Ken Langone on U.S. Economy: 'It's Not Getting Better'

For those who still aren't convinced that Washington and Wall Street are leading them up the garden path with all their talk of "green shoots" and "'V'-shaped recoveries," I suggest you listen to what Ken Langone, the co-founder of Home Depot (HD) and a venture capitalist, had to say in an interview with Bloomberg Television recorded Friday.

Need more encouragement? Below is just a sampling of Mr. Langone's no-holds-barred insights:

On today's disappointing jobs report --

It's reality. This is where we are.

On the notion that economic recovery is just around the corner --

If we did in business what the government's doing about saying "it's getting better, it's getting better," we'd go to jail for manipulation or fraud. It's not getting better and it shouldn't get better.

On the seven-month rally in the stock market --

I'm confused. All of the people that I respect as investors and as people...are all scratching their heads saying "we don't get it"...All the businesses that I talk to -- I spend a lot of my time now reaching out to people that are running companies, running businesses -- I'm getting it back from everybody: it's terrible, it's getting worse, September was worse than August...I think this [rise in share prices] is a reflection of the fact that you get nothing in the way of rate of return in the bond market....

Click here to watch the (20-minute) video, entitled "Kenneth Langone Says U.S. in `Horrible Economic Storm,'" posted at Bloomberg's website.

(Hat tip to The Pragmatic Capitalist.)

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  • Roger Knights: 
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  "On the seven-month rally in the stock market --
  
  'I'm confused. All of the people that I respect as investors and as people...are all scratching their heads saying "we don't get it".... I think this [rise in share prices] is a reflection of the fact that you get nothing in the way of rate of return in the bond market...'"
  
  But that doesn't explain why the market (SPY) went down only half a percent Friday, after the bad jobs report. There are two explanations, which may both be true in part:
  
  1. PPT support;
  2. "The worse the economy the better the market will do, because TPTB will throw more liquidity into the system"--a paraphrase of the delightfully cynical Marc Faber in a recent interview.

  Oct 04 05:44 AM

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[Roger Knights:]

"On the seven-month rally in the stock market --

'I'm confused. All of the people that I respect as investors and as people...are all scratching their heads saying "we don't get it".... I think this [rise in share prices] is a reflection of the fact that you get nothing in the way of rate of return in the bond market...'"

But that doesn't explain why the market (SPY) went down only half a percent Friday, after the bad jobs report. There are two explanations, which may both be true in part:

1. PPT support;
2. "The worse the economy the better the market will do, because TPTB will throw more liquidity into the system"--a paraphrase of the delightfully cynical Marc Faber in a recent interview.

Oct 04 05:44 AM