melissa: that's right. we have the dow up 51 points on the day. we will see you back here tomorrow and see more reaction to apple at that point when the market reopens. connell: thanks for joining us today. "bulls & bears" with david asman starts right now. david: we have breaking news. shares of apple trading higher after hours. the tech company beating expectations for the first quarter on the top and bottom line but it is not all good news. we are monitoring the conference call with tim cook and other executives now under way as the company battles a new privacy scandal involving facetime. the headlines still pouring in from the report as well. we will bring you everything you need to know. first let's bring in the panel. susan li has been following all of the numbers from apple for the past half hour. carol roth, gary b. smith, robert wolf and we are joined by john meyer. john, let's not try to sugar coat it. this is the first quarterly

decline in both revenue and profit in about ten years for the month of december, including the month of december, but they had built expectations so low, it's hard to go any lower, right? >> correct. the other thing that i think is extremely notable here is the year over year china revenue decline, which i think according to my math is roughly a 27% decline in revenue from china. then the other issue obviously is it's just frustrating to be banging our heads against the wall trying to come up with realistic ideas on what exactly the situation is with iphone sales, given the lack of unit numbers being disclosed, then obviously today with the ever-growing story involving this new clearly massive issue involving privacy with apple, a company that to date, at least in my opinion, has not been a company to worry about as it relates to privacy. susan: we were having a great

conversation here about the china play that apple has become, given that it guided on iphone sales. we are looking at under $30 billion on the books, they want to get to net cash neutral which means they want to give that back to shareholders. they have done that in the quarter, repurchasing and increasing dividends by $13 billion. some would say apple, if you look, there's still a lot of cash on the books and it will still be what it's been, with slowing iphone sales, kind of like an atm machine. do you see that as a way, as maybe a play on china? >> great question. i think apple needs to start putting this cash to use as soon as possible. quite honestly, i don't know what has been going on with the lack of use of that cash as it relates to making big acquisitions. clearly there could have been an opportunity let's say for apple to pick up tesla. that's come and gone. it's now far too expensive. apple has now spun down a lot of

their efforts in self-driving cars. now, as we know, it seems to be more of a software play but even that is completely unproven. china with apple, serious revenue declines on that note. they still have not proven what they can do with emerging markets, india, i was on the show last month where i emphasized the 1% market share in india. why isn't apple releasing lower budget iphones in say the $200 range so that we can then see apple be able to further take advantage of increases in software revenue. sorry, services revenue. that's because apple needs people with iphones in their hands to increase services revenue in a meaningful way. obviously you can increase it somewhat year over year with existing device owners, but you know, it's going to be negligible if they're not increasing device sales, especially in emerging markets.

>> john, gary smith here. i want to get back to what you said about the services. this reminds me of a company -- well, reminds me of not a company like, but ibm back in probably the '90s or so when it was predominantly a mainframe company. apple's predominantly an iphone company. 60% or so of its revenues come from iphones and yet the services area was up about -- services and non-iphones up about 19%. my question is, like ibm, i know they're trying, but can they make the transition to a not predominant iphone company to more a services company? >> i think apple has to at this point, because as i have been on the show, and the reason i think i have been on here ample times recently is because i like to talk about the ultra long term, especially with tech companies, and with apple, we have now approached essentially the limit

of this sort of super growth because of the iphone. we are now entering a phase where as we get into the next five years, the next ten years, it's going to be about, and this is not just for apple, this is for all tech, it's going to be about what is after the smartphone itself as a computing paradigm. because this is affecting other smartphone manufacturers as well. it's just it's hitting iphone first because iphone was first. in the major smartphone industry. and really, the only thing now that apple has basically missed the boat on the car, they haven't really had anything to prove yet in tv. the only thing really left that is notable that we hear in the rumor mill is again, apple entering the augmented reality space sometime in the next few years, where there could be a bet made on a.r. glasses being the future of computing in an age where let's say in five to ten years, we're not going to

ever be using smartphones. so that could be the hope for apple. >> it's carol roth. as an apple shareholder, obviously i have been very focused on the services story because i really do believe they have 1.4 billion devices, there's a huge opportunity there, not only for their own services but for third party services. i know it's been a bright spot but why do you think that they have been slow to really put the pedal to the metal and bring in third party services and really monetize a very valuable ecosystem and customer base they have? >> great question. i think apple has historically shown they do like to take their time with entering any sort of new markets, new verticals, et cetera. in fact, tim cook and even steve jobs back in the day were vocal about this strategy of taking their time and not rushing into new ventures, new verticals, et cetera. i think the key difference that

is a missing piece of the puzzle is that in 2019, we are living in an age of remarkably fast advancement and innovation in tech as a whole, and if apple's not going to speed up what they're doing in terms of innovating and new product categories, new revenue categories, they are going to get left behind. and i think that's what we have already seen again with the car. we have seen that with media as it relates to netflix at this point just completely dominating the streaming space. i think apple will be too late with a few of these items. >> john, it's robert. how are you? great insights. just going back to the stock itself, not surprising it's up. i mean, they have very low expectations. i actually think as we were speaking here earlier, it is a bellwether stock on china, and with the trade discussions starting tomorrow and then hitting their lower expectations, it's not surprising that people aren't making a play in it right now. i also think that listen, they

are down 35% year on year. this whole idea of using cash to buy back stock has not worked, okay. it's for the most part been dead money. that has been a disproportion of the number of companies that didn't use it for r & d or new technology. i mean, this year was the year that those companies that did these stock buy-backs did not work for them. >> absolutely. and that's why i sit here so baffled as a life-long apple fan, sometimes even being labeled as an apple fanboy to now be again sort of criticizing them in such a significant manner here, and the other area again where i have noted on the show in the past is that apple has also lagged behind in investing in a.i. this is a personal one for me and i think many of our viewers here, as u.s. citizens, because we don't want to get left behind in the a.i. race. we need all of our big tech companies investing in this.

so that we're not losing this game permanently to countries like china. so my question is, why has apple done a lot of these buy-backs and also left a lot of cash in the bank as opposed to investing in things like a.i., investing in let's say acquisitions of car companies, i think there was a small amount of space to do that with tesla. >> they may have missed that, unfortunately. yeah. but you know what, why don't -- last night, this went viral on social media, everybody was talking about it, even my mother, because apparently on group facetime, something they released in the latest ios update in september, if you are on group facetime i'm dialing the person i want to get in contact with, they don't have to pick up but if it's dialing, i can hear them through their microphone. and see them sometimes supposedly if they actually hit the power or volume button while

i'm calling. again, they don't need to pick up in order for that to happen. that is scary and that is a major invasion of privacy. >> just to add to that, i think the real question's going to be when did they know. because we are making it like they just found out. >> e-mail trail. >> i spoke to the mother of the teenager who found this vulnerability a week ago. i spoke to the mom this morning. the kid is 14 years old. he found the vulnerability a week ago, and him and his mom have tried alerting apple through apple support, through apple social media. they were told by apple support to file a bug report as a developer who, you know, this kid is not one of, and the mom, she's an attorney, she's not a techie person. they even went to go and file the bug report -- >> are you saying they didn't know they had this bug, or you think they turned a blind eye to not knowing they had this bug? >> robert, if i can answer that,

tim cook put out a tweet yesterday, i don't know if we have it, but yesterday was data privacy day. he put out a tweet talking about data privacy and how important it was to protect privacy so certainly, he didn't get the memo yesterday. obviously they have a problem in terms of that reporting channel. but sort of an embarrassment for the company, when you're tweeting about the vital privacy protections on #data privacy day, the same day this bug comes to the market. >> don't forget, they have been so evangelical about how tightly they protect their users' privacy compared to other silicon valley giants. he's not been making friends in silicon valley. >> final word on this, john. go ahead. >> yeah, the thing i think that's very important to specify is this is not, in my opinion, any more a question of what if apple knew this in advance. you can go to my twitter and i posted the evidence of this a few hours ago, and you can see the detailed messages, the

letter that the mother of this 14-year-old wrote to apple multiple days ago. this is before the news came out yesterday. and there was no public statement by apple. there was no shutting off of the facetime feature that causes this vulnerability until again, as we all know, after the news came out yesterday. and so according to my timeline, based on the conversation i had with this kid's mother and the specific text-based documentation i reviewed from her, which involved screen shots of e-mails and phone calls, this vulnerability has existed for at least one entire week. and my question at this point to close this off is what are some of the malicious things that have been done by people that have taken advantage of this vulnerability over the last week. >> i'm sure we are going to hear a lot about those stories and we probably won't hear from tim cook about privacy for awhile,

until they straighten this out. john, thanks a million for being with us. we really appreciate your expertise. meanwhile, kamala harris vowing to take away the insurance of 177 million americans if elected president. we knew a far left wing platform would emerge but how far is too far? our grandparents checked their smartphones

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david: california democrat senator and 2020 hopeful kamala harris raising eyebrows last night when she revealed her plan for private health care. roll tape. >> listen, the idea is that everyone gets access to medical care, and you don't have to go through the process of going through an insurance company, having them give you approval, going through the paperwork, all of the delay that may require. who of us have not had that situation where you have to wait for approval and the doctor says well, i don't know if your insurance company's going to cover this. let's eliminate all of that. let's move on. david: what that means is if elected, she could eliminate private health insurance for

about 177 million americans. so is this a huge political risk? what do you think? >> this is a huge everything risk. the government can't manage anything. i think it's hilarious that she's talking about paperwork and bureaucracy and somehow she thinks that the government is going to manage it better. we just came out of a shutdown that was more than 30 days long. could you imagine if they tried to hold our health care hostage? what they need to do is get the government completely out of the way. this is not a partisan issue. they should be opening up free market competition for the insurance carriers. we should be having more transparency all along the process. the only way that this gets better and more affordable and still giving us quality care is to get the government as far away from this as possible. >> yeah, listen, this is not surprising that a presidential candidate from the democratic party has decided that he or she is for single payer medicare for

all. it's where bernie sanders is. it's where elizabeth warren is. it's where a lot of congress that won heavily flipping red to blue, that's where they were, health care's a right. now, i'm actually for me, i'm both public and private. i think that we need a little of both. but i think it's key that whether we like it or not, this country wants health care to be a right. that's just a fact. >> the slogan is kind of where democrats are going at this point for 2020, but do people understand that socialized medicare, yes, it sounds great, medicare for all, that comes with higher taxes. you see that everywhere around the world. in the uk you are paying over 50% at the top tier. in canada, same thing. sweden, all the norwegian scandinavian countries, this comes with a cost. someone has to pay this. it will come out of your pocket one way or the other, believe it or not, and kamala harris is talking about a living wage as well of $6,000 for families, $30 trillion over ten years in

socialized medicare. $3 trillion for a living wage of -- >> i think they are talking about going to single payer system. i think there's a lot of execution risk and execution needs to it but this should not surprise anyone as we go into this election. >> well, a couple thoughts. one, i agree with everything that carol said but susan talked about doing the math. that's the problem. people aren't doing the math. it's like a lot of things, alexandria cortez stuff. they sound wonderful. it's hard to argue with motherhood and apple pie. it sounds great. of course, we on this panel, maybe even robert, know the downside. the uk, the long lines, the wait, the rationing, and the ironic thing is that even in these kind of socialized poster children like sweden and switzerland, they have large

portions, to robert's point, of private health care and private insurance. that's the winning message, if there's ever going to be one, but meanwhile, i think harris is on the right track as far as winning the election. of course it can't work in real life. but that's not what she's after right now. david: there's another problem, or may not be one, but there was a december gallup poll that showed that 80% of americans think that the quality of their health care is good to excellent. so they may have problems with the general system but when it comes to their own health care, the 177 million americans that have insurance, that have private insurance, are satisfied. they think it's either good or excellent. so what is that going to mean? >> that's part of the three-legged stool here. people want to have health care for everyone, but we also want it to be affordable and we also want it to be high quality. it's very difficult to get all of those things working in concert. i know that the only way we are

definitely not going to get all of those three things is if the government's involved. you remember when the last administration launched the aca website, they had a canadian firm, $400 million for a health care website. can you imagine the kinds of deals they will supposedly negotiate when they're in charge of all the health care? it's just not what we want to have happened. david: spend a month in british health care as i did with my wife for various reasons, and you will be shocked beyond -- i mean, i was already critical of socialized medicine. spend a month there and you will see what it's really like. that's what all these people who are very flippant about medicare for everybody, try it out. you may have a different opinion. meanwhile, will a bipartisan committee reach a deal to avoid another shutdown just weeks from now? will a member of that committee, senator john hoeven, we will ask him where he stands coming up. >> i'm for whatever works. which means avoiding a shutdown, exactly how to do that as you

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i'm for whatever works, which means avoiding a shut do you know ashutdown and the president feeling he can avoid a national emergency. exactly how to do that, as you all know, has been quite challenging. >> president trump touched a hot hot stove and hopefully he won't do it again. the conference committee we suggested as a way out of the trump shutdown permanently begins tomorrow. david: so will we avoid another shutdown? a bipartisan committee of 17 lawmakers has until february 15th to come up with a new border funding deal or else we could see the government shut down again. joining us now is someone who is on that bipartisan committee, north dakota republican senator john hoeven. great to see you. lindsey graham, your colleague,

has suggested folding the debt ceiling into a discussion of border security. can you explain how that's going? is that going to be part of the deal? >> too soon to say. there's no shortage of ideas, david, but the key is our objective is to make sure we get the government funded through the balance of the year, pass the appropriations bills which are bipartisan bills, take us out to september 30 and get to something on border security, which i believe means people, technology and a barrier, and that's what we need to get done. how we get there, there's no shortage of ideas. >> senator, president trump of course has said that getting a deal through with congressional leaders is less than 50/50 and there is that threat of issuing a national emergency, which will be tied up in courts for many, many, many years. where do we go from here? what's the probability you give to the president declaring a national emergency? >> well, look, democrats said they would not negotiate when we were in a shutdown.

and they said you know, we have to end the shutdown in order to negotiate. well, we are no longer in a shutdown so now they need to negotiate. if you look at the compromise that the president put on the table, it is a very reasonable compromise. it includes things republicans want and feel we need. for example, border security as i just described. but there are things in there that the democrats very much want and there are things that democrats have voted for before. it's a very strong offer in terms of a compromise position. so let's negotiate, let's get it done. >> senator, as one of the sole democrats up here, i mean, i don't actually agree with a great compromise put on the table. would you be willing to make daca permanent? for the border wall, since a wall is permanent as well? >> okay, but remember, this is $5.7 million for a wall versus three years for both daca and -- >> i understand. but one is permanent and one's not. my question is, i'm asking you a direct question, would you

agree, i'm a democrat, i don't think that's a great compromise. i would look at something like permanent daca. would you agree on that? that's been actually viewed as a pretty bipartisan perspective as well. >> now you have to go back to the four principles you talked about before. when he talked about a permanent solution on daca, you were talking about $25 billion for a wall. so again, if you want to talk about daca on a permanent basis, you should be talking about full funding for the wall, not one year funding for the wall. i think again, if you are talking 5.7, that correlated with the three years. he offered the four principles last year and we voted on it. i voted for it which would have been $25 billion for the wall, addressing daca, addressing chain migration, and the visa lottery system. that was the bigger deal that he put forward last year. >> which he took back. you know that wasn't voted on. >> we did vote on it. it was in a grassley bill. there were four different versions as you will recall. >> senator, it's carol roth. i wonder, we seem to always be

having these shutdowns and it seems to be related to financing. we have budgets, we have the financing for the budgets, then we have our debt ceiling all to contend with, all which seem to be addressed separately. is there any thought about making a process where these things come together so that we have one big discussion about all of the things that are fiscal instead of having it interrupt the flow of you getting work done throughout the year? >> yeah, one of the things, there's a number of ideas to do that. one of them is lead by johnny isakkson, senator from georgia. everybody thinks the world of him. he thought of a two-year budget cycle so we would set up the budget on a two-year basis and appropriate on an annual basis as well as do oversight and try to find savings and try to do more on debt and deficit. as well as not have a shutdown. >> senator, gary smith here. i want to go back to like a 10,000 foot view here.

it seems to me that most people think, a, the president got schooled on this negotiation, b, you even saw it in the clip, the left is taking victory laps, almost taunting the republicans and president trump. if i was in your shoes, you are putting on a heck of a brave face, i would be absolutely livid. do you think you really can negotiate in a calm, fair manner without this boiling over because i tell you what, i'm not sure if both sides can come to an agreement after that shutdown mess that we just had. >> the key is where we end up. we need to fund the government on a long-term basis and we need the border security as i have laid out. the democrats said they would negotiate and the things we are putting on the table, they have voted for before. so again, we will continue to make the case, i will continue to make the case that what the

president put forth is a reasonable compromise. i get that there will be some give and take on it, but also, we should go back to the professionals. customs and border protection, career professionals, they will tell you that that $5.7 billion, that covers the top ten -- not the political people, the professionals. >> very quick last question. we keep hearing from democrats about how bad walls are, how they are immoral, et cetera. has anybody asked them whether they are for tearing down walls like the one in san diego that goes 46 miles and that the people in san diego seem to like a lot? >> see, that's the point. we build border barrier, whatever you want to call it, under president obama, under president bush. there's no reason that we're not doing it now and they have supported that funding in the past. david: all right. senator, thank you very much. best of luck in reaching a compromise. appreciate you coming in. former starbucks ceo and

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>> don't help elect trump, you egotistical billionaire [ bleep ]. go back with the other billionaire elites who think they know how to run the world. david: who do you think paid that guy? former starbucks ceo howard schultz getting heckled last night after telling a crowd in new york he's seriously considering running for president as a centrist

independent. schultz also calling elizabeth warren's wealth tax quote, ridiculous at the event and warren tweeting this in response. this is liz warren. what's ridiculous is billionaires who think they can buy the presidency to keep the system rigged for themselves while opportunity slips away for everyone else. the top .1% who pay my ultra millionaire tax own about the same wealth as 90% of america. it is time for change. end quote. so gang, is there anything wrong with being a self-made billionaire? what do you think? >> you know, first of all, going back, what does ratioed on twitter mean? i don't even know what that is. going back to your point, it's 1789 and the electoral college, some people are yelling at the candidate said you are richer than 99% of the world. you know who that candidate was? the second richest president ever, george washington, worth $500 million. a few years later, they had the

same comment, you're nothing but a rich guy, you don't know anything. know who that guy was? the third richest president, thomas jefferson, about $250 million. when did it become bad to become rich and wealthy and be successful? i don't know if schultz is going to make a great president or lousy president but he deserves to run just like anybody else. >> amen, gary. getting ratioed on twitter is when more people comment and heckle you than favorite or like your tweets. i'm dropping knowledge all over the place here. but back to schultz for a second, what i don't understand is that here is a billionaire who built an incredible business worldwide, he actually transformed the behavior of consumers, something that is amazing to do and people are saying that he doesn't know anything and he doesn't have experience, yet the same people are saying that a 29-year-old economically illiterate bartender is the greatest leader we have ever seen on the planet. there just seems to be some

disparity here. in terms of schultz and the point, the point he's trying to make is that the system is broken and both parties have a lot of issues, and the fact that the democrats are coming out and bullying and harassing him because he's not falling in line ultimately proves his point over and over again. >> yeah. i love howard schultz. i think he's the king of the hedge, seriously thinking about it. though there's a chance he might pull out if he gets enough heckling, enough abuse. howard schultz, i think of all the billionaires we talk about running, mark cuban, jamie dimon was floated once upon a time, what's in it for them? i'm just wondering, why would jamie dimon ever want that job? he has a billion dollars. he has enough headaches. for howard schultz, does he care enough about america? is that what it's about at this point? >> well, let's see. i like howard schultz but as a democrat, i would be incredibly disappointed if he decided to run as an independent.

so that's one. i want to just make -- david: he is a life-long democrat. >> he is a life-long democrat. no different than i did not want mayor bloomberg to run as an independent. >> you think he'll run? he said seriously thinking about it. >> i think he has some senior people like steve schmidt and bill burton around him. it's clear he wants to run. i think the big question everyone is asking is the guy that called him an a-hole, did he buy the book yesterday? as a capitalist, schultz probably says you know what, i just made 25 bucks off the guy. david: he just wrote a piece in "usa today" and he makes a salient point, particularly now, where we are in this political system. he says 66% of likely voters say neither party is really representing my needs or interests. that's why this guy is running. he's got a legitimate point, doesn't he? >> well, go ahead. >> go ahead, susan. i was going to say in the interview on "60 minutes" what he said, i'm not sure i agree with his statistics, was 40% of

americans either identify as independent or moderate or part of an independent group. 40%, i don't think actually that wins you the presidency at that point. you still need to get closer to 50%, don't you? david: if there are three people running. >> i look forward to all of you when he decides to run as a democrat saying i will wear that schultz pin. schultz for president. i think we will be hypocritical when he decides to run, if he doesn't decide to run as an independent. >> i love the fact that there is somebody who is a legitimate centrist candidate. i don't think, though, that his policies really scream centrist to me. he seems more progressive in terms of the things that he's talking about. that's my only concern. i would like to see more people who really are around smaller government and individual rights and the things that align with the people in the middle that are sort of the middle of both parties. i like to see more of those people run and hash tag, i would vote for jamie dimon. >> fair enough. >> certainly more centrist than

liz warren who criticized him. we'll see what happens. meanwhile, are recession fears overblown? treasury secretary steve mnuchin says yes but is he right?

no indications whatsoever of a recession on the horizon and from everything we see from speaking to a large across the board businesses, the combination of tax reform, regulatory relief and trade still has a very strong impact on the u.s. economy. david: that was secretary, treasury secretary steve mnuchin in a fox business exclusive interview with maria bartiromo, telling her recession concerns are overblown. but other economists don't agree, based on numbers from the new york fed, there is still a small chance, about 22%, that we could enter into a recession this year. so who do you think is right? >> yeah, i mean, if the horizon is 2019, i agree with the treasury secretary. i think that gdp is going to continue to chug along. it may slow down in things like housing and auto sector but in general, i don't see a recession in 2019. now, as we get into 2020, you know, then i get a little more nervous because i think the

sugar high on the tax deal is now behind us and i still think there's nervousness to global growth. >> the ceo of goldman sachs said in davos that he sees a 15% probability of recession this year, 2019, 50% in 2020. i would say the last two crises we have seen have been something that comes out of nowhere and it has been long in the tooth in terms of the recovery and people are thinking this is musical chairs, when does the music stop and do i still have a chair at the end of it. i think there's a lot of conflation -- go ahead, gary. >> no, i was going to say, mnuchin is saying he doesn't think there's a recession coming. hey, breaking news. tom brady also thinks the patriots are going to win the super bowl. >> they are. >> seriously, what do we expect the guy to say? yes, it's gloomy out there but hey, trump's doing a great job. of course he's going to say that. that's all boilerplate. i kind of agree with robert. i hate to say it.

but i don't see anything for 2019 but the fact that china is slowing just period, forget about the whole tariffs and stuff, they have reached their peak. they have made the big move from an agricultural country to an industrial company. that growth is slowing. we have seen kind of the apple news. we are going to talk about housing next, i think. that's slowing. there's a lost storms on the horizon. that's not even talking about the short-term stuff like the mueller investigation, brexit, what the fed does. i'm more worried right now than i have been in the past few years. >> yeah. i tend to agree with most of the panel that 2019 looks fairly clear. certainly slower growth but not a recession. 2020, it's very hard to say. we do have a presidential election that's happening in 2020 and we know that the administration is going to be very focused on doing everything that it can to potentially prevent a recession at the same

time that there's a presidential election going on, so that could be whether it's a catalyst for trade or putting more tax deals on the table, i don't think we can count those out, either. we also have to remember that just because you have a recession doesn't mean we have a crisis that we saw last time. you can have a very mild recession. i think that if we do get a recession in 2020, it's going to be very different flavor and much more mild recession than the one we saw this last time around. david: what can the administration do without congress? obviously they're not going to get the house. a senate majority is not going to be enough to pass a bill. i think the one thing as you said, carol, is that they do have the trade ace in their deck. they could throw that out. that's one reason why they might be dragging their feet on the china thing, just waiting until, using that as a final arrow in the quiver. >> i mean, i think a china deal obviously would be a huge positive. but an infrastructure deal would be a big positive. but then i think we are going to

have another discussion about fiscal responsibility, because where's the money coming from. if we have a little bit of a slowdown, revenues will slow down, then all of a sudden we will spend $1 trillion on an infrastructure deal. >> global government debt that's $66 trillion, 80% of global gdp, there isn't money left, right? >> that's never stopped them from spending before. david: home price gains continue to slow now at a four-year low. what does this mean for the health of the housing market? that's next. i'm a bunch of wind. and just like your stomach after that strip mall sushi, well, i'm a bit unpredictable. let's redecorate. whatsyamatter tanya, i thought you loved being spontaneous? i do. and if you've got the wrong home insurance coverage, i might break the bank too. so get allstate, and be better protected from mayhem, like me.

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david: home prices plunging to a 4-year low. so what does this mean for the health of the housing market many already fear is in trouble, gang? >> i think that it is. i feel that it is. i always said the economy runs on three pillars. wages, employment numbers and housing prices. this is something i look at a lot being a homeowner. here in south florida i suppose on the east coast, the high-end market is dead. i have never seen an economy when the high-end market is dead that's going to do well. normally that's the park that's picking up.

people are wealthy, they want to move up. i don't know if it's geographic specific. >> one thing that we could do to benefit the market is bring back the ability to deduct the full salt, state and local taxes. that would have a huge impact on the high-end market. if you are in connecticut, illinois or california, nobody wants to pay those property taxes to begin with, let alone deduct them once you paid for them. it's all the democratic states that are being affected by that. >> there is tons of stuff on the market.

i agree, the cost of ownership has become too expensive. >> the inventory is still so expensive. it's not rightly priced for what people want. we have the cap on the interest deduction. maybe you should price your houses better. david: we were talk aboutivers or air -- about quivers or arrows the president might have to boost the market. >> i think we are solving all the country's problems in one hour tonight. maybe the president is listening. >> maybe we could win new york with it. >> that would be nothing short of a miracle. the fact that in fact there is not a big inventoriy because there weren't a lot of houses being built as much as the

demand was there, and that got prices arprice -- artificially . >> i think it depend on -- there is a lot of inventory, bob knows this -- for example in the high-end connecticut area, people can't move out of new caanan, and those areas, there is plenty of inventory there. let's say $300,000 is low end in a lot of places. there is not a lot of inventory there. so it's not a stratified market. i don't seat move-up market. i think it's horrible. >> it's become too expensive on

the high end. the chinese are investing less in the u.s., and they helped drive up the high-end market as well. david: let's hope things get better for housing. that does it for "bulls and bears." we'll see you back here tomorrow. >> i am seriously considering running for president as a centrist independent. >> i am in because i love the country and i'm profoundly concerned with the direction we are in. i'm not running against the democrats or the republican party. for the first time since george washington that an independent person could ignite a national movement to say it's time for to us come together. liz: that's the former ceo of starbucks, that's howard schultz. he's sounding more and more like bill clinton or al gore.