Glenn and Stu face off in a battle to the death about the economy...
GLENN: So Stu.
GLENN: Where are you in this? Because this has been an interesting story line between the two of us.
GLENN: Because you have been -- you are America's second happiest economist. No, you're actually America's happiest economist.
GLENN: But you are not an economist.
GLENN: You know what I mean? Like I'm, like, America's saddest economist that isn't an economist.
STU: I'd definitely say that's true.
GLENN: Where are you on this story line? Now that you see the things -- I mean, actual -- I mean, like almost the actual phrases that I have used in the last year are now being said all over, in all the press reports. Have you noticed that today?
STU: Well, yes. Some of them I have seen that, yes.
GLENN: Kind of freak you out? Does it make you look at it and go, oh, jeez?
STU: Certainly we're not in the most glorious of economic times. I think that's well covered. But as you -- I think the bottom line that we do agree on is that we both believe in a capitalist system. We both believe that companies that make poor decisions deserve to fail like this one has and we both believe that the biggest problem is going to be government stepping in with, you know, their capes and trying to fix everything like Superman and all of that is what has worried me from the beginning is really the government reaction rather than anything else and that's what I'm worried about right now because it seems like they're -- even with --
GLENN: It's not going to stop it. It's not going to stop it.
STU: I'm interested, too, Glenn to see, and maybe you have better perspective on this is that I keep hearing commentator -- our last guest said this as well, that it wasn't real, the whole Bear Stearns thing wasn't real, they didn't have these problems with the balance sheet.
Glenn and Stu are seen here in happier times. Thanks to Insider Payallin for sending this one in...
GLENN: It is -- Stu, it is -- do you remember the story we did in, what, September on Northern Rock Bank in London?
STU: Yeah, yeah.
GLENN: And that night we showed the line and I said, that is run on the bank. It hasn't happened since the Great Depression. This is what it looks like. And then we revealed that it was in England. And I said, at the time, something along the lines of, "You may soon be seeing this happening here in America." We had a guest on afterwards and he was like, "That's crazy talk; no runs on the bank; it's impossible for that to happen. We've got all these systems and everything else." First of all, Alan Greenspan in his little message today, he was saying, looks like some of the things that we thought were foolproof weren't. Gee, you think so Alan?
The second thing is what you saw with Bear Stearns, that is a run on the bank, just like, remember, the buildings savings and loan or whatever it was in It's a Wonderful Life, they had the money. They were solvent. What happened to Bear Stearns is what almost happened to Jimmy Stewart. Remember when he had the $2 and he was like, you $2, we're going to put you in the safe? That's exactly what happened. They were totally fine. It was fear that was driving the market. And that's why I said that, to her just now, I'm afraid that not fear but people who are unscrupulous are going to now try to make these banks fail because they can make money on it.
Like, for instance, last week I told you that I started -- I went from a neutral. I was more guarded in my investment than Warren Buffett. I mean, we took more -- Warren Buffett's plan of what he said should be safe and I said to my financial advisors in August, "Make it safer than that" and they laughed at me. Last week I decided, you know what, you're going to lose money. So bet on the index going down. Say that the stock market is going to go down. It's a very risky bet. But I'm not going to bet on individual companies. I don't do that anyway. I don't invest in individual companies just because I don't ever want to be accused of anything. But I have to tell you something. There are those who are going to bet on individual companies and I think banks and they are going to try to short-sell the stock. They are going to try to make that thing collapse to be able to make money. There will be enough unscrupulous people out there that are like, "I don't care if it collapses; I'll be rich." And that's the thing that, to me I didn't see that one coming until this morning and I realized there's enough people out there that have tons of money that don't give a flying crap about our country or anything else. We are living in a "Me" society. It doesn't matter to anybody. And just watch it, man. Buckle up. Buckle up. Remember everybody laughed when I said, "Buy shoes, buy shoes, buy a coat." It may be very, very expensive for you next fall. Buy shoes, buy a coat for your kid in the next size up; it may be very, very expensive next fall.