* Ben Bernanke is a real smart guy with a good idea for a numerical inflation target. But investors were turned off by him when he testified before the Senate. Just a guess: IRA and 401(k) owners may be worried that a one to two percent inflation target could be too close to deflation or recession. Folks may be Fed up with Fed fatigue over Greenspan’s robo-cop, autopilot tightening moves. Perhaps if Bernanke says he’s going to be just like Greenspan, does that mean the autopilot rate hikes will go on forever and doom the stock market?
* George Bush could be bottoming, though it may take several months for this to become clear. But add up all the reasons why the Bush stock deserves a “buy” rating: 1) the economy is strong; 2) gasoline prices are falling; 3) the GOP Congress will pass a sizable tax- and budget-cutting fiscal plan; and 4) after another successful election in Iraq next month, at least 35,000 U.S. troops will be withdrawn in 2006.
Larry Kudlow
Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.
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