This Week's Declarations of Independence

Jason Stipp: I’m Jason Stipp for Morningstar and welcome to a special
Independence Day edition of the Friday Five. Here with me as
always with a special July 4th, Friday Five, this Morningstar
Markets Editor, Jeremy Glaser. Jeremy, thanks for joining me.

Jeremy Glaser: Jason, it’s my pleasure.

Jason Stipp: So what do you have for the special Independence Day Five?

Jeremy Glaser: This week, we’ll see if Google can find independence in China. If
the consumer is spending, there’s going to be fireworks or fizzle. If
the house is in recovery can be independent from stimulus, how
long banks are going to remain independent from regulation. We’ll
take a look at dollar tree’s independent thinking on the American
Flag.

Jason Stipp: Well Google is in the news a while ago. It's come back recently
with China specifically. What’s going on there?

Jeremy Glaser: Sure. Google had a very public policy statement. They’re going to
stop censoring their Google.cn search results as the Chinese
government required them to. So in the meantime, they’ve been
redirecting users to go to Google.cn to their Hong Kong site where
the results aren’t censored.

Now the Chinese government was not thrilled of this idea. And
instead they’re now going to send people to their regular
Google.cn site. We’ll give them a link back to the Hong Kong site.
And no one knows the Chinese government will allow this and will
let Google stay as an internet operator in the country. No one is
really sure how they’re going to react. This is kind of Google’s last
ditch effort to stay in the country. A lot of people think that if they
loose that Google.cn domain which is possible if the governments
aren’t happy with what they’re doing. They’re going to lose
basically all the market share that they have there.

It’s not in a trench brand. It could be something to watch out for. It
could be a big benefit for buy do for those users end up going
there.

Jason Stipp: Also in the news this week there were some consumers spending
data. It was positive. Well, the doors offer anything but it seem to
be a good trend but recently also this week our consumer analyst
said that they’re expecting mediocre results so what’s going to
allow this consumer? I mean, can we expect anything of note from
them for that backup for the year?

Jeremy Glaser: We saw a lot of consumer data this week. On one hand, you’re
right. The consumer spending data look not great but a little bit
better than it had before when they exactly caught fireworks but it
wasn’t a complete fizzle. But on the other hand, it gets more
confidence just completely sunk. People are not very excited. No
one is ready to quite go out there and spend a ton of money on
anything really except for the absolute bare essentials.

I think our consumer team yesterday has a point that can be very
challenging for people to get spending other rates before I think
people had put off a lot of purchases they had to make in the first
half of the year and right now they’re kind of sitting and doing a
way to see and approach. It could be a challenging environment
ahead.

Jason Stipp: Certainly a lot of market volatility saw didn’t help consumer’s
confidence and it may have maybe hindered some of that spending.
So for the third piece, housing I think is another important part of
the recovery. And it’s still is also looking like cluster and maybe
like a little bit of a wet fuse on the economy. What’s the story
there?

Jeremy Glaser: It’s certainly has been the story of really this entire upturn and
downturn has been housing. And S&P occasionally are index, this,
that was released this week show that housing prices actually did
increase but they believe that almost all that was due to the
government stimulus. That being written a check to buy your first
or to trade up to another home. Got people out there, brought you
forward a lot of housing purchases. But they don’t think this is a
sustainable trend.

There’s a lot of talk that once it expires which already has that
we’re going to see the numbers look for increasingly worst as a
chance that people who don’t close right on time, we’re going to
get a little bit of extension. Maybe that gives us another month or
another couple of weeks of generally better supportive housing
market but it could be really challenging. I think the fact that a lot
of people are having trouble closing on these housing purchases,
shows just how difficult the market is and we really haven’t seen
that final all clear that the housing market is stabilized. That it has
only bring it go upwards.

Jason Stipp: In Washington this week, bankrupt form was on the docket. And it
seems like there’s a lot of excitement about it early in the week and
that sort of fizzled as well.

Jeremy Glaser: It looks like the deal is completely set. It got out of the conference,
the house and senate bills were reconciled, some prominent
Republicans, ex-cap from the Massachusetts had signed on. But at
last minute things really start to fall apart. There’s a lot of
trepidation to approve. The fee levying on some of the big banks to
pay for some of the bailouts and then with the past Senator Burns
who was a yes vote, if the Math got that much more challenging to
get to the 60 votes that you need to get pass to the senate.

So it looks like it’s going to have to go through at least one more
round on machinations, which gives us one more opportunity to
kind of change us. It’s going on there and for people to lobby their
senators and for there to be even more things that are going to
come in and out of the bell. So we’re still not quite sure of
financial reform is going to look like, we’re getting closer but I
think it could still be a while before we really have the final details
hammered out.

Jason Stipp: So Jeremy for number five, for the joy holiday shopping at the
Dollar Tree, you might have to make an exchange this weekend
according to a recent blog post on the consumers.

Jeremy Glaser: I think so. So our analyst only gives Dollar Tree two stars. But
Dollar Tree seems to love stars. They put 61 on the American Flag
that they are selling that looks like maybe we annex Canada or got
11 more state somewhere. This is a very unusual flag which
they’re calling a patriotic banner, not a flag because it does quite
conform to all of the conditions of a traditional American Flag. So
it’s interesting to see some of these products that might not be
completely spot on from a quality perspective. But hey, it was a
dollar so hopefully somebody got use of their patriotic banner.

Jason Stipp: That’s just a forward looking flag.

Jeremy Glaser: Yeah.

Jason Stipp: Jeremy, thanks so much for joining me.

Jeremy Glaser: You’re very welcome, Jason.

Jason Stipp: For Morningstar, I’m Jason Stipp, thanks for watching.