let's get insight from john rutledge, a cnbc contributor. he's a former economic adviser to former presidents reaganen and george w. bush. good to see you. >> good morning, how are you? >> so you do have this unique perspective of advising presidents and the white house on geopolitical international issues, and also being an investment manager. do you think that the equity markets are underestimating the potential threats and contagion of these geopolitical riffs in russia and the middle east? >> i'm not sure they're underestimating them but i think they're being overcome by bigger forces in the market, which is the central banks. but it's very clear that the geopolitical situation is a mess. it's hard to say anything constructive about the israeli/gaza situation. russia/ukraine, is a mess. the china sea, the growing conflict between china/japan, china/philippines and china/vietnam. this is a very difficult period we're going into. and it is surprising that prices have been going up. today, notwithstanding. and volatility has been so low in

they want to be shown to be attentive, and i think it's appropriate. >> john rutledge, do you agree? and by the way, is she right? >> i think these open-mouth operations are a terrible mistake. the point is to be nice about it. what the hell does janet yellen know about stock prices, small cap, large cap or otherwise? the irony is, the federal reserve board's full of professors who made their careers writing about rational expectatio expectations. in the beginning, that said hands off the announcements. now they've taken to trying to use information to manipulate prices to their own liking. i don't like it. i think it's a big mistake. >> kelly, what do you think? >> i agree. i like the fact that she is talking about this. i think that the market has a tendency to be overexuberant, and we could potentially have asset bubbles. i think with the second half of the year, we're going to see some more volatility, and i think she's being very optimistically cautious and trying to warn us not to jump in too fast. i think we should be taking some profits off the table and repositioning into ca

all with john rutledge. >>> this week u.s.ed's plan for exiting qe, china's export numbers, the port kwees bank drama. joining us to talk about some of the big issues is john rutledge who joins us right now, chief investment strategist at the private investment firm in california. he's also the honorary professor of the chinese academy of sciences and a cnbc contributor. >> hi, michelle. >> want to focus exclusively on china because one of the reasons the market sold off yesterday is the fact that their exports numbers weren't as strong as expected so maybe we weren't importing as much, a reflection on a weak u.s. economy. what's your sense of what's happening in china right now economically? >> growth is actually settled down and firmed a bit. in recent months. and one of the best ways of seeing that is looking at copper prices, or stock price like freeport that, you know, people were very worried about growth for a time but it stabilized some. they're also shifting from exports over to domestic consumption as a growth driver