HE TALKED ABOUT THE MARKET. HE TALKED ABOUT THE ECONOMY.
LET’S TAKE A LISTEN.
>> I JUST THINK EVERYBODY,
WHETHER YOU’RE AN INVESTOR OR
WHETHER YOU’RE, YOU KNOW,
ORDINARY MAIN STREET PERSON,
PEOPLE SHOULD NOT OVERREACT.
THAT’S THE IMPORTANT THING.
THE MARKET HAS SHORT-RUN
CORRECTION.
CORRECTION. AND I GUESS IT’S 10 OR 11% OR
SOMETHING.
SOMETHING. WE’VE BEEN THROUGH THIS MANY,
MANY TIMES BEFORE.
AND I DON’T THINK EVEN THOUGH
IT’S A FRONT PAGE STORY AND
NOBODY LIKES TO SEE THEIR ASSET
VALUES GO DOWN, I JUST DON’T
THINK AT THIS POINT IT’S GOING
TO HAVE MUCH OF AN IMPACT.
>> SO, STEPH, TRUTH SQUAD THAT
FOR US.
FOR US. IS THAT JUST WHITE HOUSE HAPPY
TALK OR IS KUDLOW ONTO SOMETHING
HERE?
HERE? >>.
>>. >> LISTEN, LARRY KUDLOW ISN’T
NECESSARILY WRONG.
NECESSARILY WRONG. FROM A NUMBERS PERSPECTIVE,
THEY’RE VERY SIMILAR.
WHEN THE MARKET DROPPED DURING
THE FINANCIAL CRISIS, UNDERLYING
FUNDAMENTALS WERE DISASTROUS.
RIGHT NOW WE DON’T KNOW THE
RISKS ASSOCIATED WITH THE
CORONAVIRUS AND HOW YOU WOULD
NORMALLY SAY NO NEWS IS GOOD
NEWS.
NEWS. IN THIS CASE, NO NEWS HAS PEOPLE
MORE AND MORE CONCERNED.
TWO DAYS AGO WHEN WE FIRST HEARD
FROM THE WHITE HOUSE, YES, THEY
WERE CAUGHT FLAT-FOOTED.
YOU HAD A LOT OF PEOPLE NOT IN
ROLES TO ADDRESS THESE KINDS OF
THINGS.
THINGS. REMEMBER, TOM BOSSART USED TO BE
THE HOMELAND SECURITY ADVISER.
WHEN WE SAW JOHN BOLTON TAKE
OVER, HE WASN’T REPLACED.
THE WHITE HOUSE WAS FLAT-FOOTED
A FEW DAYS AGO.
THE LACK OF INFORMATION FROM THE
WHITE HOUSE FOR THE LAST FEW
DAYS HAS SENT THE MARKETS DOWN
BUT ALSO IT HAS CAUSED
GOVERNMENTS AND COMPANIES TO
CHANGE THEIR BEHAVIOR.
SO GOLDMAN SACHS ISN’T WRONG
WHEN THEY’RE DROPPING THEIR
FORECAST FOR GROWTH AND TIM COOK
FROM APPLE ISN’T WRONG WHEN HE
IS SOMEWHAT OPTIMISTIC.
BOTH CAN BE TRUE.
THIS ECONOMY HAS BEEN GROWING
BECAUSE OF CONSUMER SPENDING AND
SUDDENLY IF CONSUMERS ARE ALL
GOING TO CHANGE OUR BEHAVIOR
BECAUSE OF THE PERRECAUTIONS WE’
TAKING, THEN THE ECONOMY WILL
DROP.
DROP. THERE’S SO MANY UNKNOWNS, SO
IT’S NOT FAIR TO SAY THINGS ARE
DISASTROUSLY IN THE RED AND
THEY’RE GOING TO STAY THERE.
THEY COULD TURN GREEN.
>> YEAH.
>> YEAH. GENE SPERLING, I WANT TO GET YOU
TO WEIGH IN ON KUDLOW’S COMMENTS
THERE.
THERE. >> WELL, I COULDN’T DISAGREE
WITH THE APPROACH THAT THEY ARE
TAKING MORE.
TAKING MORE. THIS IS A SERIOUS ISSUE AND I
THINK WHEN YOU’RE IN GOVERNMENT,
THE BEST THING YOU CAN DO IS TO
ACTUALLY FOCUS ON THE REAL
PROBLEM, TO LOOK LIKE YOU HAVE
100% LASER FOCUS ON PREPARATION,
ON THE ACTUAL, ON THE GROUND
THINGS THAT WILL MAKE THE UNITED
STATES BETTER PREPARED AND SHOW
THAT WE’RE BEING SERIOUS.
THIS IS NOT IRRATIONAL BEHAVIOR
BY THE MARKET.
THEY ARE LOOKING AT A DRAMATIC
FALL IN TOURISM AND TRAVEL, ONE,
TWO, THEY ARE LOOKING AT A
DRAMATIC DISRUPTION OF THE
GLOBAL SUPPLY CHAIN THAT GOES
BEYOND THE WUHAN REGION AT A
TIME WHEN MANUFACTURING WAS NEAR
DEPRESSION AND WHEN GLOBAL
INVENTORIES ARE LOW AND
MANUFACTURING OPERATES IN JUST
IN TIME MANUFACTURING, MEANING A
DISRUPTION IN THE SUPPLY CHAIN
COULD BE PARTICULARLY HARMFUL.
AND TO GO FURTHER ON WHAT
STEPHANIE SAID, RIGHT NOW WHEN
YOU’VE LOOKED AT THE U.S.
ECONOMY, THE THING THAT HAS MADE
YOU FEEL MORE POSITIVE WAS THAT
THE CONSUMER HAD REMAINED
STRONG.
STRONG. NOW SUDDENLY YOU HAVE THIS
DRAMATIC "X" FACTOR THAT WE SEE
PLAYING OUT EVERY DAY, THAT
EVERY CONSUMER WE KNOW IN OUR
LIVES IS THINKING ABOUT
ADJUSTING THEIR BEHAVIOR, EVERY
COMPANY IS PULLING BACK.
THAT IS REAL.
IT’S NOT JUST A MARKET
PSYCHOLOGY KIND OF CHALLENGE, IT
IS ABOUT PEOPLE LOOKING AT THE
ECONOMY AND THE BEST THING THAT
LARRY KUDLOW AND THE
ADMINISTRATION CAN DO IS SOMEHOW
WE’RE NOT ABOUT TALKING UP THE
MARKET, WE’RE NOT ABOUT
ECONOMICS.
ECONOMICS. WE’RE SERIOUS AND TO LOOK MORE
LIKE A CLOWN SHOW THAT LOOKS
LIKE IT IS, YOU KNOW, WORRIED
ABOUT THE POLITICAL SPIN OF THE
MOMENT OR TRYING TO TALK UP THE
MARKET OR TELL CONSUMERS TO BUY
THE DIP BEFORE THE MARKET GOES
DOWN ANOTHER 10%, NOT ONLY
DOESN’T PROVIDE THAT CONFIDENCE,
IT ACTUALLY MAKES THE UNITED
STATES GOVERNMENT LOOK LIKE
THEY’RE NOT ON THE JOB AND THAT