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deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. tonight on the "kudlow report" as larry kudlow would say, it's more than just a summer rally, it's the new bull market. stocks are soaring to their best july in 20 years. look at her go! free market capitalism is not dead. in just a moment, we'll dive in with some of the best minds on stocks and the economy. plus we'll go into financial sectors, technology and financials. 109%, you're reading that right, since the march bottom. we have the top investment analysts in every part of this rally and will they be stopped? will congress and president obama kill the rally when they come back? fasten your seatbelt. "the kudlow report" starts right now.

good evening. i'm michelle cabrera. welcome to "the kudlow report." larry has the night off. don't worry, even in larry's absence, we believe free market capitalism is the best part of the rally. larry says it's a new bull market. u.s. markets hitting the highest level of 2009 with the dow turning in the best july in 20 years. 12 years for the s&p and nasdaq. the bears continue to get slammed and it's the new bull market. how long does it last? is it too late to get in on the recovery rally? let's stop in with our market gurus, jerry bowyer and steve grasso, plus peter shipp author of the little book of bull moves and bear markets and peter from the university of maryland, professor. peter, i want to start with you. it says you're bullish, is that because we have gotten where it

indicates the recession has ended. >> the recession hasn't ended. if anything, it's just under way sfwhi was talking to the other peter. >> it's coming to an end. the fourth quarter is a good quarter and we have a lot more room to grow in this market. >> the other peter. >> it's a not a new bull market, the same bear market going on since 2000. what's happening in the u.s. is a sideshow. the main event is overseas, the markets are on fire there, particularly in asia.. the u.s. market looks like it's standing still. >> why are you skeptical of this? >> i know the underlying fundamentals of our market have worse and, not improved. we have more debt now. >> the gdp has improved more than two previous quarters and continuing claims, none of that is good enough for knew at what cost. look how much debt we had to in do you remember get this quarter, it will come back and bite us. >> american companies have

trimmed themselves down, gotten much more efficient. there is ability to make money there. >> look at that inventory. >> the u.s. government has hardly spent very much so far. we haven't had much stimulus. it's going to be american companies. >> they're issuing all this debt, what are they doing with the money? meanwhile a lot of companies getting propped up with bailout money. >> steve, you're on the floor everyday, what are your clients doing when it comes to fund flows? do you see the money? do you feel this is a bullish market. >> i feel my clients were skeptical 100 points ago in the s&p. now, they're getting more bullish and that money has to come off the sideline, they're getting more pressure on the s&p. >> don. >> look, i hate to disagree with my new best friend forever peter shipp. you know, this is not like the same old bear market since 2000. this is the same old trading range since 2000. this feels like the

johnson-nixon years, where for 16 years, from about -- from about '66 to '82, until ronald reagan cleaned things up. we were in a trading range in the dow and worse, a bear market adjusted for inflation. it turns out we have been in the bush-obama years, just didn't know it until we were nine years in. look back, nothing happened with stocks, inflation on the rise, doesn't mean you can't have lots of bull and bear markets a gigantic trading range, let's felt our definition straight. >> meanwhile as the dollar hits a new low value. >> not on a trading basis, diverse what currency? that's not true, peter. >> the dollar made a new low. >> it doesn't mean it made a new low. the dollar is what 10% of its lows? >> a new low for the year. the dollar is headed lower? so what. >> only if ron paul is president do we get to declare it a bull

market. otherwise, we're on the gold standard and all that other stuff -- >> one at a time, one at a time. >> gary boyer, finish your thoughts. >> the dow jones went up because profits improved, because american business is smart and cut their costs. that was in this midst of an extremely deep recession. now, off the baseline of the incredible inventory adjustment, we're likely to get positive gdp in the third and fourth quarter, the top lines go up. that is guaranteed for increased profits, not a boon but it's real. >> on the other side of the floor, we can trade to the higher end of the trading range but once these anti-growth policies coming through, what happens then? >> what happens when interest rates go up. >> congress is out for a month, very bullish. then we don't have time to read the bad legislation and time to stop them when they come back.

>> all five of you think we see many of these social policies enacted, health care being the biggest one, that would kill it. >> we will have chance to read the legislation. >> cap and trade. slaughter the bull. >> obviously, that will make a bad situation first. we're even further out on the leveraged limb than a year ago. rates will go up. they can't stay down. >> it's only a measure how we're doing. >> the fed has propped a lot of bond on the books and we're sitting on them. it isn't like consumers haven't been working down their debt and all the rest of that. >> they've gotten started but nowheres near in good shape. we've been on a spending binge for a generation, we just started saving. >> you're saying nobody's saved money for a generation. >> we have to get our savings rate up tone 20% and keep it there a long time. >> peter shipp, how long. >> did you look at the gdp release this morning. >> there was an amazing thing i want to throw out as a challenge

to you. do you realize the consumption share of gdp hit all time highs this last quarter? that means the theory the consumer is completely falling off the cliff and never come back and 25 years of scrimp and save has simply not shown up one iota in the numbers. it's an interesting theory. it's not in the data. >> we're in a deeper hole. this is going to come to an end. you can't run and economy spending other people's money. you run and economy on savings and production. we have it completely backwards and that's why we're in trouble. >> we're saving. >> we're not spending other people's money, we're investing other people's money. >> jerry bowyer, what do you do right here based on what you believe on the market? >> if you're not in, you might want to wait for another correction before you get in. we have another bull coming, i like technology because a jobless recovery and peter down the road, is right and you might want to get ready for that.

>> you can't be in cash and bonds, you have to own stocks. i just own stocks abroad, hong kong, china. >> america falls off the cliff. >> the lead paint toys. gold is up 20 bucks, that's s where you have to go. >> very stable. that's where you put your money. >> dictatorship. >> one at a time. >> they will buy them themselves. >> one at a time. lus skin. >> i want to know what is the china story if the u.s. isn't there to be a customer? all of a sudden the chinese will turn into a consumer society, wi wishful thinking. it's an idea a theory, interesting, a great narrative. but where's the data? >> they can buy their own stuff. there's a billion chinese, as long as their government stops buying our bonds and stops suppressing their own currency circumstance you will unleash massive purchasing power in

china. >> that's a big if. >> they're not going to do that. >> not in their own interest. >> peter marisi. >> they have had their exchange rate absolutely fixed against the dollar, once they start buying bonds and let the dollar fall against the yuan, they will export to china. >> they will export next to us and consume the -- export less to us and consume the products for news they won't let us make them! >> china is not eldorado. >> what should people be buying or selling here. >> good lord. i think the one place it all comes together, i think we could actually all agree, i think on a global basis, you should be buying natural resource stocks. >> true. >> no matter what happens, the united states, we know for sure we have in playing thes our future, we can all agree on that. >> absolutely. >> we know china is going to

keep growing, won't go into depression, whether or not it's eldorado is another question, that will put pressure on resources. the one thing you know will work are resource stocks anywhere in the world. >> help me out. >> health care, most mutual funds are invested in health care, as long as the obama plan is watered down, health care running until year end. >> that's a big if. >> the more i hear talk coming out of nancy pelosi, i don't think it's as watered down as 90% of us on the panel hope it continues to be watered down the way it is, a big if. >> we got to the august 1st deadline and they missed it. >> it's not energy where you want to be. the alternatives aren't feasible at this point.t. they're very subsidy based. i would think energy and health care, you can probably make a bet. >> peter mauricecmarici. >> technology, i think those stocks will do very well.

>> way to go. everyone else sticking around. banks and financials, do they have a place in your portfolio in the new bull market. banks and stocks up 100% in this rally. we're just getting started.d. tell you why when we come back. look at this chart. there it is. there's the bank index. 117% since march 9th of 2009. holy-moly. you're watching "the kudlow report."

welcome back to "the kudlow report." you know what larry says, find a bank you hate and buy it. here is dick bove. our panel is with us as well. we showed that bank index, up 109% since the march 9th low, is there possible more to go on the financial sector? >> of course, looking at it from the march 9th point of view is not the way to do it. looking ov looking at it over a 12 month or 24 month period there, dramatically lower than when it first started. therefore, if they get back to

where they were it happened, we're nowhere near where they're going to go. >> how will it get back? >> there are multiple ways it will happen.. you look at the non-cash charges hitting the industry right now, you make the assumption they will go away in stronger economy, the united states is showing strongest cash profits we have ever seen ever. we have never seen cash profits as high as they are in this quarter and when the second quarter profits are completed, it's higher? what's driving the profits? because the yield curve has steepened. >> what happened, banks ov overcapitalized, had more reserve reserv reserves in history, highly liquid, close to 10% assets in cash, companies increased market share infrom all other forms of shadow banking.g. everything is moving in their direction once this recession is over.

>> are you as bullish as dick bove on the financials. >> no. i'm the opposite.. i think there are one or two ending up being the beautiful needles in a crummy haystack. i think as a selkter, it's wiped out. as far as i'm concerned juicy stuff has taken away. no more seedy loans, private equity fee? what's it going to be? free checking accounts and giving away teddy bears. this is a regulated utility. >> that's a good point. what do you think. >> i don't think the banks made very much off the products we mentioned. >> they lost money. the capital losses is where all their fees went. >> that's where their profits come from. it's not contracted and not gone away. if the united states economy wants to borrow money in the future, they have to go to the bank and they will see this industry is growing.

these companies will show 500% increases in earnings over the next five years. >> it doesn't matter what they show. financials are a great place to work, they're a lousy place to invest. right now, they're making money and borrowing cheap from the fed, making risky bets from the fed and bonusing out all the profits. when the bets go bad, shareholders are holding the bag and there's no more bailout money. >> this is ancient history. 96 1/2% of the loans in the industry are paying interest and principle on a timely basis. that's not high risk lending. that's lending -- >> go ahead, peter. >> if you look at the financials generating profits. it's the ones doing all the proprietary trading. the companies actually making real loans they don't have big profits. the goldman, the morgans, this is how we got into this mess. >> jerry, you wanted to get in

there. >> look, larry is absolutely right, for the short run, if you can borrow at zero and lend at 5, you have to make money, just regular banking, doesn't have to be high risk stuff, borrow low and lend higher. when inflation comes that might be a problem but that isn't here yet. i understand some banks are utilities. there's two kinds of banks, banks that det.a.r.p. and they're great, buy them like crazy. banks that are t.a.r.p. will be run like general motors. >> they're not paying dividends or anything. >> i want to hear what constitutional clients are doing? >> they made their bets. with the secondary offers they bought those but not doubling down and tripling down at this point. i don't see real funds going back to financials at this point. do i have a question for dick bove. my clients are looking more at bank of america as the barometer for the market. is that flawed concept? >> no. i think bank of america is one of the best banks in the united states.

>> what a statement. >> they would be growth right now. >> you don't think that shows enormous economic power? they were dumb enough to buy merrill and countrywide, how smart can they be? >> every $8 in united states deposits are sitting inside the bank of america. do you understand the amount of power necessary to gather that much in deposits? merrill lynch will be a significant positive to this company. it has 16,000 reps selling financial products, it takes the bank out of the united states to places like india, china, japan, where it needs to be. >> they could have let them go bankrupt and bought up those reps a lot cheaper. >> i don't think so. i think if you want to get into an industry where you're not participant you have to pay to do so. >> two names you think are the very best. >> i think jpmorgan is the best in the industry. if you want a safe way to play it, buy bank of new york.

>> thanks so much. dick, don, steve grasso and peter shipp stick around, you have more work to do. a tech check on the new bull market. it had a summer rally but is it too late to get in. drilldown on johned f ford you can make a fortune with semiconductors. he ran off with his secretary! she's 23 years old!

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in this new bull market, the economy has been one of the b-- technology is one of the best bull markets, is it too late to ride this new rally. >> we welcome fresh market recruits, bill smead and from mentor.com and steve grasso and peter shipp are still with us. good to see you. let me start with you. can technology continue this tremendous run? >> i think it's too late to look to the indexes right now. they've been up 50% since march. you have to be choosy. i like microsoft, windows 7 coming out later this year. >> how will that do? isn't that the most important thing we face how windows 7 will do? >> i think that's the biggest issue for technology. that drives pc sales and cut

through business, consumers, so many things and purchases of printers, peripherals all sorts of stuff. >> bill meade, what do you think. >> we like microsoft although we're impatient with the management of the business, almost like a michael eisner thing. >> that's not good. we like accenture and ebay and think as the internet use grows being the toll bridge of the internet system will be just incredible. >> peter shipp, you're so many on many things, you're negative on technology. >> i own tech stocks, my favorite tech stock buying a lot the end of 2008 is up 500%. >> which one? >> called sky worth in hong k g kong. we started buying at the end of 2008. it was trading at one to two times earnings, now up to 10, 12 times earnings. the tech stocks abroad, you look

at the stocks that trade on the hang seng, get better valuation, buy at lower ps and we were buying sky worth had more than a 10% dividend yield. that's not the case now. if you can buy stocks in the u.s., buy a company with a lot of exports, better than sitting in cash because inflation will kill you, better than being in u.s. government bonds but given the fundamentals abroad, you're better off looking for stocks outside the united states where there's better long term fundamentals and better valuation. >> what do you think of technology way too broad, have to look at sem miss, chip equipment makers. >> i think jerry bowyer brought up a great point. it will be a jobless recovery so you want to be in text-based. for the retail investor, you have to realize this is not totally insulated from the market collapse. >> one thing about jobs, that's really what drives this whole thing. i hear this jobless recovery.

that means a short recovery. at some point, companies have to take earnings into the line. >> can i disagree with these guys? >> feel free. that's what i love about this country. >> at the end of world war ii, we had 100% of our gdp in united states government debt from fighting world war ii. we spent the next 10 to 15 years paying it back, had three recessions in the next 14 years and one of the greatest bull markets of all time. >> i think we changed a lot since world war ii. >> let me finish. at the bottom of 1982, we had one-third of the total debt we have right now at three times the interest rate. talk to any business person in business in 1982, they will tell you they were having to borrow at 20% prime, eating up all their profits. >> it's coming back. >> the auto industry was in a depression, smokestack america was in a depression, we had the greatest bull market in history

coming off. >> first, we will have those high interest rates. the problem is, the national debt about $13 trillion is the biggest subprime mortgage of all, financed short term, interest rates will go up, because we only have low rates because japanese and saudis have been foolish enough to supply us credit. >> we're off mission, this is a technology segment. john fortt, what about apple? people love apple products and apple stock lately. what do you think? >> i will get in trouble for not being bullish on apple. they've done really well thus far, the 3g s was a big hit. we have to see what they do with their ipod announcement they always do in september. i think they've gone up and starting to make mistakes, i point this past week blocking a google voice ap from their ap store. they did it because they wanted to maintain control over the

iphone's calling interface. this is the same thing myspace did a couple years ago, the hottest social networks out there, all sorts of developers trying to get on myspace and build their apes and said, don't do that. facebook opened upped and said we will do that. they became the hottest thing. and they're waiting to be that to apple. >> what about tech. >> i think you need to diversify in tech, by smas, buy semiconductors. i'm bullish on apple. i'm long apple for the reasons we just talked about. we have the consumer coming in in september. there's a lot of reason to be long tech. >> you should be bullish on apple. my clients have been bullish on apple. the biggest concern from apple, can they encroach and steal business from blackberry? i'm a blackberry user and saw 34ing earnings they weren't able to get that corporate --

>> buy multiples. if you buy tech stocks buy them cheap. i wouldn't want to buy tech stocks at 20, 30 times earnings and not overpay and try to get a dividend yield. >> they have been overpaying. that's the problem with bull markets they never let you in. whatever. >> who's -- >> bill smead here. >> 10 seconds. >> we own at&t and verizon. we would rather be owning the service, people sending us $100 checks every month. >> rather than the hardware. >> rather than the hardware and get the dividends. >> thank you, guys. sorry about the diversion into all those other things. we got back it to, though. here is another reason to be bullish, last night the kudlow caucus forecasted a gdp for the next year. and doug is the only one that is negative. turns out doug sent in the wrong

year-over-year data. his second half yield predictions is actually .5% brings the forecast to 1.2%. doesn't that sound better? >> coming up. triple digit oil prices coming out. what could that mean for the new bull market. does it slow it down. >> and jumping into the ring with the panelists when we come back. >> and happy birthday, the free market analyst would have been 97 today. we could use him, couldn't we? "the kudlow report" is coming right back. hi, may i help you? yes, i hear progressive has

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tomasulo. fcc launching inquiry into the rejection for the iphone. we have what was sent to am incorporated and vice president of world affairs why did am reject the google application for iphone and remove third party asp from its i-store. did apple act alone or in consultation with at&t, you

never want a government official asking you if you act aid lone, always bad? did they have any approval of iphone applications, very very bad. we were just talking about this with john fortt. it was the fcc taking an inquiry why it is apple rejected the google application for iphone and also removed related third party applications for its ap phone. coming up, oil prices hitting for the month. could energy prices short the bull market. trading officer international and proud oil speculator. bill smead here and dan fi fitzpatrick and others as well. i want to ask you about this, mr. smead, when it comes to apple and the google voice ap and reship wilationship with at concerns about this but active white house, et cetera. >> i find it amazinamazing, sta with a cell phone in 1990 and

paid 5 or 600 dollars a month and all i got was a chance to make phone calls to people and receive a few. now, i get all my home and work e-mail, all my stock quotes, all my calendar. >> it's much cheaper. >> it costs me $97 a month. i have three or four companies constantly begging for my business. i do not see any concept whatsoever of a lack of competition. am i being hurt? it's about the best value i get in my life right now. >> that's a good discussion. >> to kevin and the price of oil, it's creeping up. what is going on with oil? we're worried about it because it could short circuit the rally because it could hurt the consumer. >> maybe we should blame the speculators for apple. >> i've been talking about this all week with the whole talk of let's turn it all on speculators, all speculators.s. we're not focusing on the fact

weak dollar and real demand tied in with speculators. i used to trade in over the counter market, i'm all for regulation and more  transparency. let's be serious, free markets function best when allowing everybody participate and not let false things put in place. >> kevin is making reference to putting in regulation and  intervention talks. >> as we saw today, we're seeing weak dollar push ul and lots of interest. gdp was up, means demand for energy is going up. people think america runs on dunkin, it actually runs on energy. the recovery will be based on energy, we will see prices ratchet higher. nothing is different, michelle. a year ago we got to 147 bucks, we had $90 based on demand. that demand will come back and no new supply coming online, all alternatives thrown aside,

nothing changed. >> what about the commodities and stock? >> i think you can make money on commodities, buy oil, transocean, buy offshore as oil goes up, where a lot of money will go. i like tech resources, almost a pure play on metals and china a significant part of that company's owned by china, where the money will go. >> peter shipp, sounds like music to your ears, doesn't. >> it i own a lot of oil stocks, going up. around 2. -- the dollar was weak across the board today across every single currency, i think it looks like it's breaking down, going a lot lower e particularly in the fall, will push oil prices up and have a shot of going to $100 by the end of the year. >> let's explain to the viewer why when the dollar weakens, oil goes up. almost ever everything is bought and sold in dollars wherever you live.

let's do it didactically. when the dollar weakness the rest of the world these commodity cheaper, vis-a-vis their ability to -- >> easier way to look at it, when we're buying in oil and paying dollars, as the dollar loses value, we're giving opec cheaper dollars. it has to rise to reflect we're paying dollars in diminished value. i think the dollar will lose a lot of value and oil prices hit $100 a barrel by the ends of the year. >> we're all in agreement oil is going north versus south at this point. >> i'd like to disagree. >> why, bill? >> first of all, i love people in the investment world. the united states stock market goes down 53%, rallies 45% and they're screaming bear market rally. oil goes from $135 a barrel to 32 and goes occupy sfraeds. i haven't heard a single person scream bear market rally. i've been the investment business 29 years, i've never

seen the following five year bull market ever led by the group that led the prior bull market. >> look where oil prices are. >> we're awash in oil prices. >> there hasn't been any demand at this point. >> let me finish my point. >> once demand comes in not to be rude, i thought that was your poin point. >> oil is in a bull market now. go back 9, 10 years ago, oil was under 20 dollars a barrel. >> bill smead, you get the spinal word. >> dow is lower than 10 years ago. >> oil is the most crowded trade i've ever seen in my 29 years. >> it will get more crowded. >> boon pickens is always in the news at the top. >> mr. speculate e kevin kerr, thank you, bill smead, thank you. say it with the spiddle coming out with a p. coming up, washington politics. what's the impact on the rally?

warren versus steven moore. let's check in on dennis kneale what he has coming up at the top of the hour. >> a debate, do you believe in this country, i talked live with a guy in his castle, lives alone in a condo. >> all by himself. >> holy canoli. that looks great. after the break.

we want to bring you up to date on breaking news. the fcc has sent a letter to am and at&t, they're launching an in dwy inquiry them over the rejection of the apple rejection of google voice for iphone and remove related third party applications from its ap store. that's what they ask from the worldwide government affairs. did apple act alone or in consultation with at&t in rejecting the applications does at&t have any approval of apple applications in general and please explain any differences between google iphone

applications and voice-over internet protocol applications.. once again, fcc launching inquiry into apple and at&t over apple's rejection of the google voice app for the iphone. we knew this administration would be very interventionist when it came to anti-trust and fcc, also getting very involved here as well. we're working the story, have our silicon bureau chief on this as well.l. as soon as we get more, we'll bring it to you. a lot of people think the biggest problem is this assault on policies. we have the founder of air america and host of serious radio show "left jab" and stephen moore, co-author of "the end of prosperity." i feel like we have another example of this administration that wants to go into every part of business possible. >> michelle, great show.

secondly, we sometimes use the word "regulation" as a dirty word. regulation done right is not a dirty word there. are three things going on i think regulation is helping to accelerate, good things.. more liquidity in the market because of the obama stimulus package and other industries being stabilized and bad actors forced out and seeing confidence, and this administration, i voted for the guy, this administration is taking a hard look at two cost structures health and energy.y. people are gaining confidence. >> standing by the silicon bureau chief on the goldman and apple story. >> this is a real interesting thing. fcc launching the inquiry into what really apple can do. what kind of control this company can basically exert over the store it owns, over the technology it created. i'm not clear the fcc has a leg to stand on because the bottom line is apple owns this.

the company is not twisting arms in order for consumers to use it. yes, it has essentially a monopoly on so much of online digital media with digital music and the like. this kind of thing with the app store, 60,000 apps whatever the developer wants to use with the developer kit. you have to play by apple's rules to take advantage of this system. if you don't like it go, use somebody else's technology. i'm not sure the fcc has a case. >> keep working the phone. our viewers should know we called apple and they have nope comment on the fcc launching this inquiry into rejection of the google app. you heard what mark was saying, steve.e. three good things come out of this regulation, what do you think. >> i agree with the first part. i agree sensible financial regulation is a good thing and does restore confidence. where you lost me, mark is is on

the health care and energy areas, where i think the reason you see such a powerful market expansion, especially in the last three weeks michelle is precisely because the market is indicating that those initiatives are going down or at least they won't be as harmful as some thought they were going to be four months ago. >> a lot of people see the market rallying recently, good economic news but a really hard fight against this public option likely not going to happen, surcharge not as harsh as nancy pelosi wanted it. a lot of people think that's why it's rallying. >> the public option is a monitor label we slap on, the idea people can't be denied coverage if they have pre-existing conditions, whether it's public option or insurance companies forced to extend coverage, i don't care what the label is. i would argue stephen is in a gray area that his assertion it may go down is why markets are

rallying. i would disagree, i would argue taking a longer view, confidence in markets looking for long term stability. until america deals with two largest cost structures health and energy, it will not have a consistent well regulated market. >> you brought up something a krin my throat, this idea of insuring people for pre-existing conditions. this runs contrary to the whole basis of what insurance is about. the whole idea you can get in a car wreck and call up the insurance company and say, by the way, can i have auto insurance? this is not what insurance is. you will destroy the health care insurance market. >> what do you do about people who can't get health care? >> you put those people in a separate pool. it will be a lot more expensive. what you don't do is destroy the whole insurance market for healthy people. for a healthy person 35 years old doesn't have health insurance, if you don't have a pre-rating, you can get cheap

health insurance. if you want to insure more people, don't have community rating and don't have pre-existing condition. it's the very reason people -- why buy health insurance now if you can get it after you get sick. >> i buy my life insurance, buy my own car insurance, why can't i buy my own health insurance, why do i have to get it through my employer and the government, i could buy it myself.. they would treat me better as a customer because the real company is the company or government and who in secentivi care. >> no one ever said you would be forced to buy care from a specific vendor. >> no. but you will be penalized if you don't buy it from somebody. there's a mandate for coverage in the thing. >> don't you agree you should have auto insurance? the answer is yes. if you drive uninsured in america, you're breaking the law.w. don't you think it makes sense people should have health insurance. >> it should be a lot cheaper than it is right now. >> exactly, my entire point.

>> it would be cheaper if we were the customers instead of my employer being the customer, instead of the government being the customer, they would actually have to please me and the fact i could walk away to somebody else would make it a lot cheaper. >> this idea you won't force people to buy one insurance a lot of liberal democrats basically said we want a single payer system. >> a single payer system worked for medicaid and medicare a long time. >> it hasn't worked at all. >> it doesn't give you choices. >> mark, we ganged up on you, we apologize, it's always unfair fight with me and stephen. >> regulation can be good. >> very rarely. thanks. coming up, much more on the bull market plus, steve and i will talk about milton friedman and how much we miss him. he would have been 97 today and tell you about him and how important he is to your freedom. undefeated professional boxer floyd "money" mayweather

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milton friedman would be 96 years old if he were still alive. boy, could we use him. he won the nobel prize in 1976 and he is known for free markets and personal liberty. in one of his wonderful books he explained in the clearest possible language how capitalism and freedom are linked together. when people ask me who is my favorite interview ever, milton friedman. i had the privilege of sitting down with him three times.

this is my favorite sound bite. >> as you see so often the case, people attribute things to the free market which are really the consequences of government inferen interference with free market. it turns out except for you and cnbc and the like, the free market doesn't have a public relations mechanism. >> but the government comes on every single day on television and talks to us about all the wonderful things they're supposedly doing for us. stephen moore of the "wall street journal" is still with us. >> that's a great advertisement for cnbc, you should be running that every night. that's wonderful.l. you have done a great job. this is obviously the larry "kudlow report." larry kudlow is not the first guy to say free market capitalism is the best path to prosperity, that came from milton friedman. >> so frustrating, during this

epic era we're living through, everyone wants to blame milton friedman's policies instead of realizing they're what led to prosperity and government intervention has been a huge part of the problem with fannie and freddie. >> i knew milton very well. i used to have dinner with him in san francisco once a year. the last time i had dinner with him before he died, i asked what are the three most important things to do to get the economy moving, education vouchers and number two, free trade and number three, maybe most important lin terms of our current crisis, cut government spending, don't increase it. i said, milton, how much did we cut it? he said by as much as possible. >> absolutely, right. one of the favorite things i remember when he wrote about the draft and hated the draft. thought it made labor too cheap and gave government too much ease to go to war. they needed to know the true cost of war to make the right decision. if the boys were cheap, they would more than likely end up

sending them off to war. a wonderful way to bring together freedom and issues we face and idea of the free market. >> he used to say we'll have mer sen -- mercenaries, and i said if you don't call them mercenary, i wont call the draftees slave. >> he was against the draft. liked legalization of drugs, privatized social security and schools should have vouchers. coming up, larry kudlow will be back monday and watch him on "the call" on monday morning.

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