IT’S HUGE.
STUART: THANK YOU.
LOOK AT, HOUSEHOLD DEBT HAS
REACHED THE HIGHEST LEVEL IS
SINCE THE FINANCIAL CRISIS BACK
IN 2008.
LARRY KUDLOW WITH ME NOW.
LARRY, I CAN’T IMAGINE THAT A
RECORD LEVEL OF CONSUMER DEBT,
CREDIT CARDS AND WHAT HAVE YOU
IS A GOOD THING FOR THE ECONOMY.
ARE WE IN TROUBLE?
>> WELL, LOOK, I I JUST WANT TO
GIVE YOU SOME PERSPECTIVE, OKAY?
I JOTTED DOWN A FEW NUMBERS.
SORRY I’M LATE, PLANE FROM
FLORIDA WAS 2:00 IN THE MORNING.
I’M NOT SO WORRIED ABOUT THIS
RIGHT NOW, OKAY?
HOUSEHOLD DEBT AS A SHARE OF
HOUSEHOLD NET WORTH, OKAY, SO
IT’S A DEBT COMPARED TO ASSETS,
IS 13.4%.
BACK IN 2008 DURING THE
FINANCIAL MELTDOWN IT WAS 20.8.
SO THEY GOT A LOT OF DEBT, BUT
THEY GOT MORE ASSETS.
AND THEN IF WE LOOK AT
DISPOSABLE INCOME, OKAY,
HOUSEHOLD DO DEBT, 1-- WAIT, I’M
SORRY.
THESE ARE, YEAH, DISPOSABLE
INCOME.
1.03% VERSUS 1.37 BACK IN 2008.
AND FINALLY, CLIP AGAIN CITY
RATE -- DELINQUENCY RATES, 90
DAYS PLUS, 1.14% IS THE LOWEST
ON RECORD.
SO, YES, THEY’RE TAKING ON A LOT
OF DEBT, BUT THEY HAVE GREAT
COVERAGE RATIOS.
THEIR ASSETS HAVE GONE UP,
PRESUMABLY NOT THEIR HOMES, IT’S
MOSTLY THE STOCK MARKET.
THEIR INCOMES HAVE GONE UP, AND
THEY’RE PAYING OFF.
THEY’RE NOT REALLY DELINQUENT
VERY MUCH.
STUART: NOT BAD.
>> SO, STU, YOU’RE GETTING,
YOU’RE HYPERVENTILATING, STU.
I WANT YOU TO GET THAT CONTEXT
AND THAT PERSPECTIVE.
ST THE -- THE PROBLEM IN THE
ECONOMY IS HOUSING, IT’S
MANUFACTURING, IT’S THE FED
TIGHTENING, IT’S THE INVERTED
YIELD CURVE, IT’S THE SLUMP IN
THE MONEY SUPPLY.
BUT SO FAR OUR FRIENDLY CONSUMER
IS OKAY, NOT BAD.
STUART: OKAY, ALL RIGHT.
I WILL STOP HYPERVENTILATING,
AND WE’RE ESPECIALLY PLEASED TO
SEE YOU WEARING A WHITE SHIRT AS
OPPOSED TO YOUR PERENNIAL PINK.
[LAUGHTER]
NONETHELESS, ARE YOU --
>> BLUE.
IT’S BLUE STRIPES.
STUART: OH, OKAY, I MISSED THAT.
AT MY AGE, YOU CAN’T SEE
CLEARLY.
[LAUGHTER]
ARE YOU TELLING ME ME THAT WE’RE
GOING TO AVOID A NASTY
RECESSION?
ARE WE GOING TO HAVE A SOFT
LANDING?
WHAT KIND OF ECONOMY ARE WE
GOING TO HAVE FOR THE REST OF
THE YEAR?
>> WELL, THOSE ARE HARD
QUESTIONS.
I’M NOT THAT BULLISH ON THE
ECONOMY BECAUSE, LOOK, YOU’VE
GOT A BIG SLUMP IN
MANUFACTURING, YOU’VE GOT A HUGE
SLUMP IN THIS HOUSING.
SO THOSE ARE, YOU KNOW, MAJORS.
THE SUPPLY SIDE OF THE ECONOMY
NOT LOOKING GOOD AT ALL.
REGARDING THE CONSUMER, OKAY, AS
LONG AS EMPLOYMENT STAYS STEADY
OR, YOU KNOW, IT’S BEEN VERY
DECENT, JANUARY’S NUMBER WAS
PROBABLY AN EXAGGERATION BUT
WHATEVER.
AS LONG AS EMPLOYMENT STAYS
STEADY AND INCOME STAYS STEADY,
WHAT YOU’RE GOING TO HAVE IS
SLOW GROWTH, OKAY?
LOW GROWTH.
AND I THINK THAT’S THE ISSUE.
ON THE OTHER HAND, I AM WORRIED
THAT THE FEDERAL RESERVE, WHICH
IS TARGETING GROWTH, IS GOING TO
COME DOWN, AND THE FED FUNDS
TARGET RATE WHICH IS NOW 4.75%
AS YOU KNOW IS GOING TO GO ALL
THE WAY UP TO 6%, AND THEY’RE
GOING TO KEEP PULLING CASH OUT
OF THE ECONOMY SO THE MONEY
SUPPLY’S GOING TO CONTINUE TO
FALL.
I’M WORRIED ABOUT BOTH OF THOSE
FACTORS.
AND THAT WILL AT SOME POINT
AFFECT THE CONSUMER.
SO I DON’T THINK ALL IS WELL.
I JUST THINK THAT BECAUSE YOU
HAVE DEBT, IT’S NOT THE WORST
THING IN THE WORLD AS LONG YOU
HAVE THE ASSETS AND INCOME TO
BACK UP THE DEBT.
SO WE’RE NOT IN THE CRASH MODE
YET, STU.
I JUST WANT YO YOU TO, YOU KNOW,
RELAX A LITTLE BIT ON THAT
POINT.
JUST RELAX.
IT’S OKAY.
STUART: EVERYTHING’S GOING TO BE
JUST FINE.
[LAUGHTER]
CALM DOWN, STU.
[LAUGHTER]
WE’LL BE WATCHING YOU AT 4:00