Transcripts For CNBC The Kudlow Report 20130807

And then, pope francis continues to speak out about economic injustice and income equality. Does this mean the holy father is anticapitalist and antifree market or is he just trying to give business a true social content . All of those stories and more coming up live on the kudlow report beginning right now. Good evening, everyone. This is the kudlow report live and im larry kudlow. This evening, president obama finally fighting back after the slap in the face from russia which is giving a likely criminal, edward snowden, a year to hide. I say, good for you, mr. President. Nbc news Steve Handelsman joins us live now with all of the details. Good evening, steve. Larry, good evening to you. One reason to have held this summit is to talk about fighting terrorists. The United States and russia sometimes have done some of that together. I think before and after the Boston Marathon bombing. But there were other problems and the snowden case clearly tipped the balance. Before he made public his decision to cancel, president obama in california was on the tonight show with jay leno and complained that the too often russia and putin have a cold war mind set. What i say to president putin, thats the past. And weve got to think about the future. Criticism of the nsa, meanwhile, the peak with snowden in russia has subsided a bit with the revelation that the u. S. Government intercepted top Al Qaeda Leaders talking about a plan or at least their hope for some kind of a terrorist attack probably this week, probably in yemen. At Camp Pendleton today, the marine base in california, president obama told marines, we, meaning americans, dont get terrorized. I want to take special time out to salute all our brave diplomats and tireless intelligence and military personnel. Quick update on whats going on out there. Yemen claim it is broke up a plot that says it would have had al qaeda take over one or more of the petroleum and fishing ports manned by foreigners. If its true, it would have been a scary attack. President obama has stepped up drone attacks in yemen to try to keep al qaeda off balance. Larry, they would have discussed this had there been a summit next month between president obama and putin. But its put off. Some lawmakers like you here on the hill thinks its a great idea. John boehner thinks its bad. He charged president obamas plan to restart relations with russia have now collapsed. Larry, back to you. Well, sorry to hear that, Steve Handelsman, thank you very much. We appreciate. It. So we saw Hillary Clinton restart the button with russias prime minister. We saw the president was making fun of romneys concerns about hostilities from russia. Now listen to this. The 1980s are now calling for their Foreign Policy act. The cold war has been over for 20 years. All right. That was then. This is now. I want to know, what is it that turned president obama around and really strengthened his stance with Vladimir Putin . Here now is former assistant secretary of defense, peter brooks, joining us is don jensen, senior fellow at John Hopkins University center for Transatlantic Relations and leon aaron, director of studies at the American Enterprise institute and author of ideals in the making of the Russian Revolution 1987 to 1991. Okay. Peter brooks, its just you and me. One of the things i like about this correct me if im wrong it wasnt just the snowden episode, although that may have been the straw that broke the camels back. If you listen to jay carney in his press briefing, there are a lot of other issues that have broken down and obama has finally said hes had enough. What caused him to do this . Why is he changing . Why has he had enough . Well, the Obama Administration russia policy has gone from reset to regret. I think i do think, larry, that the snowden case was the camel that broke the the straw that broke the camels back. This, i think, was a personal afront. I think the president was offended by it. He had a bad meeting with putin at the g8 a month or so ago and now its just gotten worse. The situation with syria, the russians continue to buck us on syria. Theres just so many issues out there and i think the president has had enough and i think he had to show some peak to show that putin cant push the president around. I think its going to hurt putin. Its going to hurt putin inside russia because an american president hasnt stood up to him in quite some time. Peter brooks, as a conservative, yourself, working as a conservative think thaank, i applaud the president for this. Do you . Do you applaud him . I do, larry. It makes sense to do that. Although, ive been very unhappy with their russia policy. Starting with the reduction strategy, the new s. T. A. R. T. , i think they canceled the bush era Defense Program and in poland which protected us already from the iranian the burgeoning iranian ibcm threat and the fact that they let him into the wto. Theyve done everything they could to try to make russia a partner and they failed, which means they failed to understand what putin was about, what russias about, and how they delight in seeing the relative decline of the United States influence in the world today. Better late than never. Better late than never. Its a funny thing. I oppose mr. Obama on everything, particularly economic and fiscal issues. But he does something good, like the afghan surge, i favored that at the time. I felt he did something right. I mean, jay carney mentioned today you mentioned some of this. Missile defense talks going nowhere european Missile Defense counts, arm control going nowhere, trade going nowhere human rights going nowhere i mean, i think somehow the president now is going to be a new man. I dont think hes going to run back to putin at all. No. I mean, larry, the problem is the issue at large here is that putin sees us as weak. He sees obama as weak. He sees things like benghazi and other our actions in syria, our nonactions in syria, our willingness to get tougher on iran. He sees this as weakness and hes taking advantage of it. I do disagree with you. I think theres an audience for not only internationally but also domestic audience in russia. Theres still a segment of society in russia that hasnt gotten over the cold war. Standing up to the United States gets people to applaud you in russia in some segments of that society. I think putin knows what hes doing. Hes a masterful politician and hes taking advantage of us. He knows he also has over on the barrel, we have supplies going into afghanistan through russia and equipment coming out and he knows that we need that because its so dangerous to send things through pakistan. All right. We have leon. Its good to see you again. I want to ask you the same question. Do you applaud president obama for the same stance with putin . Better late than never. First of all. Second of all, it was a halfway measure. A true measure would have been sent if he simply did not go to a summit g20 summit thats hosted by a country thats clearly backtracking. Thats a Global Financial meeting. Thats my area. Thats a Global Financial meeting. I think walking away from that is absolutely wrong. This one is manomano, walking away from that. I want to bring in don jensen and ask you the same question. Don, we havent really had an american president tough with putin and russia in quite a while. Not just because president obama wasnt tough with him for the several years but even george w. Bush. What did he say, he can look into his eyes and i can do business with this guy . See his soul, yes. See his soul and it turns out that was a lot of bs. I think its high time and about time. Why do you think obama has done this . I think obama its a little bit too late. I would have done more. I think obama at long last realizes the ambitious agenda he had for the past five or six years is really going nowhere theres disagreements with every issue, as the previous speaker said. Putin wants to use as a punching bag to consolidate his position at home and without obama saying, weve had enough, im not going to meet you, and well go from there. On your comment earlier, larry, about the g20, the problem, of course, is that the russians want to use the g20 and want to restructure the entire International Financial system to the disadvantage of the United States. Yeah, but they cant. They cant. Russia is a thirdrate economic country. The only thing they have, you guys know this better than i do. All they have is Natural Gas Pipelines going into europe. Now, thats what theyve got. Were going to outstrip them in natural Gas Production and were going to export natural Gas Production and were not going to rush through all of that pedestal, too. I think they know that. Leon aron, will they stay here . Let me ask you the same question. In the press briefing today, carney, jay carney mentioned, Missile Defense arms control, trade, and a human rights. So it was not just snowden. I want to ask you, leon, is it a permanent shift in obamas policies towards russia . Well, obamas policies towards russia has one and only one thing in mind and that is a further reduction in nuclear strategic arms. When that is going nowhere, i think obama is beginning to lose patience with putin. He used to forgive him virtually everything and let me tell you i think he would have forgiven snowden as well if there was a movement on nuclear arms because obama is committed to reducing u. S. Nuclear arsenal and needs russia to go along. Now, its not just snowden, though. They expelled the United States agents for international development, harassed ambassador mike mcfall. They said that we are paying the antiputin demonstrators and we abuse and kill russian children adopted by americans. This has been the crudist antiamerican campaign, i think, since the 1970s. Right. Right. So all of that, obama apparently has been willing to take in and not to say anything so long as their was a movement on nuclear arms. I think we dont know this yet but there may have been some breakdown in that negotiations. Putin is not going along and finally were not talking about human rights. Yes. Human rights is very important. I wish obama would be even more aggressive about human rights. Don jensen, let me come back and ask you, this is a little farfetched. Did benghazi, at the end of the day, the whole benghazi episode, which is still going on, its still going on, cia agents in there and whatever, do you think benghazi had a Significant Impact on president obamas thinking and psyche . That may not relate directly to russia but it relates to our Foreign Policy and antiterrorism and being tough. Do you think president obama is a changed man over the benghazi catastrophe . I think with the russians and to protect our withdrawal from afghanistan. To achieve those he would have done a lot and i think has far too much but there is not much progress on the first issue. This is a good time for obama to make a symbolic statement. The real issue is down the road. Friday when the defense ministers meet, is there going to be any movement on Missile Defense further down the road . What will happen if theres a terrorist threat in the olympics next year . I think im not at all convinced that putin is not done messing with the United States and putin has not forgotten the libya issue where he opposed the nato bombing and thats carried over into his views on syria as well. Peter brooks, im going to give you the last word. You have the first word. Im going to give you the last month. On friday, correct me if im wrong two plus two. Secretary state kerry is going to be there, our defense minister is going to be there. If those guys come out, if kerry comes out with some soft statement, that will just be the end of it. That would just undercut this entire action. Do you think john kerry will hang tough . I think hes going to have to be very careful in what he says. I dont expect much to come out of these meetings, especially with the cloud over the obama putin relationship and snowden still hanging out there. Snowden could kick snow at any time he wants. He could do it in the next week, during the g20. You know, the United States doesnt have to go to the olympics. The Winter Olympics in february, we dont have to go there. I think thats a more sensible boycott than the g20. But youre right. Putin could change at any time. Im going to wait for that. Im going to hold that thought because i think obama sticking it to putin is a global world media event. Its the first time anybodys nailed putin in a long while and i think it changes the game. Dont hold your breath, larry. But i may be wrong. Its not a nail. Its a scratch. All right. You guys know more about this than i do. Don jensen, peter brooks, leon aron, appreciate you coming over. Many commentators say the markets just cant shake the fed fears and the taper obsession. But my question is, for gods sakes, havent stocks and bonds already discounted the fed move . A whole story is getting boring and please dont forget, free market capitalism is the best path to prosperity. It is a pity that russia has not engaged more in it. 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Grab your friends and family and start a team today. Register at alz. Org the stocks closed lower today. In favor of scaling back asset purchases. Okay. Its the third day in a row. Monday, the dow is down 46 points on hawkish comments from richard fisher. I believe this is my crosstalk, i am front running my distinguished guests. I cannot accept the fact that i cannot believe it, the bond didnt even move today. Its at 260. All of that is in the market. S p 500 is just below 1700 and change. You cant tell me markets are stupid. I dont believe it. Lets bring in cnbc contributor andrew busch, author and publisher of the bush update and chief Market Strategist from lpl financial. Andy busch, dont tell me markets are stupid. They know its coming. What would be a surprise is if it didnt come, which by the way is my first choice. They know something is up. Yeah. They start it back at the fmoc minutes back in december which we got in january. We got a spike up in rates, 2 on the ten year. Go forward to may, then they backed that down and now they are going full throttle on everyone saying september, letting you know its going to happen. The markets are not dumb, larry. You are absolutely right. If its going to be in the market view, its got to be september or december. I think those are your two options. I dont want it. Im going to be stubborn about this because im not crazy about the economy. Look, earnings havent been that great. 5 of q2 . Big deal. Ill give you another one. I think markets are very disappointed that president obama did not get a good corporate Business Tax Reform plan out there. He didnt do what people hoped he would do. He was going to incentivized the repatriation to explain these market moves. Youre right, larry. Theres certainly no grand bargain market there. One of the areas that have pulled back this week that many commentators are saying its all about the fed or the home builders, obama came out this week and talked about fanny and freddie and be a solvinging them. Not to mention maybe we had some lower order numbers. This is about earnings. Its 1 pullback from fridays alltime high. The reason i can prove it to you, what happened when qe 1 and 2 ended . Rates fell 1. 5 when they were being wound down both times. Andy busch laid it out. Yields went up in may and june. Nothing stabilized in july. The market is ready this time. Right. Completely ready. Good work. Youre both right. Just every time commentators come on this network, its like a johnny one note. They ought to be a lot more creative. Now, having said that, andy busch, i take it from your notes that you really are pessimistic. You are looking for a summer swoon. Tell me why. Yeah. I mean, typically September August and september are bad months for the stock market. You mentioned a couple of things that arent so good there. The pricing in of the fed pulling back. Its really the uncertainty, larry, more than the fed actually doing anything. Earnings havent been good. I would say, you know, maybe its a bit of a rotation out of the u. S. And maybe into euro land. Theres some good numbers coming out there. Germanys numbers were pretty good today. That shows some strength there. Maybe they can get some money from the u. S. Rotating out. But i would say overall we have to be really happy at where the economy is right now because even though weve got fiscal drag between q2 and q3, this economy is going at about 2. 5 and will likely be at 3 by the end of the year. That, you know, floats a lot of great boats. That helps with the deficit and with earnings. Overall, we may see some pullbacks over the next two months but besides that were going to see pretty stable growth going forward. So youre not all that bearish . No. I think its about two months. Well see 2. 5 , i think. Well see. If im looking at things besides earnings, i dont think earnings are really helpful to stocks this time around. I really dont. I know some individual companies may. First quarter, it didnt beat. Second quarter, it didnt beat. Ive got one for you, jeff. I think washington is going to be all screwed up when they come back from the august recess. I mean, completely screwed up. And i know this is a family station so im not using a worser word. All im saying is the possibilities of some insanity, whether its defunding obama care which i want to end the defunding is not the way to do it. A shutdown, a continuing resolution that never gets done, some messing around with the debt ceiling, thats stuff that i would be worried about, jeff, because that stuff can really screw up our markets and global markets. There are definitely issues around that, larry. Weve gotten over a lot of those big issues in the first half of the year and kicked the can down the road did not seem to mess up the market too bad. Remember, who is doing the buying. Its the big corporations that have done all of the buying this year. Buybacks in the Second Quarter were 257 billion. They are going to keep buying whether we get a continuing resolution or not. Whether we get a debt ceiling lift or not. That tremendous type of buying lift to the market, going to continue here. Youve got to buy the buyers, buy those stocks that are getting bought by the corporations with implementing that cash. Thats a trend that is going to continue. Dont buy bonds, buy stocks . Absolutely. Andy busch, how much of a downward direction are you actually looking for . Not much more than 3 to 5 , larry. It really depends on what type of sharknado comes up. The biggest risk is the fight in congress, not over the deficit or the debt but over the new fed chairman. Thats something im worried about. The fed follies continue. The best of the best. Thank you, gentlemen. Now, a Stunning Development in the nidal hasan mass shooting terror trial. Seema mody has that and more when we come back. [ male announcer ] you wait all year for summer. This summer was definitely worth the wait. Summers best event from cadillac. Let summer try and pass you by. Lease this allnew cadillac ats for around 299 per month or purchase for 0 apr for 60 months. Come in now for the best offers of the model year. Weve been bringing people together. Today, wed like people to come together on something that concerns all of us. Obesity. And as the nations leading beverage company, we can play an important role. That includes continually providing more options. Giving people easy ways to help make informed choices. And offering portion controlled versions of our most popular drinks. It also means working with our industry to voluntarily change whats offered in schools. But beating obesity will take continued action by all of us, based on one simple common sense fact. All calories count. And if you eat and drink more calories than you burn off, youll gain weight. That goes for cocacola, and Everything Else with calories. Finding a solution will take all of us. But at cocacola, we know when people come together, good things happen. To learn more, visit coke. Com comingtogether but you had to leave rightce to now, would you go . World, man oh i cant go tonight woman i cant. hero thats what expedia asked me. Host book the flight but you have to go right now. Hero laughs and i just go . This is for real right . This is for real . I always said one day id go to china, just never thought itd be today. Anncr were giving away a trip every day. Download the expedia app and your next trip could be on us. Expedia, find yours. A strange twist today in the trial of the accused ft. Hood shooter. Seema mody is joining me. Good evening, larry. That is right. The trial of major nidal hasan halted today because he seems to want to get the death penalty. Hasan admits that he was the shooter in 2009. Hes representing himself in the trial but is advised by a team of legal experts and those experts have pushed for the temporary delay. And in other news, president obama continuing to talk housing and an online chat hosted by the real estate website zillow. He reiterated the move in wall street, zillow posted a quarterly loss because its spending more money on advertising. First solar, earned 37 cents a share in the latest quarter. Well short of what analysts were expecting. Its been hurt because there was a glut of solar Heating Panel experts in the market. And ill end with tesla. Posting a high profit thanks to high sales of its newest car and plans to sell 20 million vehicles worldwide for the year. That had credibility. I guess so. This is the battery car . Yes. Very interesting. Seema mody. Were going to see you later in the show. Now, we have the latest track problem on the obama care train wreck. It turns out the Security Systems are not ready yet to protect everybodys private information. There is no firewall. This is a major invitation for Identity Theft and maybe worse. Remember, those exchanges go live in just 54 days. It is not ready. The whole system is not ready. Were going to have that story for you next up on kudlow. [ male announcer ] come to the golden opportunity sales event and experience the connectivity of the available lexus enform, including the es and rx. This is the pursuit of perfection. Trust your instincts to make the call. To treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. Axiron can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. Ask your doctor about the only underarm low t treatment, axiron. Welcome back live to the kudlow report. Does this mean that hes not in favor of the free market system . Well take a closer look. And the twitter revolution is already here. But how did it start and how valuable is it . How are businesses taking advantage of it . Our cnbc special twitter revolution is live tonight at 9 00 eastern and we have a special preview right here on kudlow. But first up, just 54 days until open enrollment is set to begin for obamas health care. There is no security firewall protecting your personal data from hackers, identity thieves, and many other federal agencies. That report found that the centers for medicare and Medicaid Services are months behind in testing data security. That means everything from Social Security numbers, income family statuses, citizen could all be at risk in making the obama Database Health care vulnerable for i. D. Theft, which is already a problem here in this country. Here to break it down is mark hanna, democratic analyst, former Campaign Aide for both president obama and john kerry. And we welcome back Scott Gottlieb, a practicing physician. Scott gottlieb, go to you, we have more and more and more things were servicing. Now it turns out the whole Security System has not been tested and could just unravel. Right. Theres two pieces to this. The hub which allows the government to share information across different agencies to help ensure eligibility for the subsidies. I dont think they are going to work that hard at getting this right. I think the bigger problem is going to be the port tal. Its a federal system set up to allow people to actually enroll in plans. Thats where people go and give all of their personal information to select the plan. 14 states decided to build this on their own. They are sharing a federal port t portal. And the privacy act wont apply to their own portal. We dont really have to defund obama care. Obama care is defunding and imploding itself. Mark, you cant tell me that the people are going to sign up for this thing knowing that theres identify theft on the other side, no heing that there are no security firewalls. I mean, the tests were supposed to be on may 13th, that deadline was missed. June 3rd to 7th, that deadline was missed. Now they have until september 30th. You would think that this is going to get done . I think it will get done for sure. You had Kathleen Sebelius the head of health and Human Services said they are all systems go for this october 1st launch. Look, the Inspector General report which scott is referring to, that was clengtiollecting d back in may. There have been improvements and theres no question whatsoever that the Obama Administration places the security of personal data at the forefront and they are not going to launch it if theres any question whatsoever well, there is going to be a massive question, Scott Gottlieb. Because september 30th september 30th is the cutoff date for the next set of tests and the thing starts october 1st. Scott gottlieb, do you honestly thing, young people who are worried about Identity Theft, for example, do you think they are going to sign up knowing theres no security firewalls . I mean, this is worst than the banks. This is worst than the credit cards. This is Identity Theft. I just dont believe that. And navigators. Theres a lot of opportunity for fraud there, too. I think people are not going to hit their enrollment targets and people who do have preexisting conditions and need the insurance. Insurance companies are figuring that out, too. Thats why you see some saying that they are not going to play in a lot of markets. It doesnt look like an attractive market. This really doesnt get off the ground effectively. They will get this off the ground whether or not they get it off the ground effectively. Thats what it is shaping up. Mark hanna, you still have yourself a verification problem. And im talking about the individual mandate here. Im putting the businessman date aside. You have a security problem and a verification problem as Scott Gottlieb suggested. You could have i dont know how many hundreds and thousands of people that shouldnt be eligible. Maybe thats a tk particular that you all want. I think thats just ripping off the treasury department. Whatever you think about the federal government and different bureaucracies and i know youre not necessarily a fan, larry, one thing they can do is enroll millions of people, whether its irs or Social Security. Nobody thought, for example, medicare was going to succeed. They thought it was going to have a false start. That is completely different. That is that is the most ridiculous thing. That has nothing to do with anything. Listen dont tell me. Youre mentioning the irs. Boy, if i were you i would not use that as an example right now. But im speaking about the governments capacity in a Data Collection sense to verify the eligibility of people coming in to that system. Thats what im speaking of. They admitted, they acknowledged that the systems broken and its not going to get fixed by october 1st. And they are predicting that it will fail and do everything in its power to fail. When this launches on october 1st, there may be a few hiccups. There may be a few problems with enrolling and minor fixes along the way. What this is going to take is goodwill and got faith on the bipartisan level of people to make the law of the land work. Instead of trying to bypass the democratic process and hijack or completely cripple this launch, which is what republicans are doing. Republicans are not screwing up the verification system. That is coming from the government. The hhs. People we dont know that its screwed up. Republicans are not screwing up the Security System. Thats coming from hhs. You can blame the republicans left and right for a whole lot of things. Right. You can talk about defunding. Thats a different conversation. But its the agencies, its the bureaucracies themselves. When you have a takeover of 15 of the economy, youve got to expect this stuff to happen. Its called big government. Theres private Insurance Fraud right now. Is there a little bit of fraud within the irs . For sure. If theres susceptibility to any mistake that is going to prevent us from insuring the vast majority of americans. I got it. Nice try. Scott gottlieb, thanks for coming up. When pope francis talks about greed being the root of economic misery, does that mean hes against free market capitalism . We will oblige him next up on the kudlow report. Jackie there are plenty of things i prefer to do on my own. But when it comes to investing, i just think its better to work with someone. Someone you feel you can really partner with. Unfortunately, ive found that some Brokerage Firms dont always encourage that kind of relationship. Thats why i stopped working at the old brokerage, and started working for charles schwab. Avo what kind of Financial Consultant are you looking for . Talk to us today. Weve been bringing people together. Today, wed like people to come together on something that concerns all of us. Obesity. And as the nations leading beverage company, we can play an important role. That includes continually providing more options. Giving people easy ways to help make informed choices. And offering portion controlled versions of our most popular drinks. It also means working with our industry to voluntarily change whats offered in schools. But beating obesity will take continued action by all of us, based on one simple common sense fact. All calories count. And if you eat and drink more calories than you burn off, youll gain weight. That goes for cocacola, and Everything Else with calories. Finding a solution will take all of us. But at cocacola, we know when people come together, good things happen. To learn more, visit coke. Com comingtogether pope francis has been vocal about his stance on the economy. In may he tweeted that people are often unemployed as a result of selfcentered mind set bent on profit at any cost. Doesnt sound like free market message to me. Does the pope agree that free market capitalism is the best path to prosperity . Here now is professor of religious studies, matthew schaltz. Do you think that the pope is against the free market and capitalism system . I think its a question of whether or not capitalism as presently constituted serves Human Dignity. I mean, i hope sincerely and i say this as a sunday churchgoing catholic convert head usher, i sin sincerely believe argentina had nothing to do with free market. I think the question is whether in one sense we can develop a free market that respects Human Dignity and human rights. I think what francis is forcing us to do is ask tough questions about whether we need or think we need especially when people are living in slums and going hungry. Well, i think thats a good point. Now, of course, adam smith, one could say the founder of capitalism, good church man that he was, also emphasized the moral aspects and the law abiding aspects of free market capitalism. I think, from what ive read, that what pope francis is saying is businesses and politicians and everybody, we all have to have a conscience as we go about our business in the system. We must have a conscience and we must not forget those but were less fortunate. Thats the way i look at it, matthew. Yeah, i think thats correct. I think he might push it a bit further, though, and ask us really to think very, very carefully about the values that were supporting Economic Activity. For example, is greed good, is profit for the sake of profit something that christians can accept . So i think he might intensify the issues a little more strongly. But, of course, hes a pope. Hes not an economist. I dont think well be hearing policy issues from him. Pope john paul ii i think had a much more market friendly approach to all of this over a period of time. And i think thats because he lived under soviet communist rule, which is even worse than argentina, obviously, so understood that the socialists systems or even the quasi socialist systems had no freedom. Im not sure this pope really understands that. Well, i think its interesting the progression of john paul iis spot because youre correct, he did become a little more comfortable with the market as his pontiff progressed. But i think basic values as opposed to policy specifics, what well hear from him are very general pronouncements about values and how they should shape Economic Activity. But not a lot about specifics, for example, what we should do with our 401 k s and so forth. I do understand that. But its important, basic Judeo Christian values, i think that those market values, thats where the rising tide lifts all boats. That doesnt mean poverty ends. But thats where the rising tide comes from. You know, in brazil, the pope had this fabulous trip to brazil. Brazil has moved in the direction of the marketplace in the last, whatever, 15, 20 years. Theyve done rather well. I know theres a lot of poverty in brazil but they have done rather well whereas russia has done terribly. I think one of the questions is whether you see capitalism working as, you know, a rising water level rising all boats or whether you see people siphoning water off at the source and leaving other people high and dry. So i would ask you, would you be willing to go along with very stringent regulations in terms of Economic Activity in order to make sure that the Playing Field is actually fair. No, i would not. I dont believe in stringent economic i do believe in safety regulations. I think economic regulations gets us back to state socialism. I mean, you know, the free market i wish we had more time. Free market capitalism, basically, is a system of exchange between two people, two bodies or two groups where they both benefit. Its not zero sum. Its winwin. And hopefully its winwin with a conscience because the rule of law must be there and a moral rule must also be there. So on the morality point, i think i agree with the pope. But on a regulatory point, i dont want to go back to sovietstyle regulation because you know what, the roman lived in be a jekt poverty. Thats one of the things we learned. Thats why the system collapsed. I hope this pope understands that as well as Pope John Paul ii did. Anyway, ive got to leave it there. Matthew schmalz, thank you. Thank you. As we prepare for the cnbc special twitter revolution, we look at how twitter is used for direct marketing and more. You may be surprised at how much of a capital tool it is and it hasnt even had its ipo. Thats next on tthe kudlow report live. Wow. Its the honey, it makes it taste so. Well, would you look at the time. Whats the rush . Be happy. Be healthy. To experience the precision handling of the lexus performance vehicles, including the gs and allnew is. This is the pursuit of perfection. The world is changing faster than ever, creating new opportunities for those who stand ready to seize them. In a time when the biggest risk is playing it safe, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, our flexible, collaborative approach helps forwardlooking companies not only run better, but run different. To give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because now more than ever, the future belongs to those who challenge the present. Tonight on cnbc in about an hour, well be examining twitter. The onehour special called twitter revolution starts at 9 00 p. M. Eastern time. Josh lip tton is here. Good evening, josh. Good evening, larry. Its called the twitter Certified Products program that started last summer. The idea is, you give businesses, brands, and publishers the products and services they need to engage and get to know their audiences on twitter. Launched with just 12 partners, now includes companies from u. S. And latin america. Its based in three broad categories. First, its defined as services that helps brands keep in touch with customers. An example would be hootsuite. It allows managers to monitor and manage multiple accounts all within a single dashboard. Here at cnbc we use hootsuite as do pepsi and virgin and seagate. Then there are the analytic products. An example would be simply measured which creates reports to polished digital strategies, Companies Like American Express and microsoft use the service. Another example is social guide. It lets advertisers measure, analyze, and engage with a Twitter Television audience in realtime. Finally, you have data reseller products. This allows tweets to be sorted to spot themes and trends. Theres topsy said to maintain the Largest Group of tweets in a world and datasift. Larry . Thats great stuff. Thanks, josh. Now, twitter, like every other company, does have its critics. As part of tonights documentary, Carl Quintanilla asked about that. When you hear about the decline of western civilization. Yeah. Or the enemy contemplation, aggressive distraction, they compare it to crack any personal attacks you want to throw at me while youre going through the list . Is it funny . Is it enraging . Is it do you think its ridiculous . No. I think that i have a philosophical difference with those people. Thousands of years ago there was a town square. Thats where the politician was talking about what was going on. Thats where the musicians were. Thats where the storytellers were. And thats where we went to feel connected to each other. That town square. And it was totally unfiltered and raw. I actually think thats a great answer. Josh lipton is still here and were joined by seema mody. I tweet two or three times a day, serious tweets. I think its a tremendous, helpful tool for media and for business. Oh, absolutely. Twitter is this powerful platform that allows individuals to share their ideas and engage with a very Dynamic Group of individuals. I know as a journalist i find it to be very helpful to stay on top of current events, to stay on top of any stories that are still developing. Just think about what twitter could have done back in the 1800s. Im a history buff. You look at the battle of new orleans, the war ended but the fighting didnt end for months because nobody knew. They didnt know. What they could have done with that realtime information. Thats exactly right. Is the ipo going to happen . Tremendous excitement. You have 200 million active users. Does twitter learn something from facebooks botched ipo . And seeing the relationship between the two as folks have pointed out the way on facebook now you have what some call twittery feature, you have the hash tags, maybe imitation in the form of flattery. Does twitter outlast facebook over a period of time . Its tough. They are totally Different Social Media firms. Seema mody and josh lipton, thank you. Twitter revolution starts in an hour. Dont miss it. Im larry kudlow. Thanks for watching. Well be back tomorrow evening. Hero if you had a chance to go anywhere in the world, but you had to leave right now, would you go . Man oh i cant go tonight woman i cant. hero thats what expedia asked me. Host book the flight but you have to go right now. Hero laughs and i just go . This is for real right . 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Let summer try and pass you by. Lease this allnew cadillac xts for around 399 per month or purchase for 0 apr for 60 months. Come in now for the best offers of the model year. Narrator in this episode of american greed. Its called operation get rich, or die tryin. The biggest i. D. Theft in u. S. History. Narrator a mysterious ring of social outcasts with an insatiable appetite for sex, drugs, and your encrypted information. It was a very fine line between exploiting a system to check it out or exploiting a system for gain. They were looking for data any way they could get it. Narrator they steal creditcard numbers and make a fortune by selling them on the black market. It just kept building upon itself 500,000 numbers, then a million numbers, up to 130 million numbers