Skip to main content

tv   The Kudlow Report  CNBC  August 7, 2009 7:00pm-8:00pm EDT

7:00 pm
equated to strong greenback. it will generate a stronger dollar over time and the money markets are are pricing in a slightly snugger fed with four small rate hikes in the first half of 2010. already, mr. bernanke has stopped creating new dollars for seven months, this is dollar bullish. last night, we told you on this program we would fix the dollar. tonight, i can report the first day of dollar recovery and if it holds out on energy nice li it's good for the dollar and growth and good for business. incidentally, private enterprise businesses are the real heros of better than expected earnings and jobs. they are driving the bull market. they are driving the turn towards economic recovery. let us give them c. as for
7:01 pm
today's job market reports, this came in at minus 247,000 jobs there. was a 43,000 improved revision from the prior two months but the whole total beat the street consensus of $300,0300,000 loss. is it possible cash for clunkers is helping with manufacturing hours? we may see the first positive production report out in a couple days, this july, be the first positive one since last october. but in truth there, are negatives, i want to be balanced. the labor force is still shrinking, that is not good. jobs are still dropping, that is not good. i don't think today's 9.4% unemployment rate is going to hold as the peak. former labor secretary robert reich and last night's bullish jobs man joe lavorgne will hash all this out in a little while. let me again underscore my take
7:02 pm
on the new bull market and the turning point towards economic rebound. these are transformational issues that are changing the investment and business landscape. as for investors out there, you have earned a wee bit of optimism after two really rough years. that's my take. first up this evening, the new bull market hit another triple digit day on positive beat the streets jobs report, yes yes yes, turning points towards recovery, yes yes yes, bob has the full rundown on today's action. hello, bob. >> the better than expected jobs report really gave the bulls some rhetorical oomp today. look what happened. we talk about the risk trade. money is moving out of safe hav havens like bonds into riskier assets, into the dollar and stocks. it's rare they have gone up together recently. it would make sense if you
7:03 pm
believe there was a global recovery and the u.s. would be a leader in that recovery, that trade makes sense. how about a floor to the market? the bulls were arguing all day, it's over, we win. the bears were saying the market will drop in september-october, the bulls are saying suppose it does drop, suppose the s&p goes to 900, they're going to start buying there because they want to buy on the dip, not just sell-out, a different mentality. simple, finals, one and then your classical cyclical stocks, industrials, consumer discretionary and materials all did well. did say financials did well. look at the end of the day as we saw big profit taking in large names. bank of america up all day, a group at the close and so did citigroup and others as well. and classic cyclicals, railroads strong, ryder and the trucking group.
7:04 pm
finally, the major industry, dow up 2% but transports outperformed everything. >> thanks very much, bob pisani. we have walter myers, jim eurieio, option contributor and director at tjm institutional services. thank you very much. jim, let me start with you. another rip roaring triple digit day, what do you make of it? >> today's a huge day. as you said before, it was kind of decoupling of the weak dollar strong stock market trade, like the currency market is letting loose of the currency market on its own to see if it can fly and it did fly. there's been so many people shorting the dollar so long now that we started this move high owner the dollar perhaps we will see some shorts take on some heat and see a little bbit -- >> tell me about short the dollar. this is such an important theme. we talked about it on this
7:05 pm
program last night. i did argue with my great friend, rick santelli a strong jobs report would contribute to a strong dollar. i noticed, as i'm sure you did, the money market boys are pricing in four little mini fed snuggies in the first half of next year. this is bullish for the dollar but can it last? this has implications for what? energy, gold, commodities, raw materials, maybe even industrials? >> the answer to your question, i hate to be the wet blanket, can it last? i don't think so. remember when we're at our worst in the market, it's probably better than people think, when we're giddy like we were today, probably a little worse than people think. i think this is a big day, we're still in a bull market, not calling it a bear market rally the good news the dow rallied along with the stock market is the thing that will drop the stock market into a corrective phase. a lot of people short the dollar and boost it up. as the week wears on, no good
7:06 pm
earnings news to come and no good news from job, people will scratch their head, maybe it's time to take profit and take strong dollar. that has to be bad for exports and minors and those quasi-inflation things that led us here to begin with. i think the dollar will go higher and yen go lower and sell everything else including the dollars, a great thing today but the very thing that causes the correction. >> that's very interesting. a lot to chew on a. strong dollar can lead to a market correction, one of jim's key points. what do you think? >> i think it can help and keep this market rallying quite a bit. >> can or cannot. >> can. >> it can. you don't believe jim's point a strong greenback will lead to the much awaited correction? >> i think it can take this market forward and keep going. the big question is how long can a strong dollar last? there's a very valid point this
7:07 pm
may be a temporary movement up. there's so much downward pressure and opinion the dollar should be lower it will weigh once we get a pop. >> what if it's just a stable dollar? in particular, a potentially good impact to hold energy prices down. your thoughts. >> from a consumer's perspective, that's a good thing, anything to keep energy costs down. look at oil and energy stocks the way they acted today, under quite a bit of pressure, completely due to the strong dollar. >> what about a steady or stronger greenback relative to the industrial sector? industrials were up 1.3% today. materials up half a percentage point today, the big winners are banks and retailers, i will get back to that in a minute. what's the impact on industrials? what's the impact on tech of a stable or stronger recoverering dollar? like we're putting the greenback in a 12-step program. how does it play out. >> the difficulty, you have a lot of multinational companies
7:08 pm
have sales overseas, as the dollar gets stronger, it will weigh on their export. it has to be a tough balancing act. if the dollar levels out and holds tough, i think that's good for tech stocks in general. not great, but good for them. put it this way, it won't hurt them. >> won't hurt them. i don't want to obsess. first, i know something about 12-step program and second, i'm a devout blirch something called king dollar, which could be a stable dollar. how does that interact with tech sector? >> let's take a step back we lost $20 trillion and the government has thrown 3 trillion, 4 trillion at it to try to solve this problem the last year. seems the stable dollar is out of the question. and some of these companies have great balance sheets, seems like tech is pretty good. over the last quarter or last four months, seemed like
7:09 pm
everyone was happy to get out of risk averse trade into risk trade, the tech part of that that will lead us out of it from the stock market standpoint. >> let me go on, we have so much to cover, great to have you guys here. the broad s&p last month, great summer rally in my judgment adds to the long rally last march. up 15% but banks are up over 30%. i want to ask you about the bank action. >> this is me now, right? >> yes. can it last and where's the correction? >> i have a lot of very smart correctionistas out there, jim, and i want to know if they will have their day and what does it mean if these banks have gone up 30% in the last month. >> it means they will correct. i am a correctionista, too. we had a steep yield curve the last three, four, five months
7:10 pm
sure they're making money, lending cost is zero and lending it out. hsb is the last to the party that announced they made money. they still have toxic assets on their books. the one good thing is time keeps passing. if it was ten years, now, 8, two years ago keeps passing, makes it less scary. due for correction seems due for correction, whether or not fundamentals supporting you, have gone a long way in a little time and i think due for correction. >> walter, i think the steep curve is the key to the play. due to the steep curve, they can make money. i want to ask you, isn't the ten year going to make money, sold of 4 1/4%, isn't that a possibility. >> i think it's possibility, talking about the banks and rally we've seen, can they
7:11 pm
continue? a great question. with the yield curve as steep as it is, they can correct. >> do you think they will. >> not yet. i think there's a ways to go. >> the financials interestingly across the board, all the categories financials including aig insurance play. >> i think as long as the yield curve stays fairly steep, i think you can stick with banks and financials. >> jim, what's the next move in the market? go to 1050. >> s&p closed at 1010. does it go to 1050. >> not yet. >> go ahead. >> not yet not 78. it's come an awful long way. earnings over. non-farm is over and i think it's due for correctional, strictly technical. i do think we're in a bull market. i think today it was in everyone's head it was a v-shaped recovery. look at volatility in the short interest futures, everyone was grabbing volatility thinking the
7:12 pm
fed will start tightening relatively soon. >> what's your favorite investment. >> things people need north dakota that they want, consumer staples not cyclical. >> and i ask are we moving toward 50 in the near term and your favorite investment trade. >> i think the trend is towards 50 and are due for a sell-off. we don't go up 50% in a straight line. >> pullbacks in this bull market could be the healthiest thing possible. >> absolutely. i'm not saying we're in the bull market rally but say we're due for a pullback. >> favorite thing. >> i will go way out on a limb and pick something if this economy turns around faster than people expect, i will pick something like dry shipping. >> dry shipping. >> if you really want to go crazy, pick a home builder. >> home builder, i love the home builder play. >> i know i'm early. >> my friend, robert toler, i
7:13 pm
had supper with him last week, he would be thrilled. >> i think the earnings will be a good indication. >> you guys, thank you, on a friday night. robert myers and jim, thank you for helping us out. coming up on the "kudlow report" we drill down on better than expected jobs number. we have will and from his website, former secretary robert reich who knows a thing or two about the job story. later, president obama takes credit, president obama takes credit for the new bull market recovery. i'll tell you who the real heroes of this recovery may be. here's a hint. none of them start with an o. anyway, keep it right here with "the kudlow report." we are trying so hard to be fair and informative to everybody. dollar recovery day one a story i love. someone once called it king dollar.
7:14 pm
7:15 pm
in a long line of amazing performance machines. this is the new e-coupe. this is mercedes-benz.
7:16 pm
7:17 pm
ick today. welcome back, everybody. a positive beat the streets stock created a triple digit garchlt my take, it may very well be a turning point towards recovery. former secretary robert reich, the author of "super capitalism" and joe lavorgne of deutche bank. let me run through a quick review. not everyone is familiar with these numbers. we got today non-farm payrolls. the trimline is looking better and better. we stumbled a little bit in may, june, not good but today was very good, down 247, we had an upward revision, i like that very much from the past numbers.
7:18 pm
joe you didn't quite make 150. if give you the 50 upward division will give you 100,000, at least 1,000 below the consensus. the job numbers are getting smaller. the next is companion survey from the unemployment rate called the household survey. the household survey is really a small business indicator, sometimes the leading indicator. here, the road is a little bumpier. you can see by and large, it is showing the same pattern as the non-farm payrolls. finally, this is an important chart, the income proxcy. i know bob rice is correctly worried about where consumers are going to have the income whe wherewithal resources in order to spend and get us out of this. this is income proxy, average hourly earnings which did improve today and average hours
7:19 pm
worked, improved today. in fairness and truth, even from the 7 or 8% low point here, it just improved to maybe about 3% or so. it's not a great number. robert reich, i know you don't buy the optimistic recovery story. tell us why and your take on today's jobs. >> first of all, i want to say i love your koch eyed optimism, i always have. in 2007 you were talking about a goldilocks recovery, i was saying we're headed for a train wreck, you were there. i love it, the sense of great recovery and great bull market. it's not going to happen, gets real. we have 14.5 million people in this country unemployed, we have the worst jobs situation since the "great depression." what you can say from today's job numbers are the job market is getting worse more slowly. getting worse more slowly, maybe that's cause for optimism, not cause for taking out the champagne. this is a serious huge problem.
7:20 pm
consumers are not going to go back to the malls, they are saving to the extent they can save at all, businesses are not investing, we don't have an export market, the dollar is high, export markets are dead. where is the growth going to come from. there is no aggregate demand out there at all except the stimulus package. >> can you answer secretary reich's worries? of course, i've been negative quite some time. the leading indicators of the market, non-capital goods order, excludeing aircraft house iing spreads, credits, equity, what will lead us out will not be the consumer, business spending, cap x and business inventory and the rise is very powerful and withdrew get incomes. that's very important. >> that's a key point. i don't mean to interrupt. you had factory workweek rise
7:21 pm
0.5%, i think where you're going. private workweek also lengthen. we haven't seen that in a while. the private workweek is the leading indicator. joe lavorgne, from that, will we see a positive industrial production number in a week or ten days. >> yes. >> that would be the first going back to last fall. >> yes, we will. bob is right, this has been a brutal recession. we came out of recession to the 1800s when they were brutal, 1930s, '70s, '80s, the same way we're going to come out again, monetary policy is finally getting traction and finally working and you have to have some faith we will turn around. >> i just want to say, i think joe was right when he was a bear. this new joe, i don't even understand where he's coming from. for one thing, yes, you're right there, may be a slight uptick on in factory order, basically anniversary are down the seller. a lot of companies have to reorder and have to do something
7:22 pm
about their inventories and true also of some consumer durables. people can't repair and repair and repair, they have to buy some things. that's not recovery. you can't build a recovery -- >> one thing you're missing is on the cap x side. >> hang on a sneaked on the cap x side. >> secretary reich first, then joe. go ahead, bob. >> there is going to be a little bit of an industrial production increase based upon simply the fact inventories are down. you have to look at the demand side overall. you have a record number of people unemployed more than six months and that is growing, they're going to run out of unemployment checks in september. where is the demand? >> joe lavorgne, i want you to finish your thought and try to deal with this one question. doesn't business, at the end of the day, through its profitability, inventory cycle and production, at the end of the day, doesn't business a healthy business get us to a healthier consumer?
7:23 pm
>> yes. absolutely. in the past, the consumer leads the way, this time, the consumer will lag. it doesn't mean we can't get 3 to 4% growth. what bob isn't playing up enough the credit spreads and complete shutdown of the market caused inventory liquidation to be greater and the level of capital spending is almost equal to economy-wide depreciation and capital stock growth is shrinking, just in stock alone will give us increase and give us demand. >> that's where i disagree with you, exactly where i disagree with you. a vigorous recovery cannot be built on replacement. we won't see that. see a little bit of uptick but not have any vigor to it. >> what about robert reich's point? i think it's very serious point. you saw today the civilian labor force shrunk. that can't be good. the unemployment rate went down from 9.4 to 9.6 but it went down for all the wrong reasons, joe
7:24 pm
lavorgne. the labor force is shrinking and households not producing the jobs, the participation rate, how many industries across the board show better jobs, that is also declining. look, i believe in the recovery scenario. i think bob reich makes good points. i think the information from today's report, doesn't that give one pause in fairness? >> i don't think it does, larry. if you look at the historical recovery, we're growing at 6.5% in the four quarters after the recession trough. 3 to 4 is still consistent with a weak recovery relative to past cycles. bob is probably getting recovery in the 1 to 2% range, i'm just guessing, that's way too low. the employment cycle is important because that's the initial start. as long as the fed doesn't step on the breaks, we've seen in 100 years, the economy gets traction and nominal gdp above fed funds, that train continues to run.
7:25 pm
>> i'm getting trashed by many of my conservative friends and colleagues because i actually came out for a federal stimulus program, cash for clunkers. isn't that going to get us recovery in the second half of the year? >> no question, stimulus program cash tore clunkers are one time -- >> you agree with me. >> you agree with me. >> kumbaya. >> these are one time events do and not make for recovery. >> do you see any positive growth in the second half, bob reich? >> i see very lit. certainly not a v shaped recovery, almost not a, you shaped recovery. we can talk about this sometime and x-shaped recovery. >> x-shaped recovery. >> meaning the economy has to be changed meaning how people are paid and structure of the employment market. we will see big changes but we're not going to see a rapid and strong recovery. >> joe lavorgne, after today's
7:26 pm
jobs reports what is your thinking of the third quarter, now we're in the third quarter, ends september 30th, what's your latest thinking about quarterly gdp? >> we will grow 2 to 2 1/2%. bob is a great american but will be wrong on the second half. >> when do we see positive job growth. >> late fourth quarter, larry. >> guys, i've never seen in a business that invests when they're not consumers out there to buy the stuff the business wants to produce. >> i have to go. you guys are terrific. joe lavorgne, you are in the right quadrant of your job last night. >> thanks, i appreciate it. coming up, president obama is looking to take credit for this new bull market recovery. this is what presidents do. i am not shocked or surprised but i have other thoughts about who the real recovery heroes are. you may not be able to guess them right now until we unveil them later in the program and
7:27 pm
still to come, how should you play the summer rally. we'll get portfolio advice from two of the biggest. "kudlow report" coming back. i still like the dollar. today is day one in the dollar's 12-step program of recovery.
7:28 pm
7:29 pm
7:30 pm
today's jobs report, is a bullish sign of the recovery. and president obama didn't want to be blamed for the downturn is looking to take credit for the recovery. take a listen. >> today, we're pointed in the right direction. we're losing jobs at less than half the rate we were when i took office. we pulled the financial system back from the brink and the rising market is resore storing value to those 401(k)s the foundation to a secure retirement. >> this is a presidential address or talk after the jobs numbers. look, it's all well and good for mr. obama to take credit. that's what presidents do. i don't have any problem with that. that's the way the game is played. he plays it very well. there are other heroes not being named. i feel like naming them. let's walk through this. let's put up ben bernanke. in the fourth quarter last year
7:31 pm
at the height of the crisis, he put in a trillion of new liquidity plus guarantees to solve the banking system, all lo looks pretty good today. a surprise second choice, some credit deserves to hang paulson, former treasury secretary, his $700 billion t.a.r.p. program helped recapitalize the key banks and the financial system. in my opinion, he looks better and better over time. then again, believe or not, president george w. bush, not only did he preside over these decision last autumn, took the gamble to suspend free market capitalism to save it. in his own words at the time, it looked awful but looking better and better. the true hero in my judgment is the enterprising american businessman, private sector n z nrnzinrn
7:32 pm
enterprising american businessman he or she will always be the driving force behind profits and jobs and incomes and economic growth for all families. the recovery is real, it began a month or two ago even before president obama took his oath of office, the mustard seeds were planted, that's the key point, the mustard seeds were planted. we're joined in this particular segment by former press secretary and white house secretary tony fratto and former labor secretary robert reich is still with us. tony fratto, i don't deny mr. obama his political and presidential progty of take credit for anything good that happens to anything, including the economy. isn't ate wit a wee bit unfair o give bush credit, paulson credit and bernanke credit and most of all, the american businessman and free enterprise. >> i'm with you on that i'm not
7:33 pm
surprised you and i agree on that i'm surprised watching the last segment, robert reich and i agree on the outlook. the t.a.r.p. is what pulled us out of the worst days. we keep hearing the president say the worst may be over. mr. president, the worst is over, the worst was that horror show we were living back in the fall when banks were failing, aig had to be taken over, fannie and freddie had to be taken over, we broke the buck, these guys did extraordinary work developing the t.a.r.p. and programs bernanke and fed put over and ben bernanke's contributions at the new york fed, they pulled us out of the abyss, if not for the work they did, we wouldn't be talking about maybe a recovery today, we'd be talking about a depression. >> bob reich, just a quickie because you will come back and flesh this out. is it possible the mustard seeds tony is describing were planted
7:34 pm
in 2008 before president obama took office? >> i don't think there's any question the t.a.r.p. program started by paulson under the tutelage of george w. bush did help salvage the financial industry but the financial industry is not main street. you guys keep thinking finance is the main st. no! finance in terms of big executive salaries and traders, commissions and bonus, that's not where the action is, that's not the american consumer, that's not main street. in fact, wall street is anything but main street. >> hold all those great thoughts. bob reich and tony fratto, we have much more work on this question. i don't deny president obama his political right to take credit, i just think other people were involved, he could be more magnanimous about that and particularly the free enterprise free market american business person still to come in the program, please get your pencils ready, we'll have two wall street titans and will help you
7:35 pm
power up your portfolio during this summer rally, heck, during this new bull market. where do we go from here? "the kudlow report" will be right back, that's where we're going. please stay with us. mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah. onstar. standard for one year on 14 chevy models. has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster...
7:36 pm
on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster, email business plans faster. all on the go. i'm bill kurtis and i'm faster than floyd mayweather. (announcer) switch to the nation's fastest 3g network and get the at&t laptopconnect card for free. are you all right? a ferocious white whale wrecked my boat. well, i'm sure we can help you, captain... ahab. well, it looks like you haven't had a claim in over four years, so you don't have to pay a deductible. that means you saved $500! $500? i could get an electronic fish-finder. that's the spirit. saving you money on boat insurance.
7:37 pm
7:38 pm
a. weir talking can president obama rightly take credit for the recovery? he did in the rose garden today. we're back with robert reich and tony fratto. if you agree it is not a recovery, that's your point of view, would it be fair for you to disagree with president obama taking credit for anything? maybe he shouldn't be taking credit? >> i think the stimulus package is having some effect. i just think t.a.r.p. is a mistake. i don't understand you. let me ask you a question, for week after week after week you and i agreed on one of the fewest things we ever agreed on, which was that t.a.r.p. was a mistake. i don't think it has been a great victory at all. goldman sachs has publicly stated it's doing exactly, using the same business model it used before, other wall street banks are back to the same practices they were using before the crisis, nothing has changed.
7:39 pm
why do you think t.a.r.p. was such a good thing. >> looking back on it, it's a fair question. i don't like t.a.r.p., don't like the government running things and sure didn't like the government taking over general motors. maybe guys like me are a bit too hard, tony, on the free market crowd. maybe it did help capitalize the banks. that is a different question i asked robert reich. is henry paulson the most maligned guy, maybe the recapitalization of the banks is being ahead and is helping. >> i think so. history will look kindly on what hank paulson did. my response to dr. reich, would you rather had goldman sachs or some other bank go out of business. we saw what happened with lehman brothers. that wasn't a solution, that wasn't something that made things better. the t.a.r.p. did make things better. i agree a financial recovery is not a recovery but there is no
7:40 pm
full recovery without a strong financial sector. tony, i agree with that. wall street is not turning around and lending a lot to main street. we're not seeing the financial sector of this doing xhat we set out to do by lending taxpayers all that money. what larry and i agreed on, you either should have a massive chapter 11 bankruptcy type proceeding for wall street or else have a temporary receivership. the t.a.r.p. bailout that had no effect on main street at all, no positive effect was throwing bad money after bad money. >> no. it's a result -- the impact would have been in the absence. had these banks gone away, had we lost that impressive intermediation the financial sector provides throughout the country, we would have noticed that. no question about it. >> tony, to follow up on this, i hate to use this phrase, pardon the phrase, is there a trickle
7:41 pm
down from the financial him? a trickle down to main street. >> it is a precondition for economic recovery. there is no economic recovery unless the financial sector gets healthy. it's not completely healthy yet. we have a way to go. there would have been carnage and waiting years to rebuild it. >> we don't disagree on that. i think you're right. my point is t.a.r.p. did not lead to the financial sector lending to main street, at least yet. a big larry kudlow type chapter 11 for wall street or else a bop reich kind of temporary receivership, either of those might have led to more lending to main street but nothing has happened. >> really, tony, the obama-geithner summers team has continued these policies. >> with little change. >> i am uncomfortable with t.a.r.p. bernanke put about a trillion in to help the bank is in another
7:42 pm
initiative. maybe that was more successful. the t.a.r.p. was $700 billion, that was $1.7 billion, all that in the fourth quarter. how much has the obama stimulus been worth so far this year. >> on the range of $100 billion, 100, $125 billion into the real economy. >> about 15% of the total stimulus package. >> right. remember, this is in a 14 pl$14 trillion economy. >> bob reich, it's kind of, i think, a bit unfair for president obama to take credit when the numbers he put on the board pale to the numbers bush, paulson and bernanke put on the board. >> i will bring back my hypothetical business person for better profits and better jobs. >> i didn't hear the president taking full credit. he said things are starting to turn around. i agree, ben bernanke does deserve full c. he should be reappointed and think the president ought to do that as
7:43 pm
soon as possible. let me say, we are not out of the woods. all of this celebration about who gets credit is so premature, it is almost laughable. >> i see tony shaking his head. >> i also agree with reappoint ing ben bernanke, larry. >> we shouldn't have all these agreements. although the bernanke -- i don't know, i'm back and forth on that. let me once again put a tout in the private enterprise private person in business who has to make tough decision in jobs to gain profits, profits produce jobs and those produce the consumer income robert reich wants, somebody has to give that business person man or woman, entrepreneur, a little bit of c. robert reich, thank you sew eev much and tony, thank you so much. coming up, the new bull market and talk with chief investment strategist, and want
7:44 pm
to see if they've changed a view from a somewhat pessimist stick presentation a few weeks back. we will be right back. my name is blake,
7:45 pm
and i am the chief shoe giver at toms shoes. i operate my entire business from my phone. i need a network with great coverage, because for every pair of shoes that we sell, we give a pair away to a child in need. it would be impossible for me to do this without a network that works around the world. (announcer) more bars in more places. at&t. the best coverage worldwide.
7:46 pm
in the new bull market,
7:47 pm
there's still plenty of time for investors to get off the sideline and put plenty of cash into the stock play. let's see what a couple investors are advocating folks follow. ron and richard. the chief investment strategist at dreyfus corporation which manages over $450 billion in assets. welcome. ron, you were really kind of not too bullish the last time we talked, maybe a month ago, no harm in that. people can change their mind. i want to ask you after a month like this on top of the whole rally since early march, have you changed your mind about the new bull market? >> it was couple months ago so i didn't completely blow the month of julie. i said the market climbed a wall of worry and you couldndon't fie tape. i am concerned about a couple things.
7:48 pm
this is interesting, everyone hip hip heooray about people losing 250,000 jobs and no one talks about the seasonal adjustment. i'm a little concerned about long term trends for jobs and unemployment ticked down for those reasons but this is a market you can make money doing stock picking versus doing general market. >> we will do some picks in the next segment. i want to give dick a chance. do you believe the bull market scenario i've been discussing the last few weeks? i'm chief economist in the bank of new york, and i'm not getting into all the details of strategy, i have been here before. we had two severe recession, one in 1974-5, one in 1984-2, at the bottom of the recession when everybody was so pessimistic as the recession was kapted to end,
7:49 pm
the credit crisis eased up, made a bottom in the stock market and rose against this tremendous wave of skepticism, it was a great opportunity after a bad period of performance in stocks and this feels exactly the same way. recession bottom was probably june or july. i don't think you ever lose big money in the stock market buying it at the recession trough. go take a look at the history. >> hang on. we'll come back and get both of you, i want to hear more details on this. first, let's check in with my pal, dennis kneale to see what he's working on. >> larry, i know you're a teetotaler, forgive the phrase, the recession is over, how do you get in? is it too late to get in? no way. >> listen, you want to have a pop or two, terrific. all that other stuff is my problem. i tee total as a national public service. i'll be back after this break. pounds and a smidge.
7:50 pm
a smidge? y'know, there's really no need to weigh packages under 70 pounds. with priority mail flat rate boxes from the postal service, if it fits, it ships anywhere in the country for a low flat rate. cool. you know this scale is off by a good 7, 8 pounds. maybe five. priority mail flat rate boxes only from the postal service. a simpler way to ship. hi, may i help you? yes, i hear progressive has
7:51 pm
lots of discounts on car insurance. can i get in on that? are you a safe driver? yes. discount! do you own a home? yes. discount! are you going to buy online? yes! discount! isn't getting discounts great? yes! there's no discount for agreeing with me. yeah, i got carried away. happens to me all the time. helping you save money -- now, that's progressive.
7:52 pm
two heavyweight investors, ron and dick. briefly, speak to the main street investor. >> look, we are at a particular cyclical moment. the u.s. recession is over, the global recession is over. the oecd leading indicators came out today, they were rising in every country. the leading indicator went up in germany, went up in france, uk, went up for u.s., went up for
7:53 pm
canada, brazil, india. how much do you want? the evidence is clear cut, we'll have rising real gdp in practically every significant country in the world in the third quarter. >> where should they go right now? they missed a chunk of this rally, we're still about 40% below the peak of october 2007. do i deare believe we can achiee those peaks and what do we do to get to them. >> they need to define their goals and find what the right asset allocation is for them. if they're 100 answ% in stocks can't afford it, they better zero down. they need to check to see if they don't need to change. they're trying to figure out if the stock market will go up or down for the next month and that will determine what will do with my retirement money. that's crazy, insane. you have to go back, never a wrong time to go to the right
7:54 pm
asset allocation. stop paying attention to short term fluctuations. >> robert, what's your best short term investment or two? you're in st. louis, if i'm not mistaken. what do you tell the heartland folks and main street investors? >> we like infrastructure. we think build america, all the companies that will do the power xwr grid and infrastructure, we like technology. you have to be careful with those up 100% and great value on muni bonds. >> corporate bonds, let me ask you about that. they had a hell of a run, corporate bonds, prices have soared. >> like any price that soars, or you have to be careful, same with treasuries but we like muni bonds on a relative basis. >> thank you very much. sorry we didn't have more time. all very is inning, coming up, more on monday. i'll be on the call at 11:00 these days, when you have to spend,
7:55 pm
shopping online can help save. doing it with bank of america can help save a lot more. up to 20% cash back from over 300 online retailers with our add it up program. just sign up and use your bank of america debit or credit card when you shop online. it's one of the many ways we make saving money in tough times a whole lot easier.
7:56 pm
7:57 pm
in the new bull market scenario i've been outlining the last couple of weeks, let me add this one point. i don't fear a correction or pullback of any kind.
7:58 pm
i'm not smart enough to know when they're going to come. i think this market runs to the end of the year. i think it runs well into next year's spring. let me add one more point tonight. i believe any stability or strength in the dollar back to king dollar in the medium and longer run is absolutely splendid for the new bull market and possibility of stronger than expected economic recovery. speaking of bulls and recovery, here's my pal, dennis kneale. dennis, i hope you have a terrific show this evening. >> thanks, larry. have a great weekend. we have a special hour coming up on "cnbc reports." it starts with a broken pipe. a water main breaks in lower manhattan, buildings not far from wall street, see rising water, subway service stops.
7:59 pm
who cares, right? this is a market show. everyone should care, it wasn't just any water main a 140-year-old water main installed in 1870. ulysses s. grant had just been sworn in as our 18th president. and construction was in full force and china went to war against prussia. that water main is a symbol of what america once was and still can be. what in the world now lasts for 140 years? nothin nothing. all on the day the jobless rate broke a terrible streak, america on the mend, and the great american bull is back in town to. us, that water main symbolizes a turning point, intersection, which way will we go the next 140 years? the way of the bull or way of the mouse? buckle up,

196 Views

info Stream Only

Uploaded by TV Archive on