Schiff vs. Luskin - an ugly draw

After listening to the effervescent Bob Pisani's absolutely giddy description of the triple-digit gain in the Dow yesterday, Peter Schiff was almost declared the winner over Donald Luskin in yesterday's CNBC face-off, but, in the end, it was just an ugly draw.

The video is available at both of their websites - the quality is much better at Schiff's Europac site but there's follow-up commentary on Luskin's blog.

This discussion (if you can call it that) actually does a good job at capturing the debate between bulls and bears on the near-term fate of both the U.S. economy and equity markets - no clear winners, both sides have good points, but neither side is interested in what the other side has to say.

Kind of like politics.

Here are a few highlights:

Luskin: It's the bears who are delusional. Here's the explanation for why stocks were up so much today. Pick up a copy of the New York Times, go to the opinion pages, look at Paul Krugman's column - he's got this end-of-the-world column about how the subprime mess is going to drag the whole economy down. He even quotes Bill Gross saying the same thing. If there was ever a buy signal, we got it. You want to buy 'em with both hands here my friend.


Schiff: If you want to lose money go ahead and do that, but you're right, you are delusional. We didn't get off to a good start. Look what happened to the dollar today - a 26-year low against the pound, a 20-year low against the Australian dollar. The dollar is breaking down, oil prices are reflecting the weakness of the dollar, we're breaking out in the price of oil. I think we're very close to a major collapse in the value of the dollar and that's going to send commodity prices, consumer prices, and interest rates spiraling, and that's going to compound the problems in the housing market that are just getting started.

It quickly degenerates into a shouting match from there.

Kind of like politics.

Favorite exchange:

Schiff: We are a burden that the world has to bear. The problem is that Americans are not producing enough, all we're doing is consuming and borrowing ... when the rest of the world lets the dollar collapse, and their currencies rise, all of a sudden consumer goods that people around the world can't afford suddenly become affordable and a lot of the capital that was squandered on American consumption is going to be available to them.

Luskin: Wait, wait, wait - this just can't go on. I feel like I'm debating Michael Moore here. America is not a burden on the world ... We are the engine of innovation for the entire world ... Because our money is so valuable, because our credit is accepted world-wide, billions of peasants world-wide are willing to work in poorly-lit, poorly-ventilated factories, just to get our paper money, because it's that precious.

Message to Luskin: Housing is worse than you think and there's no bottom in sight.

Message to Schiff: You're missing out on great U.S. energy and basic material stocks.