Kass: 'Kudlow & Company' Recap

This blog post originally appeared on RealMoney Silver on Dec. 10 at 7:50 a.m. EST.

Last night's session on CNBC's "Kudlow & Company" was a treat for me, as we were joined by the always controversial and thoughtful Denny "the K" Kneale and the lynx-eyed chief cook at Strategas Research Partners, a firm that has been doing stellar economic analysis and research during the brief time of its existence, Jason Trennert.

Here are the tapes.

On the automobile bailout, I suggested that some Band-Aid relief was economically necessary but also that, to use the title of a book from my former boss, Ralph Nader, the auto stocks are "unsafe at any speed." General Motors (GM Quote), Chrysler and Ford (F Quote) managements are weak, and their business models are unsound relative to current and prospective automobile production. Both Jason and Denny agreed that now is not the time to take chances on letting the companies fail, with economic growth spiraling lower in fourth quarter 2008 and with job losses mounting. Sir Larry demurred.

We all agreed that the cost structure of corporations and the general health of the consumer (though facing other headwinds) will be positively impacted by a near-$400 billion year-over-year reduction in energy prices in 2009.

Jason remarked that the low level of interest rates -- "the risk-free returns have turned into the return-free risk" -- could produce a beneficial asset-allocation move toward stocks. I thought that the zero percent Treasury bill rate could simply be a function of year-end window dressing by financial institutions that "wanted to look pretty." Sir Larry disagreed, thinking that was an "Inside the Beltway" response. Denny the K said that the benefit of low government rates should inure to a positive carry trade.