Larry Kudlow, Wrong Then and Wrong Now!
I’m getting sick of the sort of pablum Wall Street feeds us particularly Larry Kudlow. I’ve taken after Kudlow before, here for example. Get this from a recent post of his:
Other inflation-sensitive market price indicators continue to show broad-based domestic price stability. Gold prices have slipped back toward their $431 average range that has prevailed year to date. The 10-year Treasury continues to hover around its 4.25 percent range that has been in place since last October. The CRB spot commodity index has dropped slightly below its average 295 zone, in effect since last July.In other words, outside of oil and energy, domestic prices in the aggregate look to be stabilizing in the wake of Federal Reserve money-tightening and rate-hiking moves dating back to June 30, 1994.
…snip…
Domestic price stability and relatively low tax-rates are key policy indicators for continued non-inflationary prosperity. Add in the world economic boom, high domestic productivity and profits, a shrinking budget gap, and a new CAFTA free trade agreement, and you have a solidly bullish stock market and economic outlook for the next couple of years.
You know that gasoline at the pump is up 50% or so. My car uses premium and holds 17 gallons. Before taking off this weekend for Bend and a wedding, I filled the tank; $36! Now, we just called 1st Call to fill the oil tank for the winter. I know we paid about $300 for 263 gallons last year in November for oil. This year the price of heating oil is up 44% 152% to $2.88 a gallon. We will be paying over $400 $586.08 for 203 gallons for oil this year, but Kudlow says,
…In other words, outside of oil and energy, domestic prices in the aggregate look to be stabilizing…
Larry, the CRB hit 334 today! And you can’t say anymore, as you did, that adjusted for inflation Oil is well below its highs of the 70’s.
Update:
Yes, they are nonsensical. The price of oil and energy affects the price of everything else or cuts into profit margins. One can only take so much of a cut in profit margins before one must start raising prices.
Fools talking bright nothings to fools.