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you will lose weight. tonight on the "kudlow report," more big news, the summer rally boom. it is a ne new bull market. call it what it is. they expect it until the spring of next year, 2010. we should get back to the pr pre-lehman ballpark, 1100 on s&p and 11,000 on the dow and roughly 20% from here. so there's plenty of room for you investors still sitting in cash on the sidelines. stocks are a whole lot better than bank accounts, but obama's bearish health care plan is losing in the polls however, it is still alive in congress. that's a big red flag for stocks sometime next year, the new bull market, fasten your seat belts,

the could l"the kudlow report" t now. we made that one. good evening, everyone. i'm larry kudlow. welcome back to t"the kudlow report" where we believe free market capitalism this is best path to prosperity. with positive beat the street earnings coming from all corners of the economy today, this summer rally is based on solid fundamental, it is not an empty air pocket. i am calling it a new bull market. that is the reality in my view is now the new bull will last well into the spring of next year, probably another 20% gain to get back to pre-lehman levels we saw in august of 2008. here's the deal. businesses have made the necessary corrections to restore profitability. the economy will recover by 3%

or slightly more, all backed up by a very easy money fed in the short run will overcome some anti-growth and war on capital policies coming out of washington d.c. in other words, the fed is powerful, corporations are doing what they need to do. capitalism not dead yet there, is still room for the cyclical economic recovery. if we do get higher taxes on health care and surtaxes on rich and on businesses and workers, all that's bearish stuff. that's still alive in congress. that's what troubles me. even if it's losing in the polls, i would saytu enjoy the capitalism this year but there may be fewer easter eggs by springtime of next year. look, we will fill in the blanks on all these issues, some of this is controversial stuff. we will talk to america's very best pollsters, talk to great investment gurus, we will debate

everything. once again, i want to underscore this point this evening at the top of the show. it is my view this is much more than simply a summer rally. it is a new bull market. it is a cyclical market. it is backed by good economic fundamental, businesses are doing their job to cut cost, profits will explode in the quarters ahead and the fed is backstopping with easy money. i want to talk about this accurately and realistically. a new bull market started in early march and will go at least a year, if not more, corrections and pullbacks not withstanding, the bears have lost this cyclical round and they lost it badly. let us get right to it. cnbc matt nesto is at earnings sen row to with a full report. we had a hell of a day. >> i will start off with somethi somethingcom must lative. you said the coming quarters. i would say the fourth quarter estimate right now more than

100% year on year earnings growth. in a quarter we're looking at 25-30% decline in earnings, yet if you look at the big picture, two-thirds of the way through earnings season right now, 75% of results have actually beat the street. if we keep this pace through the end of the second quarter earning season, this will be the best outperforms on wall street we've seen really since they started keeping this data 15 years ago. another way of saying that is this worst quarter for analysts in that same period of time. we look at the darlings du jour in terms of who did well on wall street, you see names like expedia. i went out of my way to try to pick five different companies in five different sectors. expedia, very strong, better than expected. room rate growth very strong. motorola, a tech name, beating the st. franklin resources financial and dow chemical also

strong and the destock iing situation is over and the third quarter looks better, dow chemical up just about 8% on this session. also worth a mention weak names, exxon, the biggest battedest symptom stock of themmal falling 8%. they're tied to the economy, don't sugarcoat it say we're still investing in our business through the cycle, good, bad, but they took a hit today as did colga colgate-palmolive. a national global company. growth did not meet the expectations of some who wanted it to do better. becton dickinson, had a big gain on foreign exchange hedging positions and will go bye-bye next year and forecast looks light and kellogg, to give you a couple big names. and 10 more reports after-hours

led off by disney, looks to be a little bit weak. get ready, larry talking about the new bull market, people looking for aay in and have to look for weaknesses, disney a little weak, first share made it but looks light. we heard that many many times. las vegas sands coming in. i mentioned it's been one of the hottest stocks the past couple of weeks, up about 6%, miss there, six in a row and yrcw, pardon me, i'm old school and pit pitney bowes. >> bill zares, star of stage, screen and television. >> and will be unless he gets it turned around. >> a friend of mine. >> defending his quarter. also worth a peek is ge versus the dow. we saw that giveback final 30 minutes of trade. >> ge gave it back after chief

financial officer barney frank said it's okay to keep their capital financial division. >> they don't need to. >> through all their books, just the biggest division. >> i want to ask you a serious question, they are our parent network and i guess we have to be very careful unless we have long term contracts. any chance barney frank is the next ceo of general electric? he is making policy decisions. >> it says a lot of things. it did hurt -- discrepancy whether or not it was new information. a debate out there. it was new to some and did see the dow softening up. >> in your excellent report which covers the waterfront and helps enormously and i want to thank you for staying this evening helps so much, i know you have a new young family. thanks. the s&p banks up 3.5%, led by the regionals. what's up with that?

no earnings reports. >> i mentioned franklin resources and asset manager, not a bank. again, this will be one of those rotational situations we did see financials doing well, we saw insurers doing well and will see people -- >> i think it's one of the more totally bullish aspects of teeth tally bullish aspect. matt, thank you. >> much more on this we have cnbc market analyst peter costa and mike, action contributor and director of u.s. equity derivatives trading at cantor fitzgerald. peter, we're up, i'm looking at the charts. the s&p 500 is up 46% since early march. it is utterly utterly stupid and ridiculous not to call this a new bull market. >> i agree with you, larry. >> why don't we refer it to? it's more than a summer rally. it is a new bull market. >> part of that is i think people are afraid to say that.

you came out tonight and you've basically put it on the table. you think this is a bull market. >> i'm unveiling it. >> america and the 25 million people that watch this show will be so happy you came out and said that. >> better than sunday night football. thank you for that. >> i watch the ratings also. one thing i did notice and we noticed the last couple of days, on the trading floor, one of the things we've seen, any time anything sold off, it never sold off much. there's always an underlying biside and underlying bid. everywhere you look, market has underlying buyers. the economy, the market is being held up by interests and money that wants to come into the market. any time there's a dip, like matt said, it's time to buy. this is a good point to start doing it. >> come on in, buddy. there are 1,000 and 2,000 and maybe 10,000 economic theories, ankle bilting every step of the

way on the economy. ankle biting the sectors and the economy. i'm not smart enough to keep track of all these ankle biters. i want to ask you, mike, why can't we call this a new bull market? since early march, this is the end of july, that's a whole bunch of months, we're coming up to the fifth month anniversary of this baby. 45, what did i just say? 46% rise in the broad s&p 500 index. how can we not label that objectively analytically and emperically a new bull market? >> you know where the fear is coming from. generally speaking, the market has a good way predicting what the economy will bring for us and telling us good things and we still have negative numbers, you see unemployment continuing to rise even though we seem to see that stabilizing, it gets people panicking. they can't come out and say. >> it this is an anna lit iggic,

imperi imperialist imperialistic analysis. dow up more than 20%. march, april, may, june and july. we had corrections and pullbacks along the way, it is still rocking and rolling, how can we not call this a new bull? i mean that. i'm very serious. i want to change the nomenclature and agenda and want to change the whole discussion of this thing because i think it's koch ei it's cock-eye'd. >> people saying the market is ripe for a pullback and say, it will pull back. i don't see lot of people coming in and dumbing stocks, not when it was up 10, not 20, not now. instead, when the market drops back a little bit and people are stepping in and buying. >> pullbacks and corrections are really really healthy.

we've all been around enough to know that you can't run straight up and down. you're up 12% since july 10th, according to matt and others. suppose i roll back the whole summer rally, i am still up 35%. that still meets the definition of the new bull market. nobody is telling me anymore we're going to roll back to either the old march lows or be below those march lows. that is off the table. that's why i say, it is time to call a spade, a heart and a full royal flush just what it is. it is a new bull market. those babies last a year, year and a half minimum. >> i'm not sure we will last a year, year and a half. i do think and agree with you, we are in a new bull market. i'm looking more 8 to 5% follow through on the market. >> pull back or -- add on?

this baby can't be stopped 9200. >> 1150 on the s&p. >> 1150 on the s&p, solid 20% move from current levels. that's my view. >> i think that's what you said before. >> do you buy that. >> 1150 might be a little rich. 1100's okay. i think what will end up happening, next year a lot of bills are coming due. i want to be very cautious next year. >> i'm not going long term. i can't get there. there's too many policy obstacles, political obstacles, too much unknown stuff. all i'm saying, cyclicly we are seeing a bull market predicting economic recovery, the big story of profits. i want to ask you, i have to jump out. you are coming back. your single favorite investment right now, and let me say how stunning it was for banks to go up 3 1/2% today. that's a stunning thing. that comes out of left field.

what's your favorite play right now, mike? >> i like the energy space. >> and oil at 40 dollars a barrel? >> oil's going higher, the energy space is going higher. >> you answered the question. >> mike, thanks a million. peter costa, we have lots more to do. we will rock'n roll, investment strategies from two legendary investors. one of my heros, ed. and another hero, former head of pain weber, they both know a lot. i especially want to know if ed yardeni will sign onto the kudlow label this is a new bull market. look at that, i got a smile at him right at the top. then the cash for clunkers program was so darned successful, apparently they already ran out of money. breaking news, john harwood, more on that later in the program. keep it right here on "the kudlow report." the bull market is in full

flower. it doesn't mean it's forever, doesn't mean i'm not worried about what's going on in washington. it does mean capitalism is still around and cyclical rebounds happen over and over again. i'm larry kudlow. we will be right back. hi, may i help you? we're shopping for car insurance, and our friends said we should start here. good friends -- we compare our progressive direct rates, apples to apples, against other top companies, to help you get the best price. how do you do that? with a touch of this button. can i try that? [ chuckles ] wow! good luck getting your remote back. it's all right -- i love this channel. shopping less and saving more. now, that's progressive. call or click today.

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yardeni. welcome back. outstanding earnings reports which help drive the stock market up today nearly 100 points on the dow. here's brief stats i hope are pertinent to my argument. first, we got the weekly unemployment claims. this is interesting story. they went up for the week. the four week moving average is still beautifully coming down. this is so huge, it is one of the principle leading indicators, there are debates here about automobile seasonal adjustments and what do you know? but the fact of the matter is we've gotten close to 700,000 as we're approaching now 550,000 or thereabouts, as long as the four week movement remain is in tact, the four week moving average remains intact, we're okay,

doesn't mean we will not lose jobs in the next jobs report in august, does mean the situation is improving. behind all the profits and improvement and bottoming in housing, improvements in  unemployment claims and rise in capital goods orders and rising leading economic indicators. i want to note a old friend of this program. real m2. one measure how stimulative the fed has been. you can see from a pancake during 2008, the first half of 2008, a pancake, near zero, real m2 jumps up to about 10%. okay? that's after the fed made it and it has now platt toad at 10%. this is inflation adjusted, # highly stimulative, goes along with the steep upward yield

curve and fed funds rate. the fed is not extending it anymore and it doesn't have to grow anymore. 10% m2 growth is a big number. now, a very distinguished economist shows us a couple interesting things. he is telling us high yield spreads in the bond market are very correlated with jobless claims. the spreads -- let me see if i get this right, spreads in white, jobless claims in blue, making the case the different engsal between high yield junk bonds and treasuries, that difference, called the credit spread and unemployment claims is well correlated. check this out. well correlated. it suggests as these high yield spreads continue to come down, by the way, corporate bonds had a terrific rally today.

people underestimate that. forecasting better profits and credit quality and better stock market and better equality. finally, one more, our old friend, the intrade pay to play betting parlor, not really betting, investment, you have to pay to play, we are now, let's see, let me go to here. the odds for positive q3 gdp next quarter ending in september are all the way through, about 70%, good news. we will get a slightly negative gdp report tomorrow but will get a positive gdp report in the third quarter. that, according to the intrade and all of that is bullish. i keep my theme the new bull market. now, we have a special breaking news report from our great friend, john harwood, cnbc's washington man. he is on the phone. john, what's happening? they're running out of money for cash for clunkers?

>> reporter: that cash for clunkers program has proven so popular in just a few days, the administration and congress fear they have run out of money. they voted about $950 million for that program and once they get to the maximum, they've run out of the authorization to spend money. the transportation department has informed the congress and administration that there appear to be more deals in the pipeline than they have money for, which is going to bring this program to an end unless congress votes to appropriate more money, given the popularity, they just might. >> john, is this cash for clunker going to be a clunker? are we taking next year's sales and putting it into this year's sales? how do you read this r. >> reporter: there certainly is criticism for the plan and how much of improvement are you g getti getting in subsidies for people to make these deals.

when you're at the bottom of the valley in terms of the economy, autodealers are looking for any bit of help they can and congress is trying to respond to them. >> no matter how you game the system, no matter what the stipulations are, we like it if car sales are picking up, bottom line. let me get this right. is congress going to replenish and add to the funding? can they do that? what happens here? >> reporter: it's possible. you have a balancing act between the popularity of this program and concern we see in every poll and statement in administration about not making the public feel they're just spending way way more money than the united states could ever pay back. >> indeed. >> reporter: so the spending concerns will balance against popularity. >> indeed. way way more money than we can ever pay back. that is a thought. appreciate it. the new bull market. we will have investment strategies from legendary investors ed yardeni and joseph, former head of payne weber and

welch management. the new bull market, how far can it go? what should you be doing in this meantime?

summer stock strategies, let

me correct that, new bull market. ed yardeni, and joe grano, former head of payne weber and wells management. now the ceo of centurion holdings. author of the book "you can't predict a hero." important book about his time in the service. were you a marine? >> green beret. >> green beret. my gosh, as well as his time on wall street and my pal peter costas still here. new bull market. i want to call a spade a spade. it may be an inside royal flush, i think we're in a bull market, ed. you are the guru, you tell me. >> larry, i always like your optimism and tend to share it. i've been getting increasingly optimistic about this market since march when the fed went to full bore quantitative easing. having the fed funds rate near zero is also extremely bullish. as you know, our stock market has been a bit of lagger.

there have been great bull markets overseas in china and other emerging economies that started in november. it's great the u.s. is finally catching up. you listed a lot of economic indicators in the u.s. looking better and better. i think it's very important to stress the stock market is becoming increasingly decoupled from the u.s. economy, even if the u.s. economy doesn't have a great recovery, many u.s. companies will have great earnings because they have more revenues overseas and cut their costs dramatically. >> one other quickie before i get back to joe and peter. on earnings surprises, to me, this is a prelude to genuine earnings increases. they will have tremendous leverage once the top line starts rising. a lot of people disagree with that view. i need you to weigh in on it. >> they must think this time it's different. so far everything that happened including your new bull market says the business cycle is alive

and well and had our bear market and those are followed by recoveries and the stock market starts to anticipate it. the fact profit margins are going up rather sharply, all we really need is confirm that with revenues. even if the revenues are on the punk side here, i think u.s. companies will find plenty overseas. i think in the second half of the year, you will have a full-fledged earnings recovery that will probably surprise a lot of people. >> joe grano, let me come back to you. you have run these large consumer and retailing divisions, you've been on wall street. first, i want to ask you, is wall street up to the task of financing and support iing and brokering a new bull market. a lot of people are worried about wall street and wall street's health a suburban amount of class warfare going on. hardly a day goes by some politician or group doesn't blast goldman saks and other walt firms. you are a veteran, can wall

street do the job, what do you think. >> yes. wall street is not the same wall street two years ago, whole different configuration, too many firms gone, much more consultation. the infrastructure, capital is there, despite the since in '07 and '08. yes. the bigger question, is the consumer prepared to reengage. >> a lot in cash right now, not participated in this rally. >> if you had a million in the market and it went down to $600,000, you're acting like it's $60,000. there's a fear element as to what will happen prospectively. 70% of our gdp is predicated on consumption. >> it's all predicated on the health of business that is improving. i want to ask you, all these indicators, bond spread, money market spread, libor getting to an all time record low. the fear, crisis, emergency seems to be done. money supply is cranked up,

yield curve positive. why can't we run -- new bull market. these things have to last a year, year and a half. why can't we run like that? >> i share your optimism because i'm one who will never wbet against america. no question corporate america e delevered and cut costs. >> to their benefit. it happens. >> and is that infrastructure and cost savings is it sustainable a relevant to market reaction and we're moving pretty bullishly, as you're pointing out. if consumer consumption does not come back and talk about the consequences of deficit 3 1/2 times larger than last year. let's talk about trillions of dollars of guarantees the government has put out, i'll give the government in this administration high marks on financial engineering to avert a

disaster. they made mistake, letting lehman go. >> and may be broke, busting the bank. >> what i'm suggest iing in oth words to get it done there, are unintended consequences we have yet to understand. furthermore, i'm now concerned this shift to social engineering we can ill afford right now. >> ed, come into this. social engineering. that's a big thing. a lot of this stuff going on, national health care, whatever, cap and trade, this is social policy, not macroeconomic growth policy. how do you respond to what joe grano is worried about? does that put a cap on the growth of the economy? does that put a cap on the ultimate return. >> i'm saying pre-lehman, 11,000 or 11 to 1200 on the s&p. does that limit the prosperity rebound? >> i think it does. it's major threat to it. if we're going to have more government and larger deficits, we're going to have higher taxes. whether it happens today or

tomorrow, the fact is consumers start to behave as though it's happening today. consumers anticipate pretty accurately where their income and taxes are going. we really have a government that's almost out of control. we have these thousand page pieces of legislation that have all kinds of earmarks and pork barrel projects. the real goals of these legislation almost defy the point. it seems the government is out to spend money and be more and more in our faces and all sorts of areas of the economy. that can't be good. i'm rooting gridlock will win out and this health care debate is very very important. there's a counter revolution occurring here where there's a lot of people say, look, we don't have the best health care system, there's a lot of problems with it but do we really want to take a risk of ruining what we have right now for something that will bring

the government in in a major way. i think it's a big risk. >> peter costa, we have more work to do. if the health care passes and some more owner rouse regulatory issues pass, it's really out 2011, 2012, 2013. is it too cute to assume we can still have a cyclical bull market and economic recovery before the bad stuff kicks in if the bad stuff kicks in? that's a question a lot of people ask me, can we get the job done in the next year before the bad stuff comes in later in the decade? >> i absolutely think it can. as a matter of fact, the market has proven periodically it can run up to levels that precede writ should be. we can run up to 11,000 on the dow. we may not be there for long but we definitely can get there. that can end up next year, halfway through next year, you might see that tail off and we

might drop down to 9500 again. >> that's right. you can have a great, what was the phrase, great christmas goose but the easter eggs might not be quite so good. let's focus on christmas before we get to easter. your favorite investment right now? >> my favorite investment, to health stocks, mercker advisor. >> oh, you may be working for uncle sam. you're not worried about that? >> i'm not worried about that. a well managed health care company in health can survive. >> can survive. interesting. >> to me, a well managed company is much more important. >> joe grano, where should the retail people who watch this program, where do they run and hide or should they come in? i want them to come in. you have another 20, 25% to go. you may not agree with that. >> i'm suggesting retail america has gotten crushed in the last year. 401(k), iras crushed some has come back.

i'm not prepared to tell them jump in two feet on a bullish sentiment that may only last ten months. >> by some whacked out commentator. >> i want them to be longer term investors. i think the discernable trend may be more discernable at the end of the fourth quarter. i want to see the consequence of all this money being printed and all these guarantees. without question inflation will come as will higher interest rates. >> maybe not for a couple years. >> i suggest within 18 months you will see higher interest rates. >> can you make money in the meantime. >> you can but don't jump in at 100%. leg in. a bullish call frankly should be more than ten months for retail investors. >> that's right. >> ed, your favorite investment. >> i think information technology is the best way to play the resumption of the blood samp sample -- global boon. you have people moving to a

better standard of living and tend to buy cell phones and laptops and flat screen tvs and cars with semiconductors in it. i think cars are a big winner. i think it's a long term investment, don't think it's a short trade. >> ed, how about banks? they're global, in asia, even in china. >> they're too big to fail only a few months ago. now, they're bigger than that now with all the consolidation occurring, less competition and better profit margins, the politicians seemed to have gotten bored with them and moved to other issues. >> except for goldman sachs, everybody's piniat take. i am sick to death of all the attacks on them. i think it's bad for financial recovery, bad for the united states. i think it's class warfare, i

think there are cultural issues there. i am sick to death of the attack on goldman saks. joe, peter, the new bull market. we will focus much more on that a fresh group of all-star panelists, market gurus waiting in the wings. plus, to have a little fun, we will bring back the kudlow caucus and ask them about the stock market forecast and gdp economic growth forecast. really, i'm sick to death of that story. we want the banking system to recover. stop picking on one firm. it smacks of some weird left wing marxist populist thing. we'll come back with better news than all these attacks on goldman. k today.

with the summer rally, aka the new bull market. let's call it what it is, not just a summer rally a full-fledged bull market up 45% from the low.

with that in mind, we decided to engage our market and economic sentiments, we checked in with our panel of regulars we call the kudlow caucus. there are those beautiful faces, only a mother could love them all. today, we asked the group, what's your year end dow and second half real gdp? 11 members voted. here's what they said. the average year end dow forecast came in at 9,400. it closed today at 9155. the second half gdp average forecast, 0.9%. it is very clear that the kudlow caucus does not agree with kudlow. okay. now, jerry bowyer and jim la camp shared my predictions, high kind of guys and kass and reich and moore at the low end, 8,500.

as for the economy gdp, high forecast came from jerry bowyer at 2.5%. dougy kass had the only negative forecast at minus 2.2%. to see how each voted and why, go over to the kudlow.cnbc.com. me, i love every one of those guys. but they are all wooses, we are going to outperform. i don't want to cheerlead, looking at the objective imperical fact, new bull market. the economy should grow at 8% out of this session but i think you can get at least 3% plus. much more in the new bull market. we will find brought to put your money, another panel of all-stars waiting to come in on the wings. i want to talk about rising positive profits earnings. 75% beating the street with 60% reported, 75% beating the street with a 10% above increase, i want to see what that is going to mean because there's profits

coming from every single corner of the economy. that's got to mean something, folks. the new bull market, "the kudlow report," straight ahead. at 155 miles per hour, andy roddick

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all right. we have a quick whip around. it's great to see you, we're a little stressed for time. i want to know. new bull market. that's my take, you may disagree. what's the best investment? how do people make money. >> we're fully vested. enjoying the ride. our target is a high s&p 500 by early next year. get into small caps, mid-cap, favor growth. that's the tech area, by the way, move from software to hardware, that has the next leg. we did it today. >> well put. >> dan fitzpatrick, you don't see it that way. i'm calling it a new bull market, i know you want to sort of take my head off. go ahead, dan, what do you do here? >> from a traders standpoint, i think you want to buy. 2010, not so good. i've been telling everybody you got to buy stock.

i like tech resources. bank of america, also still got some legs. you got to go financial, technology. it looks a little heavy to me. but ultimately, i hate to say it, i have to be bullish. >> find a bank you hate and invest in it. bill smead, what's your take. >> large cap technology, stay with it 5 to 7 years. >> oh! >> it's incredibly underowned. we have a huge slug of ipos you're probably right won't happen until next spring. notice the chinese, they're dumbing massive ipos on to their market. nobody talks about the bear market rally. that this is bear market rally, in our opinion. >> thank you, gentlemen. coming up straight ahead. obama-care is a big red flag for stocks and jobs. i think the worst of it comes next year. we have steve moore, scott rasmussen and frank of the

gallup poll coming up the public coming down, they don't like it but he and democrats are stubbornly fighting for what i think is a set of bearish policies. "kudlow report" back right after this. welcome to progressive.com. you must be looking for motorcycle insurance. you're good. thanks. so is our bike insurance. all the coverage you need at a great price. hold on, cowboy. cool. i'm not done -- for less than a dollar a month, you also get 24/7 roadside assistance. right on.

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there they are. i see a vice president, president, professor gates and

officer crowly. ilove kumbya. i don't do that. i just ask for fiscal sobriety and policies. obama-care is taking shape. it will be bad for stocks and jobs and the other question, will it pass or not? we javedan new port of the gallup poll and scott rasmussen and wall stre"wall street journe moore. co-chairman of the end of prosperity. let me get the pollsters in first. scott rasmussen, on the health care issue, it seems to me president obama is really losing the battle in the polls very badly though they are not giving up in washington. >> his numbers are declining on health care reform. it's difficult to poll on because there's not a particular pl plan. what we know is opposition is growing in the last month and a half.

number of people strongly opposed to the plan as being developed is up to 41%. just 25% strongly support it. the reason, simply a majority believe it will increase their costs, cut the quality of their care and believe if it passes, it will lead to middle class tax hikes. >> middle class tax hikes. frank gallup, are you seeing similar issues. >> americans are concerned. it's predictable, any time you have a public policy issue like this, people start off positive and then opposition and where it goes from here is the real key. the telling statistic in the gallup numbers is does congress understand a good understanding what's involved in this health care reform issue and 27, 29% say yes a low number. a lot of americans are saying, wait, we're not sure what we're doing here. >> they don't read it, frank, congress doesn't read their own bills, 1500 pages or whatever. americans are not dumb, they know that.

steve moore, given these lousy polling numbers, we have distinguished gallup and rasmussen and fox news is saying the same thing. "new york times," cnbc, same thing, pugh poll is even worse, i just saw that before we came on the air. steve, your newspaper is saying, wait a minute, blue dogs folded, public health option, government health option is still there. >> larry, this is an incredibly unpopular plan but democrats seem to want to walk the plank. i do believe they will pass something, make that predictions in october pass a health care bill. but the question is will they get rid of all the lousy stuff, on business i wrote about today and public option i think is out of the plan. >> you think the public option is out of the plan? >> i do. >> it's still in the program i saw. the blue dogs didn't say no. on the senate side, let's get this straight, the senate side

is saying no government option, no government insurance option takeover. this business about cooperatives will be government funded. it's a health care fannie mae, the same difference. >> it will not cut it, larry, the reason is what's being reflected in the polls. americans believe this kind of government takeover of their health care system is going to reduce the quality of their own care. they are extremely concerned about that, especially by the way, women. women spend two-thirds of the health care dollars like my wife and yours and they don't like a dim munition in the quality of care. they will pass something but it won't be horrible. >> pass something but not horrible, the most bullish i ever heard you on the subject. you might want to consider buying back your stock portfolio if you believe that. stock rasmussen, you do investor polling and consumer polling. what happens if washington jams through bills and legislation the public doesn't want? that's a weird disconnect. >> that happens all the time but

right now what we're seeing, people expect it. democrats strongly want this health care reform by 2-1 margin, people think no matter how bad something is, congress can make it worse. we'll see what happens. consumer confidence this is key to all the things you're talking about in the previous segments and down from its peak a month or so ago. >> frank, what does your poll show about independence on health care issue. >> it's down on all groups. democrats supportivnot as suppo republicans never up for it. i should point out the result, every ceo takes chances at times, takes a short term hit for long term gains, that's what obama is doing, the key thing is long term, will this be positive if they pass a bill. >> i have to go. frank new port, scott rasmus sense, thanks so much. "the kudlow report," we will be right back. i've been growing algae for 35 years.

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