Kass: 'The Kudlow Report' Recap

This blog post originally appeared on RealMoney Silver on Oct. 8 at 7:37 a.m. EDT.

I was back with Sir Larry Kudlow on Wednesday night. By my record, I have now been on CNBC's "The Kudlow Report" (or the old "Kudlow and Company") on nearly 50 occasions. While Larry and I typically don't agree on the political issues or even on economic forecasts, I admire him greatly on a number of levels. He is a dear friend, and our volleys are always fun and stimulating. Last night was no exception!

This time we were joined by the eclectic, personable and overall nice guy, Jim Paulsen, who is the chief investment strategist at Wells Capital Management. Stated simply, Jim is among the best strategists around. I admire his practical approach and the rigor of his analysis. Importantly, he has a great sense of humor, is a terrific communicator and a worthy opponent in debate.

My talking points were as follows.

Alcoa's Earnings Report

The Alcoa (AA Quote) release last night was not an important positive tell. My view expressed last night was that the Alcoa earnings give little clarity as to whether there will be meaningful top-line growth in American industry over the next several quarters.

The media rhetoric on the Alcoa quarter has gotten hyperbolic. This is a company that has had nine consecutive sales declines -- and this year's year-over-year drop was more than 30%! Aluminum is a cyclical business, and the company only beat the consensus sales forecast of $4.55 billion by $75 million, basically a rounding error. The company has $1 billion of cash and is being weighed down by $10.5 billion in debt! Moreover, the quarter benefited from several nonrecurring gains: a tax credit and a gain from asset sale. As well, cost-cutting of 20,000 employees aided results.