Media Appearance: Kudlow & Company (7/17/07)

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Its the regular 5 pm appearance on Kudlow tonite: And, we’ve gotten 2/3rds of the old band together — Marketwatch’s Herb Greenberg, John Rutledge, along with Dennis Kneale of Forbes. James Galbraith   and John Harwood will also be popping in.

The discussion will cover last week’s breakout, the new market highs, terrorism and oil.

Also, last week, after the Thursday rally, we sent out to clients/subscribers a note where we (shocker!) said surprisingly nice things about the semiconductor space:

"The semiconductors are coming back to life here. Stocks in the group with a good technical patterns, rising institutional ownership, improving money flow, and/or high short interest include Altera (ALTR), Sandisk (SNDK), Infineon Tech (IFX), Applied Materials (AMAT), Intel (INTC) and Maxim Integrated (MXIM).

Our favorite market sectors continue to be agricultural chemicals and the seismic data group.  If Thursday’s action holds, we will consider increasing our tech exposure, besides the aforementioned semi’s, a recent stock that keeps popping up on our quantitative screens is Western Digital (WDC). 

What will cause the market to top? We still believe it will happen when speculation picks up and investor sentiment becomes even more bullish — i.e., excessively so — but until then expect normal trading volatility with an upward bias. Bond yields remain the wild card, and any move over 5.30 % could likely trigger a corrective wave"

To say the least, it should be interesting.
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What's been said:

Discussions found on the web:
  1. Fred commented on Jul 17

    Good call Bary…I’m overweighted tech as well. I’ve been flamed before, but still feel tech capex will emerge (like in the telco space currently). Productivity has another up leg in front of us if I’m correct.

  2. Stuart commented on Jul 17

    lets hope this time he at least gives you a chance to respond as opposed to the typical, “I don’t like what you are saying” and don’t want people to hear it so I’m either going to drown you out, cut you off and switch to someone else or change topics. He could do the usual, numerical alchemy and try to baffle to the point of nonsense..throwing together this ratio, that ratio, add in a bit of this and some of that ratio and voila..I construct the point I want to talk about.

  3. sanjosie commented on Jul 17

    At one point four participants were talking simultaneously. I can only manage one to listen to one person at a time – I must be “listening challenged” or maybe my “disambiguator” is broken.

    Yes, I agree with you, the Fed is boxed in on interest rates. IMHO they will let the greenback sink interminably.

  4. TexasHippie commented on Jul 17

    Fred – I see productivity improvements *within* Tech based on a very inspiring technology: Cisco’s TelePresence. When this gets commoditized it can do more than cut down executive flying time; it will greatly enable working from home, wherever home may be. Companies will be able to hire fresh Purdue grads from Indiana without having to move them to the Bay Area. Offshored tech jobs will become red-state tech jobs since median incomes are low enough to be competitive to rising wages in India (along with the language/culture barrier, etc.).

    But I don’t see what the Tech sector can do to boost productivity elsewhere. Other discussions we’ve had on things like WiMAX lean towards advancements in consumer entertainment and connectivity, but I don’t see those benefiting corporations.

    In my opinion the only area that Tech can improve presently is Health Care, but as an industry defined by efficiency-stealing middlemen I don’t see this happening any time soon.

  5. GerryL commented on Jul 17

    What Kudlow does is that he stacks the panel with people that agree with him. That way when somebody says something he disagrees with he interrupts them and turns to somebody that agrees with him.

  6. Barry Ritholtz commented on Jul 17

    Well, its my own fault for letting myself get pigeon-holed that way . . .

  7. Sven commented on Jul 17

    They should let the greenback sink. We need to sell those exports to make up for the sputtering consumer :)

    Is there a rule on Wall Street that every bull market has to end in a speculative frenzy? I know some have, but I don’t think all of them have. Some of them just burn out.

    And do we really need “more” speculation to end this…I’m sure the latest crop of real estate “moguls” would plow their money into the market if they could only offload a couple of those condos they bought.

  8. tjofpa commented on Jul 17

    Tech is a good bet.!?

    Thanks… the top is in.

    Swiss cheese under 1.20 & $/yen headed in the same direction.

    LOOK OUT BELOOOWWWWW!

  9. Werner Merthens commented on Jul 17

    It is a common (mis)perception that a weak currency invariably boost the exports of the country with the weak currency.

    Yet, when one looks at trade data vis-a-vis exchange rates, reveals that paradoxically the common perception is wrong more often than it is right.

    There is hardly a country that exports products with 100% domestic content. A substantial part of ‘exports’ is procured internationally. A strong currency reduces those costs.

    Companies faced with ‘exchange rate challenges’ may look harder at potential productivity improvements and cost reductions, leaving it in a much better competitive position long term.

  10. Sammy20 commented on Jul 17

    What world are these people living in?!?!?

    That Dennis Kneale is constantly one of the least informed dicks I have ever listened to(although he seems to know exactly what the market will do at all times in the future)….”I read the transcript”…what an ass!

    If the market truly humbles investors, I think it is about time it kicks some serious ass….those guys have just reached the point of mania….what ever happened to being humble…and to make their points they lie and make up data…..ugh, I can’t watch that awful show!

  11. Winston Munn commented on Jul 17

    Am I late to the party – is this already widely known?

    Quote:

    “NEW YORK (AP) — Bear Stearns Cos. told clients Tuesday that a meltdown in the subprime mortgage market has made the assets from two of its flagship hedge funds almost worthless.”

    Can you say, “Mark to market” kids?

  12. Stuart commented on Jul 17

    Winston, that is the BIG question. To what degree is this going to open up Pandora’s box and start full scale mark to market revaluations. As I’ve posted before, personally I think Federal authorities will move heaven and earth to keep that box shut and not allow full scale mark to market revaluations. Several people have replied that they must, them’s the rules…words to that affect. True, they’re supposed too, but the rating agencies were already supposed to be objective, and we all know that hasn’t been the case. It’s obvious that these securities are overvalued by the tune of hundreds of billions considering the amount of subprime, Alt-A mortgages taken out the past few years, not to mention just plain old ARM mortgages and all are carried at close to original value. Lord knows what the leveraged up derivative effects are as I think only a handful of people can guess that, but considering the scale of CDOs that have been leveraged as well as CDO swaps (CDS), this could be a horrifically frightening figures starting in trillions. Like that old story of chain of loans from one farmer to another to another to a trader all exchanging and leveragingup further animal trades based on the very first exchange of a single cow, concluding with, “we better not hope that first guy wants his cow back”. I have a deep suspicion this is what is taking shape and if so, I’m back to Federal authorities will move heaven and earth to keep this covered up, else the risk implications to the underpinnings of the credit market are just too severe to tolerate. That’s one pricy cow.

  13. Winston Munn commented on Jul 17

    Stuart:

    Thanks for the comment. This could well be the “Big One” everyone has so feared. As you so aptly noticed, it is the CDS market that is “factor x”, the unknown. How can the government stop factor x? It is mostly OTC, unregulated, non-monitored, and outside the scope of government interventions – and is valued in TRILLIONS.

    I’m not so sure Big Ben is so hot to stop a collapse, as he may be itching to find out if his theories are correct and the Fed really can prevent a depression by dropping cash from helicopters – and it appears this shock wave may act across borders, as FCBs hold about 53% of GSE paper, so what the U.S. does may not matter globally.

    It looks like all it would take is one bank to panic….and then the rout is on.

  14. Joe Klein’s conscience commented on Jul 18

    Winston,
    Dropping cash from helicopters? How would that avoid a recession? That would just cause inflation to skyrocket.

  15. Stuart commented on Jul 18

    good time to buy some bullion or good quality gold company shares and hold while I wait for the sound of helicopters.

  16. john commented on Jul 18

    barry why did you let dennis run you over?barry i could of sworn in dec 2006 you said the market would correct big in 2007? you didn’t sound bearish today at all? do you forsee a 10% hit anytime this year? hey you lost some weight and looked good

  17. Winston Munn commented on Jul 18

    “Dropping cash from helicopters? How would that avoid a recession?”

    Depression, not recession.

  18. tjofpa commented on Jul 18

    “Winston, that is the BIG question.”

    Or, as Jim Willie so aptly put;
    “What level of corruption will the authorities permit.”

    They better keep tuned to that Lunar calender cause the tide may be going out soon.

    THe Big 5 Accounting Firms…
    The Big 3 Rating Agencys…

  19. jab commented on Jul 18

    Winston

    Ben’s comment about dropping money from helicopters was a response to avoid Deflation not depression. Deflation is no where in sight.

  20. Winston Munn commented on Jul 18

    Jab:

    Yes, sloppy on my part. But Bernanke is a scholar of the Great Depression and he has stated that tightened lending was to blame at a time when the opposite should have been done.

  21. Fred commented on Jul 18

    Hippie…Productivity gains come from all types of technology advances. Wimax (ubiquitous/mobile) broadband will untether all different types of business opportunities — ones we can’t even imagine yet. Nonotechnology is another “blank canvas” where engineer/entrepeneurs will make “jobs” more effecient. We’re early in this new leg of advancements.

  22. Matt M. commented on Jul 18

    Barry,

    I don’t understand the reason to go on any show. I can see using the appearances to sell your research, but where’s the benefit to the LP’s in your fund? You had once mentioned that your partner’s (LP’s?) wanted you to go on these programs. Why? Just curious.

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