Bad as democrats, all right . How to turn poverty into prosperity if such a thing is possible. All of those stories and more coming up on the kudlow report beginning right now. Good evening, im larry kudlow on the kudlow report. Today is the best day of the year so far for the dow. Lets go over to the Bertha Coombs with all of the details of todays big rally. The one and only kudlow. You can see a lot of black and green. The dow and s p and nasdaq up 1 . Powered by strong earnings results. Earnings so far having been reported, earnings are up 9. 5 for the quarter, it being looks like. Revenues only up 1 and thats part of the problem. Meantime, though, blockbuster earnings today. Disney helped power the dow higher gaining 5 on the day on an earnings Beat Estimates it had strong growth at espn and frozen its animated picture, much better than expected performances at the box office and helped power the bottom line. Cocacola also rose after taking a 10 stake in Green Mountain coffee. The beverage is announced a tenyear deal to develop home beverages. The news initially sent soda stream shares lower but rallied on speculation that the maker could actually now be an acquisition target for cokes rival, pepsi. And it was donuts to more dollars for Dunkin Brands against all of the cold weather that has people eating more donuts and drinking hot coffee. Twitter losing a quarter of its value despite posting a surprise profit. But whats troubling for investors is that this was the fourth straight quarter that the social network saw slower user growth. The same story for linkedin after providing disappointing guidance. Well see if the bulls can follow through tomorrow, larry, after the januarys jobs report. Of course, last month, a very negative surprise. Bertha coombs, thanks. I can see that one of my tasks will be to tweet more. Anyway, lets get right to it on our great market panel. The world is not coming to an end. Thats how read one of the key themes. Joining me is jim urio, peter costa, president of empire executions, and michael, forbes executive editor. I go to you, mr. Urio. The world is not coming to an end. We saw that earlier in the morning with the jobless claims coming back down. How are you playing it now . Todays big gain has a lot of Technical Information on it. I would rather be long than short. I want to he are mind a month when we saw the print on the last jobs report. I heard the whole Trading Floor go, oh, man, because it was awful. We felt like we were coming to the end of the world back then. We need proof that its not. Its coming. When we get a bond price break like this going into one of these numbers and its a strong move, it seems like the number has confirmed that direction. I do think its going to be a decent amount tomorrow and id rather be long than short. I think were basically creating a tradeable bottom on the jobs question, if we get a lousy jobs report such as mr. Iuorio was describing, can it be blamed on the weather, john silvia, or will it be blamed on a sinking economy . Thats an important question. Weather or lousy economy if its a lousy number. I think its got to be more the weather than anything else. Yes, jobless claims continue to move down. Were looking for 195,000 jobs. Unemployment rate at 6. 6. Larry, theres too much in the economy that says weve got pretty good momentum Going Forward, probably 2 to 2. 5 , depending on how the fed counts it, Economic Growth year over year on a Fourth Quarter basis. I think weve got a lot of good things going for us. Its not a boom but its definitely good Economic Growth. John silvia, i doubt if anybody covered this data point but today we had productivity numbers. It was up 3. 2 in the Fourth Quarter and up almost 2 year on year, which is how you should look at that. Now, john, unit labor costs so price is rising, unit labor cost which is, what, about 65 falling . That is so good for profits, john silvia. We had tremendous profits momentum. Thats what im trying to teach jim iurio. Can you back me up on that . Basic economics, larry. Price of the output, a good proxy for your input costs. Profit margins look pretty good. You, on the other hand, ive got a problem with you. You dont like this market at all . Theres one thing that i could say to dissuade you. Larry, the economy is only going to grow as fast as the output and, yes, unemployment is falling but im not buying stocks until i feel confident that this emerging market problem in terms of falling economies and the trouble they are having there with their currencies is back on the write track. Were starting to see some of that with some of the emerging countries, supporting their currencies. But bei but, look, its becoming a much more important part of the court. I had former assistant treasury secretary on behalf of greece and he said its not argentina. Theyve probably already collapsed. They just wont admit it. Turkey is the one that has to be watched and, in particular, because europe is heavily invested in turkey and thats the one were watching. Now, if turkey can stay afloat somehow, the central bank did protect it by raising rates but the Prime Minister doesnt like it at all. Thats the one i worry about. And brazil. Its huge economically so if they and turkey and a couple others file suit that Atlantic Coast is so bad, argentina is becoming brazil. Go to chile, stay out of the atlanta south and peter costa, i want to get your investment take. Youre going into is this a time to buy . I think that we might be a little optimistic about tomorrows jobs numbers. Even though the weather has major effects, its not like one part of the country is suffering through cold or rainy or whatever. The whole country has been affected by this weather. I think youre going to see a lower number tomorrow. The market is going to react tremendously. Peter, im going to bet you, because ive known you for years. Im willing to bet you that spring will come. Yes. I am absolutely convinced in this great country of ours that spring and Better Weather will come. Why does stocks get hung up on storm systems in the winter . It still boggles my mind. To me as a trader its an opportunity to buy because i think the market sells off. Tomorrow its a great opportunity because i think short term one second. Ive got a couple for you. Cyclicals led the way today. Energy, tech. Cyclicals led the way. What does that tell you . Is that a progrowth signal or is that just because they are cheap . I think after seeing what happened on monday, i think there is still some people going out there and it was ready. The market was ready for some major move. We saw it a little bit on tuesday, much more today. I think its scary to see a market go up 188 points prior to some big number tomorrow. But i think its basically were bottoming off in oversold condition and i think this is a lot of traders getting back into the market. Jim iurio. Whether they used the Inflation Expectations, they have really dropped about 30 basis points. Theyve actually dropped about as much as the tenyear bond, which has dropped about 30 basis points. What does that mean . Why are inflationary expectations coming down, in jury judgmen your judgment . Well, if you lived in chicago for a few months you would not be sure that spring was coming. Secondly, i think that this whole month, the first five weeks of this year has been based on a lack of optimism of the whole economy. So that Inflation Expectations and mild expectations of deflation seem to be kind of normal considering thats the mood we are in by the way, i think theres a solid chance that it is because too many people are expecting its going to be the weather. And i think its time for a beat. John silvia, what im gathering, i think theres going to be a big drop in the gold price. Also, i think gold is way too high. But they all say that they are going to be imparting any deflationary conditions that might be occurring . Is that why these bond rates have come down and is that why the inflation rates have come down . No, i think it reflects the global downshift in terms of the economic expectations. For me, larry, the trend of the year, a lot of people are talking about 3 , 3. 5 gdp. They have really downplayed that global phenomena in terms of strength and thats the driving factor. But i am fairly comfortable with the low inflation forecast Going Forward. I mean, john, it looks to me i think you said a number before but i dont see how you break out of the 2. 5 growth rate. Labor force hasnt grown in years, by the way. But is that about where you are and can the stock market produce, lets say, 10 earnings that would lift up the market or is just 2. 5 not going to do it in. No, 2. 5 on a Fourth Quarter basis, which is what the fed publishes, thats our outlet. 2. 5 gdp is a good number. You continue to be more efficient all the time. Getting back to your point about unit labor costs, being incredibly efficient about unit costs and a lot of technology against the process. Im just telling you, for all of you people out there and for the people sitting around here, youve got to watch that number, unit labor costs if prices are rising faster than costs, youre making money. If prices are falling, youre not making money. Right now they are rising. Not hugely but just enough to get us profits. Thats why i think this market is very viable. Ive got to get out of here. Peter, jim, john silvia, thank you, gentlemen. Another bombshell problem with obamacare. If you make just a dollar too much at your job, you may end up losing thousands of dollars in subsidies. Just another salvo in the war on work. And dick myers is going to join us to talk about how much its going to cost in december. Im coming right back but ill say it for the 100th million time, there is no free market in that whole obamacare program. We should scrap it. Im kudlow. Well be right back. We have to pass the bill so that you can find out what is in it away from the fog of the controversy. All right. That was then speaker of the house nancy pelosi talking about obamacare before it became law. I think she was exactly right. I think its all leaking out now and nobody particularly likes what these leaks are telling them. Now, weve got the critical 2014 midterm elections approaching. Im guessing democrats wish they had actually read that bill before voting for it. Maybe im wrong. Here to offer their expert analysis, former clinton adviser and radio talk show host dick morris is back with you and senior fellow at the manhattan institute. Before we get into the politics here, weve got ourselves whats being called a job trap and a poverty trap where, you know, this thing incentivizes less work. Do i have that right . Can you briefly explain to us this whole brewhaha over 2 1 2 million jobs lost . The three reasons that obamacare is shrinking the labor force, it contains tax increases over the next ten years and i dont need to remind your viewers why that would shrink the labor force. The second thing is that there is this employer mandate that requires every business with more than 50 workers to offer health care to the workers. It means that employers have to hire more people. Thats point number two. Point number three is that lowincome people will be eligible to buy the insurance plans and as a result of the subsidies, because they have an economic value, people can work less amount of hours. That gives an incentive to work less. People are calling it a steep subsidy cliff. Thats what im seeing around. It pays to work less because then you might have a lower cost but bigger subsidy. If you work more, not only do you lose your subsidy but you might go into a higher tax bracket. So its like a double loss. Now, this is the dumbest thing. This is not just obamacare. A lot of these antipoverty claims have the same problem. Why dont they try to fix this . One thing i want to caution you on is any plausible plan that reforms the Health Care System in such a way that we stop over subsidizing the wealthy and attract some help to a safety net, its going to help to a degree. The problem with obamacare, the effect is very, very large because of all of the other destructive things that obamacare does. So, for example, this Senate Republican bill that we all like to replace obamacare, that bill will have some of the same effects but to a much more modest degree. Dick morris, on top of the rise in premiums and deductability and cant get your doctor, cant get your hospital because they are out of network, now weve got the cbo numbers, as you well know, showing a massive equivalent of 2 1 2 million job losses. Republicans are saying i told you so. What is the political impact of this in the 2014 midterms . I think its devastating. I think that every day we learn something new about this law that we dont like. The steep cliff that was being talked about earlier on my radio show today, if you make 62,000 and live in wisconsin and youre 55 years old and your income goes up by 1 dollar, you lose 13,000 of government subsidy. The problem is, this is exposing the fundamental weakness in all of the entitlement programs and giving everyone a crash course of what europe is all about. I really agree with that. Thats an important point. Were going to cover that later in the show. Youre right. All of the usa poverty programs suffer from defects that are very much like that. By the way, larry, when i worked for clinton, he worked very hard and very success full. He lowered the cliffs. So the marginal 1,000 bucks that anybody would make, they would keep a large portion of it. But its like these folks are at an 80 tax bracket when they go to work. But lets look at this politically now. Republicans need 5 to be at 50 50 in the senate they need a 6 to take the senate. Do you think, in combination with all of the other criticisms of obamacare, the higher premiums, the doctors, the hospital, the fact that the president did not tell the truth regarding you can keep your own plan, now we have this job loss problem. Will this push the gop over . Will this go out there and hammer obamacare, hammer job losses and hammer the economy . Is that their strategy . Yeah. Absolutely. And the Playing Field is very pro republican. You have three seats that are giveaways to republicans that are certain to take them to the Democratic Senators and republican states, montana, south dakota, and west virginia. Then you have four democratic incumbents who are highly endangered species. The only one clear chosen is arkansas and cotton is ahead in the polls. The other three landrieu and begich, it looks to me like two of three of those are going to lose. And then you have four of the states waiting in the wings that are blue states. Ive been following these people. Terry could win this thing. And then in minnesota you have a woman named omart and shes got a shot and youve got a woman in oregon named webby running against merkley. In New Hampshire you have robert smith, bob smith the old senator, or scott brown the massachusetts senator. Smith cant win. Brown could win. Smith cant win. There is so much complaining going on about the shrinking networks of doctors and hospitals and a lot of heat you probably saw this in the newspapers, is any of that stuff going to get changed . The great example with senator tom coburn whose own oncologist was not included. Is that going to change . Its not going to change and here is why. In a quasi marketbased system where you have a choice among different plans, the premiums are going to be lower for those who have a lower network of doctors. The problem with obamacare is not that the narrow of the networks for doctors are narrower. Its that youre paying a higher premium and having a narrower choice and a higher deductible. One thing about the politics, heres the thing, the democrats are going around saying its a good thing that the labor force is shrinking. Thats an incredible that is incredible. You are so right. Im glad you raised it. That is the dumbest thing i have ever heard in all my political years, which goes back several decades. I cannot believe it. It will give them time to pursue their dreams. Yeah, right. Taxpayers are going to be paying so other people can pursue their dreams by quitting the workforce . Thats crazy. Thank you very much. Ive got to get out of here. Now weve got a verdict today in the major Insider Trading trial of former matthew. We go live to the courthouse for that report. When you order the works you want everything. An expert ford technician knows your cars Health Depends on a full, complete checkup. The works. Because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. Get our multipoint inspection with a a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup. Only at your ford dealer. But with less energy, moodiness, and a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two 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 axiron. The former at the center of the Insider Trading case that brought down steve cohens trading business was today. What can you tell us . Matthew martoma, former Health Care Portfolio manager at sc sac capital was convicted guilty of all counts against him. This carries with it a maximum prison sentence of 45 years. Hes accused and now convicted of engaging in the largest Insider Trading scheme in u. S. History at least in terms of profits and averted losses which total in this case a 250 billion. This is part of the ongoing track record of u. S. Attorney for the southern disstrict of going after these types of it cases. In just four years, since 2009, barara has either brought guilty pleas or won convictions for 79 individuals at an array of firms for this type of misconduct. Nine of those individuals worked at either one point or when the charges were filed for sac capital. Now, it was a day of high emotion, obviously, for martoma and his wife. As they left the courtroom being were showing you video of this right now, there was a scuffle that broke out between probably an overzealous photographer and an associate on the defense team, a woman who was eight months pregnant and it almost looked like there were going to be fists there. This is the kind of thing that p has when youve got emotional situations and a man who has three Young Children and was once sitting on top of a Successful Hedge Fund career is now facing tenplus years in prison. I can understand that, kate. Does this mar tomorrtoma convic bring steve cohen closer to an indictment . I would have to say that it brings him closer rather than farther. There were witnesses in which the defense talked about how people like Matthew Martoma or the key witness against him were mere cogs in the wheel as the government formed a bigger case. None of the loops are closed here. They have settled with the firm over various allegations but its not as if anyone has gotten a pass and as a matter of fact, i did some additional reporting today and learned that the authorities are hotly pursing another individual within sac with potential misconduct charges along the same line. So i cant name that person but it would appear theres at least one active case against an individual and perhaps more. Well, as you say, itbarar ha been a very successful u. S. District attorney. If bipartisan, democrat and republican mistakes for decades have been paying people not to work and creating a heartbreaking poverty trail. Obamacare is one shining example as dr. Bill grace explained to us last evening. There are enormous moral hazards that we have both in the Health Care System that obamacare represents and the disability programs given out too liberally and then Unemployment Insurance that is going on and on and on and theres a moral hazard. Not only do we not create the jobs that we are paying people to get lazy and the more they stay off stay away from work, the less likely they are to return to work. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Every now and then i get a little bit hungry and theres nothing good around turn around, barry i finally found the right snack [ female announcer ] fiber one. Work and family are at the center of our lives. The foundation of our dignity as a free people. When we deprive people, we destroy their dignity and undermine their families. We cant support families unless there are jobs and we cant have jobs unless there is money to invest and the faith to invest in. Wow. Money to invest and the faith to invest it. My former boss, Ronald Reagan, this is his birthday today. That, of course, was candidate reagan in 1980 explaining how important our American Culture of work is to our economy and our national spirit. But unfortunately, down through the decades, democrats and republicans have created poverty gaps. Policy has been all wrong. So lets talk about this. We have jared bernstein, former chief economist for Vice President joe biden and jim, the American Enterprise institute. Look, gentlemen, this is not partisan. I think the subsidy clip was a little steep for obamacare. But weve been making this mistake for decades and decades and decades. If you give up, if you get a job, you lose your benefits and you may go into a higher tax br bracket and those are disincentives for people to get out there in the world and support their family. How do we get out of this box . Thats kind of an oldfashion view. The new view is not that people are trapped in poverty. They are trapped in jobs. We have 140 Million People trapped in jobs. Sure, we got that rate down under assume but far too many people are working. Thats a likely partisan. The gap between what welfare pays and work pays, that gap is what domestic policy is about and that gap is just way too narrow. In some other countries, you have a couple of options. In scandinavia, you make all of the benefits universal or you can try to reform those programs. Its not easy. They have been trying to combine these programs so the cliffs are more transparent but its a very thorny problem. Youve got to fess up, this jay carney stuff, that was really not a good thing for them to say. But im more interested in the broader question. Sure. All right. How do we get out of this p poverty box . If they go to a higher tax bracket, it is a tax hike. This affects so many problems. Id rather subsidize them directly than have an argument about what kind of subsidies would be necessary. But the incentive structure, the tax incentive structure, were paying people not to work. So you were kind of hinting at a negative tax idea . Yeah. I can see the appeal. Look, it was interesting, dick morris said something earlier and i thought you were nodding in agreement, larry, where he said if you want to get rid of these cliffs, bill clinton did this with the earned income tax credit. By the way, you showed Ronald Reagan before. His favorite antipoverty is pro work. Its not as quite as simple as youre flushing it out to be. But if you want to get rid of the cliffs, you can, instead of reducing subsidies or benefits, you can give people the same amount of benefits instead of being 400 poverty like the obamacare act, it could be 800 . As jared suggested, that would be much, much expensive. We have a tradeoff between benefits to meet some kind of a market failure. Retirement security, disability, all of those things require programs to help those people and the structure is endemic. I think its consistent with every argument ive heard on this program tonight that Social Security is the biggest job killer everywhere and i think we could all agree that we accept that tradeoff. I dont want to go there. Thats a different debate. Its the same thing. No, its not. What im trying to get at here is some new thinking. Look, the bottomless benefits is rising and the overall share of gdp is rising. What do we have . 47 now . If this stuff was working, it would be working. It doesnt. Theres got to be new thinking here, jimmy. Paul ryan talked about this, something to do in Great Britain where they combined these to a universal credit. Thats one possibility. You can talk about some wage subsidies to make that gap a little bit bigger. If the administration itself has said that a slowing growth in labor force is going to be the biggest drag on the economy Going Forward and then when we find out that the antiwork effects of obamacare are three times as big as they were, im concerned and im sure jared is concerned. I dont know anyone, including most of the people i encounter around here who spent more time working on this issue of full employment. Im completely with you in the importance of work and, in fact, increasing Labor Force Participation a lot of what just we have a serious crisis and i have not seen one plan i guess you could say single paired. Nobody is talking about that. I havent seen one plan that doesnt involve providing subsidies that couldnt otherwise afford coverage. As their income rises, those plans will be expensive. So so all im saying is that these tradeoffs are endemic. I dont think they are nearly as harmful as you suggest. The evidence shows that people dont respond like youre suggesting. Do we know what they are . All i know is like two days ago it was 800,000. Now its 2. 5 million. Heaven help us the cbo gets a new report then it would be 5 million. Ive got to get out of here. I appreciate the goodwill on both sides. If this stuff were working, the numbers would be a lot better and this troubles me enormously. 47 of the households in this country are on some form of government assistance and even if i take out Social Security and medicare, its still a big number. All right. Jared bernstein, jimmy, well have you back and do this another day. Now, folks, its been another busy day on capitol hill. We have more new news on Unemployment Benefits and the debt ceiling and immigration. The great Robert Costas is about to join us. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Its been that way since the day you met. But your erectile dysfunction it could be a question of blood flow. 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Ask your doctor about cialis for daily use and a 30tablet free trial. We go to washington for major developments on a number of fronts, bill costas is joining us. Unemployment extension died in the senate today . Is that true . Thats right. Were seeing a lot of lethargy right now on capitol hill. Republicans and democrats cant come together on a consensus. So is it dead . What happened . I never saw its not dead. The white house is making this a key priority. Lawmakers will come back next week and try to restart the negotiation. For three months . Exactly. Lets go to the debt ceiling. As i understand it, the leadership in the house cant find a package that will get him 228 votes. Is that true . Thats true. Boehner is mulling several top options. I think hes going to focus on one or two, especially one that would establish more military benefits for retirees and they would reduce by paul ryan and patty murray. Republicans may try to attack those to a new deal. Is the Health Care Insurance bailout tied to the debt ceiling . Its not happening, larry. Thats not happening because the votes arent there. Boehner said earlier this week if the votes are not there to tie the risk corridors from the Affordable Care act to a debt limit deal, thats going to whip it on thursday and just like the risk corridors on obamacare, the votes arent there for keystone. Its going to be something mild, look for the military benefits to pop up early for a debt limit proposal. You know, im a stubborn old mule. I like going back two years. I like the boehner rule. You want to cut a dollar debt. Youre not seeing it because the cuts are not there for republicans. Theres only so much right now with domestic programs. Is eric cantor an alternative in the house . Thats the key because republicans are being tagged to the party that is only about repeal, doesnt happen and c cantor has a challenge and hes saying that is good because hes a real conservative powerhouse and these are the moderates running the purple districts with the red district folks. Thats cantors challenge that can put the party ahead on health care rather than just the Affordable Health care act. If you look at John Boehners press conference today, he personally wants something to happen so its not dead and unless the speaker really kills it. And when do you recon that happens . Theres a republican version of the dream act. I think thats going to trickle out later this year. Any kind of comprehensive reform, anything that possibly deals with legalization, unlikely because boehner knows the conservatives dont want it, republican votes are not there. All right. I still want to cut spending, robert. I cant help myself. Robert costa, thank you. Appreciate it. Cnbc contributor. Were going to have the preview of the jobs report from a labor market expert. And speaking of jobs, tonight our nbc colleague jay leno wraps up his host of the tonight show after 22 amazing years. He always made politics and the economy a big part of his show. Jay, we will miss you. I will miss you. Heres one of his topical jokes from last night. During the olympics, the government will monitor every ec email, every social media message and listen in on every phone call. In fact, people are now comparing russia to the united states. Thats how bad it is. Has a new dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Bulldog bulldog whats this . Mattress discounters president s day sale ending . But mattress discounters has the Largest Selection of memory Foam Mattresses under one roof comforpedic, icomfort, optimum. Even a queensize sealy gel memory Foam Mattress for just 497. And wow four years interestfree financing on the entire tempurpedic cloud collection. [yawns] the president s day sale is ending soon. Mattress discounters economists are expecting the jobs report to come in around 189,000. Some fear the extreme Winter Weather could lead to a more disappointing report. Here now to discuss this is ed lazear, president pushs economic adviser. Now hes a Stanford University professor. As always, ed, good to see you. I know youre focused on other measures. But ive got to tell you, i fear im not predicting this. I fear the dow will sell off 1,000 points. Do you have any sense what this number might look like tomorrow . Well, i would guess that it will be about the same it would be of the last six months. That would put it in the neighborhood of 179,000. Last month was an anomaly. The average error associated with that number is closer to 75,000. If you added the average to it, its about 150,000 but it wouldnt have been so bad. So i never put too much stock in any one months number. Obviously it wasnt a good number. The thing that was probably the worst about last months number was that average hours fell. Thats something that i always focused pretty heavily on. That was bad news and that would be okay. The employment population ratio, 58 something percent. Thats not a recovery. Thats a part that bothers me. Ive learned that from you. What are you looking at here . Why cant we move that number . Yeah. I mean, thats really the big problem. What that tells us is that while were growing jobs, were not growing jobs much faster than were growing the population and thats really the problem. What it tells us is that we havent really had a recovery. What weve had is a movement in to kind of a longterm stagnation in terms of the labor market. Things arent terrible but they are not getting better. At this rate, what we would need is about seven years to regain the jobs that we lost during the recession. Thats a very long time. Some of this is demographics. Youll hear people talking about the employment number is going to be lower because people are retiring. Thats true. That only accounts to a third or half of a decline and what that means is much of this, if not most of it, is still a Business Cycle effect. We really havent covered the jobs that we need. Thats problematic. I think of that as being in large part a function of policy. Nope. Thats something that were going to talk about when the numbers come out. Ive been tracking it ever since you told me to, in effect. I was interested in your notes that so far changes in the s p 500 are consistent with 2. 1 real Economic Growth. You mean changes from last year or you mean changes from the month of january . 2. 1 growth. Thats even lower than the anemic recovery. I looked at this in some significant detail. We had pretty good gdp numbers. They have almost no predictive powers. The last three months change in the s p 500 is the best predictor of where were going to be next year. That number we had a pretty good day today but thats saying Something Like 2. 1 to 2. 2 for next year and thats the kind of number that weve seen since june of 2009. Its not really a recovery. In fact, as you know, larry, its not keeping us on pace for longterm growth. It should be closer to 3 . So youre basically saying, right, no breakout in the economy. Thats what youre really saying . Well, thats what the market is saying. And i think the market is the best indicator. Theres a logic to it. The market is seeing what is going to happen in the future. The gdp numbers tell you what happened in the past. If theres something good that is happening, thats reflected in the stock market. If thats bad, thats also reflected in the stock market. Well leave it there. Maybe well get you on radio after the numbers come out. Ed lazear, thank you. Remember, were going to be your curling headquarters during the Winter Olympics starting next week. Its time for team kudlow to get back into practice. Full, complete checkup. s healta the works. Because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. Get our multipoint inspection with a a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. 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