gary k. bull or bear? >> maybe after we drop 20%-- >> and now your prediction. quickly prediction. >> auto zone, defensive auto retailers, i think it's 20% the end of the year, only group start to go work. >> brenda: toby, he likes something. >> i like gary, but i hate his stock. >> i'm like rodney danger hefield. >> brenda: put the pedal to the metal with cavuto on business which is up next. take it away, neil. >> neil: well, stocks taking off and administration shaking down. the downgraded our credit, period. welcome, i'm neil cavuto fox on top of over the top power play, not even in two weeks after standard & poor's hits washington with the credit ding. d.c. coming back with a slight hammer. the justice department is investigating whether s & p botched ratings, up to the mortgage meltdown, remember that one?

remember that three years ago? and creepy or coincidence, ben stein, charles payne, dagen mcdowell along with the best business reporter on the planet, charlie gasperino. and the timing period, i'll leave it that. >> if they bring a knife, you bring a gun. that's the chicago way. >> neil: very good. >> and it's obvious-- >> that's like creepy good. >> it's obvious that this is political pay back, we know s & p failed we know they blew it, so did moody's, and everyone else. why did the noise ratchet up on this. trying to discredit them more, as if they need to be discredited to discredit the downgrade. it seems purely political to me. >> neil: charlie, you say they take among, take months. fine, i agreed with that. >> sometimes years. >> neil: do you think had we not had the downgrade we would have had decisions within days of that. >> they haven't finished the

lehman brothers investigation, that's all i can tell you and we're talking three years. i will say this, obviously the leak or whatever it was was curious, it's not going to-- they were shooting back at s & p, the government is-- >> for now they've left fitch and moody's off. >> i don't believe that. i believe they're involved. >> neil: s & p is the one that was reported. >> noi what was reported. i believe they're in it together and i will say this though, if were you going to tell me does anybody deserve to be investigated out of the 2008 financial crisis, it's s & p, moody's and fitch. >> neil: and that would put congress. >> listen, i've been very, i've always said it was a government inspired crisis, but these guys put triple-a ratings on some of the worst. >> neil: no doubt, no doubt. >> they might have caused the financial crisis. >> neil: and s & p, and believe me i'm not saying it saint. i find the curious gangup, and senate banking panel looking into it and, i don't see that with fitch and moody's, maybe it will come, but i don't see it.

>> it is pay back and it's headlines, but frankly you need to have your head examined if you buy anything based on what standard & poor's says. going back to enron and worldcom. the mortgage securities. they've downgraded the u.s. triple-a credit rating and what happens? our treasury bonds rally and go through the roof. they're just dead wrong all the time, but they're getting paid back because they did what they did. >> and to me, why did you say i need my head examined. >> you've got a big head. >> neil: ben stein, what do you think of that, not the head examined. >> it reminds me of the deer dead days when i worked for president prnixon and this is the exactly same thing, the s & p caused mr. obama a lot of political embarrassment, political headaches and so their answer, the government is after them. is he hitting them with a sledgehammer as hard as they can. obviously. s & p is screwed up for a very, very long time and

they're human beings and they're going to screw up. by the way, on the panel, i could remember when they were giving pretty good ratings to the junk bonds. so-- >> let he me offer, let me offer completely does run a corrupt business model. they are paid. >> they do. >> they are paid by the people they rate. but, listen, i will say this, if there was ever a time to investigate s & p it's now. this is a joke. i'm not defender of the administration. think of it this way, we're rated worse than france. >> and actually-- >> and that rating should be based on one thing and that's people, will we pay our debts back because we will he' print money. >> go ahead of the chris. >> let me give awe completely different view on this. i think that s & p saw this coming and had a heads up this was coming and they downgraded us because this was coming, because they're corrupt and need to be investigated. they're absolutely corrupt. >> neil: what? >> well, i think it's great, but i don't see anything

crazier than the issue we've been talking about and charles, stepping back from this and whether the messenger is the problem or what have you, the fact of the matter is the triple-a credit is gone in either one agency. i've been playing this out in my head. what if s & p is eventually sold off by mcgraw-hill and i know they're slg other things and maybe it goes away and goes away period and the other two are giving us triple-a ratings. is the triple-a rating the thing that stands? >> well, you know, i believe in suggesting to hear they've lost a lot of clout and downgraded greece and europe said forget it we're not going with you. >> neil: so you go to the friendly greater? >> you go to the friendly, but ultimately powers. >> and these are unsolicited ratings. and what's great about the debate, why do we need the stupid ratings agencies. why do we have so much

market-- we are he' triple-a. i will say this, we do not need rating agencies. this is a scam, it's a cartel, it's a-- >> i tell you what. >> they have way too much power. believe me, i'm not a defender of s & p, i agree with you on the flawed past, dagen. the fact of the matter is we have not deserved a top rating for years. the argument afford to pay our bills because we could print money. if that's how you argue the defense of a great grade, i went through college with a 4.0. it's stupid. >> and downgrade belgium. >> fine. >> we're defending a triple-a rating saying, well, if push comes to shove we can always print more. >> no, no. >> what are we mozambique? >> if we're double a and france is single a. and shows the absurddy of the system and-- >> aim he not saying that we don't deserve a top financial aid and spending money on

programs that don't-- >> and taking in people and. >> to your point, neil. >> i think the american public should thank s & p for one thing, a necessary wakeup accumulate. >> that's what i'm saying. >> it won't be a wakeup call, the markets will ultimately dictate the wakeup call and if the markets and investors-- >> they are. >> and exactly, so they're going to kick the can down the road. >> and even that doesn't mean that we're not in trouble. it just means that europe is it in more trouble than us. give us some time to play up. >> and everyone has been running to our paper and we still stink, they stink more, but that's hardly an area to say, well, you know, all of a sudden, you know, i go on the biggest loser and i'm the-- >> and neil, with respect, with respect, i think the original topic was the key topic, which is is the government using its heavy handed thug power. >> yes. >> to strike back at its critic and the answer is definitely yes. >> yes. >> and was it warranted. >> yes. >> was the u.s. credit system

a mess. >> yes. >> is the government acting like bullies, yes. >> also. >> they've been investigating them for three years. >> what did they do and-- >> charlie, that's 156 weeks and they chose this week after the down grade? >> and everything hostage in congress-- >> and you and i argue about this, i find all of these curious when i acted. you remember when a cbo after the health care package came through and the numbers didn't add up to the cbo. goes to the white house for a little chat and few days later, well, the way the president's numbers, they just might work out after all. i'm telling you, i take it from someone who is an italian american. >> i'm half. >> and that's all i'm saying, all i'm saying. >> you know, neil, i have been in a position where i've worked in it, where i ran a government that had to be rated and when we had problems with the rating agencies we went in and spoke with him and

show showed where our numbers differed and tried to work out a solution. what's happening here, i can't buy it. i believe that s & p saw it and s & p downgraded us to jump the gun. >> what government were you running. >> the chief deputy nassau county and we ran into numbers all the time. >> nassau county. >> i'm working with that and working it out with my head and anyway, it's not just investors, shoppers are getting pinched as prices on everything rise. do they need to come down before the jobs are back? the forbes gang is on it. is a bank mess increasingly looking like a nightmare right over here? . i know you're worried about making your savis last

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>> hi everyone, live from america's news headquarters, i'm jamie colby. critical new warnings, the u.s. is facing a shortage of drugs needed to treat a number of life threatening illnesses, so far this year, at least 180

drugs that are crucial for treating childhood leukemia, breast and colon cancer and other diseases are close to running out and critical trials for some experimental cures are in jeopardy and the obama administration a stock pile of crucial cancer medications and overseas, major developments from the month lines of libya, rebel forces making big gains and closing in on the capital city of tripoli reportedly taking full control of the key oilsy of brega, and gaddafi is planning to leave the country. i'm jamie colby, keep it right here on fox. have a good day. >> european market meltdown not helping to calm down our markets. major bank stocks plummeting there. fears that it's growing over here and whatever is ailing them is going to be a big, big problem here.

the whole contagion, how real is it? >> i don't think we're in 2008 area right now. i think our banks are much better capitalized and we don't have triple-a mortgage backed securities and mortgage backed securities rated triple-a and considered on our balance sheets and something else that's modern day nefarious. >> if you have a big french bank that goes down, i'm sure we hold that paper here, could a big french bank go down. yes, here is the thing, if france gets downgraded and bonds will get downgraded and people won't be buying french bonds unlike u.s. bonds and those banks, if you saw the stock market, and they're hammered lately and those banks get hammered and that could be a problem. by the way, it could be a problem for our economy and people talking about double, us falling into double dip recession, if europe has a major bank. >> what triggered our financial crisis, it's a classic lehman, when it broke the buck, in 30% of u.s. money

market fund aspects, based on the latest numbers are in short-term debt of european banks, i'm not talking about government money market funds or treasury money market funds. if you do the math. it's 30% and people prepared for another accident if something bad happened with one of the european banks and federal reserve would surely step in, but that's not good for this economy. >> absolutely. i'm worried about u.s. banks and the action in these stocks alone tell you something is wrong and yet, they keep talking about the relationship to european banks and american banks and tell you what, when boink is laying off 10,000 people and goldman, stocks are down 50%, something is wrong. in paper of 2009 we changed the county standards again for banks and that's sort of make that up. and it's great. the bank stocks rebounded and they have the stuff. and we don't know what's in some of the banks. >> i think that goldman is different pile of now what, than bank of america and citigroup, and bank of america

and city are in some trouble, the trouble, i think, outside of europe. >> and think about it, when we did the bank bailouts, the initial plan to buy the toxic assets off the balance sheet. that was the first one, it didn't work and hank paulson didn't do it, and didn't do it, so that stuff is still on the balance sheet. remember, they recapitalized and gave them money and that's on the balance sheet. if we go into a double dip recession, that stuff, cdo's, mortgage-backed securities, you name it, tied to consumers, they go down in price, banks got to take big write office. >> we couldn't bail them out again and there's no political will. >> that's the best news. >> and the problem, there'll be no problem. >> you know, that, no, no, no, they are too big to fail. if citigroup went under with 800 billion dollars in deposits, we're bailing them out because the fdic funds. >> and this congress is going to bail them out? this congress won't let this president spend money on anything. >> they won't. >> they won't, that's the problem we've got.

>> and i think if too big to fail comes back and bites them-- twice in a row the atm machine didn't work and-- >> got to have the money and-- >> and currently the money in and out. >> that's a crucial little jump. and then ben stein, how worried are you about another type meltdown for banks? >> not in the slightest, for u.s. banks, u.s. banks by any measurement that's commonly accepted by account ants are extremely well capitalized and standards are much thicker than in late 2008. we had a very solid banking system now and it doesn't require any kind of congressional action for the banks to be bailed out in the unlikely event they did require a bailout. the federal reserve could bail them out. there's no chance of another big bank failure and our banks are soundly capitalized and by the way, the french banks are more soundly capitalized than you might think. france runs a fast and loose situation with the banks, but the government is super, super tight with the banks, and they won't let the banks fail over

there either. and this situation, i think, is a bit overblown, but as the u.s. banks, they're fine. >> just so you know, ben, we did a segment on it. >> and quickly, if the bank stock tumbles, that's a lot of money that they lose, if it escalates beyond, there isn't much more to go for some of them. how big an issue just is that. the capital lost there? >> you know, major. i agreed more with ben than charles on this. i think we're much more capitalized and you know, listen, markets overreact at stuff going on there, it's not good and people see in 2008 every time. but here is the thing if you're an investor and i guess investors watch the show, if bank stocks go down, market is, the bank stocks have not decoupled from the overall market if you look at the way the bank stocks are trading, when they go down, generally the market goes down. >> very good point. we're going to take a quick point. one of the world's richest calling for it. obama says let's do it and

they must have been watching ben stein, for years he's been urging it. >> we can have much higher taxes and especially on very wealthy people, i don't want to raise taxes on dagen, don't want to raise taxes on charles. >> and are all of them missing new numbers? we're go to show you that could of motorcycles, boats, even rv's. nobody knows where he got his love for racing. all we know is, it started early. casey mears, driver of the number thirteen geico toyota camry. geico, saving people money on more than just car insurance.

. >> neil: president and warren buffett calling for tax hikes on the rich and leading the char

. >> neil: sock it to the rich. what if i told you there simply aren't as many rich folks to sock?

warren buffett and president called for tax hikes on the rich and 15% fewer of them. that's the decline in number of returns for those making over $200,000 a year. pretty much ben stein makes in a day. and that would be a 55% drop off in tax returns for those making over 10 million dollars, so ben stein, that's not is a good trend. >> well, it's not a good trend, but there is he' still plenty of rich people. we desperately need government revenue. where else except rich people if they have the money to buy bentleys, and they have the money to buy jet airplanes and money to pay more taxes. >> you're saying 200, 250,000 jet airplanes and-- >> no, i'm talking about people like you, have incomes of 10 million a year or more. >> you know, well, by the way, in issue of fairness, no one leaves into the 50% who aren't paying any income taxes that

are credited. >> brenda: on pay income tax, too. >> neil: before we get to-- >> you have to take, you have to take away half of their net would worth to get what the bush tax cuts took away from the richest 1% of americans. >> and the entire-- >> and before we say in the issue of fairness the rich have to pay more, i am saying and let's address nifrn having skin in the game pay something and-- >> i agree. >> and that's worrisome and charles payne says don't you think we should take more-- you're annoying me, charles payne? >> come on, warren buffett-- >> all the time, realistically, it's really nuts, really what this is is a smoke screen, obama wants to go after people, households making $250 and considers that rich. we're talking about small businesses, we're talking about people who contribute to society in so many ways and you know, you've the got to tell you, ben, it's great if someone buys a bentley or a jet and someone's got to work

on it and park it and put gas in those things. >> pan buy it-- >> not giving the money to the government where it's going to be wasted or redistributed to political allies of this administration. >> charles, i agree. >> i would not just that as a campaign tip, and marines fighting terrorists in afghanistan. >> i have no problem, and when the super community fails they're going to gut defense because he they don't want to take any other. >> that will be a disaster. >> and wait a minute, wait a minute, i'm the chick, i am he' the third here, ben to your point and warren buffett's point you talk about millionaires and billionaires, that's not who obama wants to raise taxes on the 90% of the people paying taxes under the obama plan 200,000 or more are not millionaires. >> we're getting bent out of shape over what warren buffett says. he he may be a great investor. what does he know about fiscal

policy, right. >> and i love the guy and afterable and-- >> nice guy. >> if you feel that strongly you want to pay more taxes and the rich, cut a check, shut up. what i am saying here there, i think, charles to your point. before we start asking anyone of any income group to pay any more to this government. let's clean up and fix this government. before we decide who pays more for a crappy product, improve the product. >> by the way, you don't hear warren buffett talking about that. he loves big government. in guy is a limb zoousinelimous bentley liberal. >> he drives his own car, he drives his own car. >> and stop, stop. when we come back, first thanks to charlie and dagen and to chris hans. up next, a market to say the least and that's why we've called him thain, charles thain with stocks beaten down. >> ♪

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