Friday, September 28, 2007

Friday Night Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Melissa Lee will start us off with a report from the NYSE.

THE MARKETS...Our market panel will discuss and debate all the latest stock market and economic news and developments. They'll stick around throughout the show.

On board:

*Michael Darda, chief economist at MKM Partners
*Arthur Laffer, chairman of Laffer Associates
*Dan Yergin, chairman of Cambridge Energy Research Associates
*Stefan Abrams, Bryden-Abrams Investment Management managing partner
*Michael Panzner, Wall Street trader & "Financial Armageddon" author

BONDS & CREDIT UPDATE...Jon Smith, Chief Investment Officer at Haverford Trust Company will join in with his perspective.

FED & THE ECONOMY...Bob McTeer, former President of the Federal Reserve Bank of Dallas will join Alice Rivlin, former Federal Reserve Vice Chair to discuss what may lie ahead.

GLOBAL WARMING DEBATE...The Sierra Club's David Hamilton will duke it out with Messrs. Laffer & Yergin.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Vive la France!

The Christian Science Monitor posed a rather interesting question today: Who's a better friend to America – Britain or France?

Here are a few notable highlights from the article.


"…Under the turbocharged presidency of Nicolas Sarkozy, France isn't that old France anymore, while England's new Prime Minister Gordon Brown seems to be trying to assume the role of former French president Jacques Chirac.

…[Sarkozy’s] domestic policies make Socialist and union leaders' teeth itch: Cut a third of the civil service, pay for performance, encourage overtime, undermine the 35-hour workweek by any means necessary, rationalize the pension plans of half a million public workers, put work at the center of French life, and make heroes of those who, as he puts it, "get up early."

…In foreign policy, Sarkozy has gone American most notably in his policy toward Iran. He famously laid out the choice of "an Iranian bomb or the bombing of Iran." Iran's possession of nuclear weapons would be an "unacceptable risk to stability in the region and in the world," he said this week in a speech at the UN General Assembly.

"I want to tell the American people that the French people are their friends," he told The New York Times recently. "We are not simply allies. I am proud of being a friend of the Americans."

Free Market Capitalism Moves to 7pm

In case you missed it, we announced on last night's show that Kudlow & Company is moving up in the world. Beginning October 10th, we're moving from 5pm ET into the 7pm slot at CNBC.

Thursday, September 27, 2007

The Grey Lady's Fall

Great column written by my good buddy Jerry Bowyer.

Take a look at the attached stock price chart and you get some idea what it must feel like to be one of the owners of the New York Times. Over the past couple of years, the poor souls who were trusting enough to buy into the New York Times Company have been repeatedly beaten with a stick. Stock in the Times Company lags the Washington Post, the Dow Jones Industrial Average and, worst of all, Rupert Murdoch’s Newscorp by a mile. No doubt you can find a worse investment, sub-prime mortgage companies perhaps, but it would hard to do so.



It’s not just a newspaper thing. The Post is a newspaper too. Yes newspapers are having a rough time, but the time is rougher for some than for others. Overall newspaper circulation is down, but The New York Times and the Los Angeles Times have taken much heavier hits than the industry as a whole. Some papers, such as the Wall Street Journal, have basically held even, and the New York Post (heavens, Murdoch again!) has actually grown...

So, if the problem isn’t the global environment, the local environment, the labor environment, technology, the subscription model or regional conditions, perhaps it’s the newspaper. Could the problem be that the New York Times has a liberal bias? Perhaps....

Click here to continue reading Jerry's column.

Thursday Night Lineup

On CNBC's Kudlow & Company this evening:

Melissa Lee will get the show started with a report from the NYSE.

THE MARKETS...Our market all-stars will discuss and debate all the latest news and developments affecting investors.

On board:

*Joe Battipaglia, market strategist at Stifel Nicolaus
*John Rutledge, chairman of Rutledge Capital
*Barry Ritholtz, president of Ritholtz Research & Analytics
*Jason Trennert, Chief Investment Strategist at Strategas Research Partners

ECONOMIC SHOWDOWN...On to debate are David Malpass, Bear Stearns chief economist and Brian Wesbury, chief economist with First Trust Advisors.

TAXES: YOUR MONEY, YOUR VOTE...CNBC'chief Washington correspondent John Harwood will deliver a report on all the latest from Washington.

On to debate will be Jared Bernstein from the Economic Policy Institute and Dan Clifton of Strategas Research Partners.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

HillaryCare

Only two groups of Americans need to worry about Hillary Clinton’s new health plan: people who are healthy, and people who are sick. The healthy would pay higher insurance premiums, because Clinton would prohibit insurers from giving them a discount. The sick would suffer a few years after Clinton’s proposal became law. Her mix of subsidies, tax hikes, and regulations does nothing to control costs—so, before too long, the government would end up imposing price controls and rationing care. (Indeed, the fine print of her plan already includes some rationing.) The public wants healthcare reform, but it does not want a government takeover of health care. Republicans ought to explain to the public that, despite Clinton’s assurances to the contrary, a government takeover is exactly what she has proposed.

From National Review "The Week..." October 8, 2007

Wednesday, September 26, 2007

A GOP Recipe for Electoral Disaster

In an exhaustively researched survey of 145 precincts and 175,000 votes, Richard Nadler of America’s Majority Foundation concludes that when Republicans talk about enforcement-only, deportation, and criminalization of illegal immigrants they get slammed politically.

According to Mr. Nadler, “Policies that induce mass fear in illegal aliens induce mass anger in legal aliens because of ties of family culture and a shared media communication.”

Because of the predominant Republican Party attitude of enforcement-only, the study indicates that Democrats will capture New Mexico, Nevada, Colorado, Florida and Iowa in the upcoming presidential contest.

Mr. Nadler goes on to say that Republicans who support comprehensive immigration reform run almost even with Democrats.

Any discussion of mass deportation or criminalization is a disaster.

This is tough stuff. GOP: Be warned.

Wednesday Night Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Melissa Lee will start us off with a report from the NYSE.

THE MARKETS...Our panel will discuss what's ahead for the markets, economy, and Fed.

On board:

*Noah Blackstein, portfolio manager at Dynamic Mutual Funds
*Wayne Angell, former Federal Reserve Governor
*Michael Metz, chief investment strategist at Oppenheimer & Co.
*Don Luskin, chief investment officer at Trend Macro

DEBATE: THE ECONOMY & FED...Deutsche Bank chief U.S. economist Joe LaVorgna will square off with Bob Stein, senior economist at First Trust Advisors.

Our market panel will weigh in following the economic debate.

A LOOK AT TRADE...US Trade Representative Susan Schwab will join us in a one-on-one interview from the White House.

YOUR MONEY, YOUR VOTE...James Galbraith, economics professor at University of Texas/Austin-LBJ School of Public Affairs will debate Steve Moore from The Wall Street Journal editorial board.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Picking Winners & Losers

(UPDATE: Click here to watch the video of yesterday's energy conference playing at NRO's "Planet Gore." Many thanks to NRO's Kathryn Lopez for putting it up....)

Powerline ran a nice little recap of the National Review Institute's energy and national security forum I moderated yesterday down in Washington.

My three key questions:

(1) Why not let the market decide the winners and losers rather than the government?

(2) How sure are we that man's actions are responsible for climate change?

(3) And even if we're quite sure that we're behind climate change, what reason is there to believe that accelerating the movement away from traditional energy sources will have any meaningful impact in stemming global warming?

Tuesday, September 25, 2007

Tuesday Night's Washington Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Scott Wapner will deliver a quick market report from the NYSE.

HOUSING & THE ECONOMY...On to discuss today's existing homes sales number and what lies ahead for the markets are Gary Shilling, president of A. Gary Shilling & Co. and Michelle Girard, senior economist with RBS Greenwich Capital.

Our market panel will offer their market perspective following the economic debate.

On board:

*Fritz Meyer, senior investment officer with A I M Advisors
*Jerry Bowyer, NRO Financial contributor and author of The Bush Boom.
*Herb Greenberg, senior columnist at MarketWatch/CNBC contributor.

WASHINGTON MONEY POLITICS..On to offer their take on the budget, spending, and social security are Senator Judd Gregg (R-NH), Senate Budget Committee Ranking Member and Senator Ron Wyden (D-OR), also a member of the Senate Budget Committee.

**Bob Hormats, Goldman Sachs International vice chairman will join the market panel following our discussion with the senators.

HOW THE MEDIA PORTRAYS BIG BUSINESS...Brent Bozell, president of the Media Research Center will be joined by our market panel to discuss.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Monday, September 24, 2007

Monday Night's Washington Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Scott Wapner will deliver a quick market report from the NYSE.

MARKETS...Our market panel will offer their insight on all the latest news and developments affecting investors.

*Mike Holland, chairman of Holland & Company
*James Pethokoukis, senior writer at U.S. News & World Report
*John Brown, MoneyNews.com editor
*Steve Liesman, CNBC senior economics reporter

OIL, DOLLAR & THE ECONOMY...Our panel of experts will weigh in with their perspective on what lies ahead.

On board:

*Mort Zuckerman, chairman & editor-in-chief of U.S. News & World Report
*Dan Yergin, chairman of Cambridge Energy Research Associates & CNBC global energy analyst
*John Brown, MoneyNews.com editor

AHMADINEJAD, IRAN & MORE...We'll have a one-on-one discussion with Senator Joe Lieberman (I-CT).

MONEY POLITICS...We'll discuss the economy, Fed, tax hike threats, and more.

***House Financial Services Committee Chairman Barney Frank (D-MA) will join us once again with an update and his perspective.

***The Dynamic Duo of Robert Reich, former Clinton Labor Secretary and The Wall Street Journal's Steve Moore will duke it out.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Friday, September 21, 2007

Friday Night Lineup

On CNBC's Kudlow & Company this evening:

FED REPORT... Former Federal Reserve Governors Wayne Angell and Lyle Gramley will offer their insight and expertise.

**White House counselor Ed Gillespie will join us in a one-on-one interview to discuss taxes and the economy.

WASHINGTON TO WALL STREET DEBATE...The Wall Street Journal's Steve Moore will square off with Ross Eisenbrey from the Economic Policy Institute.

INFLATION DEBATE...John Tamny, senior fellow at the Manhattan Institute, and editor of RealClearMarkets will battle it out with Brian Wesbury, chief economist for First Trust Advisors.

THE STOCK MARKET...Our market panel will offer their perspective on what lies ahead for investors.

On board:

*Stefan Abrams, Bryden-Abrams Investment Management managing partner
*Craig Columbus, Chief Investment Strategist, Advanced Equities Asset Management
*Michael Panzner, Wall Street trader & "Financial Armageddon" author

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Bush the Supply-Sider

At his news conference yesterday, President Bush proclaimed that he’s a supply-sider. He added that he remains determined to keep tax rates low in the face of a large-scale tax hike threat from the Democratic Congress.

In a White House meeting this past Wednesday with a handful of other conservative journalists, I heard Mr. Bush make the same supply-side claim. He was responding to a question I had asked regarding tax hike vetoes. He said, “Supply-side economics has worked.”

At his news conference the President did not completely describe the incentive model that is central to supply side thinking. But he did point out that economic growth and budget revenues have responded favorably to lower marginal tax rates.

He's absolutely right. Total revenues have far surpassed the 2000 peak at lower marginal tax rates. In fact, since the mid-2003 tax cuts, revenues have grown by 45 percent. Revenue growth has averaged almost 10 percent per year since 2003 and has far surpassed the previous 2000 peak.


This sort of analysis drives liberal economists crazy. Too bad. The budget numbers are the budget numbers.

Meanwhile, the deficit has fallen substantially from about 4.5 percent of GDP to 1.5 percent of GDP under Mr. Bush’s tax cutting policies. The 2001 tax cuts were not supply-side, but the 2003 tax cuts that lowered the tax rate on incomes, capital gains, and dividends most certainly were.

Remember, the basic tenet of supply-side economics is keeping more of each extra dollar earned or invested. This makes it more profitable to work, save, invest or take risks. If it pays more, after tax, then people will respond to the incentives. As Nobel Prize winning economist Ed Prescott has put it, economic behavior responds to changing tax rates.

But give President Bush a lot of credit, even though his analysis may not be totally comprehensive.

Thursday, September 20, 2007

Confidence Returns

The rally in gold in recent days is telling the Fed that the 50 basis point shock and awe rate cut is sufficient. Gold’s rally is putting a floor underneath the fed funds rate. I’m okay with that. The Treasury yield curve is now nicely upward-sloping. It is normalizing. That’s a good sign for future growth.

As reported in this morning’s Wall Street Journal, credit markets have revived following the Fed move. Bond sales are resuming. Yields on corporate bonds and loans have moved lower. The commercial paper market is improving. The LIBOR rate has dropped by 35 basis points.

Confidence is returning.

Inflation indexes are running around 2 percent for the CPI, PPI, and imported prices. World stock markets surged on the Fed rate cut. In the US, if stocks truly believed big inflation was on its way, they’d be falling not rising. After all, the capital gains tax is not indexed for inflation.

Right now the dollar is soft and gold is strong. This is more a liquidity warning sign than anything else. Over time, as US growth and investment picks up, there will be stronger dollar demand. Additional capital formation will soak up any liquidity excess. In other words, a growth solution.

Meanwhile, low unemployment claims suggest something like 100,000 new jobs per month.

The story looks just fine to me. And I’m waiting for Europe and England to lower their own interest rates.

Thursday Night Lineup

On CNBC's Kudlow & Company this evening:

Bob Pisani will start us off with a report from the NYSE on today's action.

THE FED & ECONOMY...Our Fed gurus will offer their insight on all the latest news and developments.

*Robert Heller, former Fed Governor
*Bill Ford, former Atlanta Fed President

MARKETS & ECONOMY...On to discuss gold, inflation, the dollar and more are the following guests:

*Jim Awad, chairman of WP Stewart Asset Management
*John Browne, editor of MoneyNews.com
*Jerry Bowyer, National Review Online columnist and author of "The Bush Boom"

WASHINGTON TO WALL STREET...CNBC Chief Washington Correspondent John Harwood will get the ball rolling with a Washington report.

On to debate:

*John Browne, MoneyNews.com editor
*Jared Bernstein, senior economist at the Economic Policy institute
*Jerry Bowyer, National Review Online columnist and author of "The Bush Boom"

HOUSING...James Lockhart, the director of the Office of Federal Housing Enterprise Oversight will be aboard to offer an update.

WINDY CITY ECONOMIC SHOWDOWN...Battling it out live from Chicago will be Doug Kass, president of Seabreeze Partners Management and Brian Wesbury, chief economist at First Trust Advisors.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Wednesday, September 19, 2007

Wednesday Night's Washington Lineup

On CNBC's Kudlow & Company this evening:

**Tonight's show will broadcast live from Washington

CNBC's Bob Pisani will start us off with a market report from the NYSE.

THE MARKETS...Our panel will debate yesterday's Fed action and what it means for the markets going forward.

On board:

*Joe Battipaglia, market strategist at Stifel Nicolaus
*Jon Smith, Haverford Trust Co. Chief Investment Officer
*Jim Lacamp, portfolio manager & financial adviser for RBC Dain Rauscher

HOUSING & THE MARKETS...Brian Montgomery, the Housing and Urban Development assistant secretary who heads the FHA will join us in the studio. Messrs. Battipaglia & Lacamp will also join in the discussion.

OIL & THE MARKETS...Red Cavaney, President & CEO of the American Petroleum Institute will be aboard to offer his perspective along with the market panel.

INTERVIEW WITH CHUCK GRASSLEY...A Washington to Wall Street interview with Senator Charles Grassley (R-IA).

YOUR MONEY, YOUR VOTE...CNBC Chief Washington Correspondent John Harwood will deliver a report on Sen. Obama's economic plan.

On to debate Obama's plan will be Austan Goolsbee, professor of economics at the University of Chicago & economic advisor to Sen. Obama along with Dan Clifton from Strategas Research Partners.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Invitation from The National Review Institute

(Click on the image to view the details.)

The Big Easy’s Money Pit

Looks like the Forbes folks agreed with my take on Uncle Sam’s billion-dollar boondoggle down in New Orleans. (From the October 1st issue).

Editor-in-chief Steve Forbes:

“…The other day the White House released a fact sheet detailing what the federal government has done to assist New Orleans and other Gulf areas in their rebuilding efforts. The sentence that hits you between the eyes: ‘The federal government has provided more than $114 billion in resources—$127 billion including tax relief—to the Gulf region.” As economist and CNBC’s host of Kudlow & Company Larry Kudlow pointed out: ‘All divvied up, that $127 billion would come to $425,000 per person!’ In New Orleans a family of four would thus have some $1.7 million.

…Another effective response would have been to make New Orleans and other impacted areas tax-free enterprise zones for a period of time. No taxes on income, business or property. Investment money would have flooded in, as would thousands of Americans looking for a place where they’d have a good chance to better their lot in life. As Kudlow put it: ‘Private-sector entrepreneurs would have succeeded where big-government bureaucrats and regulators have so abysmally failed.’”

Forbes also reprinted the following excerpt a few pages later:

Spectacularly Reckless The idea of using federal money to rebuild cities is the quintessential liberal vision. And given the dreadful results in New Orleans, we can say that the government’s $127 billion check represents the quintessential failure of that liberal vision. Hillary Clinton calls this sort of reckless spending “government investment.” And that’s just what’s in store for America if she wins the White House next year. – LARRY KUDLOW, National Review Online

Glad we’re all in agreement here.

Bravo, Mr. Bernanke

Ben Bernanke‘s shock and awe, frontloading action to slash the fed funds rate 50 basis points from 5.25 percent to 4.75 percent (which I predicted, see Goldilocks 2.0) is just what the doctor ordered.

This is Mr. Bernanke’s coming out party. It’s his Fed now. In one fell swoop, yesterday’s move wiped Alan Greenspan off the front pages (thankfully).

Tuesday’s Fed’s action ultimately boosts financial confidence and reduces the cost of money. This in turn will help stabilize, even boost asset values across-the-board. It moves us away from the punitive inverted yield curve. It’s pro-growth and it will increase the demand for money by reducing the interest cost of money.

Tight money had been strangling the low tax rate on capital and investment. So the Fed’s easing move will revive the investment incentive effects from the supply-side tax cuts. The idea here is that the Fed had been squelching them and now is liberating them. Now the reduced interest tax on money has become more compatible and congenial with the low tax rate cost on capital.

The inflation hawks out there will be disappointed because stronger investment and growth will absorb liquidity and reduce the inflation rate.

Across the pond, the European Central Bank and the Bank of England may follow Bernanke’s lead. They of course are suffering from the same problems we are.

I think this is ultimately bullish for stocks, bullish for the economy, bullish for the dollar, and bearish for gold. It will take some time for these things to work themselves out, but these are my expected outcomes.

Politically speaking, this sets up 2008 as a much better year for the GOP’s bid to capture the White House. While the economy is in low gear, and will remain so for at least another six months, a brighter economic picture is in the cards.

Goldilocks 2.0 is not as good as Goldilocks 4.0, but bravo for Bernanke. I give him three cheers and a big thumbs up.

Tuesday, September 18, 2007

***Tuesday Night's Special Lineup***

On CNBC's Kudlow & Company this evening:

CNBC's Scott Wapner will start us off with a report on today's 336-point Fed-fueled stock market rally.

FED GURUS...Former Federal Reserve Governor Wayne Angell will join us along with former Atlanta Fed Governor Bill Ford to discuss today's strong Fed move.

STOCK MARKET PANEL...Our panel will weigh in with their take on today's news.

On board:

*Michael Metz, chief investment strategist at Oppenheimer & Co.
*Dennis Kneale, managing editor of Forbes magazine
*John Rutledge, chairman of Rutledge Capital
*Don Luskin, CIO at Trend Macro

ECONOMIC GURUS...On to debate today's Fed move are Deutsche Bank chief U.S. economist Joe LaVorgna and Bob Stein, senior economist at First Trust Advisors.

STOCK MARKET DRILLDOWN...Our market mavens will sort out today's impact on stocks. Joining us are Michael Cuggino, portfolio manager at the Permanent Portfolio Family of Funds and Stefan Abrams, Bryden-Abrams Investment Management managing partner.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Bernanke Gets It Right

Once in a while you get it right. One time in a row.

I talked about this in my last column, Goldilocks 2.0.

The Bernanke Fed made a good strong move this afternoon. The stock market applauded loudly with a 250-point rise in the Dow. Essentially, the Fed followed Treasury market rates lower. The 4 percent Treasury bill rate had been urging the Fed to make this move.

By itself, this action will not heal the credit markets overnight. But it will help. Lowering the cost of money will -- over time -- raise asset values across-the-board. New cash injections at the new target rate of 4.75 percent will raise the low 2 percent growth of the monetary base in order to accommodate the banking system’s unusually high cash demands.

Adjustable rate mortgage holders will get almost immediate relief.

This is a confidence-inspiring move by the Fed. Lenders will be more apt to lend and investors will be more apt to take risks.

Importantly, President Bush should now make it very clear that he will veto any tax hike proposals. With tax rates on capital remaining low, and a modest easing move by the Fed, the outlook for next year’s economy improves markedly.

We should see this first in the financial markets (like today’s stock rally) and then with a lag, we will see stronger economic activity.

I also suspect that over time, the improved economic growth outlook for the U.S. will actually strengthen the dollar’s exchange rate, in part because the interest tax on money has been lowered.

And while gold did rally immediately after the Fed move, I would look for some gold weakness along with a better dollar. In my view, rumors of stiff U.S. actions against Iran have been boosting oil and gold prices. Depending on world events, these two commodities are important barometers of political risk.

All that said, the Fed has followed the Treasury market message of lower rates. This is a very positive development that will strengthen the financial system and the economy.

Anchored by low tax rates, increasing economic growth will hold down inflation as stronger investment absorbs the Fed’s additional cash reserves.

They got this one right.

Smearing a General

From Richard Cohen's article, "Hillary Missed Her MoveOn Moment" in today's Washington Post:

"It is an odd standard Clinton has when it comes to smears. When the entertainment mogul David Geffen, once a Clinton supporter, called both Bill and Hillary liars, Hillary not only decried the remark as a particularly vivid example of the "politics of personal destruction," but she demanded that Barack Obama do the same -- and return a $2,300 donation Geffen had given him. Yet when Clinton herself was asked to repudiate the abuse of Petraeus, she either saw no reason to do so or, much more likely, was afraid to alienate an important constituency, the 3.3 million members of MoveOn.org, who stand symbolically at the frontiers of New Hampshire and Iowa. She would, it seems, rather be president than right.

...The MoveOn.org ad was the moment for Clinton to rise above hackdom. It was a moment for her to insist that the business of politics, not to mention governing, is made even uglier and more difficult when people who merely differ with one another resort to insult. It was a moment for her to say that an Army general, under orders and attempting to fulfill a mission, should not be so casually trashed -- especially since she herself has been on the other side of the Iraq War issue and said things she must now regret. And it was a moment for her to trot out her favorite phrase and use it, not in her own defense for once, but in defense of someone else. That moment is gone now -- maybe because for Hillary Clinton it never arrived in the first place."

Instead, Mrs. Clinton told the highly decorated four-star general that his report on the surge required "a willing suspension of disbelief."

Monday, September 17, 2007

Supply-Side Battle

“…A new generation of supply-side business economists has proved the most prescient on Wall Street. David Malpass, Don Luskin, Brian Wesbury, and Michael Darda now serve up the most incisive—and profitable—analyses. But far from being “monomaniacal” or marching in lock-step, supply-siders have for the last decade engaged in spirited debate over monetary policy. The most interesting Wall Street and monetary debates these days are happening within the loose arena of supply-siders, often on Larry Kudlow’s nightly CNBC show, which entertains by far the most sophisticated economic discussions found anywhere on television…”
– Excerpt from The Big Boom by The Discovery Institute’s Bret Swanson -- a response to Jonathan Chait’s new anti supply-side book.

A big thank you to Bret Swanson for the hat tip. Another hat tip goes out to Don Luskin for featuring it on his excellent website, "The Conspiracy to Keep You Poor and Stupid."

(By the way, I have yet to read Jonathan Chait’s anti supply-side book. But I will read it and will respond to the attacks.)

But be sure to read “The Big Boom” piece by Bret Swanson. It’s excellent. And so is Don Luskin’s response to Chait on his website.

Monday Night Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Scott Wapner will start us off with a report on today's stock market action.

THE MARKET, ECONOMY & FED...Our market panel will dicuss and debate all the recent news and developments.

*Barry Ritholtz, president of Ritholtz Research & Analytics
*Alison Deans, director of investment policy at Neuberger Berman *Gary Shilling, president of A. Gary Shilling & Company
*Michelle Girard, senior economist at RBS Greenwich Capital

*GREENSPAN & THE ECONOMY*

*Arthur Laffer, president of Laffer Associates
*Robert Reich, former Clinton Labor Secretary
*Steve Moore, member of The Wall Street Journal editorial board

POLITICAL RUNDOWN...CNBC Chief Washington Correspondent John Harwood will give us an update of all the latest from Capitol Hill.

HILLARY'S HEALTHCARE PLAN...On to debate will be Sally Pipes, president and CEO of the Pacific Research Institute and Mr. Reich.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

How About Reagan and Thatcher?

Washington and Wall Street are all atwitter over Alan Greenspan’s new book, The Age of Turbulence. Of course, the mainstream media are headlining Greenspan’s criticism of President Bush and the Republican Congress. Hastert and Company spent way too much and Mr. Bush failed to use his veto pen. Who can argue with that? Supply-siders and all conservatives have made this point.

But Greenspan points a finger at today’s Democrats as well. Greg Ip’s Wall Street Journal article, “Greenspan’s Dismay Extends Both Ways,” makes this case.

In an interview with the WSJ, Greenspan remarked that “The Clinton administration was a pretty centrist party. … But they’re not governing again. The next administration may have the Clinton administration name but the Democratic party … has moved … very significantly in the wrong direction,” referring to the Democratic party’s populist bent — especially its ill-advised skepticism of free trade.

And in his 60 Minutes interview last night, while Greenspan referred to Hillary Clinton as “unquestionably capable” and “very smart,” his “tendency would be to vote Republican.” Adding to his remarks, Greenspan — a self-described libertarian Republican — told the WSJ about the upcoming election, “I doubt if I would vote Democrat … I just may not vote. At the moment it’s extremely hard to say.”

It’s important to remember that Greenspan supported both Bush tax cuts in 2001 and 2003. And even without more spending restraint, the supply-side tax cut of 2003 worked to reignite the economy and throw off potfulls of added tax revenues. Meanwhile, the budget deficit has been falling for years.

Greenspan makes interesting points on the housing boom. He argues that it was sparked by a global boom, fueled by the downfall of communism and simultaneous rise of capitalism worldwide. He said that “a billion” new workers were liberated for productive jobs and higher wages, and that this created a worldwide housing boom. He said that same shift to global capitalism also brought down inflation and interest rates worldwide.

On the whole, Alan Greenspan was an excellent Fed chairman during his tenure from 1987 to 2005. The numbers bear this out: Real economic growth averaged 3 percent; inflation averaged 2.5 percent while unemployment averaged 5.5 percent; and the stock market increased about 420 percent, or roughly 10 percent yearly.

So the Maestro did a very good job.

But the real hero of the last couple of decades is undoubtedly the triumph of free-market capitalism around the world. Krishna Guha of the Financial Times is the only one to have picked this up. He captures this nicely in his book review of The Age of Turbulence. Give credit to Adam Smith’s “invisible hand” and Joseph Schumpeter’s “gales of creative destruction” for making Alan Greenspan’s Fed job a lot easier.

And while we’re at it, let’s give big credit for this remarkable twenty-five years of prosperity to Ronald Reagan and Margaret Thatcher.

Goldilocks 2.0

(My latest syndicated column.)

A batch of economy-wide stats was released Friday morning, covering retail sales, industrial production, import prices, and consumer confidence.

The verdict? It’s a 2 percent economy. Call it Goldilocks 2.0.

Might the current financial turmoil throttle back growth a little more in the next six months? Yes, perhaps. Will there be some negative earnings surprises, especially from financial companies? Sure.

But the bears would have us believe the sub-prime credit virus heralds the end of the world. They are wrong. Remember this: Our free-market capitalist economy is resilient and durable. It has proven time and again that it can take a punch.

Sure, recession probabilities have increased. But so what? We’ve had virtually uninterrupted prosperity for twenty-five years, going back to the supply-side economy and technological boom launched by President Ronald Reagan. Since then, we’ve experienced 93 positive GDP quarters and only 5 negative ones. That makes for a truly phenomenal batting average.

Consider this: Marginal tax rates are low. Inflation is low. Interest rates are low. And the world economy remains strong. The stock market — which I still believe is the best barometer of the health of business and the economic future — has behaved surprisingly well during this difficult stretch of turbulence. In fact, the sum total of the so-called “bear assault” is only a 4.5 percent correction from Dow 14,000 and other index peaks registered two months ago.

Yes, profits are getting sloppy. And yes, there are some credit shocks out there yet to be revealed. However, the Federal Reserve will reduce the cost of money by bringing down its basic target rate on Tuesday. President Bush will veto any Democratic tax hikes. And at the margin, the Iraq War story is taking a turn for the better. Meanwhile, American entrepreneurs are still working hard.

Speaking of next Tuesday, the best thing the Fed can do is deliver a big-bang, shock-and-awe rate cut that would bring the basic fed funds target 50 basis points lower to 4.75 percent. At the same time, it should lob a full percentage point off the discount lending rate, cutting it from 5.75 to 4.75 percent. This would be a confidence-inspiring move for all concerned: borrowers, lenders, businesses, consumers, and mortgage holders. Not only will slashing the cost of money add significant new liquidity to the economy, it will raise asset values across the board.

The Fed also might think about setting up a special facility for non-bank lending institutions that are experiencing a liquidity squeeze. Perhaps also a temporary liquidity facility for commercial paper lenders. The asset-backed commercial paper market is vital to funding many of the daily operations of businesses across the country, and it’s this market that has been hardest hit.

Such monetary front-loading would be very powerful, indeed. However, if the Fed goes small with only quarter-point reductions for fed funds and the discount rate, many investors will have an incentive to withhold money while they wait for interest rates to finally bottom at much lower levels later this year or next. In other words, a timid Fed action might actually prolong and deepen the economic slowdown.

This is not a time for small-ball. It’s time for Bernanke and Company to go big.

And let’s not forget that taxes are just as important as money. President Bush and Treasury man Henry Paulson should absolutely squash all the Washington rumors of tax hikes, in particular a cap-gains tax increase. If investors expect a hike in the cap-gains tax, they will have every incentive to launch a massive wave of stock market selling. Needless to say, this would be utterly calamitous for the whole economic picture.

The animal spirits may have had their wings clipped a bit by the credit crunch, but with the right tax and money policies there is still plenty of sizzle and juice in this story. It’s very easy to be totally pessimistic and bearish right now, but that’s precisely why I will avoid falling into that trap.

Optimists are winners. Pessimists are losers.

Goldilocks 2.0.

Friday, September 14, 2007

Friday Night Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Mary Thompson will start things off with a market report from the NYSE.

*FED, MARKETS & THE ECONOMY*

We'll begin with a one-on-one interview with Bill Ford, former Atlanta Fed Governor.

Also joining in:

*Joe LaVorgna, Deutsche Bank chief U.S. economist
*Jason Trennert, Strategas Chief Investment Strategist
*Steve Moore, member of The Wall Street Journal editorial board
*Vahan Janjigian, V.P. & Executive Director of the Forbes Investors Advisory Institute

OIL PRICES...Dan Yergin, chairman of Cambridge Energy Research Associates & CNBC global energy analyst will join us with his perspective.

The market panel will also weigh in.

IRAQ/GENERAL PETRAEUS/BELTWAY POLITICS...Our guests will debate all the latest news and developments.

Joining us this evening:

*Lanny Davis, former Special Counsel to President Clinton
*Andy Card, former Bush White House Chief of Staff

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

The Free Market Hall of Fame

Just received an email from my old pal Mark Skousen. He’s the founder of FreedomFest, which bills itself as “The World's Largest Gathering of Free Minds.” They put together terrific, thought provoking conferences out in Las Vegas once a year.

Turns out they’re also putting together a "Free Market Hall of Fame." It's a "who's who" of all the folks contributing most to the success of free markets and free people around the globe.

(Incidentally, yours truly was nominated.)

Categories include:

1. Academic economists
2. Journalists and writers
3. Business leaders
4. Legislators and government officials
5. Think tanks

Click here to vote for your favorite free market advocates.

And remember: Free market capitalism is the best path to prosperity!

Thursday, September 13, 2007

Thursday Night Lineup

On CNBC's Kudlow & Company this evening:

Bob Pisani will get things started with a recap of today's action from the NYSE.

MARKETS & THE ECONOMY...Our panel will debate all the latest news and developments.

On board:

*John Rutledge, chairman of Rutledge Capital
*Gary Shilling, president of A. Gary Shilling & Co.
*Michael Ozanian, Forbes Magazine Sr. Editor.

OIL & THE ECONOMY...Gulf Oil CEO Joe Petrowski will join us to discuss.

Our market panel will stick around and weigh in with their perspective.

FED DEBATE...Former Federal Reserve Governors Wayne Angell and Lyle Gramley will take a look ahead at Tuesday's Fed meeting.

IRAN, IRAQ & PRESIDENT BUSH'S SPEECH TONIGHT...Tony Blankley, editorial page editor for The Washington Times will square off with Joe Cirincione, vice president for national security at the Center for American Progress.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Wednesday, September 12, 2007

Wednesday Night Lineup

On CNBC's Kudlow & Company this evening:

Bob Pisani will deliver an update on today's market action from the NYSE.

STOCK MARKET & ECONOMY...Our panel will weigh in with their perspective on all the latest news and developments.

On board to discuss:

*Arthur Laffer, economist & chairman of Laffer Associates
*Joe LaVorgna, Deutsche Bank Chief U.S. Economist
*Jim LaCamp, portfolio manager & financial adviser for RBC Dain Rauscher

INTERNATIONAL MARKETS...On to discuss recent events in Japan, Russia and elsewhere are David Malpass, Bear Stearns chief economist and Bob Hormats, Vice Chairman of Goldman Sachs International.

FED DEBATE...Squaring off will be John Browne, editor of MoneyNews.com and Jerry Bowyer, National Review Online contributor & author of "The Bush Boom."

TAX HIKES AHEAD?...On to debate are Washington analyst Jim Lucier and Heather Boushey from the Center for Economic & Policy Research.

Please join us for another free market edition of Kudlow & Company at 5pm ET on CNBC.

Free Market Capitalism, 10 Jihadism 0

That was the theme of our 9/11-anniversary show last night.

A big hats off goes to my good friend “Jimmy P” Pethokoukis from U.S. News & World Report who joined me on set for patching together the following picture on his blog:

“…Since September 11, the economy hasn't suffered a single down quarter. In fact, it has notched 23 straight quarters of economic growth…Overall, the American economy is, adjusting for inflation, $1.65 trillion bigger than it was six years ago. To put that gigantic number in some perspective, the U.S. economy has added the equivalent of five Saudi Arabias, eight Irans, 13 Pakistans, or 15 Egypts, depending on your preference. And while 9/11 did cause the stock market to plunge, the Dow is 37 percent higher than it was on Sept. 10, 2001, creating trillions of dollars of new wealth for Americans. What's more, the unemployment rate is 4.6 percent today vs. 5.7 percent back then. Not bad at all.”

You would think that these backward economic countries mentioned above would finally see the light and adopt the American model of free market capitalism. But unfortunately, they’re still stubbornly clinging to a heavy handed, top-down, quasi-socialist approach to government economic planning.

Now I don’t think for one moment that Osama bin Laden’s evil brand of jihadism would be solved by economic growth alone. Too many of the al Qaeda leaders come from comfortable, middle-class, well to do, even professional backgrounds. So that’s a titanic ideological battle. But creating dynamic, growth oriented economies and raising the level of prosperity while reducing poverty sure wouldn’t hurt in this long war against terrorism.

Moreover, a free trading zone located in the Middle East, one that would enhance pro-growth economic liberalism, would surely be a good thing and would be connected to the United States.

"Liquidity Now!"

Add Harvard economist Marty Feldstein's name to the growing list of folks calling for substantial Fed rate cuts.

In his WSJ op-ed today, the former chairman of the Council of Economic Advisers under President Reagan wrote:

"The time has come for the Federal Reserve to cut the federal funds interest rate substantially, starting on a path from the current 5.25% to 4.25% and possibly even less. Without such a policy shift, the U.S. economy faces the risk of a significant economic downturn..."

Click here to read it.

Tuesday, September 11, 2007

Tuesday Night Lineup

On CNBC's Kudlow & Company this evening:

Bob Pisani will deliver an update on today's market action from the NYSE.

MARKETS & ECONOMY...Our panel will debate all the latest news and developments.

*Don Luskin, CIO at Trend Macro
*Dan Clifton, Strategas Research Partners director
*Elizabeth MacDonald, Forbes magazine Senior Editor
*Michael Panzner, Wall Street trader & "Financial Armageddon" author

JACK WELCH INTERVIEW...The legendary former GE CEO will offer his insight in a big picture interview on a host of subjects.

GEN. ALEXANDER HAIG INTERVIEW...Mr. Haig will join us to offer his perspective on the war in Iraq, Petraeus' testimony, and post 9/11 America.

DEBATE: STRENGTH OF THE U.S. ECONOMY...On to duke it out are "Jimmy P" Pethokoukis from U.S. News & World Report and Christian Weller from the Center for American Progress.

Please join us for another free market edition of Kudlow & Company at 5pm ET on CNBC.

Piercing the Fed Temple

On last night’s Kudlow & Company, House Financial Services Committee Chairman Barney Frank continued putting heat on Bernanke & Company to begin easing rates and adding more cash to the economy. Mr. Frank is calling for a Fed policy shift on two grounds: First, financial markets have seized up and this could spell trouble for the economy. And second, the Fed should be focusing on fighting slower growth rather than inflation.

Mr. Frank is the rare elected official publicly calling for fed rate cuts. For some reason, most senators and House members are reluctant to take on the Fed in public. But Chairman Frank is a big believer that in a democracy such as ours, everyone has the right to speak out on monetary policy. While he clearly respects the Fed’s independence, he doesn’t believe the Fed is on some distant planet absolved from any public criticism. I agree.

The “Secrets of the Temple” -- as discussed in Bill Greider’s great book twenty years ago -- should be penetrated, especially by elected officials.

As the late economist Jude Wanniski often remarked, money is the most democratic of all economic issues. Everybody has greenbacks in their wallets and purses. Folks have a right to know what the cost and value of their money is. Informed public debate about money can be quite useful to Fed policymakers, other government leaders, and the public at large.

Mr. Frank was also concerned that regional Reserve Bank presidents have an obsessive, built-in bias of slaying inflation at the expense of fostering economic growth. Incidentally, it’s interesting to note that while the seven governors of the Federal Reserve Board are nominated by the President and confirmed by the Senate, the twelve regional Reserve Bank presidents are essentially private sector representatives. They are neither nominated by the executive branch nor confirmed by the Senate. However, they are voting members of the open market committee on a rotating basis, along with the seven governors.

Put simply, of the twelve FOMC votes, seven go to the confirmed Fed governors, one goes to New York Fed head Timothy Geithner (who is a permanent FOMC voting member), and the remaining four votes rotate among the unconfirmed regional presidents who serve one-year terms. So the unconfirmed, regional Reserve Bank president votes are essentially on equal footing as the confirmed Fed governors.

Mr. Frank is on to something here. With the possible exception of San Francisco Fed President Janet Yellin -- who has expressed concerns about the economy -- it does appear that these reserve bank presidents are focusing almost exclusively on inflation. For whatever reason, Kansas City’s Thomas Hoenig, Dallas’s Richard Fischer, Atlanta’s Dennis Lockhart, and Richmond’s Jeffrey Lacker (and of course, Bill Poole in St Louis) all seem to be opposed to easier money.

Chairman Frank is only looking for a mild easing, instead of a full-scale, open-the-spigots approach. And as the Chairman of the powerful House Financial Services Committee, Mr. Frank does have oversight authority over the central bank. In that important sense, I think he is absolutely right to speak out.

If Barney Frank is rocking the monetary boat, then so be it.

Jack Welch on Kudlow & Company Tonight...

Legendary GE head honcho Jack Welch will be joining me for an in-depth, big picture interview on tonight's show.

Welch is arguably the greatest business figure of his generation. It’s always a great honor to have him on as a guest.

We’ll of course discuss what's going on in the stock market & economy, some politics, as well as get his insight on where America stands on the anniversary of the tragic events of 9/11.

Please join us on CNBC tonight at 5pm ET...

Monday, September 10, 2007

Monday Night Lineup

On CNBC's Kudlow & Company this evening:

Bob Pisani will deliver an update on today's market action from the NYSE.

MARKETS/ECONOMY...Our market pros will discuss and debate all the latest news and developments.

On board:

*Michael Metz, chief investment strategist at Oppenheimer & Co.
*Noah Blackstein, portfolio manager at Dynamic Mutual Funds
*Dr. Bob Froehlich, Vice Chairman & chief investment strategist at DWS Scudder

***Jim Nussle, the new Director of the Office of Management and Budget will join us from the White House North Lawn with a look at what's ahead.

LIEBERMAN INTERVIEW...Sen. Joe Lieberman (I-CT) will offer his keen insight on today's Senate testimony from Gen. David Petraeus & U.S. Ambassador to Iraq Ryan Crocker.

WASHINGTON TO WALL ST...Rep. Barney Frank (D-MA) House Financial Services Committee Chair will join us in a one-on-one interview.

DYNAMIC DUO...On to duke it out are Robert Reich, former Clinton Labor Secretary and Steve Moore of The Wall Street Journal editorial board.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Friday, September 07, 2007

Now Is The Time

A simple yet overlooked thought in the current debate about the health of the economy, the subprime credit virus, and the proper role of Federal Reserve monetary policy is this: you don’t have credit blowups, liquidity freezes, dysfunctional commercial paper markets, suspect bank loan quality -- nor do these ailments spill over into London and European money markets -- when central bank policies are easy and accommodative.

Financial panics and overly stressed markets are symptomatic of tight and restrictive money. In other words, the current story of financial fear, trembling and high anxiety is itself a critically important signal that money is way too tight.

Economists are always on the hunt for indicators to determine whether central banks are fostering liquidity shortages or liquidity excesses. They look at currencies, commodities, bond rates, and a host of other price indicators. One such indicator in the economist’s arsenal demanding attention is the current financial state of extreme risk aversion, cash hoarding, and utter lack of financial confidence. More than any other gauge, it is today’s financial panic that unequivocally signals to the Fed (and perhaps the Bank of England and the ECB) that something is wrong with money.

In an important sense, this is all these bankers need to know in order to understand why their policies are off course and inconsistent with financial stability and economic growth.

Friday’s disappointing jobs report pounds this point home (though in my judgment, a one-month’s jobs decline is not in and of itself a major development -- nor does it necessarily foreshadow a recession.) But the unexpected loss of 4000 corporate payroll jobs (the first on drop in four years) plus a very unsettling 316,000-drop in the household jobs survey is of course consistent with the recent shocks to our financial system.

So were the 81,000 downward revisions to the prior months’ of June and July. Incidentally, the only reason unemployment held firm at 4.6 percent is a 340,000-drop in the civilian labor force. This undoubtedly signals worker discouragement and declining labor morale.

After President Bush slashed tax rates four years ago, many of us argued that the rising household survey of jobs gains was a good leading indicator of more work and lower unemployment. We were right. Both the payroll and the household surveys produced over 8 million new jobs, while the unemployment rate dropped from 6.3 percent to 4.5 percent. That said, year-to-date the monthly change in household employment is actually falling by an average of 16,000. This is a big negative and does not bode well for future job tallies.

There are some saving graces to the economic story. While the Goldilocks, soft-landing scenario is imperiled by the deepening financial squeeze, it is not yet completely dead in the water. Recent numbers from the Institute of Supply Managers show an expanding economy in manufacturing and services. Same store chain sales came in above estimate for August. Personal incomes after tax and after inflation are still rising by 3.8 percent for the twelve months ending in July.

Silver linings aside, the commercial paper market for short term business loans continues its deep south migration with an almost unprecedented $300 billion evaporation. In the months ahead, nearly a trillion dollars of commercial paper will have to be rolled over. It’s hard to say where all this money is going to come from in today’s risk averse environment. At present, investors are more than willing to finance short term Treasury paper at roughly 4 percent, but so-called asset backed corporate paper is going unfunded despite a better than 6 percent return. Exactly the same problem is cropping up in the London interbank loan market as LIBOR rates have jumped nearly a hundred basis points in recent days.

The main point here is that if businesses are unable to access working capital to fund its daily needs, then these firms will be forced to shrink their operations. That means layoffs.

American companies are already experiencing their first profit decline in over five years. Non-financial domestic corporations have experienced negative profit margins and falling profits over the past three quarters. Treasury Department tax collections from business income have fallen off a cliff. Wall Street analyst Dan Clifton revealed that corporate tax revenues fell 29 percent in August compared to a year ago. And these corporate tax collections have now dropped in three of the past four months. A year ago, they were rising by more than twenty percent.

So while big companies are still benefiting from overseas-based profits, the domestic story is rapidly deteriorating. Moreover, it’s a safe bet that the financial sector will deliver downside surprises as today’s mortgage mess continues to unwind.

Unfortunately, not a single one of these critical economic issues came up in this week’s GOP debate in New Hampshire. But make no mistake about it, the financial credit crunch and the economic downturn is going to loom large in next year’s election.

As for the Federal Reserve, it is of course an independent agency. None of its members will be standing in front of voters come November 2008. Nonetheless, it is the Fed, more than any other policy lever that holds the all-important key to our economic future. Disappointingly, so far they have downplayed the disruption in financial markets.

If central bankers would come to their analytical senses, they would appreciate that today’s financial panic is itself sufficient reason to slash the Fed funds target rate by at least a full percentage point from today’s 5.25 percent to something around 4 percent. New cash needs to be poured into the liquidity parched banking system. Such a move would be a much-needed injection of confidence into a rattled marketplace. In addition, a lower fed target rate would not only deliver much needed addition to bank reserves, but would help to raise asset values across the board by dropping the cost of money. A pro-growth Fed policy will actually strengthen the beleaguered US dollar and reduce the price of gold.

Earlier today, former Fed chair Alan Greenspan compared the current financial turmoil to that of 1987’s stock plunge and the 1998 dislocation of giant hedge fund Long Term Capital Management. (And, just for good measure the maestro threw in the land boom collapse of 1837 as well as the bank panic of 1907.) Fortunately, financial panics don’t occur very often. But what we have before us today is a modern version of the old fashioned run on the bank. The only difference is that the bank today is the global money market.

The Fed can fix this. But they better get moving.

Friday Night Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Mary Thompson will deliver a quick recap from the NYSE.

THE MARKETS & THE FED...Our stock market/economic panel will offer their perspective on today's stock market selloff and what may lie ahead for the economy and investors.

***Former Federal Reserve Governor Wayne Angell will join us in a one-on-one interview.

Other market guests include:

*Michael Panzner, "Financial Armageddon" Author
*Jerry Bowyer, National Review Financial Columnist
*John Browne, MoneyNews.com Editor
*Craig Columbus, Chief Investment Strategist, Advanced Equities Asset Management

DEBATE: TODAY'S JOBS NUMBER & THE ECONOMY...Squaring off will be Joe LaVorgna, Deutsche Bank Chief U.S. Economist & Brian Wesbury, First Trust Advisors Chief Economist.

*US Secretary of Labor Elaine Chao will join us in a one-on-one interview.

WASHINGTON TO WALL ST. DEBATE...Jared Bernstein from the Economic Policy Institute will debate all the latest news and developments with Steve Moore from The Wall Street Journal editorial board.

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Last Night's Steel Interview

From Reuters:

US Treasury's Steel sees money markets settling

WASHINGTON, Sept 6 (Reuters) - The U.S. Treasury's domestic finance chief said on Thursday he was optimistic that money markets would be operating normally by year-end as a liquidity crunch eases and market confidence returns.

Robert Steel, the Treasury's undersecretary for domestic finance, told CNBC Television, however that it would take a long time for banks to become more comfortable in taking lending risks, and more encouragement was needed.

"I think for now things are working and they've improved from where they were at the bottom," Steel said on CNBC's Kudlow & Company show. "Basically we believe liquidity is beginning to come back but we're vigilant and focused on the issue," he added.

Steel also said that efforts to help financially troubled homeowners restructure their mortgages and avoid foreclosure should be focused on owner-occupants, not those with second homes or properties bought for speculation.

Thursday, September 06, 2007

Thursday Night Lineup from Washington

On CNBC's Kudlow & Company live from Washington this evening:

Bob Pisani will start us off with a report from the NYSE.

MARKETS...Our market panel will offer their perpspective on the latest stock market and economic news.

*Barry Ritholtz, president of Ritholtz Research & Analytics
*Michelle Girard, senior economist at RBS Greenwich Capital
*Gary Shilling, president of A. Gary Shilling & Company

WASHINGTON TO WALL STREET...On to debate Congress's private equity tax proposal, the AMT, and more are:

*Rep. Charlie Rangel (D-NY), House Ways & Means Committee Chairman
*Rep. Jim McCrery (R-LA), House Ways & Means Committee Ranking Member

***Joining the debate will be Jared Bernstein, senior economist at the Economic Policy Institute and The Wall Street Journal's Steve Moore.

ECONOMY & HOUSING......Robert Steel, Treasury Under Secretary for Domestic Finance will join us in the studio for a one-on-one interview.

CAPITOL HILL SHOWDOWN...Mary Matalin, Republican strategist and Dee Dee Myers, Democratic strategist will be on to debate all the latest political news and developments.

Please join us for another free market edition of Kudlow & Company at 5pm ET on CNBC.

The President & Senator Backbone Address Surge Success

Drudge is featuring a remark President Bush made yesterday during his visit to Australia. Responding to the Deputy Prime Minister's inquiry of how his recent surprise trip went in Iraq, Mr. Bush told him, “We’re kicking ass.”

Well, he’s right. The Petraeus surge is working. (Even the dreary MSM shows signs of finally coming around...)

Meanwhile, Senator John McCain was crisp, clear, and confident in last night’s GOP debate -– and he was absolutely right on the money about the troop surge’s success in Iraq.

Governor Romney’s line that the surge was “apparently” working was off the mark. It was inappropriate. Kudos to Senator Backbone for calling him out on it and responding that, “The surge is working, not 'apparently.'"

Right on to President Bush and John McCain for hanging tough.

You’re gaining ground.

Wednesday, September 05, 2007

Wednesday Night Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Bob Pisani will start us off from the NYSE with a report on today's action.

MARKETS...Our market mavens will offer their perspective on all the latest news and developments affecting the stock market and economy.

On board:

*Joe LaVorgna, Deutsche Bank Chief U.S. Economist
*Elizabeth MacDonald, Forbes magazine Senior Editor
*Joe Battipaglia, Stifel Nicolaus Market Strategist
*Arthur Laffer, Laffer Associates Chairman
*Daniel Clifton, Strategas Research Partners Director

HOUSING UPDATE...CNBC chief Washington correspondent John Harwood will get us started with a quick report.

***Mr. Harwood will be followed by a one-on-one interview with Sheila Bair, chairwoman of the Federal Deposit Insurance Corp.

Our market panel will weigh in with their perspective following the interview.

JOBS & THE ECONOMY...The Dynamic Duo returns...Robert Reich, former Clinton Labor Secretary and Steve Moore of The Wall Street Journal editorial board will duke it out.

(Messrs. Reich & Moore will also stick around to discuss Mr. Reich's new book, "Supercapitalism.")

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

Earvin Takes Magic to Washington

From today’s WSJ:

WASHINGTON -- The private-equity industry is taking a new tack in its fight against a bid to raise taxes on fund managers, arguing the effort would harm investment firms owned by women and minorities, and discourage economic activity in neglected areas.

Minority and women business leaders today plan to announce a new group, the Access to Capital Coalition, to oppose a move in Congress to raise taxes on carried interest, a cut of profits that hedge-fund and private-equity managers receive. Among the high-profile business people enlisted in the fight: Former basketball star Earvin "Magic" Johnson, who now is chairman and chief executive of Johnson Development Corp., which invests in bringing businesses into urban areas....


Good for Magic. The most valuable thing for these minority businesses and entrepreneurs is capital. It is the seed corn of future economic growth.

The last thing Congress should be doing is threatening to raise the cost of capital for minority firms investing in low-income areas. Reducing their investment returns is a surefire way of stunting growth in areas thirsting for capital.

Tuesday, September 04, 2007

Tuesday Night Lineup

On CNBC's Kudlow & Company this evening:

CNBC's Bob Pisani will lead us off with a market drilldown from the NYSE.

THE MARKET...Our market panel will sift through and debate all the latest market news and developments.

On board:

* Jeff Kleintop, chief market strategist, LPL Financial Services
* Herb Greenberg, MarketWatch Sr. Columnist & CNBC contributor
* Stefan Abrams, Bryden-Abrams Investment Management managing partner

THE ECONOMY, FED, INTEREST RATES & MORE...On to debate what lies ahead are John Ryding, chief economist at Bear Stearns and Tony Crescenzi, chief bond market strategist at Miller, Tabak & Co.

POLITICAL ROUNDTABLE...Our experts will discuss Fred Thompson's budding GOP campaign as well as other news, trends and developments out of Washington.

On board:

* Larry Sabato, UVA political scientist
* Chris Cillizza, Washington Post political blogger
* Mike Allen, chief political correspondent for The Politico
* John Fund, columnist for The Wall Street Journal's opinionjournal.com

Please join us at 5pm ET on CNBC for another free market edition of Kudlow & Company.

September Optimism

Bob Novak’s column this morning talks about "Republican Melancholy.”

Okay, I’m sure there’s a lot of that going around. But on the other hand, President Bush is making some good moves. His surprise trip to Anbar Province is one example, and it highlights the progress from General Petraeus’s counterinsurgency surge.

Here at home, the president is taking steps to help the lower-middle-income working poor to hang on to their mortgages and their homes with an expanded FHA insurance plan and an end to the IRS foreclosure tax on housing short sales.

Meanwhile, Fed chair Ben Bernanke is moving toward a slight easing of policy. Today’s ISM manufacturing report shows growth, not recession.

Incidentally, the stock market actually rose in August, and opened higher in the first day of September trading earlier this morning.

If stocks are optimistic, then so am I.