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Larry Kudlow: Don't Panic, This Isn't Remotely Like 2008
Real Clear Markets ^ | 08/09/2011 | Larry Kudlow

Posted on 08/09/2011 7:56:16 AM PDT by SeekAndFind

During a period like this, with stocks plunging almost on a daily basis, it's clear that fear and shock are ruling the roost. But fear can be overdone. As someone who has been around awhile and has seen many sell-offs, let me offer some advice: Do not panic. Market corrections come and go. They are not the end of the world. Most times they are actually healthy.

The S&P downgrade is a fiscal warning, not an economic event. And the growing fear of U.S. recession may not pan out. There are still plusses out there, believe it or not.

Our financial system is in vastly better shape than it was in September 2008. Vastly better shape.

The Federal Reserve is highly accommodative, as illustrated by the upward-sloping yield curve. Using the yield-curve measure alone, the chances of recession based on historical analysis are very low.

And energy prices are coming down, with oil moving toward $80 a barrel. Oil analyst Peter Beutel points out that gasoline prices in the last two weeks have fallen by 35 to 40 cents. Adding in other oil-related savings, the energy-price drop amounts to a $100 billion tax rebate for consumers.

Plus, corporate profits will continue to rise while business balance sheets are pristine and chock full of cash. Consider the combination of solid productivity, moderate wage rates, and falling commodity prices. These are all plusses for the economy and stocks.

So in light of all these factors, it seems to me that the economy can hold up. It's not the kind of rapid growth I'd like to see. But it's not the deep and dark recession that seems to be embodied in the stock market plunge.

(Excerpt) Read more at realclearmarkets.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: debt; downgrade; larrykudlow; stockmarket

1 posted on 08/09/2011 7:56:20 AM PDT by SeekAndFind
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To: SeekAndFind

Larry....you’re wrong again you sorry sack of......


2 posted on 08/09/2011 7:59:06 AM PDT by PALIN SMITH (In a time of universal deceit, telling the truth is a revolutionary act.)
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To: SeekAndFind

The most reliable indicator that a recession is on the way, is an inverted yield curve on govvie bonds(meaning, short-term rates are higher than long term rates). At this writing, the yield curve is pretty steep. Short term rates are very low, while long term rates are quite a bit higher by comparison.

There you go! :)


3 posted on 08/09/2011 8:00:01 AM PDT by RexBeach (Mr. Obama can't count.)
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To: SeekAndFind
gasoline prices in the last two weeks have fallen by 35 to 40 cents

Where would that be?
We're stuck here same as a month ago.

4 posted on 08/09/2011 8:00:08 AM PDT by grobdriver (Proud Member, Party Of No! No Socialism - No Fascism - Nobama - No Way!)
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To: grobdriver

dropped 9 cents over night here.

Market is up 230 right now.


5 posted on 08/09/2011 8:01:10 AM PDT by cableguymn
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To: SeekAndFind

Somone has to make the bull case, though I think he glossed over the gooberment failures a bit too easily. Zimbabwe and the Weimar had going companies all the while their respective governments cheated people out of their wealth even as their stock markets “soared.”


6 posted on 08/09/2011 8:01:39 AM PDT by junta ("Peace is a racket", testimony from crime boss Barrack Hussein Obama.)
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To: SeekAndFind

7 posted on 08/09/2011 8:01:50 AM PDT by Bloody Sam Roberts (Be prepared. It's a hard rain's that's gonna fall.)
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To: SeekAndFind
And energy prices are coming down, with oil moving toward $80 a barrel.

Because the economy is slowing down and demand for oil is lower Larry. This is more of Kudlows sunshine and lollypops BS he tries selling on a regular basis. I notice he totally avoided the trouble in the EU in talking away this "non event".

8 posted on 08/09/2011 8:02:21 AM PDT by Lazlo in PA (Now living in a newly minted Red State.)
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To: SeekAndFind

Don’t listen to him, whatever you do. What does he know? Panic! Sell everything and take a huge loss! Panic! Panic! The sky is falling!


9 posted on 08/09/2011 8:02:32 AM PDT by Peter from Rutland
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To: grobdriver
gasoline prices in the last two weeks have fallen by 35 to 40 cents

Diesel here in SE Tennessee is $3.87/gallon. The price has been going UP lately, not down. Cost me $130 to fill my truck the other day.

10 posted on 08/09/2011 8:05:06 AM PDT by Thermalseeker (The theft being perpetrated by Congress and the Fed makes Bernie Maddoff look like a pickpocket.)
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To: SeekAndFind
Nothing to see here folks!


11 posted on 08/09/2011 8:06:00 AM PDT by skeeter
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To: Lazlo in PA

Larry is the quintessential optimist. He could have been at Hiroshima Ground Zero and announced the house fire would soon be under control.


12 posted on 08/09/2011 8:09:04 AM PDT by donozark (Never loan money to a preacher...)
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To: PALIN SMITH
Larry is a fool.

Companies & Consumers stop spending, unemployment goes up, and lack of demand drives gas prices down. Oil Prices are merely one indicator.

Might as well relate the weather to the price of gold.

13 posted on 08/09/2011 8:09:50 AM PDT by wbill
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To: SeekAndFind

Ah, but trust is the coin of the realm, Kudlow. And if there was any of that to be had a couple of years ago, there’s none now. The ruling class is flat busted. No, it’s not ‘08. It’s unimaginably worse.


14 posted on 08/09/2011 8:10:57 AM PDT by mewzilla (Forget a third party. We need a second one.)
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To: grobdriver
Where would that be?

I'm in the SE. I've seen gas prices go down maybe 10-15 cents in the past couple of weeks.

40? Not likely.

15 posted on 08/09/2011 8:11:43 AM PDT by wbill
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To: SeekAndFind
Larry Kudlow: Don't Panic, This Isn't Remotely Like 2008

True -

Back in 2008 we knew the financial scare was a pre-election scam set up by Obama backers.
The fundamentals were still fairly sound and we had not been through TARP, Stimulus I, QE-1, QE-2 and three years of Obama's insane wealth redistribution, so we had $2 or $3 trillion less debt.

And at that time we still believed that the crooked and inept politicians creating the problems were motivated by greed and a desire to push the liberal agenda, not by a desire to destroy the country.

Now, three years later, we know the economy is much worse than it was in 2008 and that the fundamentals are getting even weaker day by day.

And we now have a president who has clearly stated he wants to remake America.
To do that you have to un-make it first. That is exactly what he is doing.


16 posted on 08/09/2011 8:13:39 AM PDT by Iron Munro (One Trillion seconds = 31,709.79 YEARS / One Trillion dollars = Obama's small change)
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To: SeekAndFind

Dow is up 230. Hussein better schedule another speech this afternoon to tank the market again and keep the evil rich people from regaining some of this market value.


17 posted on 08/09/2011 8:13:58 AM PDT by crusader71
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To: Lazlo in PA
I guess that's as opposed to your doom and gloom.

I would hardly call Kudlow's article "sunshine and lollypops," I would characterize it more as "Don't panic, all is not lost." It reads as quite balanced to me.

In my opinion, we are not facing the end of the world scenario as you seem to believe. We are, however in a bad economic downturn and with the current administration there is little prospect for any real improvement in the near future.

Until we can rid ourselves of Obama and his cronies, the closest we can hope for is for the economy to reach a holding position or a slow continued decline.
18 posted on 08/09/2011 8:14:40 AM PDT by Sudetenland (There can be no freedom without God--What man gives, man can take away.)
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To: PALIN SMITH

Somebody tell Larry that corporations have a lot of cash but they are not hiring.


19 posted on 08/09/2011 8:15:41 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: grobdriver

Spot prices for delivery next month have fallen that much, but it won’t show at the pump right away.

No matter. The US is pumping significantly less oil than BO (Before Obama). Prices are coming down because investors believe that the economy is going south. If it does as Kudlow predicts it will go right back up, and stay there until we start producing more energy. Which is NOT going to happen.

As someone else in this thread points out, he is acting if the situation in Europe is not a significant variable for us. We are already sending billions over there to prop up things. If it crashes there, we will be profoundly affected.


20 posted on 08/09/2011 8:18:25 AM PDT by ChildOfThe60s ( If you can remember the 60s....you weren't really there)
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To: Iron Munro
Government may have designs on IRAs/401Ks,etc. Tank the market, then come to the "rescue" of millions of Americans who lost their life savings. Socialism on the march. Virtually unstoppable (as I see it) by any means other than force of arms.

What we are seeing in London has only been prevented here because we have a Black man as President. Were he lily white, and worse, a Republican, our cities would be in flames.

Next stop? Libya...

21 posted on 08/09/2011 8:20:24 AM PDT by donozark (Never loan money to a preacher...)
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To: PALIN SMITH
I love Larry, he's always optimistic.

Wrong as hell, but optimistic

22 posted on 08/09/2011 8:21:17 AM PDT by NeoCaveman (all your gold are belong to us)
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To: SeekAndFind

must need his cocaine or FBI files....


23 posted on 08/09/2011 8:23:53 AM PDT by Dick Vomer (democrats are like flies, whatever they don't eat, they sh#t on.)
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To: Sudetenland
In my opinion, we are not facing the end of the world scenario as you seem to believe.

I said no such thing on doom and gloom. My argument is that Larry is hyping the economy without citing certain things that hurt his argument. Oil prices tanking was just one blatant omission. I am a regular watching his evening CNBC program. No matter how bad things are, he consistently pushes that things are fine and everything in the economy is turning around. He even had to tap dance around the price of gold in his argument in this piece.

24 posted on 08/09/2011 8:27:35 AM PDT by Lazlo in PA (Now living in a newly minted Red State.)
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To: SeekAndFind

He is right. It isn’t like 08. We won’t allow Hussein’s cult to win this time.


25 posted on 08/09/2011 8:31:23 AM PDT by Recovering_Democrat
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To: SeekAndFind
gasoline prices in the last two weeks have fallen by 35 to 40 cents.

That's BS. They're down about 4 cents here in Los Angeles.
26 posted on 08/09/2011 8:31:34 AM PDT by Deo volente (God willing, America will survive this Obamination.)
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To: Iron Munro

Fundamental Transformation™


27 posted on 08/09/2011 8:33:15 AM PDT by Jane Long (2 Chron 7:14)
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To: Jane Long

It’s more like 1929...


28 posted on 08/09/2011 8:34:49 AM PDT by null and void (Day 929. When your only tools are a Hammer & Sickle, everything looks like a Capitalist...)
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To: Iron Munro
You forgot, the biggest drag on the future optimism for business is Obamacare.

It is interesting that they picked the day of signing the deficit increase bill to announce that they are forcing the insurance companies to pay for birth control and morning after pills.

This is one of the first mandates from Obamacare and any company that doesn't see the writing on the wall is delusional. No company will be safe from government takeover if this stays intact. The federal government can come up with a 'public good' argument to take over any industry or business.

29 posted on 08/09/2011 8:43:22 AM PDT by arkady_renko
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To: SeekAndFind
True if Obozo does nothing else, but that ain't going to happen, the sneaky bastard is implementing regulations that are killers.
30 posted on 08/09/2011 8:44:44 AM PDT by boomop1
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To: SeekAndFind

No, Larry, it’s worse than 2008.


31 posted on 08/09/2011 9:07:20 AM PDT by SoldierDad (Proud dad of an Army Soldier currently deployed in the Valley of Death, Afghanistan)
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To: grobdriver

Haven’t seen a drop here in N. CA.


32 posted on 08/09/2011 9:08:15 AM PDT by SoldierDad (Proud dad of an Army Soldier currently deployed in the Valley of Death, Afghanistan)
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To: Georgia Girl 2
Somebody tell Larry that corporations have a lot of cash but they are not hiring.

It is not the purpose of hiring to piss away your money.

You only hire if you think that you can make more by hiring than by not hiring.

33 posted on 08/09/2011 9:26:44 AM PDT by HIDEK6
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To: crusader71

Why, pray tell, is the Market up today? What has changed since yesterday? The answer is not nothing. What has changed since yesterday is that things are getting worse. Furthermore, they will continue to do so for as long as The Usurping Marxist Onada nd his band of angry commies continue control the levers of power.


34 posted on 08/09/2011 9:35:40 AM PDT by dools0007world (uestion)
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To: HIDEK6

“You only hire if you think that you can make more by hiring than by not hiring.”

Yeh thats my point. Things are not great just because Corporations have cash.


35 posted on 08/09/2011 9:36:06 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: SeekAndFind; All

Larry Kudlow would barbecue live puppies over hot coals, if it would yank the indexes up half a percent for him and his day trader buddies.


36 posted on 08/09/2011 9:44:22 AM PDT by Notary Sojac (Nothing will cure the economy but debt deleveraging, deregulation, and time.)
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To: RexBeach

I honestly haven’t looked, but are you saying there is no inverted yield curve right now ? If thats the case, that would be a major point for Kudlow, I haven’t actually seen what the curve is like, so I honestly don’t know.


37 posted on 08/10/2011 10:16:16 PM PDT by Sonny M ("oderint dum metuant")
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To: Sonny M

The Treasury yield curve is a long way from inverted.

The curve is still quite steep: From short-term bills and notes, to long-term bonds.

I think Larry is right on target.


38 posted on 08/11/2011 5:14:29 AM PDT by RexBeach (Mr. Obama can't count.)
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To: RexBeach
Personally, I always liked Kudlow.

If the curve is very steep, does or doesn't that signal inflation ?

I'm kind of vague on this.

Do you know where I can see the curve ?

39 posted on 08/11/2011 6:41:59 AM PDT by Sonny M ("oderint dum metuant")
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To: grobdriver

If oil is so low...why are the gas prices still over $3.50 a gallon? C’mon 0bama explain that to me will ya’?


40 posted on 08/11/2011 6:44:20 AM PDT by EBH (God Humbles Nations, Leaders, and Peoples before He uses them for His Purpose)
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To: Sonny M

Yes, oftentimes inflation accompanies this sort of curve. How much? Hard to say. But given rates as low as they are, and the Fed’’s remarkable utterance earlier this week that it plans to keep rates low until mid-2013, I can’t imagine there’s much inflation threat out there.

Bloomberg.com is where you can see the yield curve. Go to the home page, then click on “markets”, then click on “Rates & Bonds.” Then you’ll see old curve.

BTW, this yield curve biz has been one of the most accurate precursors of recession since the end of WW2.


41 posted on 08/11/2011 7:35:15 AM PDT by RexBeach (Mr. Obama can't count.)
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To: RexBeach

Thank you kindly, much appreciated.


42 posted on 08/11/2011 8:31:43 AM PDT by Sonny M ("oderint dum metuant")
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