i think that stock is going to have another leg up. just like home depot. like to say there is always a bull market somewhere, i promise to try to find it right here on "mad money." i'm jim claimramer and i will s you tomorrow! good evening, and welcome to "the kudlow report." i'm larry kudlow. tonight, the eyes, hearts and prayers of the nation are still focused on oklahoma. we have a live report coming right up. also this evening, new and dramatic developments to report on the irs scandal. we have news on what has been a triumphant day for apple ceo tim cook and jpmorgan chief jamie dimon. yet another tuesday rally on wall street and senator marco rubio will join us to talk about immigration and the irs. first up, this evening -- first up this evening, the nation is still very much focused on oklahoma right now.

nbc's erica gonzalez joins us now with the details. good evening, erica. >> reporter: good evening. we are live outside the moore medical center. and this is the grand scale of things. you have cars flipped over, slammed up against walls, wheels up and then the smaller picture, which are things like this. trees uprooted, makes it look like a lumberyard exploded all across the area. now we have recently learned that the destruction, the casualties, are all a direct result of a confirmed ef-5 tornado. upgraded since yesterday. there are neighborhoods that have been leveled, the casualties, 24 people confirmed dead, 9 of those children. going forward with comparisons to joplin, to the tornado of 1999 right here in oklahoma. there is one thing that remains certain, and that is, this is going to be very, very costly. >> it will be billions. billions of dollars. i believe. because of all the tremendous amount structures and certainly

the interruption of business in this area. and it's going to take a long time to get all this cleaned up. >> reporter: now, curfew comes into place in just a few hours, so people will -- are supposed to be hunkered down in their homes, in the most destroyed areas. and then after that, the real work continues. and that is recovery and cleanup. live in moore, oklahoma, eric gonzalez, nbc news. >> erica, for a moment, governor was talking about billions of dollars of aid, a little bit of a flap broke out today. senator tom coburn, whose budget hawk, as you probably know, suggested that if they go over the allotted fema money, there is $11 billion that he wouldn't take it, he wouldn't vote for it. unless -- unless it was offset elsewhere in the budget. a lot of people jumped on that, erica. can you tell us anything? is there a discussion? >> reporter: you know, the biggest thing here is that

people need relief, and they need help. when you walk into areas that have literally been flattened, when you go to elementary schools where playgrounds have fences that are thrown across swing sets, you get a real perspective for things and people here are not the least bit concerned with budgets. they want help and hands-on right here on the ground. >> it seems like, erica, this is the totally wrong moment to even have that discussion with all those people in need. >> exactly. i couldn't have said it better myself. >> all right. what's the next step for you? what's your next step? >> reporter: you know, going forward, we will go back into the neighborhoods after curfew sets in to place. only military and police will be allowed in those areas. we're going to try and get another grip of things and see what people are doing, where they are sheltering in place. because they have no place to go. so going forward, it is, you know, where will these people spend the next couple nice, next

couple days, how soon will insurance adjusters be here, how soon will fema be on the ground and how soon can they rebuild, because this area, unfortunately, is all too familiar for folks, again, dealing with that 1999 tornado. but when we asked them, how does this compare, they say this is far worse. this is far greater than what happened in '99 and where we are, we are reliving it all over again. >> how many people, erica, are coming in from the outside to help? first responders, they're still going through the rubble, still looking for bodies and so forth. it's a dreadful exercise but necessary. however, in terms of rebuilding moore, for example, rebuilding all the homes, rebuilding the schools and what not, are people coming in from the outside, from oklahoma, from texas, from missouri? >> reporter: they are. and i think those are the tighter-knit communities that really do come together. you've got the national guard that's been here in place, all of the police departments imaginable. i mean, i think the thing that has everybody just really in awe

is the fact that somebody has said we need help, and it has not taken anybody but a day, but a few minutes, but a few hours to get here and be on the ground and be with these people, whether it's to give them a hot meal, to take them to a hotel, or to help them get an insurance adjuster to their area. >> all right. we'll leave it there. thank you very much. nbc's erica gonzalez, thanks for helping us. now we're going to switch gears. the senate judiciary committee is expected to pass a sprawling immigration overhaul bill by the end of the week. that sets the stage for a full senate debate in early june. joining me now exclusively, welcome back florida republican senator marco rubio. senator, welcome, as always. before we get to the immigration issue, i just want to ask you, i want to go a little bit far afield. i want to ask you if you believe a special counsel will be necessary to get to the bottom of the irs rat's nest. i know you've talked a lot about the irs. and i want to ask you secondly,

sir, do you think the white house had any involvement in targeting the tea party, and other conservative groups? >> so three separate parts to that. the first is we need to get to the bottom of what happened. and i think there's bipartisan support for that. the special counsel is something we should consider and i've been thinking about that myself. there are down sides to special counsel, as well. and that is borne out in history. they have been misused in the past, as recently as indeed bush administration, against the bush administration. that being said, it may be necessary here, particularly if we don't have any confidence in the justice department's ability to get to the bottom of what happened here. as far as your question about the white house's involvement, that's what we want to know. that's exactly the question we want an answer to. i think what's troubling -- i'm not prepared to say the white house is directly involved but i think what's troubling, every single day, the time line continues to move in terms of who knew what at the white house and every at a gets more and more troubling in terms of who knew what and when. that's exactly the kind of questions we need to be answering. an irs official tomorrow, i understand is going to plead the fifth. here's the bottom line.

i would say this is really not a republican or democratic issue. this is a fundamental issue about whether the government of the united states should be targeting citizens because of their political affiliations, using perhaps its scariest agency of all, the irs, to do it. and by the way, a reminder the same agency that went after americans because of their political views is going to be on the front lines of implementing and enforcing obamacare as early as next year. >> which is an incredible fact. all right. appreciate your views. let me go to the immigration question. as you know, today, a petition or release list of 150 prominent conservatives and groups came out against the gang of eight of which you are a prominent member. the immigration reform bill. what do you think? i know you have wooed conservatives, you have done a good job in my humble opinion. i happened to be with you on this issue but many of my conservative brothers and sisters are not. now you've got a list of 150 against you. >> first of all, i'm respectful

of their views and share many of their views and concerns can and we work together on any other issue before the united states. i think within the conservative movement in this country, there is a debate happening about what the immigration policy of the united states should be. and the best way to address it. and if you saw in that letter that was released today, they acknowledge there are many portions of it they are in favor. and primarily the complaint seems to be about the size and scope of the bill. and the areas that it covers and they think it does too much in one single piece of legislation. it's a concern i've shared in the past, and quite frankly, continue to share. on the other hand, i think now is the time to act on this issue, and get it solved. because we can't leave it the way it is. the status quo is just as bad. and so we've got to figure that out. and so certainly, i think as we move forward now on to the floor of the senate, in order for this thing to pass, one thing is to have a bill. another thing is to have a law, a law that can pass the house and senate. there will have to be changes made to this bill, and particularly because people are saying the following to us. here's what people are saying. a lot of conservatives. we are prepared to deal with the 11 million here now, because we

know they're never going to go back, the vast majority. we're prepared to deal with that but only if we take measures that ensure that we don't have a future wave of illegal immigration. i think that's a very reasonable request, a very reasonable position and one i think we need to be able to accomplish if we want this to become law. >> a lot of people are talking about and one of the key bullets in this petition to you is the idea that we're going to blow up, that the immigrants are going to blow up the entitlement system. and, in fact, the senate judiciary committee today voted to allow illegals who then somehow get legal status to start collecting welfare benefits. i think right away. now, that's a tough one. and that's something that conservatives don't want to swallow. >> well, i think, actually, the provision you're talking about is the earned income tax credit. not the welfare provision, but the earned income tax credit, what they call tax welfare. that's a big problem. i had a bill last year that addressed that problem. and i to think that needs to be addressed in this bill. i don't think we should allow people who have illegally violated the laws on immigration

to have access to this program. the argument is they should be able to use the full tax code. i think the merit is, yeah, okay, let's examine the entire tax code and get rid of that provision, especially the way it's being abused. but i would say as far as this immigration issue is concerned, the issue you're talking about is not welfare. it's tax welfare through the earned income tax credit and i do think that needs to be addressed. i think the way it is in the bill now is one of the impediments to it passing. >> what about the flip side of this issue. some of us, including myself, old reagan supply siders, i think immigration is good for economic growth. i think immigration is about growth and opportunity. i can it's part of the soul of america. i haven't heard that kind of language from many of my pals. you know, if more people enter the labor force, senator, if more people enter the labor force, which has gone stag nanlt, we'll grow more. and i don't see how america, which hasn't grown in a long time, should turn that opportunity down. >> well, that's exactly right.

i think one of the points to bear reminding, there was a letter today by groups and individuals that were concerned about the immigration bill and opposed it, but just last week, a group of equally impressive conservative groups. & individuals supportive of immigration reform, primarily for the reasons you've just outlined and that is the economic benefits of it. just today an amendment was adopted in the judiciary committee that improves, for example, visas of the high-tech industry, which we know is critical for economic growth. you're absolutely right. virtually every group that's looked at immigration reform, except for one, has said that immigration reform would be a net positive for the economy of the united states and that's what we expect the congressional budget office to say. ultimately, iffit not good for our economy, we shouldn't do it. and i do believe that immigration, legal immigration, done in an orderly fashion, and a controlled fashion, is a positive for the united states of america's economy. >> actually, the fiscal establishment, which is not dynamic, the cbo scored the 2006 immigration bill didn't pass. they said it would create more revenues than spending because

of the labor force, because of the economic growth benefits. and doug hall zeke, former director and former acting director, both agree. more people in the labor force, more growth. that includes the brainiacs you talked about. it also includes the lower-wage people. but it also means social mobility. you know, poor people go to school in this country, they can can rise up the ladder of opportunity. >> absolutely right. i mean, that's one of the reasons why i support immigration reform. and i support modernizing our legal immigration system. look, it helps the housing market. you have people that are here in this country illegally now that are not paying taxes that will be paying income tax and revenue to the government. but also be given the opportunity to improve themselves, to go up the economic ladder. to become net contributors to our mischaracterize life in this country as consumers, as buyers. but also in our business life and in our housing market and all these other elements. so, look, again, legal immigration done right for this country with the proper enforcement mechanisms should be a net positive for the united states. >> this is a soluble problem,

senator rubio. this is a soluble problem, and thank you for your efforts. we appreciate you coming back on "the kudlow report." all best. >> thank you. now, folks, this was supposed to be the day senate democrats and even some republicans, made apple ceo tim cook squirm. but let's just say it did not turn out that way. we have pretty hot debate coming up on who won the battle of the politicians versus the tech superstar. and, of course, neither senator on that committee was looking to embarrass apple. listen to this highlight from senator rand paul. >> frankly, i'm offended by the tone and tenor of this hearing. i'm offended by a $4 trillion government, bullying, berating and badgering one of america's greatest success stories. if anyone should be on trial here, it should be congress. i frankly think the committee should apologize to apple. i think that the congress should be on trial here for creating a bizarre and byzantine tax code.

>> senator paul, you're, of course, free to apologize if you wish. >> you can apologize to anyone you want. this subcommittee is not going to apologize to apple. we did not drag them in front of this subcommittee.

apple has real operations in real places with apple employees selling real products to real customers. we pay all the taxes we owe every single dollar. we don't stash money on some caribbean island. that was apple ceo tim cook doing a pretty good job testifying in front of the senate today, and here's how senator mccain responded. >> it's completely out outrageo that apple has not only dodged full payment of its taxes but managed to evade paying taxes around the world through its con very lute and had pernicious strategies. >> oh, my goodness, i love him. he's an old friend, but john mccain has the story completely wrong. how about this? shouldn't congress spend some time reforming, flattening and simplifying the tax code instead of beating up on a great american company? all right, i'm joined by frank

clementi, campaign manager for americans for tax fairness, and cnbc chief international correspondent, michelle caruso cabre cabrera. michelle, $14 billion behind exxon and paid all their taxes overseas. i don't understand this line of reasoning. i just don't get it. >> i thought senator john mccain was a particular embarrassment, larry. i thought he was trying to out-levin carl levin. i expect carl levin to think that $6 billion in taxes isn't enough, that creating hundreds of thousands of jobs isn't enough. that being a great beacon of the american economy isn't enough. but john mccain, with republicans like him, who needs democrats? i mean, this man ran for president on the republican ticket. he deserves the hash tag whyyoulost. this is unbelievable. >> frank clementi, you may not agree -- i don't know what your position is. but apple has violented no laws,

and what cook pointed out, and he's used to running international operations for apple, so he know what he speaks in ireland and elsewhere, they paid every nickle off of foreign income they earned. every nickle. they didn't donnell anything, frank. that's why i don't understand this whole hearing. >> well, larry, they're just not paying much in taxes. the tax rate in ireland is 2%. the tax rate in america is 35%. as the investigation by this committee showed, if those profits, $100 billion in profits are sitting off shore in ireland, if that money was brought back to the united states, they would pay about $40 billion in taxes. >> why should they? in why should they when they don't have to, why should they when they're legally saying to the united states, to the congress, to john mccain and anybody else, you guys are so dumb, they're saying. why should we double tax these profits? why should we triple tax these profits?

this is shareholder money. and they could invest the profits, frank. that's the part i don't get. you want to bleed them some more. >> no, the significance of this hearing is, it's actually showing what the problem is. i agree. apple is obeying the law. the problem is, the laws are useless in this case. it allows, it permits them to make these profits offshore and not have to bring them back, not to have them be taxed until they're brought back. so apple can choose to keep them off shore forever. >> michelle, how stupid is that? we could use the money here at home if it were done constructively. why are we double and triple taxing overseas money? >> no, you're absolutely right. and what mr. clementi highlighted, the difference in the tax code is a phenomenon is something wonderful, a wonderful economic phenomenon that has happened the last 30 years all over the world. it's called tax competition. in other words, nations compete on their tax codes. and those that have the lowest taxes, that have the best environment for business, they get more businesses. emerging markets have learned

that all over the world and they're starting to use those exact economic rules that for a while made us very successful. and as tim cook pointed out, if we don't get smart, we will lose our competitiveness. people on the other side of this issue love to talk about tax harmonization, as if it's happy, like a bank holiday, for example. ann rand would be rolling over in they are grave. be careful of people who want tax harmonization. that means they want everyone to pay higher taxes. >> frank clementi, instead of ireland raising their taxes, the united states should lower its taxes. >> larry -- >> that's what tim cook is trying to organize, and we should simplify them, and reform them and that's what these goofy senators don't get. >> you know, you talk about reducing the deficit all of the time. how are we going to reduce the deficit if we don't raise revenue. watching corporations get a tax-free pass on helping to reduce the deficit. american businesses, main street businesses, small businesses,

individuals, everybody is contributing to reduce the deficit, because they're paying their fair share of taxes. huge multinational companies like apple and other big we understand ones, they're not paying their fair share of taxes. legally not paying their fair share of taxes because that's the way the system is designed now. that's the problem. we've got to change the system. i don't think you want to have a race to the bottom where corporations -- >> let me just read this. >> 2%, which is what it is in ireland. >> exxonmobil paid approximate $31 billion. chevron paid $20 billion. apple paid $14 billion. the next closest, michelle, is wells fargo at $9 billion. hell, even walmart only paid $8 billion. michelle, can we grow our way? if you lower tax rates, you're going to employ and grow, or what? >> well, i can't stand this myth of away rat taxes. corporate taxes are a complete and total farce. who pays corporate taxes? you and me and every other consumer. they're always passed on to the ultimate customer. if you lowered corporate taxes,

more people would be hired. there would be more jobs. there would be more people paying income taxes. it would be a far more efficient system. corporate taxes are false, all they do is add piles and piles of costs to the businesses so they can move their money around. >> all right. and the nobel prize tonight goes to michelle caruso-cabrera. sorry, frank clementi, we appreciate you coming on. >> okay, larry, thank you. >> next time. now, speaking of taxes are more breaking news on the irs scandal. one of the key figures will take the fifth at tomorrow's house oversight committee hearing. it could be because she lied so much in recent years. anyway, that grim story coming up in just a few minutes. and in the meantime, please don't forget free market capitalism is the best path to prosperity. i will tell you, folks. simple, low corporate tax reform would be such a growth booster for this country. i'm kudlow. we'll be right back. you hurt my feelings, todd.

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9 children in that elementary school that was destroyed. switching gears now. saks could be for sale. the at the present time store chain has hired goldman sachs to explore strategic alternatives, including a sale of the company. and the stock was up 11% in the regular session because of strong earnings. it jumped another -- quite a bit after hours there, because of that news. espn meantime is laying off 400 employees. it's a little more than 5% of its global work force. espn has been a cash cow for disney, which owns 80% of the cable and entertainment franchise. espn says it's making the cuts to smartly manage costs. never thought it would happen. >> tough stuff, espn, my goodness. many thanks, bertha coombs, we appreciate it. now, a woman who could hold a key to a lot of answers in this irs scandal has just decided she won't say anything to congress. she is going to take the fifth

at tomorrow's scheduled house committee hearing. we have the latest on that and the possible irs government union president's involvement in this story. coming up next on kudlow. vo: traveling you definitely end up meeting a lot more people but a friend under water is something completely different. i met a turtle friend today so, you don't get that very often. it seemed like it was more than happy to have us in his home. so beautiful. avo: more travel. more options. more personal. whatever you're looking for expedia has more ways to help you find yours.

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in this half hour, tim cook wasn't the only triumphant ceo today. jamie dimon won a big battle to keep his titles as both chairman and ceo of jpmorgan chase. but was it a completely victory? we'll have to look into that. another victorious day for the bulls on wall street, yet another tuesday rally. we're going to talk to one trader who says this rally reminds her of the 1980s. really. she'll explain why. anyway, new developments tonight in the congressional investigation of the irs targeting scandal. in his first public comment says the scandal broke, doug schulman told the senate finance committee today, while it happened on his watch, he wasn't responsible. john harwood joins us now with the details. good evening, john. >> larry, we didn't get a lot of new information at the senate finance committee hearing from doug schulman, the irs commissioner who left office last december. or from steven miller, the acting irs commissioner who

president obama fired last week. steve miller did acknowledge that he was behind the flawed rollout plan involving a planted question for an irs official to come out with the news of the misconduct. and he took some heavy fire from senator orrin hatch for failing to correct the record after the irs had told congress targeting did not happen. >> you didn't mention any of this in your responses to me, to the senate or any other congressional body. mr. miller, that's a lie by omission. there's no question about that in my mind. it's a lie by omission. >> over at the white house, press secretary jay carney got a little bit impatient when he was peppered with inquiries about the exact timing of when the white house was informed of the end of the ig report auditing this irs activity, comparing it to the flap over the president's birth certificate. >> we could go down the list of questions. we could say what about the president's birth certificate, was that legitimate. >> i'm not asking about that.

i'm asking about -- that's not what i'm asking about. >> okay. >> but there won't be any laughs at the white house tomorrow at a house oversight hearing, because lois learner is expected to take the fifth amendment to protect herself from incrimination. that lends an air of potential criminal activity to something that the inspector general found wasn't even partisan in its motivation, much less criminal. larry. >> all right. many thanks to john harwood. i'm glad someone in team obama found an amendment they really liked. the fifth. anyway, i want to go to a different aspect of this irs mess. could a bombshell report from the american spectator prove the smoking gun in the irs scandal? the story alleges president obama met with anti tea party irs union chief colleen kelly a day before they began targeting conservative groups, a claim which the union denies. in fact, in a statement sent to my producers, national treasury employees' union admits that while its president was at the

white house in march 2010, she had, quote, no direct contact with the president or the first lady. here now is democratic strategist and host of sirius xm's left jab radio, david good friend, and american spectator, contributing editor, jeff lord, former aide to jack can kemp. there seems to be ack ambiguity. this is the basic left wing government union, irs union. and you wrote that she was right there in the white house as this irs -- as the attacks that changed and the wording changed. was she there? or was she not there? >> she was definitely there. now she is saying that she was there for this long meeting that involved rules in the federal workplace or whatever. but i just want to point out one thing that she has said to me, and not to you, and not in this general statement. to the general statement that you have there, she attached one

last line that says, quote, unquote, president kelly has never discussed the tea party with the president. now, i have seen this statement around, it's everywhere, except that one last sentence. and the reason that sentence was included in the version i got is because i asked this morning eight questions of president kelly as she likes to call herself as to what her associations were in the white house, whether she is willing to release e-mails and phone records. who she knows, et cetera. and, of course, there was no answer. so we've seen this before. this is what stonewalling is all about. this goes back to the nixon era. and you've got to be very careful with these folks, because they know how to parse the language. >> let me go to dave goodfriend. david, the trouble i have, let me ask the question first. the trouble i have with this, march 31st, all right, colleen kelly he did or did not meet with president obama about the tea party, okay? but it is interesting, in the

very next week, in the very next week, the specs, the policies regarding targeting the tea party, and other conservative groups came into play. within one week. now that seems awful coincidental to me, david goodfriend. >> i'll tell you, larry, and i will break this to mr. lordes, i was in the obama white house in early 2010 and i expect to see tomorrow an article that david goodfriend must be responsible for what the irs did, because after all he did meet with white house staff just before this was announced. i think it's a little too cute by half. and i regard -- if i were a republican right now, i would guard against the image that the american people basically concluded in the clinton administration of a sort of witch hunt mentality. this should be bipartisan. look, chairman max baucus in the senate, a democrat. you've got republicans in the house. both upset and both looking at this. if you want to maintain a real,

credible investigation, and punish the people who should be punished, because this is outrageous, try to take the witch hunt out and focus on the facts. >> we are focusing on the facts. this came up and worth pursuing. we've-looking for a quarterback, whether lois learner or her boss, sarah hall ingram, moving over obamacare. i'm looking, david for a quarterback. and the reason i'm interested in mr. lorde is colleen kelly and pro obama union, made statements against the tea party, against conservative members of congress. you know, i think that there is some plausibility to this. because i wasn't aware, and this is maybe my down fall, that the irs had become this left wing union. that's the thing. and i'll go back to jeff lorde on this. >> you knew about ntiu. you knew about that. >> i know, but i didn't know -- i always looked at the irs as kind of a bunch of accountants.

now what i'm learning is, they have this left wing union bias, jeff lorde. maybe the facts aren't in yet, i agree. but there is enough to ask the questions you're asking, isn't there? >> are you asking me? i'm sorry, go ahead. >> i'll tell you, larry. the problem here is that the irs union is basically both player and referee here. they are going out in their political world and collecting money from irs employees, voluntarily, they say, but, of course, you know, what does the word voluntary mean. and they're giving it to anti tea party candidates and then they turn around and they have in their professional lives and the irs, they are going after the tea party, they're withholding applications, they're slowing down the process. all of this for plain old fashioned partisan politics. and this is the problem. i mean, they're playing on both ends of this field here. and that is a very, very serious situation and an institution that is basically -- has police powers over every american in the country. >> yeah, dave, i will give you

the last word on this. here's the thing. long stories in the "new york times" "washington post" and elsewhere. the people in cincinnati who were blamed for this said, wait a minute, wait a minute. this came from the higher ups. all these orders to go after the tea party came from the highier ups. so david, we're looking for the higher ups. and the question is, whether this union, whether this colleen kelly, qualifies as a higher-up. >> i think you should look for the higher ups. we all should be interested in who made the decision, and when and why. because it's an affront to the american people to think that law enforcement would be politically motivated. that's just unamerican. and let's not forget, the united states has the highest tax compliance rate of any industrialized country, and it's because we believe in the rule of law here. so i agree, we should be finding that person. i think this is -- go and look for the person in government. this -- talk about unions, seems kind of a sideshow. who in government made this decision. that's what i want to know. >> all right.

well, that's why i frankly want a special counsel to go after that with subpoena power and maybe we'll find out. we'll see. this union story is going to go on. a lot of stories are going to go on. jeff lorde, thank you. david goodfriend. we appreciate it. now, is this rally as good as the bull run of the 1908s when the great ronald reagan was in the white house. our next guest says it's very similar. we'll get into that next up on "kudlow." changing the world is exhausting business. with the innovating and the transforming and the revolutionizing. it's enough to make you forget that you're flying five hundred miles an hour on a chair that just became a bed. you see, we're doing some changing of our own. ah, we can talk about it later. we're putting the wonder back into air travel, one innovation at a time. the new american is arriving. ♪behold!

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another all-time closing high as the dow finishes higher for the 19th tuesday in a row. remember the 1980s. my next guest points out the eerie similarities between today's market rally and the decade that was. here now is abigail do little, equity strategist at the seaport group and chief u.s. equity strategist with deutsche bank and author of the new research note, "remember the '80s." david, i loved the '80s, i was in the reagan administration. i've got say, the economy, from the end of '82 through the top of 1990 was a 4% growth economy. this is a 2% growth economy. >> that's right. i wasn't in the administration, but i was building my

credentials as a reagan youth at the time. >> there you go. >> happy to admit that. and the mid ae'80s, '85, '86, interesting, weak for e. the reason why, stronger dollar, weaker commodity prices, particularly oil. and '85, '86, s&p earnings declined slightly each year. and lately we've got very anemic earnings growth, sluggish manufacturing, sluggish business, spending export activity. and what i'm watching for the summer is how a stronger dollar, which i expect, to continue, interacts with commodity prices. >> just a quick follow-up. following gold and rising dollar, i regard as very bullish for stocks. >> that's right. >> i would expect all price to say fall in line. is there any chance of that? >> well, look, whether you look at the dollar and you think it's going to get stronger, there is no reason to own anything like gold when you believe in the dollar. and i think what's happening is that while a stronger dollar weighs on earnings growth, a stronger dollar is one of the reasons why investors are accepting lower interest rates, just like they did in the mid

'80s. they accepted that inflation was beaten, low interest rates were here to stay. and that pe rose from at the pressed levels, exactly what happened over the past year. >> all right. abigail, you don't believe a word of it. which is fine. and from your notes tonight, you're looking for a 20% correction. >> i am looking for a 20% correction in 2013 and reflects some of the macro, negative macro factors. i can that we're still looking at an anemic employment situation. gdp growth. the economy really is not in a recovery, in my view. more stability. where the recovery is in confidence. confidence is a very fragile thing. still concerns over europe, china and fiscal concerns here and the shenanigans in washington. you put that together with the fact we have declining estimates on the s&p. not to mention flat revenue growth. and i think that it puts together when you -- when you pair that with the pair bollic trend in the s&p since the november trough, i think that it really creates the perfect storm

for a decline back down. any sort of pullback at this point would be somewhat healthy. 20%, i know, would feel very extreme to the market. >> just thinking about it. i want to ask you something, both of you, goldman sachs today came out with new estimates, big numbers. goldman sachs lifted this year's s&p target to 17.50. get this. for next year, 2014, goldman says it's going up another 9% to 1900. this is the s&p 500. and in 2015, goldman says it's going to go up another 10% to 2100. now, those are humongous numbers. quick quickly, i need your take on that. what's the probability of that, david? >> this has got good chances. >> really? >> it does. i'm just trying to take this step by step. there is a lot of game left to be played this year. our price target on the s&p for yea year-end is mid 1600s, about 15 times, 110 in earnings. anything in the mid 1600s is likely for the end of the year.

>> 1669 today. you're saying the rally is pretty much over. >> i'm saying -- well, i think we're going to end the year somewhere in this balanlpark bu in 12 months time, could work our way up to 15 and 16 p/e next year. 1750 is reasonable, maybe not year end for this year but 12 months and by the end of 2014. and yeah, i think something 2000 by the end of 2015 is reasonable by secular view. >> it's really almost a 25% increase, goldman is predicting, for the next two-and-a-half years, abigail. what are the odds? suppose you got this correction with the market bounceback? what are the odds that goldman will be right? they get it right once in a while. >> they do get it right once in a while. i think the odds are unlikely. we're in a multiyear tapping process, halfway through, very similar to what happened in the three years before 2000. around 2007, 2008. i think that that's happening right now and the markets could get more frothy, maybe they achieve their 1750 target this

year. but i think that we're likely to see a big correction down. and returning to -- >> they're betting on low interest rates. i didn't read the whole piece but betting on low interest rates. >> my take on interest rates is different. i think we're going sub 1% on the ten-year yield. i think that similar to the decline from 2007 from about 5% to current levels and even lower last year, i think it's more on a flight to safety as opposed to reflection of fed policy. of course, it's both, but i would say probably 25% flight to safety. >> what's ben bernanke going to say tomorrow? essentially, abigail, you're predicting a recession. 1% long term bond is a recession and the fed would just have to pump like crazy, whether they're efficient or not, we don't know. what will bernanke say tomorrow? the street is always worried he'll buy fewer bonds. >> i doubt anything new. he'll stay the course for the summer, watch the data. which is my plan for the summer too. let's just watch the data, watch dollar, watch commodity prices. i think the u.s. is not in jeopardy of a soft patch. but the global economy,

particularly manufacturing activity, needs to be watched. >> is our economy getting better or worse, real fast? better or worse? >> i think it's going to get better, this is a long-lasting expansionary cycle of moderate growth. >> all right. 25% increase in the s&p 500. i love that. david bianco, abigail dolittle does not agree. catch more of abigail's analysis on today's edition of cnbc's talking numbers available at the web address you see on the screen. i wish you luck. but i hope you're wrong. god, i hate to say that. the other big winner tonight, jamie dimon. he's going to keep both his ceo and chairman titles. how did he beat back the critics and is his victory a total triumph? next up on kudlow. it's as simple as this.

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major victory for jpmorgan's jamie dimon. he comfortably beat a shareholder vote to split ace chairman and ceo roles. only 32% of shareholders voted for a split. so he will continue maintaining both positions. since march, 2009, jpmorgan stock prices skyrocketed over 230%, pretty good number. here now we go to cnbc contributor, jeff sonnenfield, senior associate dean for executive program's yale school of management. welcome back, jeff. was this in your judgment an unequivocal victory for jamie dimon? >> yeah. this is not to say that somebody isn't going to argue they have some regulatory problems, and a host of different settings.

but in terms of today's vote, this was a huge triumph, a huge triumph for the jpmorgan investors, 68% of them saying we want to keep it the way things are, and it's a myth about the separation of roles where you really have a small minority, small community of -- we might say governis tas, often derivative shareholder lawyers that make some money by shaking down firms, and as well as some idea logs that are anti management. there is no research that it makes companies more accountable, not preventative, not predictive. the u.k. experience has been a sddisaste disaster. larry, when we met each other 13 years ago, almost every one of the companies had separate chairman. >> i agree. i never understood that whole theory. but i do want to ask you this. some of these share hold other owe coming out of this meeting

also changes in the risk management committee. on the board of directors, okay? i mean, lee raymond, former head of exxon, says they're going to be replacements on the risk committee. all allen fuder, david cote and james brown. is this a signal to jamie dimon, this woman fuder got only 53%, not very much. in fact, all under 60%. this sounds like a warning to jamie dimon. >> well, you know, i think they wanted to make some changes on the risk management committee, already. in fact, going into this, since the london wale crisis, added a ceo of a big four account canning firm and need today beef this up. this isn't to say the risk management committee doesn't have hard working people meeting constantly on this. you look at some of the language used in the trades s and no regulator, no financial analyst, nobody in management, let alone any financier could figure out

what they were talking about. so i don't know that more expertise -- i think one of the things the governor govern iistas like to make a ritual out of, you look at freddie mac, they're all financially literate in the mortgage backed securities. >> i understand. i understand. i'm just saying that i think the shareholders really -- >> mf global, you'll finance sears. >> i think they send a signal on the risk committee. let me ask you something else. >> it's a good thing to change it a little bit. >> the power -- let me go to the power of the public unions. the power of the public sector unions, as pension fund owners. they seem to be behind, for example, splitting up jamie dimon's role as chairman, and ce he . also wanted changes in the risk management. how big a force will these public sector union pension people be? and where are they going?

>> you know, they have a political agenda. if they were interested in really -- really interested in good governors, they would take a look at how somebody they never seem to challenge, a woman who is the president of a university, on the board of medtronic, ibm, federal percent is, m.i.t., the brookings institute. i don't know some dozen enterprises. as well as being a ceo of a major research university. why don't they ask questions about individual directors where there perhaps are some issues to be concerned about. instead, they go after these big targets. a big lesson for many ceos, i'm sorry to say from this, is jamie dimon, who is a real corporate states person, engaging in public discourse. assignments, sometimes different parties would like what he would have to say. engaged. others say this is what happens to you. and i think that's really dangerous. he was an easy target. i really think that's a shame. >> so you're saying just basically -- just a couple seconds. a lot of these public unions, a lot of these government unions snuff out good discourse, good

discussion. >> they're politicizing something that really should be left in the corporate realm. >> and they're taking the wrong targets. there are bad guys out there, but confusing the good guys with the bad guys. >> thank you. jeff sonnenfeld, we appreciate it. thanks for watching, everybody. i'm larry kudlow. congratulations, mr. jamie dimon. congratulations. you won a big one today. we'll be back tomorrow night. hey, look!k! a a shooting s st! mamake a wish!h! i wish w we could lie e here forevever. i wish thihis test dririve was , so we e could headad back to thehe dealershihip. [ [ male annououncer ] it's p practicallyly yours. testst dri! bubut we stillll need your s signature.. vovolkswagen s sign then d drie is back.k. and d it's neverer been easisir to get a j jetta. that's t the power of german n engineerining. get $0 dowown, $0 due at t signing, $ $0 dep, anand $0 firstst month's p pt on any n new volkswawagen. visit vwdedealer.com t today.

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