Some notable quotes from last night's Kudlow & Company:
Fed Finally Gets It Right It all goes back to March 17th. Bear Stearns Monday. That’s when the world changed. That’s when the Fed figured out that it could solve the credit crisis by something other than cutting the funds rate. And so, ever since then, all of these different markets have gradually, more and more, come to realize that it’s “one and done” at this point, at the most. And that the Fed is going to start hiking again, as soon as October. The futures markets are now looking at three rate hikes out a year from now. That strengthens the dollar; it weakens gold; it weakens oil. It’s great for stocks because it means that the Fed is going to stop fueling the inflation machine. And that there’s confidence that the credit crisis has been mastered. This is just fantastic news.
-Don Luskin, Chief Investment Officer at Trend Macro
A Bullish Signal When you narrow risk premiums, stock markets soar. When you widen risk premiums, stock markets tank. We’ve had wider risk premiums, whether you use the junk bond spread, or some other spread. There’s a hundred ways to measure risk premiums. They have peaked in the last few weeks. They are beginning to narrow. Stock markets recognize it. The process is finally working.
-David Kotok, co-founder & CIO of Cumberland Advisors
Schadenfreude We’ve found out from Pennsylvania just how deep the divisions are in the Democratic Party. The media often talks about the divisions in the Republican Party, but we’ve got our nominee. That’s done. We’ve been united for some time. The Democrats have very serious divisions. They have race, gender, age, class divisions…you don’t just heal that. You don’t just heal that with a nice convention. You don’t just heal that by taking a certain position on an issue. I mean, these are very deep divisions in the Democratic Party that go back forty years to the riots of ‘68. It spells serious trouble for them in November.
-Jerry Bowyer, chief economist at Benchmark Financial Network