All rip it apart . John, i will start with. You look at headlines, you jump up and down. But upon closer inspection it bass meaningless. 62. 8 Labor Force Participation rate, lowest since 1978. Does that blow your mind . Yes i am. Despite the deep drop of Unemployment Rate month, year to year were not getting same type of real Income Growth and spending growth we got in the past. For instance, suppose we go back, 10, 20, 30 years, this type of drop of Unemployment Rate would be associated with real Income Growth, real Consumer Spending growth, 3 to 4 . Instead both of those metrics are struggling to grow by something just over 2 . I mean, susan, the numbers, i struggle with them. You can fudge them. Right, exactly. Theyre revised. We all took a statistics class. We know we can make the numbers look as pretty as we want of the. My mother used to have a great saying. Figures lie and lie liars figure. That is really simple. What is alarming to that number since im an entrepreneur, instead of dropping out of labor force, go create your own job. They did a study that entrepeneural activity is taking a nosedive except for baby boomers. Youre seeing a spike. People with established careers. With some success, im not giving in. I will go out and create my own job. That is interesting, jonas. Does that mean everyone would rather take the unemployment check . I mean as a matter of fact, we have a sound here from labor secretary thomas perez i want everyone to listen to. He has a plan to solve the future. By the way, it means more handouts. Take a listen. Weve got work to do. There is no getting around it. And the way we do that work is investing in infrastructure, passing Immigration Reform, putting money in peoples pockets by raising minimum wage. And, helping longterm unemployed by extending Unemployment Benefits. Im sorry, extend Unemployment Benefits will help jobs . You know, i cant think after better time in this countrys history to start your own business, both from fundraising, amount of capital available, amount of money you can make quickly. There has never been a time where you could just become a millionaire, a few years, in history. The temptation to be in the workforce is low. Why i think this whole figure is really useless because it is gauging things that dont necessarily in fact this is the worst since the 70s . The highest growth rate in this labor force was in the carter administration. That wasnt a great economy. It was in the 50s, way lower than it is now during the Eisenhower Administration which was a great time for workers in america. And peaked in 2,000. I think it will decline for a while and doesnt necessarily mean the world is falling apart. Like pay raise is more important than Unemployment Rate but actual Participation Rate i dont think it is meaningful anymore. But just to jonass point, average hourly and Weekly Earnings are completely flat. Yearoveryear david, theyre only up 1. 9 . That is anemic at best. Those are poor numbers for sure but jonas makes a good point. There is secular dynamic we need to explore. Weve been exploiting jobs for decades. The sad fact is, big muscle jobs go to where big muscle jobs are cheap and that is simply not in the united states. As we exports, our competitors, china, south korea, all around the world that is competition for us. We dont have that leg up that we had years ago we were superior in education. So those are some of the dynamics we have to deal with. We have to compete on a global scale. That means progrowth policies will have to be put in place to get around this dynamic. Good luck with that, right . You know where we have to start . We have start with the overregulation of business especially pertains to Small Business. I think that is a big problem. Thats why were not sighing more startups. It is too much after headache to get a business going with all of the these clients and idiotic. You dont know how much time corporations today have to devote towards adhering to compliance regulations. This wasnt true five or 10 years ago. Susan, youre in this. Right. Well, just to your point about regulations and things. Impact of regulations from the federal government alone is significantly more hurtful to Small Businesses than it is to big companies. But the other point is, there are more than 27 million Small Businesses in the united states. They right now employ almost 2 3 of the entire workforce. If we had an administration that was supporting Free Enterprise and capitalism, helping Small Business instead of just spending rhetoric on it and he have one of those Small Business owners would hire one person, think about the dent we make in unemployment instead of extending Unemployment Benefits. The Administration Says if we spend on infrastructure and Immigration Reform well create job, jonas. Does that make sense . Immigration reform on Technology Workers it possibly would. I think we have the back wind of having the best, even though the easy to get started any Small Business. It is it is not easy to start a business. Go to kickstarter. All you have to do is you dont have to be exactly. You dont have to be in hangs absolute terms awesome but have to be better than every other country. We have that advantage than the politicians do. Were one step better than europe. Why more startups happen here. Jonas, dont you think the Regulatory Environment is peer. It affects the financial industry. Maybe we should have gotten our hand slapped but so burden some, it is very difficult for us to hire because compliance issues are so see norm news. I know at love Financial Firms fold up shop and fold into larger firms because they simply could not handle the cost of dealing with all these new regulations. Youre chomping at the bit here. Yeah. You also want to consider, the low rate of wage growth. As long as that, you will have a hard time getting the political impetus behind Immigration Reform. People are going to look at this say, no way. If you want to let more immigrants in, i dont care if theyre hightech workers. That will have effect making it all more difficult to realize an increase in wages to keep up with inflation. A lot of workers would like to come to this country. A lot would want to come but people already here we give it out for here. Low wages, isnt that from point of view starting a business isnt that awesome . That is your biggest labor cost, biggest cost in most businesses if that is low it makes it easier to be profitable. You can overcome the red tape because i can pay people hardly anything. That would put you out of business. That is the problem. Labor costs is more expensive than regulatory costs. That is your cost. I dont agree with that. A lot of startups happened recently, if there was such high wages for taxi drivers, would have uber would have got off the ground and profitable. To viewer at home why do i care about the number . Jonas if your point, entrepreneurs are not counted in this number. They revise it all the time. We have the parties friday, what who, jobs number. Should we celebrate Something Else instead . Look at reaction of financial markets. Big buzzkill. Oddly enough, hearhere we have 288,000 new jobs created. Looking at that number, right away i thought to myself, well that 10year treasury yield is heading up to 2. 57 today. Instead it closes under 2. 6 . 288,000 was not a surprise. It is payback for no, no im sorry. Most people on buy side were looking for higher number. This is simply catchup for the poor numbers that we had. Focus right now, weather was a big part of it in those numbers. Creating jobs but for the most part these are lowerquality jobs. Okay. Last word. Adam smith did not write a book called the jobs of nation. The job of economy is to create wealth. Job is indication of wealth creation. If your economy is creating wealth faster than other economies and this one is, jobs aside. It just doesnt matter. Weve got to go. Our panel is on fire and that is really, real cool. Theyre not going anywhere. Here for the whole show. That is great. Well talk about, believe it or not somebody out there is calling for 15 minimum wage. What does that do for the economy . Well tell you. Dont go anywhere. Well be right back. Its the Little Things in life that make me smile. Spending the day with my niece. I dont use super poligrip for hold because my dentures fit well. Before those little pieces would get in between my dentures and my gum and it was uncomfortable. 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Tell your doctor about any history of Mental Health problems, which uld get worse while taking chantix. Dont take chantix if youve had a seris allergic or skineaction to it. If you develop these, stop antix and see your doctor right away, as some coue life threatening. Tell your docto if you have a history of heart or blood vessel problems, r if you develop new or worse symptoms. Get medical help right away if you have mptoms of a heart attack or stroke. Use caution when driving or opating machinery. Common side effectslude nausea, trouble sleeping and unusual dreams. I had to qt smoking to keep up with this guy. [ male announcer ] ask your doctor if chanti is right for you. Tracy welcome back, our panel is here all fired up. Join has, susan, david and john. Lets talk about earnings. 2 3 of the s p 500 reported. Earnings are booed. We get the Berkshire Hathaway numbers as we speak. Profit down for first quarter. Berkshire of course mainly insurance, rails. He basically owned things he knows, right . No tech. John, start with you. 2 3 of the s p 500 beat this kind of like, what happens every quarter if you ask me. We set barlow enough that 2 3 can beat it. This is very strange recovery. Thus far profits are 30 higher than peak of prior recovery. Nevertheless, payrolls have yet to return to their peak of the previous recovery. In past upturns, payrolls were 4 million jobs higher by the 58th month of the recovery, which was april, was, positioning in the cycle, prior to that. Prior to that eight million. Under reagan we had created more than 11 million jobs during the first 58 months of the recovery. Under obama, were still down 100,000. Tracy doesnt say much, susan, does it . No, it doesnt. I really think, this recovery is what they keep calling, recovery, is very weak. Your point, tracy is welltaken, the bar is so low, expectations are so low now, than any little up tick, were celebrating like you were saying earlier. I do think that, you know, investors have become very savvy in that they dont really flinch quite as much as they used to. Tracy right. Were watching people, come back into the stock market, that may have been bouncing out years ago. So i think that is good sign, that people are, leveling out. But weve certainly, got a situation where we set expectations. We are setting them low that we can overdeliver and underpromise. Tracy david, i think that is interesting, what were seeing this trend, retirement money particular is coming back to the market, coming back to stocks. Old school, 60 40, 60 equity, 40 bonds portfolio is coming back. I dont think it is surprising market is hovering near alltime highs. Tracy is that bad theyre coming in at the wrong time . I dont think so. What does bother me, let me put a caveat to that, a lot of retirees, people actually in retirement are putting too much money into stocks. Thats probably a bad sign because in the end, stocks are risky assets. Highyield bond are risky assets. Theyre called junk for a reason. A lot of retirees are putting money there. I find that kind of concerning. Tracy jonas, well hear from, our very own liz claman going to be talking to Warren Buffett. She has been there all day, at the event. Probably got a dilly bar by now. Well talk and hear sound from that later. Jonas what do you think about what is happening during earnings season . Specifically to Berkshire Hathaway, although earnings are soso, next year insurance is general will be profitable. Theyre sticking to high premium increases across the northeast. Theyre all doing it and not be able to price shop out of it because of all the storm settlements. They reassessessed whole area. Theyre raising them to levels way higher than they will settle out over next few years, et cetera. I think insurance in general will have rising profits over the next, two, three years, perhaps. Perhaps longer. I think youve got to love Warren Buffett. Ive been, im sorry, i have been a fan of his. I read one up on wall street. I think took intimidation of investing out for people like me. You dont think he had a really big stumble this past couple weeks with the coke issue . No. I thought that was abominable. I was actually tracy he is Warren Buffett. He can kind of do what he wants. He is also a shareholder, tracy. He has a fiduciary responsibility and he failed. Tracy why did he fail . No, he did not vote his shares even though he said on air in competing network that he felt the pay package was excessive. He should have voted shares and said something. His son is on the board of directors. I think that had a lot to do with it. Tracy well hear from him in a bit. Hopefully well get to defend that jonas, your finger is in the air. Peter lynch, magellan fund. Just to correct. I will say to buffett, whenever he falls out of favor it is time to get out of tech stocks into value stocks because, he has fallen out of favor this year. You brought up one point. Bitcoin is mirage. He doesnt get, whenever he doesnt get it, get out of tech stocks. It happened in 2000. His stock was lagging. Berkshires stock has been up 66,000 since 1980. However in the last decade, only modestly outperformed. Good times and bad times. Last five years it actually underperformed the s p. Just like 99. Just like 2000 my friend. Bigtime. If you invested one dollar that was 34 years ago. Were way beyond that tracy talk about a dollar today. John, if i have a dollar today, retiree theyre flooding back into this market. Whether or not they should or shouldnt be where they are, where should they go. If youre value, retiree, look at municipal bond. There might be bargains out there, at relatively low duration that youre not facing above average Interest Rate risk. Tracy you would stay out of the stock market . I think the stock market is still perhaps going to go higher. I believe that that Interest Rates will remain low for extended period of time. I dont see the first fed rate hike until the summer of 2015. If then. We, outlook for Corporate Credit is pretty good. The default rate may move higher. But only gradually. Profits as long as profits grow, youre not going to have extended slide by stocks. I, but i would approach increasing my exposure to equities in a measured, conservative manner and on the debt side, take a look at some possibly undervalued state and local Government Bond. That is the thing, jonas, fundamentals are in place for this market to keep going. Should they all be getting in right now . Fundamentals look pretty good in 2002. It is a tough call because the bonds and cash side will not deliver. Everyone knows that every 10 or 20 years, no way you will beat stocks. But to at this point to start saying okay, it will be 100 stocks over 20 years i will do better, its a tough way to do it after the big increase. Would say continue with the bonds. I would go even further, forget low duration, what everyone is saying for years. Take risk of long duration. Stocks tank and other stuff wont. My dad is 89 years old. He was in bonds and we recently adjusted portfolio and put more back into stocks. Good quality stocks. The kinds that, you go for a longterm investment. Tracy might as well be a bond because they give you dividend like coupons. To be fair, look, im a confirmed bull in stocks, for sure. I said it many times on this very program. One of the things that is driving this market because business managers, ceos, cfos are taking lowhanging fruit. The lowhanging fruit is actually buybacks, is simple pay the debt markets are friendly. You buy back stocks an increase earnings. You put nothing into capex. Tracy buybacks are accounting trickery if you ask me. Does nothing for does nothing, but, that lowhanging fruit is gone now. Now they will have to do something. They will have to spend capital and cash on balance sheet. In jonass support, the 10year treasury bond made two recent attempts. Last fall and, earlier this year to reach 3 and failed. It failed in part because the equity market didnt like that. And moreover, what were discovering is that middle class american households are withdrawing from the Housing Market. It is incredible to st