Coming up, big ackman losing the bid of allergen and over 2 billion on the deal. Thats why the ceo said hes still suing for the back room tactics and valiant hear what was said and if theres moves to close that loophole to engineer a scenario in the first place where he won no matter the outcome. Fascinating story. I mean, just outwitted everybody on that one. Was it ethical . Elon musk warned here that robots may turn on humans. He said it with a straight face. Now, he says it could happen this decade. And by my calculation we have about five years left in this decade. Well tell you why elon is moving up the timetable and look at how real the threat of robots to hubls really is. Yeah. The story yeah. Strange times. Okay. Look, the dow up 16. S p up 2. The nasdaq is a little bit negative and fascinating about the period as they say never short a dull market or what have you, were climbing to newer and newer highs all the while actual volatility in the market at multiyear, sometimes multidecade lows. Later we are talking to a group of College Students who won a trading competition in one month. They doubled their money. It was unbelievable. In four weeks. But what a four weeks that was. Lets get to the closing bell exchange. Anthony chan. Mark ibel. David malpas. And so does Rick Santelli in chicago. David, what about the Global Economy right now . I mean, when we think about the Central Bank Policies going on, you know, theyre going in opposite directions and especially now with japan and the problems that theyre having right now. How do you assess where the opportunities are right now . Hi, bill. Well, i think that world nominal gdp, that means just in dollar terms, whens the world doing, it is slowing down and puts downward pressure on earnings and thats putting some kind of a temporary peak on equities. The reason for that is Central Banks have not really added money to the world economy. When you look at credit growth, whether in the u. S. , europe or in japan, its been slow and thats right. Thats disinflation ary. When you look at world dollar gdp, looks to me like its less in 2015 than it was in 2014. About 77 trillion. Wow. Wow. I mean, thats a huge deal in a Global Economy. Used to be the rule of thumb is anything below 2. 5 is a global recession practically. Anthony, do you agree with that prognosis . I think david is right. Credit growth is slow and why today mario draghi says he wants credit growth going again. Looking at private sector lending to businesses in europe its still down 2 but again whats mario draghi saying . Safing to continue to put as many steroids in that pipeline as possible and, in fact, not even ruling out the possibility of doing sovereign and buying coverup bonds, private bonds and mortgagebacked securities and almost no limit of what he plan to do if he doesnt see credit growth moving faster. David is right. Well see more credit growth in the months ahead and japan. We know whats happening there. We know a lot more credit growth will happen. Rick, this sounds like dollar bulls are still in control right now. How could the dollar go down in this environment . No. I mean, its going to be tough for the dollar to go down. Concerning japan, europe and the uk. So the weakness of those currencies, of course, on a relative value trade make the dollar look good. For credit, everybodys correct. Theres a major faux pas. Central banks can use the test tubes to create credit but how its used is going to be a completely different question. Its a horse of a different color and i think theyre limited as to what they do in that arena and should they try to fine tune their pencil into how the credit thats created gets put to use, the unintended consequences move up exponentially. Japan down. If you look at the last 12 months, both of the categories of gdp, 6 out of 12 are negative numbers. This doesnt really fare well for the whole form of central banking and, indeed, David Malpass is spot on. Global dynamidynamics, less for. I dont care how we stack up relative to others and the economic grading category. Less is not better. But, david, are you blaming the quantitative easing approach that shinzo abe is taking in japan or still the ramification of the sales tax hike at work . I dont think qe is working. If you look in the u. S. , the Median Income levels for americans going down and down and down. Because the central bank is channelling the credit toward bigness, toward the government and big corporations. That just doesnt create jobs. So turning to japan, we have a perfect test tube. They have bought a huge amount of bonds and their economy is going slower and slower. Meanwhile, diane, this week hearing from retailers. Earnings, gasoline prices coming down. Is that a boost to the bottom line . What are you expecting . I dont think she should underestimate the impact of lower gas prices. I think it is key not only for the economy as a whole but in particular for retailers and lower and middle class incomes where gas is such a big component. It wouldnt be surprising to see dramatic increases in retail as everybody heads to the pump and discovers they have more dollars to spend. If you look at fridays Consumer Confidence data, what we see is biggest increases happening in lower and middle income families and one of the things thats really interesting is number one place to do the spending is in food establish. S. They want to eat and get to the restaurants so we have a lot of Companies Reporting now. Likely to be a really good week. I dont know if theres truth to the rumor they conducted that Consumer Confidence survey at gas stations. That would do it. Diane, as a followup to davids point, do you agree with him that Balance Sheet expansion by the u. S. Central bank hasnt worked . I think david hit on a really good point and theres a sutd l point that we need to focus on. One of the statements was, look, he sees lower earnings. That could be true unless, of course, we start to have acquisitions for earnings. Right . We are starting to see a lot of transactions where Large Companies are acquiring Small Companies that have wonderful earnings. So in the past, we have seen vertical integration. Strategic mergers. We might to start to see Large Companies paying a premium for small and mid Cap Companies with wonderful, robust, steady earnings and could change the earnings picture and then in the interim lead to m an activity of now and first half. Before the first hike. Mark, lets bring you into the conversation here. Where do you see Investment Opportunities right now . I think what we learned today from japan and i think the announcement of draghi just as important as japan. Nonu. S. Story is a qe monetary story. Similar to what we were a few years ago. Our story becomes much more about growing at 3 and can we justify our market valuations earnings Getting Better . We think theres cheaper values outside of the u. S. Within the u. S. , i would agree with diane. With that gas tax. Strong dollar into christmas looks good and managers are overweight health care and financials. David, i want to go back to you on this paint, as well. It feels like the sharplidy veer gent outcomes in the europe and u. S. Speak to how well Monetary Policy worked contrary to europe and has hardly expanded the Balance Sheet at all. I dont think thats the causal effect. Europe has these huge structural problems, meaning, you know, the governments are just gigantic, the tax rates are very high and so theyre growing slowly. But its not because of what the central bank is doing, but other factors. In the u. S. , our growth is stayed way low. This is a horrible recovery by normal standards. I agreed with diane that you might find some Financial Engineering by Big Companies so the current environment is great for wall street. Its great for washington, d. C. But its been very bad for Median Income and for wages. Anthony, i know you have been the big bull on the economy here in the United States. What about the impact of lower gasoline prices . Are we over estimating the impact that it could have on retail earnings . I dont think so. I have a model the look at november Consumer Confidence as the best leading indicator of what holiday sales are. Remember what diane said. Look at Consumer Confidence. If you look at novembers preliminary reading, the highest since november of 2006. And back then, i remember that Chain Store Sales or the general merchandise component of the retail sales november and december up 4. 5 year over year basis. If you look at the current readings, theyre pointing to holiday sales of 3. 5 . That compares to. 9 last year. Remember that if you continue to hold these gasoline prices at these levels, thats adding close to 100 billion to households purchasing pockets on an analyzed basis. This is going to boost retail Sales Activity during the holiday sales season. You know, anthony, just a followup question as well as people try to figure 0 the impact of japan in recession, what are the two different outcomes of a japan mired in recession relative to one beginning to grow again as any of these various policies perhaps work . I think that the data speaks for itself. One of the things i noticed of japanese data, with the preliminary number, just like us, it has a lot of information thats missing. So i would not be surprised the numbers are biassed higher. Yes, its recession but Pay Attention to what theyre doing. I agree with rick. Not to say were sanctioning or saying quantitative easing is good but it does boost Economic Growth and thats why the central bankers are talking about work out there to Structural Reforms at the same time. And by the way, david is right saying this is a miserable recovery. So far, we have grown on average a little over 2 and the normal recovery is 4. 5 go. To europe. You agree to him. Go to europe saying 2. 3 is bad. To them its good. Its not as good as it could be and were still at a pretty nice looking house in a bad looking neighborhood. All relative. Thanks all for joining us. Appreciate your thoughts. Thanks, guys. By the way, over the weekend, paid 2. 69. I saw the picture. Not not the case in my neck of the woods. Certainly better than the recent past, though. So, too, here for the markets. Dow up 18. S ps up a couple of points. 2041. Doesnt seem exciting with a point or two every day and the typical forecast coming into this year was for a year end target of 2014 just like the calendar year. Well above that despite the volatility. Wasnt that adam parker that made that forecast . A couple of different guys did, yeah. Sometimes you win when you lose. Hedge fund titan bill ackman making 2. 25 million from 66 billion buyout. That despite ackmans work to take over allergen that failed. The pros discuss how he made all that money and if what he did is legal. Thats the thorny question right now. Td ameritrade ceo talking with us and if gains lie ahead in the new year. College students trading skills to the test. Someone turned a virtual 500,000 into more than 1. 5 million in a month. That student joins us when we come back. Ameriprise asked people a simple question in retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Uh, and i know my iq. Confident retirement today. Okay. Uh, and i knowuhi know what blood type i have. Oh, wow uh huh, yeah. I dont know my credit score. You dont know your credit score . I dont know my credit score. Thats really important. I mean i dont know my credit score. Dont you want to buy a house. Like, ever . You should probably check out credit karma, its free. Credit . Karma . Free . So, thats. How much . Thats how much its free. Credit karma really free credit scores. No credit card needed. I am an electric crew foreman out of the cupertino service center. I was born and raised in the cupertino area. Its a fantastic area to work. The new technology that we are installing out in the field is important for the customers because system reliability i believe is number one. Pg e is always trying to plan for the future and we are always trying to build something stronger and bigger and more reliable. I love living here and i love the community i serve. Nobody wants to be without power. I dont want my family to be without power. Its much more personal to me for that reason. I dont think theres any place i really would rather be. Welcome back. Pharmaceutical drug maker actavist announcing to acquire allergen for 60 billion. Valiant teamed up with bill ackman to acquire the company raising eyebrows because he had taken a stake in allergen but not in valiant. Follow that . Im with you. Allergen ceo this morning along with activist ceo. Heres what they had to say. Of course, the goal of any activist investor as you so ably stated is maximize value. That goal presumably is achieved and this is a sideline. Our litigation on the inside trading suit continues. It continues . It continues. Why . At the end of the day i personally am quite disturbed of the shareholders that sold the stock in the period not knowing that there was a bid coming from the other side so i think we have a fiduciary obligation the protect those interests. Lets talk about that. More re action. Mark, did bill ackman do something illegal . Absolutely not. I think they should be sending him a thank you note. Do you agree . On the legal side did he do anything unethical . Okay, look. The question is really important question. I would not have sold the stock if id known that deal was going on. Right . I mean, if ackman bought i if know that he bought 10 position and side deal to make an offer for the company as a seller and owner, i wouldnt have done that. So theres material nonpublic information that would have influenced my decision. I think that is a violation of the but ill defer. It doesnt pass my sniff test. Counselor . May not pass the sniff test but its legal. Right . As we talk about a lot, material nonpublic information is basis for a lot of what goes on in the markets and doesnt mean its illegal insider trading. Theres a distinction. The information, alleged information that rises to a violation has to to have been received in violation of a duty. Bill ackman had no duty to disclose his own information but the deal with valiant and he did. The laws very clear on this. What point, you know, at what point, because you and i are silting on the floor of the New York Stock Exchange where if you and i say we do a deal and give each other the words and agreement on the floor of the exchange, thats a deal. Right . Thats true. So they had an understanding. Right . Why isnt that a deal . They had an understanding but the law is clear on this. And the 2nd circuit case law here in new york most extensive and looked at by the California Federal Court in connection with the case brought by allergen and until we have an inked deal, we have no duty to disclose. Its not material nonpublic inside information if its my information. If to take to that the most logical extension, you would have no activist investing going on. But the sellers that sold in the quiet period are looking up and saying look at the money. They should be selling sending thank you notes and the money they made and the people that didnt know the quiet period some sort of problem here . Yeah. I dont think it is. Whose responsibility is it then to talk about another deal coming up . Responsibility of the issuer. Right . So ackman as a private activist hedge fund other than the 13d obligation filings i believe they met and lawyered to the nth degree. Michael, isnt this a case of bill ackman outsmarted everybody else . Yes. Yeah, i think thats probably what it is and it doesnt feel good and doesnt feel right and when we hear about these sort of things on wall street as investors, we begin to feel icky. I mean, we begin to say we dont trust the system and the big guys doing and getting away with things like in this and mom and pop cant play on this turf. Just again to try to put it in context, what do you think carl icahn would have done differently in bill ackmans shoes in this deal . I think hes more conservative than bill ackman is in terms of taking stuff to the mat as it were to get a deal done. Everyone made money here. Bill ackmans conduct made money for his investors of mom and pop, the pension funds, the firefighters, the teachers invested with persian square made a ton of money. 2. 3 billion, 2. 4 billion estimated. Allergen shareholders. Not those that sold. They didnt lose money per se. They just didnt make more. Thats right. Not everybody can win on every trade in this industry. Having i hate that. Having said that this, though, mark, do you suspect that there will be somebody to a regulator type or even a legal type to come along and want to legislate something . Does allergen have a case any. I think they have no case. To say, oh no, were good, sends the wrong message. I think the case fails. I said it august 1st on the show when it was announced that the lawsuit was filed. I think the regulators are going to look to see the California District Court does and i think ultimately going to turn down and rule against allergen. If you need a proxy, a beard, somebody else to represent you, it says it does send the wrong message there, right . That valiant needed ackman because had valiant made the purchases, it would have tell the graphed major signals. Its a position in another public company. But if you have a Hedge Fund Manager do it for you and a deal with him on the side, acquire the 10 position under the rad