

to do on a personal level at they don't have time to take time off from work to do. they can give me an assignment, whatever it happens to be. $40 per hour. melissa: that is a lot. >> i don't think it is. it is a great value. an attorney has billable hours, they have to prepare a house for sale, so do they take time off and lose all of those billable hours, or do they say come in $40 per hour, get my house ready and get it done? melissa: is seems there is growing competition in this deal. somebody in new yorkou did something similar, but it seemed like it took a lot of time to get them up to speed on what you actually needed done that you spent so much money to get it done. do your clients y that? >> my business has billable overhead. my overhead for them is worker's

comp., i pay commission. i am very flexible. i can work at a very reasonable rate but my job is to save people's money. i will negotiate a lease for people, so the two hours it takes. i have six people bidding on the business, i charge somebody two hours worth of work and it would be made up in a payment. melissa: what is the weirdest thing somebody has asked you to do? >> every job is different but i had one gal in her early 20s in spain going to school in barcelona was there for a year and summer along the way she adopted a dog, she left the dog and getting her home is challenging. they contacted me after multiple tickets that were purchased and

the dog did not make it on the plane because it was a little bit of panic. there are restrictions. 2:00 the morning, on the phone with barcelona. melissa: original thought was there are men who are single or busy who need these things done that conceivably a wife would do but most of your clients are women? >> i have heard it any times, i could use a wife. that is how it sort of came about. the women for whatever reason are the ones who know exactly what they are looking for and they find me through networking and women in a lot of different areas. melissa: thank you so much for coming on. next on "money," the days of drive-in movies are over, but the days of prostitution are over in switzerland.

they're open for business, we have it all in "spare change." you can never have too much "money."

melissa: it is time for our daily fun with "spare change." i'm sure you've heard about about this, switzerland, the city ofzürich launch the concept today in an effort to make the business of prostitution safer for the women and less of a nuisance for the residence. it is legal there.

customers drive into the box, they take a woman and negotiate the price, no doubt outrageous to a lot of us the $2.6 million project was approved by locals who paid with taxpayer dollars. it goes to the idea of managing an issue rather than outright banning it. what do you think of this idea? they say we can't gerid of it so let's make it as acceptable as possible. >> anybody who has lived in the meatpacking business, you will know sometimes a guess to be a little bit of a nuisance. everyone to each his and her own but if you live amongst that. melissa: so you are for this? >> if i were switzerland i may approve that. get that away, especially if i have children. i wouldn't wt the noise and melissa: i have been driving to work in the morning and then propositned by somebody on the corner looking for business, you almost want to give her credit,

working all night long. what do you think? >> i live on 42nd street. i just want to run. i am getting my own exercise. what i love about this is how forward thinking it is. we try to do this in america therthey would be protests, mar. this is we have problem, it will not go away, this isn't making it safer for the prostitute, how they will be referred to, make it safer for them, social workers on-site, health care, they are going to do it anyway. melissa: it is open all night, away from the city center, café laundry, shower. >> and they are paying tax on it as well.

melissa: there has been a mixed record whether it has improved things or not. >> i think of drive-thru's i think of a restaunt. can you supersize, i don't know exactly. >> they say they were lined up. >> that is what it is. i have walked down the street in amsterdam. you can look at them in the window and smiling and waving, this is the same thing in the drive-thru. it is better than the alternative, peoplon the streets where there is no control whatsoever. melissa: there you go. thank you, guys. you know this was our question of the day. drive-thru prostitution stations

funded by taxpayers. a lot of funny responses. if the government is going to do it to you, you might as well enjoy it. we want to hear from more of you. you can follow me on twitter. up next, who made money today? they may have finally dug themselves out of a huge financial hole. the answer right after this. you can never have too much money, i hope. come back after this.

>> whetr on wall reet or main street who -- here is to make money getting a big

lift from "barron's" today as prices are set to decline some energy producers are switching back to cold due to the lowe's prices and ample supply. the bright outok sparks a rally. look at that. losing money today anyone who owns archer daniels midland soared today but the weather is threatening to cut the size and lescorn means less product. and failing to make a record of finalist racy performance is all the talk of last night's show was 1 billion viewers that a short of the record 12.4 million said back in 2011 and still -- still no word as she has to

end in -- to back in. ♪ >> in the '50s,@ there was a new sound. >> @♪ wake up, little susie @ ♪ wake up @ >> it had rhythms and lyrics that spoke to us. >> @♪ maybellene ♪ why can't you be true @ >> and all across america, radio stations gave us the latest hits. >> @♪ well, you can rock it,@ you can roll it ♪ ♪ do the stop and even stroll it at the hop @♪ >> there was chuck berry,@ jerry lee lewis, buddy holly,@ and of course, the king. >> @♪ well, since my baby left me ♪ ♪ well, i found a new place to dwell ♪ ♪ well, it's down at the end of lonely street