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By Jason Stipp and Jeremy Glaser | 07-12-2012 03:00 PM

Financial Feuds

Morningstar markets editor Jeremy Glaser digs into divergent views on stimulus, Europe's way forward, in the media market, and more.

Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to The Friday Five.

Bulls and bears aren't the only ones feuding in the market recently. Morningstar markets editor Jeremy Glaser is here with the scorecard.

Jeremy, thanks for joining me.

Jeremy Glaser: Always glad to be here, Jason.

Stipp: So, what do you have for The Friday Five this week.

Glaser: We're going to talk about the Fed, Europe, WellPoint, DirecTV, and finally Marriott.

Stipp: We got some insight into the recent Fed meeting and where the governors stand with respect to further stimulus this week. There is not complete agreement there.

Glaser: As the minutes came out, we saw that there is a little bit of a feud going on inside the Federal Reserve right now among those who think that the current economic weakness, or perceived weakness, is really just a temporary issue and that growth is going to continue and that more monetary stimulus is not necessary or would even be helpful. And there is another group that really thinks this is more of a permanent problem and that we're going to need to have another round of quantitative easing or other exceptional measures in order to get the economy moving again.

Right now, they just take a wait-and-see approach. They extended operation twist, which was expected. It's not going to have an enormous impact. And the idea is that if the economy continues to go down, certainly they will be ready to be there with new measures, but it doesn't seem like anything is imminently happening. I think the answer to this feud and who wins this feud is going to have an enormous impact on the markets, depending on how it moves the Fed to act.

Stipp: The domestic economy, obviously, is a point of discussion among of a lot of market watchers, but the European economy is also creating quite a bit of disagreement and feuds over there: What kind of reform should we do? How quickly should we do it?

What's your take on the outcome of these feuds?

Glaser: Well, feuds are definitely nothing new in Europe. In the last couple of years and couple of months, they have tried to really stem the sovereign debt crisis. We've just seen a lot of competing interests. We always seem to muddle through and kick the can just a little bit further down [the road]. Sometimes the plan keeps the markets satisfied for few weeks. Most recently, it's been for a few days or even a few hours as Europe tries to come together with a plan that's actually going to be useful.

I think we saw this week a couple different feuds with the idea of, is Spain going to implement more austerity measures or should they be focused on growth? With what's the best way to have a Spanish bank bailout? ... Who should have to take losses, if they have to take these [bailout] funds? 

I think as we see all these different feuds, they come down in kind of two big camps: The first is those who really think that reform is the absolute, most tantamount thing--that instead of worrying about getting the money right away, it really needs to be contingent on huge structural reforms that could take some time and could be extremely unpopular, but that those have to be implemented in order for that money to be released.

And there are those who are more concerned about expediency, who want to see more growth right now, who want to just get the banking system back up on its feet, and they'll worry about those reforms later on.

So, everyone agrees there needs to be reforms. Everyone agrees that there needs to be some of this bailout money spent, but the challenge is exactly what order should it happen and how fast both of those things should happen. I think that that's the tension that's really going to drive the crisis in the coming weeks, the coming months, and the coming years as they try to build this fiscal union.

Stipp: Back here in the U.S., pundits are still feuding about the recent Supreme Court decision over health care, but meanwhile, health-care companies are moving forward with their business plans. We got some news on that front this week.

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