State Budgets: The Best and the Worse

" I'm not comics and I'm Robert Baker and then I'm not in that healthy hammer from the law picture of the settlement are saying and ethics and it's yeah you know it. Interesting way to release are getting to meet earnings we've got to a pretty broad based rally on our hands a lot of the things to Goldman Sachs this morning."

" I know we -- have the market up about a 128 points here at mid day and again you know we're seeing a lot of this sort of moving -- and then -- is betting on the news coming in today and -- now competency is becoming back up again mentions us from the financials doing. Pretty well."

" Yeah they -- Goldman you know getting an upgrade by Meredith Whitney and then at the same time they were out -- revising upward a lot of their earnings expectations for other banks like Bank of America. Wells Fargo raising the price target there -- so in the financial sort of gluing themselves. In a bit here and we're seeing a kind of a broad based on this -- the others reporting later today CSX the big. Well -- company after the -- not fairing quite as well that's that's W Goodwin to watch very -- people think about the economy and hopefully we'll get some guidance this time around."

" I've got to say overall guidance will be -- I don't really will be watching to see what these companies say going forward and want some signal or insight as to whether companies are seeing the economy beginning to pick up or whether they're still seeing. A little bit of a slowdown and how quickly that turns around long. Determine how much confidence in -- the market."

" confidence well we've seen it ebbing and flowing on the -- we -- fourth straight down weeks as we. -- in here want to see if people get more confident now on. As some looking online we're talking on and on loved uninteresting lineup today mcdonalds and -- here is the CEO of trade came. We'll also be talking credit card crunch is -- they did that cutbacks is a good for America is some of these things our own -- file from the F. Foxbusiness.com. Will be joining us to talk about that obviously not what we're going on the Capitol Hill today that's."

" Read the big confirmation talks for Federline nor have begun and they are underway in Washington in -- be. On that to see how that plays out of course she is expected. I think they're pretty much to be confirmed. -- live on Fox News right now is live on Fox News and expected to face some. Tough questioning and it's certainly from Republicans but them overall. Be very well like violent and Democrats seems to be yet so we'll."

" We'll what we'll be joined sucking up. Fox's Carl Cameron is going to join us now from Fox News Channel talked social event that will. To have some mother analysis were for some guests on that a little bit later on and talk about their IPO market later and you haven't but I this country."

" Government that does not that they have been much. That cut top of the conversation about fairly rare thing to see some pick up especially some software companies and Rosetta Stone. I am with another IPO and a the very strong so. Some say that may bode well."

" Or future appearances here we'll find out we'll find out how things are going -- in the trading already numbering endowments and its chairman CEO of trade king and done. Up from Florida access some good weather for a change appear -- rocket attack on an independent or even have enough -- yeah -- the -- sunshine. They could be campaign from the yeah exactly. Any of around here let it settle into the car on the way to work and that would make well. Does the weekends I guess but god taught us you which we've talked a lot about volume lack of participation Wall Street how is that affecting business like yours where you are in the online trading business and that's. Who is your basic customer -- and what sort of volumes."

" Are you seeing. Our customer is a self directed retail clients as somebody who is a traitor not necessarily day traitor but somebody who is taking. Not always all but a portion of the the portfolio or their assets and decided they're -- is self directed his investments we've certainly seen large growth in. Our company since you could -- September 15. Where really a bell -- and a lot of clients -- up there and around the country and I think around the world and began to question those -- relationships that they trusted for so long even. Questions and bedrock principles like leather buy -- holders the right strategy for them they've been testing for so long and and moving to this two firms to cater to the self directed investor like treatment."

" Not even if such a good. The topic I want the head on an -- is that really the profit a lot of people have their financial advisors in fact. Recent service to -- more than three quarters of individuals with at least one million to invest in tend to move their money away from financial advisors and more than half intend to lead advisers altogether and yeah a lot of people say this has to do the fact they did put trust in them to manage their accounts and they saw them. Cut in half pretty much for the recession hit and also in after Madoff afternoon scandal brand. People really get begin to question who they can trust. You know get your friend. Recommended to you or your father your mother or somebody said hey this is the person should really be investing your money went and went in the happening you know that turned out to be. An unfortunate case for a lot of folks so are you seeing. A lot of pick up in your business because of that."

" Yet that -- firing my broker sentiment is absolutely something that we hear from you know at least half of customers opening new accounts of us. A dozen unions that are taking all the assets away because that is -- in for one more information source of the -- in that sense. At that advised relationships that student at research reports are still going to have another touch point but they're moving firms like -- king a senator I think that trust issues brought up Kelsey. Really we started the -- just in 2005 but we started with the abuse of trust and transparency being. Core part of who we are humble blogger on me myself and accessible. By the -- my clients I interact with the several client today via private message or email her comments on my blog we make all of our service representatives. Clearly accessible to folks and and we just we're service oriented we're not giving advice about giving great service with a smile on her face and making sure we help you get the job done."

" And I met with our views of taking online and what things that really stands out -- people really love your educational tools and I think that's we'll probably end up being another fallout from what we've seen in the economy or people want to take more control their finances. And learn themselves -- rather than just handing it off to a professional adviser who again as we said -- there may be trusted to the people want to learn more. And you really that's a lot in that aspect of your business with the you know maybe for your competitors aren't as strong and right -- that would."

" Thanks for notice I have. Actually we we responded really quickly and as a small entrepreneurial. You know nimble company we can do that. We responded very quickly will we noticed and change in the mix of clients come to treat king no one -- who responded was by. Adding a section -- learning center called the rookie corner so this is special resources for folks who are new to self direct investing not necessarily new for the market although we do get a number of clients were telling us. This season their first entry into the market because they perceive there's historic buying up what sorts of pets have you seen that. Increasing a lot. And say October or January is is made off. Came mortal -- on synergistic in -- constant increase in traffic really since that September 15. Watershed moment he will. A constant increasing traffic whether it's and are learning center where we have. Others educational resource -- talked about her also -- trader network part of our website where people can connect with each other. Taking clients and prospective clients can connect with -- other retail investors commiserate share ideas shared concerns. I share adjusted for him. The other forums group sponsors a bunch of different function on people can make trade notes can choose to. -- actual treats -- which can following treatment with -- in May it may raise some red flags or how -- how is this policed -- so you don't have people pumping and dumping and taking advantage of the rookies who aren't there -- this would be the absolute -- place in the world to fuel pump and dump scheme because we know who you are you may choose to go by displaying and it's an anonymous name is most of our clients do within the -- network. But you've got a little badge underneath -- it's issued taking account holder and that tells the world that. -- king a -- regulated FCC regulated firm actually knows who you are we verify your identity. And this would be you know the surveillance cameras are on if you will to be pretty -- place to commit a crime."

" By the way -- from Ohio says he just signed up with the guys last week's. At least one fan out there appreciate the business -- investors who are trying to dip their toe back into the market but don't want to jump in full full force instead of ate it picking individual stocks are -- ATF's are using growth in that area country --"

" Absolutely we see among our top ten and if you click here within our -- trader network actually conceded trading activity. Click on the trading activity -- you can see for yourself what are most actively traded -- most widely held positions are taking you'll see. ETFs moving over the last several months and can sorted by different time frames moving up into the top ten. Firm are most active in our most widely held in some cases yes."

" outlets like CA IG and Citigroup among most active but pretty surprising considering it for quite ahead."

" Well our our clients are are are treating not unlike professional traders right now they're treating around news and they're treating things that move. And they're looking for that visibility talked about this so hard to find in the marketplace right now so with a lack of long term visibility all which really have a these short term gyrations of I can guarantee you no matter if you know when she speaks and and changes your view -- Goldman. You know this is an analyst Meredith Whitney who was at the front really calling the similar debacle yeah exactly -- she was at the front end of predicting the downside of the -- financials. Folks give a little bit more weight to you know something positive that she says that again. Folks are starved for for good news and are looking for long term visibility without that they're trading around the news on the things that move a lot nothing Indian city a move allowed any given day. -- certainly do have him what you say -- you recently you've surveyed your clients. They seem pretty skeptical it dean. First of all why they remain skeptical and if they are telling you that and when they see us -- emerging from recession some economists that we already have. Others aren't so sure it was had to really interesting and lively conversations going on in a trader network recently won. Team member a client who calls that goes by the name old fart. It's fascinating. It's fine tune in folks she's thinking back. There but he is a seasons clearly season traitor. Phone's been that's not new to self direct investing. He posted an article that was in the journal -- week or so ago. And talking about whether the recession is in fact over and and just post is a discussion topic -- that are you know -- some pretty vehement opinions on. Both sides of that topic from an economic viewpoint but also really. Looking not just treatable short term bought the looking long Kermit the economy there is them that -- the skepticism. Amongst our client base. Doesn't mean a walking with the marketing and they are looking for short term trading opportunities to get back some of that money they lost in that while last year. But but in terms of long term optimism we're seeing a lot there."

" And that investors are -- to short on country king everything a lot of that activity and then moving in that section well."

" We see affirmative shorting we also cater to self directed retail options traders that we provide the tools and educational resources for folks to be able to trade options and they often do and it's just four and five let's. 65 cents a contract to trade options intriguing so if you learn about options treating you learn about how to use them for insurance purposes and how to protect -- protect against your portfolio and also how to make directional you know predictions it if you if that your. If that's your style and -- the tools that. Professional traders use to make money not just in up markets but in down markets inside these markets and we see you know some short selling and a lot more option option trading giant that with the structural question DS have direct market access we do not we do not permit direct market access what we've learned is that. The routing technologies gotten so fast enough for us to be able to route for national best bid -- offer we're required to get for our clients. That there is no client they could click and picked the fastest market stances are routing technology can and so. I'm that was -- kind of Lacey thing online brokers offered some folks in the ninety's when. You really could spot an arbitrage opportunity between two markets as a retail investor demand and actually trade debt arbitrage. Those opportunities for the market boxes. Market was much too quickly for retail side we have had to do that now. Goldmans and out of there before you can blink yet again I think 24% in the volume I saw that I have yes an eye popping it's really something."

" About this education. For point because I think so many people out there talking about wanting to a self educate. What kind of response you getting from your client says to the tools that are up there and also where -- would you get all of the research that you pull from to put on the site. So that your investors can really see without -- with the professionals are saying about each company stock."

" Sure in some cases we will partner with third part independent third parties to provide research we have market creator research available on our site and information mighty sea and the number of different independent sources that we provide the love the educational content is is created by our own educators. I was editing options analyst Brian overby who's actually written. A book that's very popular about options trading on the options playbook it's Anderson the only. A fun book about options. I've ever ever cracked open myself pretty proud of that. We're just -- about that second edition has fallen -- as it takes 38 please option plays in which we refer to them. Please teach him out just been in this two page real simple formats you can understand. You know why would -- put this play on under what circumstances would of the risks and rewards of that that particular strategy and is appropriate -- his rookie year as. In a mediator this little option trader and instead she threw. The pluses and minuses of strategies and and we have them available online for -- for free as well its options and their futures you know you know futures have been here about the CFTC you know to romance stepping up margin requirements would be. Q how strictly margin requirements for options players on the pretty strict again these are retail clients we need to that we have a responsibility to look out for them and to make sure that they're not. I do entries are unsuitable for them -- you know you mentioned ETF some leverage these -- have been. Popular in some cases with retail clients in Finneran stepped forward and I think appropriately to expressing some concern that. Become clients may not understand the complexities of how these two and three X leverage -- trade and should not you know who -- and we we weren't written a lot about this with special section of the website about this war retail clients not to. You know these are set it and forget patriots these leveraged ETFs are meant to be really things easily enough of during the course of the day and and he stay right on top of so if you see something insistence. A three X you know down back on in the financial sector for example I can't purchase it today in wake up you know three months from now on think -- Here does not direct correlation not a direct -- a lot of the reset at 3 PM -- don't necessarily the baskets are not quite a 100% correlated to. The underlying index if you are. They're very attractive and we come closer naturally attracted to these -- looking a lot simpler ways for leverage on -- and while -- learning option trading strategies and shorting strategies and other things these are easy products that do appealed retail clients. But they need to you know really understand the complexities of the -- said we need to ask for more thing though IPO in your future. You know we get that question from time to time and our our our job is just to build a great business it gives great service to our clients and and -- itself. Come on generic CEO from -- so much for joining us here. And thanks for -- counsel Robert."

" Sure -- we're going to take a quick break we'll be right back in just -- sex. Then welcome back death via live I'm Robert Graham an unhealthy -- and I cannot say thanks so much for joining us guys it's. Quarter pastor we're looking at a rally here fairly broad based off the highs of the session today but a lot of activity with the F financial saying. And speaking of financial literally we're going to have rich -- joining us now. Going to talk about little -- appear ready for small businesses. There is. Rich."

" Robert good afternoon -- I'm doing just by Robert and you know what we talk about what's next for TARP here we've had some discussions as to whether TARP would go to back peaceful bonds whether it would help housing and now there's some more talk. About using some more TARP funds to help small businesses that currently. The Treasury's been working on this fifteen billion dollar program out of chart that would help by some some of the SBA sponsored loans. -- that's something it really hasn't got off the ground yet the president announced in March and so there's a real concern out there. That some of the short term liquidity problems of small businesses maybe something that that that they could work out with -- the last we heard an administration officials were talking about this. Last week. But they're still in the very early stages of negotiations and tops on this and they have nothing settled yet. So say the next deficit still unsettled we're not sure where we're going from -- are -- deadline. There is no deadline and and there's also question as to whether or not they're going to wait for this current fifteen billion dollar treasury TARP program to get into effect. About whether they'll step up SBA anymore even -- whether you have direct our landing. For for companies like CIT you know it's one of the biggest small business lenders. It is having problems staying afloat will -- winning give more TARP money is CIT is that the answer here -- businesses small businesses are having a tough time getting short term credit. There are some programs through the Small Business Administration. Some set up by stimulus the stimulus plans subset of Qatar. But they really haven't gotten off to the type of -- the administration hopes and now the question is it what can they do admit the issue as it doesn't have to go. Through congress -- this -- We've but I try to save Chrysler and GM through TARP that didn't take any type of a congressional okay once they approved the TARP program -- this is something that. Treasury the administration can work on behind closed doors and if if they want to do something. Through TARP to help small businesses they'd certainly be able to set that up and you look at the totals for talk right now I mean there's even a fight. And congress as to what to do with the rest talked as a 127 billion dollars in TARP. Seventy billion of that is money that banks have repaid to exit -- And Republican senators are saying wait a minute that seventy -- needs to go to the general fund and stayed there. Geithner says while I have TARP authority I have the authority to have 700 billion dollars outstanding at any time and invest rightfully so. There's a debatable legal fight over TARP going on in congress as well."

" Rick is somewhat concerned and getting money to small businesses that if they do not prop them up -- not extend credit to allow them to continue functioning. We'll see a big drop again in unemployment of these companies a lot of business and it will. Really sort of undermine the -- say fifty well that they began to see in the economy that it it's such a big part of the economy and jobs. That they can't just let them you know these small businesses --"

" That's right it all goes back to small businesses especially when you consider the percent of jobs in this country. That are created by small business all the small business volume in this country. But you're also hearing it when you're talking about trying to raise funds to paper for health insurance or health care in this country. I you've got Democrats a talking about in the house. Surtax on folks making 350000 dollars a year above visited them real fear that back it -- small businesses so. You don't Washington in a way as -- really. Focus its attention on the systemically important -- systemically. Risky companies has put. Tens of billions of dollars and Citi Bank of America but what about the smaller guys and the whole I think it was really that you start. Getting this systemically important companies you get them lending began and that will solve the problem with the equities small businesses. But. That's not quite happening and so do you need to directly going cut out the middleman. And help them set up these small businesses guys that would that's one less quickly rich -- talked a marathon CIT has allowed. To go to fail go under without any savings it maybe TARP funds can be directed to other existing TARP recipients to sort of step in and pick up the slack. That that could very well be what they have to deal with CIT. We heard -- CIT wasn't one of those establishments are businesses that was going to be considered. The systemically important one if you just think of the entire atmosphere around this. You know the Obama administration it really hasn't let anyone fail again and that's something I think that maybe treasury. Could possibly try to draw the line here you just look at the grander scheme. We put so much money to GM we put so much money into Chrysler we continue to put money on is some of the larger institutions on Wall Street. You know would the Obama administration to make a stand here for CIT. But then again are you beating up the small guy because they are such a wonder to small businesses that -- a lot of concerns surrounding what would happen if CIT would have ball and it just continues to be a question about about small businesses. Small businesses have any ability to get their hands on liquidity so they can function in in the middle of a recession -- thanks so much Richardson in DCN you know Kelsey get. Got on got weighing in saying -- too shaky for years that they go bankrupt -- sold off to creditors split supposed to work so -- a lot of."

" People -- like the idea of government stepping in popping up all these businesses have certainly been ongoing conversation with people coming we go back to the dog eat dog world of."

" Capitalism mistake. We've got Darryl does to pilot the bitter end bitter pill for us he bitter pill to the credit card shoppers."

" Of the world when I was in high school I played football coaches were always yelling at us no pain no gain. You know and we were feeling the pain and why they're worried about half -- the -- phase right now and what I'm hoping is that from that pain. Leads us to -- down the road in the paying. In terms of credit cards right now it was a good reporting USA today last week which indicated. That rule on the end of April credit card issuers head. Issued 38%. Less chords than they had a year ago. And the cards that are issues have smaller limits so fewer people getting credit. And those who are getting it. Are getting less money to play -- But most of us a few years ago -- that was -- case clearly the credit card companies didn't get the message until ghastly. This is bitten part of my point in in in the column I wrote for foxbusiness.com. Essentially column. Was that all of this is common sense right you know so much. Of what happened to a system is -- that brought on this credit crisis was self inflicted the companies be they mortgage lenders be they banks -- credit cards. Gave credit to people who very likely couldn't pay it back so what's happening here is two -- the credit card companies have wised up. And they're giving credit to people who they feel probably can pay it back gee what a concept that there. And on top of that consumers are hopefully going to have to learn a little bit better. How to use the credit they've been extended. A -- call when I was in college and I got my first credit card offer I'm not mistaken it was like 500 dollars you know maybe you could do more with 500 dollars at that -- but still was 500 dollars what happened was. We became as a society both. On the on the on the business side and the consumer side. -- credit was so we see the people issuing credit made tons of money off of it. And the people. As consumers we just became used to be there's almost instant gratification. Right right you could buy that new car. You could buy that whole you couldn't afford you could go on vacations that you couldn't afford. Wolf make no payments for the Condo in Florida over a book read that all of this was based. Falsely as we've come to learn. On the notion that real estate prices were going to continue to go up I think by now we pretty much you can throw blame all of the place you can look you can do all the reports you want. I think the crux of whole credit crisis was founded on the this false premise. That real estate prices were going to continue to in the line of the -- exactly was going to cover your credit card you never really had to pay anything back. Because your hole was going to be worth 15% more next year seeking get that home equity -- to go on that vacation. Expand your credit cards. However high. And none of it was ever really gonna be paid back we've learned how false that one's right and now the credit card companies have learned and it's a bitter pill to swallow but. I'm hoping that as a nation. Consumers. Are going to become a little more responsible maybe I'm being wildly optimistic. I called around I spoke to several consumer -- we -- it isn't a bad thing that Americans are being are getting less credit. The flip side of that of course is that if Americans are getting less credit they're spending must try to throw yet."

" So we're live so much and -- you -- humor of similar size and -- and Evelyn and her giving up their spend it would watch retail sales so closely. And that really bodes for consumer confidence and how quickly -- may get out of this. Recession in yet. What we really should be viewing in what you're talking about is being fiscally --"

" A few months ago I wrote the story on the paradox of savings now and as many paradoxes sort of built into this -- recovery as we work through it. -- I checked saving was a really good thing you know but if you talk to some of the macro economists out there they'll tell you that. People safe too much they're not spending that's sort of obvious the same principle applies here if Americans are getting all the credit they want to go out -- buy expensive cars and gotten by. Vacations. The new iPhone whatever it is they want well the economy's going to the slowdown I think the point of my college that may be. Recoveries to be a little bit slower maybe we need to learn our lesson do we mean that we need to learn how to use credit responsibly. So that. Hopefully maybe we can avoid the sort of crisis in the course we're not by probably well know totally why. Well we're also maybe you know going from I -- into starvation diet here they're right in -- somewhere in between there's going to be a happy medium and we are restocking right now. The question is will -- be painful people suddenly. I don't think I. I think and that the that the credit folks I talked to said that there there is happy medium that other banks are shutting off credit entirely their -- they're scaling back. It's a pendulum you know and always and you see in the stock market is seen in the oil market are we not seeing the pendulum swinging wildly back for. A year ago where was not a 140 dollars a gallon why who knows why speculation probably. Now it was down to 33 or four months ago can anybody really determine why. Now it's a pendulum and -- cyclical swings that cyclically back and forth. We're doing the same thing with the credit markets here. We went from giving credit to anybody 98 point six was the requirement. Body temperature if you could sign your name and lying about what your income was you could get credit. Court that you know mortgage companies wherever we gave you money any lender would would we give you the money. Now we've swung the opposite direction right and again and probably will be painful for a while and it may extend. The recession slash recovery. But. If it takes that to weed out those who can pay money back and those who can't then it's probably work in the long run well we we will see."

" and of course there's a -- shape up. People's credit limits being adjusted that's a different columns for different day does -- organize. Check out regulation the company out out exactly since it was foxbusiness.com. Go to the website. Check it out you probably are there any way to get the player up and running so much echoed Nelson's column slash story today in look for to -- more happening I think all right thinks -- and we'll be right back with you and just a minute we'll. And welcome back to foxbusiness.com live I'm Robert -- and Kelsey Hubbard hello and defend I think -- today yes likewise -- of."

" About the luck I think for the market if it looks at a record thirteen point some of that now."

" So it can present on the farm Jenna and Connell -- intuitive Haitians respectively in. Anyway I don't worry and I know all the -- is still up pretty broad. Pretty broad rally on our hands here and it's good for stocks living things aren't so great right now offer what state budgets."

" Now it is big problem in this state they are really had a good. Get get it really does mean they have these shortfalls that they really are having to have layoffs across the -- cutting back a lot of programs and so into it we really -- I don't know quite got it in the headline but you know Florida New York other major cities to that. We are reaching far reaching and in a lot of trouble."

" Let's Willis for an expert -- she's director of the national conference of state legislators. Fiscal program and -- thanks so much for joining us here on Fox Business there and basically oval will started off right there I mean we know the state of the State's balance sheets. Looking at 281 billion dollar cumulative shortfall right now that correct."

" That's correct and it's actually going to be growing we already know that the current physically or 30 gap that must -- the close with the exceptions of California some other notable states. -- can be growing beyond what state city originally forecasted what they've actually closed already so this problem is growing it's gonna last for quite awhile."

" President Obama had an Op Ed in the Washington Post yesterday. Saying that the stimulus hasn't had enough time to work through this through. Sort of -- ended the my we'll get their -- in the states have time to waive any they need help now and is enough for the stimulus money getting to them."

" Well this -- this stimulus money is starting to get out to the states. And it's been used extensively in this clear 30 budget and in fact the problems of states would haven't been much more severe had not been for that federal stimulus money. -- impact more in this current fiscal year than we did last year so money is coming out but it's been coming out a little bit more slowly than some people had expected. I think the bigger concern at this point for a lot of states is once it runs out what happens of that."

" And up there Obama originally set in his -- that they wanted to get 75%. Of the stimulus that would in the first eighteen months do you. See that being on track and again if this -- to worry about that money running out. What anything is going to happen none of that money is not get through them within that timeframe."

" I think the money will get out an eighteen month period certainly flowing into state budgets now it's a part an important part of the solution -- had. Available to them to deal with these massive budget caps and they've been encountering. But in terms of you know when it finally runs out and we we expect that most of the money we'll have hit states by December of this year. Some money again coming out next year at that point -- tell us they're facing a class its state revenue performance doesn't rebound. And at this point there's no reason I think it will recover strongly. -- states are facing another round of budget problems."

" Yeah and so was so what's the prescription here who is a political out there to raise taxes that you know where persona -- deep recessionary is deep split on how we are phrase it right now. Are people that got a raise taxes are we looking at perhaps tax breaks -- tax cuts to trying to stimulate. More businesses to hire people and increased spending -- what is the prescription for -- guys."

" Well to get question and the answer is all of the above. We are seeing an appetite for tax increases and part of that is because -- that spending cuts have been so significant so severe. But certain lovely start getting to the bone of state programs and say well we've eliminated we cut back. We need some additional revenue -- the budget. So we are seeing an increasing appetite certainly for additional revenues a lot of that coming from fees. Motor vehicle fees are fees and licenses those kinds of things that increasingly state are looking at sales tax increases personal income tax increases on high income earners. So we're starting to see sort of venue. Phase if you will of dealing with the current economic recession. As this continues I think we're going to see some additional -- in trying to raise some revenues again because of spending cuts have been some severe."

" Doesn't that race some interest in red flags -- you -- you have Maryland is -- millionaire's tax that got fewer -- now people -- away also after the market's decline. There are just fewer of them in general on main thing is that that running the risk to people would would leave the state."

" Later we hear studies have been done and and sometimes you hear people do try to leave. But generally speaking it appears that people don't just uproot because of a small in the overall scheme of things a small tax increase. When you look at how much impact tax increase happened on a person's income you really want to uproot leave friends and family leave community. So some that is out there I think I think to a certain extent is perhaps overplayed it's not as much as people would think. Class William -- for quite frankly in this economy all states have higher unemployment at this point there's no place to really go and find yourself in about a situation."

" Are -- let's take a quick look at -- got the full screens here they show. -- largest budget gaps here -- they've talked to us a little bit about some of these -- after we get through it and we'll start off of New York with 32%. Nevada had a thirty dollar one point 6% budget gap we're talking. You know -- seventeen point 65 million dollars and in the State of New York obviously hard hit. With that collapse on Wall Street and in the securities and Arizona Florida you've got housing was about the states Nevada as well and then. Vermont which is an interesting 125 point 8%. Budget shortfall there what what's the story in Vermont native -- familiar with that."

" Yeah it's a combination of factors are really you have the same revenue problems at every state is facing and so they're seeing revenue shortfalls that -- Vermont health reported some. Pretty big increases in Medicaid and other health care spending so the budget gap is being created by revenues falling below expectations and and spending exceeding expectations. In categories rests really hard to control spending -- craft."

" You know had a comment here from one of our viewers Larry in Ohio thing if property tax is up a third and he's leaving as soon as he can sell his house. They were -- about this issue are people going to be moving out of state that taxes are looming."

" Well again it's hard to imagine that there would be massive relocation. It's expensive to move you have to be looking for a job elsewhere with the unemployment rate being what it is in the difficulty finding new employment. It's a pretty hard deal to just pick up and live. Now the interesting thing about the property tax is that the economy obviously been suffering but because the property tax assessments and the cycle that those assessments -- under. The -- homeowner may be seen you know less stable are increasing property tax bill because property taxes. Don't experience that quick and rapid decline that other state taxes yeah."

" The only really be able to fix the budget crisis that that these states are having before we see an upturn in housing or at least the stabilization. Doesn't since so much to the US property tax -- pool is linked to house values and foreclosures. We haven't seen a lot of the positive. Data coming from the housing market a little bit here in the air but overall we're still seeing some. Declines across the board profit in the nation so is that bill of that problem."

" Well it is a big problem bottom line -- are going to have to fix these budget gaps are required to buy a lot constitution. So it's certainly something have to be done additional budget cutting some revenue increases. But in terms of the of that magnitude of the housing sector and its collapse on state budget that's been significant. And as you said earlier in the show certainly what we've seen in Florida and Nevada California Arizona that's been a big problem in the states Kennedy part of what they've had to deal -- How we're going to have to see residential and commercial. Issues sort of bottom out and start improving before going to see some real improvement in the states but at the same time have to factor in what's happening with jobs and employment. What's happening -- other aspects of sectors of the economy and sort of look at the big picture but housing is a very significant important part of what we're talking about."

" let's take a look at how the smallest budget gaps if you will we're talking about well Arkansas and North Dakota no budget gaps not applicable to them. Than you've got you have -- come out right next sort of Vermont if you're in Vermont ten. If you're not one of those maybe drawing down on the the heavily on Medicare Medicaid may -- want to move next door Montana. Looking pretty good as Wellington West Virginia also in the top five with a -- smallest budget gaps. What -- why these situations so much better particularly like I said you've got to you know -- in New Hampshire Vermont next door to each other."

" for the states you listed they have natural resource sector economy so those have been in this state like Texas and Wyoming and North Dakota West Virginia. Alaska to a certain extent have benefited. During the times when the price of oil was so high so we've seen some benefits there certainly is the price of oil has declined some of those states have gone into the deficit situation. But in terms of you know some of the other states there Arkansas has a very. Limited narrow budgeting structure and while they're having some revenue problems is not affected their state spending so that's why they -- to that list North Dakota has had. Perhaps the strongest situation thus far although we know from North Dakota that they're expecting that overall revenue collections are going to fall in the current fiscal year compared to last year. In New Hampshire. You know the whole different tax structure in these states some around the country somehow personally contact with some have sales taxes. New Hampshire has neither of -- it's a big property tax state. So you know you might do want to move across borders but you probably think exchanging one set of problems for another sat."

" All right for an -- thanks so much for joining us to discuss the state budget does shortfalls here. We're going to move from state shortfalls down the Capitol Hill Carl Cameron for the Fox News Channel joining us we're we're talking about Sotomayor is. Senate hearings heavily Karl is standing by here like Karl. Karl has not going to be able to join us right now so we're going to keep moving along we do have Tom -- a partner with Pryor Cashman to discuss. Judge Sonia Sotomayor is. Confirmation hearings here and not think so much for joining us first of all. -- thank you thank."

" If you actually have what further apart we'll went before her as if a lawyer and yet tell us what your experience was when you. One important -- in my life."

" I was before her on several occasions when she was a district court judge on -- cash and and I guess that the most substantial example. Represented. When the parties and rather -- publicized trade dress case between two beverage manufacturers and it was a it was a hearing. -- hotly contested as a hearing on on these issues. My experience with her on that and in other copyright case in which appeared before her. She is invariably. Extremely well prepared when -- come in for an argument. She is a very smart thoughtful judge she shows a great respect for precedent and knowledge of the important precedents and -- She can be. Very tough on on lawyers if she thinks that you're trying to put something over on her she's going to let you know it and he's not going to buy it if she doesn't like the way of handling a case she's going to let you know it. -- on the appellate panel it's a little bit of a different experience for the member in the second circuit she would usually serve as one of three right three judges on the panel. And you were less of the master of your own courtroom you have to -- first -- you're not hearing evidence you're just hearing arguments which tend to be a very brief presentation. And you're you're mindful of the other judges on the panel I've watched it there too and again she always. Was very very well prepared. You talk about president is a lot of talk out there are some criticisms and then some not so much so. About whether or not she would adhere more to precedents or in the Supreme Court whether she would you know rule with empathy years says some are saying any you know maybe I try and if you will legislate from the bench. Where do you see her coming down in terms of that is that something easy to forecast I don't think it is easy to forecast I'm looking a lot of the studies that you tried to. You know -- all of her decisions for instance in the business world she has not been predictably. Pro business or anti business there was in late 2006 there was a big securities class action came up for review. To the second circuit and which she was part of a panel that said that the district court's approach. Of using six focus cases in this case that said that a number of a large investment banks. Had manipulated the the value of some tech companies their initial public offerings. What disabuse us of an acceptable approach that second circuit panel she was on so now that six focus case approach would not be acceptable. And frankly the effect of that was to leave a lot of small investors with no practical way of pursuing their rights now. The panel thought that that was the correct legal approach even though it had a harsh result for individuals. So I don't think that she is up TWA it was also viscerally -- Barack. Correctly ruled that it was in it was she was saying that it was in international waters on the panel did come don't think its US waters of the damage of TBA flight 800 of them are trying to sue for damages and another example might be I think she was on the Maurice claret versus and a -- panel. Which there was a challenge to the NFL's mandatory for your way out of high school before he could be in the NFL draft. A pro individual judge might have said Mountain View I'm not going uphold this mandatory for your weight and she was part of -- did uphold."

" In fact one of our viewers from favorites this go is saying that she may not be tough as people think but your saying your experience whether that. She's pretty cabinet and other viewers saying that as long Michigan -- from the law and -- we leave out personal feelings and probably yes she'd be a great candidate. Otherwise -- as they do feel pretty strongly at least our viewers that."

" It's important to keep in mind is the difference between. Showing bias because of your experiences and being mindful of your experiences and deciding how decisions wolf that. That the the landscape. There's no evidence to me that she's going to shelling advised by the way in the famous firefighter case guess one of the point this was dispatched. Okay. And she she seems to put me to be pretty fair minded and in her approach he has the respect for the law. -- think that hateful play a big role in the coverage from here I really don't think it well the reversal. First -- was a pretty narrow change it was a 54 vote. Her decision -- which which latest an anonymous for -- decision by a three judge panel on the second circuit. Was made in light of the then existing on the second circuit. It had to do with the notion that a disparate impact. And this kind of test for instance wouldn't be acceptable what the Supreme Court really did was to say. We're going to raise the evidentiary burden if you're going to go with the disparate impact defense. And it was really the Supreme Court trauma the second circuit -- to make that decision."

" Yeah and that no dusk and AME now I understand when the firefighters may be testifying. On the hill today so the lead plaintiff. -- I have to ask going to testify and I'm sure he's got an axe to grind I'm sure that will be interest -- we have we heard some analysis on the network this morning dozen people were saying if they were they would not put him there and we should be Anderson it is is that president for something like this there there is there's precedent for going."

" Anybody you want frankly. It is NAA. A pretty wide open down. Rodeos since since the Bork hearings many years ago or Clarence Thomas hearings anything -- acceptable depending upon. What side of of the -- you're coming from. But look I think the ultimate question really should be whether it's it's. Looking at the general judicial landscape looking at the business judicial landscape the question is you need to look. At in individual nominee not just in terms of that nominee's past but. What effect if any can that nominee's going -- to court the expected to have in terms of the ideological makeup of the court. Given that she would be replacing Justice Souter who was proven most of the time to be a member of the court's more liberal wing even if everyone were correct and she could be expected to be a more reliably liberal member of the court that would mean to be no ideological change in the makeup of the court. It would be like replacing. Chief Justice. Rehnquist with chief Justice Roberts one conservative for simply a younger conservative it would not be for instance like replacing Sandra Day O'Connor. Who was a right leaning centrist. With justice -- who is more predictably conservative. And certainly not like replacing for instance Thurgood Marshall was the far left the court Clarence Thomas who was in the far right."

" The challenges for a lot of these candidates is to sort of give their opinion but not. Tread too far into how they would rule in future cases especially when they're asked questions regarding abortion or gun rights does have to think so is that typical balance. For someone going before any process in these hearings and then what what should people be listening for when they watch that."

" It it is a difficult balance. You can be sure that many of the senators especially those are going to try and make her uncomfortable. Are going to try and probed very deeply in terms of where she will go I expect she will follow the line it's been established. In all the post war hearings in fact I think even more declined to say how he would rule on certain issues. I don't think she will say how she will rule I think she will give very broad based questions. And she will not give any hint of how she don't specific case and I think to be it in improper for her to to do some. The wise Latina comment we keep hearing that coming -- whatever was it just sort of you know comment playing to her audience is that to you some people say it's it's off putting. The way it comes across. How much would that come into play from critics or perhaps from those sympathetic to her I already heard from one of the Republican senators this morning and you can be sure you're going to hear coming up again. I think it passed she's probably going to say it may not have been the best choice of words what she was simply trying to say I think. Is that people -- necessarily affected by their experience and that their experience gives them an understanding of how the Supreme Court decisions. And or any appellate court decisions are going to affect those people who who reliant law. I I don't think that some I I think she's probably going to move off that a little bit. But frankly it's not much different from Clarence Thomas saying it's important. To to have an appreciation for. Issues that they you've walked in when you make decisions and he was as reliable conservative as you -- have -- very quickly here does she get approved then. Is there a big business case -- on the horizon that we should be looking toward. I'm not. Well the Supreme Court is right now deciding since its discretionary view which certain petitions will be granted for next year so -- I'm not aware right now any big business case that that we should assume becoming -- for argument next year. And so was -- is does she get approved I think she's going to be readily approved it's not only as of the sixty. Reliable votes I think a number of Republicans -- vote for my guess is going to be should get between seventy and seventy."

" Buy votes all right. Tom -- fervor from Pryor Cashman thinks so much for joining us here at the front so we'll see how that unfolds again it's -- showing on the Fox News Channel right now if you want to check it out and now we're going to have an update from the NYC coming up just a minute."

" All right and welcome back to foxbusiness.com live I'm Robert Graves of Kelsey Hubbard agreed to be repeated and nice to be a deal this afternoon and well. We've got the confirmation hearings under way we've got a rally on Wall Street earnings from starting to get a little traction here today I am after that are really looking to see how companies have fair and also looking for guidance going forward as to whether or not going to feel some relief from this recession going forward now. And that's really the big story than you have going to be watching for -- people are watching the banks today because I had -- Goldman Sachs but let's not talk about -- let's get go straight to the source who got Tracy Byrnes."

" Our -- and I and I didn't a 117 points right now the Dow at least. You know surprisingly enough didn't move all that much based on senator Shelby's comments appear Barnes about how Ben Bernanke is worried about a jobless recovery right now we'll -- on. Oil basically flat you have the financials that you guys mentioned at Goldman Sachs called for Meredith Whitney for first call coming out of her new -- for goldmans going to report what should be relatively stellar earnings tomorrow. And even the energy stocks they were down this morning oil now pretty much -- trading flat. Energy stocks have bounced back as well speaks -- today though is CIC and I won't sing this song from meatballs I was already told not to. But I'm dying to the I'm going to before the end of that. CIT basically saying that they are struggling with liquidity issues. Trying to get into that -- temporary liquidity program also hired Skadden arms. -- potentially talk about bankruptcy and liquidation. Either way hired -- as an adviser. Not a good note -- all the small business of the world I mean that CIT one of the big financiers of small businesses. Helping small businesses keep an inventory and things like that if they go down. Doesn't doesn't think much about our recovery process especially in small businesses -- 80% of the jobs out there to really hoping this whole thing works out and but as it upgrades down here today though as well craft. Marriott Best Buy all of upgraded to outperform they're all doing really well that really think about the financial -- saying now volume. Pathetic. At about 460 million shares traded right now on it's 1 o'clock it's gorgeous out this can you blame him. Then he had just quickly Tracy what anyone talking about the comes down there may be filing for bankruptcy. The cubs. Good good I'm up on the big base level flat -- they absolutely arts kids it's awful actually done. So lovely winds beyond that some between the cubs and you lining seeing CIT song from Naples. A lot of activity down here on the right and let me know when they do confident that we don't want to miss that yeah I think it's my -- this morning they thought I had four heads -- they never heard of the movie this and so on nothing. It is in my happy heart and run up -- I was told I was warned. You need viewers. You cannot be singing."

" I would go for karaoke I'm definitely not getting but anyway thank tonight Tracy -- they New York Stock Exchange -- much. It guys we'll be right back where you talk guy he owns yeah just a minute of --"

" I -- revenues."

" Yup that was it well let me tell us about -- it doesn't you know have on America leave them in America's lead in Europe and I he has that's good news -- an effective software -- industry feels good -- and years ago. Exactly I noticed that not one of those companies may not be around anymore and that's dot com via VA Linux my man."

" Paper money from it they made money and got out something and then somebody did somebody and I -- that now have a sock puppet it's about it anyway I haven't even. No I got to -- before they closed doors of my the last company that matter act. Well the sock puppet and excellent -- for my from but my cat."

" What's that one person thing will be interesting to see happen and I fear that he wrote that it found with a hundred point nine million earlier this month. --"

" All that change you from the China so we we have had a few we've got Bob fairly is CEO it. Baltimore based technology company metal storm and now Bob thanks so much for joining us here. Thank you for having me. So listless start about it or come out IPOs would you deny you your your IT company here you're waiting. Trying to gauge the markets four IPO clearly in markets on better footing there was a couple of months ago but is it where you'd like to see it before you mean you're trying to us as a lot."

" I don't think he's exactly where we'd like to see it before we get back into the waters we we filed and has -- back in. May of 2008. At a time when things are starting to look good and right after that the market kind of what the other direction. And rather than continue to have the cost of having the IPO on on the shelf we decided to pull it and I continue to execute our strategy using private source of capital. As you said there's been eleven IPOs this year twelve IPOs this year. You know that he talked to the bankers it's it is they make it seem like it's a trend. We don't really see that yet we're optimistic but does still pretty cautious it's their job right drumming up business you guys say they'd like to make it into a trend right. Yeah absolutely and and you know where we're anxious to get back in at the right time. I think that job you know a lot of companies are positioned sort of in that hundred million dollar revenue type category. Really need to be careful before they they get back into it is very expensive to. To do the filing amended to keep during the reporting as a public company. Running everything in his view from a compliance perspective is is difficult and and really costly so we want to make sure that that. The market is going to be predictable. That we can see clear way forward to getting the kind of capital that's going to be -- easy for us to have."

" And if you -- a college friend at least we have seen some in the software space open cable solar links mentioned Rosetta Stone. Do you think we'll continue to see. We're software companies and in -- on a trend yet on this -- in too early to call that but you think that is the type of company that is. Moving in that direction and will be the other factors jumping in as well."

" Well I certainly think -- this software and technology sectors is going to see a lot of activity in this regard. It's key for America mean our our ability to drive innovation is somewhat tied to our ability have companies go out to the public markets get capital. Do the necessary -- expand their business models. We're no different than than any other company in that regard so. I think I think you'll see a lot of technology companies get out there you know companies like ours have. A lot of recurring revenue a lot of predictability of their models we don't wake up every day and worry about where all our revenues -- come from a lot of it is sticky. A lot of it is very predictable we can we can use that sort of as a as a way to fuel ourselves and when IPO I think other software and technology companies into the same."

" Bob talked to us a little bit about that a stormy not. That's -- no offense but not necessarily a household name here. Enterprise business architecture here taught us a little bit about what you actually do. And they obviously we've seen the employment trends not that great so when you're in the enterprise space obviously you've you've got a challenging audience they're -- market --"

" It's it's absolutely challenging the beginning of this year January and February in particular. I key. Buyers of major corporations kind of we're in a bunker but they've come out. -- a storm we provide sort of a framework for companies to manage the overall process for how they do their business so. Taking their DNA taken their blueprint for how they do whatever they do. And turning it into a competitive advantage. Finding new ways to get revenue driving efficiencies. Reducing cost and in this environment that value proposition resonates very well. So we've been really pleased with our results. Both at the end of last year in the first two quarters of this year I think -- down. The overall process management space is something that companies are looking at as a way to it is to gain an edge."

" a comment from -- here with those private. Company is the way to go ahead in public and got that one from Springfield thing IPO market will be flat for the rest of the here you agree with."

" That year. Well I mean you know there's the sentiment is okay there's always a lot of sentiment about remaining private and and you know it's an easier environment operating you don't have the quarterly pressures. What you do get the capital and you know a company like ours are our strategy is to -- one -- to grow organically above the market rate. And secondly is to execute acquisitions. We've been fortunate over the last couple years -- to do a couple of acquisitions. With the private the private the prime deprived environment where that with private equity. That's not easy it's very difficult to put values on private companies the the public market would give us. Our currency would give us capital to be -- execute on that -- strategy. So I don't think necessarily remaining private is is is the end all as far as the IPO market remaining. You know flat for the rest of the year. I don't expect it to explode I think that you know -- it -- trickling in now some interest in IPO is a bunch of companies have. Priced in in the last couple weeks. I think it'll take a little bit and I think will will continue to evaluate how that uptake happens as to whether -- we put our -- back into the war. Well -- sold is selling it to companies basically they're customers. What are they telling you how is the real economy out there right now. I it's it's tough I think yeah we -- to the global 2000 marketplace. And our. Our customers essentially don't have budgets. Typically we would have been able to. Sell our software into the budget to solve a particular problem within an organization. Today we've got to prove out the return on investment. And then our our customer advocates need to go to work within their organizations define the money. There really isn't budget. Within Nike the way that there used to be. On this budget for keeping the lights on and and running the infrastructure and those sorts of things but they've cut back severely. If you can prove that return on investment. We -- of a big willingness to buy. An appetite. As good as it's ever been. But in order to get to that point you really gotta do a lot of work to show how you're going to drive value within that organization."

" And I want to bring in another beer cat -- What new innovation is coming online -- there."

" When -- innovation is coming my wife I think you know and in this space that as I see it. You know the ability to really use process as capital. Within your company versus data so in the software business we we talked for a long time about using information using data. To drive business decision making and you -- create new products and alike. I think today the the process that a company uses. -- data as a contributing element to that overall environment. Is is something we'll see a lot of innovation you'll see people try to capture. The unique human things that they do and and encapsulate data to. Understandable processes that that drive profitability -- time and time again."

" Bobby a lot of times people like the hearken back to the class of 86 and by the idea class I mean look at this class Microsoft sun Oracle EMC. He has SunGard data Adobe all coming out of Vienna that last big recession in the early eighties. Do you think we could see some kind of Renaissance like that coming on air routes including your company as well but. Really coming out of the amid the chaos we've seen in the last nine months or so."

" Well I think capsule is an opportunity for that. I think a lot of people have commented on it never being able to be the same as it was then. But certainly I think they'll be a resurgence I think as I was saying before. We need to drive innovation in this country and the only way we're gonna get innovation is to have the capital to do it where you get the capital from the from the public markets the private. Markets can only go so far generating the kind of capital to drive real serious innovation so. You know there may not be another class of 86 but perhaps he'll be a class of twenty tend. That is as notable is that class perhaps not at the same scale but certainly. Indicative of power to departure from. This this recession -- from an ideal respect."

" Grooming him a lot of companies actually did start recessionary times if there's a lot of renovation of one you know we we do see. The trend happening with so many of the -- that a lot of people are beginning to start their own companies rather then begin an exhaustive job search and that kind of that the Republicans need to feel."

" Bob Farrell thanks so much for joining us CEO of minister we'll continue to track -- progress and his company and see if they indeed. To make it to market than we did indeed make it to 1 o'clock come out that thanks for sticking with -- guys have a lot of fun Robert group here today than it has ever thanks so much bigger."