Into the market. And there he was. The man known as the god father says the market is setting the stage for a vigorous rally. Ralph acampora will explain why. Goldman sachs has been the big winner since the election. The banks ties to what is being described as one of the largest financial flaws in history could be a red flag for investors. We have details on the important story coming up. And a survey says economists are skeptical of president elect trumps growth plan. Billionaire carl icahn appeared on Halftime Report earlier today. Hope you saw that great interview. He is concerned that the money going into the market right now is coming from people who just dont study the market. There is a lack of stock for sale. Yet on the buy side from what i consider a lot of investors that really dont study the market. They are giving it to people, giving it to a buyer of etf. They tell you the goal is to buy through a black box. There is nobody deciding is this a good stock. Can you decide if it is a good value in the short term probably not. Lets get to our Closing Bell Exchange and talk about that with michael farr, cnbc market analyst who is standing by at post nine and Rick Santelli is at the cme in chicago. When you consider that we saw a record amount of money going into etfs in the early part of the quarter do you sense that we are now a late part, late portion of the cycle when the public starts to get in . Yeah. Look at what we had over the last couple of years. Its been flash crash. We had the financial crisis. We have had so many things to keep the retail public out of the markets. When you have had the last eight years of the same administration, same policies and really nothing to get you off the bench, so to speak, and get you back into the market or get you involved in the market place you can see why people who really dont have the sophistication or the time to analyze individual stocks just by the market because two thirds of the stocks go up with overall market. I dont think it is necessarily a bad thing to do quite frankly. The same way we have seen rotation that is why people are buying etfs because you cant pick financials one day and utilities the next day. This is the same strategy Warren Buffett has said, if you do nothing else in the stock market buy low cost and hang on to it. What is the problem if the broader public does that . They are recognizing limitations when it comes to picking stocks by doing so. You cant just listen to half of what mr. Buffet says. He says if he didnt manage his own money he would buy an index fund or etf. He says americans are funny and love stocks when they are expensive and hate them when they are cheap. As the market is making new highs enthusiasm builds and people feel bullish and want to participate and they always get into the last leg of the ride. They often dont have the tenacity to hang on when it is most important. You have to know things are expensive. If you look in the survey from april, 52 of the public is in stocks that is down from 65 before the crisis, its not like we are at the case where everybody is piling into the market. High markets can certainly go higher. The dow is 6,000. Green span wasnt wrong and went up 33 and then went up over 11,000. So this can go higher and there is more money on the sideline. You cant throw caution to the wind if you get in rather than etfs i like looking at stuf that has been hurt and maybe consumer sta staples and health care and tech. Im curious where you stand. You and i have been in the business about the same amount of time. I dont know what ever happened . Let me phrase this delicately. If there are problems in the future i think the highest probability of where they would be felt would probably be in etfs. Having said that the cubs won the world series this year. Nobody likes statistics more than i do. Statistically speaking that was an event that every time they became part of the playoff scene statistically you had to bet against them. And what i found is when you take the mentality of a contrar yn and anybody involved in trading understands it and likes it. Some of the biggest moves in history do occur sometimes and they would go against the grain of that mentality. One final point 19992000 the nasdaq was at 5,000. I know it is higher than that today but not a whole lot. You can look at this in a variety of ways and in the final analysis i think the particular rally is either going to be a biggy in the three to five year horizon or fail miserably. I think i can come up with many answers that are more optimistic in terms of performance. The proof is always in the performance of the market place. Its not just about the retail public. There are institutions which is in a way been as much to blame if you want to call it blame for not participating in the equity market. I think it lowered the equity allocation and lowered the return targets to about seven percent and yet the market is up 14 this year. And i think what you just stated i think shows you why the market has been pushedo aggressively higher when people start to rotate within the equity market you wind up having the chase event, financials people complain we are overbought. I stated overbought and overowned are two different things. You can unwind overbought but you have to allocate those financials. Thats why the chase will still happen day on, day off. There is still a chase for equities. Wish we had more time. It is clear that rick is still basking in the glow of the world series. Well see you later. President elect trump said economic agenda could feel growth. Wall street economists are skeptical of the number. The president elect and his team said their plans could leave to 3 , 4 growth. Cnbc found very few economists see 3 . Pr 2. 3 and that is up from 1. 7 this year and then gets to 2. 5 . There are some gains just not nearly as much as the president elect is estimating. 20172018 averages. Jeffreys is the top. Hsbc, they come in at 2. 5. Citi group 2. 2. Jp morgan 1. 9 . Chief economist doesnt think congress lets the new president get away with such big deficits. Here is a red light green light. Infrastructure spending seen as positive. Deregulation, as well. Tax cuts and repate reegz. Strong dollar could hurt earnings. Trade policy is a huge negative and then the fed could be potentially more hawkish. Trump adviser said on squawk box every time somebody bets against trump they are disappointed. I think economically that is true, as well. That remains to be seen. Or whether economists forecasts are right. Lets bring in an economist who is not so skeptical. Cnbc senior contributor mr. Larry kudlow. Thank you. Thank you. I am an optimistic. I think kellyann conway has it right. Six percent seems like a reach. Reagan had sixes and sevens coming out of the deep recession. We are a little different place in the business cycle. If mr. Trump gets the kind of business tax rate reduction for largely Small Companies along with the expensing i dont see why you can have a period of percent or five percent growth. Not forever but i dont see why you couldnt have a big bump up. The animal spirits are improving, big story today the wall street journal poll Shows Confidence is picking up significantly since the election. Forecasting is difficult. On the other hand these things have happened before in the past. So how do you reconcile the street at 2 with the Trump Administration at 4 to 6 . Can i first give deep and lasting respect to larry kudlow and his ideas . The couple of things i dont buy. They dont buy that congress will give him all he asks for. That is not the fault. I think they dont buy the effect of all of this stuff. There are big numbers for potential gains. There are huge numbers built in for potential gains from kaks tax cuts. There are a good amount who say a tax cut that looks like the one you guys have built which gives a lot of rebates and cuts to the wealthy doesnt end up juicing growth as much as you guys think. Steve liesman, lower marginal tax rates your take home pay goes up. You are rewarded for work ethic and success and investment and risk taking. I think the incentive model works. You can quarrel about the a exact number. People have done very well. The idea that you are going to juice the incentive to work even harder doesnt seem like all i will say is this. I have a great book for you to read. Christmas shopping called jfk and the reagan revolution. We go through the numbers very carefully when kennedy and reagan lowered marginal tax rates the economies exploded. I believe the same thing can happen now. You are talking about a decline. I understand all of that. Principles dont change. I dont know about the exact numbers. In the website i think it is Something Like 3. 5 or 4, not 6. If the dollar rises on the strength of faster gdp with more business incentives, todays numbers show how weak Business Investment is, that will stop inflation. That will stop inflation. Strong growth with king dollar will not cause inflation. Just in reverse, inflation will remain calm. Real rates will go up. I get that. I think the stock market will have a great rally but there will be corrections. That raises the next question about trade. It goes back to whether there is going to be whether the administration is at odds with itself on the issue. When you consider today they announced a trade repfor the administration. I want to get your thought on that. The impact of the view of the Trump AdministrationGoing Forward on trade when we have known peter a long time. He is very much a hawk on trade with china and i would think nothing of trying to impose those tariffs and being protectionist. What is your view of that part of the Economic Policy coming out of the administration here . We do know peter very well. Peter and i agree on some things and we disagree on other things. My view this is just my personal view. Im representing no one but kudlow. I think president elect trump will turn out to be a negotiator. And i think he needs to change some of the treaties, the pacific treaty, the mexican treaty because there have been violations or the rule dont look good. He should defend american interests. I have no problem with renegotiating the art of the deal. And i still believe that mr. Trump would use tariffs only as a last, last resort. That is my view. I may be right. I may be wrong. I havent spoken to them about this in a while. He is a negotiator. By the way, we should negotiate currency stability along with trade rule. Very good. Always good to see you, my friend. See you later, bud. One of the worse performing stocks on the s p 500 bed bath and beyond after reporting q 3 profit well below analyst expectations. The Home Furnishings retail, the cfo attributing to decrease in number of transactions in stores. Down by 14 year to date. Other specialty retailers weighing on the Consumer Discretionary sector. That is worst performing in the trade. Take a look at names like gap down between 5 and 6 . Certainly a tough day for retail. I wonder if it was the data this morning . Even though the gdp number showing consumption up 3 . For november exactly. 45 minutes to go in the session. We have red arrows. The dow struggling to hold 19,900. S p is down seven. There is nasdaq down 33. Goldman sachs has been red hot since the election up 32 and far outpacing the rest of the dow components. We are going to look at why there could be a red flag on the horizon. Why Ralph Acampora says a rally is coming in the market. He will make his case when he joins us live coming up. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley were opening more Xfinity Stores closer to you. Visit us today and learn how to get the most out of all your services, like xfinity x1. Well put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. Theres more in store than you imagine. Visit an xfinity store today and see for yourself. Xfinity, the future of awesome. We have breaking news on barclays. Eamon javers with the news for us. Something unusual here the department of justice saying it is suing barclays to recover Civil Penalties for fraud in the sale of Residential Mortgage backed securities. This dates back to the Great Recession that looked like settlement talks have broken down and now the department of justice is taking action. They say they are alleging that barclays engaged in fraudulent scheme supported by misrepresented mortgage loans. According to the press release the department of justice put out. Unusual here they are naming two defendants by name. In the press release it says that these entities and these individuals quote fraudulently sold tens of billions of dollars and misled investors about the quality of the mortgages backing those deals. So this is an old story but a new action here being taken by the department of justice. Thank you. Goldman sachs has been a big winner of the trump rally. The stock soared 32 . The wall street journ al reveald Goldman Sachs being tied. Kent brown joins us now. Goldman sachs had deep involvement in this malaysian Government Investment fund where 3 billions to the 5 billion was stolen. The question was whether Goldman Sachs investigation is what did goldman know . Raised bonds for this fund and the question is did goldman know anything was wrong and should have reported it. That is what everyone is looking at. People will read the piece and look at what has happened and reported in terms of the problems. A couple of names involved in the Trump Administration. At least you bring up the fact that some of it was run by him and he didnt intervene to stop anything going on there. You also mentioned names of other people filling positions that he vacated at the firm. You also name ceo similarly not necessarily stopping this activity. The question now becomes if people start to get more upset and pointing more fingers about this activity does it implicate all figures as they had a big management change. One thing we try to show is the decisions on the fund were made at the highest levels. It was one of the most profitable clients for the two years. Some people were pointing fingers at the guys in asia and say these guys were doing it and lying or keeping the information secret and close but when we were able to show is that these decisions were made and reviewed and organized at the very top. We have very good examples of the topics after the firm trying to cultivate the Prime Minister and people involved. The difference is whether they knew enough about exactly what was going on to have realized this is basically theft. Thats the issue. Should they have known this seems like an unusually large amount of money they were able to raise. Should they have known it went a step further . They say they didnt know. This was a governmentrun fund running by the Prime Minister. You have to assume that things were okay. It is a pretty serious organization. There were a lot of red flags. So why did they need to raise so much money so fast . Why did they pay massive 600 million in fees. When a bank raises money for a government you get one percent of the fee. It is very small, very unprofitable. They were making 10 , 11 of asse assets. There were several employees raising flags about this. There were internal controls triggered. It was a tuszal within the firm about what to do with it. One of the things is people who really did raise objections were stumped down by people at the firm. It was an interesting read in the wall street journal today. Thank you. Merry christmas. We are heading to the close. If youre just tuning in waiting for the dow 20,000 party going to have to wait yet again another day. Down 40 points now. 100 points away from the magic number. Going to explain why coming up. Weight watchers, one of the best performing stocks on wall street today because of a big loss by a shareholder Oprah Winfrey. Details we think when we come back. Too bad Weight Watchers is not in the dow. It is one of the big winners after Oprah Winfrey announced she just lost more than 40 pounds while on the companys plan. She spent about 43 million on her Weight Watchers stake back in october of 2015. Todays gain makes her investment worth 77 million. However, that stock is still down nearly 50 this year as the Company Faces increasing competition from free weight watching apps. A lot of pressure on a person. Swing the market cap one way or the other based on how that is going. That is the star quality of oprah. She loses weight and Weight Watchers takes off. The cult of Oprah Winfrey is still in tact. He had a big interview with michelle obama. 30 minutes to go into the close. The time now for a cnbc news update. Here is what is happening. The u. S. Returning half of the biggest american base on japans okinawa island. South Koreas Constitutional Court holding the first hearing in the impeachment case against that countrys president. The court decided to allow the admission of documents dismissing objection by president s legal team. Preparations for president ial inauguration are underway in washington. The committee announcing the official event start january 19. And the countrys oldest known living gorilla celebrating her 60th birthday today at the columbus zoo. Colo was the first gorilla in the world born in a zoo and surpassed the expected Life Expectancy by 20 years. Her longevity is putting spot light on better medical care for zoo animals. Thats the cnbc news update. She looks pretty good. She looks really good. So do you. I wasnt phishing. We have a news alert on