Transcripts For CNBC The Kudlow Report 20140306

That makes three. Those stories and much more coming up on the kudlow report, beginning right now. Secretary of state john kerry meets with russias foreign minister sergei lavrov, but so far lavrov is unling to meet with the new Ukrainian Foreign minister. John harwood has more. Good evening, larry. The u. S. Positioned some planes, a u. N. Envoy was harassed in crimea. There was a pledge for an aid package to go with 1 billion from the United States thats under discussion. John kerry met with his ukrainian and russian counterparts and compressed optimism that those talks would continue and bear fruit. We agreed to continue intense discussions in the coming days with russia, with the ukrainance, in order to see how we can help normalize the situation, stabilize it and overcome the crisis. All parties agreed today that it is important to try to resolve these issues through dialogue. Of course, the question is when the russian and Ukrainian Foreign ministers will meet. Russia is resisting that, because they dont recognize the new ukrainian government. Meanwhile, members of Congress Tomorrow are going to start debating a sanctions resolution as a means of putting pressure on russia to take that offramp that u. S. Officials are trying to get them to take, larry. John, in that rambling seminews conference that putin had yesterday, he did indicate, and this was picked up by some papers, that he might be willing to accept the results of the spring eye selectio elections kiev government. It sounds like putin is backing off just a wee bit. I agree with you, larry. Certainly thats how the administration interpreted that. President obama said yesterday hes pausing to reflect on what hes done so far, so i think there is some hope that having made his point in the crimea, that Vladimir Putin may not go further and may look for defuse this crisis. Thats the opportunity that john kerry is trying to make rear. John heart wid, thank you ever so much. Many thanks to john as always. So will the threat of economic sanctions, asset seizures, from the president and secretary kerry enough to make russia pull out of crimea . Here now is nbc news analyst Michael Mcfall who just days ago departed as u. S. Ambassador to russia to return to stanford university. Also with us john herbs herbst. And gentlemen, thank you very much. Paul, let me just ask you is putin softening his position . Because because i dont believe putin wants to be booted out of the g8, and i dont believe putin wants to be subject to oleo gashal seeshies bans, and other things that would embarrass him . I think hes keeping his options open. I watched the press conference closely yesterday. On the one hand, he did open the door, talking about maybe recognizing a new legitimate government after elections in ukraine. That was a good sign. He talked about this february 21st agreement, and how the parties need to come back to that, including the deposed president yanukovych, but he also in the next breath talked about how this is a revolution, and therefore russia is not obligated to meet its treaty obligations visavis the ukraine in terms of commitments to territorial integrity of the ukraine. He had both messages there. I dont think hes decided ultimately what his end game is. Well, okay, but let me follow up. Youve just come from your turn as russian ambassador. You know, this business about the ukraine elections were phony, and he wont recognize the government, thats pretty thin reed stuff. Thats not going to carry much, and he knows that. He knows it, but they dont like the way that yanukovych fled. I was in my job just a week ago. I saw the senior Government People deal with Foreign Policy even before they moved into crimea. The overwhelming message i heard from them, including minister lavrov is that yanukovych is weak, how did he allow this to happen . They dont like the current government in kiev. Thats why minister lavrov didnt meet with the acting foreign minister. They want to see if they can get a better deal in terms of the composition of the government and the changes to the constitution, by the way. That might give their folks more power in the ukraine should they change the constitution. But john herbst, yanukovych, if im pronouncing that right, he and his cohorts killed how many people in the streets of kyle yes . 80 . Thats right, scores. The europeans have now essential put a price on the head of yanukovych and 17 others by saying if they show up, theyll have their assets seized and other sanctions, whatever they can do . I mean, these guys are International Criminals now. Thats the position that putin is in, hes backing International Criminals who murdered all these protesters in the streets. Well, its not just that. The russian hands are dirty in connection with that violence. Theres evidence that the snipers who were firing were not the snipers were firing to kill were not ukrainance, but someone else, mercenaries the where did they come from . We all remember that mr. The Senior Adviser to putin called for yanukovych to use force to clear the square. There are reports in ukraine from a mr. Maskal, a member of the muir radda, that a member of the russian intelligence was in so russias hands are not clean. They were encouraging yanukovych to use violence. Now of course they have invaded crimea. Well get to crimea in a second, but i want to ask charles, i think another factor, important factor today is the role of the European Union people who sounded extremely wussy before, but suddenly found their backbone and spine and now they are talking about asset seizures of these russian criminals, and on top of that, theyre talking about a 15 billion loan of some sort. In other words, financial assistance. This is now the u. S. Is standing with the eu, charles. I think that puts putin on the defensive. I would agree, larry. I think this creates a different balance of power in the situation. You know, on the one hand western europe is quite dependent on russia for gas and oil particularly germany. On the other hand theres an interdependence factor that may mitigate the potential for continued aggressiveness by putin. He not only provides the gas and oil to western europe, but he depends on those markets for foreign exchange. The russian economy is vulnerable. Ironically out of all of this, the extreme as a rule neblt and free fall of the ukrainian economy may eventually destabilize, because the strong support has definitely increased over the last few days. I couldnt agree more. This is a big thing. Russia needs the foreign exchange. Their economy is in terrible shape. Youre exactly right. Mr. Mcfall, let me pursue this more. At this point, you tell me technically, i dont know, at some point all putin has to do is to tell his mill their people in crimea to stand down and go back to the bases and the barracks. Thats all he has to do. Will he do it . Hes got the whole world against him. He is increasingly isolated, mr. Mcfall. He has no place to go. His bravado is shot. Nobody believes his phony argument that his guy in kiev was a good guy. All he has to do is say go back to the barracks. It will happen soon, is it not . Its not going to happen unless he gets something in return. Youve been dealing with Prime Minister putin and president putin as a Government Official for the last five years, followed his career before as an academic. I would be shocked if he said, youre all right, i agree, im going to have my soldiers go home. He wont do that. What does he want, ambassador . Well, first of all, as i said before, i dont think he knows what he wants. I think he was very upset that he lost his guy, yanukovych in kiev, and this was a reckless kind of spontaneous tactical move to go into crimea. Now theyre considering. I think, you saw what secretary kerry said about the conversation today. That leads me to believe that, you know, he said we have some Creative Ideas that we discussed with foreign minister lavrov. You know, what could those Creative Ideas be . Perhaps a return to this agreement so that there would be new elections. Perhaps a new constitution that would make ukraine more federal system of government, but he wont just walk away from this. That im totally sure of. Hes just not going to say everybodys right, im going to walk away. That is not consistent with him. All right. You know him, i dont. You know the story, i dont. But increasingly he is going to be one isolated guy. John herbst, i want to talk about putins isolation. Its kind of a weird story. David ignatius in the Washington Post wrote a great column about this. If you look at the former soviet bloc, most of them, including the big ones move to the west. They move to nato and the European Union. We were going through it this morning. The big guys czech republic, hungary estonia, latvia, i dont want to read them all, they all went west. Now putin suddenly wants to go east to salvage something called the soviet or russian empire. It cant be done. They want to go where the money is, the money is west. They want to go where the new center of gravity is west, thats nato, the European Union. Theres no way, john, that putin can win this. No way. I agree with you completely. You develop wealth by reaching out to the world market the way the chinese have. The russian notion of eurasian what putin is trying to do by pushing udrain east is not in ukraines interest, its not in russias interest. It would ensure russia not being able to compete economically. Thats a formula for failure. Charles, a formula for failure, give you the last shot at this. Its call the mcgritsky act ord it gives the power to sanction visas, those who are in can be thrown out or not let them in. First of all, the haas will strengthen that, thats what they said. Second i believe that president obama, who i think has done very well in this. I have supported him throughout this. I think hes done very well. Hell probably support that. He didnt at first, but now i think he will, and bakley the o olig arches will have trouble banking. Theyll get to putin at some point, arent they . I think that trade sanctions take a while, but financial sanctioning can have shortterm impact. I think the potential is real that financial actions are enacted previously in elaboration, but even if its just u. S. Action, because of the integration of western jumpian banks into the u. S. Financial system, it has the potential for Immediate Impact of russian corporations, russian citizens, the russian economy. But i would say one other thing. The World Economy is still fragile. I thinks we play thus the scenari scenarios, we have to be concerned that the World Economic recovery doesnt need another bout of instability here. I think markets are a bit more on edge globally than it revealed by the trading of the last couple days, so i think that as everyone moves forward, we have to be alert to the fact that Global Recovery is still a very fragile animals at this point i think thats a great point. Global economy in a Global Markets are skittish. Ambassador mcfall, i agree with you, sir, we cant be sure what putin is going to do. I think thats good insight. Im speculating. Thats what i kind of do for a living when we have stories like this, but i sense from all the reports that were getting that somehow putin is moving back, hes moving back, hes moving away from the edge. However, sir, i cant by dead wrong. And the point about financial sanctions is key. If i could just add, its the financial sanctioning that will be key. Because youre absolutely root right. I just got off the phone with a major russian multimillionaire. People are skittish. Theyre afraid of that. If they cant trade in their dollars with their Bank Accounts in london and in new york, that makes them very nervous. Thats where we have leverage ufrlts and if they cant get in and out of the the usa, theyll be one teedoff group. Ive been at dinner parties with them. I dont like them, i dont like anything about them, but putins got to live with them. Thats not a small thing. Ive got to get out. You guys have been great. Thank you ever so much. I hope you return and help us parse through this. Ambassador mcfall, john herbst and mike the president is making more big unilateral changes to the health care law. Well have the latest for you next up. Later on, things got ugly today on capitol hill, as former i. R. S. Official lois lerner again took the fifth in a house hearty. Youll hear how heated and nasty it got between two top congressmen. Speaking of a skittish world dont forget that free market capitalism is the best path to prosperity. Those countries of the former soviet bloc that went west into nato and the European Union get the capitalist story. Mr. Putin does not. Im kudlow. Well be right back. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. New obamacare changes are coming out today. The administration now says it will allow insurers to keep people on the noncompliant health plans that were originally canceled. Remember those very plans that president obama first promised you you could keep, then he said you couldnt keep it, well, now you can keep them again for three more years. This whole thing is a political ploy, in my opinion to try to shield vulnerable redstate democrats from any blowback in next falls mid terms as those plans might be canceled again. Here is Health Policy expert grace marie turner. If you like your plan, you can keep it. If you like your doctor, you can keep it, oops, then he said you couldnt, then he said oops ill let you keep it for a year even though its a pain in the neck for the Insurance Companies and may be more expensive. Now he says, oops, you can have it for two more years. What do you make of it . Totally, larry, youre right. Its absolutely politics, throwing the Health Insurance industry that is doing their best to try to comply with this law in complete turmoil. Its political determined. Democrats who are specially Vulnerable Senate democrats who voted for this law in 2010 are facing the voters for the first time many of them this fall, and they are desperate to top the carnage. Tens of million of people stood to lose their Small Business Health Insurance policies, because they did not comply with all of the rules and mandates. So the president has waved his magic wand, or i guess his pen, and basically said okay, well let you keep those plans, but first of all the states have to agree, because they regulate Health Insurance and the health Insurance Companies have to agr agree. Its not easy for the Insurance Companies to reprocess them and the cost structure may change and the forecast may change. In effect the policies may wind up being more expensive. Let me just say, i guess it was two weeks ago, i wrote a column and i said we should have a threeyear moratorium on the entire obamacare plan. Look whats happened. This is the threeyear moratorium i was talking about it. I want it for everything. The business side is up to two years an rising. There should be no mandates, no Insurance Company bailouts, there should be no more timing changes. Everything should stop in its tracks until we can go back, congress, whoever wins in 14 and 16, go back and redo this whole bloody thing. Thats the amazing thing to me. Hes doing the threeyear moratorium i talked about. Well, except for the 1 trillion in new taxes, and he has not yet postponed the individual mandate. So if you dont have Health Insurance, you are going to face penalties starting next april that is one of the most unpopular parts. Right. I forgot. Youre right. All this stuff should be frozen. Im not being partisan. I have no idea who will win the eek electric. All im saying is nobody likes this anymore. Obama doesnt like this anymore. His advisers dont like it anymore. His supporters dont like it anymore. The next will be staterun single payer and thats got to be stopped. The president has already changed this 20 times, most of them illegally. Obama is repealing obama care with his pen illegally. The voter should do this through the representatives in congress to make it legal. What the president is doing is against the rule of law. Weve got to do this through the process. Youre right. Basically what hes doing is putting off the uncomfortable parts of this until he gets out of office to leave the mess for the next person. And leave the overall taxes. Youve got to go back to congress, which is a lawful body to deal with that. The president may not like it, but hes got to do that. Thats my point with the moratorium ends. Put a date on it, and people come up with new ideas. They may be very interesting. Some of them may be democrat, some may be republican ideas, i hope to heck its a freedom of health care with no mandates, but leave that aside. Only the congress can make fundamental changes in a wall like this. Thats my point. Thats why we should stop it dead in its tracks. Take a timeout. Its like on football. Lets look at this on the instant replay, op the instant replay cameras should last three years. The house has passed legislation to delay the individual mandate. To allow people to keep the plans they have, and the president has a veto message, im going to veto this law if it were to get through the senate, and yet he does the same thing illegally that congress is trying to give him the authorization to do, because they too want to delay this. The logic is incomprehensible. Thats the right word. And the senate wont even vote on this. No, they wont you and i could come up with a dozen senators who would like to vote on it, but its too late. Grace marie turner, thanks very much, as always. Heading into the targeting scandal ended in an ugly scene. This is Elijah Cummings and darrell issa after issa gavelled the hearing to a close. Would el have the whoa story after this. If you would sit down and allow me to ask questions, i am a member of the congress of the United States of america. I am tired of this honestly . I wanted a smartphone that shoots great video. So i got the new nokia lumia icon. Its got 1080p video, three times zoom, and a twentymegapixel sensor. Its got the brightest display, so i can see what im shooting even outdoors, and 4 mics that capture incredible sound. Plus, it has apps like vine and free cloud storage. My new lumia icon is so great, even our wipeouts look amazing. Honestly, i want to see you be brave comcast business built for your company. Your customers. Your. Sales department built from the ground up. For fast downloads. Fast uploads. For a. Built for tablets. For laptops. For. This. Built for saving money. Built for saving time. Built for architects. Built for. Sign up for internet and voice and find out how to get four weeks of internet for free. Comcast business. Built for business. Investigation into the i. R. S. Targeting of conservative groups continued today. But the house hearing didnt exactly go as planned. Our own cnbcs Morgan Brennan has the details. Good evening. Good evening, larry. Congressman issa has tried to get lois lerner to talk, shes done so in the past and did so again today my counsel has advised me i have not waived my constitutional rights, and on his advice, i will decline to answer any question on the subject matter. I respectfully exercise my fifth amendment right. My fifth amendment right. My. I respectfully dlan to answer that question. Reporter in all she repeated that same line nine times. Clearly frustrated chairman issa called an bankrupt end to the hearing. Seeking the truth is the obligation of this committee. I can see no point in going further. I have no expectations that ms. Lerner will cooperate with this committee and therefore we are adjourned. Chairman, i have a state. Mr. Chairman, you cannot run a Committee Like this. You just cannot do this. This is we are better than that as a country, better than that as a committee. Issa then excused all the witnesses, but said he would let Elijah Cummings make his statement. But first i would like to make some brief points. For the past year the centering accusation were adjourned. Close it down. But even without his microphone he continued to talk. Thats when things really got hot. If you will sit down and allow me to ask a question, i am a member of the congress of the United States of america. I am tired of this. You cannot just have a onesided investigation. This is absolutely something wrong with that, and its absolutely unamerican. Hear hear. So after that issa walked off. Cummings spoke for a few more minutes, but nothing got accomplished. Lerner didnt testified, wasnt given immunity, and the committee and the rest of us still dont know her side of the targeting scandal. Does it look lie darrell issa did sit down for a wee bit. I thought i saw that in your tape. Anyway, my editorial, not users, mine. I wrote a column on this months ago, and i said shes not going to talk. Shes going to continue to exercise the fifth, take the fifth. What should be done here is a special counsel. Investigative committees can only go so far. Other conservatives know that theyre not keeping the issue alive. In fact theyre kind of obscuring the issue, and i said special counsel, very limited definition, that they should have a special counsel to get to the bottom of this. Theyre not going to have that. Darrell issa is a smart guy, but i think they played their cards wrong. Morgan brennan, thank you very much. As i said before, russia generally an economic basket case, but that doesnt mean Vladimir Putin doesnt have an impressive list of american lobbying and pr firms on his payroll. Eamon javers has a live report for us on that, next up on kudlow. Well also take you to california where Benjamin Netanyahu is offering governor jerry brown a free Market Solution to that states major drought problems. Our josh lipton has a live report. Stay on kudlow. Well be right back. [ male announcer ] we know theyre out there. You cant always see them. But its our job to find them. The answers. The solutions. The innovations. All waiting to help us build Something Better. Something more amazing. A safer, cleaner, brighter future. At boeing, thats what building Something Better is all about. At boeing, thats what building Something Better is all about. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. [ male announcer ] with nearly 7 million investors. Oh hey, neill, how are you . [ male announcer ]. Youd expect us to have a highly skilled call center. Kevin, neill holleys on line one. Ok, great. [ male announcer ] and we do. Its how edward jones makes sense of investing. At Kaiser Permanente weve reduced serious heart attacks [ male announcer ] and we do. By 62 , which makes days with grandpa jack 100 more possible. Join us at kp. Org and thrive. To nbcuniversals coveragens of the biggest loser olympic winter games ever, with the most coverage of the most events on every device. And the most hours of streaming video on the nbc sports live extra app, including the x1 platform from xfinity. Comcast was honored to bring every minute of every medal of nbcuniversals coverage to every screen. So whats next . Rio 2016. Welcome to whats next. Comcast nbcuniversal. Welcome back to court court. Weve got two reporters standing right now. Josh limit ton has been traveling in california today with israeli Prime Minister Benjamin Netanyahu, and eamon javers has been looking into who is working for Vladimir Putin here in the u. S. Lets begin with eamon. They dont just have the embassy up on madison avenue, to carry out statecraft. They have a battle of lobbyists and pr people on retainer throughout the country, thanks to the foreign agents registration act, we can see who exactly is on the payroll. Starting with the Public Relations firm ketchum. They were paid 1. 5 million to do a variety of things, including distributing press releases, handling website modernrussia. Com and managing russias twitter account. They also put together the oped ped in New York Times last fall, submitted that to New York Times. Also on the payroll maslansky partners. They special in language massages and research. They were paid over 138,000 over six months as a subcontractor. Also a subcontractor here, the law firm alston and bird. They were paid about is 00,000 over six months, and venable, the law firm in washington paid 168,000 over six months. They were working on the gaspron export account with his for gazprom, the giant Energy Company majority controlled by the russian government. They were working both those accounts and setting up both. Thats how it works in washington. Are they all american citizens . They are, as far as i can tell. We called all of these firms for comments. None would call us back except for maslansky, who said they didnt see anything wrong working for the russians. We didnt have a chance to ask key questions like that, but looking at the bios on a lot of these web sites, it does appear that the majority of them are american citizens. If theyre not, we can throw them out. This leads to another point i made at the top of the show. People coming in from russia or wherever, and im especially thinking about the oligarchs, who like to travel freely, theres the act that allows personal sanctions or revoke visas. Basically either throw foreigners out or not let them in. The president has the authority. That bill was passed just a couple years ago. Now it could be a powerful weapon. What is interesting here is the foreign agents registration act that we used to get this information, all of it has to be publicly disclosed to the department of justice. That dates back to world war ii, and the whole effort there in passing that law was to figure out who was advocating for germany in the runup and during world war ii. Theres a long history to Foreign Countries hiring folks in washington. Now, though, they have to disclose it and were able to see everything above board on the documents at the department of justice. Wonderful, fabulous report, eamonafter, cant thank you enough. Lets go live to Silicon Valley for more on the Prime Ministers visit to california. Good evening, josh. How is Prime Minister netanyahu . Evening, larry. Governor jerry brown and israeli Prime Minister Benjamin Netanyahu met today in mountainview, california, discussed cybersecurity, alternative energy and the drought here in california. Netanyahu talked about the successes israel has had in becoming one of the most productive and profitable Agricultural Centers in the world. California doesnt need to have a water problem. By cooperating we can overcome this. Weve proven it. Its not a possibility. Its a concrete result. Israel is the worlds leading innovator in turning dry lands intole forms, wick technique is desalination, where saltwater is treated and processed before turned into clean drinkal waters. The technologies is already building what would be the largest plant north of san diego when its completed in 2016, that plant will produce 50 million gallons of water per day. Why does californias drought matter to you, larry and frankly the rest of your viewers . Remember californias Central Valley grows 99 of the nations almonds. 49 of all lettuce farmed in this country. That really is just the start of your grocery list that relies on the golden state. California produced over 44 billion in Fresh Produce last year and the drought threatens to dry up 11 billion of that figure this year. Larry . Thats a big story. I like those numbers. One of the morals of the story here, one of the bottom lines to the story, josh, is that israel is such an amazing hightech country. Theyre making inventions left and right. This is one of them, the desalination to deal with the water drought. Israel is surging ahead. Theyre really a very capitalist country, and im glad theyre giving us help in california. Josh, thank you very much. Appreciate it. We had a couple weak economic reports today that everybody is blaming the weather. What happens if fridays job report disappoints for the third month in a row. Well talk to vince reinhardt. Hell give us the scoop, next up on the kudlow report. Iwe dont back down. We only know one direction up so were up early. Up late. Thinking up gamechanging ideas, like this dozens of tax free zones across new york state. Move here. Expand here. Or start a new business here. And pay no taxes for 10 years. With new jobs, new opportunities and a new tax free plan. Theres only one way for your business to go. Up. Find out if your business can qualify at startupny. Com but when we start worrying about tomorrow, we miss out on what matters today. At axa, we offer advice and help you break down your retirement goals into small, manageable steps. Because when you plan for tomorrow, it helps you live for today. Can we help you take a small step . For advice, retirement, and life insurance, connect with axa. Impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. With investment information, risks, fees and expenses lifes an adventure and it always has been. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than 4 hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. Free throwsen frozenomics. Brutally cold weather seemed to restrain hiring. Heres todays read on ism servicefuls data, weaker than expected. How does the economy really look . What does this mean for the february jobs report that comes out friday . Lets bring in Morgan Stanleys managing director and chief u. S. Economist, formerly the director of the Federal Reserve Boards Division of monetary affairs, old friend vincent reinhardt. I want to get to this weather stuff in a minute. We have viewers out there. In your opinion, what are Interest Rates going to do . I want to start there. People worry about their mortgage rates, their car loan rates, the credit card rates. They dont see the fed in the way we see the fed. Its really a direct Interest Rates. Whats your forecast . Last time i checked, janelt yellen is going to go lower for longer. She will dover that about rates have fallen so far this year, that means in real terms. Monetary policy was tighter this year than the year before that, and that would be the reason to tighten. If the fed is not tightening anytime soon, longerterm will move up only slowly. Were benefiting from the flight to safety, so theyll stay low. If the fed continues to slow down by bond buying, socalled tapering, and if they quit buying bonds over the course of this year, which i think you agree is likely, what does that do to Interest Rates . Not really much itches if im thinking about getting a mortgage, should i get it now or should i wait . Thats really the key question. So we see the tenyear yield only moving up very slowly. The tapering is old news. Markets absorbed it, the fed is only slowly cutting into the asset purchases, and they have said theyre not going to sell securities and reinvesting mature proceeds. Our central bank will have a big Balance Sheet for a while. So the tenyear, which is somewhat aligned with mortgage rates, ends the year where . About 260 something now. Below 3. 5 . But up . Its going up. So people should get their mortgage now . Buy their car now . Even though shell push out on the first tightening, as the year progresses, well get closer to that data. The other thing is Market Participants always get ahead of themselves. They come to expect tightening sooner and by more than the central bank wants to deliver to keep the expansion sustained. Im one of them. I think higher shortterm rate helped the economy. My friend john taylor and your friend john taylor. His taylor rule says the shortterm rate should be 1. 5 right now. Your thought . And what the fed is doing for forward rate guidance is augmenting the fact theyre stuck at zero by promising to keep the rate lower. Thats right, so its a dumb policy . You used to be a hard money guy when you were at the American Enterprise institute. Im a hard money guy, but i think thefold should achieve its goals. One of the goals was a 2 inflation rate. Since inflation is almost half that, the fed has the opportunity to keep i think we should have price stability. Every nickel of inflation is a tax hike on american consumers. So i i never heard of a central bank that wanted more inflation. I think the bank of japan qualifies on that score right now. I like the old volcker greenspan definite tis when it doesnt affect the Decision Making of houses. Because expectations stay low. And both of those guys looked at open market prices, look at commodity prices, gold prices. That was very important. Weather, adp came out lousy today, private jobs report. Now i see people knocking down their forecasts for fridays nonfarm payrolls to 125,000. If we get 125,000, that would be the Third Straight lousy jobs month. A, do you think its all weather . And b, if that happens, Third Straight lousy jobs month, will janet yellen do anything about it . Okay. Its bad enough having to live through the weather. Now we have to explain what it means in economic data. Absolutely. We were lower than consensus going in. We had written down 140, when it was back when it was 150. We were not just a data observer, but a data collector. We have a group that does a realtime indicator of activity, using big data, surveys, internet traffic, and you see the geographic footprint. Where the weather was lousy, the do you was lousy. When the weather improved, the data improved. So we think that it is mostly weather. That said, regionally theres some weakness, and also across some categories where you wouldnt think necessarily it should be weak, but we think that the economy so its a mixed bag. So underneath your ice crust theres some softening. Were not growing any better than 2. 5 , which has been the recovery right now for five years. 2. 4 . Were not blasting off. It aint going to happen. Our forecast is we had been stuck in a 2 growth channel, because were in the shadow of financial crisis and politicians just kept getting in the way. No, no and now going up to 2. 75 sicklically. We have to abolish the Corporate Tax, vince. The fed cant do this. The fed creates money. If you do a list of the 15 things in washington c. That could be down, number 14th would be qe, numb 15 would be forwardrate guidance. Number one would be Corporate Tax reform, maybe abolition. Tax reform generally. We tax well get to another subject. Lets top taxing saving and investment and start taxes consumption. Many thanks to vince reinhardt, even if i put a few words in his mouth. Stocks stayed flat all day. Does that mean the wild ukraine volatility that is run its course . Well talk to some money experts up next. Theres a saying around here, you stand behind what you say. Around here you dont make excuses. You make commitments. And when you cant live up to them, you own up, and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it when you know where to look. 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. Bulldog oooh bulldog mattress discounters 197 mattress Sale Television announcer get a serta mattress, any size, for just 197 each piece when you buy the complete set. The 197 mattress sale. Bulldog oh boy Television Announcer . Is ending soon. Mattress discounters it took a lot of juggling to keep it all together. K. For some lowincome families, having Broadband Internet is a faraway dream. So we created internet essentials, americas largest lowcost internet adoption program. Having the internet at home means she has to go no further than the Kitchen Table to do her homework. Now, more than one million americans have been connected at home. It makes it so much better to do homework, when youre at home. Welcome to whats next. Comcastnbcuniversal. After yesterdays recordbreaking session it was steady as she goes today. The dow off 35, nasdaq up six, the s p 500 flat on the day. Joining me now ace cnbc contributors carol roth and peter costa. You heard vince reinhardt, one of the best Monetary Analysts around, he said longterm rates in his forecast are going from today, which is, what, 260 and change on the tenyear to 3. 5 . I ask you, carol roth, right there. Is that bullish or bearish for stocks . If thats true. Normally i might have an outlook on it, but right now theres a bifurcation. You look at where the tenyear is trading, looking at stocks that continue to go higher. So joe know if i can correlate the two today, as i might be able to do at some other period of time. You really didnt answer the question. Its okay. Im very keen on this. If long rates go up from 260 and changes to 3. 5 , what does that do to stocks, in your opinion . Up or down . In a normal market or in todays market . Its like pulling teeth. Peter, same question. Im going to help you out here, larry. I do feel that rates are going to be going up. I would say thats probably a very accurate forecast, but im not in that industry. But as far as stocks go, i do think that there will be some shakyness Going Forward as the rates start rising, but i do think the overall economy is still increasing and still getting better. Bullish. Ill put a couple charts on the wall, charts that we used last night. I dont care about the weather, i dont care particularly about ukraine. Maybe ill care if something bad happens, im interested in profits, the mothers milk of stocks. Corporate profits as share of gdp are at an alltime high. Heres why. Wages unfortunately have been coming down even while profits have been going up. Wages are about 0 , 70 of business costs. When you take productivity and add it on to low wages, you have yourself a very profitable situation. I would argue, and again i dont like this argue, but if wages stay down, because the labor market is not tight, thats really good for profits, and really good for stocks, even though i dont like that. I think your argument is valid. I just dont think its sustainable. I think that the profit levels that we have now are because companies have cut back. And when you go out and talk to people, there are people who are doing now two, three peoples jobs. They used to have coworkers. Now theyre overworked and underpaid. They can only get away with it for so long a period of time, because people will get burned out. I dont think theres room for companies to continue to do that. Im a growth guy. I really dont like this story, but im also a profits guy, and businesses are because its a weak labor market, businesses are taking advantage of it. I have another chart. Businesses have neff had better position. The debt to equity ratios have bakley deleveraged and collapsed. Nonfinancial, all right . Nonbanks corporate business debt to equity. Look how much that has fallen. From 85 down to less than 50 . So peter, another bullish thing. If profits are rising, wages are moderate and the position is pristine. Real quick. Like carol said, i dont know if its sustainable. Right now it looks great on paper everything looks great. I think if we can continue this my bigger concern is about unemployment. If unemployment goes under 6 , then the wages will start pressuring. I agree. If consumers dont have the good jobs and the jobs dont come back, i think theres a lot of pressure on the consumers, a lot of debt out there. Look at the corporate debt no, consumer debt. Carol, peter, thats it for tonight. Im larry kudlow. Well be back. Derwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geico. So our business can be on at ts network for 175 a month . Yup. All 5 of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line, anytime, for 15 a month. Low dues, great terms. Lets close new at t mobile share value plans our best value plans ever for business. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Spcan go 795 highway milesen on a single tank. Huh. So you could drive from los angeles all the way philadelphia with just three stops for fuel. Thats just a hop, skip, and a jump. Try that in another midsize sedan. Its more of a hop. A skip. A jump. A leap. Maybe a schlep. Probably a hurdle. A little bit of a trek. Avo during the tdi clean diesel event, get a 1,000 fuel reward card and 0. 9 apr for 60 months. Narrator in this episode of american greed. If theres one name in albuquerque real estate thats as solid as a rock, its doug vaughan. We trusted him. We really trusted him. Narrator his realestate Investment Program takes in 75 million from more than 600 investors. What doug did was he took their money and simply created the largest ponzi scheme in new mexico history. Narrator but hanging over this dream landscape of neverending profits, a storm is coming. I recognize that i do face some serious challenges. Everything was great, and then, all of a sudden, boom talk about a crash and burn. Narrator when vaughans only chance of keeping his head above water is to steal more money, he pulls the most vulnerable of new mexicans down with him. By the end, hes desperate