Arthur Laffer: US is in Recession Now
I almost fell off of my chair yesterday when I heard Art Laffer on Kudlow say those words: "The US is in a recession now."
That's quite a reversal. As a trader, I am quick to give credit to those people who recognize when they are wrong and reverse themselves. I suspect Laffer is trying to distant himself from some of the more hallucinatory and reality-disconnected pundits he shares the camera with on K&Co..
For the record, I don't think we are in the classic NABE definition of recession -- yet. Elsewhere, the Leading Economic Indicators declined for the 3rd straight month, and the 5th month in 7.
click for video
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Of course, Laffer is a political creature above all else, and is now blaming the recession on Bernanke. This is setting up the talking points for the election. "If I was in the White House, I would start pointing the finger at Bernanke"
And, he disagrees with Kudlow, saying it won't be difficult to run as a Republican in a recession.
So much for the politics of personal responsibility . . .
>
UPDATE: January 18, 2008 11:16am
NOTE: Laffer calling a recession is actually the video before this, which is not posted on CNBC --but I TIVO'd it, and can upload it over the weekend.
>
Source:
Leading Indicators Decline 0.2%
DEBORAH LYNN BLUMBERG
WSJ, January 18, 2008 10:07 a.m.
http://online.wsj.com/article/SB120066859773200703.html
Friday, January 18, 2008 | 11:02 AM | Permalink
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Comments
That whole group sounds like they shared a plate of magic mushrooms before the show.
Blaming da Fed for a bunch of moronic bankers? The question I want answered is where or where were the regulators? Time for another Glass Steagal reg and a breakup of the ratings cartel.
Laffer's 1 + 1=3 only works at inflection points.
Sorry for venting.
Posted by: Ross | Jan 18, 2008 11:14:10 AM
I am a lifelong Jet fan. Bernanke reminds me of Rich Kotite.
Posted by: The Dirty Mac | Jan 18, 2008 11:19:49 AM
In economics, there exists a considerable distribution of opinions, approaches and theories. Most of them reach opposite conclusions and appear very contradictory to the point where they are artsy.Buffett said that if you find the right stock, it doesn't matter what the economy does. So in that sense we shouldn't care about recession and economics? Words... Rob,
www.WallastonInvestments.com
Posted by: Rob | Jan 18, 2008 11:29:47 AM
How long will it take before we realize that the talking heads don't know any more about a given subject than the man in the street? Who is in the market for twisted information, faulty analysis, and bad advice - especially when it comes to money and finances?
The internet gives us much better insight, unedited and on demand, than any "expert", political or economic, on television. It also lets us check the track records of these gas bags.
Right now, the question of whether we're in a recession or not is equivalent to the global warming "debate." If we are not currently in a recession, a recession (and, most likely a very painful recession) is certainly imminent. I know it, you know it, the man in the street knows it, the pundits know it, and the government knows it.
So why the news when somebody says it?
I wonder if Britney Spears has an opinion...
Posted by: Marcus Aurelius | Jan 18, 2008 11:42:27 AM
BUSH SPEAK: i am stunned, no details, no indication Bush and Congress even remotely on the same page. so now, 2 for 2: nothing out of Bernanke, nothing out of Bush, 3-day weekend and the MidEast is once again on fire. nice.
Posted by: scorpio | Jan 18, 2008 11:43:03 AM
Kotite. too funny. as a Giants fan i LOVED his tenure with the jets and eagles.
Posted by: craig | Jan 18, 2008 11:46:16 AM
Why anyone tunes in Kudlow is beyond me- except when you are on Barry. CNBC should put a disclaimer on the bottom that this is a paid announcement from the Republican right wing. "stocks crashed today, our health care system collpased, China is calling in it's loans, but other than that our economy is just great" Larry Kudlow
Posted by: larry | Jan 18, 2008 11:47:05 AM
Art Laffer has no credibility; it's 1929 and he acts like it's 1979.
Posted by: Paul Jones | Jan 18, 2008 11:48:28 AM
Wholly F**K! Is the Dow gonna break below 12,000 today?
Posted by: Donny | Jan 18, 2008 11:49:55 AM
In this clip he says that the White House should start pointing the finger at Bernanke. Hilarious! Finger pointing!?! How about sticking out their tongues? Have they tried making funny faces yet?
I can't believe these people are asking, actually asking, whether or not the US economy is in a recession. Not only that, but suggesting that a rate cut would make CDOs look attractive. CDOs! Maybe next they should ask if the stock market is down for the year, and what denomination is best when flushing cash down the toilet.
Posted by: Jay | Jan 18, 2008 11:50:55 AM
Gotta love an almost 240 pt reversal in a little over 2 hours on options day.
It's ovah......it was ovah once the Aug. lows broke.
Ciao
MS
Posted by: michael schumacher | Jan 18, 2008 11:50:56 AM
Bush's conference. I'd say that qualified as a DUD.
wow.
Posted by: Stuart | Jan 18, 2008 11:51:26 AM
This Cramer vid on "fictional" earnings at the financials is almost as good as the "They know nothing rant about the FED".
http://www.cnbc.com/id/15840232?video=624755222&play=1#
Posted by: Groty | Jan 18, 2008 11:54:10 AM
Looks like a record volume day on the NYSE- well over 5 billion shares a comin'.
Posted by: New Yorker | Jan 18, 2008 11:57:06 AM
correction...make that 270 pts and it's looking to add to that as well
How's that dip buying??? Anyone??? Bueller??
Ciao
MS
Posted by: michael schumacher | Jan 18, 2008 11:58:25 AM
I am not sure what Kudlow is going to do. In the past I have pointed out that Kudlow stacks the panel with people that agree with him and when somebody says something he disagrees with he calls on another panelist that he expects to agree with him. It was really funny when Laffer didnt didnt agree with Kudlow and called a recession.
Kudlow has stated on the Kudlow Propaganda Hour that he feels it will hurt the Republicans in 2008 if there is a recession. Does anyone really believe that he would be calling this a Goldilocks economy and the greatest story never told if this was a Democratic administration?
Posted by: GerryL | Jan 18, 2008 11:59:41 AM
Rebate Bonfires
a week ago or two, I was watching a discussion on c-span with Rubin, Martin Feldstein, M. Zandi, and a couple of others. And the rebate was promoted by Feldstein and I am thinking this is the best solution these guys can come up with, no wonder we are in such deep sh-t, no wonder these wunderkinds from Harvard are such idiots (Feldstein professor).
So now it will become policy, the Sheriff of Nottingham says keep your pittance and be sure to spend it.
I think we should have rebate bonfires to indicate this time we want some real solutions or at least some in depth discussions of the real problems. Not just a portion of our OWN money given back with the understanding we will spend it.
Burn the rebate.
Posted by: rexl | Jan 18, 2008 12:05:42 PM
Wait for the "oversold" people to come out soon. I can't disagree with that observation however in the context of what is occurring now (the deflation of cheap money thrown at the market in hopes of "forstalling" -I loved it when the Fed said that- a recession) It never entered the MSM that we migh have been just a tad bit overbought throughout the entire summer???
Remember all those 200pt + days in the summer (where volume is very low historically speaking) that seemingly came from nowhere??? Where over the last two weeks we are seeing the problems associated with that failed strategy of inflate, inflate,inflate......did I mention inflate??
Ciao
MS
Posted by: michael schumacher | Jan 18, 2008 12:07:00 PM
Kudlow and the bunch of happy talking Republican shills he lines up with the occasional token realist to preserve the balance argument are really disgusting. I wonder when someone is going to sue cnbc for the boosterism we've heard from this crowd because yes there are silly billies out there who believe this crap. Basically his attitudes are widespread in the GOP as a cursory reading of the output from all the right wing think tanks and opinionaters easily demonstrates. I'm afraid its going to have serious consequences over the next few years for the Republican party who are probably staring at the wilderness. Basically it's needed to get rid of all these idiots.
Posted by: John | Jan 18, 2008 12:08:02 PM
I did ok..... 5% on monsanto.....
now I'm short again
MS pttttttttt..
11,500 we get a bounce.
I'm still long some financials
I'll step in if the vix hits 40... for a taist.
we need a pool on end of the day close. I may go buy a 6pack of beer and drink this away.
Posted by: Eric Davis | Jan 18, 2008 12:08:47 PM
anyone agree with me, that the dumbest thing was saying "I'm going to cut"... by uncle ben.
WTF would you do that? it made no sence except to prolong this....
Seriously Why even bother cutting? if not for it's placebo effect..
Posted by: Eric Davis | Jan 18, 2008 12:11:58 PM
but MS its expiration date today. I hope we break those Aug lows but I just can't see that happening on expiration day.
Posted by: Costa | Jan 18, 2008 12:13:52 PM
"it's 1929 and he acts like it's 1979"
Its 1347 I tell you.
Posted by: The Dirty Mac | Jan 18, 2008 12:16:29 PM
"reality-disconnected pundits he shares the camera with on K&Co."
Kudlow IS that pundit, day in and day out.
"Art Lafffer has no credibility; it's 1929 and he acts like it's 1979."
That whole "supply side" argument that was Kudlow & Laffer "in the good old Reagan days" lacks credibility and is exposed for the ruse it really was in Wikipedia. Well at least, Laffer is in the acceptance stage.
Posted by: Pat Gorup | Jan 18, 2008 12:19:26 PM
Dirty Mac, 1347??????
Bring out your dead.
Posted by: Ross | Jan 18, 2008 12:25:28 PM
