>> absolutely.you get inflion at productity. productivity.that's d go. >> it's money supped.it only hao go. so you've got to get inflation, you've got t get productivity. both. >> pl: you're bullish on theork? >> you have to own thepructive . otherwis it killsyou. >> paul: okay.bob,ou've been rue nightl business report mol portfolio since its incepti waback in 199 let's seehowit's doing versus the standard & poors 500. look at tt. the drach model portfolio up 98% comped to 69% for the intpz. i -- s&p 500. i congratulate you on e great jo >> it will get better. >> paul: let's hope so.in janua, you recommended three stocks. let'see how theyerformed. mahewsnternational, which is in the funeral biness, i unrstand, down with its -- strang down almost 21%. do you still like it? >> yeah.think anything in qualit the's a big divergence quality in this market. qualy scks underperform lower quality. >> paul: so it's theirurn tocom? >> yeah. >> paul:etro canada areatbig wi. dn't that get a big winner? >> yes, norps.it's still up. >> paul: t

if you wait to lg and the deficit remains too lge the rket will worry about ring inflion and deficits and you'llave recession again so the timing and the sequencing and when to do it will be a very difficulpolicy proposition. >> suzanne: if you'r economi projections e correct and i have to point out they're below consensus would seem the stk market may have gottenay ahd of itselft the current levels do you agree wi tt? >> yes. the stoc prices arejustified because they're void of th risk of a near depressiothat's the race be risk ithe first quarter and if the economy is going to be weaker and profitson't recover as fast and you have weaknesses in theest of the world, eure, japan i thi there will be down-sized risk from the stockarket with this points on. >> sanne: what are you oking for your money erseas or u.s. equiys to do the best. >> my mind is sti in cash becausi think there's ris on equities credit and commoditie i think the downside istoo many risky assets it's betteto wait for a mow robustrecovery. >> suzanne: wh would you expe the stronger sig to be. what you look r? >> well,

we've hahad inflion data out this mornining showi that inflatioion is droing back, actual, falling below tt 2% bank o england target for thee first occasion in some time.. lookining at annual rarates of . is doesn't seemm to have had a ge impact on the marts today. we are barely steady by points or so at this stage. amongst the bigge gainers, bac resesources stocks are dog their bit t higher by 8.9%. lonmin, not fast behind, kazakhmy's,, xstratata and rio tinto. vodane istill the biggestst declin. we have e had a dngrade from the analysts from ubs on vodafone. the ares of the companare trading lower today. papatricia, w is it lookining i germany? >>well,l, we stilillook quite firm, up about 0.9%. i have to say, volumes are sligly better than yesterdrday at ts me. arou 29 million shaharesave traded andnd we had macroecononc data invesent and confidee below exexpect ag so we e had a rise of ababout eight cononsecue months.. now it s seems a analysts ink there is a euphia, thinking the w whole ide that therere isa big recovevery. howevever, what seems to happe ght now is a litt bi of a wake

a lot of it had to do with inflion. a lot of it had todo with th employment rate. is is an astronomical unemployment rate an the pn in the country, in those famies where people lose their jobs is almost somethg that we cat measure. and the political ramificatns can manest itself in the twep election, 2012 ection. >> i'm going t go back to bush for a anybody beuse what's inresting to me-- and you alerted me to this idea in those ur books-- they talk a lot about a bunch of stuff as to how th were going to do it, but they never talked about-- cording to you should we do it? shld we go t war? >> particularly in iraq. that's what's so astonishing. and i wrote the second book "plan o attack," about how they made that decision. and a numbef people after the book came out, called me up and said "you kn, whas interesting abouthis book is the meeting ty didn have, which is the meeting to sit down and say okay, we've doneall this planning, we have mitary plans thatthey've updated and changed and thought they made better time and time again. now let's sit back and s should we

they wnt loer interest rates which over time leadsto more inflion. there's a al balancing ac here.he fed in takg its aggressive action h done things that are unprecedted and made people uneasy. people want mo political oversight over tho actions. and therick would be to find a way to givethem what they nt, perhaps more transparency, peaps asking forhe permission of t treasury before they maksome of these ergency loans. als givingongress a kujal to beat up theed everytime doing somethingnpopular like raisenterest rates. >> ifill: orde out a lot of money. w we know that the purpo of the fed chairm going to the hill toda was to calm people do and say we've got thiman. he wrote an op-ed todain the all street journal trying to lay that out. did it work aer almost a ll day of hearing wh all these lawmakers asking etty tough questions? >> well, if y look at the barometer of investor confence the stock markets seem to be prey happy. it went up today. there were actually not many sprises in what he said aboutonetary policy for those who have been following it carefully. his whole strateg he