tv Wall Street Journal Rpt. CNBC July 5, 2009 7:30pm-8:00pm EDT
hi, evererybod welcome to the "walststet joururna r rort." comimingo o yofrom the asn idids festival l whee theig nassrom finance, politics and business areere. i' b be talking with er schmidt toto tata about what's ne to termsms of search media and whether he's fliling any hehe from new competition. > theobob nbers, a ao o sales, housi prices. whwhatoes it all m mn and how could itffffecthe mket and ththe economy. s see wise economiccdvice fr a real olol. e e mley ool. ththe ce behindththe popularar website e on investing for the long te.. ththe all street j jrnrnaleport" begins r rig n n. this is america's number oe financial newsws program. the"wall ststetet jrnal report."." now mariaa bartiromo.
>> here's bll griffeth with me of the storieses in thehe hehelines this ekek. >> hererss a lo a a what's making news a a we head ioo a nenew ek on w wl l street. unployment continues to o rise. the jujune jobs number was wors than whatnanalys had enen pecting. the ececony y st 467,000 jobss last nth. thunempmploenenrate nowtt 9.5%. 0.1%. ththatss the highest ratat sinc gust of 983. ththe markets wraraeded uthe sendnduarter on tuesdayitith their best showing in yeyear the e ww rose by 11% in the ththremonth period. its best rformance sincece 2003. the s&p ss up 1515 itbebest quarter sisiee1998. anthe nasdsd was u up 20% posting itits b bt numbebers si 2003. the dowicicke off theewew quteter wednesdayonon an up nonote but fell on thursday. the marketserere closesed on frfrid in observance of theululy 4thholiday. autoto ses are slowly startiti t to wer up.. rdrd h better than expected vehicle sales forhehe month
ju down just 14% from a year ago.o. general motorssas off by 336% slightly worse than expectations. totataales were o off by %.%. ononcted swindlerr bernard madoff will spend thee rest of his life inn il. hehe ss s senncncedo 150eaears n prison b bjujudgdennyyhehe who called his crimes "e"extorordirily evil." madoff defrfraudd thousandsdsff pepeop i i aassive ponzi schemee which totaled$65 bbilon, including fafake profits. itit i expected thaha at leleasn more peopop c cou be charged i coection with thatcase. it'sbeen a busy dd important weekek. to sales were ouou the markets entered a new quarter. thth jobs repepor came outnn thursday. here to help us u uererstd it,t david wters is the ceoeo wintergreen advisors. david, thanks f for joining .. g gre to be rere >> 9.9. e unemployment ra.. how w chch higher do uu tnknk i goes and h h the market already anticipated that? >> i think uortunately it
continues s torereepporor a while befeforthth economy cacahs its wiwind andnd u know, iss ununrtrtune for so manypeople. >> do youhihinkhat interest rates will have to g highehe from rere what wilil t fefed' response be to all ofthis, do you t tnk? i i think rates probablyy stay w for quiteomometime, bibi. en with our borrowining cocontuiuing the treasusu will have to borrow and boboowow and borrow. > ultimatelel rates have to . but in t t sht run, i i think tetes ay lower and thehe fedndnd the whwhol feral governmeme m my have t to do anothther stimulus ckage. >> c cisisti romeraiai on cncnb on thursrsdathth is stillll the tatabl a second p pacgege h not b bnn ruled d ou >> the prerededentas always s si he'll do w whaveverit takesestoo atate need totododo forhehe amamerananpeople. wel do whatever i kes. >> would thatveven help at isis point? >> i itnk, you know, the patient needs a l l of medicacati.. sically had a gnt ececomomic stroke globobal.. and we're stlln hlilingmode. housingg needs to bebe healed. needs to bemomore business investment.
d confidence has to be rerested. >> c condedee in early j jun wa t great. it was l les t tha expected for ee consusume but athe same tte, houousi seemss t to showing some signs of recovery in someme parts ofe country. manufacturininseseemto be recoveringng. where are we in this cycle, do yothink? >> think it's pbabay just the beginnining. and d wh w we really y eded to s on as vevests is thehohole woworl and i thihink it's the world beyond nororth america where th lo-term prospects o othe bebest > y are looking outside the united states foretette vestment opportunitieies? >> yes, si >why? >> we think there's ssssdebt. there's s mo g groh potential. and there's a l lotf people w w want to woworkarar to have everythihi t thawe all have. >> you have a rather coconctrtred rtrtfoo. t to0 stocksks in that poportlio. has thatheheed you or h hur you in this cycle? > wl, i think lasteaea it alalmo didn't mattetewhwhat you owned. fact, inn many cases, qlility securities went down evenorore cause people could s selthem.m. i think comingngutut of th,, its helped us a bibit.
>> individidua investors who wee dollar c cttavavaging through ththisave had stomach an awful lot of v vatatily in the last s six months.s. did they say the course? is thatwhwhat you're dodoin >> yes. we ha dollar cosostvevera investors who have m mad money the lalastererd of timime who he been smart e eugh to keep going. we think there's'srere portunities out tthe. lifefe wl l onon bibill kids will e e chococola bars. you know, pelele are going to wa jewelry. you owow there's's gngngo be lot s sff examples arorodd the woworlofofhuman wantss and n nd that are goingng tbebemet. >> those two xamples, you knknow ayay the consumer herere. eyeyre classisic defensive plays. they are the kinds of investments you m makuring downturns in the economy.y. t tha what you'reooooki at? > w like compapaeses that cat on g gro that are undervalued as well. u u ge paid towait. but we love itithat things that have priciningowower -- >> uh-huh. at this pointnt do yoyou eect another downtururnin the enomy?
do youexpect anoththershshoe to drop or havave boomed out he?? can youou i invt with c cfifide in that rrard? >unfortunatatellmost nobody knows the tuturebill. things can turn owown, but there's somany bubuneness and curities thatarare soheap alalrey, that the odds are in your favor asas a long-term investor t to well.. >> of cosese we don't know, but you havetoto invest anyway. >> absolutely.. >> so do yo anticipate a declinine t way you i invt or do younvnves anticicipangng we veve h bottom here? >> wee invest n n quite knonowi what's'soioingo happen.n. but havingng a h hhh degree of confidenencen n th businesesss inststin. if priceceoes down,e'e'veeen a buyer throroug this whole preses we're ntntinng to be a buyer. a dodoll c cosaverager. >> favorite sectors, least fafarite sectors. favorite sectorould be again, aa.a. long ererm. you know,w, g groh coumer cocompies. asast vorite, things like tomobile related. tougugh,ouou bbusesess. w we' oiding anything that's v vercacapil intensnse.e.
and really d doe't'tave the ililitto raise its prices. i think thosee e trickcky areas for the long term. >>dadad wwinrsrs, good to see yo thksks f joining us today. >up next onhe "wl street joururnareport," theeoeo of search giant ggle on who i i tctcng your seseareses. and whwh t thell try to s sel t u in that regard. maria anand eric schmidtt at th aspen i ide festivavaoming upup. andmaking money for the lolongerermy following vevestnt strategegie almost anyy fool can use.
wawa to get your ke on wh wewentnn in iran and how the visions ofof tprotesters a and the visions of al of this action thahat s s ing onn in iriranthth the world didn't knoo about was only found on yououbee or itter. wh w w that like f for you during that moment? >> it'ss a source o great pride for us thahat people willuse ths chchnogy to discover the usus and the sorort terrible things d dontoto humans a arod e world. andd think t the iranian situtuatn,n, ts poor woman whoo wassssstially asssinated, anand incorrectlyly so, it's a teteible thing. wwe have a cord of i now we ca put p preure on the governmement what i hope willll h hapn is th peopopleitithithe country wi haveve tame accecess to thth informatioion atathe rest of us who were upset about it ilill. h how didd youu get ththat communicatioio because i had somome friendnds had family in iran a they sa all theehones were down. theinternet was notaccessible. how is it possible? >>hihisparticular video w
actualal p put to aile and carried acrossss t borderranand th uploadededon to set of serverers atat me their w w t t theesisis that youtalked ababt.. so the gererent tried to suppressss. th's'sthe gatat rt of the story. bubut cldn't be suppresseded. and to me thingshahat are imrtrtan pictures ofof images sf horrific thgs. theeererble tngngs at hpepen in the worldldouou c't suppress ththem amore. that's t the great testament to the internet. >> that iss soowower pfl rllll amazing.g. tell me about businessss today a broad sense. cacan you continue t t mononoess search?? >> we think o.o. we dott think we'redodone by ay means.s. there are many, m man a aerertig products that t weee developing. e most interesting thing we'e've delolopein the last year uses information ababoucocomm arches to improve theinds of adwe suggest for you. soagn, you aren't qtete sure what ad use,e, but w we can ma tttterd s sugstions. itit where ogle can b be a helper i in generatatin ads,whwc
means wewe generate moror moneyr ourselves. it w wor f f everybody. >> where is the growth coming from going forwawardn the next five or t years forogogle isis it m mor searchch opportu? mobility? something snels. probably a ccbibinaon. it's obvioioushaha the highest grgrow i i i in our coree busin as people e ge onlinene and as we get bteter d b btete and more rgeted ads, ththee ads become moree vavalule. our whololeheheor is advertisin is not targeted. st a random a ad you walk by. it's a waste o somebody's's neney. you aren't g gng to b buy wh's notrerevant to you. where are we i t terf the ececony and the business cycle. recognize you are coming up t o earnings a a c't sayoooo much about ogogle business. can you giveve a sense if you've seen a a change i c ctomr papaerernsiven this economic upseset? >> there's a neral senseseovov theasas -- the worst is binind us. the past fewmomont, t tngs have generally stabilized inthth ececonieies ound the world. without lklkinpecifically out google rrulults it s sms like there's a a bette
confidence unemployment is moro favorable. the e stulul packckag a ginning to work. th is alolong and deep rececessn.n. ressssn is due anand a rereonable assumptioion 0909 the year t thae're in now, is pretettyucuch difficult ye and at 2010 iss the covery. wh kind of recovery we haha, i dot think anynyonknows.s. anyone who telel y you who kno. >> how is obamama doing? >> wellll, i'm, viviouy a aele knowown supporter o of t president. ththk he's done w wel given t hahande e s dealt. i c cnot imamagi beingeleld -- given such aarge number of cres on dayay one and t theveve executed q qckcklyn theststulus packagag o on e agendas t tha they promoted. andararge they have keptoo the script thatotot them elelteted. they areeiei transnspantnt they sa t ty would if you votededoror ththem >> that's ttru a a business person w wit prits andevenues all aroundd the worlrld, what are youou thoughts on taxing i iernational profits? well, wee don't agree witit te
prpresenenand s policies on everythingng. the current proposal that'ss i ee treasury departmtmenagain,n, the details matter here,asas te property that it's going to t tx foreignn earningsgs at u.s. t rates. and the theoeoryhere ishahat sosomew w is will preventeoeopl from movining j job from the u. to other countrieses the only problem iss it aually causes us s toecome cocompitive ithe other ununtrs we operate in. anand ny of ererics most importrtancocompies,and i h hop gogoog i is in thatlist, arere avily dependedentupup inrnational market ssha, rerenue and grgrow. somee of t the big emem that yo havealked about,t, change e worlrl t don't nickel dd meme osmall inin. bubut c chae the world for the better with bibithings. give m me urur priorities i ierr of thehe b i isss the world faces. >>ell, from my pepersctive, ththwoworl will be a better plae if peoplplcacan talk to eaeach r more. anything thatauause people to be able to getet more a accs to inrmrmatn in whatever terms make see.e. an example i'm veryprprd of isi the automatic t tralalaon of
lalauages. mostst ws s se to h heeeen caused b becse people didn't t speak to each otheher. they couldldttcommunicatete. they didn't realalizththat peop are theame everywherere a have the same aspiririoions without ngngge, without communicicioion becomom easy to proselytize andgeget animal spspirs if you wiwill of evererodody ing and eveventllll nflict anderrible things occur.r. from our perspective, formation access for everybody, broroadcacale access thatat informatatio the deveveloenenof b busesses around those informrmatn,n, espspeclll for r alall d new ntntras, ththe e ar the hihightt priorities. > m thanks toric schmidt of google. >>nonow re's a look at whatt some of themovers and shakers in t the world of sisine and politics told mehihi week at ththasaspe ideasfestival. there is a groupupof opople o o sa anything that'ss about gulation is titiusiness. i think the esident had e ininsit t ve early onhat to be for stronger oversight of our nanancl ititutions is not an-b-biness. it's'sdedespately needed b by sisine and by capipill rkrks ththate restore the publbl
trust. i i think ththe'e's guiui ncern that their policic agendna and particulararlyhehe actions those e incongress, w whe you g acrossss t environmenenta regulations, the taxaxpolicies, labor market policies like the ee choice ac they've ltt thimimprsion they are anti-b-busesess. and that's a arorobl they face. > think thehere a fair question as to w wheerer we had too much regulations wi regard toto h housing w was managed. and so maybe we should h hav a didiererenstructure here. and another cases, c clelyly we need more regulation. think it's balance off let's gegethe right regulation. 's not a matterrf less or mo. it's a m matrr of the r rig gulation. >> t thecocomy, ithinin still reires some fed stimulusnd me fed intervention soo t t challenge around thehe ex strategygy i getting it t right. dodon'wawa to exixit too earlyly because we s saw whahat ppened japan, for example. you don't w wanto exit too late, obviouslsly. the fed is thihinkg g out the exexittrategy and t tnknkinabout thee t ting of ttt strategy. up next the "wall street journal report," foolili investmement s sategies thahatm be theest for your long-g-te
rtfolio. is now a good timeo put your money in the markekets andhehe ression made money tight all o ove t world. why ththe queenayay sn be countingng h p pnies.) lead mpanies thveven collaboration withth t w wld's leading compmpans.s. together, we're heheining shape the exchanging woror.. ny e eonext. poweringnghehe exchanging world. that stickcks to you teeth so well you can even drink water w. necrest whitestrips advaed seal. get dramatically whiterer smi while you dousus about any.
english to impart sound financial adadce. joining sustomomgardner, co-author r t themotley fool mimilln dollar portfolilio. ththan for jojoining us. your m milonon dollarorortfio was partrt o o an experiment,t, ght, with y you online community. hodidid come ababou tellll m aboutut this. >> we h hav aboutenen membershi services at the momotl foolol value, growth, u., international, small p,p, larg cap. ananwhat we wanted to d was gi p pple a look at all off those apoaoaes. mimilln-dollar portfolio i i picking from the beseststocks i ththos services an we're backig itititith r own mlili llllar it's'soo longer a million dollas because wetarted the service about a year ago. it's a grgrea ararni opoprtrtuny for people and a greaeat eaeayou n nee that long-term i invtmtmen perspective. > what a areeople doing nnow 's obviously a tougugh market environment.t. bad news for ee equity mamaets. whwhyre smart investors g getngg in now? >> i thinknkarren b bufttttas alallyet the exampleoror so nynypeople. u know, you think he has phyhy sayings. ththe's really a lot off groundd thinkingngbebend t this like get greedydy wnn otothe are
ararl and feful when oers are greedy. buffettt did not i iesest significant amounts of hiss capital from 202004toto 2007 a w w s put tensns of billionons work becausese i auction marketet, ee priceses are very . yoyocan have thatt ivive-ar tie pepersctctiv this is a w wdederf time to o beiesting. >> when he wrote at oed at the end d of'08, s somofof the s st henvested in were h higrr than whwherthey are right w. 's's dn over the sht teterm > at's true. hehe not really l loongng at th prices. a t t ofther people do. i think hee knows 5 t 1010-yrr timehohorin is why i'd ma ththes investments. he's investing intt a horrific time. it a timehahathere's a lot of fear out there butouou are getting lolow prices for thaha fear. let me takehehe other side thth. if i sayay look, tom. i'm a lg-g-te investors s well. but if iinvested in thiss market ten years ago, i i'mtill down. i i'mlat in a ten-n-ye riod. >> well,l, y know, i saythat, it's hopefullyyoyou are followig ththe momoey fool principle off
adngngach month,eaeachyear. you are getetti lower prices and hihigh prices. doar cost avererining. yoyou ee getetti y you dividend payments as s we.. so, s,s, the market has had a terrible teyear peririod that's goioingoo happen. it is anan anomaly. i don't tnknke'll see ything keke tt over the ntten years. >> what are thee st commomon mistakes investotors make, particularly i i p perds like we're in now. >> levevere.e. whether you u ar an indivivialao institututio >> stay awayrorom debt. >> using marginn and leverage ae beautiful anand g gd times but they are totally destructivive bad times. it's turningngouou i invtmtmen portfolio or yourr corporation into a rulet spin.n. atat'shat a lot o of invesestmt banks didi theyururneinto hedgdg funds run by tdeders and took risks not sustainablbl not using rgin, havingg minimum fifi-year time hohozozo and fofor individidua, , itmamai sure you'vee gotten rid o of hihighnterest debt. get the credit cardd p pments dodown creded c carwiwillow charge 20% to25%onon those cards. yoyoll never beat that ininveing. >> you arere sinin the number oe item on thatat chececisist whe
do you need theney? doe know your gogoal atat a you l lking to achieveve re? >> absolututel >> i think a lot of p pplple t in thehe gee of ininststin it's n.n. it's a wonderful gaga.. it's the world's g greesesgame. but t yohahave to havenn ovever plan thatyoyo investments are fitting inin.. that's's t s srit of the book.k. give you aook at how to build a portfofoo.o. nono for the nextxt three month t t a uple stock tips for t next year but a plan forhehe xtxt t years of y you financial life.. >> tom, goodo have you on thehe program.m. thanks so ucuc tom gardner. >>up next, a look at th news this week that will h he an impact on y you money next week. andd long live the queen's bank aaccntnt. rising coststsavav made herer jesty tap intoer resesveve shsh what she c cando thgh, to ototec the royalesestegg. as weoo to the break. a l lk at hohow e e stk market deded e week. we know why wewe're here.
> let us knonow what's on you mind. we le hearing from you. e-mail us at email@example.com. for more on r show and our guests go to oururwebsite, wsjr.c.cnbc.co if you misiss anything, yououl e able toeehe full inintervie with ourur guests arting on nday. here are the storiries comi up at may move the marketsts a
affect yourr mon this week. on mondnday, prident obam begins a o-day visit too moow. hehe'll be meetwith president memeedev por to the g-8 summmmit. wednesday, thatat big ent begins in ily when the leaders of the eight largest industrialized nations tatakes plac in italy. alcoa has s r report on wednesdaday. the trade balancnce tells uss whether t u.s. iss porting or expoporting mo goods right now. and thee university ofof michiga issues itsts preliminanaeport on coumer sentiment.t. we'll see h how likelely consur totor spenright now. > keeping aastle isn't so cheap these days. queen elizazathwas ford to tap intoeserve cash to cover some of the costssof keeng the househehd at buingham palace. her majey recees just undnd 8 million poundssrom british taxpayerers each year andotal rorol expenses add up to 41.5 million.
nenearly $ million.n. the royalatchers say she's going toto have t ask thehe govevernmento ncrease herr maintence or the reserve f fd could run out by 2012. that wouldld be heher 60th year th throne.e. even royalty s to pininch pennies these days.. that iss the show foror tod. thanks foror joining uu maria isbackext wkend with lessonfrom the richehe men in totown acrosamerica. what they know that t the rest f us don't. each wk, keep i i heree whe wawall stree meeeeain street. have areat weekend.