Douglas Kass Open Letter To Larry Kudlow

Douglas Kass Open Letter To Larry Kudlow

Douglas Kass, a hedge fund manager, popular commentator on markets, and a personal friend of Director of National Economic Council Larry Kudlow, has penned an open letter to Mr. Kudlow expressing his dismay at the over-hyping of the state of the economy from Kudlow and Trump.

This is a good read and he argues in a convincing manner unlike the talking heads on TV that you see shouting at each other. You can read the complete letter here.

He cites many salient points which contradict the hype. For example:

To begin with, the jobs market is not as strong as it is being heralded – this is not “the greatest jobs market in history.” Indeed, the Obama Administration created, on average, 211k non farm payroll jobs/month in its last 20 months compared to 190k jobs/month in the first twenty months of the Trump Administration. And since the total US population climbs every year (+250% in the last seven decades), the percentage improvement, on a per capita base, is not that impressive in 2017-18. The same observation applies to wages – they are not simply anywhere as grand as currently advertised by the White House.
— Douglass Kass

Other key points he makes:

  • S&P 500 companies are issuing negative earnings guidance at the highest rate in more than two years.

  • Tax cuts and government spending are borrowing from future economic growth.

  • Many cyclically sensitive companies report rising costs and supply chain problems.

  • Harsh trade talk is impairing global trade, to the point that IMF downgraded 2018-2019 world growth projections.

  • Recent market weakness is likely a warning of “Peak Global Growth.”

I think it is important that we, as citizens, get enough information on our own that we can make informed judgments about what is real and what is propaganda. I encourage you to read and digest this letter.

Observation Tower at Clingman's Dome

Observation Tower at Clingman's Dome

“Few are guilty, but all are responsible.”

“Few are guilty, but all are responsible.”