except for maybe wells fargo which also had a really good quarter. yes, google is okay to buy down here. like i say there's always a bull market somewhere. i promise to try to find it for you right here on mmd. i'm jim cramer. i'll see you monday! hey, larry, what are you looking at to close out the week? >> all right, jimmy, my take? both china and the u.s. are better than folks think. i'm still playing it from the optimistic side. good evening, everyone. i'm larry kudlow. this is "the kudlow report." so this roller coaster week on wall street. markets took another dip today. the dow down 137. the s&p off 17. the nasdaq lost 44. but again, i'm still an on the mi optimist. and in just a second i'll show you how this is still going to be a shallow shakeout, and i'll make the case that our economy and china's are both better than you think. all right. the president and vice president unveiled their 1040 tax returns today. turns out he's using the same rich man's exemptions that he rails against. and that's not stopping team obama from promptly pounding mitt romney to release his returns all the way back to the

1970s. all they're trying to do is discredit romney's business success. the romneys, by the way, pay 20 times what the obama's pay for 2011 taxes. tonight we begin with the late-day stock plunge. we welcome cnbc's jackie deangelis. she has all the details. good evening, jack e!. >> good evening to you, larry. stocks log their worst two-week slide since november with today's slide driven by the lower than expected first quarter gdp growth in china and worries the recovery has stalled. renewed concerns over europe this week adding some pressure on the way down as well. we saw the dow sliding 137 points, the s&p shedding 17 points, and the nasdaq composite losing 44 points as well. on the s&p large cap sectors we saw fijs lead the way lower despite good reports from jpmorgan and wells fargo this morning. but the sectors that are linked to growth, those are the materials, energy, and financials, they took the brunt of it today. the s&p 500, the dow, the

nasdaq, they are down 3.4% or more from their intraday highs this year. and let's take a closer look at the big banks as well. rising bond yields in spain adding some pressure to the heavyweights, as you can see here. losing 5 prs on some of these. and citigroup as well. the least -- or the best performer today, down by 3 1/2%. larry, back over to you. >> all right, jackie, thanks very much. now, let me just take a moment to tell you why i think china's economy is better than a lot of folks do. it was china that apparently triggered today's downturn. you may be misreading it, however. let me begin with this thought. i know q1 came in at 8.1%, maybe a little bit light. all right? however, don't forget, industrial production in china up 11.9% year on year. that's a big number. retail sales up better than 15%. that's a big number. those two numbers tell me that the economy in china will probably pick up steam as the year goes on. so this little miss today, it doesn't look important. don't also forget, loans are

rising in china. money supply is rising in china. and i wouldn't get too bearish on it. i don't think it's a soft landing. i think it's an expanding economy. so we'll leave it there. now, as we've been saying on the show, we had a volatile roller coaster week here on wall street. monday down 131 points. tuesday off 214. wednesday up 89. thursday up 181. today down 137. all right. that is life. we have to cope with it. here now we bring in our expert investor, steven weiss of short hills capital and author of the new book "the big win." zach karabell of river twice research. and joining us for the first time on "the kudlow report," alec young, global equity strategist with s&p capital iq. in your honor, alec, is china doing better than we think, or am i just whistling dixie? >> well, i think it's probably somewhere in between. i think, you know, it's a manageable situation, but what we'd like to see is more comments around more bank reserve requirement cuts.

we've seen a couple, as you mentioned. that's really jacked up lending. that's a good sign for growth going forward and getting us the soft landing we want. but i think the market wants to see some signs from the officials that there's more coming because all of this is happening against a backdrop of worsening problems in europe and china. the biggest export market -- >> they'll do what they have to do. zach karabell, you're an expert. come on, you're an international guy. what's the chinese story? there's such fretting about china. me, i say china looks better than people think. i'd be buying energy. i'd be buying materials. i might even be buying some industrials also. >> as you know, i've been preaching the gospel or quoting the an alax or saying the taoi-ching of chinese growth. and i will change that tune if companies like nike and caterpillar and yum brands saying in concert that they are seeing a dramatic shift in the landscape of either demand for their product from the chinese consumer or companies like vale

et al. saying there has been a radical slowdown of demand for industrial inputs. and nothing that has happened in this data, and you've got to look at chinese gdp data more as a shadow on a cave wall. it's a partial representation of reality. >> that's where production numbers interest me. that's@retail sales numbers interest me. that's why bank loans interest me. steve weiss, i know you probably hate this story. the shanghai stock market up 2 1/2% this week. i don't want to do a whole sell nar on china. i'm just sake people overreact. wall street may be smarter than it deserves to be sometimes. >> yeah, i've never heard that. there are two issues here. first of all, you had sparn banks. they increased their lending from the ecb march over february by 50% to 200 and about 30 billion. that helped drive the markdown as yields got to 6% in the ten-year. second, there's a whisper number ina. our market number was up yesterday because we thought china would come in and blow out the number, not 8.1 or 8.3 where consensus was but 8.6.

but there are two economies in china. i agree with zach. i agree. i agree with you about that the industrial economy may be strong but what's not strong is the property economy. we have three cities come out and say we want to make it easier for people to finance their homes. we'll reduce reserves for that -- >> that doesn't stop the rest of the economy from growing. it may not stop the -- >> i think you have to look at it it two ways. nike's great. consumer products that we export there, great. material steel, short. >> let me come home, alec. look, two data points today that interest me. michigan consumer sentiment. now, it was off a touch but the upward trend line still looks pretty good. i think we've got a picture of it someplace. the cpi, here's where i disagree with wall street again. cpi came in about on target. but the cpi is rising 2.7% year on year. average hourly earnings for the u.s. labor force, 2.1%. real earnings are falling. and that does trouble me. i'll be honest. i'm not quite as optimistic on

the u.s. just because of that little glitch number. do you have a thought on that? >> yeah. and i think it's a fair point, especially in light of this monster rally that we've had in the first quarter valuations aren't what they were in decemb december. the bar's been raised for u.s. economic data, for consumer expectations. and i think that's harder to handle when you've got spain really going off the rails. but -- >> don't worry about spain. energy prices, however, this is the good side. energy prices are slipping lower. that includes gasoline prices, which have finally stopped rising and are off three cents. now, that means the inflation component for consumer spending may come down. >> yeah, i think we've been over weight the consumer discretionary sector. we still are. but that was based on a very low bar for the consumer that was set by the economists a few months ago. as the consumer has continued to exceed expectations, i think the bar's been raised. so overall i wouldn't be putting new money into u.s. equities right now. >> isn't the profits bar too low? >> yeah, the profit -- >> and by the way, just one

other thing. what about banks? jpmorgan came out with a very decent report today, surprise to the up side. banks are overcapitalized, more liquidity than they know what to do with, they're making loans. why is that not good? >> no, i think banks are going to drive the recovery, and i think they should. profits are going to be clearly stronger than people expect, have been stronger, will continue to be stronger because they're playing in this global soup where they're in a very privileged position. i don't want to jum not p on a word you said but i'm going to jump on one word, the monster rally thing. there's clearly a sentiment we've come too far too fast but if the markets had been up 4% in 2011 and they were up 5% through mid-april of 2012 we'd probablying be going, okay, this is a nice healthy economic recovery with a stock market to boot. the fact there was no gains last year and we've had 10% gains this year, you know, it's a calendar defect. >> up 25% since october. >> you can't average the stock market. you have big moves.

you've got to sit back and take a break. >> how bearish are you? >> i'm not really bearish. i lowered my exposure. i'm still net long. i agree the earnings bar is incredibly low. jpmorgan i thought was a very good -- >> because the economy's basically okay. and what i'm saying also, and this is an important point, maybe you'll -- i think the international situation is okay. and regarding europe i know europe is not okay. but all the liquidity that's been pumped in, europe may turn out to be a milder recession. the main point i'm saying is it's already in the stock market. the european thing is already in their stock market, and our stock market. >> you've got a bond bubble. money will come into equities. that bubble will burst. like the housing bubble burst, that will burst it. mark my words. >> we've got to get out of here. thank you, gentlemen. i am going to mark those words. steven weiss, zach karabell, alec young. rewarding success at its best because new ceo pay numbers are out. we have the numbers. they're big numbers. but i don't mind one bit. and the president plans on taxing those very ceos and other successful americans.

that i do mind. obama releases his tax returns. yet it turns out he's using the same rich man's exemptions that he rails against. hypocritical? we'll discuss it. don't forget, free market capitalism is the best path to prosperity. on "kudlow?" we'll be right back. everything that i've gained in life has been because of the teachers and the education that i had. they're just part of who i am. she convinced me that there was no limit to what we could learn. i don't think i'd be here today

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some big ceo compensation numbers out today. cnbc's jackie deangelis joins us with that and more. the latest breaking headlines coming into the cnbc newsroom. hello again, jackie. >> hey, larry. well, goldman sachs ceo lloyd blankfein got a 14 1/2% raise to a total of $16.2 million, including stock awards from prior years. despite a decline in profits and share price during 2011. blankfein's take-home was dwarfed by cbs's les moonves, who clokcked a 21% increase in his package to 61.9 million. and you're watching speeded up more than 200,000 of your tax dollars at work, moving an 11-ton minzantea shrub, once thought to be extinct away from a highway project next to the golden gate bridge. the trouble is may not be rare since it sells for $16 or so at nurseries. our thanks to brett basel for

finding this outrage. >> jackie deangelis, thank you. next up on "kudlow," president obama and vice president biden unveil their income tax returns. if the president is using the same rich man's exemptions that he rails against, i don't get why they're attacking mitt romney about his returns. we'll cover it all in the break. romney paid a whole lot more taxes than obama did. zap technology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap.

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let's go to washington. the tax policy debate's getting personal. obama and biden released their 2011 tax returns and then they promptly start bashing mitt romney and calling for him to release his returns all the way back to the 1970s. huh? i don't get it. but the treasury could be making a profit on bailout nation. so let's go to cnbc's john harwood, joins us now with the details. good evening, john. >> good evening, larry. you know, with rick santorum out of this republican race, the obama administration took two steps today to try to advance its interest in the accelerating general election contest with mitt romney. the first was that treasury report you alluded to saying for the first time that the u.s. government expects to make a profit. let me repeat, a profit on the entire range of its bailout activities. that's largely because of interest earnings the federal reserve will get on its purchase of treasury securities to keep interest rates low. and this is not going to eliminate concern among conservatives and some independent and swing voters about the role of the federal

government in bailing out certain industries, but it may limit some of the down side. the second was the obama administration in advance of tax day released president obama and vice president biden's tax returns to advance an argument that they think works well against mitt romney. look how they post up in this tax tussle. first of all, president obama made almost $800,000 in 2011. that is less than he had made the year before because of lower book earnings. mitt romney made $21 million. the administration likes that comparison. second of all, barack obama paid an effective tax rate of around 20%. mitt romney, about 15%. on charitable donations, the president of course gave a lot less than mitt romney. $172,000 to mitt romney's $2.6 million. but a higher percentage of his income. those romney figures are based on an estimated return that the romney campaign released earlier this year. the actual return will not come for several months. mitt romney filed for an extension today. and of course mitt romney's trying to turn the argument to

the obama administration's desire to raise taxes, larry. >> john, just quickly, basically, romney paid $3 million in taxes. he paid roughly 20 times what obama paid. i mean, that's got to be worth something. 20 times as much in taxes. >> exactly. he had much higher income. >> right. >> and as a result he paid higher taxes, though not a higher percentage of the taxes. the obama administration's going to come back and say yeah, but president obama doesn't have a swiss bank account, he doesn't have money offshore in investments, and that's the kind of detail the administration's going to try to pull out of mitt romney. mitt romney's going to try to resist that argument. >> all right. we'll see. john harwood, thanks very much. our free market friday panel's going to look at all this. why is the vice president being the hatchet man? why is he going after romney? he's going after his taxes. he's going after his business success. even though romney is paying $3 million in taxes. 20 times what obama's paying. doesn't anybody take that into account? it's enough. how much is enough? we'll be right back to tell you. if you have copd like i do,

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welcome back to "the kudlow report." at yet another campaign event touting the supposed merits of the buffett rule vice president biden took the opportunity to slam mitt romney on the former governor's own policy plans.

take a listen. >> there's a romney rule. the romney rule says let's double down on the tax cuts for the wealthy. look, governor romney's friends are good people, but they have a fundamentally different economic philosophy than we do. and governor romney calls the president out of touch. and anti-woman, by the way. but out of touch. hey, how many of you all have a swiss bank account? [ laughter ] [ applause ] no, i mean -- no? >> joe biden, you'd love to have a swiss bank account. come on, buddy. fess up and tell us how rich you'd like to be. the vice president also said this is not about class warfare. really? here now are cnbc contributors keith boykin. he's a former clinton white house aide. and robert costa of the "national review" along with matt lewis, daily caller senior contributor. can i just get this? romney proposes a tax cut that

is across the board. okay? just factually. when biden says it's a tax cut for the wealthy, it's across the board. every income category gets it. that's one of the things that bothers me about this stuff. >> well, the disproportionate -- the disproportion of the bulk of the tax benefits go to the wealthy, though. that's the point. the reason why people are concerned about this and the reason why the buffett rule is important is it's not about class warfare. it's not about attacking the wealthy. it's about making sure that everybody's paying their fair share. >> it is about class warfare. >> no, it's not. if it were, then warren buffett wouldn't be behind it. is warren buffett a class warrior? is warren buffett a class warrior? zbles a class warrior with president obama right now. >> and bill gates is a class warrior? >> it is not tax reform. it's not encouraging growth. >> i didn't say it's not tax reform. i said the wealthy will receive the bulk of the benefits. >> no, i'm saying -- if you -- you can't blow a hole in the deficit with trillions of dollars in -- >> all political. >> if you cared about the

deficit, if you cared about deficit, matt lewis, then you'd know that this goofy millionaire's tax raises less than $50 billion over ten years. okay? given what, $45 trillion in spending and 7, 8 trillion dollars in deficits. so it's not about deficit reduction. it's really about taxing rich people. but isn't it really about taxing mitt romney? isn't that what the whole buffett plan is about? >> well, it's really about politics. >> really? >> yes. i hate to blow their cover. >> it's romney's money. it's mitt romney's wealth and demonizing mitt romney's wealth. >> and his success. because mitt romney is the presumed republican nominee. so all of a sudden -- by the way, we could be talking about the unemployment rate that's still above 8%. >> you want to keep talking about mitt romney's money. they want to make this election about mitt romney's money. >> no. the problem is romney is using this strategy where he's trying to take everything that obama says and throw it against him. so he's saying now that obama is out of touch. so all that joe biden was doing

in that clip, he was saying i'm the guy that's out of touch? obama's the guy that's out of touch? and he's the guy with a -- >> he's not saying obama's out of touch. he's saying obama's -- >> let me finish this thought. romney is a guy who said $374,000, which were his speaking fees, was not a lot of money. >> you're missing the big -- >> let me finish my sentence before you attack me. >> let me just -- let me raise one point. one of the parts of the story today i really love the most, team obama is bashing romney. romney paid 20 times in taxes what obama paid. >> romney makes 20 times more than obama makes. >> but i'm saying the totals are fantastic. romney's the guy contributing to the u.s. government. >> he pays a lower tax rate than obama does, though. >> it's close. 15 versus 20. that's pretty darn close. >> if it's close, than why are you complaining about a 5% increase in the marginal tax rate? you're only increasing the marginal tax rate -- >> hold on a second. the part i'm saying -- let me go to you. president obama is bashing romney for the same kind of

supply-side policies that george w. bush had. and by the way, ronald reagan had. and yet obama takes advantage of the very same bush tax cuts and bush tax credits. and it's not illegal. i don't have a problem with it. but i'm just saying it's hypocritical. he's putting his daughters through college over the same bush tax cuts that he's constantly bashing. to me people will see through that. >> yeah, it's hypocrisy. it's an effort to cast mitt romney as different, as other. i don't have a swiss account. he does. so it's political gamesmanship. but -- >> you know, it doesn't cost anything to have a swiss bank account. that is like the most overrated thing i've ever heard. just diversify your portfolio -- >> every person has a swiss bank account. the average -- >> it's unhealthy to demonize wealth in this country. he's lambasting -- >> if i could just finish a sentence around here. >> go ahead. keith, you first. then you go. >> the problem is the american people are not in mitt romney's shoes. they're not in barack obama's

shoes. the question is which person, which candidate is going to be best interested or best suited to work for their interests. and mitt romney hasn't shown that he's interested in helping out average american working people. not because of his wealth but because of his policies. his policies are not -- >> all right. but keith. keith, let me -- look, this is a guy with a fabulous business career. and they are attacking his very business success and the money he earned during that career. now, i would say in view of the state of the economy and the unemployment rate and the budget deficit and so forth that actually romney is the guy people will look to because they're going to see right through all this political class warfare. >> and it's not just romney. i agree with you, but it's not just romney. think about essentially what this says, is we want to raise taxes on the people who provide jobs and who are entrepreneurs. and by the way, the reason that some of these rich folks pay a lower rate is because they're invested in capital gains taxes, right? so they're actually investing. they're creating businesses.

they're investing all that stuff. right? i feel like democrats and joe biden would rather get revenge and get even with the rich than spur the economy. >> can i just say something? the top tax rate when bill clinton was president and i was there was 39.6%. we created 22 million jobs during that time. it was the longest period of peace-time economic expansion in u.s. history. >> but you know what? >> that's all that president obama wants to do is go back to those tax rates. >> he's had three years -- >> isn't it obvious -- >> no, it isn't. because he's had 3 1/2 years to do it and he hasn't done it. >> under bush's tax cuts. >> he loves bush's tax rates. that's why he used them so effectively for his own tax returns. but the bigger point here, the bigger point here is that he doesn't have a plan. romney has a plan. and it's that plan that's going to be fought over. team obama can demonize romney and be as negative as they want. it will never work. it's not presidential leadership. >> right. and i think that -- i mean, the truth is -- >> i've got to get out. >> this is smoke and mirrors. t