THAT WILL DO IT FOR US.
"KUDLOW" IS NEXT.
LARRY: HELLO, FOLKS.
WELCOME TO "KUDLOW," I’M LARRY
KUDLOW.
SO DESPITE A BIG STOCK MARKET
GAIN TODAY HUGELY VOLATILE
TRADING THE DOW SWUNG ROUGHLY
1500 POINTS DOWN AND THEN UP,
THE FACT REMAINS CONSUMER PRICE
REPORT CAME IN FAR WORSE THAN
EXPECTED IN ITS FINAL
PRE-ELECTION READING.
ALL RIGHT.
THERE WAS A BIG STOCK DROP ON
THE NEWS.
SHORT-COVERING SEEMED TO TAKE
OVER FOR THE REST OF THE DAY.
THAT KIND OF VOLATILITY IS AN
UNHEALTHY SIGN, CAVEAT EMPTOR.
WHATEVER THE REASONS I THINK
OUTLOOK FOR STOCKS AND BONDS A
VERY PRECARIOUS ONE IN THE
MONTHSES AHEAD.
MEANWHILE THE INFLATION
ARITHMETIC WAS VERY BAD.
OVERALL CPI UP 8.2% FOR THE
YEAR.
CORE, EXCLUDING FOOD AND ENERGY
UP 6.6%.
THAT CORE RATE IS THE BIGGEST
RISE SINCE AUGUST OF 1982.
NUMEROUS SIGNS OF STRONG AND
BROAD-BASED PRICE PRESSURES
THROUGHOUT THE REPORT.
THE CLEVELAND FED’S MEDIAN CPI,
IT IS A VERY USEFUL INDICATOR,
ITS EXPENDITURE WEIGHT IS EXACT
50th PERCENTILE OF ALL PRICE
CHANGES WELL THAT ROSE 7% YEAR
ON YEAR.
CONTINUES TO RISE STEADILY MONTH
AFTER MONTH.
LOOKING UNDER THE HOOD OF THE
CPI, GROCERY PRICES UP 13%.
FOOD PRICES UP 11%.
FOOD AND SHELTER UP 6.6%.
USED CAR PRICES FELL 1.1% IN
SEPTEMBER BUT CAR PARTS UP .8.
INSURANCE UP 1.5.
MAINTENANCE AND REPAIR UP NEARLY
2%, ALL FOR THE MONTH.
SO IT WILL COST YOU A LOT MORE
TO KEEP THAT CAR ON THE ROAD.
OH, BY THE WAY, NEW CAR PRICES
UP .7 FOR THE MONTH.
MEANWHILE MEDICAL CARES SERVICES
UP A POINT FOR THE MONTH.
OVERALL SERVICES UP 7.4% FOR THE
YEAR THE TAKE OUT ENERGY, STILL
UP 6.7%.
WHILE IT IS QUITE TRUE THAT
GOODS PRICES HAVE CALMED BUT
BEHIND THE RISE IN SERVICES,
THIS IS A KEY POINT, IS THE WAGE
COMPONENT.
WITH THE ATLANTA FED’S WAGE
TRACKER UP 6.7% FOR THE YEAR,
PEOPLE FORGET THE IMPORTANCE OF
RISING WAGES IN THESE SERVICE
PRICES.
IT IS A MAJOR PART OF THE
ONGOING INFLATION PROBLEM.
NOW I APOLOGIZE, I HATE TO BORE
EVERYBODY WITH ALL THESE NUMBERS
BUT FACTOIDS ARE IMPORTANT.
I KNOW THAT IS IS A NOVEL IDEA.
BUT IT IS IMPORTANT.
MEANWHILE SOME MORE.
REAL MEDIAN WEEKLY WAGES SINCE
JANUARY 2021 ARE DOWN 5 1/2%.
REAL HOURLY WAGES HAVE FALLEN 18
STRAIGHT MONTH WITH THE LATEST
YEARLY READ DROPPING 3.8%.
IN OTHER WORDS, WORKING FOLKS
ARE LOSING BIG TIME.
THEIR WAGES ARE RISING BUT
INFLATION IS RISING MORE.
THIS CONTINUES TO BE THE SOFT
UNDERBELLY OF THE BIDEN ECONOMY.
MIDDLE CLASS FOLKS ARE GETTING
SLAMMED BY HIGHER PRICES BUT IF
YOU THINK THAT THE INFLATION
ARITHMETIC IS BAD, THE MONETARY
ARITHMETIC, JUST AS BAD, MAY BE
WORSE NOW.
TRUE ENOUGH, THE FED IS KNOCKING
OUT5 BASIS POINT RATE HIKES WITH
MORE TO COME IN NOVEMBER AND
DECEMBER -- 75.
PROBABLY INTO NEXT YEAR.
IF IT WERE UP TO ME I WOULD DO
THE FULL PERCENTAGE POINT HIKES,
RIP THE BANDAID OFF, POUR COLD
WATER ON THE CUT AND IT WILL
HEAL BUT THERE IS A HUGE POOL OF
EXCESS MONEY OUT THERE BUT THAT
IS WHAT THE FED FAILED TO DEAL
WITH.
BANK RESERVES GROWING
$3 TRILLION, TWICE AS MUCH AS
THE PRE-PANDEMIC.
SO-CALLED REVERSE PREPURCHASE
AGREEMENTS, FED DRAINS MONEY
EVERY DAY, PUTS IT BACK AT
NIGHT.
THAT IS 2.6 TRILLION.
THAT IS NINE TIMES THE MOP-UP
OPERATION PRE-COVID.
THE FED SAYS THEY’RE RUNNING OFF
BONDS $75 MILLION A MONTH.
IN REALITY THEY HAVE ONLY TAKEN
DOWN 164 BILLION, SHOULD BE
TWICE AS MUCH NOT ENOUGH,
OVERALL BALANCE SHEET SHY OF
NINE TRILLION DOLLARS.
PRE-PANDEMIC, 4 TRILLION.
IF INFLATION IS DEFINED TOO MUCH
MONEY CHASING TOO FEW GOODS WE
COULD STILL HAVE WAY TOO MUCH
MONEY THAT IS THE KEY PROBLEM,
IT IS DRIVING UP PRICES.
DRIVING UP WAGES.
DRIVING DOWN LIVING STANDARDS.
I SPOKE BRIEFLY WITH ART LAFFER
TODAY WHO WILL BE ON THE SHOW
TOMORROW.
HE SAID THE FED SHOULD LET
INTEREST RATES SEEK THEIR OWN
LEVEL WHILE THE CENTRAL BANK
MOPS UP THE EXCESS MONEY.
HOW ABOUT THAT?
NOW LAST POINT, ONE WAY TO
ABSORB EXCESS MONEY IS TO
PRODUCE MORE GOODS BUT WE ARE
NOT.
THE BIDEN SOCIALISTS HAVE BEEN
ON A SPENDING TEAR, NOT A
PRODUCTION TEAR, A SPENDING
TEAR.
THE CBO JUST REPRICED STUDENT
LOAN CAN CANCELLATIONS AT
400 BILLION.
IT WILL BE 500 BILLION TO A
TRILLION.
BAILOUT BILL 300 TRILLION.
SO-CALLED INFLATION REDUCTION
ACT COULD FIND UP 800 BILLION IN
RENEWABLE TAX CREDITS.
BUDGET DEFICIT RE-UPPED TO
1.4 TRILLION THIS YEAR.
BUSINESS TAXES RAISED, STOCK
MARKET TAXES RAISED AND THE
REGULATORY WAR ON FOSSIL FUELS
AND BUSINESS IN GENERAL
CONTINUES.
BIDEN IS BLAMING SAUDI OPEC WHEN
ALL HE HAS TO DO IS UNLEASH
PRODUCTION.
THERE IS A VERY NOVEL THOUGHT.
BIDEN SAYS INFLATION IS COMING
DOWN BUT HIS SPENDING KEEPS
GOING UP.
INSTEAD OF WORK EFFORT, WE HAVE
END TO WORKFARE AND WORK
REQUIREMENTS.
INSTEAD OF INCENTIVES TO GROW
THE ECONOMY, WE HAVE RACIAL
JUSTICE AND ESG BOARDS
PROLIFERATING THROUGHOUT THE
FEDERAL GOVERNMENT.
YOU KNOW WHAT?
THE BEST RACIAL JUSTICE I CAN
THINK OF IS GROWING THE ECONOMY
BY FIVE OR 10% COMING OUT OF THE
RECESSION.
AFTER THE SUCCESSFUL TRUMP TAX
CUTS PLEASE REMEMBER MINORITY
UNEMPLOYMENT CRASHED.
POVERTY CRUMBLED AND INEQUALITY
DECLINED.
NOW THAT’S RACIAL JUSTICE.
GROWTH IS GOOD.
GROWTH WILL SOAK UP EXCESS
MONEY.
SUPPLY SIDE GROWTH WILL MAKE THE
FED’S JOB MUCH EASIER.
THE FED’S NO ANGEL.
THEY SUPPORTED ALL THIS CRAZY
FEDERAL SPENDING.
THEY’RE IN DENIAL ABOUT THE
INFLATION PROBLEM UNTIL JUST
RECENTLY.
NOW, LAST, LAST POINT.
THE ELECTIONS ARE IN A COUPLE
WEEKS.
INFLATION IS STILL THE NUMBER
ONE PROBLEM.
INFLATION, ECONOMY, CRIME.
I DO BELIEVE THAT BIDEN
DEMOCRATS ARE HEADING FOR A
WHOOPING AND THEY DESERVE IT.