. >>> well, jim paulson is not buying the bubble talk, saying there is still a lot of upside in the market, jim, nice to have you with us. so tell us why you're not expecting any bubble trouble after a nobel prize winning economist says that things are vulnerable. >> you know, susie, i think the primary thing that creates sort of a bubble economy and ultimately a recession is just simply too much confidence about the future. when all the players, consumers, businesses, policy officials, everybody gets really bullish about the future they start to engage in dumb behaviors, they stretch the balance sheets, hire too many people and buy that second summer home and that is the thing that ultimately has to be corrected. and i think that confidence is better today but we're still at confidence levels that are below average by a long-term historic norm, and i think the description i would give is we're more comfortable, maybe, but we're certainly not euphoric, the type of confidence that begets behaviors, that brings about a bubblelicbubblel type risk. >> we have low inflation and rising interest

let's ask jim paulson. jim, what do you think? do you think we'll get this pullback?f your timeline is 20 years, why do you even care if we pull back? >> i don't disagree that we'll get a pullback, ooze are we're get a 10% correction next year, but my feeling is that it comes from higher levels. i think we really the next several months, maybe up to 2,000 on the s&p and we correct back to where we are today. i look at kind of a flattish mark next year. i don't think it's terrible. i think after that, i still think we have a lot of up side left in the market, maybe we aren't even halfway through this economic recovery yesterday. multiples are just average for the most part. i think before it ends we'll have multiples hit 20 times or better. i think there's still a lot of room. i would encourage people if they're not where they want to be for the next four, five years, that use next year to slowly get there. maybe investment a little every month, don't try to call the exact rally and correction. i would start the year adding to cyclicals. if the market goes up and bond

joining us is jim paulson from wells capital management, david lutz, jim, i imagine you hoped a taperwednesday just for the sake of not having to deal with when will the feds taper questions anymore? >> yes, i do. i think it's been long overdue in my book and the data has been there for a while to at least at a minimum suggest that maybe we should ease less aggressively. that's the only decision that has to be made. not like we're going to tighten right away. ease less aggressively when the unemployment rates drop 3 percentage points, back growing, when the global economy is arguably the broadest and most synchronized it's been. i'm hoping they'll taper and if it's a controlled taper, methodical slow taper i think the markets will be fine with it and actually will probably go higher in the early part of next year. >> to that point, is it possible by taking away the uncertainty factor by giving us a taper this week, it would actually be a positive for the market? is that a possible scenario? >> absolutely, mandy. at the end of the day, the market does not like uncertainty. it can handl

also, jim paulson who is the chief investment strategist at wells capital management in minneapolis.ve been talking about how the market's been unbelievable. ever since the taper, it's closed higher every single day. you think this is based on fundamentals. >> i do. i think the driving force, becky is the economy. and we've had rather consistently better than expected reports, maybe more consistent than ever before in this recovery on a broad array from everything from consumer sales to capital spending to claim numbers. and then also broadly globally more so than ever before. we've got better growth reports coming from the u.s., japan, europe, the emerging world. i think it's that -- it's the sense of acceleration of global economy and also a broadening global economy that's driving stocks higher. >> bob, you agree with that? >> i emphasize the word broadening, becky, more sectors, more parts of the economy, more geographies doing a bit better and that's causing investors to smile and buy some stocks. >> what are you buying? what's making you smile? >> i still think the lean toward

. >>> coming up jim paulson gives his assessment of the fed move, what it means for the markets.nd of right. "squawk box" will be right back. >>> still to come, pulitzer prize winning author tom friedman from the economic recovery to global challenges facing business, we cover it all. >>> plus, former wells fargo chief dick kovacevich. how naughty was he? oh boy... [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex. [ttdd# 1-800-345-2550 can take you in many directions. searching for trade ideas that spark your curiosity tdd# 1-800-345-2550 you read this. watch that. tdd# 1-800-345-2550 you look for what's next. tdd# 1-800-345-2550 at schwab, we can help turn inspiration into action tdd# 1-800-345-2550 boost your trading iq with the help of tdd# 1-800-345-2550 our live online workshops tdd# 1-800-345-2550 like identifying market trends. tdd# 1-800-345-2550 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to schwab.com/trading to learn how. tdd# 1-800-345-2550 sharpen your instincts with market insight from schwab tdd#

joining us now is jim paulson. he wants it to.tment strategist at wells capital management. and dr. phil is portfolio manager and chief investment officer -- oh, no, it's neil hennessy. oh, i had some problems i was going to bring to you. it's not -- he has the most popular show on tv, dr. phil, did you know that? >> issues -- >> what did he say? >> good line. >> we're going to have to settle for neil. he's the chief investment officer at hennessy funds. you are jonesing for a taper so bad, you wish they'd end the whole thing this month, don't you? >> i always hope they'd end it a lot sooner already, joe. i really think if we have a controlled methodical linear taper that the fed suggests that the market's going to be fine with that. it's been well-communicated. i think they're ready for it in september showing all signs it's going to be fine. the problem is, i think it might start out a controlled taper, but i think it might turn into more of a panic taper. and the difference would be if money supply of velocity turns up, then yo