Media Appearance: Kudlow & Company (1/27/06)



Tonight’s appearance will be Kudlow & Company, and I am scheduled to be on from 5:00 to 6:00 pm. Also appearing: Supply Side Art Laffer, Chief Economist for Mesirow Financial Diane Swonk, Raymond Learsy, and Jed Babbin.

There were some rumors wirling around sometime about Diane being appointed to the Federal reserve . . .


UPDATE: January 28, 2006  6:19am

Lots of email and comments about the show — and people continue to ask "why do it." Aside from the obvious, there’s plenty of good explanations:

1) I may disagree with his politics (I’m a pragmatic independent) but he is an extremely bright and engaging guy; Off camera, Larry is utterly charming and guileless; The on camera bluster is just "show bidness;"

2) I try to keep my appearances on any show I’m on reality based. So when 2 other panelists claim "There is no inflation" I do not try to convince them — instead, I want the viewers to think: "No inflation? These dolts are clueless — let me listen to what that fat bastard is saying."

3) Of all the people who are not in the conservative camp (me), I can get Larry to actually listen to alternative arguments — he knows I was Bullish on Oil since 12/03, and on Gold for even longer — so when I say there is a real chance of market dislocation, it get his attention.  And he is well aware that almost nobody else on Wall Street is saying this. He’s been around long enough to know when everyone is on one side of the boat . . . 

4) He’s definitely come around (somewhat) on the more egregious examples of the Administration’s incompetence. Especially with spending and deficits, but on New Orleans and Iraq also.

5) Speaking of Mess O’Potamia:   The subtext of Jed Babbin’s comments is that if we weren’t so tied down in Iraq, we would have the free hand needed to address confront Iran — a soon to be nuclear power. So the f%&@ up in Iraq  becomes a National Security issue . . 

Category: Media

Sell Off on Volume

Category: Technical Analysis

Technicals versus Economics

I got involved in a debate earlier at RealMoney – Columnist
, and wanted to pass it along here.

Pre-GDP (1/27/2006 7:31 AM EST), I wrote :

1) Technicals remain strong, and continue to be the driving force short
term. But economics look weak, and continue to be source of concern
long term.

2) Last Friday’s market actions was the market’s early warning sign.
Very heavy volume to the downside on a big selloff is never a good
thing. I interpret that day as a foundational crack of the cyclical
Bull market. Again, we are not looking for a 1987 situation, but rather
a Q1 topping out, and an ugly rest of the year.

3) Gold also looks toppy — it’s well overdue for a 10% correction. We
are short here, but would re-establish a long position in the 480-510

4) A 500 point day in Japan is too exuberant — it’s a sign of very
emotional trading. Historically, these sort of buying frenzies tend to
end badly. As such, we are lowering our multiyear price target on the
Nikkei down from 21,000 to 18,000. I would not be surprised to see this
lowered again before year’s end. And the Korean Topix, which I have
liked for some time, is geting crazed. Still plenty of upside, but
getting frothy…

Norm Conley raised a legitimate question about this:

"It seems as if you are taking two outlier one-day moves in markets (one "up"
move, and one "down" move), and extrapolating that although they are
contradirectional, they both carry ominous portents."

My response was:

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