Kass: Kudlow Recap

This blog post originally appeared on RealMoney Silver on May 20 at 8:04 a.m. EDT.

During last night's appearance on "Kudlow & Company," I once again encountered and disputed the bullish chorus.

While at the studio, in preparation for the show, the following tune was playing in my earphone -- you can't make this stuff up! -- which neatly (and more eloquently than I can) summarizes my current market view.

That's life, that's what all the people say.
You're riding high in April,
Shot down in May
But I know I'm gonna change that tune,
When I'm back on top, back on top in June.

-- Frank Sinatra, "That's Life"

Without further ado, let's go to the tapes.

Talking Buffett

Sir Larry's first segment was a general discussion on why I am short Berkshire Hathaway (BRK.A Quote). TheStreet.com readers are well aware of my analysis of Berkshire and my view of Buffett's recent style drift. Last night, I made the additional point that Buffett, despite the $1.2 billion derivative loss at Berkshire in first quarter 2008, is getting a free pass from the media, who have underreported and sometimes has even ignored Buffett's latest swings at some bad pitches.

Larry's Goldilocks Scenario

Dennis Gartman, a learned market sage who I immensely respect, contended that stocks are moving much higher and suggested that "everyone I know is bearish" and that betting against the American consumer is "a bad bet." I argued with Dennis that a negativity bubble existed at the SocGen market bottom and in the Uncle Vinnie Farrell market retest in March, but, with the VIX and put/call ratios at lows that existed at the market peak seven months ago, that bubble of pessimism has been deflated.

Scudder's Dr. Robert Froelich says not to underestimate the consumer and the buying that will follow the tax rebate. Last night, I argued against a positive view on the consumer -- indeed, I am at the polar opposite of Dr. Bob, as I believe that the consumer is the Achilles' heel of the U.S. economy. The U.S. consumer is spent-up, not pent-up, and levered to the gills.