Christine O’Donnell, the former Tea Party favorite and GOP Senate nominee from Delaware, is on the hot seat right now for allegedly misusing campaign funds. Is there something to this story? Or is this just another attempt by the left to discredit the whole Tea Party movement?
O’Donnell joined me for an exclusive interview last night to defend herself. Here’s the transcript.
Friday, December 31, 2010
Friday, December 17, 2010
Reaganomics 2.0 in the Driver’s Seat
On a historic night this past Thursday, a new Tea Party Republican Congress completely transformed U.S. economic policy. Elections matter, and so do their ideas. Smaller government, low taxes, and less spending were key election themes in the Republican landslide. And those themes triumphed this week as a large tax-cut bill finally passed the House and a monstrosity of a spending bill was defeated in the Senate.In one fell swoop, Obamanomics is out the window. Reaganomics 2.0 is now in the driver’s seat.
Perhaps the most amazing part of the story was the work of Mitch McConnell and John McCain (among others) to kill the 2,000-page, $1.2 trillion omnibus spending bill in the Senate, along with its 6,600 earmarks totaling $8 billion. This budget monster dripped with contempt for voters and taxpayers. But business as usual was overturned.
I had an inkling of this when Sen. McCain told me in a CNBC interview earlier that night that, if need be, he would favor a government shutdown over passage of the spending bill. And now, under a short-term continuing resolution, the whole current-services budget baseline can be lowered by anchoring it to 2008 spending.
Hundreds of billions of dollars can be saved, producing a smaller government that will be, in effect, a tax cut for the private economy. And the symbolism of overturning massive spending only two years after Obama’s debt-laden stimulus package is enormously important.
Of course, the tax deal is far from perfect. But low tax rates will be preserved for personal incomes, capital gains, dividends, and estates. This is pro-growth and pro-capital formation, and it’s a confidence builder, too.
Tax cuts for businesses, which are new to this bill, may prove more effective than most people think. And while the payroll tax cut has only a small labor incentive, it is not nothing.
Yes, there’s too much spending in the tax bill, as some cranky conservatives keep reminding us. However, it’s only about 12 percent of the total $857 billion legislation. Unemployment benefits come to $56 billion, the refundable tax credits are about $44 billion, and the utterly stupid ethanol subsidy is about $5 billion.
Meanwhile, 88 percent of the bill goes to tax cuts — where people get to keep their own money and where there are some significant incentive-effects on the supply-side.
It’s not a panacea. Hopefully broad-based flat-tax reform will materialize in the next few years, along with entitlement reform and deep spending cuts. But it is worth noting that late Thursday night, according to the Washington Post, negotiators removed more than 70 temporary programs from the bill.
For those conservatives who are still complaining, I urge you to reconsider the importance of marginal tax-rate incentives for the economy. Tax-rate increases will depress growth and worsen the budget deficit. There’s no way America’s financial position will improve without economic growth, nurtured by low tax-rate incentives. And if the compromise tax plan had been defeated, the economy would have been held hostage for as much as six months, before the implementation of some kind of new plan to extend the Bush tax cuts through the complicated budget process.
In this sense, the tax-cut compromise does far more good than bad. A new batch of statistics shows recent economic improvement: rising retail sales and industrial production, a jump in the Index of Leading Indicators, and lower jobless claims. The trick here is to nurture the new economic improvement, not snuff it out with higher taxes.
In the new session of Congress — which will feature a true Tea Party GOP conservative majority — new spending-limit policies can fill in the blanks left by the tax deal. But if President Obama has the acumen to see that a pro-growth economic policy is tied to low tax rates, the GOP should take great care not to cede that message and lose the economic-growth high ground.
A great battle will be joined over the spending, taxing, and regulatory mandates of Obamacare, which is probably the biggest job-killer of all. Conservative reformers in the new Congress will force this fight, along with tax, spending, entitlement, and monetary reform. Behind all this, however, the new Tea Party GOP must maintain a message of economic growth and prosperity.
Crankiness is no substitute.
Wednesday, December 15, 2010
A Growth Bounce for Treasuries
Rising Treasury bond rates are all the buzz on Wall Street. Over the past six weeks, bond rates have moved up about 100 basis points to more than 3.5 percent.
Will this snuff out economic recovery? No.
In fact, yields are going up precisely because economic growth has quickened and real yields are rising. Some call it the growth trade. Get out of bonds and buy stocks.
A blowout retail number for November arrived this week, with retail sales up five straight months. Manufacturing from the industrial-production report is up five consecutive months. And the production of business equipment (capex) is rising 12.5 percent over the past year.
Fourth-quarter growth could be 3.5 to 4 percent. And that could spill over into the new year, especially with tax cuts coming. The Senate voted overwhelmingly to pass them, and 80 to 100 Democrats will join most Republicans to pass the tax-cut package in the House.
The tax deal isn’t pure, but it is a positive. It adds to confidence and refreshes incentives on personal-income investments. And with 100 percent cash expensing, it even adds incentives to business investment.
I can’t for the life of me understand why any conservatives would want tax rates to jump up, or would want to drain $600 billion or more from the private economy. Some of the goofy spending increases in the package -- which are probably only 5 percent of the total -- can be fixed later. Let Paul Ryan take them out. Or fund them out of the leftovers from the stimulus package, which failed so badly.
I’m glad to see that the NFIB, the Business Roundtable, the Chamber of Commerce, any number of bank economists, FreedomWorks, Americans for Tax Reform, and others agree with me. And I do not understand Mitt Romney’s opposition. He ought to know better.
And speaking of ought to know better, the jump in long-term interest rates on rising economic growth should tell the Fed to stop QE2. Capital gains and low-tax incentives for businesses large and small are real job creators. On the other hand, just printing money would be an inflation-creator over time. In fact, the rise in long-term Treasury rates is telling the Fed that short-term rates are too low and should be higher.
Will this snuff out economic recovery? No.
In fact, yields are going up precisely because economic growth has quickened and real yields are rising. Some call it the growth trade. Get out of bonds and buy stocks.
A blowout retail number for November arrived this week, with retail sales up five straight months. Manufacturing from the industrial-production report is up five consecutive months. And the production of business equipment (capex) is rising 12.5 percent over the past year.
Fourth-quarter growth could be 3.5 to 4 percent. And that could spill over into the new year, especially with tax cuts coming. The Senate voted overwhelmingly to pass them, and 80 to 100 Democrats will join most Republicans to pass the tax-cut package in the House.
The tax deal isn’t pure, but it is a positive. It adds to confidence and refreshes incentives on personal-income investments. And with 100 percent cash expensing, it even adds incentives to business investment.
I can’t for the life of me understand why any conservatives would want tax rates to jump up, or would want to drain $600 billion or more from the private economy. Some of the goofy spending increases in the package -- which are probably only 5 percent of the total -- can be fixed later. Let Paul Ryan take them out. Or fund them out of the leftovers from the stimulus package, which failed so badly.
I’m glad to see that the NFIB, the Business Roundtable, the Chamber of Commerce, any number of bank economists, FreedomWorks, Americans for Tax Reform, and others agree with me. And I do not understand Mitt Romney’s opposition. He ought to know better.
And speaking of ought to know better, the jump in long-term interest rates on rising economic growth should tell the Fed to stop QE2. Capital gains and low-tax incentives for businesses large and small are real job creators. On the other hand, just printing money would be an inflation-creator over time. In fact, the rise in long-term Treasury rates is telling the Fed that short-term rates are too low and should be higher.
On CNBC's Kudlow Report
Tonight at 7pm ET on CNBC:MARKETS & ECONOMY
- Rich Karlgaard - Forbes
- Jon Najarian - OptionMonster
- Andy Busch- BMO Capital Markets
DEBIT CARD FEES: IS THE FED OVER-REACHING?
-Brian Gardner, Keefe, Bruyette & Woods
-Peter Navarro, University Of California - Irvine Business Professor
CEO SUMMIT AT THE WHITE HOUSE: PROCESS OR POLITICS? WILL CEOS START HIRING?
- Jimmy Pethokoukis, Reuters Money & Politics
- David Goodfriend, former Clinton WH staffer
GOVERNMENT SPENDING GONE WILD
New Spending Bill Totals $1.1 Trillion
- Rep David Dreier (R-CA)
- Rep. Bill Pascrell (D-NJ)
HOUSING:
FORECLOSURE DATA TO BE RELEASED TOMORROW...WILL RISING INTEREST RATES AND THE FORECLOSURE MORATORUM KILL THE HOUSING SECTOR? ... WHAT DOES ALL THIS MEAN FOR THE HOMEBUYER AND YOUR MORTGAGE?
- Stephen Gandel, Time magazine
- Matt Englett - KEL Attorney
Please join us. The Kudlow Report. 7pm ET. CNBC.
Tuesday, December 14, 2010
On CNBC's Kudlow Report Tonight
Tonight at 7pm ET on CNBC:MARKETS & ECONOMY...DOES THE BERNANKE FED HAVE THE STORY ALL WRONG?
- Don Luskin, Trend Macro Chief Investment Officer
- Keith McCullough, Hedgeye Risk Management
- David Goldman, former head of Global Fixed Income Research at Bank of America
TAX DEAL UPDATE
CNBC’s chief Washington correspondent John Harwood reports.
THE OBAMA-CEO SUMMIT
President Obama met with Gates & Buffet today and will meet with CEO's/Business Roundtable tomorrow. Is this a new pro-business move or just a game of politics? What can we expect from the "new" Obama economic agenda?
- Robert Reich - former Labor Secretary
- Steve Moore - Wall St. Journal Editorial Board
ECONOMIC GROWTH & INTEREST RATE OUTLOOK
With all the positive economic signs, isn't it time for Gary Shilling to change his forecast?
- Gary Shilling - A. Gary Shilling & Co. President
- Brian Wesbury - First Trust Advisors Chief Economist
RETAIL: ARE WE LOOKING AT A NEW CONSUMER?
- Hitha Prabhakar -Style File Group retail analyst
- Liz Dunn - FBR Capital Markets & Co. Retail Analyst
IS THIS THE END OF OBAMACARE?
- Ben Ferguson - Syndicated Talk Radio Host ICON Radio Network- Memphis
- Mark Levine, Democratic strategist
Please join us. The Kudlow Report. 7pm ET. CNBC.
Respectful and Loving Opposition to Krauthammer
As I wrote in my last column, “Sell Bonds, Buy Stocks,” I continue to favor the tax-cut package. With all respect to Charles Krauthammer — he’s a brilliant guy, at least three-times smarter than I am on most things, and I love him — his recent column mischaracterizes the tax package.
Republicans should distinguish between tax cuts now (or back in 2003) and massive government-spending stimulus in 2009. The current package would refresh and maintain low tax rates, adding to confidence. So many people around the country and in financial markets expected the tax cuts to expire. Now they won’t. This is good.
We can avoid the train-wreck scenario for the economy and the stock market. We can avoid rolling back marginal tax incentives and draining $600 billion or more from the private sector and handing it over to the government.
Roughly 90 percent of this package is tax cuts. Neither Charles nor other conservative critics of the deal even mention the business tax cuts that are new, including 100 percent cash expensing, which will have a positive effect for job creation (though it should be permanent rather than just one year).
The package’s payroll tax cut for one year is really a demand-side rebate. But at least it keeps money in the pockets of the workforce. That’s not nothing. And extending the AMT is very positive. At $150 billion, this too is not nothing.
Like other conservatives, I worry that extended unemployment benefits will keep unemployment higher than necessary. But this could be funded out of the $110 billion of unspent stimulus funds from the 2009 package. And while the extra spending add-ons for ethanol, wind, and solar power, along with other nicks and nacks, come to $5 billion, they also could be taken out of the unspent stimulus and should not be enough to block the package.
I think conservatives have to keep their eye on economic growth. There’s stuff in the deal that I don’t like, but the overall impact is going to be positive.
The GOP should not go back to root-canal deficit obsession. Next year Paul Ryan is going to lead the charge on deep spending cuts. That’s the best way to lower the budget deficit — not tax hikes.
Root canal doesn’t work. Growth has to be essential to deficit reduction.
When I read Charles Krauthammer’s article carefully, what he really seems to be saying is that conservatives should oppose tax cuts because their growth impact (he acknowledges 1 percent better growth) might reelect Obama. I don’t think that’s good economic or political logic. What Republicans should be doing now is promoting growth and better jobs. There’s plenty of credit to go around. And then comes flat-tax reform, spending cuts, and meaningful deficit reduction.
I know this tax-cut package is not a panacea. I’m just saying it’s a good thing, a step in the right direction. And I think it is consistent with Tea Party principles, as per its endorsement by FreedomWorks.
More on this later.
Republicans should distinguish between tax cuts now (or back in 2003) and massive government-spending stimulus in 2009. The current package would refresh and maintain low tax rates, adding to confidence. So many people around the country and in financial markets expected the tax cuts to expire. Now they won’t. This is good.
We can avoid the train-wreck scenario for the economy and the stock market. We can avoid rolling back marginal tax incentives and draining $600 billion or more from the private sector and handing it over to the government.
Roughly 90 percent of this package is tax cuts. Neither Charles nor other conservative critics of the deal even mention the business tax cuts that are new, including 100 percent cash expensing, which will have a positive effect for job creation (though it should be permanent rather than just one year).
The package’s payroll tax cut for one year is really a demand-side rebate. But at least it keeps money in the pockets of the workforce. That’s not nothing. And extending the AMT is very positive. At $150 billion, this too is not nothing.
Like other conservatives, I worry that extended unemployment benefits will keep unemployment higher than necessary. But this could be funded out of the $110 billion of unspent stimulus funds from the 2009 package. And while the extra spending add-ons for ethanol, wind, and solar power, along with other nicks and nacks, come to $5 billion, they also could be taken out of the unspent stimulus and should not be enough to block the package.
I think conservatives have to keep their eye on economic growth. There’s stuff in the deal that I don’t like, but the overall impact is going to be positive.
The GOP should not go back to root-canal deficit obsession. Next year Paul Ryan is going to lead the charge on deep spending cuts. That’s the best way to lower the budget deficit — not tax hikes.
Root canal doesn’t work. Growth has to be essential to deficit reduction.
When I read Charles Krauthammer’s article carefully, what he really seems to be saying is that conservatives should oppose tax cuts because their growth impact (he acknowledges 1 percent better growth) might reelect Obama. I don’t think that’s good economic or political logic. What Republicans should be doing now is promoting growth and better jobs. There’s plenty of credit to go around. And then comes flat-tax reform, spending cuts, and meaningful deficit reduction.
I know this tax-cut package is not a panacea. I’m just saying it’s a good thing, a step in the right direction. And I think it is consistent with Tea Party principles, as per its endorsement by FreedomWorks.
Wednesday, December 8, 2010
On CNBC's Kudlow Report Tonight
Tonight at 7pm ET on CNBC:10-YEAR TREASURY SOARS TO SIX MONTH HIGH…GOLD SILVER DOWN SHARPLY
- CNBC’s Rick Santelli reports.
THE MARKETS & ECONOMY
- Howard Lutnick, Cantor Fitzgerald Chairman & CEO; BGC Partners Chairman & CEO
- Todd Schoenberger, Managing Director; LandColt Trading, LLC
- Joe Battipaglia, Stifel Nicolaus Market Strategist
CEOs ROADMAP FOR GROWTH
- CNBC's Eamon Javers reports.
ONE-ON-ONE WITH HOWARD LUTNICK
- Howard Lutnick, Cantor Fitzgerald Chairman & CEO; BGC Partners Chairman & CEO
SHOULD THERE BE MORE DEFICIT OFFSETS TO $1T STIMULUS PACKAGE?
- Chris Chocola, Club for Growth President
- James Glassman, George W. Bush Institute Executive Director; Kiplinger's Personal Finance Columnist
OBAMA & STATE OF THE DEMS ON TAXES, SPENDING & JOBS
- Robert Reich, Fmr. Labor Secretary; "Aftershock" author; CNBC Contributor; Univ. of CA., Berkeley, Prof. of Public Policy
Please join us. The Kudlow Report. 7pm ET. CNBC.
Friday, December 3, 2010
Shock Therapy for Jobs
Unemployment jumped to 9.8 percent in a very disappointing November jobs report. Nonfarm payrolls increased by only 39,000 and private jobs expanded by just 50,000. This is way below what the economy needs. Most discouraging, the smaller-business household employment number fell for the second time in a row, down 173,000 in November after a 330,000 drop in October. This is the nineteenth straight month with unemployment above 9 percent.
Now, after the severe financial panic of two years ago, it seems clear that too many tax and regulatory obstacles are blocking satisfactory job creation. And it also seems clear that a number of fresh new incentives will be necessary to spur the kind of prosperity that Americans desire. Following the deep recession, we need shock-therapy, pro-growth, tax-cut and deregulatory incentives.
Post-election, is the Washington war on business really over? Has the war on successful earners and investors truly ended? Is the class war against capital still being waged by the White House?
Will Obama bring senior business people into his inner circle? Are we going to get pro-growth tax reform for individuals and corporations? Are we truly going to limit government spending in order to reduce the onerous budget deficit? Is King Dollar currency stability on the table?
These are all key questions for the economy’s future and the murky unemployment outlook.
Perhaps the only saving grace from the poor jobs report is that it will spur a quick resolution to extend all the Bush tax cuts.
Democrats keep shilly-shallying with all these silly class-warfare amendments, like a $250,000 limit, or a $1 million limit. This has everything to do with left-wing redistributionist social policy and nothing to do with economic growth. The fact is, passing the bill to freeze the tax rates will help business confidence. Why don’t Democrats understand this?
But there’s more.
Large and small companies remain worried about the high regulatory and tax costs of Obamacare, which is the number-one jobs-stopper. How expensive will it be over the next five to ten years for the new hire? Companies also have to deal with a crazy quilt of new financial regulations that may block access to new bank loans when private credit demand kicks up.
But the Bush tax cuts will not do the job alone. Full-fledged flat-tax reform — of the sort embodied in the best of the Bowles-Simpson fiscal recommendations — will be necessary for full-fledged economic recovery.
Lowering the top personal and corporate tax rates will increase after-tax returns for work and investment. That’s the kind of strong new incentive that will be necessary to ignite rapid economic growth in the post-meltdown period. Broaden the tax base and lower marginal rates across-the-board.
And full-throated spending reduction will be necessary to drive deficits lower, and reduce the threat that future taxes may have to go up if the bond vigilantes come after the U.S. Treasury market the way they have attacked various countries in Europe.
Meanwhile, the Fed can produce money, but we are learning again that it cannot produce jobs. It also can produce inflation and a devalued dollar.
In other words, the basic building blocks for growth must be restored: limited government, lower tax rates, and a steady currency.
However, all is not doom and gloom on the economy. There is some optimism. In fact, there’s a mystery to Friday’s jobs report, since it just doesn’t tally with all the other good economic news.
Retail sales are up four straight months, and chain-store sales for the early holidays surprised on the upside. Manufacturing reports have been solid. Even for November, the Institute for Supply Management’s surveys for manufacturing and services were solid. The ISMs are basically real-time economic indicators. And oddly enough, the employment component of each looks fairly strong.
Meanwhile, core business investment is rising at a double-digit pace. Profits are at a record high. Commodity indexes are rising at a better than 10 percent rate, year-on-year. The M2 money supply is growing around 8 percent annually. Business loans from commercial banks are finally bottoming. The Treasury yield curve is positively sloped. Oil prices, closing in on $90 a barrel, are too strong. And the stock market’s strong run continues.
In sum, the economy is actually rising at a roughly 3 percent rate. But economic growth should be double that.
There is so much work to be done by the new Republicans in Washington. Let’s hope the Tea Party message is alive and well in the GOP. Smaller government, lower tax rates, deregulation, and free-market economic freedom. We need it now more than ever.
Now, after the severe financial panic of two years ago, it seems clear that too many tax and regulatory obstacles are blocking satisfactory job creation. And it also seems clear that a number of fresh new incentives will be necessary to spur the kind of prosperity that Americans desire. Following the deep recession, we need shock-therapy, pro-growth, tax-cut and deregulatory incentives.
Post-election, is the Washington war on business really over? Has the war on successful earners and investors truly ended? Is the class war against capital still being waged by the White House?
Will Obama bring senior business people into his inner circle? Are we going to get pro-growth tax reform for individuals and corporations? Are we truly going to limit government spending in order to reduce the onerous budget deficit? Is King Dollar currency stability on the table?
These are all key questions for the economy’s future and the murky unemployment outlook.
Perhaps the only saving grace from the poor jobs report is that it will spur a quick resolution to extend all the Bush tax cuts.
Democrats keep shilly-shallying with all these silly class-warfare amendments, like a $250,000 limit, or a $1 million limit. This has everything to do with left-wing redistributionist social policy and nothing to do with economic growth. The fact is, passing the bill to freeze the tax rates will help business confidence. Why don’t Democrats understand this?
But there’s more.
Large and small companies remain worried about the high regulatory and tax costs of Obamacare, which is the number-one jobs-stopper. How expensive will it be over the next five to ten years for the new hire? Companies also have to deal with a crazy quilt of new financial regulations that may block access to new bank loans when private credit demand kicks up.
But the Bush tax cuts will not do the job alone. Full-fledged flat-tax reform — of the sort embodied in the best of the Bowles-Simpson fiscal recommendations — will be necessary for full-fledged economic recovery.
Lowering the top personal and corporate tax rates will increase after-tax returns for work and investment. That’s the kind of strong new incentive that will be necessary to ignite rapid economic growth in the post-meltdown period. Broaden the tax base and lower marginal rates across-the-board.
And full-throated spending reduction will be necessary to drive deficits lower, and reduce the threat that future taxes may have to go up if the bond vigilantes come after the U.S. Treasury market the way they have attacked various countries in Europe.
Meanwhile, the Fed can produce money, but we are learning again that it cannot produce jobs. It also can produce inflation and a devalued dollar.
In other words, the basic building blocks for growth must be restored: limited government, lower tax rates, and a steady currency.
However, all is not doom and gloom on the economy. There is some optimism. In fact, there’s a mystery to Friday’s jobs report, since it just doesn’t tally with all the other good economic news.
Retail sales are up four straight months, and chain-store sales for the early holidays surprised on the upside. Manufacturing reports have been solid. Even for November, the Institute for Supply Management’s surveys for manufacturing and services were solid. The ISMs are basically real-time economic indicators. And oddly enough, the employment component of each looks fairly strong.
Meanwhile, core business investment is rising at a double-digit pace. Profits are at a record high. Commodity indexes are rising at a better than 10 percent rate, year-on-year. The M2 money supply is growing around 8 percent annually. Business loans from commercial banks are finally bottoming. The Treasury yield curve is positively sloped. Oil prices, closing in on $90 a barrel, are too strong. And the stock market’s strong run continues.
In sum, the economy is actually rising at a roughly 3 percent rate. But economic growth should be double that.
There is so much work to be done by the new Republicans in Washington. Let’s hope the Tea Party message is alive and well in the GOP. Smaller government, lower tax rates, deregulation, and free-market economic freedom. We need it now more than ever.
On CNBC's Kudlow Report Tonight
Tonight at 7pm ET on CNBC:THE IMPACT OF THE JOBS NUMBER; IS IT A BOGUS NUMBER? JOBS; TAXES, DEBT COMMISSION & QE2
- Robert Reich, Fmr. Labor Secretary; "Aftershock" author; CNBC Contributor; Univ. of CA., Berkeley, Prof. of Public Policy
- Steve Moore, Senior Economics Writer for WSJ Editorial Board; "Return to Prosperity" co-author
WHY DID MARKETS IGNORE THE JOBS NUMBER? WHAT'S DRIVING STOCKS?
COMMODITIES RALLY BOOSTS EARLY DAY STOCK SLUMP
- Todd Schoenberger, Managing Director LandColt Trading, LLC
- David Tice, Portofilio Manager, The Prudent Bear Fund
- Marc Pado, Cantor Fitzgerald U.S. Market Strategist
OIL CREEPING UP - HOW HIGH WILL IT GO? ANOTHER TAX ON THE CONSUMER?
- Daniel Dicker, Independent Oil Trader, TheStreet.com Senior Contributor
- Peter Beutel, Cameron Hanover President and Author
THE GREAT ESTATE TAX DEBATE
- Keith Boykin, Former Clinton White House Aide; Editor of The Daily Voice online news site; CNBC contributor
- James Pethokoukis, Reuters Money & Politics Columnist; CNBC Contributor
STOCK PICKERS
- Michael Cuggino, Permanent Portfolio Funds; President & Portfolio Manager
- Michael Farr, Farr, Miller & Washington President; CNBC Contributor
Please join us. The Kudlow Report. 7pm ET. CNBC.
Wednesday, December 1, 2010
Good News Lifts Stocks
Stocks hit the jackpot today, with the Dow up almost 250 points.
There was better economic news from ADP private jobs and ISM manufacturing. Revised productivity came in stronger with falling unit labor costs that point to strong profits. Europe’s debt problem looks a little easier on hopes the ECB will be buying bonds. (Maybe QE2 for Europe.) There were rumors that the U.S. would contribute more money to a bigger IMF/Euro bailout fund, although the Treasury denies any commitment. China’s manufacturing survey came in stronger. And hopes are growing for an across-the-board extension of the Bush tax rates.
So all of this added up to a big stock rally.
And one final thought: The improving U.S. economy again suggests to Ben Bernanke that he should back off QE2. A tax-rate freeze is a much better idea for growth.
However, if Europe pumps in more money — as I increasingly think it should — we could be headed for a global mini-boom. Surprise, surprise.
There was better economic news from ADP private jobs and ISM manufacturing. Revised productivity came in stronger with falling unit labor costs that point to strong profits. Europe’s debt problem looks a little easier on hopes the ECB will be buying bonds. (Maybe QE2 for Europe.) There were rumors that the U.S. would contribute more money to a bigger IMF/Euro bailout fund, although the Treasury denies any commitment. China’s manufacturing survey came in stronger. And hopes are growing for an across-the-board extension of the Bush tax rates.
So all of this added up to a big stock rally.
And one final thought: The improving U.S. economy again suggests to Ben Bernanke that he should back off QE2. A tax-rate freeze is a much better idea for growth.
However, if Europe pumps in more money — as I increasingly think it should — we could be headed for a global mini-boom. Surprise, surprise.
On CNBC's Kudlow Report Tonight
Tonight at 7pm ET on CNBC:ECONOMIC AWAKENING!....ANOTHER BANNER DAY FOR STOCKS!
- Russ Koesterich, BlackRock's iShares Group; Global Chief Investment Strategist
- Joe Battipaglia , Stifel Nicolaus Market Strategist
- Don Luskin, CNBC Contributor; Trend Macro Chief Investment Officer
- Zach Karabell, River Twice Research President Economist; CNBC Fast Money Contributor
- CNBC’s Bob Pisani
TAX TALKS // AUSTAN GOOLSBEE INTERVIEW
- CNBC chief Washington correspondent John Harwood reports.
GOOLSBEE TAX, ETC. DEBATE
- Matt Miller, Washington Post Online Columnist; Public Radio's "Left, Right and Center" Host
- Brian Darling, Heritage Foundation Dir. Government Relations
GOLDMAN LIFTS SECTOR VIEW TO OVERWEIGHT....ARE BANKS BACK? DO YOU PLAY IT LIKE GOLDMAN?
- Scott Valentin, FBR managing director
- Peter Cohan, Peter S. Cohan & Associates
TOMORROW'S JOBS REPORT....PLUS, SHOULD UNEMPLOYMENT BENEFITS BE EXTENDED (AGAIN)?
- Robert Reich, Fmr. Labor Secretary; "Aftershock" author; CNBC Contributor; Univ. of CA., Berkeley, Prof.
- Dan Mitchell, CATO Institute Senior Fellow
Please join us. The Kudlow Report. 7pm ET. CNBC.
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