I like to say theres always a bull market somewhere. I promise to try to find it for you right here on mad money. Im jim cramer, and i will see you monday good evening, everyone. Im larry kudlow. This is the kudlow report. Call it raging bull, if you want. Stocks climb higher again today with the s p closing above 1,500 for the First Time Since 2007. Were up about 5 for the year and the best part its a broadbased rally, which is the best kind. As ive said, a lot of this reflects an economy that looks better than you might think. And then on the political front, president obamas recess appointment to the nlrb declared unconstitutional. And louisiana governor bobby jindal calls republicans the stupid party. How about that . And then there is an unconfirmed scandal. I say unconfirmed. Did senator bob menendez sleep with underaged dominican prostitutes . This is the kudlow report and we begin right now. All right. First up, our most optimistic story tonight, stock continue their bull run, the s p 500 and dow closing in on their alltime highs from october 2007. Brian shactman joins us now with all the details. Good evening, brian and good work today. You touched on the s p details having its best streak in terms of winning streaks days in a row in eight years but how about the dow. Were now 105 points shy of 14,000. Eight components hit new highs today. Beyond the five on your screen, utx, pfizer and p g also doing it. Now, speaking of history, historically life is good, larry, as you well know when the dow transports show leadership, up another 3 for the week. Apple used to be leadership but not right now. The stock hitting a 52week low and has lost the distinction of being the worlds most profitable company, exxon back on top. And theres netflix, huge story in the other direction, even before earnings boosted shares on wednesday, the stock has been an absolute monster in 2013, up another 15 today. Larry, 83 year to date. Were not even a month in, okay . Thats unbelievable. A quick note looking ahead, more than a hundred companies in the s p report next week, a few of the most interesting ones, at least to me, caterpillar and yahoo monday, amazon tuesday, facebook wednesday and exxon mobil on friday. 270 points and an alltime high on the dow. Medium cap, midcap and small cap indexes are outperforming the big cap indexes, which gives everything, i think, some real bolstering. I like the foundation to this thing. I know theres a construction coming somewhere, but that may be a buy not a sell. Brian, thanks for a great report. You hang with us. Much more coming. Lets go to our two big investors tonight. Don luskin and jim le camp. Jim, let me start with you. I know theres a correction out there someplace but im not here to look for that. I think the fundamentals are good. The economy ended the year better, the large and medium and small cap stocks, theyre all doing better. Europe is doing better, china is doing better, japan is doing better and i dont want to sound, you know, too boomy here but the fact is things have improved, have they not . They certainly have improved. Theres a number of reasons for it. The economy is getting better. Its firing on more cylinders than it was. You can quibble as to whether its four cylinders or five cylinders but the economy is doing better. More importantly, were seeing a great Asset Allocation out of bounds into stocks. The fed has finally gotten what it wants, its forcing more risk taking. Pour more money into stocks and were seeing individual pour more money into stocks. I like what seeing out of a lot of the metrics you mentioned, the transports and momentum stocks are breaking through and carrying their move. Sentiment has gotten a little too bullish. From a shortterm perspective, we may go into a 5 correction or so but i agree that would be more of a buying opportunity or not. I would quibble on japan and spain but for now i think the market looks pretty good. Don luskin, on japan i think the depreciation of the yen a lot of the european banks in so much trouble paid back twice as much of the loans to the European Central banks. Japan, china, the usa is doing better. The Central Banks are easing, don luskin. Whats wrong with this picture . Nothings wrong with this picture. If youre an investors, you look at all the good things happening in the world, all the horses will get to the finish line, your task is to pick the fastest horse. Japan solving a 20year problem of deflation and too strong a currency in an economy driven by exports. All over europe for the last three years facing an extensi existential crisis. These are all great things for the Global Economy. Wait, i havent mentioned the u. S. What have we done . Weve raised taxes by 200 billion a year. The reason that u. S. Stocks are up 5 after this horrible thing weve done to our selves that under norm circumstances would cause a recession is because were in a Global Economy and every other major country in the world is doing the right thing while were doing the wrong thing. Thats propping us up. Were fine, well have a great year. These other countries doing things right, that arent kicking the can down the road, theyre going to have fabulous years. Thats where you want to put your money, my friend. I was reporting in 2007 when we hit dow 14,000 and everyone got slammed on that. Theres a hesitance at these levels. Whats not getting talked about enough is the impact on consumer sentiment. If you go to any coffee shop, grocery store, anywhere in this country, people are looking at their 401 k , they feel better and i think that will translate into positive consumer spending, which filters into the whole economy. The Retail Investors is getting involved. The money flows are ramping up tremendously on the retail side. I would disagree with one thing. Don and i always find something to disagree on. Where i will disagree is i think theres a lot of countries kicking the can down the road. Japan is printing more money. Thats what they should do. Japan should print money. Thats not kicking the can down the road. Thats hang on. I just want to add this one thing. I dont think its the most important subject but i just want to say that after going through 20 years of deflation, japan is now reinflating and the currency is falling. I think thats good. But the main point, don luskin, Brian Shactman is reporting a lot of the banks have had tremendous performance, United Technologies is doing well, staples, pfizer, 3m, Johnson Johnson doing well, transports, unbelievable what the transports are doing, airlines, trucks, railroads. In other words, theres so much balance i know theres a correction but with all this balance isnt the foundation solid, don luskin . It is. Its fine. Im not trying to tell you that u. S. Stocks are going to go down in 2013, im just telling you there are faster horses on this track. I was fascinated by the question of whether senator menendez is sleeping with underage prostitutes. I have the answer to that question, its not a wink. Nod a wink . I dont know hes not sleeping with them, its not a week. I no position on the story. I want to make that very, very clear. Jim lacamp, what would you be buying now, after this phenomenal week, maybe were overshooting a bit, how would you be playing it as we go into a new week . I like the emerging markets quite a bit. I would be looking to buy hong kong and mexico. Here in the u. S. Were still seeing leadership to things related to home building, not necessarily the Home Builders by themselves but things like lumber liquidators, home depot. Theyre still great stories. You have Earnings Growth that is well above expectations. Beyond that, larry, i think another thing thats going to be positive for this market is that Second Quarter expectations are really low for the market here and were seeing revisions really come in actually okay this quarter. So we set a low bar and i think the earnings are going to continue to be a driver for this market. Brian, on the thompson numbers, 68 of 147 reporting companies are beating on profits. 65 are beating on sales. Now, i know the bar was lowered for profits and sales, but still theyre coming in a little bit better. How significant is that and with all these Companies Reporting next week, what are the expectations . I think the expectations are they will continue to exceed those reduced expectations. The thing i want to point out to people is i look at revenues w now. It seems to ebb and flow. Companies have proven over the last five years they can be more efficient and know how to cut cost. What happened to apple . Revenues are disappointing. If amazon doesnt grow revenues, we know theyre investing heavily. As all these Companies Come out again, youre saying watch the revenue side at least as much as earnings if not more so. Yes. Don luskin, would you be a seller next week, don luskin . If youre just trying to do one week at a time market timing, yeah, it feels like theres got to be a correction out there somewhere. But, you know, you just got to be a little bit careful here, folks. Yeah, were having a good earnings season but if you dollar weighed it and looked at the performance of Big Companies with big dollar earnings versus the smaller companies, only 13 or 14 of the Companies Account for all the beat in dollar terms. Its not as solid as it looks and we dont know what is going to really happen when weve gotten through a month or two with people opening up their pay pact packets and joe six pack and susie cream cheese finding they have 2 left. These are People Living paycheck to paycheck, dont have credit lines anymore, housing atm has gone belly up. Consumption growth has gone down, larry. I hear you. A lot of risks to washington, d. C. But we dont have time to go through they. Don luskin, thank you, Brian Shactman, thank you. During the president s address, he said we are not a nation of takers. Au contraire. Half the country is getting benefits. And a feud that came to a head today on cnbc. It got personal. This is not an honest guy. He takes advantage of little people. I appreciate, bill, that you called me a great investor. I thank you for that. Unfortunately i cant say the same for you. Were going to have more clash of those titan a little later. As always, dont forget free market capitalism is the best path to prosperity. Maybe well get some in washington to help this rally. Well see. Well be right back. [ male announcer ] something powerful is coming. See it on february 3rd. Remember when president obama said in his inaugural address that he wants government to be the great income and wealth leveller in order to redistribute from the haves to the have notes . The commitment we make to each other, these things do not sap our initiative. They strengthen us. They do not make as you nation of takers, they free us to take the risks that make this country great. All right. But in todays wall street journal, Nicholas Eberstadt reply, yes, we are a nation of takers. Americas welfare programs dispense entitlement benefits of more than 2. 3 trillion a year here now former chief economist to Vice President biden and jim from the american nt prize institute. Jared, 2. 3 trillion a year is a big number and it bothers me that were corroding the American Work effort and were doing some damage to society with all this dependency. I can make you feel much better. First of all, before i got here, i added up Social Security, medicare and medicaid. I got 1. 6 trillion so mr. Eberstadt needs to check his numbers. Heres the fact over 90 of the dollars we spend on entitlements go to three types of people, elderly people, disabled people and people who are working. If you want to tell me people who are retired and benefiting from Social Security and medicare, if disabled veterans, if people who are retirees who paid into these systems throughout their careers are takers, im not going to believe you because i know youre better than that and i know jimmy p. Is better than that, too. So lets get away from this taker stuff. The president s right. It just doesnt work. Go ahead, jimmy. Go ahead. Back about 1935 we had a democratic president Franklin Roosevelt and when talking about the welfare state, the dole, he called it a narcotic, a destroyer of souls. Then the left forgot about that for about 60 years, woke up in the mid 90s for welfare reform and forgot about it again. Weve had an explosion of people getting Social Security disability at the same time when the workforce has become less physical, fewer injuries and yet an explosion of people on disability. Why . Because those are people who have been misdiagnosed or who are im sorry to say on the dole, who should not be getting disability payments. We are create being exactly the thing Franklin Roosevelt warned us against, which is a narcotic, a destroyer of souls, a destroyer of our labor force. Jared, the odd thing about this story, the odd thing about this story is that the Unemployment Rate is coming down. Were in a modest recovery. And yet these small entitlements like the disability that jimmy mentioned keep rising and rising and rising. We always talk about food stamps. This disability thing, were actually paying people not to work, jared. That cant be work. The disability thing is very misleading, what jimmy was just taking you through. Ill post something later on my blog that shows you how much of the disability rates have to do with older people. Demographics does not explain that. As jimmy suggested with welfare reform, our welfare system is much more professional work than its ever been. The earned income tax credit has become more important, more people or food stamps are working, more people on welfare are working. 90 go to people who are elderly, disabled or working. Jared, do you acknowledge, just to take one example, that continually extending Unemployment Insurance can create a disincentive for people to seek work. Do you concede that at least . Heres the thing. If we were at full employment, i would totally agree with you. But with an Unemployment Rate stuck too close to 8 , i very much disagree with you. The most careful research on this has shown the extension of Unemployment Insurance explains less than half a percent of the increase in unemployment. I think youre refusing causality between unemployment and the insurance rate. President obama indicated he didnt want to take on the entitlement, Social Security and medicare in particular. He called them insurance funds. But the reality is, jared, theyre not insurance funds. Insurance funds are geared to pay for themselves through premium adjustments and other means. Were going to have to put tens of trillions of dollars to fix medicare and some of that to do Social Security. And that means its not insurance, its a transfer payment. Its just another government dependency transfer payment. Thats what bothers me about this. I understand but youre painting with much too broad a stroke. Youre right about private insurance but these are social programs. Todays generation pays for the Retirement Benefits of the generation that preceded it. Where eberstadts numbers are completely as my grandmother would say, he completely lumps in the National Cost problem. Its worse in the private sector than the public. Social security costs are manageable. If we dont manage the medicare pressures, well thats a perfect example. Were going to have a Health Care System where were going to be sending checks to buy Health Care Insurance for families making almost 100,000 a year. Thats what i mean by expanding the welfare state. Those families may have to pay higher premiums and i think thats a reasonable policy. Because of obama care. I got to cap this. Youre both great. I just think that were worried about damaging the social fiber and work ethic of this country. Were in this together, larry. More to be revealed, two great pals. Thank you. Different story. A federal court tells president obama his own Labor Relations board recess appointments were unconstitutional. And governor bobby jindal calls republicans stupid. And an unconfirmed sex scandal involving a u. S. Senator. It is unconfirmed. We got all that coming up just ahead. [ female announcer ] what if the next big thing, isnt a thing at all . Its lots of things. All waking up. Connecting to the global phenomenon we call the internet of everything. Its going to be amazing. And exciting. And maybe, most remarkably, not that far away. Were going to wake the world up. And watch, with eyes wide, as it gets to work. Cisco. Tomorrow starts here. Omnipotent of opportunity. You know how to mix business. With business. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above. And still pay the midsize price. I could get used to this. [ male announcer ] yes, you could business pro. Yes, you could. Go national. Go like a pro. Yes, you could. We asked total strangers to watch it for us. Thank you so much. I appreciate it. Ill be right back. They didnt take a dime. How much in fees does your bank take to watch your money . If your bank takes more money than a stranger, you need an ally. Ally bank. Your money needs an ally. Cnbc is the talk of the internet tonight. A huge argument between two ult ra rich hedge fund guys, bill ackman and carl icahn. I simply said to him, look, carl, you are no friend of mine and that was it. And every time he said he goes on tv, im going to defend myself. I never said i want to be friends with you, bill. I wouldnt be friends with you. Okay, carl. You said youd like to be friends so we can invest together. You think i want to invest with you . Lets mo