social, mobile and cloud, which is one of the reasons why facebook is soaring. they've got all three. and don't forget, google cutting its losses, another good thing. i like to say there's always a bull market somewhere, i promise to try to find it for you here on . the president's state of the union message last night was principally about inequality and it was not about growth. therefore, it did not help the stock market. meanwhile, the fed did as expected and continued cutting back on its bond buying. but of course stocking sold off sharply anyway. some believe the fed writes the market's daily memo. steve liesman and i will look closely at this whole story. also the elephant in the middle of the living room. president obama talked about high tech hubs and broadband for kids and evils of inequality, but it sounded like a diversion from the continuing failure of

obamacare which he did not mainly address. tonight, we have the kudlow economic rebuttal to the state of the union. and speaking of income inequality, millionaires are good. they invest to create businesses and jobs. inequality can be a good thing and it can be a sign of a truly free economy. and there is yet more to the inequality story. did women's will i be cause rising income equality? and as bird of a feather flock together, they marry successful me men. isn't that a good thing? the "kudlow report" begins right now. good evening. i'm larry kudlow. is this the kudlow report. we're here here at 7:00 eastern and 4:00 p.m. pacific. it was another bad day. another big selloff. bob pisani with the details. good evening, bob. >> hi, larry.

stocks ended near their lows for the day as the fed continued to reduce its bond purchasing program. markets were up overnight as the turkish central bank dramatically raised interest rates to combat capital flight from that country. but much of that rally dissipated even before stocks opened in the united states. it was kind of a strange day. there were a lot of contradictions. for example, many believe that the u.s. is the best place to invest right now. but small cap stocks like the russell 2000 again today declined more than big cap stocks like those in the s&p 500. strange. and consumer stocks were again weak today even though they are defensive names and should hold up well if there are indeed growth concerns. and then the opposite happened. while material stock, those that are cyclical and most associated with the global economy and emerging markets, were up today, led by strong earning reports from dow chemical for example as well as owens illinois. now, several companies provided guidance for 2014 that was

disappointing and they were hit hard as a result. they included boeing, emc and tupperware. those are steep declines. but remember, we're in a down market in january. if we were in an up market, those stocks would still be down today, but not nearly as much. back to you. >> many thanks, bob pisani. here is a question. one question out of many. is the fed taper slamming down u.s. stocks and foreign exchange currency around the world? is it the fed's fault? here is my great friend steve liesman. is the fed having an him pact on the stock market and the global currency sell soeoff? >> the currency selloff ypuzzle me. they blamed it on the fed, so it was a bit of a puzzle. the best read i have from the

sxerp experts in the field is that there are political issues. ukraine was not really related to turkey, but the overall backup of the federal reserve withdrawing that liquidity seems to have exacerbated the problem. >> i agree by the way. i wrote a column that a lot of these emerging market economies have been moving to the left lately, abandoning free trade principles. not everyone agrees, but that's what i saw reading up. particularly today's action, they jacked up interest rate, turkey, more than anybody thought. currency couldn't hold. a lot of the south africa couldn't hold. indian rate hikes couldn't hold. that tells me maybe it is an international monetary event. maybe it will be harder for the fed to unwind qe than we thought. >> i think that's a good thought. and i was always puzzled by the 300 point rally on december 18th when the fed tapered first. the idea that stocks could sell off or should selloff in that environment of a taper made

sense to me. the question is how far would it selloff. and the absence right now of countervailing positive growth data i think creates a vacuum. all last week, what was the headline in the the turkish lyra. if you had claims drop for example, tomorrow morning, you get a gdp number tomorrow morning with an upper three, but if it's near 3.8, 3.9, the market will forget about that because if the u.s. economy grows more, the s&p 500 companies cannot help but profit in that environment. >> we'll get to profits later in the show. but profits are raising on a combined basis, about 9%. >> and they were up more sequentially quarter to quarter. so what are all the people complaining about? >> the fed's own statement today was a little more optimistic on the economy, but again, it was ignored by the stock market. let me just ask, is it going to

be harder for the fed to clean up? janet yellen replaces ben bernanke. and stanley fisher is a pretty tough guy and i hear he's had it with qe. he'll come in, great m.i.t. professor, he's coming in as vice chairman. >> apparently all fed meals will be kosher. >> okay. you may argue about his inheritance, but bernanke leaves a very tough spot. # $2.3 trillion get reserve. how is yellen going to handle this? maybe the market threats that there is going to be worse news come out of the fed withdrawing cash, not just putting in less, but withdrawing cash. >> i think that would be a misnomer. i think the fed has set upon a policy and our survey suggests that is what the market believes. there will be a $10 million taper at each meeting this year and that will bring the qe program down to zero if there

are issues having to do with addressing economic weakness, the fed will do so through greater guidance and lower interest rates for longer. so it's a passing of the baton in policy and this is something bernanke began, something that i think yellen is on board with. i would not expect a dramatic change in policy and i think what we saw this week is important. we had lower stocks, we had a couple negative economic reports. the fed still decided to taper. that is the base case for the fed, get used to it. >> get used to it is right. the fed is going to be reducing liquidity. the fed is the central bank of the world. the most powerful central bank of the world. >> can i stop you there, though? you said reducing liquidity. what liquidity is leaving where? there is still $4 trillion sloshing around. >> the cash may not be used, but the point is now they're buying fewer bonds, they're injecting

less cash. people are starting to forecast what you you just said. qe is going to end this year and the next move is going to be they start withdrawing cash. maybe before the year is out. maybe these markets are saying being well, the fed's going to move faster, the american economy might be stronger, and all of a sudden people that benefited from the cash, leveraged foreign currency trading for example, thatted had the overnight carry trade coming back to the usa buying cheap currents, that game is over. >> i don't mind that. do you mind that, those carry trades unwinding? is that a big economic issue? >> i think the issue is expectations. and i think the second issue is i don't think people are sure what the fed will do. forward guidance notwithstanding. yellen, is she the bernanke shovel brigade leader? >> it's a whole -- i don't think it's a whole lot different.

i think the market doubts that growth will be there to supplant the qe that is not going to be there. or that the increase in quantitative easing. that's really the forecast that i think investors have to make. if the fed's going to withdrawal, i'm okay with that. if there is growth in gdp, if there is job growth, lower unemployment rate. what you you seem to be saying is the market is backing on a mistake from janet yellen and it's a mistake to bank on that mistake. >> to some extent the fed, janet yellen is in this rocket ship that has no windows. she has a lot of instruments and a lot of equations, but she's not really sure. so she's trying to steer around. what are the rules? is it a commodity rule, a gold rule, a -- >> you are right, there is no hard rule. there is no hard rule. >> in other words, it's not -- >> and it's not a tailor rule. >> that would have it above 1%. that's what john taylor told me in a radio interview.

so people are saying again how are they going to do this steve liesman? she's the head of the shovel brigade. >> if there is going to be a major change with yellen, it would be that she tries to implement something closer to a rule than bernanke. but what you find is you find that people in a vice chair or governor's position, aka bernanke, talk in wonderful terms about about rules until they get to be the chairman and then when they get to be chairman, they want the flexibility that comes where operating without a rule. one more thing, larry -- >> i'm a rules guy. >> there was a dinner for bernanke last night. apparently charles plosser made some outgoing remarks to bernanke and all the fed presidents presented him with an mlb baseball cap from their district. he's a big baseball fan. so this was a little inside news. >> i think he helped save the world in 2008. beyond that, i've never quite been sure. i want monetary rules.

steve liesman, you're awful nice to come and visit tonight. another one. call it the elephant in the living room. president obama barely mentioned obamacare in his state of the union address last night. the entire speech was really a diversion from the absolute failure of the health care law. we'll take a look at that and hear from the gop senator who put together the republican alternati alternative to obama care. and later in the show, is women's lib the reason for income inequality? that's right. studies have shown what we know is the truth. wealthy, educated women like to marry rich, successful well educated men. we'll ask two if they care one bit about income inequality. and free market capitalism is the best path to prosperity. but it needs a stable monetary anchor. i'm kudlow. we'll be right back. [ tires screech ]

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obamacare disaster, four minutes. he offered no apologies for the elephants in the room such as premium hike, canceled plan, dysfunctional websites or his promises that if you liked your and your doctor, you could keep it. the president used his speech as a diversion from his obamacare catastrophe. even offering this phony challenge to his republican critics. take a listen. >> if you have specific plans to cut costs, cover more people, increase choice, tell america what you you would do differently. let's see if the numbers add up. >> all right. apparently the president missed that memo because republicans such as my next guest, republican senator richard burr, are in fact coming forward with a market based health care solution. senator, thank you, sir. before we get into your plan, do you think that a lot of the stuff last night, incredibly

small ball stuff if you ask me, was that a diversion from talking about obamacare? he didn't seem to want to address it. >> i think it was. the president delivered a great speech. he was passionate. but there was no substance to it. and that's allowed him to start today to go back on the campaign trail and i think do everything by executive order that he wants to and put the blame on congress. i think it was shocking what ended about bring me your ideas when it took just a little over four minutes on monday when we introduce this had alternative for jay carney the white house press secretary to come out and basically slam our proposal. no phone call no conversation. immediately went to the press and said this is awful. >> so they knew that your program was out there. they knew that. that's why carney went out and slammed it. let me just ask you a country emquestions. let's go through this. first of all, does your plan take care of the pre-existing conditions for sick people? a lot of voters don't believe

republicans really care about sick people. and also another popular part of obama care is the issue of letting sons and daughters up to 26 years old stay on their family plan. do you keep those provisions which i think are the most popular in obamacare? >> we absolutely do. we require insurers to keep kids on their plans of their parents until they're 26. we think, though, with some of the approach that we've got in bringing down health care costs, it would make it more attractive for those individuals that are that age to buy their own plan. and we also mandate that you can't unwrite somebody with pre-existing conditions. and we do that two ways. if somebody doesn't have an interruption in coverage, then there is no way to change their policy. but if they didn't have coverage or they had an interruption, there is a one time opportunity to opt in without any penalty for any type of pre-existing

condition. so we not only did it once with a promise, we did it twice. >> all right. that's good news i think. now, let's go to the whole thing about premiums and mandates. does your plan remove the individual mandate, just take it away, so that consumers can have total free choice to buy into any insurance plan that might have, you know, three parts of the old mandate, or six parts, but don't have to buy everything in there? does your plan give real consumer choice? >> we give real consumer choice to the american people. we do away with the individual mandate. we do away with the employer mandate. we get rid of 12 different taxes, including the tax on health insurance. so what we've tried to do is to create a true marketplace that drives costs down and as we know, obamacare has done nothing but drive costs up and that's why 6 million people lost their health care because it was unaffordable for them. the president promoted last

night that he's put 9 million people in health care. 6 million on medicaid alone. well, we attack medicaid by giving medicaid beneficiaries the same tax credit option where they can choose to go into private insurance and actually have access to 100% of the doctors versus the 40% that today serve medicaid. >> can i just follow up on that, senator burr? i was going to ask and you tax reform question. why aren't individuals and families and so forth, consumers, why can't they buy insurance with pretax dollars the way businesses do, businesses get a deduction, they don't get a deduction? does your tax credit all encompassing, does that mean everybody gets a tax credit who buys insurance? how do you deal with the tax aspect of this? >> i wish we had enough hone to do it for everybody. the fact is that our tax credit is really targeted to 300% of federal poverty and below. and it's -- amount is determined

by your age and above that 300% of poverty level. and then you're on your own. but we create a marketplace that is market driven. and we believe that our plan today is budget neutral. and we believe that in the second ten years, it actually saves a tremendous amount of money. so it addresses all the things that we thought a common sense consumer oriented health care plan should look like. >> let me ask you another one. very controversial, coming up again and again now. the idea of bailing out insurance companies. using the so-called risk corridor provision, the insurance companies lose more than they expect, uncle sam will bail them out. do you take that out? >> we take it out totally. i think insurers will embrace what we've done because they can actuarially evaluate what the premiums should be and what their costs will be. we're after a healthy america. we're after people who can see

100% of the doctors, we're after hopefully insurers that understand let's keep people well, let's keep them out of the hospital. and by do doing that, we drive down health care costs for everybody and not just a select view. >> all right, senator burr, thank you, sir. good luck on the new plan. >> great to be with you. cnbc's crack reporter robert frank is about to take all the air out of the latest absurd obsession from the left. he's about to bust the three biggest myths about income inequality and he is about to join us next up on the "kudlow repor report". tte or au lait?

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go national. go like a pro. president obama spent a lot of time during the state of the union talking about income inequality. but not everything he said was accurate. cnbc wealth editor robert frank has the truth about incomethank. it has given rise to common myths.first is that inequality is at an all time high and rising. take depends on the it time period. share of national income held by the top 1% is actually lower today than it was in 2007 when very few were complaining about inequality. and it's roughly in line with 2000 during that huge dot com boom. the second myth is that the rich are getting richer and the poor are getting poorer. in fact everyone is getting

wealthier and richer, but the rich are getting richer faster. and it's a small number of super rich that are really driving the gap between the top and the bottom. that is the 1% on the bottom if you look at that chart and the 0.01% at the top doing much, much better. myth number three is that we now have a permanent throublue to b accuracy. if you look at those who made a million or more, half are only million dollar earners for a single year. only 6% made a million for more than two years. so larry, while inequality is high, we should be talking about solutions and have a better understanding of the problem and in fact whether it is a problem. back to you. >> many thanks, great stuff. people moving in and out of capital gains in the stock market is a big part of the issue. so now the president got his 90

minutes last night to set up his economic agenda, but i believe it's not a growth agenda as we've been discussing. it's an income in-equal agenda. i think we need jobs and growth. we should not be punishing success. the kudlow rebuttal is next. i always say be the man with the plan but with less energy, moodiness, and a low sex drive, i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications.

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first let me play you president obama's state of the union song and dance on income inequality. and then let me tell you why i think he's wrong. >> after four years of economic growth, corporate profits and stock prices have rarely been higher. and those at the top have never done better. but average wages have barely budged. inequality has deepened. upward mobility has stalled. the cold hard fact is that even in the midst of recovery, too many americans are working more than ever just to get by let alone to get ahead. >> here is the thing. from me. bill gates, steve jobs, mark zuckerberg just to mention a few, they literally created thousands of millionaires, including by the way low paid staff who own stock and suddenly struck it rich. now, that does cause inequality at least in the short run, but

who cares? that kind of wealth will be invested back into the economy to create businesses and jobs and you get arising tide of growth for the whole economy, for everybody. the president doesn't seem to get that. he doesn't get the wealth message. and it's linked to growth. that is what troubles me. all right. let's talk more about this. we have mattie it doppler, michael strain, and carol roth. am i being too hard on him? because i just -- let's just say for examplet doppler, michael strain, and carol roth. am i being too hard on him? because i just -- let's just say for example doppler, michael strain, and carol roth. am i being too hard on him? because i just -- let's just say for exampledoppler, michael strain, and carol roth. am i being too hard on him? because i just -- let's just say for example you were a low level staffer at microsoft when they first started and they handed out stock and it was probably worthless. at some point later, you're worth $7 million. what is wrong with that? >> there is nothing wrong with that. i used example of mark zuckerberg and the fact he's a billionaire, the only people who were hurt by that were maybe the

wi winklevoss twins. but everybody else did well. he could have gone to work for somewhere else. he left that job open. he created more jobs. and i hate this whole idea of income inequality because it's basically saying there is one pie and that for some reason, if you slice up the pie, that if i want a piece, it has to come at the be least of somebody else and we're in a capitalist system. we're growing the pie. we have 28 million businesses, 6 million employers in this country, there are plenty of opportunities for growth if we have the right policy. >> people who get we would any don't put the money under a mattress. that money goes to work in the economy. one way or the other. that is what market capitalism is all about. michael, let me ask you you about another thing. the president second mobility has been declining. i thought there was a study led by a harvard professor that said social economic ability hasn't changed in 50 years. maybe it should be better particularly at the low end pip o i'm not denying that, but not the all of a sudden it's

crashing. >> it's been flat over the last few decades. a new study confirmed that. a finding that a lot of economy i.s had believed already prior to the study. and you're right to talk about the low end. we need more wealth. we also need nor jobs. and that is the thing i wish the president had focused on last night. we have a record unemployment. if you're worried about inequality, a good way to deal with it is to get more folks jobs and that was totally be absent from the state of the union. >> let me play a tape for you about his views on corporate tax reform. take a listen to the president on corporate taxes. >> so let's make that decision easier for more companies. both democrats and republicans have argued that our tax code is riddled with wasteful complicated loopholes that punish businesses investing here and reward companies that keep profits abroad. let's flip that equation. let's work together to close those loopholes and those incentives to ship jobs overseas

and lower ax rates for businesses that create jobs right here at home. >> i just don't think he has that story right. he mentioned tax reform and he wants to lower rates. so that sounds good. but he'll finish people that have profits overseas because they don't want to be double and triple taxed. and we have global necessary. we won't end that. and then he has this transitional thing where he wants to slop taxes on businesses at home, and use it for spending purposes. either, a respect let's eliminate the whole bloody corporate tax, or, b, let's just have a revenue neutral big slash in corporate tax rates. >> right. and the president didn't give us anything new to talk about. when he's talking about tax reform, what he means is a massive tax hike. and you're right, he nibbles around the edges of what a corporate tax reform package could look like, but at the end of the day, what it is, it's a rate reduction only for multinationals that isn't

anywhere they're close enough to be globally competitive. but it also goes after small businesses. and we're talking about the lack of jobs, the lack of employment here in the nation. small business owners are the ones who are supposed to be driving that job growth and they're the ones who will get nailed under obama's tax plan because what he does is he heros out any depreciation for them, he embraces capital costs and raising the minimum wage he raises labor costs. >> and you have to remember most of the small businesses in this country are not even -- they're passed through entities. on all the legislation away personal taxes and the fact they have to pay a medicare tax and extra taxes on their investment income actually hurts small business owners. minimum wage, obamacare, one thing after another. i'd like to see policies that actually help small business owners and inspire job growth. >> let me stay with that. michael strain, by the way, in some sense the whole corporate tax is a pass through. they may pay the corporate tax, but they pass it through in terms of lower wages, less

hiring, and higher consumer prices. to me, that is a reason to get rid of the corporate tax all together. let the individuals who own the stock, they can pay whatever the earnings are, but that means they will only be taxed once and we could have more hiring and higher wages. that is the argument being made to get rid of the corporate tax. >> yeah, that's right. and like you said, the stockholders, the shareholders are people who are paying those taxes and who own the company really and so to say they're not being taxed is just ridiculous. at a minimum we need to lower the corporate tax and it fits in with this general theme. the president seems to be concerned about everything but unemployment, about everything but jobs. and that is where the central focus should be with the labor market as troubled as ours is. >> i want to give him some credit. he did talk about free trade. he did talk about free trade. and he wants -- he has an initiative for atlantic free trade. he has an initiative for pacific

free trade. today senate majority lead are harry reid said no special consideration for -- no fast track trade promotion bills. which is really too bad. free trade would be pro-growth. i have to give obama credit for that. i know he doesn't push it, but he did put it on the table. and now harry reid is knocking it down. >> well, listen, the only people who probably hate that had speech more than some conservatives are the senate democrats. the president now is laying out a progressive agenda that he thinks is right for the country, but he doesn't have to walk the planning on it, the senate democrats do. if he really thought increasing the minimum wage was a great economic idea, would save us all these jobs and save the economy, he would have done it in '09 or 2010 when he had the democrats controlling both claim betthamb congress. senate democrats don't want to be taking those votes either. >> i was glad to see the paragraph on free trade. i think that's a good thing. >> one pair graragraph out of 6

minutes. >> i help put these things together. a paragraph is all you get. i'm going to give him credit on this, too. >> you're giving him credit twice. >> immigration reform. if you do it right, immigration reform is definitely pro-growth in my view, not all my conservative friends agree with me, but in my view, particularly the brainiacs, the foreign students going to school here, and also the kids of undocumented workers should be given the same -- and let's keep them all here. now, obama said that. we should have some progress on immigration. >> i think that we should have some progress. i think the type of progress you're talking about is very helpful. i don't think that that is the type of progress we're going to get. >> don't you think obama was sincere? >> i think he wants to have immigration reform, but he wants to have broad immigration reform and i think that would have an impact on the low end of the job scale. i think if you look at

everything that he's done in terms of all the time that he said he's focusing on jobs, first he focused on health care which obviously didn't help jobs. then the minimum wage. i think the same thing happens with immigration. you'll bring a bunch of people into the system when we already have aring a hard time filling the jobs. >> nobody's work. only 58% of the population is working. so we might need -- listen, michael, let me ask you this on immigration. you hear from speaker boehner, you hear from paul ryan, budget chairman, republicans in the house are looking hard at immigration in pieces. that's how i understand it, michael. and to me, the low hanging fruit here is the brainiacs. the h 1 b visas and the foreign students and kids born here. to me maybe we're not ready for trusting about border security and legalization. but why not go with the brainiacs? that to me would be absolutely pro-growth. >> i couldn't agree more. what we do right now is madness

with these high school immigrants. we bring a lot of them here as graduate students, they come here, they earn ph.d. and engineering and science and technology, and a lot of them want to stay and then just when they're toward contribute to the economy, we tell them they have to go back home. it's utterly crazy. we should let all of them stay here if you want a graduate degree from a good school, should you have a green card stap led on your diploma. >> i'll just say his message was not good on pro-growth, not good on inequality. always look for the good in things. these are hard times. thank you all very much. we'll talk about whether women's lib is actually the root cause of income equality. what a way to go. but next up, we have to talk more about a wild and not good day for stocks. trading was crazy before and after the fed's expected decision to continuing tapering

down bond buys. we'll talk to two top investors, why stocks continue to sell off and why all the world's emerging currencies are tanking. stay with us. [ male announcer ] legalzoom has helped start over 1 million businesses. if you have a business idea, we have a personalized legal solution that's right for you.

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report. shares of facebook jumping 12% after a strong earnings report. adjusted earnings of 31 cents a share, better than expectation. revenue of $2.6 billion also better than expected. facebook capitalizing on mobile advertising, now more than half its ad revenue coming from mobile. that had been a big concern on wall street. but they seem to be executing on that. and larry, one more thing before i go. you know we had a big downdraft today. here seems to be continuing. the nikkei has just opened in japan and it is down more than 3%. back to you. >> all right, thanks. very difficult omen. so, yeah, another rough day here on wall street. the fed puts in less cash. i think people expected that. but emerging markets especially their currencies continue to drop. one might say plunge. dow off 5% year to date. stock market looks a lot better valued rely it difference to rising profits after this corruption. my personal advice to investors,

buy the dip. stay out of emerging markets. but let's turn to our experts, see what they have to say. michael and jim are both here. jim, let me ask you in a trading sense, okay, the market opened down today. whether that had anything to do with the state of the union speech, i don't know. but i don't think that speech helped stocks. maybe it had to do with the rest of the world. then the market sort of stabilized, fed comes out with its minutes, and yes they will taper. and the market really tanks. and then it jumps back up again. and then it tanks again. i don't understand. is there any rhyme or reason for that kind of behavior? >> there is some rhyme or reason to it and one thing you're for getting, too, is last knight the s&p was up ten handles based on the perception of the turmoil in turkey and then it turned around and really had a 25 handle swing by the time we had been open for a half hour this morning. so to me when we see these

things where we can't keep a bid and we independeend up finishin beaten lows, correction is of a foot. i don't think it is time to bite dip. is taper the cause? no. taper and emerging are markets have a relatively casual relationship with the correction as does earnings, as does numbers thats c s cas ca s cadi. all those four things create nervousness. this is definitely a healthy correction. as far as buying the dip, not so sure. remember -- >> i didn't necessarily say buy it now. i think this is a healthy correction and i think it really -- >> i do, too, but i don't think it's over. >> you may be right. but it really helps valuations among other things because profits are coming in 9% for the fourth quarter. that's not so bad. but michael, another aspect to this. are we in a world currency crisis? >> absolutely. currency attacks are the reason for this. it starts with emerging markets. the world is awash in currency.

whether brazil or japan, developing countries like japan and others, we've been debasing their currencies. it's been a race to the bottom. if i'm going to invest in something and i know i'll get a weaker currency back, i'll less likely to invest. >> i've been talking about how many of these countries, not all, but their policies have move to the left away from free trade and free markets and towards money printing and inflation. brazil's inflation rate 6%, argentina says it's 11, but it's probably 25 because of wage and price controls. india has 11.5% inflation. russia 6.5%, turkey 7.5%. indonesia 8.5%. all of a sudden they're devaluing. >> the two are linked. debasing a currency makes it easier for governments to be big spenders. and that has happened in this country, as well. what needs to happen is these countries have to defend their currencies, they have to buy their currencies, not sterilize them and then go out and buy

bonds after they defend their currency and buy it back. and then what they need to do is raise interest rates. that will actually help the economy by stabilizing the currency. >> but this is all very deflationary and recessionary. today turkey as you know surprised everybody. they took their target rate from 4.5% to 10%. as i read it, actually the lyra did better and then faded. if they don't sterilize, that means they would be cutting back on their money supplies. then you've got an emerging world recession and then american companies who do business there are going to have a whole lot of trouble selling their goods and services to them. >> there is no question. but if this was an issue, the fed didn't mention it one time in their statement today. which i thought strange. and i think maybe there is a psychology behind that that if they did, they would be kind of painting themselves into the

corner of not being on the taper path that they were. but this is a confusing issue and it has layers. i think that once we weather the storm, the realization could also appear that we are clearly the world's tallest midget when you look around as to where to invest. but i understand that in the meantime we have to go through some shocks, too, and it probably fuels in to the timing of it it with a correction, as well, and probably works itself out over a month or so and that's when we trade stronger. >> is this systemic risk? >> absolutely. >> or just individual countries? >> no, it's systemic because as jim just correctly pointed out, we're all trading partners right now. and this is also has gone on for years. and this is the problem. if you look at fixed private nonresidential investment the, it's only 2% of gdp. the post world war ii average is 4% in this country. and when you're debasing your currency year after year, you're going to hurt investment and that's going to hurt future revenue and earnings. as jim pointed out, earnings

currently have been strong. but if you look at the companies whose stocks are getting whacked, it's what they're saying will happen later this year or next year. and that's the problem. >> so what is the trading thesis, just buy in companies that deal in the u.s.? >> you know, what the best investment right now is gold. i'll tell that you right now short term. >> larry will be mad you saying that. he hates that talk. >> if everyone is raising their interest rates around the word and t world and the fed is tapering, i wouldn't buy gold. about i could be wrong. thank you, gentlemen. guess what? you can thank well educated and rich women for income inequality. that's what a new study says about successful women who like to marry successful men. two successful and very smart married women are about to join me to talk about that. next up on the "kudlow report". [ crash, alarm blaring ]

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this is an interesting twist on the income inequality debate. specifically how the fight for women's rights could have contributed to the wealth gap. three quarters of adult women are now part of the workforce. that is up from just 36% in 1950. so as more women become educated and employed, are they marrying similarly wealthy educated men and therefore does that widen the income inequality gap at least for households? that's what the data show. here now carol roth and naomi

schaffer riley. this a women's e'swomen's lib s. they marry smart guys and household incomes explode. >> absolutely. bosses are no longer harrying their secretaries, they're marrying other bosses. that contributes to income inequality. but there is also a marriage gap. more -- it tends to be that the middle and upper classes are more likely to mayor i are oig and married households tend to be richer. >> and unmarried households i think you're inferring the rlowr middle and so forth, unwed mothers, they are poor. so you got the it on both sides. more unwed mothers, not good. more households where the educated people are marrying and stay married, good. do you agree with that? >> there is a clear correlation

between the two and it speaks to for the just an economic imbalance, but a socioeconomic imbalance. i think that we've had an issue around the construct of the family in our society that hasn't been a good thing. whether it's from economic perspective or other perspectives. we do have a lot of single parent households which are really challenging, a higher divorce rate and a lot of women who aren't marrying at all. >> divorce impoverish, does it not? if they get divorced, doesn't it make both sides -- >> the only person who wins are the lawyers. >> and divorce is also stratified, as well. you're actually less likely to get divorced in the upper and middle classes than you are in the lower classes. >> because it's too expensive to. >> that's part of it, but studies have shown that the stress that comes from having to worry about money actually leads to more problems in a marriage. so you can see how will this is

pulling apart at all sides. >> that's where i want to go. i've beaeeen married a good lon while. i'm marrieded to a saint. anyway, let me just say this. people say that the pressures of two professionals getting married let's say, two well educated high earning professionals, that those pressures are so great it is causing a rise in the divorce rate in the upper end. is that true? >> no the divorce rate has stabilized and in many cases it has dropped off. there are a lot of stresses associate td with two working households, but a lot of that can be solved by paying people for child care and being able to have things that you can do with your kids. the stresses are definitely, you know, i think solvable with money. >> it leads to another kind of inequality which is time inequality. we make a lot of choices. skills and things that we forego in order to have more wealth and

to work more. my husband and i are both workaholics, sometimes up to 7 days a week, but we've cho shen to do that together and we have a great partnership. and i think that that's what works. both partners being on the same page. but we've made that choice. you can make the choice or you don't have, to but it's not just about money. it's also about making the right choices that work for you. >> i know you've written a lot about morals and culture. how do you get the lower 20%, let's start there, how do you get them to stay married? >> it's very hard. it has to be getting married before having kids. and that's what leads to the economic stability. one of the things is that our view of marriage has changed so that marriage is now considered like a prize, that you get at the end of once you've gotten your whole life together, once you have your education, your down payment on a house, oh, then we can have this giant expensive wedding. but the bottom line is marriage is a tool for getting there. >> that's it. good advice.

thank you very much. we appreciate it. that's it for this evening's show. a little bit of controversy towards the end, but that's what the facts state and that's what they say. thanks for watching. i'm larry kudlow. we'll see you tomorrow night. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. on expedia you canyou're book any flight, car and hotel together to save even more.

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