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tv   The Kudlow Report  CNBC  May 24, 2012 7:00pm-8:00pm EDT

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ahead. also, could the mess in europe with the possible frakt yurg of the eurozone be setting us up for another lehman moment? the scary prospects ahead. and the president doubles down on renewable energy, saying it will help the economy and create jobs. but has that policy failed? "the kudlow report" is moments away. thank you to the fine men and women of the u.s. coast guard, navy, and marines for giving us the honor of hosting you here today. don't forget to watch david faber's j. crew show tonight at 10:00 and 1:00 eastern here on cnbc. don't forget also that we're just in the grips of europe and every time it goes up big i want you to licen up. it's just that too dangerous. there's always a bull market somewhere and i promise to try to find it just for you right here on "mad money." i'm jim cramer, and i will see you tomorrow! hey, michelle, what are you looking at? >> oh, jimmy, we're going to be talking about europe because europe might be even more dangerous than we think. we'll explain. good evening. i'm michelle caruso-cabrera in for larry kudlow ease takes a
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few days off. this of course is "the kudlow report." radio talk show host neal boortz joins me as my special guest tonight. welcome to the show. >> thank you. it will be fun. >> it will be. tonight with the nation moving dangerously close to falling off a fiscal cliff a new report says the actual deficit in this country is nearly four times what the government says it is. but the president says he's doing all he can to control spending. so is it a case of fuzzy math or is there a real spending problem? also the threat of an exit by greece from the eurozone, a fracturing of the eurozone causing investors to suffer paralysis. but could the mess in europe be leading us to even bigger problems? is it another lehman moment on the way? we'll discuss. president obama doubling down on renewable energy saying it will help stimulate the economy and create jobs. but is this a pipe dream? and is the white house energy policy a failure? we'll take a look. first, though, could a plunge off the u.s. fiscal cliff be sharper and more dramatic than we thought? a new analysis from "usa today"
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says the real american federal deficit four times the official reported amount thanks to creative accounting. this against the backdrop of a brewing presidential election battle over the nation's fiscal health. and who's to blame for it? cnbc's eamon jafers joins us with details. >> it's a campaign year effort by the white house to define the narrative on the issue of the president's legacy on spending. yesterday the white house was very eager to embrace a new analysis which seemed to suggest that the spending binge that a lost americans are convinced the president has undergone didn't actually happen. that analysis says that you can't attribute the things that happened in the president's first year because most of that spending was teed up by the previous president and the previous congress. take aw listen to white house press secretary jay carney. he's on air force one briefing reporters. it's a little hard to hear because he's on air force one, but listen here to what he had to say yesterday.
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>> i have to make the point. do not buy into the b.s. that you hear about spending and fiscal restraint with regard to this administration. i think doing so is a sign of sloth and laziness. >> but the administration might not be so eager to embrace a new study today by usa today. this morning which suggests that actual deficit numbers are much higher than previously reported because the official numbers undercount obligations on entitlements like social security. the "usa today" analysis showing official deficit in 2010 of $1.3 trillion and actual deficit they say $5.6 trillion. and an official deficit in 2011 of 1.3, actual 5.0 trillion dollars. all of this a campaign-year effort to get the legacy of the president on spending under control from the white house's perspective. it's going to be a bat that will they go into throughout the next couple of months. neal, back to you.
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>> okay. thanks, eamon javers. that's incredible. i'm sure the press corps loves to be told that they're being sloths. at any rate, here now is former clinton white house aide keith boykin and cnbc contributor jim pethakocis of the american enterprise institute. and cnbc's michelle caruso-cabre caruso-cabrera. keith, i want to start with you. what i stunner -- >> i'm going to interrupt you because you don't have a mike. so we're going to -- yeah, your mike has fallen off. >> i'll answer the question, though. the problem with the numbers is there's two sets of numbers. one is about the deficit being larger than it is. the other is about the spending. the spending part is what's really interesting because ought bama administration has not been a big spender compared to previous administrations. we've seen a 1.4% annual increase in spending under the obama administration. compared to 10.2% under the bush administration. a huge and vastly huge
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difference. >> the problem -- >> no, the -- we looked at it and verified the numbers. >> let me know when you're ready for the truth. i'll give to you. >> i'm giving it to you. go to here's the problem. the deficit has gone out of control. that's because the revenue has been so little. we need to increase the revenue if we want to reduce the deficit. but we have this huge economic crisis we have to deal with. yes, there is a deficit problem but no, there is not a spending problem. spending is relatively under control. >> jim, if you don't get him on this, i will. you get the first shot. >> give me some facts. >> the president spends over the course of his term what he says he's going to spend, spending will average 23 -- >> let's talk about the spending -- >> let him finish his point. >> trust me. you should let me use the late numbers. it's 23.5 -- percent of gdp. the previous all-time high not counting war years was -- >> the reason --
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>> average spending will be higher than the previous all-time high. >> the reason why you're using the gdp numbers is because they benefit you in terms of slanting the numbers. >> i'll use your numbers. >> gdp in this country is down dramatically because we are in economic -- >> you decide to throw more kers yeep on the fire. he took a one-year surge in spending and he made it new permanent levels of spending -- >> gentlemen. >> that's no longer the ceiling. that's the floor. >> i'm the nervous guy here. i'm the guest host. give me a chance here, keith. one thing. >> what's that? >> for these numbers on obama's spending, they took 80% of obama's $850 billion stimulus bill and dumped it on george bush. can you explain to me how that works? >> first of all, this is one person who did this study. i understand the obama administration people are picking up on this. i don't cacenn't care about thi. >> study you don't care -- >> the arguments --
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>> you said -- >> i did not quote the -- >> we'll throw it out. >> politifact. but my point is if you look at the numbers, though, that the real issue here is not whether we are increasing the spending because there's no verifiable numbers that indicate there's -- >> hold on. >> let me ask you one question -- >> no, you're not the host of the show. hold on one second. >> where's the spending? >> i think everybody here at this table can agree that under bush we spent too much money. that is why the tea party exists, because people got tired. they were tired of spending. they were tired of -- and they got a president who wanted to increase spending even more. they don't want it. as far as they can tell, we're going on 12 years of the same policy. we're tired of it. >> where's the spending? name me the -- >> health care reform. >> health care hasn't even been started yet. there's -- >> health care reform has added to future out outlays. >> where are you getting your information from? >> the biggest congressional -- would you let me snsh would you let me finish?
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>> clearly not. >> no. you never let anybody finish a sentence, keith. >> i'm sorry. i love you so much. i don't want to be disrespectful. but please, where are the numbers? health care reform hasn't been implemented. where else? >> health care reform when you look at the cbo's report on health care reform, the suspending by the federal government goes up higher than it would have been if we didn't have health care reform. >> when does it happen? >> over the next ten years. >> as of now have we -- >> and that is forecast -- >> have we spent any more money on health care? >> that is not the point. he has absolutely committed this -- let me finish. he has committed the federal government to spending far more money over the next 10 and 20 years than they otherwise would have. >> okay. >> one more point. our problem is entitlement spending. and he has no desire to fix that. >> you have three people against one. so that's already not fair. >> that's how it works. no, no, no. i was on bill maher on friday. you're going to take it. >> i'm used to this. my point is nobody has given me a single example of where the huge increase in spending has
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come over the past three years. >> i did. you ignored. >> okay. where is it? >> a -- whoever it is wrote this article for market watch took 80% of obama's $850 billion deficit bill and dumped it on george bush and said george bush spent that money. that is factually -- >> we have a $5 trillion increase in the debt. that didn't happen because of an $800 billion stimulus bill. by the way, a third of that stimulus was for tax cuts -- >> you're totally and absolutely ignoring that. you're ignoring the fact that he's charging obama's stimulus plan to george bush and that shortly before obama was inaugurated he asked george bush to release another $400 billion in tarp funds so he could spend that and that too was credited to george bush. you're not being honest with the amount of spending obama has engaged in. >> i'm not saying there hasn't been an increase in spending. my point is there's been an exaggeration in the increase in spending and the deficit is not caused by this, it's caused by
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the lack of revenue. >> one-year surge because of unusual circumstances in spending in 2009. >> absolutely. >> and then the president has decided for the rest of his administration, for the ten-year budget window to keep that spending at that elevated level. that's the problem. he got to the house. it was on fire. and now he's throwing more kerosene on the fire. >> fiscal year 2009 included both the bush administration and the obama administration. we had a fiscal crisis which hasn't yet completely absolved, even though the recession has gone down. >> will it be resolved in 2016? how about 2020? >> i just got back from mum miami ix spent a week there, and people are talking about jobs there. >> let me bring up your point. you talk about the lack of tax revenue growth because of a lack of gdp growth. >> exactly. >> the president should own that. the gdp hasn't grown as much because of his policies. so you don't want to argue about the spending. but we can argue about the tax revenue -- the lack of tax revenue is his fault. >> i don't say that that's the president's fault entirely, but
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that's a fair claim. it's much more fair than arguing the president's -- >> he's had four pieces of legislation, transformative legislation. you'd have to go back to fdr. and at this point he needs to own the economic consequences of that legislation. >> he's not responsible for a global economic crisis. -- >> he is responsible for health care reform, dodd frank -- >> you spend your time traveling across the world. you know what's going on in europe. >> yeah. they're spending too much. >> he's not responsible -- look what happened in britain. you've been there. >> he committed us to more health care spending just like in europe. >> they're in a second recession. if we had followed that same route, we might be in a recession -- >> and if they had reformed their entitlement spending a long time ago -- >> maybe their economies are doing better. they're already at the tocchet laugher curve and they increased taxes from there. as far as this quarter goes, listen, great britain had a huge surge in government spending in the first quarter and the economy went down. >> and keith, look at belgium, which did go on thatto an austerity program. they cut taxes and cut spending and they're roaring with their
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economy right now. >> all right. sorry. we got the wrap. >> i don't know about you but i'm having fun. >> keith, you are always a good sport. >> i don't know what to say, but you guys are great. >> i said the same thing to steve ratner last night. pete, thank you for being with us. neal is going to be with us for the rest of the hour. coming up europe's crisis grows. no one knows if greece will stay or go. could a europo zone failure bring down banks and call a lehman-like fallout? like a dog with a bone the president doubling down on renewable energy tax breaks. he calls it common sense. common sense would be doubling down on a huge job creator like keystone. we'll talk about that later. and don't forget the kudlow creed. free market capitalism is the best path to prosperity. "the kudlow report" is coming right up.
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the eurozone crisis still front and center. st. louis fed head james bullard out today saying, "greece could exit the eurozone without causing too much damage. but fears over a deep european recession and the risk of a greek exit have kept global fim markets under pressure." what does bullard see that a lot of investors don't?
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could a eurozone break-up bring down banks, calling a lehman-like fail -- fallout she tried to say. here is michael pento, president of pento portfolio strategies. and kevin caron is market strategist with stifel nicolaus. michael, will the me start with you. do you believe greece leaves the euro? if it does is it cataclysmic for the u.s. snarkt. >> i don't believe the greeks leave the euro. if they did it would bring the most severe penalty down upon the people of greece first and foremost. and secondly if it does evolve to a point where there's a departure of greece from the euro there's two ways. there's a disorderly way which the financial markets don't twoontd see and the banks don't want to see and then there's a more gradual orderly way which will take a longer period of time and really require a lot of negotiation and compromise, not only from athens but also frankfurt. and that's a longer process. and that is something that i any markets could tarlt much more
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easily. >> michael? >> i've got to tell you something. this reminds me a lot about theothe o housing crisis we had in 2007-2008. remember it was contained it wasn't going to do harm to any nations outside the united states. in fact it wasn't going to harm the puppets. >> but it did. >> now they're trying to tell me that a sovereign debt crisis isn't as deflationary as a banking crisis. complete lunacy. greece has to -- >> they're both becoming the same thing now. >> what do banks hold in their assets? they hold sovereign debt. sought countries are insolvent and the economies are insolvent. of course the banks are insolvent. that's massively deflationary. and yes, greece must leave the eurozone. absolutely. >> but i think this is somewhat different because what we saw back then here in the united states with the housing crisis was something that came on very sudden. expectations were not there, and there was nothing in place to prepare. this has been going on for three years. >> we've been watching this as a train wreck in slow motion. >> i remember summer of twoorks
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wasn 2007, wasn't that when the bear stearns highly leveraged -- that started -- it was a slow motion train wreck. >> but you get his point. we're asking could this be a lehman moment and the fact that we're probably asking that probably means that maybe it's not so much a lehman moment. it's going to be bad but -- >> the ibex in spain is down 40% year over year. they've had their lehman brothers moment. >> yes. >> michael, but think about this. this has really been something that's -- we're talking now about euro exhaustion. how long have we been talking about this? >> years. >> years, right? and as we go through this process, you have to imagine that all of these scenarios have been played out one way or another. and as you go through this, what we're talking about is getting to the june 17th election, right? it's in nobody's interest on june 18th to wake up and have athens announce that they're abandoning. they may begin to -- >> i want to give takeaways -- >> back and forth. this is not a one-way decision.
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>> based on your view of the world, what does somebody do right now? you're in the united states. >> the pento portfolio strategies is about 80% cash. we hold some gold -- >> 80%. >> 80% cash. we sold before may because we realized that deflation is not a very good time to invest in commodities. sold our commodities. we held a little bit of the miners because the miners have priced in the metal going down to about $900 an ounce. >> let's define deflation for the novice here on cnbc. everybody knows inflation. that's when prices go up. deflation is when prices go down. the last time we saw a horrendous bout of it in this country was the 1930s. >> how about the fall of 2008? >> all right. >> when oil went from 147 to 33. >> i'm talking about the ten-year period that we suffered in the 1930s. the full-on depression. which they're feeling in greece, by the way, for sure. >> and they're going to feel in portugal, too. can we talk a little bit about -- >> i want to get the takeaways on what an investor should do based on your view of the world. >> i think that the best thing an investor can do is focus very
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much on the long term. don't be swayed by the day-to-day market noise that we're going to hear a lot more of. when you look at your portfolio, if you're looking at equities, very solid balance sheets the way to go. fortress likes balance sheets. not a lot of debt. there's no reason to go there. consistent profitability is the way to go. we like to have some dividends coming off the portfolios. and by the way, michael, i don't completely disagree with you. we have in one of our portfolios about 20% in cash at this point in time. >> which is high for you normally. >> it's a bit of a buffer. but again, balance, consistency. great balance sheets. >> last word, real quick. >> 40% of the revenue from s&p 500 multinational companies comes from overseas. >> that's why he's telling you the solid balance sheets. >> and you have a strengthening dollar. >> which is one more reason why you'd want to focus on s&p. >> guys, thank you. michael pento, kevin sccaron, really appreciate it. tune in form 1:00 p.m. for a special edition of "power lunch," "euro zone in crisis."
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cnbc team crisis on how the european crisis is impacting our markets. next up on "the kudlow report," an update on a truly vile story we told you about earlier this week. a vial of late president reagan's blood up for auction has found a home. details when we come back. if you have copd like i do,
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the president was out today speaking on renewable energy. a bit later of course "the kudlow report" will debate the success and/or failure of his policy. as memorial day approaches, new yorkers know that fleet week is upon us. thousands of military men and women in the city. with the wars winding down, the fleet will be smaller and many vets will soon be looking for jobs. diana olick spent the day with some of them aboard the "uss wasp." >> reporter: about 300,000
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service members leave the military every year and that number will only increase as budget cuts force an even larger military drawdown. we spoke to service members right here aboard the "uss wasp" who are about to set out on their own. >> i think we've got excellent leadership skills and we've got a lot of experience. it will translate well. but it's a tough time. it's a tough economy for everyone. >> reporter: aboard the "wasp" sailors gain skills in everything from mechanics to medicine, i.t. to engineering. for those who want to stay in the military that should be an asset. but again, not in today's leaner times. >> the marine corps is downsizing a great deal. so i mean, a lot of people don't even have that choice. >> reporter: corporal ortiz is going back to school to become a nurse. over 8,000 veterans have taken advantage of the new g.i. bill since 2009 for higher education. and the military itself is working with the private sector to help generate jobs for already skilled workers. sailors we spoke to said the best plan is to have a plan well before leaving the military. they say it's important to gain as many skills as possible here before heading out to shore for
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welcome back to "the kudlow report." i'm michelle caruso-cabrera in tonight for larry kudlow as he takes some days off. radio talk show host neal boortz is our special guest tonight. hello, neal. in this half hour, as the economy tries to stay on track, could it be derailed by deflation? what should investors be doing? and we're at about the halfway point until the election, but the latest numbers show president obama grabbing a slight lead in some battleground states. overall, though, it's just about a dead heat. so what's it going to take for someone to vault into the lead, or will this be a race to the wire? first up, president obama traveled to an iowa wind energy facility earlier today to pressure congress to extend renewable energy tax breaks, an issue that has become a top priority for the white house. cnbc's eamon javers is back with us again with all the details. >> hi, michelle. it was newton, iowa and the plant the president visited today actually makes those giant
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blades for wind turbines, and he framed his call for congress to pass these tax credits for wind companies all about the jobs that those tax credits will create. take a listen. >> if congress doesn't act, topps like this one will take a hit. jobs will be lost. that's not a guess. that's a fact. we can't let it happen. you can't wait for eight months. you can't wait for a year to get this done. it's got to be done now. >> the white house knows that it's on tricky ground here in terms of renewable energy given the scandal over the failed energy company slind rah earlier last year. that got headlines and it's going to get more going into the campaign. but the white house clearly seems to like the idea here, michelle, of running against a do-nothing congress. the president today invoking again the idea that he's got an agenda for congress that can fit on a post-it note and asking them to do something, anything.
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they like the idea here of running against congress, michelle. >> thank you, eamon. eamon javers. so as president obama pressures congress to extend renewable energy tax breaks many are asking if the president's energy policies are a complete failure, basically a waste of taxpayer money. let's get reaction from our guests. here is dan weiss, senior director of climate study at the center for american progress and christopher horner of the competitive enterprise institute and author of power grab. mr. horner, let me start with you. what do you think of the president's decision to pick winners and losers in the energy sector, particularly when it comes to wind energy? >> well, he's picking temporary winners from losers. they all came with the same pitch, hat in hand saying unless you give me this wag of money we'll disappear. and as he admitted today, what the rest of the sentence was was of course even if you give me this bag money i'm going to burn through it. he was saying his stimulus companies need another bailout oregon they're going to disappear. these are temporary jobs. we're borrowing from china to
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create temporary jobs that require higher electricity prices to keep the bubble inflated. if we're going to create these independent industries why not make it pet rocks or something which require the debt in taxes but not higher energy prices. >> dan weiss? >> that sounds pretty good but unfortunately it's not true. the reality is is that we've created 3 million clean jobs, green energy jobs in this country, and that in fact there's bipartisan support for these tax breaks. and the reality is there hasn't been an energy source we've used in the last 100 years that didn't receive government support including coal, oil, natural gas, and nuclear power. in fact, we're still subsidizing oil with some tax breaks dating back to 1916. instead -- >> we're still subsidizing -- commercialized in 1880. >> instead of investing $4 billion a year in tax breaks for big oil, we ought to instead invest in clean new technologies that our competitors are building like wind and solar power -- >> what makes windmills new, dan? they're 120 years old.
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>> hold on, guys. >> windmills are 120 years old that produce electricity. what makes that new? >> dan, hold on one second, please. >> okay, guys, you can get together after the show. dan, i have a question for you. these clean energy jobs, some of the clean energy jobs that barack obama brags about, you take a school bus driver, you take him out of a gas-powered school bus, all of a sudden they're driving a hybrid, there's a clean energy job. another one is believe it or not people that work at goodwill. taking goodwill donations, washing them and putting them up for sale at a thrift store. a clean energy job. >> i don't know where you got that information from, but that's just silly and wrong. >> i'm sorry, it is neither silly -- >> 3 million clean energy jobs in the united states. brookings said it was about 2.5 million. where you got your stories i don't know but -- >> that just -- >> neal, can i answer this? >> yes, go ahead. >> that just proved too much. dan just showed they don't know,
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2.5 or 3 million because it comes from a computer model based on assumptions where if you ever read don quixote you've got a windmill job. it comes from a computer model. they're not identified. >> well, chris, you've got rhetoric but you don't have facts. and in fact 2.5 million. 3 million is an estimate there. that's better than what you've got which is nothing but rhetoric. >> dan, here's the issue. >> estimates aren't fact my friend. >> you say there's been 2.5 or 3 million jobs created. okay, whatever. the problem is you focus on the seen rather than the unseen. so the question is when the government focuses all that money on those 2.5 million to 3 million jobs if that money had not about directed to the private sector how do you know we wouldn't have gotten 4, 5, or 6 million jobs? >> well in fact, michelle -- >> that's the thing. >> did you ask me a question? the money invested has leveraged $6 investment in tax credit. that's a -- >> but that is so not a relevant -- that's not a
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relevant metric. >> $4 billion in clean not ji investments over the coming years. >> the private sector creates jobs, real jobs, what we call permanent jobs that don't depend on a continued inflation of the bubble at a fraction of the cost to what the state creates. and what you're saying is it requires private equity and the reason these private equity companies are now flocking to it is because the government, the politicians are trying to extend a wealth transfer, a handout. as soon as the wealth transfers expire then the jobs collapse -- >> 5 -- >> let him finish. >> the model has collapsed. let's look to europe like you said and learn their lessons. >> in fact, chris, you know well from the oil industry, which is a big supporter of the competitive enterprise institute, they claim without their tax breaks that they would lose jobs. so doesn't the same argument apply -- >> but they wouldn't disappear, would they? >> that is a very good point, dan. dan, if you got rid of subsidies for the oil industry, it would still be here. if you got subsidies -- >> then why don't we get rid of them? you just made my point,
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michelle. >> i would love that because then it would disarm you completely. i don't think we should subsidize them either. >> dan, would you agree to wipe out all subsidies? >> hold on a minute. hold on a minute, chris. dan, there's one truth here. you cannot name me a bona fide green energy enterprise out there that can operate on its own without government subsidies. why aren't we allowing the consumers to make this choice instead of politicians in washington making this choice of what energy schemes are going to survive and what are not? >> you know what? we already pick winners and losers. we decided that nuclear power would be a winner even though wall street doesn't want to invest in it. we decided that oil and gas will be a winner. that's why we give them $4 billion a year in tax breaks. we already pick winners and losers. in effect, what we need to do is support new emerging technologies just like we did with coal, just like we did with oil. in fact, we've got oil tax breaks that date back to 1916 that are still on the books.
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>> the same kind of tax breaks every other corporation gets. >> clean energy technologies that our competitors like china and germany are making. we want to be able to sell them our technologies, not buy it from them. >> all of them government subsidized. let the consumers figure out what is going to work here. they always make a better decision than government bureaucrats in washington, d.c. >> part of the problem is there's been market failure because the cost of coal-fired electricity does not account for all of its social impacts. when you get an asthma attack or when you die prematurely the person who uses that coal electricity doesn't pay for it, you do. >> chris, last word. chris? >> because it doesn't -- >> the social costs -- >> you made that point, dan, thank you. >> the social costs of the abundant reliable affordable energy. how about the social costs of 2,700 people, seniors and the poor dying eacher just in the united kingdom from fuel poverty? imagine extrapolate that out to the u.s. the social cost of causing
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electricity rates to skyrocket as is the administration's goal are counted one victim at a time and the body count is rising. >> that's a good point, which is why the president -- >> dan, chris. >> -- weatherized half a million homes in order to have people have lower energy bills. >> good discussion, guys. thanks for coming. coming up next, a late-day rally for the dow as greek exit talks cool. our experts tell us how to navigate the choppy waters. still ahead, mitt's momentum. obama and romney running neck and neck. what can romney do to pull away from the pack? "the kudlow report" is coming right back. in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max.
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♪ born on the bayou [ female announcer ] the perfect song for everywhere can be downloaded almost anywhere. ♪ i'm back, back in the new york groove ♪ [ male announcer ] the nation's largest 4g network. covering 2,000 more 4g cities and towns than verizon. rethink possible. but proven technologies allow natural gas producers to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today. and somebody asks me a question about the volt. what really blows them away is when i tell them i almost never go to the gas station, despite the fact that they see me driving to work every day. i fill the volt up once every --
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maybe once every couple of months. and that feels absolutely wonderful. i'm hardly using gas, but it's there when i need it. anybody that thinks that this car doesn't have solid performance, hasn't driven it. there's no other car like this on the road. ♪ markets in the red most of the day but stocks managed to stage a final-hour comeback again today. the dow ended up 34 points. just the fourth day of gains this month. on the economic front, today's durable goods orders disappointed as incoming data continues to paint a weak picture of manufacturing activity. so what can stir the markets? here now is stephanie link, cnbc contributor, director of research with thestreet. michael ozanian. i got that right, right? >> yes, you did. >> "forbes" magazine executive editor. co-host of the emmy award-winning show "sports money." and john thompson financial.
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stephanie, let me start with you. two days in a row that we have this comeback despite these fears of what can happen in europe. why? >> i think there's some short covering going on because people are thinking that maybe europe has a resolution of some sort. but i also think that it's really more china. i think people are expecting that maybe china's going to get more aggressive in terms of easing because their numbers continue to deteriorate pretty rapidly. >> so they're going to do more to bolster their economy, which would be really helpful to us. >> and the markets are down 5.8% in the last month -- just in this month afloerngs may. there's a lot of negative sentiment, a lot of oversold conditions and i think people are just kind of covering their shorts. >> didn't go down every day. mr. norman, you're the economist. >> right. is that good or bad? >> all this talk about greece going to leave. this is the week leadership in europe said okay, it's possible. could this be calamitous in what does that mean for a u.s. viewer who's worried about their job in this country, if greece leaves the euro? >> i don't think greece is going to leave the euro. the interesting thing is if you look at the polls of the greek
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people i think 80% favor staying with the euro. since the elections sort of the backdrop has gotten better. the economists said austerity's not working. austerity's been the problem. collapsing economic growth, causing soaring unemployment and actually making the deficits larger argercentage of gdp. so i think politically there's been a shift in the winds. it's maybe not the market picking up on that immediately but i think that's a positive. right here we have the same thing. modest growth. 1% to 2% growth. low inflation. the fed's not going to raise rates. low costs for corporations which factor into decent profits. >> so steady eddie is what you're talking about. >> exactly. and the market can recover from this. >> mr. ozanian. i'm calling him mister but i called him mike. >> i'm not as upbeat on the
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economy as my friend michael is. their easing and problems with the euros helped strengthen the dollar. i think that's one of the reasons we've seen commodity prices come down. >> is that deflation? >> no, you know that, m1 is up year over year -- >> that would be the money supply. money supply is considered to be inflationary or not depending on if it's increased. >> stephanie's point about it coming down this month. that's an asset bubble as opposed to deflation. i don't think you can have deflation when you have such rapid growth in the money supply. >> you don't have wage growth. it's hard to have inflation when people aren't earning enough to push prices up. the dollar's strength, it's kind of a drag on the stock market because it translates into lower earnings for a lot of companies. i don't know if that's really helping the market at all. >> some ideas for people? >> i still think the u.s. is the best neighborhood. i know it's the common theme right now but i think within the
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u.s. housing remains strong. housing got pretty encouraging data points this week. i like something like a weyerhaeuser which is a reit, so you get a little dividend protection. i also think consumer is still a place to be. especially with lower commodity costs. they have a little bit more money to spend. >> and gasoline prices coming in, right? >> that's exactly right. so it helps consumer as well as the industrial companies. i like those kinds of names. and more domestic-oriented industrials. they're very cheap, but i kind of want to stay here. so companies like an eaton who just bought cooper which i think is going to be a home run. >> i think if you want to look at consumer staples their profit margins right now because of rising commodity prices were the lowest in three years. >> they're getting squeezed. >> companies like campbell's suit are doing well. but i disagree with you. i don't think employment wages have anything to do with inflation. inflation is always a monetary phenomenon. go back to the early '80s. >> no, it's not. >> you had stagflation in the -- >> this argument is how old?
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80 years old? >> no, it's about five minutes old, and i think i won. >> well, ideas. any specific -- >> nobody mentioned technology. why? you had some serious hits. look at intel. it took a huge hit. it's a fantastic company. i think you have to be buying on a pullback like this. i'm still very much in favor of technology. >> anybody buying facebook? >> coming down a lot, getting pretty cheap probably because of the european exposure. >> i think facebook is a decent by. i think all the headline news on facebook is terrible, and i think there's some good growth there. i think $40 is a good price for facebook. >> and it's below that. >> but is $30 a good buy? >> all the news is great. >> do you have any thoughts on facebook? are you on facebook? >> am i on it? >> yeah. >> i used to be. i think i spend about one minute -- >> a day? would you buy it? would you short it? >> no, i wouldn't short it. >> just let the dust settle. i think at 30, 31 it's an
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interesting idea but there's too much noise and too many shares. you've got to let the dust settle. >> people look at apple. we're wrapping? bottom line, apple, is it cheap or not? >> yes. >> cheap? >> yes. >> i've been long on apple for two years. >> guys, lady, gentlemen, thank you so much. stephanie ling, michael ozanian and michael norman. coming up next, mitt momentum starting to swell. romney and the president running neck and neck. will a slow summer for stocks and a stalled economy catapult romney over the finish line? it's gonna be a casual thing.
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welcome to the world leader in derivatives. welcome to superderivatives. president obama has apparently become mr. 48%. take a look at these new nbc/marist battleground state polls out today. in florida obama leads romney 48-44, but that's down from a previous eight-point lead. in ohio obama's leading 48-42. but he held a 12-point lead in march. in virginia obama's ahead 48-44. that's down from a once whopping 17-point lead. with just 167 days until election day, what does this all mean? here to break it all down is democratic strategist, former clinton adviser richard sack
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reidese and robert costa of the national review. what do you think of these numbers? what are they telling you? >> well, i think they're pretty good for the president overall. i think the good news for the republicans is that mr. romney is very competitive. i mean, i think the numbers show that the president is ahead. incumbents are very difficult to beat. but romney's going to be very competitive. >> robert? >> we're seeing the president below 50% in poll after poll, and that tells me that as much as president obama may still have a little bit of a lead in these battleground states mitt romney's within closing distance. and at this point in the race, we're only in late may, for romney to be so close in these key states, high 450i, florida, virginia, he has a lot of time to close a very narrow gap. >> i wouldn't say it bodes very well for him. i think the president is still the favorite. the president has got the better case. it's very hard to beat an
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incumbe incumbent, as i said. and look, he's winning in all these big battleground states. look at the polling today. it's clear. if he wins those three states by 4% in november, he's got it locked up. >> okay, guys. let's -- >> you -- >> hold on one second. let neal get in here. >> richard, you say he's leading in all these states. i just heard the results of that poll. but earlier this week i saw another poll in florida that showed romney with a 6% lead in florida. what percentage of these voters -- we have the diehard obama, diehard republican. what percentage is actually up for grabs right now? >> well, that's a good question. in these elections very small percentages of people up for grabs. and i think there will be some back and forth. it's still far -- it's still pretty far out. i saw that 234rflorida poll. the most important number now is the president's overall national approval rating and he's at about 48%. i mean, and that is -- it's very close, but that is enough to win, and it's a good number for an incumbent president. >> president's approval rating
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is great, but let's look at mitt romney as profl regulate. it's really jumped since the primary. romney got hammered in the republican primary. he's used the last month or two to really repair his approval rating. we can slice and dice every single poll every week as political junkies talking about how the president's 48, he's 46. he's all in the high 40s, dancing around the high 40s. but what it really comes down to is he's below 50%. and i think we can talk about the benefits of incoumbency buti think that's only giving him the pourpt lead in the battleground states. >> does the base come out for obama in does the base come out for romney? >> i think the president's base will be very strong. and i think he's running acampaign to remind democrats what he stands for, remind -- >> but the question isn't about the base. it's about independents. >> the president wants to move the country forward. the problem that romney has is that he has yet 20 articulate any vision about what a romney president would mean -- >> what about every single ad this week? that's wrong. every single ad this week is
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focused on day one of the presidency. he's had two major videos. tax cuts, regulation -- >> it's a pretty grim day one. >> grim? it's a pro-growth. >> hang on, guys, let neal get in here. >> richard, you just used to phrases, that the president wants to move the country forward. well, isn't that swell? and that romney has yet to really formulate a vision for the country. i'm a little bit weary of the president wants to move the country forward. would you mind sharing with us just what he wants to move the country forward to? >> i think the president's main theme is going to be to remind voters that he inherited a very difficult financial situation and -- >> robert, listen to me. stop being an interrupter. i can't take it anymore. you've interrupted every answer. and i'm on your side, robert. okay? so let richard finish his point. >> i think the president will make the case he inherited a particularly different financial
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situation and the economy -- >> and made it worse? >> no, listen. to the extent that the economy continues to improve, especially in these battleground states, which it is, those states that were highlighted at the top of the segment all have unemployment rates that are lower than the national average. the president is going to do very well, especially as the economy continues to improve. >> but this man is -- >> and mitt romney has not made a case for himself. >> he is running against capitalism. >> that is not true. >> of course it's true. >> president is a 34moderate an the president is for capitalism. >> robert, is he a moderate? >> not at all. we've seen him demonize business, bain capital. running the same campaign that -- >> i wish you would tell my democratic friends on wall street that the president is running against them because -- >> you talk to big democratic donors you see what you hear? they're running away from the aren't. they're disappointed in the president's anti-business message. you see obama's super pac is struggling to get donations.
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i donate see wall street behind the president the same way they were four years ago. >> and democrat donations to obama are largely the pauyment f protection money more than an approval of his presidency. >> listen, what do you say to that? that's come out of nowhere. but -- >> not really. come on. you see plenty of corporations that donate in equal amounts to both sides of the aisle. so that way they're protected either way. >> the protection money is a little out there. >> both sides are going to have enough money to run the campaigns they want to run. this is really not about who's funding which campaign. it's about a vision for the future. and the president wants to take the country forward, continue the economic progress we've made, and mr. romney wants to take the country back to where we were in the bush days that got us into this problem. >> real quick liu -- >> that is very clearly -- >> robert. >> you say the president wants to take the country forward but all you're talking about is blaming what happened in the past. i hear president obama talking about the past -- >> it's clear --
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>> i told robert he could have the last word. many thanks to richard socarides and robert costa and our special guest tonight syndicated talk show host neal boortz. >> it's been fun. >> we can hear you on about -- >> 230 radio stations. and looking at me it's clear why i'm on radio. >> thank you for joining us. i'm michelle caruso cabrera. that's it for tonight's show. thanks for watching. you have a very good night.
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for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years. wow. this is new. yep. i'm sending the dancing chicken to every store in the franchise to get the word out. that could work. or you could use every door direct mail from the postal service. it'll help you and all your franchisees find the customers that matter most: the ones in the neighborhood.
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you print it or find a local partner. great. keep it moving honey. honey? that's my wife. wow. there you go. there you go. [ male announcer ] go online to reach every home, every address, every time with every door direct mail. (female announcer) most life insurance companies look at you and just see a policy. at aviva, we do things differently. we're bringing humanity back to life insurance.


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