Investment guru Leon Cooperman warned that the bond market, not the seemingly endless bull stock market, is actually the bubble on Wall Street.

"My world is cash and stocks. I think bonds are the bubble, not stocks," Cooperman told CNBC's "Halftime Report."

Cooperman, the CEO of Omega Advisors, said the market can handle higher interest rates, however, as there are no signs of a recession looming.

"The economy, if anything, is too strong," Cooperman says. "The economy is on fire … The conditions that normally lead to a big decline just aren't present," he said.

“The economy is very strong recession is not on the horizon,” he said.

“The market can easily handle the rise as long as the slope of the rise is gradual,” he said.

“I think the rise in rates is more positive than negative. People are fixated” on rates when they shouldn't be.

He also noted investors should buy stocks they see as "fundamentally cheap" after a recent decline in equities.

Meanwhile, Cooperman isn’t a fan of the automatic selling systems that kick in and dump stocks when they hit a certain level.

“I think the whole structure of the market is broken,” he said. “This whole thing now with all these quantitative systems destroying the market, particularly that group that buys strength and sells weakness. They really exaggerate the trends up and down. The conditions call for a marked decline are not present,” he said.

"My central view is the market will be higher than it is today at year-end," he said. "We're in a zone of fair value and it's going to take a recession or a change in the Fed's posture" to get us out of that, CNBC.com quoted him as saying.

In a wide-ranging interview, Cooperman told CNBC: 

• The Fed has been "extraordinarily accommodative"
• The market is neither cheap nor expensive
• Higher rates might be good for stocks
• The S&P 500 is in a fairly valued range
• The market could be lower a year from now
• He is not a "raging bull" on stocks
• Says AMC Networks is an attractive stock

However, not everyone is as optimistic as Cooperman.

Former Republican congressman and two-time GOP presidential candidate Ron Paul warns that the U.S. is barreling towards a recession of titanic proportions.

“I think it’s coming, I’m not saying that in six months ‘I know it’s going to happen,’’ he told CNBC.

The Newsmax Insider belongs to the Libertarian Party, a faction that emphasizes constrained government spending. He sees federal spending and monetary policy as dual forces inflating a market bubble.

“The recession is set in place by the inflation and the distortion of interest rates which have been going on now for too long, historically larger than ever before,” the former Republican Congressman from Texas said.

The seemingly endless bull-run stock market will also come to a sudden halt.

“We have the biggest bubble in the history of mankind,” he said. The bubble is bigger than ever before. There’s no avoidance of a correction. The only thing that makes a difference is how to handle it,” he said.

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