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tv   The Kudlow Report  CNBC  March 20, 2014 7:00pm-8:01pm EDT

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stocks are resting, and they will recharge again and they will be back. i'd like to say there's always a bull market somewhere. i promise to try to find it just for you here on "mad money." i'm jim cramer and i will see you tomorrow. president obama really does get tougher on russia. he announced a new round of sanctions today targeting a russian bank, more kremlin officials and some oleregards. we will have the latest for you. russia isn't the president's only headache. right now, he is polling very badly on the economy, on obamacare and foreign policy. so where does this lead to democrats come november? meanwhile, the markets bounced back with 109-point gain for the dow today. i think a little fed snuging is long overdue and healthy for the economy. how about this? janet yellin could be a hawk empress pressure a hawk empress. we'll see.
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coming up on "the kudlow report" beginning right now. good evening, everybody, i'm larry kudlow. this is "the kudlow report." we are live here at 506789 p.m. eastern, 4:00 p.m. pacific. president obama leveled new sanctions against 20 individual and a key russian bank today. he warned more on are on the way if moscow escalated a crisis in ukraine. good evening, eamon. >> 16 russian people and four senior officials called cronies of vladmir putin today, also a bank which the senior delegation called a crony bank for the putin regime. all of that, the president said, designed to send a message to russia and the russian people. take a listen. >> the russian people need to
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know and mr. putin needs to understand that the ukrainians shouldn't have to choose the between the west and russia. we want the ukrainian people to determine their own destiny. and to have good relations with the united states, with russia, with europe, with anyone that they choose. >> now the president also said that new authority given under this executive order that he signed today will allow the united states also to sanction certain portions of the russian economy, certain sectors altogether possibly mining or energy sectors like that. that's not something they have done today, it's new authority they have under the sanctions as of today. a late breaking oleregard may have dodged a significant portion of the sanction impact here by selling all of his shares in his firm, just yesterday. the official is gennady timchenko. it's an enormous exchange firm.
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they do $93 billion in annual revenue, putting a statement on its website saying potential sanctions, so to insure with certainty the continued operations of the gunbar group the shares were sold on on march 19th. they will not say how much was transacted. can you bet it didn't go into a western bank, presumably, that money is safe for the oleregard in a russian bank, larry. >> russian bank, maybe a cyprus bank, but you know, he's a big fish. this is an interesting story. he was on the sanctions list today and he is a big olegarciccal fish. this is a win for obama. >> this is one of the official the administration officials called a crony of putin. i have become familiar the
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common thread here among these oleregards cited today is they all made their billions since putin came to power. there are no yeltsin cited here. this is put ons inner circle here. >> eamon, stick around. we have work to do. so obama took a step in the right direction today if you ask me. i still say, let's see him go further, go after more russian oleregards, especially ones operating in the usa, tougher financial sanctions and a push for american natural gas exports. i want to see some lng terminals. let's see what the experts think, michael mcfall, who, of course, recently stepped down as u.s. ambassador to russia. michael, welcome back. first of all, am i right in suggesting that today was a much bigger day in terms of spearing some bicker fish, besides timchenko, you have one guy that owns a russian railroad. they are oleregard, pals of
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putin. they got their bank, their bank is on the list, so it sounds like obama is getting tougher. am i right in saying that? >> absolutely. no, no, this is a serious escalation over the first list. it's in response to annexation. right. so it's a tit-for-tat, in terms of the way the administration is thinking about it. what's very important about some of these people is that they have assets that can be frozen, unlike the first list, where most of those people i don't think had any assets in the west. >> so you think it might be frozen where, in london, the u.s.? is possible? >> yeah, i personally don't know. i'm not an expert on where these 2350e78 keep their.they're people that are close personally to president putin. >> let pe ask you a question, i want to stay on the theme of sanctions, i want to ask you, where do you think this is going to lead?
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in other words, for president obama, all right, i continue to back him, i'm so glad he's ramping up the sanctions, i hope he continues to ramp up the sanctions, what's the end game as you see it? what's the end game for the obama strategy? what do you want? >> well, the way i along at this sanctions part of the end game is that in the first instance, they want people to pay that were a part of this aggression against ukraine and whether or not it changes people's thinking is a different thing. they want them to pay a price for that. secondly, the new executive order that he has signed today gives him the right to go after economic enterprises, not just individuals. he didn't name any of them, except for the one bank that you already zrievenlt but described. but he raised the spector that he could raise dramatically. what i see he is doing that to prevent russia from getting further involved in eastern
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ukraine. that was the play i think he was trying to communicate to the russian government today. >> you think he wants clear assurances about eastern ukraine. eamon, let me go back to you. you read this stuff. one of the big money places for russia is london. russia has raised a fortune, four, $500 billion in recent years, security offering, ibos. another big place -- ipos. another big place, it's more than a black rom in pimco, it's t. rowe price and mutual managers which had a look at by the sec today. so, in other words, do you think that president obama is going to say to these guys, if you take your money out, we will close down your mutual fund operation? do you think he's going to talk to great britain, david cameron at this g-7 meeting say i want you to stop financing russian issues? >> typically, the nationals involve a whole effort in the
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entire western world, beyond just the united states. and under opack, the office of foreign office controls, senior institutions have as to put procedures into place and do the due diligence among all their accounts and customers to see if they have assets longing to any of these people, freeze those assets. all they can do is put them in an interest bearing account. they can subtract a few fees. that's it. >> that stuff is frozen. if they had assets in the western world, that will be very difficult for them to move it around at this point. it may have an impact. >> ambassador, let me stay with that. there are reports from news services that roughly $35 billion left russia on monday and tuesday. okay. days that the market cracked, you know, the stockmarket crash. if that kind of thinking continues, or if under order from president obama, for example, because these american morning managers are invested in europe, as i said to the tune of
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about $350 billion, if that continues, you are going to deflate russia big time. they only have a few sources of financing literally to continue operating as a country. now, that's pretty powerful stuff. >> i agree, it will take time, because in terms of their macroeconomic situation, they're in pretty good shape. they have deep reserves. but this is going to take its toll over time. if you remember, just a months before this whole crisis, if you listen to russian government officials, the most senior government officials in charge of the economy, the number one question, the number one issue for 2014 was how to increase investment, russian investment and foreign investment. so the numbers you just described ra the exact opposite of what the russian government used to be trying to move forward in a, you know, in a progressive way. in terms of their interests. >> this is not a good
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development for them. >> the weird thing here the weird thing to me, maybe it's not weird. i don't understand putin politics. there was a time when i was in moscow quite a bit. that was an older government. but the stang thing to me, ambassador, apparently putin met today with a bunch of oleregards, not a part of his inner circle. okay, whether they're old oleregards to new, i don't know. apparently he was late, very late, made them wait and many met with him for five or ten minutes and that was all they would do. now that kind of attitude, i don't know, maybe he doesn't understand global finance, ambassador. >> well, president putin has a rep takes for being lates to all of his meetings, just so you know, so i don't think he was discriminateing against the particular oleregards. but if you have the ability to move money in russia to other places, you got to think that this is the time to do it. i mean, i think there's a great deal of anxiety about the
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long-term here. right. and the short term, everybody is going to rally around the flack and say, yes, i support what putin is doing, but when people think about their individual economic interests, what is happening to rich people in russia today, this is not good for them. >> eamon. >> i was going to say the irony here is all of the effort that putin and his government put into the sochi olympics just a month ago. all of that, the message was a rebranding of russia for the world saying, hey, russia is open for business, in many respects, it was trying to generate business opportunities for russia and some of these oleregards in question. now, all of that success that he had on the world stage is being undermined and that rebranding effort has been brought to a halt. >> totally great point. you are exactly right. i will speculate on this, it's easy for me to speculate because i'm not a russian expert. but i believe, if the russian military moves into eastern ukraine, money will leave moscow like you have never seen and the
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moscow stockmarket, which is already down about 20% for the year, will utterly collapse as will the rulebook, in other words, putin makes a military move, you will see the money completely leave russia and they will deflate. they will deflate, just like they did in 1998. and ask the west to help them out. only this time the west won't help them out. we will see. we will follow this closely, ambassador michael mcfall, as always, eamon, javers. thank you so much. the next guest says the individual obamacare mandate is all but dead. >> that may be a good thing. but those obamacare premium costs are about to soar. later, president obama and the democrats, they are now sinking in the polls on foreign policy as well as obamacare and most importantly the economy. we have an expert political pal ready to talk about these dismal numbers. what do they mean? i think democrats are going to have to jump ship, but it may already be too l.a. don't
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forget, free market capital imis the best math to pros permit we will see the power of successful free market capitalism in this confrontation with russia. you just wait, i'm kudlow. we'll be right back. .'l there's a new form of innovation taking shape.
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at a company that's bringing media and technology together. next is every second of nbcuniversal's coverage 0f the 2014 olympic winter games. it's connecting over one million low-income americans to broadband internet at home. it's a place named one america's most veteran friendly employers. next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal.
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there is an important deadline, if you have been thinking of buying on the majority of people may be able to buy health insurance for as little as $100 bucks or less a month. less than your cable bill. i thought everybody had a cell phone. >> well, not exactly, but that was president obama making his final pitch for obamacare. now, i'll say this, i'm supporting him against putin and russia, not on obamacare. i don't believe the march 31st deadline will stick and to me the individual mandates, it is dead in the water by the president's own hand. but let's talk to the expert. we welcome being health policy expert bob chechevsky.
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welcome being. i don't know, weeks, weeks, weeks ago i wrote a clumsying we ought to have a three-year moratorium on all this stuff. first we had an individual mandate moratorium that's coming up in three years, now it seems like the president, himself, is taking the whole thing off the table. what do you think? >> well, absolutely. the president had an interview with webmd earlier this week. he essentially said if you find health insurance unaffordable, you won't be mandated to buy or pay a fine. well, a family of four making $59,000 a year, larry, has to pay $5,000 for health insurance. then they're going to get an average deductible of $2,600. a family making 71,000 has to pay $6,000. and pay a deductible of $600 per person for that policy. that's not affordable. that's why people are not signing up. obamacare is not affordable. the president specifically said, few can't afford it, you are not
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mandated to buy it. >> so this was a new exemption. all right, the first resell shun, if you got canceled, you could renew it. you had to renew it by a year, then that became a couple, three years. then that became permanent. as far as i know, permanent. now you are saying correctly to my knowledge, this hardship exemption, which i guess is done in a cross basis, it's got 13 other exemptions, plus the one you were talking about, the 14th, which seems to cover everything imaginable. i don't understand, why is he doing this? because he must know or his advisers must know. they're destroying this center of obamacare, which is the individual mandate. >> right. i think the administration will claim early in april that they will have enrolled 6 million people. that's where they're headed. only about 5 million of those will pay for it based on the carriers of who is paying, who isn't. based on those numbers, only
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about 25% of the people who are eligible for subsidies will sign up by march 31st. >> that means, larry, 75% of the people will not sign up. are the democrats going into november finding 75% of the people eligible for subsidy, in fact, haven't signed up? that's the political problem he's got. this thing is a hardship. it is unaffordable for most of these families. and he's not going fine them. that's going to continues to undermine the whole program. >> you notice, i loved your blog, i don't know, a couple weeks ago, that in this consumer products company, all of the greatest grains from the greatest universities and the marketing people decided to, you know, design new dog food and they did all their research and all their models. the only thing is they forgot to ask the dogs. this remind me, you are exactly right, all eggheads from the finest universities, design this massive health care strategies only they forgot to ask the consumer what they want. now they're stuck in this.
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see, i think this just brings down the whole thing and i want to ask you just two more points. number one, how, what kind of same are the insurance companies in? okay. you are saying, 5 million people will sign up for this thing. what kind of shape are the insurance companies? not only with the low sign-up ratio, but the adverse selection to the young people didn't come in by more than 20 or 25%. what happens to the insurance? >> well, the insurance companies have got a huge decision that they're going to have to make. they have to if to the obama administration with their new rates and new health insurance plans by may for the november open enrollment at the end of this year. these insurance executives have a heck of a decision to make. they're seeing far fewer enrollments than they expected. they are seeing the age of the population far older. they are seeing old customers signing up. where when you separate the people who already had insurance, you just look at the number of uninsured who are signing up.
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it's to the that many. which means they are probably sick. when you get a small turnout like this, it's going to be the sick people signing up first. so the insurance companies have a big set of decisions to make as to what they're going to do for 2015. if they actually charged the real rates, based upon the poor number of people we've gotten, health insurance rates are going to skyrocket beyond what they are and they're already unaffordable. or does the insurance company do its best to keep the rates down, absorb loss, remember, there is a $20 billion re-insurance fund subsidizeing insurance company losses, so do they use that, subsidize the rates another year and hope that the obama administration can reboot that? that's the set of decisions the insurance executives have to make. >> i know it's in the law. i know the re-insurance is in the law. all that is in the law t. risk card is in the law. i just tell you, particularly in an election year, if the insurance companies, maybe through no fault of their own, if they have to get money from uncle sam, aka a bailout, all
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hell will break loose, it will become a campaign issue, obamacare front page, getting bailed out, holy cow, i can't acknowledge, i will ask our political experts later, you are infering that may happen, are you not? >> well, i don't think the insurance companies can charge the real rates here. they're going to have to rely on the $20 billion re-insurance fund, which is a legitimate fund, because when you got all these sick people coming through, whether it's 6 million or 12 million. costs are going to be a lot higher than premiums could support. be you the problem is, there is no light at the end of the tunnel with obamacare with the low enrollment we've got. >> all right, thank you, bob, as always, really appreciate it. >> thank you, larry. now, folks this day began with the new lead in the missing malaysian jet mystery. we are about to get an update by steve handlesman, next up, i'm kudlow. kudlow.
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zblrnlgs >> new developments in the search for the missing malaysia airlines flight tonight. this after satellite images reveal two large pieces of possible debris that may be floating in a remote area of the indian ocean. being called a credible lead. we have nbc's steve handlesman now joining us with all the credible details. good evening, steve. >> reporter: larry, thanks, here's a bad detail, it's an unbelievably remote area. you go straight through the planet from the u.s. you come through this part of the indian
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ocean. it's more than a thousand miles from one of our most remote city, which is perth. and this might be a false alarm. these images might not show plane dear, after so many days with nothing, these photos are raising hope. here they are, they're by a u.s. satellite company for the australian government. it took four days of looking through the imagery to come up with these images, so they're four days old. they might be pieces of the boeing 777. the malaysian government calls this credible evidence. so right now out in the vast and remote search area where it's 7:25 a.m. friday morning the search is back on. one u.s. plane today, an australian plane and merchant ships are trying to spot plane pieces maybe no bigger than 60-feet, perhaps a wing part, buoyed up by an empty fuel tank. the plan is to locate debris,
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verify it comes from malaysian flight 370 and try to calculate where it might have drifted in the 12 days since that plane impacted with the ocean. and eventually then to send down submersibles to try to get the black boxes, two from the boeing plane, to lock at them or bring up engines and fuselage parts. the experts say those kind of pieces of evidence, especially the flight data recorder, they say, and pieces of the fuselage would shows larry, how malaysian flight 370 ended up on the bottom of the indian ocean, if, in fact, that happened and these photos are plane debris and not something else. >> all right. many thanks, for the update. nbc's steve handlesman. up next on kudlow, poor mr. president, poll numbers sinking on the economy on foreign policy and on obamacare. democrats, i think they're running scared ahead of the november mid-terms. late night comedians are not holding back either. the kudlow report, however, will
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be right back. >> don't you see what you are doing, though? you are forcing people to accept something that the majority of them done even want. >> yes, in russia, we have word for this. obamacare. >> ouch. ouch. ouch. now that hurt. >> yes, does obamacare cover burns? burns? ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need.
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. >> president poll numbers are weaker than ever on foreign policy, but also on obamacare and maybe most importantly on the economy. where does that leave the democrats in november? is there anything the president can do to turn the tide? here now is democratic strategists. we welcome back jennifer reuben right turn blog offer and sarah fagan the advocacy. >> i somewhere to go to my friend chris, we had an important interview with bob lazewsky, a knowledgeable insurance guy. here's what he said, he said the
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individual mandate is basically dead. he said the sign-up for obamacare is going to be way down, way down. he said, in fact, not only that, the wrong people are signing up. it's the elderly, not the young. and then he clinched by saying that the ens companies will have to go to the government for help. there is a re-insurance fund and a risk porter fund. now i ask you, no mandate, the wrong people, too few people and an insurance bailout, chris, this being an election year, what do you make of that? >> well, if you listen, the idea of an insurance bailout is a non-starter. that's not going to happen. it's definitely not going to happen in an election year. listen, in terms of the enrollment number, roughly 5 million. there is one estimate i saw today they will hit roughly 6.2 is the projected number. in terms of who is enrolled.
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is it the right demographic? we have to wait to see what the final data is, the enrollment numbers. i think it's too early for anyone to predict somehow to extend it. >> he's going to extend it anyway, chris. you know. that we all know that. >> in terms of the individual mandate? by the way, i don't think he's going to extend it. we are not going past march 31st. >> the bigger problem for him, larry, politically, is two-thirds of voters now believe their health insurance premiums are going up and their taxes are going up because of this. >> that is baked in. >> that is something he will own into this election. >> maybe fees are going up. >> two-thirds of voefrts, people whose premiums will not go up, think plemiums will go up. politically, that's disastrous for him heading into this mid-term election. >> all right. jennifer, i got to believe sarah is right. i know chris wants to make a good showing of it. to me, i don't know if i were a
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democrat, a congress person, i'd run from it. i would -- >> they are running from it. >> get out of dodge. i would sigh say, no, no, i was sick. i had the flu, they voted on it. >> you can't run from it, that's one thing. >> you can run, you can't hide, how about that, chris? it's really hard for these democrats, not only did they vote for it. remember in the senate, each one was technically the 60th vote because after the election of scott brown, we thought that they would be stymied. but they wouldn't. so the bill that they got through the senate ultimately was it. not only did they vote for it. each one was a determining vote. but they've taken a zillion votes since then. they are always against fixing it. the new line from the democrats is, oh, we want to fix it. we don't want to repeal it. what could possibly fix this? i'm waiting with baited breath. nancy pelosi says she couldn't be prouder. i would be proud if it worked. so i don't know what she is
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talking about. >> the best part of this, though, the best part of this is it is the president, himself, who has ended the individual mandate by changing all the rules, regulations and extensions. the hardship chris kofini sze. i think this is wonderful. i wrote a column months ago saying have a three-month moratorium. little did i know the president did it for me and then some. why did he -- this is the heart of obamacare, chris. he, himself, with this hardship exemption quote/unquote has basically let everybody off the hook for all time. >> well, you know, how do i answer that question? that's an easy one. thanks, larry. >> but it's the truth. look, chris -- you know i -- i'm telling you the truth. >> listen, i have said this before and i'm very open about it. we, meaning the democrats, of dodd, the administration has done a bad job in terms of implementing the small. i think the merits of the law,
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the purpose of the law, the rule of the law are good. the idea of providing affordable health care to everyone is a good thing. making sure everyone is covered is a good thing. making sure people with pre-existing conditions. >> isn't it a failure? >> making sure people with pre-existing conditionss is a good thing t. implementation is poor. i tell you, larry, this argument that they make that they will win this wave of election simply by saying obamacare, i can tell you why an incontrovertible fact that's not true. it's called the last election. they ran on it. they didn't win, it's not enough. >> they really didn't, mitt romney was tied up because -- >> he didn't. >> the thing here is that the law is now being implemented. iment had not been implemented and as the president did, in advance of his re-election, which he's doing now, in this election, is to keep kicking the can down the road, so that the political hardship isn't quite as bad as it is today for democrats. kicking is bad.
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>> you are looking, write a note for yourself, you are out of it. >> that's right. they're not going, it's like the housing crisis ten years ago. there is no, you are not going to know if you are telling the truth or not. you say, i got enough income. i don't have enough income to boy health care, therefore, i'm not going to do it. >> this is baked in now. >> jennifer, let's turn to recent polling numbers on the economy, regarding the president. 56 disapprove of the handling of the economy. 41% approve and then you got some really bad polling numbers developing on foreign policy. and i think this putin crimea thing is not going to help, although, i am trying so hard to support the president on this, but basically, we got 53% disapproval. jen, what happened to it? republicans aren't producing economic growth plans. what happens on this economic measure? >> well, i think that republicans need to pound this home on two or three points, in terms of the pro growth and for the life of me, i do not know
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why the democrats have not gotten behind a pro energy anti-putin bill to essentially flood the market with liquified natural gas. this is a no-brainer from a security standpoint, from an economic standpoint. it would do if president a world of good from a polling standpoint. it's the right policy. i think if republicans come up with two or three things, energy being one of them, they will do just fine and, you know, i feel for the democrats, but one week we hear that obamacare is not going to be the central issue. then we hear, of course, it will be the central issue, but we'll be able to defend ourselves. i think they have to figure out how they will run and if their message is we're going to fix it, i would like to see the planet is going to remedy all this. it's great to have great intentions. it's great to say we will give everyone free health care, how are you going to do it? this is not it. this has been a disaster. >> republicans are developing a growth method. >> they are. >> a lot of senators, house members, then you gottesman the
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obamacare. now you may have an insurance company present, if you were advising democrats, what would you tell them to do? >> one of the things the president needs to do is be strong on this foreign policy. he could start by reinstating missile defense in poland and the czech republic. talk about how this started is when he come into office, the first thing he did signal to putin was, i'm going to work you, i'm going to pull back your hated missile defense program and from that day forward, president putin has been walking all over him. and so to me, you know, he needs to come out strong on foreign policy. obamacare is baked in. the economy at this point is baked in. but he does have a chance to check mate president putin. >> all right. i'll give you real fast, chris, i got to get out. >> listen, the notion somehow that the president will be tougher on putin, you know, it's an easy cheap shot, but the reality is. >> it's real. >> it's realistic. >> the reality is problem had the same motivation, the taim
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same approach in terms of reaching out to putin and it didn't work. you can argue -- arguing that now -- that's a different thing. listen, in terms of democrats and their strategy in the fall, you know, let's wait and see what happens in november. but the last few elections, i seen republicans believe they will do really well, they didn't. >> they did well in 2010. >> we'll see. thank you, i present it. you are all great. now, folks, the markets still in full fed mode. reaction to what janet yellin said yesterday. i still say she sounded much more hawkish than usual. anyway, why does the fed continue to target the wrong thing? why are they always targeting jobs? how about the dollar, priceability? anyway, we will talk about what this means for the market and your money next up on "the kudlow report." kudlow report."
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. >> janet yellin may have spurred a major stockmarket blowup yesterday. maybe. but i think a gradual snuging of interest rate policy, moving short-term rates back into something normal territory, is a good thing for stocks. a good thing for the economy. so i welcome ms. yellin to what i think may be a new category, a
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dove, but with hawkish talons. by the way, the market today regained every bit of yesterday's losses, here now, we welcome stephanie link of the street, a portfolio manager at jimmy kramer's charitable trust and peter costa president of empire executions, stephanie, everybody knows may not know to the day whether it's february or may or whatever, the fed is going to start raising rates next year when they were finished ending quantitative easing. and that's good. that's a normalle economy. that's not going to stop the stockmarket, by the way. >> if they're doing it for the right reasons. the economy is growing. it's getting better, which i think it is. we talked a couple weeks ago when i was on your show, there are a couple good indicators we had gotten like the mpis and isms. we got out of that weather funk, we western sure if it was weather or a weak economy. we got good data, it followed it
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up since then, today they said all those kind of thing, it's not perfect. the economy is getting better, enough so, so we don't need to have these emergency kind of monetary policies. >> you can't have an emergency five years after the fact, the emergency has been over. no one is going to understand what yellin's forward guidance is. she's goent 20, 30, 40 jobs regulators. whatever, investors know ratess are going to go up. so my question to you, peter costa, is how do you invest knowing that rates are going to go up? >> don't be afraid. >> right. >> don't be afraid, whatever your investment portfolio looks like, and you're comfortable with it. i this i that, you know, longer term, with a little higher rate, interest rate environment, you are still going to do well. you have the quality companies that know how to manage and in boit both environments, they will continue to grow as long as the economy grows.
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and i personally think the interest rate will be cut, i mean raised, earlier than later. >> i think that's exactly. >> it's possible, it could be in the fourth quarter of this year, which to me, i don't have a problem with. >> stef, why are banks doing so well? that's an interesting sector. we really have had a run, why do you think that's true? >> i think that was behind today's rally, they led the markets higher than the financials have read, right? i think that's a couple reasons, if the economy is getting better, you will see better loan growth, two. that's right. if the economy is getting better, you will see a steepening of the yield curve, that's good for profitability for these banks. we have seen these companies ramp et down their net interest margins, their profitability figures for years, if we now start to stabilize and go higher, imagine the positive operating leverage with the top line growth, so stocks are still very cheap. they're trading above -- >> i used to do them. >> big time, big time. >> peter, what is your best
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recommendations now? >> right now, i never will, you will never hear me recommend the financials. i will stay out of that one, i have gotten hurt on that recommendation several years back. i do like the health care stocks. i still think even with obamacare, i think well managed health hmo or even a drug company well managed will do very well. >> not insurance company? insurance companies are in deep doo-doo. they have to ask for a bailout. >> they're in trouble. i think a well managed insurance company will be able to navigate this. >> one that's not in obamacare? >> right. if they can get themselves out of that particular moras, they will do well. >> there are rumors they will hike up their premiums. >> they will try. that's exactly right. last one, growth stocks, growthy stocks, industrials, manufacturers, i noticed the chips did very well today. that's a growthy stock. is that where you should be? >> typical, it's financial, it's
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industrials, those are the two highest correlated sectors to a steepening yield curve. so financials and industrials, technology, certainly, particularly if you get the business investment sense back the capex, you get companies that start to spend again and replace their older equipment. those are the three areas you want to be in. i agree you want to be in health care, they run. you got to go on a pullback. >> you don't want to be in an emerging market, right? if the fed is tightening, you don't want to be in gold, you want to be long in dollars, whatever that means, it's not a commodity pledge, get out of here, peter costa, stephanie link, i'm so glad neither of you obsessed about interest rates. i'm so happy. most of you know one of my great mentors was the late jack kemp. his two sons have kept teaching alive, they are about to join us live to talk about what their
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dad would say about today's economy and the whole business with vladmir putin. all right, two kemps, one kudlow. we'll be right back. we'll be ri. .
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♪ mattress discounters >> i think all people respect the word entrepreneur. they appreciate the risk-taker. the guy or galanos takes an idea out of their head and heart and puts it into a business that adds value to our economy. >> right. great stuff. my old friend and mentor the
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late jack kemp, always advocated for big ideas that would unleash our god-given activity to spur economic growth, instead of all this dreary stuff, president obama, big government class warfare. why not approach to the kemp approach, that's the question, for sure. by the way, it would reward success, provide up yarde mobility, make america great. think of it. jack's two sundays, jim kemp, president of the jack kemp foundation and jimmy, let me start with you, you know this is like so much pessimism and doom and gloom now jay days, jack was a great optimist and can figure a way out. what's the kemp foundation doing and saying? how do you propose that? it's a psychology. >> yeah. we are advocating for a real understanding of the american idea that you talk about so much. and a lot of our political leaders are talking about it. you've talked to paul ryan, marco rubio, scott walker.
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they understand this country depends on the people having the self determination, the motivation to make the lives of the future generations better. and that's what makes this country great. faith and freedom, the combination of those, provides us the opportunity to have an optimistic view of the future. >> reward success, incentives matter. but, it's not the whole story. i want to get your piece in here. it's something i have argued with a lot of my friends on the left on this show. we are worried about an underclass that is becoming intergenerational. we have all the wrong incentives. now, you're working with families. talk to me about that. tell me what the principle key points are there. >> well, there is good news and bad news when it comes to families. first the bad news, people think that marriage won't work and that the divorce rates is 50%. it doesn't 50%. the high point of the divorce
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rate in 1981 and it's been dropping since then. the tough news is that the marriage rate has been dropping as well, so fewer people are having faith in this institution, which really represents commitment and upward mobility, raising your kids, reaching the american dream together. >> you could almost predict the outcome of the child. i mean, this is, we were on the board in power america, which which jack started. let me ask you this, kudlow model, there is none, breaking new ground. first of all, finish your education. are you a kid. okay. finish your education. number one. okay. go out, get a job. and hold the job for a while. all right. number two. >> all right. >> then get married. >> and then stay married. >> and have the kid. okay. what's wrong with that model? >> you reiterated the success sequins the brookeings institution pointed out, first
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education, then work, then marriage and parenting. >> that equation protects children and it brings husbands and wives the greatest possible benefits that marriage brings. but the word is commitment. so you commit to kind of stages. and i just want americans to know that there is hope for marriage. actually the divorce rate is more like 35 or 40%. people who invest in their marriage, prepare beforehand to make that life-long commitment, ends up making a lot more money, their kids get into college. they find that american dream much more often. that's kind of the challenge. the expectation is marriage is too much of a risk. if you invest in it. >> do it. >> you got to have faith. jimmy, we need growth to create jobs. that's very important. >> yes. >> one thing that jack objected to, he worked on a little of this when he was secretary of hud, our welfare system and the benefits are all skewed to staying on welfare. >> right. >> all right. that's crazy, so if somebody wants to better themselves, they quickly steep cliff, moves the
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benefits and jumps into a higher tax bracket, which as paul ryan said on this show last week, could be 80 to 100%. that's nuts. >> you got to have tax reform. kemp's plan is, progress, but we need much more than kemp's plan and you've got to be able to have tax reform across the board, larry, before we go the kemps have a gift. this is important. he was a good football player, not a tennis player. this is a jack kemp buffalo bills jersey. >> for heaven's sake. >> we want you to remember him. we know you do. we appreciate your friendship to himch. to us. and now from the kemps to larry kudlow, you are a great leader and we appreciate your work here on "the kudlow report" all these years and. >> i said to your mom and you and all the others at the kemp foundation dinner, i really miss him. and you know what i miss, i miss the fun calls. even when he was ticked off at me, i just loved it when he was
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on the other side of the phone talking and always talking good sense and, gosh, he was a great man. good luck to both of you. i got to get out of here. many thanks. jimmy kemp, jeff kemp. you guys are so great. thanks, for watching tonight's show. i'm larry can you do lie and have a read of jack kemp's books and clippings. go on google you will find it. see what we are talking about. ♪
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>> narrator: in this episode of "american greed"... he's a successful insurance broker. she's a vice president at a leading financial firm. >> she was making close to a quarter of a million dollars a year. they were living large. >> narrator: tina and joe caronna lived the good life, with a nice house and a collection of classic cars. but joe has one very dark secret. he's stealing money from clients to finance their fun. >> he preyed on people that were friends and family. he didn't prey on strangers. there was nobody he would not steal money from. >> narrator: how far will joe caronna go to keep his sins a secret? >> i started crying, and i said, "i don't want to believe this.


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