Back in the studio for the regular appearance with Kudlow tonite.
The topics will be Housing, The Markets, Sentiment, Earnings, and of course, the Fed.
I’m scheduled to be on from 5:00 to 5:30 pm — tonite will be the grudge match on jobs between Ed Yardeni and myself.
Should be rather interesting.
~~
UPDATE August 3 2006 7:12 pm
It was 2 on 1 tonite, but I think I acquited myself okay.
I think what Doc Yardeni has been focusing on is the Business side of things, which has been very strong. On the other hand, the consumer side is weak.
His data on wages salary and benefits is skewed by the top few percent. If you look at the median, its different than the average.
Lastly, let’s look at the "wisdom of crowds." Why is there so much negative sentiment amongst so much of the country? People are clearly concerned about sonmething — I guess the entire country is delusional as to their own financial situation . . .
Barry, ss, A/P, BDG, et al. I’m attaching a link to an IMF paper called “When Bubbles Burst” and I think it is one of the most interesting pieces of literature I’ve come across of late. Here’s the money shot:
“An important theme running through the foregoing analysis is that housing price busts were associated with more severe macroeconomic developments than equity price busts. Coupled with the fact that housing price booms were more likely (than equity price booms) to be followed by busts, the implication is that housing price booms present significant risks”.
Also:
– Housing price busts have larger wealth effects on consumption than do equity price busts.
– Housing price busts were associated with stronger and faster adverse effects on the banking system than equity price busts
– Price spillovers across asset classes matter, as evidenced by the fact that housing price busts were more likely associated with generalized asset price bear markets.
– Housing price busts were associated with tighter monetary policy than equity busts.
Look forward to others thoughts
http://www.imf.org/external/pubs/ft/weo/2003/01/pdf/chapter2.pdf
Well that figures – that Kudlow would be the arena. BR may well be boxed in by the Yardeni-Kudlow tag team. Maybe Kudlow will make the mistake of having Joe Lavorgnia on as well… that will even things up!
Thanks for the info Joe! SS, BDG, I’d enjoy hearing your thoughts on this as well.
Joe, I recall looking at that paper a month or so ago. Your summary is about all the “takeaway” you need from it.
Here’s another oldie, but goodie from Hussman on why the FED is irrelevant. I think you’ll enjoy this one:
http://hussman.net/html/fedirrel.htm
Hey Barry,
Kick Krudlow in the nuts for me. Thanks in advance!
Why do you go on this idiotic “show” and give Kudlow any credibility? His diabolical rantings make me think he never kicked that cocaine habit back in the 80s.
Anyone know of a way to see this show online for those of us without cable TV?
Scott, forget it.
To get the full effect of the show without watching, go get yourself a flag, wrap yourself in it, and light your money on fire in an ashtray on the living room floor while chanting, “Buy on the cannons and sell on the trumpets” over and over again until your head spins backwards.
Even Neilsen won’t know the difference.
Kudlow gets no love here.
Is he that bad?
Seems to be smarter than Cramer. Plus – he wrote back in December that an inverted yield curve will lead us to a recession.
Not a total hack.
As usual, Barry gave a poised and articulate presentation of his viewpoint. That is especially difficult with an opinionated moderator who basically disagrees with you!
Yardeni was also effective and had some evidence for his viewpoint. The charts on the various unemployment measures perhaps deserve some comment.
When do you guys get a cheering studio audience? Is it just me or does CNBC get more pathetic each time you tune them in?
CNBC pathetic? Never. The fact is, to this dumbed down populace, it works. Stupidity is a positive choice. When the Recession begins next year and all those RE people get layed off after the fiscal resets come in, they can cheer and so how “creative” relocation is healthy for the economy since the rest of it is SO strong.
Oh, by the way, Nabisco Fig Newton’s are now only going to be made in Mexico!!!!!! Yeah!!!!! Give more Uncle Sam tax breaks to Corps so they can leave the country!!!
Sorry BR, but I didn’t watch anything you were on today. I could have managed, but am not too much into the cult of personality thing that television strives for (I have not even bid for Tori Spelling’s panties on ebay! as tempting as that may be to many) and am more interested in what people have to say in print (even if it is only internet print).
At any rate, Richard Russell yesterday declared that M2 has increased by 10% over the past 10 weeks (not sure how he figures) and today said that The Cooler is just doing the same thing that Greenspanic did by opening up the liquidity gates even while raising interest rates. I’d like to know what you think about that as well as where you think things will land next week considering that the BoE surprised most by raising rates for the first time in a long while?
I am going to guess that between the offshore liquidity operations keeping the smiley face on the market lately that Succo has written about twice now and the BoE surprise, we get another 25 bps raise next week. But I’ll hedge that a bit by putting a fairly tight stop on my USD/JPY short trade on oanda.com. This is why you want to be in the currency market- it punishes stupidity severely.
Barry: Got a chance to catch you on Kudlow tonight. Key take away fo rme was the Medium is the Message.
Kudlow’s medium is not really intended for serious discourse and discussions of the kinds that you present here at the Big Picture.
Good ideas, good conversation, good data, good trend graphics take time and Kudlow’s machine gun style and flashing hard to read graphics just doesn’t allow for more than getting in a few words edgewise – which you did amazingly well considering the circumstances.
Yardeni also had some good things to say and his ideas need more time and space. Hope you will continue your conversations with Dr Yardeni on the blog
Barry, maybe it is the fact that you are a nice guy, but you never call people out on these economic statistics when you are on Kudlow. When someone claims CPI is only 2.4% and that is a good thing or unemployment is at a remarkable 4.6%, why not call them out on those phony, manipulated numbers. Why not say CPI and unemployment are closer to 7% if accounted for as they were in the 70’s. Or that nobody lives on core inflation, we live on real top line inflation.
I almost always agree w/ the views you present on this blog, but when you go on Kudlow you don’t unleash…UNLEASH BARRY.
Kudlow keeps talking about how commodities have been killed and he loves killing gold. But the facts are commodities are all up big year to date. They have all corrected from a ridiculous parabolic rise and are now coming right back up. Gold down 100 is all we hear…what a distortion of the truth!!
Yeah. It’s funny how Larry pumps the slightest uptick in the homebuilders but you can see him grinding his teeth when gold or oil is up. When they’re down then it’s big news of course.
He seems, finally, to get the problem with tech. He just hates commodities because they equal inflation?
(for Glenn, in case he doesn’t go back to the scene of his ‘crime’:
Steve Forbes
08.14.06
Dunce Cap
Fed Chairman Ben Bernanke’s Congressional testimony a few weeks ago was a disappointment. Investors and executives better expect more turbulence and higher interest rates.
The man is still underestimating inflation — despite the sky-high levels of prices for gold and other commodities. More disturbingly, the Fed boss hinted that inflationary pressures would be easing because of a slowing economy. Bernanke and the Federal Reserve bureaucracy still seem to cling to the notion that growth causes inflation. It doesn’t. Excess money creation does, as Milton Friedman conclusively demonstrated decades ago. The destructive idea that there’s a tradeoff between inflation and economic growth has unnecessarily retarded our expansion and capital markets in the past. Experience has shown this idea to be nonsense. Both the 1980s and 1990s saw vigorous growth and declining inflation.
Bad ideas are sometimes harder to kill than obsolete government agencies.
Ben Bernanke’s education in central banking, alas, is going to be a long one. So far this student is proving to be a slow learner.
http://supplysideforum.blogspot.com/
“dunce cap” is right!
I have seen Kudlow on CNBC for many years dating back to a Saturday morning panel show with Bill Griffeth and Jim Rogers. I think that is where Neil Cavuto got the idea for the Fox Saturday morning shows. Anyway, Kudlow liked to mention that gold was a good indicator of inflation. Over the years he would use gold to explain there wasn’t any inflation. Then when gold started moving up a few years ago he had excuses that it had nothing to do with inflation. Recently when gold went down a few hundred dollars he explained that it was because the fed was controlling inflation. Kudlow seems to like indicators when they prove his point and ignore them when they don’t.
Gold doesn’t look dead to me. The weekly chart looks like a test of the May high is likely.
On the other hand, the dollar index is rolling over on the weekly and seems headed for a test of the May low.
Yep, cult personality driven. Bury anything lower key and more thoughtful. Invent character names for your players. Send them to wrestling school to get the hang of it. Bob P is a most reluctant player(he’s called The Stallion); Kudlow would swap spit with the mouth that affirms his codependcy needs; Cramer is perfection. And, yes, it’s ashame that Ed and Barry couldn’t take over the room and do their own show. When do these guys have time to do research, invest and think, in between blogging, cabling, and haivng a life?
I’ve been wondering who would be buying 10 and 30 year bonds right now, and the only conclusion I can come up with is that it must be the Fed.
Would you be putting your precious earned money into 10 and 30 year bonds at this time when you can get equivalent rates at the shorter end of the curve with much less time risk?
But if you could print money like Helicopter Ben, and it wasn’t really your money and didn’t cost you anything, wouldn’t you run off a few billion more in paper to buy the 10 and 30 year bond to give people the false impression that “smart money” was buying because inflation must be under control?
The irony is that shoving all that money through the pipeline is even more inflationary.
Moskow gives a speech in which he says the “ongoing debate” over the appropriate CPI level is healthy (What effing debate??) and now we are starting to hear chatter that 2.4% core rates “aren’t all that bad”. Hmmm. Sounds to me like they may be wanting to change the rules of the game or give themselves cover in the future for what they are about to do.
All my friends have very negative sentiment even though they have evry good lives-they always think their friends and neighbors are doing better than them.
I watched to see the rumble in the jungle. It wasn’t much of a rumble. I was really hoping you’d be on the set together so that you could body slam him.
One thing that Ed said which is totally inaccurate. He said wages, salaries and benefits have been rising at a good clip. That is incorrect and a bastardization of the data. The BENEFITS portion has been rising. The wages and salary component has been pathetic.
F*ck benefits. Are benefits going to pay my gas bill? What may be your benefit may not be mine. Benefits have been rising because the cost of benefits have been rising. Other than that, his rear view mirror analysis was actually quite accurate. Then he hopped in is car, and drove home backwards.
Why is consumer sentiment going down? Because us consumers are paying 3.++ per gallon with the same wages we had when gas was 1.++. None of my children can afford to buy a house. Of course this is all my fault as I didn’t get a Harvard MBA and go to work as a corporate CEO.
Of course this is all my fault as I didn’t get a Harvard MBA and go to work as a corporate CEO.
That is why CEOs need such outrageous compensation. They need to provide for all their future decendants.