Yamma, flash boys fame, claim the market was rigged and former australian Prime Minister, kevin rudd. Plenty to discuss with him, from the siege in sydney to the massacre in pakistan and chapter in signer hacking in light of sony and reported likelihood north korea was behind all of it before we get to that lets begin with the markets. In fact, an historic day lack agent nearly 300point gapes for the dow, second session in a row to put that in perspective we havent seen backtoback gains of this point magnitude since december of 2008, same for the s p 500, add 3 points today on top of about a 30point gain yesterday. Again, thats the first time we have seen that in more than five years. Get into this market rally and closing Ball Exchange with the nasdaq also up nearly 2 again today. Ron mullin camp us, jim lowell from advisory investment, hank smith from Haverford Trust and very own rick santelli. Welcome, everybody. Jim what do you make of this snap back . Too much too soon . No not at all. Hard to keep a good market down so long as the u. S. Fundment architecturals remain generally upbeat, pointing toward slow growth, not no growth. I think this rally may hit some bumps in the road but i continue to think that gains remain the rule, not the exception to it. Unless we see some major impingement, maybe russia collapsing in upon itself, i think is a market still poised for better days ahead. Ron, do you agree here is this all because of the fed . Is it is an ta zplaus whats going on . It gets interesting. We always look for Good Companies at cheap price and cheap prices are getting a little hard to find. But there are so many macro things going on, whether it is the fed, the price of oil, that on a shortterm basis, i mean, on basis measured in days, yesterday the day looks a whole lot like Algorithmic Trading and shortcomings, we dont get too excited about the day to day other than gives a chance to buy the things we think reach full prize to excuse me, set thing wes reach full price and maybe buy a few others that look good to us. So the day to day we dont worry about too much. Ron, are you are you bullish on this market in 2015, ron im hearing caution if you think this is just programmed buying . I think the gdp about 2 this year, 2 gdp, corporate revenues four to five and corporate earnings 7 to 8 much cant do thain definitely. 2 gdp, think the market is priced do 7 or 8, but 7 or 18 going to be lumpy while you get there, going to be very exciting midsingle digits percent. Hank smith, what about you . Is this now going to be a pivot after this sharp snap back here towards a 2015 where maybe the any is whats strong and market is whats relatively weaker . Yeah, i agree with Steve Liesman earlier that we shouldnt have had this 800, 900point drop at all. The fact is the u. S. Economy is gearing to a higher level called a 3 growth environment compared to 2 growth. Corporate usa is doing fine. Profits are good. Balance sheets are strong. The fed is still going to be accommodative, even after the first rate hike and theres going to be accommodative for a long while. So, it pays to be bullish, just like it has been for the entire past year, pull backs and corrections are going to be short and shallow and investors are going to take advantage of them and we think that environment continues into 2015. Rick, cropping here, but one interesting feature of todays rally is that its happened, even as oil prices have weakened again, a positive development, correct, if it means that ultimately, equities run hinging or not as correlated to the declip in oil prices because it looks like that is going to continue. No, i dont think so i think its all about the fed. Lets look at the facts, okay . And i agree with all our guests shall doesnt mean stocks cant go up. They will. Doesnt mean you cant find positives in the economy. They are there. But yesterday locker the dow 17,069. Todays current high 17,666, 587 points. And what happened between yesterday and today . We got a real lousy philly data, we had mixed data, we didnt have anything. The fundamentals didnt change in a 24hour period. It was the fed. Now, we could argue about whether it should have gone down before happened or any adjustments but the reality is the catalyst to much of what is good for stocks comes from the Federal Reserve and think thats pretty says to understand, you read the statement, they are hemming and haug and seemingly trying to come up with every were they can to kind of postpone the inevitable and that is, of course, normalizing rates to a level appropriate to the current Economic Activity we have. You agree with that jim and what are you guys buying here . Are you going into the energy space at all . We have had another 4 decline in oil, even as the dow is at 319 now. We are Underweight Energy right now i think patient money will be smart money in the oil patch. We have seen history basically dictate very sharp selloffs in oil prices before and then long, slow, good rallies back, but we are not we are not energy trades, by any means, we Like Health Care in this space, we Like Technology in this space. We like Consumer Discretionary and staples in this space i think rick was right. We definitely saw some weak Regional Manufacturing reports this week, first from new york on monday, today, philly, but next week, where we get consumer sentiment, income, spending and savings, thats what we really key our reasoned optimism off of, so long as the u. S. Consumer is in relatively good shape, we think this market holds up. And ron what about you, if you guys are a little more cautious on the market, especially into next year here, how are you investing . A couple points, each of the last four years coming into the year, the economists expected over 3 growth. Each of the last four year, came out less than 2. Secondly, we talk about energy, but in fact, the police of recall that gas hasnt changed much. Natural gas, of course is domestic commodity, oil is internation commodity. Nevertheless, the natural gas stocks, people got kill aid long with the oil stocks, we think a pretty Good Opportunity there beyond that we do think that cheaper oil makes it good for the consumer, things like discover Financial Services, master card and visa have run coils offer is pretty cheap, we think room left to go in the air lines, after that, pick and choose individual companies that are taking advantage of whats going on currently. Ron what about ricks point though . Youre talking about how growth is weaker, could disappoint the fed and ricks saying thats exactly why we are rag, the fed came out, less hawkish in its statement expected, now up 6, 700 points on the dow, are you sure you dont want to sort of be long the fed in this camp remaining accommodative as long as the economy you indicate need it is . Maybe im getting too old but used to be when the economy did well, companies did well and their stocks did well. We have gotten into the point lately, theres so many people so much money chasing shortterm stuff that when the economy does poorly, we say oh, but the fed will bail us out. That works for a little while, but doesnt work indefinitely. So you got cross currents going on that, as i say going to be very exciting modest returns. All right. Hang on one second, everybody. Want to get out to our Steve Liesman in just a second here. I believe we are still waiting for him to get ready. We will go instead to hank smith here for just a second, hank and let you respond to what ron was just saying. Well, kelly, based on the conversation on what were buying, i think the market has put Energy Stocks for sale, i think the selloff has been way overdone, particularly in the Higher Quality names and so for longterm investors, initiating positions in names lake exxon, chevron, yielding 3 and 4 and a highquality Exploration Company like shah lumber shea makes sense, maybe not for a nearterm trade but for a longterm investment. These companies have made money for shareholders over the decades regardless of where the praise of oil has averaged out and we think thats going to be the case in the future. L and we will get to our steve in just a few minutes. Thanks for that, everybody, good to see you this afternoon. Appreciate the perspective here and we have got about 50 minute goes into the close and as mentioned, historic day her for market, the dow up another, about 312 points. Thesome p add morgue than 35 points. Look at that the nasdaq as well having a strong day. The gains across the major index, pretty much identical, 1. 8 , thats after the yesterdays Strong Performance as well. Much more ahead on this spectacular run today. We are coming to you live from the yale summit here at the waldorf astoria here tellin new york. Plus, reestablish u. S. Relations with cuba and we will be going live to havana where our Michelle Carusocabrera has a special report on what reestablished ties mean for u. S. Business and the global economy. Dont go anywhere. Welcome back, we begin here with some breaking news on the volcker rule and our Steve Liesman. Whats going on, steve . Thanks very much the Federal Reserve announcing it is delaying implementation of the volcker rule for at least two years. It was supposed to take effect in 2015, july 2015. Now is delayed until july 2017. This covers legacy funds, those funds that were in place prior to december 2013. Kelly, im sorely, it there is no why in this press release but i have to speculate it has something to do with the trouble they have had coming up with the rules surround it an enormously complicated rule, a difficult for them to find the bright lines it govern proprietary trading wit dodd frank rule banned certain insurance by the u. S. Government or deposit insurance, engaging in proprietary trading. That whole thing on hold for two years as a result of this decision by the Federal Reserve today. Steve, thank you. Financials already having a strong day as you can see there. Goldman sachs, one of the leaders in the dow, up almost 3 . Our Steve Liesman back at headquarters. My next guest says 2015 will be a good year for the economy and a great year for investing in energy. Joining me now steve schwartzman, the ceo of blackstone here for the yale ceo summit. Welcome. Good to is he you. You really think energy looks attractive right now, right here . What do you guys see as opportunity . We can look at energy in a lot of different way, we have the ability to invest in troubled companies. We have the ability to buy debt. We have the ability to make investments in new companies and completely recapitalize companies that have a financial need. So for us, with very large amounts of capital a huge decline there are going to be a certain number of companies under real stress and that presents a very unique window. What happens if, as some argue, we are going into a 2015 where theres simply going to be too much production in the u. S. . Are you going to be able to consolidate that production . It doesnt sound like the culled sauddyes will be pulling back, they said the whole decline today was transitory. This is a commodity, a global commodity with some pockets of regional oversupply. We, as blackstone can do nothing about that in particular. But i think, like most commodities, theres less of it produced at a certain point as the price goes down. And then things will normalize. And then the consumption of the world going up over time will result in prices going back again on the higher side. One last question on this topic, but would you, because, it is a big space, people talk about energy, about oil, talk about a lot of different things. Do you mean that the producers themselves look interesting to you or are you talking more about people who might be otherwise involved in the distribution and consumption . Well, its all up and down the channel. There will be some producers that basically took on debt, High Expectations of prices. There will be suppliers where everyone wont need their rigs and other equipment. There will be a lot of different areas that go into dislocation. Well, we will watch to see where you guys find the most opportunity. I just want to turn in the meantime the big news event this week before Everything Else that happened, frankly for your industry, the pet smart buyout, more than an 8 billion deal. Dethroned you guys having the biggest take private deal of the year back i think in the summer. You know, prospects for a 10 billion on the horizon here . I dont think it is a question of the size, 8, 10, 5, 3. Its a question of how good the deal is. And there was there were two groups of people who thought that was a pretty good one. And choose mean you guys did not, by the way . We didnt see it the same way, but what ive learned is that we dont have the complete monopoly on truth. We find that there are many different ways to invest sizewise, geographically, area of concentration and we had a very large commitment haas year through all of our different private equity areas. We committed approximately 10 billion, which is large. And so you dont have to do one large deal to put out large alps of money. It does seem tonight missing link though in this bull market, you know, we have stock prices at alltime high, we have a lot of merger and acquisition activity thats back toward peak levels but the take private deals with nowhere near the peak level wes saw in 2006some that because prices have now become so high, too high, perhaps, for a a lot of these names that might otherwise be attractive . Because the people doing the deals with a good bit smarter than they were in 2006. There is nothing heroic about paying very high prices after markets have run very far. And the key is having discipline and creating good unleveraged returns, which then we can leverage and turn into something higher. So where do you guys look if its not to pet smart if its not to some of these other names that have been floated around out there . I mean, where then do you put all of this dry powder to work . Well, theres all kinds of startups in the financial area, as regulation has made life somewhat uncomfortable for regulated institution and thats global type of play because the reregulation rules are more or less global. We have the opportunity to buy Smaller Companies and build them up through through acquisitions. And expansion. We have got the whole energy complex, there will be no shortage of good things to do with high returns. And what about real estate . You guys got aggressively into Residential Real Estate during and right after the collapse. Now i wonder what how you see prospects for residential and how you maybe see prospects for a lot of commercial properties in this country. Well, in residential, we are now the largest owner of houses in the United States. We have invested around 9 1 2 billion dollars, what we do is we rent these houses because at the kind of price levels with the 20 deposit needed to buy a house, 45 of americans just simply dont have the money for the deposit. So, we see, as investors and renters, if you will of house, that things are quite good. Dos this mean represents are going to keep going up . I know you and others will already take some heat from that and people are saying it is extortion, represents are going up too much and the average rent or the average household cant afford it the same way buying houses becomes unaffordable, are rents going up too much . I hadnt heard that actually, this is the first time, because whenever we put the houses out for rent, they virtually all rent very quickly and it is a much better thing for a consumer to be able to be in a Quality House in a great neighborhood with a good school district. This is . A very good thing and a replacement for for not being able to buy and live in a home. What about real estate from here then, where are the biggest opportunities for you guys . We think the biggest opportunities, they are all over, but you have to be more selective. The biggest area is right now europe for us. Theres a the banks have really had to contract and theres a lot of trouble credits. In other words, there were they are not troubled assets, they are troubled credits. So somebody paid too much for these things and they have gone down a lot. And the cycle that we had in the United States, theres still some interesting things to buy, but the cycle in europe is several years earlier. So, we see the opportunity to buy very large amounts of real estate, not under the expectation that europes gonna get much better but because the yields on european real estate are much higher because theres been a crisis of confidence in europe by the europeans, which we are able to sort of take advantage of through large purchases. Speaking of crisis, i was going to, if youre looking at russia, seeing opportunities there right now. I think russia is too complex at the moment. If you just look at the volatility of the currency going from 80 to 65 in a day, and all kinds of issues pending recession, if things stay the way they are, some type of governmental imbams, which will happen if oil stays as low. The rumor is that russian government needs somewhere between 100 and 110 a barrel and its around 60, so that means that the government should start losing large amounts of money, i think until things are normalized and we have not bought a company in russia in our firms history, but just thinking about it on a broader basis, think theres a reason to wait for some normalization between the great powers of the world before one stars investing. Well, and this week, an interesting time to bring up that, there was a hot debate earlier about whether it was the right move for sony pictures, which you have been involved with in your career, to pulling the airs of the information the interview, im sorry, its movie that shows the assassination of the north Korean Leader on christmas day. Was