Transcripts For CNBC Squawk On The Street 20121211

Mission critical rise above d. C. Welcome back to our continuing coverage, Mission Critical rise above d. C. Weve been here all morning long. While weve been here on capitol hill, weve been talking to lawmakers about rising above gridlock and reaching a real deal on the fiscal cliff. In the last hour we sat down with Grover Norquist saying no one should strike a bad deal, and that there is no better reason to raise taxes now than there was in the past. He also added he thinks House Speaker boehner has been a good leader during the fiscal cliff negotiations. And then we were joined by bob corker and bob conrad. Corker said we need to focus more on entitlements now, and he will not sign any package that doesnt deal with entitlements at this point. Conrad said more, not less, should be included in some sort of a big deal. By big deal, he means over 4 trillion. We are now just 20 days away from the fiscal cliff deadline. We continue to bring both sides of the aisle to sit down together. Congressman sander levin is a Ranking Member of the house ways and means committee. And a republican from new jersey, the vice chairman of the House Budget Committee and a member of the House Financial Services committee. Gentlemen, thank you both for being here. Thank you. We just sat down with senators conrad and corker. They seem to agree on a lot of areas. One of those areas is they think we need to negotiate up from this point, not down from this point and cut some sort of a deal that is 4 trillion or greater when you add up the tax increases. Congressman levin, would you agree with that, going up not down . No, i think we should go up. The question is, when. My view is, first things first. We have to pass the middle class tax cut. Thats half of the potential impact of the cliff. Half. Then what we need to do is reach a decision and not renew the upper income tax cuts. Thats 1 trillion over ten years. We have to make sure we pass unemployment insurance. I brought a chart here, and it shows the impact middle class tax cut has the most in terms of impact on the financial cliff. Ui is next, unemployment insurance. Because when people receive it, they spend it. And 2 million people, if we dont act january 1, their federal benefits, all of a sudden, its gone. Also, the physician reimbursement has to be handled. And also, the dont forget dont forget a t. If we postpone it and go into next year, its chaos. First steps first. I think we need to do the entitlement issue, but we cant do it all at once. If we try to do it all at once, im afraid we go over the cliff. And we should not do that. Right. Congressman garrett, i know youre committed to an issue that says that spending is a problem, not revenues. There you go. Our state has been hit by a storm that may be worse than hurricane andrew. It requires spending. Do you veto that spending on principle . At this point in time, we just got the president s proposal as to the 60 some odd billion dollars. The governor said theyre looking for more. Thats just coming over to the house and senate to take a look at those numbers. I think in those numbers, i think its appropriate for congress to look at them, to also look for what i was asking for, that we never got with katrina, and that was some degree of accountability. You remember all the stories about the fema trailers, about the credit, debit cards, whatever they were at that time, given out to people across the country, even if they were not in those areas. I think the American Public wants to make sure there is a that level of accountability going into this sort of thing. But you raise a good point, were at 239 billion in deficit, i think the first couple months of this year and theyre talking about adding 60 billion on top of that. Im trying to figure out what kind of spending is good and what kind of spending is bad. Were all spending. We know there are a lot of people in congress who are committed to cutting spending. But when you ask them about it, as we have this morning, theyve got different they pledge their constituency to not increase taxes. They want to cut spending. But if new jersey doesnt get that spend, even if its a little bit wasteful for heavens sakes, were really going to be hurt. One persons stimulus is another persons wasteful spending. The president talked time and time again, aside from the issue of the katrina spending, or sandy spending, the president has spoken time and time again, we need additional stimulus of spending. We saw how well that has worked out the last couple of times, 700 billion, 800 billion spent and not producing any jobs. Thats the problem. When the government spends money, and a lot of these other Infrastructure Investments and stimulus, it takes from the private sector, not creating jobs. If the government is able to spend this money better than a private sector, i have a problem with that. I just came from michigan. Theres been a resurgence of the Auto Industry. There was federal money that went into it. Without federal money, chrysler and gm would have gone bust. The liquidity. Like aig exactly. Let me finish. You talk about its all wasted. Thats not true. Thats not true. Some of it is well spent. And i think you should answer your question. Sandy, not named after me, had a major impact on the east coast. Theres been a request for help from the federal government. Im all in favor of accountability. But did you have accountability with katrina . I dont think so. Its your constituents that are paying for the wasteful money. If youre coming here telling your constituents, you really dont no, look, im saying, im in favor of accountability. The congressman from new jersey needs to speak up for the state. Im in favor of accountability. Let me finish. After accountability is built in, will you vote yes or no . I will be supportive of slaks once we have the accountability in place. Good. Work with me on the accountability, fantastic. Absolutely. Ill make sure the people in new jersey and new york are not left high and drive. Because its a national issue. When theres an emergency, we just dont all say, everybody on their own. Which is often your theory. No, everybody in this country isnt always on their own. We are a national community. And when theres a tragedy, when theres some kind of event in new jersey, new york, we all have a responsibility, accountability. Dont use that as a dodge for saying, lets act. The Auto Industry would have been on its just destroyed. About 1. 5 million jobs, i might add. Absolutely. And we had accountability there. Let me get a word in here. I know you want to dominate the conversation no, i want you to get to the point. We now agree there should be additional language in the legislation to have accountability. That is a great point. So far there wasnt that accountability when you voted in the past on a bailout to states in this area. Its good that we moved that point. I look forward to working with you to provide that accountability. There was accountability in terms of help for gm and chrysler. And aig. There was accountability. And people like you were investing in aig when the government was doing at that time . Aig was saved. That was really important. Were you personally investing in it . Im at a 48 tax rate. No, when the government was bailing out aig, were you personally encourage your viewers to buy aig at that point in time or saying, now is not the time . I was recommending aig. I thought it was a good deal after the stock became public again. No, no there was nothing to trade. If the government does such a great job in these bailouts, maybe we should have the government be involved in all these things, like solyndra and all the rest. A lot of people are in shelters. Do you believe the government does a better job of picking winners and losers in the private sector . When theres a loser, we have, like when theres a storm like sandy, losers, we have to step up to the plate. Lets get back to the main issue. The main issue, that is the cliff. But you said first things first and you want to see the tax increases before you go along with spending cuts, that is a nonstarter with the other side of the aisle. Let me finish. No, you always want to finish. Let me just say this. Are you for the middle class tax cuts . There is no middle class tax cut. No high income tax cut. The tax rates do not go down. We have current tax rates here. If we pass this bill jointly, the tax rates stay here. No one is suggesting that the tax rates for the middle class go up. Lets get the term oh, oh, you dont up or down . No, im saying they go up. Everybody agreed to that. I dont know why. Dont mislead the viewers. You said that you want a middle class tax consult. No one is suggesting that the taxes go down. So youre misleading the viewers when you say theres a possibility of if we dont act, the taxes go up. Thats not what you were saying a moment ago. What were all suggesting is tax rates should not go up on anyone. Im quoting president obama when he was senator obama, bad Economic Times is not the time to raise taxes on anyone. Then why are we raising taxes the people are for it. We should extend the middle class tax cut and not the i dont want to be rude, but congressman garrett from new jersey and congressman from new jersey. Thank you for being here. This mission continues. Weve got much more from capitol hill. This morning, at 10 00, senator mark warner, and 11 00 a. M. Former white house chief of staff, i remember when he was working in the private sector. Now its time for my coanchor to come in. Jim, i cant tell if youre having fun down there or not. You tweeted this morning that you call this fun . Yeah. Ill tell you one thing, guys, listening to that conversation, a few minutes before the opening bell, front page of the Washington Post, investors arent waiting for a deal. Theyre selling stock, theyre trying to sell homes. Theyre setting up shelters, gifts for taxes. This discussion is not academic by any stretch of the imagination. We have to avoid the cliff, period. Yes, we do. We do. To your point, carl, 20 billion in special dividends have been paid out this quarter. Some of the economists said this would be a jump of income in the household, payouts to dividends, acceleration into this year. Becky and jim, who have been doing amazing work on capitol hill, did talk to Grover Norquist, a bit of a rematch after cramers appearance a couple of weeks ago with Grover Norquist. Obama personally moved it out two years, because he didnt want to raise taxes and damage the economy, because he said the economy was weak. The economys not strong now. So the argument to raise taxes now is not any better than it was two years ago. I think theres a real danger we could end up with some damaging tax increases, and nothing to show for it. Jim, Quick Reaction to that exchange between you and grover . There was a lot of positives here. Grover wants to put cameras in the room. When i cover the florida legislature, how many years ago was that, they put cameras in the room. You know what happened, a lot of people started making a lot of sense. So i think that grover makes some good points, because you wouldnt get this kind of rancor. Jim, good to have you down there. We need you down there today. We want to draw your attention to the screen here. David and melissa was halted for news pending. And here is some news. This goes back, of course, if you recall, liberty owned a stake in expedia. Trip adviser was spun off from expedia. But they also still held a stake there. I have to look in a bit more, but there have always been a lot of goings on between mr. Malone and mr. Diller in terms of their various ownership stakes in these companies. In the meantime, futures coming off of a fourday win streak off the dow. Thats not happened since the middle of october or so. S p riding to the upside, just barely. Nfib, big collapse in Small Business optimism in this country. German confidence, positive for the First Time Since may. And the fed meeting begins, a twoday meeting with that press conference tomorrow. When we come back, goldman making a call on retail today with a number of buys. Well tell you whats going on next. Phil lebeau talks about Virgin Atlantic. And well talk aig. Absolutely. One more look at futures. More squawk on the street in a minute. Try running four. Ning a restaurant is hard, fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chase. Governor of getting it done. You know how to dance. With a deadline. 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. This is awesome. [ male announcer ] yes, it is, business pro. Yes, it is. Go national. Go like a pro. The governments now planning to sell the remaining stake in the insurance giant. Theyll be sold at 32. 50 each, representing 16 of outstanding aig shares. The sale expected to total about 7. 6 billion. Treasury and Federal Reserve will exit the bailout with total profits of taxpayers for 22. 7 billion. On 182 billion bailout, that is approximately a 12 return. Not bad. Before the show, we were saying treasury like everyone else, trying to get out before the Capital Gains go up. Thats not really the case. The point is a good one, 22. 7 billion. We have it broken down to a certain extent. Over the last 19 months, the treasury has sold 1. 66 billion shares of aig. Once represented a 92 stake in the insurer. Theyve taken that down, as you see, the average price they got, now selling for 34 million shares. That will wrap it up for them. 1. 66 billion, 31. 18 a share, of course. It ends up being 22. 7 billion. Not for treasury as much as the Federal Reserve realizes a significant profit. Particularly buying the damaged assets that were at aigs Financial Products unit. Namely all the cds for the mortgage securities. Thats where they made a lot of the money. You can see it right there, of course, 22. 7 billion. A lot of shareholders saying were going to get fourplus billion dollars announced yesterday, another 5 billion when we sell the remaining in aia as the lockup there. Why not they could have been in a position to buy the stake back themselves, that being aig. The question for aig will be next year. What do you do with all your excess capital . What will the government, which still has a lot of sway here, allow you to do with your excess capital, amazingly enough people even considering buying Something Else. That will be a key question. Not just for them, but gm also that has a large hold in the treasury. The stock is trading higher, jim, in the free market. This morning bernstein saying the offer was oversubscribed. And the last overhang on the stock is out of here. Yeah, this is amazing. This was not a qualified aig. This is actually by the public. Dave and i talked periodically about how the hedge funds like this stock. Tim is an executive in t. A. R. P. , okay . He was in charge of this sale. He said over and over again he would not break price, that aig would not lose money for the government, but more importantly he was not going to hurt the shareholders. My hat is off to him. Im down in washington, all i ever hear about is the government shouldnt is a bunch of idiots, they dont know what theyre doing. Aig was fabulous. Yeah. And on t. A. R. P. , the government has recovered more than 90 of the 418 billion spent under t. A. R. P. So interesting stats for the tax paks out there. A. Never would have thunk it four years ago. I think anybody, 182 billion sunk in, nobody ever would have expected to get it back, let alone make a profit. Exactly. As you know, cramers in washington, but hes still ready to help you capitalize on the markets. Find out next in his mad dash. Investors would love to get a lump of coal this year. Which five top executives are most likely to be fired in 2013. Were going to answer that question. Well look at the futures as we head into the Tuesday Morning open. Mission critical open. The dow looking to open higher by 45 points. More squawk on the street straight ahead. Igations. Igations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. I always wait until the last minute. Can i still ship a gift in time for christmas . Yeah, sure you can. Great. Wheres your gift . Uh. Whew. [ male announcer ] break from the holiday stress. Ship Fedex Express by december 22nd for christmas delivery. He may be on the hill today, he may be in the middle of political discourse, but jims eyes are never taken off the market. Youre watching at t this morning, whats up . I think the report that came out this morning is very significant. It says that at t is selling more smartphones than we thought. Smartphones, thats apple 4, which they actually mentioned the 4 is doing well u and iphone 5. Carl, i just confessed, this market is about where we are right here, in the rotunda, and where apple is going. This is a bullish piece about apple. Fast money, other shows that maybe apples not doing that well. You certainly wouldnt feel that way if the look at the at t overweight by jpmorgan. We tried to debunk some of the debt cross thesis, it doesnt always work. No. Remember, though, if you do have a big capital gain, youre stuck with the tax adviser who says, what are you doing worrying about the iphone 5, the iphone 4 . Nail it down. Carl, it is encouraging to see that the actual substance, the Technology May be winning. And this is a report that i did not expect. Because it also means that at t is the margins have to go down because theyre subsidizing more apple phones than they thought. I dont know how youre going to do it. Youre going to do this hour from the hill, come back and do mad tonight. I think theres a Holiday Party. You dont realize, its an identical twin. Im standing here going down to the Holiday Party at the white house. More energy than any mere mortal. When we come back, senator mark warner, democrat of virginia, part of our special day, the long focus on the fiscal cliff, rise above d. C. , and the opening bell in just about four minutes. The there is no massproduced human. Every human being is unique. And there is one store that recognizes it. The sleep number store. The only place in the world youll find the extraordinarily comfortable sleep number experience. An exclusive collection of innovations that totally individualize your sleep. Perfectly comfortable pillows that adjust to your size and shape. Temperaturebalancing bedding. Dual warmth comforters. All designed around the sleep number bed a bed with dualair technology that allows you to adjust to the support your body needs. Each of your bodies. In the name of human individuality the sleep number collection. Discover how our sleep professionals can individualize your sleep experience. Exclusively at one of our 400 sleep Number Stores nationwide. Sleep number. Comfort individualized. This holiday season, give the gift thats magical the innovative airfit adjustable pillow at special 30 savings. He loves risk. But whether hes climbing everest, scuba diving the Great Barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesnt nickel and dime him with hidden fees. So he can worry about other things, like what the market is doing and being ready, no matter what happens, which isnt rocket science. Its just common sense, from td ameritrade. Youre watching cnbc squawk on the street. Were at the Financial Capital of the world, awaiting the opening bell to ring on this Tuesday Morning. Theres certainly a lot to watch. Were seeing a big move in the euro. Primarily the swiss franc raising deposit rates, which swiss franc deposits can be held. A gain in the euro. The first day of the twoday fed meeting, where its widely anticipated the fed will embark on further stimulus action. It will be hard to say how expansionary that move is. If youre ben bernanke, why would you throw a curveball at this hour. Well see. That press conference, a little more than 24 hours from now. Were continuing e inine ini more on trip adviser. Look at the cnbc realtime exchange. We did see the features point to a higher open. Here at the big board, cocacol cocacola [ bell ringing ] and ringing the bell there. Trip adviser, interesting deal, because the pricing at which the shares were bought. Youve got to remember, of course, you have a change in voting control. It had been controlled by barry diller, it will now be controlled by liberty media. They will own 22 of the economics of trib adviser, but 57 of the total votes of the company, effectively controlling the company. So any thoughts you might have as a shareholder in erms it of the future takeover premium in terms of changing control. Well, for now, dont expect them to go to the price that john malone and liberty are paying here. Thats quite a price, 62. 52 a share. Well see what their stock does. We anticipate it will move up. But nowhere near the price hes paying in order to gain control of the company. Barry diller, if you go back, of course, expedia, they split trip adviser, that was controlled by mr. Diller. He had a Voting Agreement with liberty, which continues to own a significant stake in expedia. One interesting question mark i have here is why liberty did not exchange some of its sake in expedia for its stake in trip adviser. Which would be tax efficient. Tax efficiency drives much of the decisionmaking at that company. Mr. Diller said, im resigning as chairman of the board, but ill still serve as a director as well. Its time for me, got a lot of other things going on. Time for me to get this over to liberty. And allow the Management Team to continue to do the job theyve been doing. Shares of expedia are trading higher by 2. 2 on this gain. Yeah, third biggest gain on the s p, expedia. Big day for retail, jim. Youve got urban at the top of the winners list this morning saying that the Fourth Quarters going to be high single digit. Thats more than some thought. And earnings from Dollar General. Youve got goldman with their top picks initiating coverage, changing analysts, top pick coors and tume. Calling the strength of disruptive retail. That piece was amazing. Lets lump in trip adviser for a moment. There have been a lot of new companies, public companies, whether it be the coors, whether it be tomb, tumi, trip adviser, that people want to own. Urban outfitters, why do people want to own that . These all have a growth at a time when growth is hard to come by. These are positive stories. Im in the capital and everything that im hearing means the capital that Consumer Spending should be on the ropes next year. Wow, are these stories ever not in sync with whats happening in the capital. Yeah, goldmans also initiating, jim coach, excuse me, coach, as its only accelerated stock, saying there is competitor pressures. Surprisingly though, jim, the shares are only down by a quarter of a percent. Yeah, i think that when you see a broad move in retail, it will catch up later. I think that sometimes what happens is, if an analyst wants to show true mettle, they want something that has been touched. Coach did right what was happening in the United States. The stock has been happening horribly, unlike some of the others. I think coach is not going to have the upswing that the other guys have. Were watching shares of apple as well. Outperforming the markets. We havent been able to say that in a few sessions, up by 1. 5 . Morgan stanley out with a note this morning, analysts having done a survey essentially saying interests in purchasing the apple td product is almost twice the initial interest in buying an iphone or ipad. And she says, success could mean 50 billion in revenue upside for apple. An interesting forecast, given we dont know what the product is. And we dont know the price at which it will be sold. Well, i think that apple is so important for this market. Rightly or wrongly. And if it can buck the trend, we have a couple of times bucked the trend, it does create a rosy view for all of the technology. Texas instruments not blowing up last night. I know it sounds odd, isnt it great that a company didnt blow up. But tech has been a real anchor. If you could get that lifted and get the financials lifted, then you have quite a nice session brewing. Jim, speaking of which, markets only been open for 4 1 2 minutes, and already the best gain of the month for the s p, all month long, s p only closed up 4. 66. Youve got to go to d. C. More often. Look, it could be the reason. Hey, look, can i just mention on this trip adviser. Talk about a company that really resonates with users. Linked in trip adviser, those are two ipos that actually have great business models. I dont blame anyone for taking a bigger stake in trip adviser. It works for the consumer. Yeah, its social media, plain and simple in terms of at least the travel area. And of course, as you point out, jim, it is a vote of confidence in trip adviser and what its doing. And perhaps a bit with their decision to take down their stake over time in expedia. At least thats been the case thus far. Well see how that stock performs. Anyone whos used trip adviser, ive used it as a consumer, and also here in new jersey, its make or break. Trip adviser is very hard to lets just say you cant gain it. As soon as trip adviser sees something that is obviously chill, they get at it. If you have a review that seems target, you can go back to trip adviser and theyll pull it. It is a real service and real people around the world love it. Were watching shares of jpmorgan going higher. According to sources, the bank may ask regulators as early as january for permission to start buying back shares. That would be great for shareholders. The ceo chairman said he would e in favor of returning returning shares to shareholders. Were seeing that react. Return of capital is the key consideration in the Financial Services industry. We talked earlier about aig. And a lot of the capital thats going to be coming into that company. It has used last time the treasury sold, aig stepped up to buy a lot of that stock back. How much excess capital did these Financial Services companies need, whether it be insurers like aig, or a Morgan Stanley. And how effective is that in terms of buying back stock which is yet another question people have. It will be interesting, jim. As early as january we could see a lot of the Financial Firms file for at least permission to return capital in some way, shape or form, be it a dividend or buyback. Some of them are really starting to brim with capital. I know that when you look at the group, as long as the Federal Reserve keeps Interest Rates flat, you get the Net Interest Margin that investors are just not thrilled about. Youre seeing that interest margin still being compressed. I think if you get a fiscal cliff deal, it will be mildly inflationary. That may actually raise rates, even if the fed keeps buying bonds. We actually need to see rates up in order to get real excited about the banks. Thats a good point. We continue to watch facebook. Flirting with 28. And apple here at 5. 40. Well see how it manages that resistance. Bob pisani is on the floor with more. Still talking about the fiscal cliff and how little reaction well get with the markets. Up 60 points in the dow right now. Theres no particular worry out there. They believe that a deal is going to happen. If you look at the vix, for example, not only are they not moving, theyre not moving out of any range, but theyre moving in an even tighter spread than they normally do. The relationship between vix and vix futures is squashed down. This is the deal, the republicans will agree to tax increases, and very quickly this week well turn to debate on what kind of spending cuts theres going to be, and dealing with entitlements. They believe a deal is coming, well see. I espoused this a couple of weeks ago, that the markets are going to sell off even with a deal on the fiscal cliff . Why . Because it represents the beginning of american austerity. Higher taxes in the long run, spending cuts in the long run, that is a headwind for stocks. Not a tailwind. I know everybodys excited about the deal being made. But a substantial minority believes thats a deal for the fed stocks. The general consensus down here, current purchases, 85 billion, is going to continue. Instead of 45 billion from operation twist, operation twist goes away, and you go to outright purchases of treasuries. And you continue with that 40 billion in mortgagebacked security purchases. The 85 billion, theyre doing right now, continues in a slightly different form. You guys, were talking about aig. Just two observations on aig. Youll notice here, it looks like to me theyre not repurchasing any of their shares. Theyre dumping a huge amount of shares on the market. Aig isnt actually buying it back. Thats a signed of strength for the company. The other interesting thing is, the losses on sandy have been coming in recently. Aig gave 2 billion in pretax losses. You include the taxes, aftertax, maybe 1. 3, 1. 4 billion in losses. That is imminently manageable. For all this disaster, and it was indeed a disaster, roughly 20 billion short losses, total in short losses for everyone has been imminently managed. If you think . 3 billion, after tax losses for aig, they made 1. 9 billion in profit in the last quarter. And theyre going to have insured losses after taxes, 1. 3 billion. Imminently manageable. Have you noticed, by the way, that all the Insurance Companies are trading back where they were at the prices they were trading at prior to hurricane sandy. By the way, while were on aig, for all those people who thought this was a bad idea for the government to get involved, aigs low was 5. 53 march 9th, 2009. It is over 33 today. Back to you. Bob, thanks for that. Rick santelli in chicago. Good morning, rick. Good morning, melissa lee. Well, things have changed a bit today. Just look at a 24hour chart of tenyear yields. Yes, they are up. We went from the doldrums, very tight range, close to 1. 60, to this interday, that will break out 1. 65. It is slightly over a twoweek high on yields as you see on the chart going back to the third week in november. If we look at the boon, a fairly similar pattern, just kind of compressed a bit. It hasnt sold off as much, pushing the yield higher and the comp is only several days versus several weeks. Remember, they had their german Business Confidence that really helped out a bit, as you can see from the next chart. Look at the euro versus the dollar, indeed their data helped out in their meeting and getting into the beginning of our twoday meeting. Maybe theres something going on there. Remember, were supposed to see a twist turn into a treasury purchase. You wouldnt really know it by looking at 10s and 30s, but most of that is most likely built in. Nobody down here can see the fed withholding at this point based on fiscal cliff issues. Look at the dollar yen. The japanese has a boatload of issues, whether its recession, or its their deficit on trade growing. It has moderated just a bit. Melissa lee and carl, back to you. And david, too. Check out the latest moves in metals. Carl, you know, traders here on the floor say a lot of their customers arent willing to make any big bets here ahead of the fed meeting or with the fiscal cliff looming. And so many are seeing very, very light volumes here in terms of particularly gold trading, but Energy Trading as well. We have seen gold prices near the lows of the session. But this has been a very tight range here in todays trading session, only about an 8 range or so. All eyes are on the feds. When were looking at gold prices right around 17. 10 an ounce, we have to look at the energy market. There were also seeing light volumes for this time of the morning. But were also waiting to see what happens in vienna with the opec meeting. In addition to the fed that comes out tomorrow. The expectation is, that opec will leave their current quota unchanged, around 30 Million Barrels per day. The actual production, around 31 Million Barrels a day. There may not be any change to that. The key will be what happens in terms of the election of a new secretarygeneral and saudi arabia in the running for that as well. Back to you. Thanks very much, sharon epperson. I did want to look at shares of largest forprofit hospital in the country. A secondary offering this morning. Hga finds itself in the of so many movements of the capital structure, reflective of the 250i78s. Dont forget, they borrow at incredibly low rates not long ago, 1 billion, to pay a special dividend. You want to pay a special dividend prior to any tax increase on dividends as well. Capital gains figuring into that debate, lets call it at this point that weve been detailing down in d. C. With our Mission Critical coverage. This morning, two of the owners of hca, it was a huge leverage back in 05, and 06, almost four times their money at this point, they take 32 million shares off the table. Why now . You know why, their Capital Gains rate may go up, or will likely potentially will go up as well. That is pressuring hca stock as you see there. They take their ownership stake down, and they have a significant one. It levers itself back up to 4 1 2 times, and comes down and back up by continuing to pay special dividends to their owners. They start to sell their stake. Well see whether consolidation comes to this industry as well. Well keep an eye on that as that stock up at this point down by 2. 5 , 3 this morning. David down here in the capital, its very interesting that every republican, of course, think obama care is terrible. If youre a shareholder in aca, or want to be one, you should be applauding obama care. I think this is a deal you probably want to be in. Yeah, it is interesting, the forprofit Hospital Companies have done quite well under the Affordable Care act. Just a quick note, trip adviser open for trade, up by 11 . As you mentioned, david, not as high as liberty is paying for the shares. But it sa nice close a real vote of confidence from john malone who runs liber liberty. Again, trip adviser up to 59. 5 right now. Delta airlines buying a stake in Virgin Atlantic. The most interesting aspect of the story is the wager between Richard Branson and willy walsh, lets say its below the belt. Well have the details coming up next. And Richard Anderson, plus a gadget lovers delight for the holidays. A live interview with the ceo of brookstone. Bob, these projections. Theyre. Optimistic. Productivity up, costs down, time to market reduced. Those are good things. Upstairs, they will see fantasy. Not fantasy. Logistics. Ups came in, analyzed our supply chain, inventory systems. Ups . Ups. Not fantasy . Who would have thought . I did. We did, bob. We did. Got it. Delta airlines announcing it is buying a 49 stake in Virgin Atlantic. Hi, phil. This is rumored for some time, melissa, it was finally finalized this morning. Heres the Details Behind the stake that delta is taking in Virgin Atlantic. Cost 360 million. A little below what many people qur expecting. 49 , thats what deltas expecting of Virgin Atlantic. This is the important part. The Virgin Atlantic brand remains. It will not be converted over to the delta brand. This is all about increasing its exposure into the uk market, specifically the slots at heathrow. Those remain the crown jewel in terms of the Airline Business going over to europe. If you have access to those slots, its a much easier way to become profitable or increase your profits over in europe. By the way, there are 31 daily flights between the uk and north america. Well find out exactly what happens in terms of frequent flier redemption possibilities between delta and Virgin Atlantic. Remember, Virgin Atlantic is not part of any global alliance, not part of the sky team alliance, although many wonder if thats going to change with some time. Take a look at shares of delta. Richard anderson has had a nice little move here. Some people would say, listen, this is all about jet fuel as it has moderated. Theres Something Else at play here. Well be talking with Richard Anderson about this at 11 40, first on cnbc. Well talk to him after the press Conference Announcing this deal. You dont want to miss what he has to say. This is a ceo, and weve talked about it several times, who is trying to take the steps that will help delta grow in the future. You look at the alliances theyre forming, gold in south america, and now with Virgin Atlantic. Theyre trying to position delta to have greater access globally for their business customers. Thats the key here. Yes. Oil refining, they are thinking different, biphil for sure. Phil lebeau in new york. Willy walsh making a bet with Richard Branson that the Virgin Airlines brand will not be around in five years. Branson offered to bet 1 million pounds, walsh reportedly said, i dont have a million pounds. A knee in the groin maybe. Thats as painful to him as it might be to me. Why cant our executives be that creative. Thats so colorful. A ceo challenging another one like that in this country . It would be rare. Its rare. Usually they control the company. That is typically they have large shareholders, theyre never going to Say Something like that. They dont often mention body parts. Only a guy could really appreciate that story. Cramers live in washington. Six stocks in 60 seconds. If lawmakers do not agree on a budget by january 1st, 2013, the expiration of the 2001, 2003 and 2009 tax cuts will generate 225 billion in revenue for the federal government. Try running four. Ning a restaurant is hard, fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chas just tweeted at jim cramer, well start, jim, with ruckus. What a dispoilt. This thing went public recently. I say stay away. Morgan stanley from sell to hold. This is a kind of a reverse housing play. I like this very much. Laczar. This infrastructure trade is going to be very big if we continue to find more oil in this country. Goldman up, neutral to buy. These medical Device Companies have been so bad. Maybe its finally right. Analyst day. Industrial stocks, they are still being like, you know, people say heck with the cliff. Full speed ahead. Goldman on deckers, uptrends appear weak. We know that theyre weak. And that is why we think that theyre going to make a bid for decker. Jim, whats on mad tonight . Sachs, youve got hurricane sandy, fiscal cliff, can they still make the numbers. By the way, if you go to see the tree, sachs, of course, the Christmas Tree in rockefeller center, i recommend everyone get to see the tree and see the saks. Our special coverage of the fiscal cliff, Mission Critical rise above d. C. Continues. Democratic senator mark warner of virginia, one of the gang of eight, well hear what he has to say about a bipartisan solution to the cliff. Thats coming up next. [ male announcer ] they are a glowing example of what it means to be the best. And at this special time of year, they shine even brighter. Come to the winter event and get the mercedesbenz youve always wished for, now for an exceptional price. [ santa ] ho, ho, ho, ho [ male announcer ] lease a 2013 glk350 for 399 a month at your local mercedesbenz dealer. Monarch of marketing analysis. With the ability to improve roi through seo all by cob. 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. Im going big. [ male announcer ] good choice business pro. Good choice. Go national. Go like a pro. [ male announcer ] good choice business pro. Good choice. I have obligations. Cute tobligations, but obligations. G. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares a us which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Look this isnt my first christmas. These deals all seem great at the time. But later. [ shirt ] merry christmas, everybody not so much. Ho ho ho this isnt that kind of deal. [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. The president insists on my way or the highway. That is a bad strategy for america. Its a bad strategy for your businesses. And it is not a game that i will play. The fiscal cliff still looms. Cnbc has called on lawmakers to rise above gridlock and reach a deal. Now, were beating down their doors. Live from our nations capitol, this is a cnbc special report. Mission critical rise above d. C. The mission continues. Im becky quick, along with jim cramer. This is our special continuing coverage all day from capitol hill. Mission critical, rise above d. C. Weve had candid interviews with lawmakers all morning long. This is what we now know. Senators bob corker and kent conrad agree more, not less needs to be included in the deal. Conrad would like to see a whole lot more, hes calling this a big deal. Something to the tune of 4 billion plus. Also, congressman sander levin and garrett, they were here this morning. Thats about the only thing they agreed on through the course of this. They agreed to sit together, quite an accomplishment. A sense of optimism on the hill this morning. The final points are still tripping up both sides. A democrat from virginia, directly involved in the talks, and is one of the gang of eight. Senator, im thinking there was this movie when i was growing up, dr. Strangelove. Im thinking, after listening this morning, how i learned to stop worrying and love the fiscal cliff. Is that where we are right now . You know, jim, this shouldnt be that hard. The idea that weve got to get a 4 trillio over ten years, with a mix of revenue increases, spending cuts. You know, when you look at the size of our economy, when youre looking at whats asked of people all across europe, uk, all in emerging nations, this is so small on a relative basis, that its almost unamerican were not going to be able to step up and get it done. You know, im optimistic that were going to be able to avoid the fiscal cliff. Were not going to go over that, were not going to see sequester, the challenge is going to be, is the deal going to be big enough, comprehensive enough that we take that minimum of 4 trillion off this 16 trillion debt over the next ten years. Were going to intervene, no matter what, in the trends of American Business, meaning as soon as this one is over, well have a debt ceiling. Because we cant get investment going in this country. Thats why people keep leaving the market. You know, becky knows, everybody in business knows, if we could actually get a big deal done, that will do more nor job growth and economic stimulus than any single policy that the president or governor romney talked about during the campaign. This idea that were going to lurch every 12 to 14 months, regardless of who would have been elected, romney or obama, i would have been in favor as a former governor of getting rid of this kind of debt ceiling poker that we play. I agree with that point. But senator, you also came up with a plan to decouple Social Security from this process, saying we need to look at these issues first, other issues later. We had senator corker here in the last hour and a half or so, his point was, hes not signing any deal that doesnt deal with both at the same time. I think as he put it, Something Like, you dont learn anything the second time the mule kicks you in the shins. He doesnt believe the cuts will come if he agrees to it now. Becky, one of the things weve always said, even since simpsonbowles, is it would be a separate path. Social security doesnt directly affect the debt and deficit. It is going bankrupt, depending on when the actuarials said between the late 2020s, early 2030s. I do agree with bob weve got to get it done. You confuse the issue when you mix it in the debt issue. There ought to be a separate process. Youve got to have a vote, i would argue, when you have have a solution set for Social Security, it ought to be for 75 years solvency. Then every ten years, come back and require congress to readjust it, so we dont continue to create these crises every 20, 30 years, because you cant predict what longevity is going to be. If you could do that, jim, wed both be making a lot more money. But lets go ahead and do this on a regular readjustment basis. Because all the entitlement programs are changing, because thank goodness were living longer. Now, do you think we could really get things going here if the president just said, okay, heres 500 million 500 billion that you cut out of medicare. Were going to negotiate with the drug companies, were going to raise how much it costs to do Medicare Part b. The republicans that we hear from keep saying the same thing, until the president offers something, we cant get started. How about a little bit of an offer to get things rolling . If you go back to the gang of six, simpsonbowles, we had a whole menu of options that gets you in that range of savings. Now, part of this, when you get into the baselines, one of the things is and this is important stuff. That most of the structural changes on medicare wont take we wont get the real savings until the second ten years. The referee in all this stuff is the cbo, which says were only going to count things in the ten years. A technicality. Its an important technicality when you say whats going to count and not count. The thing that i think the president is asking, i get this as well. Heres this menu, nobody wants to go first in terms of offending folks. So i would argue the president s kind of offended folks by laying out where he wants on revenues. Lets have the republicans who want to make changes on medicare whos saying heres off of that list. What about things like means testing. I think the thing, like means testing, makes a lot of sense. The challenge is that means testing, which i think most of us all agree, makes sense on Social Security. Folks like me should pay a little bit more under medicare copays or whatever, but it only generates over ten years about 60 billion. When the reality of the rhetoric hits the numbers, ive been obsessed about this to the point other senators run the other way when they see me coming. But weve got to get it done. We can get it done. And the thing that we have to realize is, and this will be for all of your viewers, when a deals announced, if the left and the right arent angry, theres not a real deal. What about if its less than 4 trillion . We think thats a 4 trillion, there will be a down payment. Theyll have to be to get tax reform, to get entitlement reform, additional process to fill in. But if theres not a requirement to fill that in, and then consequences, a trigger or a default mechanism and not something crazy, but something we could actually live with, and ive got specific ideas there, then you know its not real. Youre the first person whos come on this morning and said as i regard someone who speaks to ceos is, which is, you have some of this, some of that, rise above. We could have aggressive growth. We could take over the world in terms of world leadership. Youre the first one to mention, we could have a boon here. The australian prime minister, good guy, said when america is one relatively small deal away from economic preeminence for the next 60 years. When our allies are saying, heres what we ought to do, i think everybody in business realizes, you give us that certainty, we can plan to any budget. Give us a real budget. But weve got to get this done. What we need to do is that weve had and i get politics. But with the president and speaker playing to the base, theres a lot of us here who are, you know, part of the bipartisan coalition, that want to get something done. Weve got to be ready to stand up as well, because when the Interest Groups start having the incoming, when some of the folks up here are saying, hold it, theyre raising too much revenues here or there, we in the senate have got to be willing to stand up and accept it. I commend you guys with the rise above, i think part of this whole effort to fix the debt. If we want to get this done, arent willing to say, all right, well have some skin in the game, were not going to get it done. Radical middle. Thats what it comes down to. Senator, thank you very much for your time today. We appreciate it. Thank you. Keep it locked on cnbc all day. Mission critical rise above d. C. Jim is heading back up to headquarters for a mad money show tonight. Youve been working on it all morning. Yes, its true. The next hour ill be joined by former white house chief of staff bill daley. Then at noon, brian takes up the seats on capitol hill. Their lineup kicks off with Patrick Mchenry from north carolina. I want to bring in my coanchors back at the new york stock exchange. And jim, its remarkable to watch the markets, at least in todays sessions, all three major averages are higher. Dow higher by 91 points, nasdaq helped by the big mood were seeing in apple today, up by more than 1 . Jim, i was talking to edgar denny yesterday on fast, and he said, we have a deal, a fiscal cliff deal, and bob pisani was delivering a talk on the floor. A deal would signal the start of american austerity. Whats your take . No, we get a deal going, look out above. I think theres lots of ceos i talked to who want so much. They want to bring money back here higher. This is the cheapest place to build and hire people in the world. But theyre just not sure exactly how much theyre going to have to spend because of the government. Thats the impediment. These guys want to built here, insource, energy costs really low. It can happen. Its huge. With that in mind, if we close at these levels, at least in the green, thats five days up, guys. Weve not done that since march, which is a thats a long time ago. I like having becky on squawk on the street. I like sitting next to jim. Thanks, guys, its been great. Thanks, jim. Thanks, guys. See you soon. Stimulus watch as the fed kicks off a twoday policy meeting. Wait until you hear what investors are saying in our latest fed survey. Thats next. Should you keep betting on a recovery in the new year. Rbc offers the 2013 housing outlook when squawk on the street returns. Well, if it isnt mr. Margin. Mr. Margin . Dont be modest, bob. You found a better way to pack a bowling ball. That was ups. And who called ups . You did, bob. I just asked a question. It takes a long time to pack a bowling ball. The last guy pitched more ball packers. But you. You consulted ups. You found a better way. Thats logistics. Thats margin. Find out what else ups knows. Ill do that. Youre on a roll. Thats funny. I wasnt being funny, bob. I know. Its easy to follow the progress youre making toward all your financial goals. A quick glance, and you can see if youre on track. When the conversation turns to knowing where you stand, turn to us. Wells fargo advisors. [ male announcer ] tis the season to discover the kid in all of us. Enjoy Free Shipping and great values on your Holiday Shopping from l. L. Bean. Dow up 92 points. The nasdaq really being helped by the gains were seeing this morning in shares of apple. The nasdaq is higher by more than 1 . Apple computer is up by 2. 4 brs. Bullish note for the demand for itv due out sometime next year. Meantime, the fed beginning its final major policy meeting of the year today. Cnbc is out with the latest fed survey. The senior economics reporter stee leesman is at headquarters. Carl, if you could name one reason why the fed will do additional qe and why its doing it now, why would the reason be . Just in general, whats the major goal here . To compensate for the fiscal cliff. No. Austerity. No. Low Mortgage Rates. No. What about unemployment . Got him on the third try. Thats the one that the fed keeps saying, the reason why its doing qe. We asked our correspondents whether or not mr qe would bring down the Unemployment Rate. Guess what they said, no. 59 said, more qe, which the fed is expected to announce tomorrow, will not bring down the Unemployment Rate. Which is really interesting, what will help bring down Mortgage Rates, like carl said, yes, what would help lower bond yield, yes, will it cause inflation, no. A little bit closer right there. So just take this in for a second here. It will bring down Mortgage Rates, it will bring down treasury rates, but it wont lower the Unemployment Rate. Thats a clear sign that what wall street thinks right now is the problem with unemployment is not linked to Interest Rates. Thats not what bernanke thinks, but thats what a majority on wall street believe. Take a look here. Were going to show you in a little bit, the gdp outlook is lackluster. 2013 keeps coming down, now below 2 . Whats the forecast for the market . Not much changed from the end of this year. Thats about 4 up for next year, no big boom expected in the stock market next year. Lets go on and take a look at some other data here. Whats the biggest threat to the u. S. Economy . Slow job growth, 9 . Moving on here to the next one, the euro crisis, thats come way down, 11 . The next one is going to be 33 . The winner, the fiscal cliff, 35 . What are people saying about the fiscal cliff . We have people write in, and i believe thats what well look at next. Well look at the probability of a u. S. Recession. That has come up. In part because of the fiscal cliff concerns. It was 19 back in march. A high of 36 . So were halfway between the low and the high pretty much. This is a 13month high for the probability of recession. Now we want to show you what people are saying about the fiscal cliff, allowing the economy to go over the cliff would be extremely reckless, says donnelly. Theyre going out to try to help the Unemployment Rate. Wall street doesnt believe its going to happen. They do believe it will help lower Mortgage Rates and the Unemployment Rate and not a lot of help expected for the stock market. Melissa . Steve, thanks for that. Thats interesting stuff there. Nothing like getting your Blood Pressure up. Liesman testing you live on tv. What do you think . Wrong, wrong. Brought back bad memories, huh, carl . 2013 Housing Market outlook this morning, according to the report there will be an increase in new Residential Construction activity, and also recovery in home repair and remodel spending next year. Robert, some of the stats are staggering. Its not just an increase in starts, youre looking for 950,000 starts. That would be a 22 increase. Whats the primary driver of this . Is there really that much demand out there for 950,000 new starts . Were looking for three things. Tighter inventory levels, stable pricing environment, and low Interest Rates. So collectively, we think these three factors would definitely drive demand verystantially next year. Its been a terrific year for the home builders. We think were still in the third inning, not the seventh inning. Both for fundamentals and the stocks. Is there a part of the market well see the most building . Is it the lower end or higher end . Take a look at the demographic patterns, household formations depressed since 2007. Theres a notion there has to be a catchup and new households now being formed. If youre to take that piece as going forward, you would think it would be the younger end of the spectrum out there going out there absolutely. Were comfortable with the thesis that first time home buyers are going back to the market in a very strong way. We see a number of stocks doing really well who cater to that market next year, like lennar, hulte, tull will do well and our big cause of the sandskaps will show strength. Arizona, california, nevada and florida. Its going to take us out. The concern investors might have is the pulte is already up. Holmes is also up. What could you say the market is ahead of the recovery and a lot of this is already factored in to where we trade . I know the call i believe is for 30 gain on the home builder stocks over the next year. Were definitely comfortable with our call to the upside. And we think the spring selling season will be robust. Its going to beat investor expectations. We think volume sales will definitely come in ahead what the street is looking for right now. We think pricing is going to be much firmer. We look for upward move on kay schiller. And gross margin performance will beat street expectations. Were actually very comfortable being up there, if you look at toll numbers, if you look what were looking for on a forecast for the National Association of home builders, if we get to 950, thats going to be terrific. My call is that by the end of 13, our exit rate will be above 1 million. If we get there from a psychological standpoint, huge boost for investors. Im curious about your call on toll and granted. Your favorites of lennar, pulte and kd homes. Also, theyre more towards the high end of the spectrum which is not where youre expecting the biggest growth. Correct. They dominate the luxury segment. Their footprint is washington, d. C. , to boston. Extremely competent builder. We love the story fundamentally. We think the good news is reflected in the stock. A lot of experts say 950 is great. Its not average. If youre counting on first time buyers, that means youre counting on mortgage availability. Is that going to be are they going to be readily available in 2013 . Firsttime buyers. Theres enough access to credit right now, the bigger threat is what happens in d. C. , the fiscal cliff story. The challenge is, changes to tax law that make it more expensive to own a home, could undermine the nations recovery. Thats our primary concern. Although the mortgage deduction, the mortgage Interest Deduction is very popular, intellectually its almost indefensible and abolished elsewhere. Maybe the republicans would cut into that, because they want the tax rates to stay where they are on wealthy americans, on a quid pro quo, what does that do for your thesis . Were trying to create an incremental buyer who says its better to own as opposed to ren. Anything which creates deterrent to that slows the pace of growth. Were totally comfortable with our price targets, upside for the group. All this is subject to change, if we have to revoke or flex down deductibility interest expense. If the Interest Rate deduction were eliminated, what would happen to the forecast of 950 . Absolutely catastrophic. Meaning what . Nothing . No, youre going backwards. Youre not going forwards. Youre going down from, well do 780,000 this year, youll be stuck around 780, or potentially below that. Its a huge deal. Big difference. If its eliminated or limited or both . If you limit it, theres a certain level, we think 750,000 is the magic number. If you flex below that, it becomes problematic and undermines the recovery, both in pace and magnitude. If its eliminated, thats catastrophic. Theres no ifs, buts, or ands around that. Thank you for joining us. Thank you very much. Robert wedenfeld. Indicating things about the tech giants that might surprise you. Stick around and find out what were talking about. But first, these five ceos have something in common. That might not be a good thing. Find out after the break. [ male announcer ] feeling like a shadow of your former self . Cmon, michael get in the game [ male announcer ] dont have the hops for hoops with your buddies . Lost your appetite for romance . And your mood is on its way down. You might not just be getting older. You might have a treatable condition called low testosterone or low t. Millions of men, fortyfive or older, may have low t. So talk to your doctor about low t. Hey, michael [ male announcer ] and step out of the shadows. Hi how are you . [ male announcer ] learn more at isitlowt. Com. [ laughs ] hey you wont just find us online, youll also find us in person, with dedicated support teams at over 500 branches nationwide. So when you call or visit, you can ask for a name you know. Because personal Service Starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. Our support teams are nearby, ready to help. Its no wonder so many investors are saying. [ all ] im with scottrade. You wont take our future. Aids affects us all. Even babies. Chevron is working to stop mothertochild transmission. Our employees and their families are part of the fight. And were winning. At chevron nigeria, we havent had a reported case in 12 years. Aids is strong. Aids is strong. But we are stronger. And aids. Aids is going to lose. Aids is going to lose. Were seeing a nice gain in the shares of urban outfitters, giving Earnings Guidance saying so far in the Fourth Quarter, net sales are in the high single digits. That was better than what analysts were expecting. Were seeing two analysts which have raised their price targets. Youve got jenny raising its price tag. Goldman sachs initiated coverage of the stock rating it at mutual with a 42 price tag. This is today one of the best performers of the s p 500. Back over to you guys. A dow thats up on a monday. Take a look at this collection of ceos. Youre looking at the five most likely ceos to be fired next year, according to our next guest. Hes the media director of the street. Com. Good morning to you. Good morning, simon, how are you . Im concerned about meg. So meg is out of there . Talk me through it. Steve balmer . You dont think steve gates will fire him, do you . Im not sure what hes thinking. Bill gates and balmer are friends, theres loyalty there. But balmer is running a circus at microsoft right now. Windows 8 is not anything that he thought it would be. The surface tablet the same thing. I think they have an opportunity at xbox, that theyre not taking advantage of. Its a matter of not being aggressive and going with the same old tools and working out of the same old toolbox. I know david is there. The interviews hes done with meg whitman is unbelievable. He asked her how many different ways why are you still in the printing business, meg . She gives the same answer over and over again. We need transformational ceos in the Tech Companies or theyll go by the wayside. You cite actually marisa meyer, and the yahoo effect she has by moving over. To that end, talk me through where you are on other companies that might be drawn into that. Well, i think best buy was the best example. They had the same search firm that was you know, that found marisa meyer, or suggested marisa meyer at yahoo . Youve got to give them a lot of credit for making that move. The investors are excited, the stock is up 25 since she took over. Now, of course, she has to deliver. But at best buy, they go with hubert jolley. Who is this guy . You are in need of a wholesale transformation at a company, you cant think like a Retail Company anymore. You have to think like a tech company. And you bring in what amounts to a consultant for the business. Thats the problem. And shareholders should be angry, not just because the stock dropped. Yahoo has been stagnant for a while, and shareholders have been angry there, but at least the board went out and did something. Thats what best buy hasnt done. They could have gone that route like yahoo did, but they refused to, and the results now, its not there. I know this name isnt on your list, rocco, but i wanted to bring jcpenney up. Ron johnson you could have argued would have been the ceo to turn the company around. But weve not seen the results. Would you consider putting him on this list as well is this. I wrote an article earlier in november that criticized ron johnson and his performance. I think what happened there is ron johnson was fantastic at apple. But he worked at apple with steve jobs. Ron johnson probably read a few too many of his press clippings. If you watch the investor day he did a few months back when he first came to jcpenney, people thought he was crazy when he went to target and went to apple. And then he talks about how he went to steve jobs house, saying, steve, im leaving for jcpenney. And he said, are you crazy . And hes saying, target was great, i went to apple was great and now were in the same position with jcpenney and im going to work the same magic there. No, you can run shotgun with steve jobs all day long. Steve jobs was the retail architect. We should note, andrew mason isnt on the list either. Rocco joining us. Thank you, guys. Earlier this hour, you heard democratic senator mark warners take on the fiscal cliff. Now republican senator john barraso is coming up. Wooohooo. Hahaahahaha oh. There you go. Wooohooo. Hahaahahaha im gonna stand up to her no youre not. I know. You know ronny folks who save hundreds of dollars switching to geico sure are happy. How happy are they jimmy . Happier than a witch in a broom factory. Get happy. Get geico. Fifteen minutes could save you fifteen percent or more. Why they have a raise your rate cd. Tonight our guest, thomas sargent. Nobel laureate in economics, and one of the most cited economists in the world. Professor sargent, can you tell me what cd rates will be in two years . No. If he cant, no one can. Thats why ally has a raise your rate cd. Ally bank. Your money needs an ally. Halls of congress all day today as part of our Mission Critical coverage. This morning chairman kent conrad sat down with becky quick and jim cramer. Lets hear what he had to say about reaching a deal. We are on the cusp of having the possibility of doing the big deal, because if we took the president s revenue, we took the republicans spending cuts, and we put them together, wed have a package of more than 4 trillion. Senator John Barrasso from wyoming, the fourth ranking republican in the senate, joins us this morning from capitol hill. Senator, good to see you again. Good morning. Good to be with you. Thanks, carl. A lot going on. The journal says the talks are progressing steadily. Theres a moratorium supposedly on public comments. The dow is up almost 90 points. Are we getting closer . Well, i believe we are. And we need to. I agree with kent conrad, we need to do a big deal that takes a look at the spending which to me is the key problem in this country. With 10,000 baby boomers every day turning 65, the tidal waves of those folks on medicare and Social Security, are really the problem of the 16 trillion debt. Its not that were taxed too little, its that we continue to spend too much. Michael gursen in the Washington Post this morning is talking about where the responsibility lies for the president himself. His argument is, hes got to provide a way for boehner to land this deal safely. He writes, the moment boehner concedes on rates, republicans fear a leak and a Democratic Victory dance, before any serious outcome on spending cuts can be locked in. A, are you willing to move on rates, and b, how do you guarantee those cuts will come in return . Well, i think Michael Gerson is right in the sense that you have to have something that john boehner will take to the house, and then can pass the house of representatives, that the president agrees to sign. Whatever that is, carl, i believe that will pass the senate. So thats the fundamental decision and discussions that have to be done between john boehner and the president to come up with a big solution that deals with the amount of spending that we have on Social Security and on medicare, before john boehner says anything in terms of raising taxes through rates. The issue is, john boehner has already put revenue on the table through other ways to do it rather than raising rates, and i believe those other ways are better ways to go. So, senator, how difficult is the debt ceiling discussion . Its quite clear that the president would like to bolt that on to any deal. And yet, for rank and file gop, to lose control of setting the ceiling on the debt is a huge issue. Can it be sold, could it be sold by boehner to the party . You know, the president , when he was in the senate, voted against raising the debt ceiling and said to do so would be irresponsible to raise the debt ceiling. Now the president is asking for a new credit card after hes maxed out the old one. The constitution, you know, article 1, section 8, says it is the congress who will decide on borrowing money for the country. So i do not see the congress in any way giving up its authority to the president to be able to in an unauthorized, unchecked way, raise the debt ceiling. Then you are deadlocked. The president has been absolutely cat goric that he will not move forward without getting that in the bag. Youre saying its a nonstarter . The congress is not going to give authority to the white house for raising the debt ceiling, unauthorized, unapproved without the oversight that is demanded. And the president himself, when he was in the senate, opposed giving that authority to the white house. Mark warner was on earlier this morning and said, if we go that route, senator, were going to have this sort of lurching drama every 12 months, every 16 months, whenever the ceilings come up, and those are like speed bumps on the economy. Fair or not . Well, i visited with senator warner last night. We work closely together, working on different issues together. Hes very thoughtful. To me, though, the debt ceiling is something that the American People want direct input into that, through the congress, and the president has shown in the past he has no appetite to control spending. Even the original proposal that came forth by secretary geithner called for last week called for additional socalled stimulus spending. Our problem is that we are spending too much already, and our solution is to get more people to work, to get jobs and growth. Thats the way to increase tax revenue in the country. I think its a mistake for the president to be asking for unlimited, unauthorized opportunity to raise the debt ceiling, and then just to spend more taxpayer moneys. Taxpayers believe that the additional money that they would spend would be wasted because government does a pretty good job of wasting taxpayer money right now. They do tend to take it in and spend it right away. Senator, good to have your insight today. Thank you for being with us. Thanks, carl, for having me. Meantime, in washington today, treasury announcing it has were going to actually, before we do that, get to the treasury, well talk about apple here. Up by 2. 75 . Perhaps not coincidentally a level there, seeing this nice gain. Morgan stanley out with a note this morning saying based on a survey of consumer demand for apple tv, there could be an additional 50 billion in revenue next year to apple. Apple, along with other tech stocks, outperforming todays session with the nasdaq composite up by 1. 25 . The treasury announcing today it sold all of its remaining shares in aig for 23 billion. Wrapping up the biggest bailout during the financial crisis. Mary thompson is back at hq with the details on that. It is a profit of 23 billion . Yes, a profit. The government is out of aig. The governments sales of the aig stake was one of bens goals when he took the reins back in august of 2009. In a note to employees this morning, he wrote, that today warrants a celebration like no other in aigs history. The closing of this transaction will mark the full resolution of americas Financial Support of aig. With the profit to taxpayers of 22. 7 billion to date. It marks one of the most extraordinary and what many believe the most unlikely turnarounds in American Business history. They sold their remaining 16 stake, over 234 million shares in aig at an average of 32. 50 each. A corporate poster child at the financial crisis, aig resuscitated a government bailout by the treasury of 182 billion. The securities lending business and derivatives are nearly bankrupted, the property and casualty giant. As the firms fourth ceo in two years, ben executed a plan to simplify the firm by key overseas businesses in order to rebay aigs debts. With one of his primary goals achieved, the question comes, what will benmosche do next. Does he stay . Benmosche came out of retirement to run the firm. While he said hell stay through 2013, you wonder how long through this year. Carl, back to you. Mary, he also thanks americans for the help, which sort of reminds us in a report that he said he would have been liked to be thanked by americans. It certainly was a joint effort by the government and aig. So both sides deserve thanks on that. Yeah. Well said. Thanks, mary. Sure. When we come back, the fiscal cliff and your money, how to position your portfolio for profit, whether there is a deal or not. Squawk on the street will be right back. [ male announcer ] when it comes to the financial obstacles military families face, we understand. At usaa, we know military life is different. Weve been there. Thats why every bit of Financial Advice we offer is geared specifically to current and former military members and their families. [ laughs ] dad dad [ applause ] [ male announcer ] life brings obstacles. Usaa brings advice. Call or visit us online. Were ready to help. You wont take our future. Aids affects us all. Even babies. Chevron is working to stop mothertochild transmission. Our employees and their families are part of the fight. And were winning. At chevron nigeria, we havent had a reported case in 12 years. Aids is strong. Aids is strong. But we are stronger. And aids. Aids is going to lose. Aids is going to lose. Youll also care about our new offer. You get access to nurses who can help with your questions. And your loved one can get exelon patch free for 30 days. If the doctor feels its right for them. It cannot change how the disease progresses. Hospitalization and rarely death have been reported in patients who wore more than one patch at a time. The most common side effects of exelon patch are nausea, vomiting, and diarrhea. The likelihood and severity of these side effects may increase as the dose increases. Patients may experience loss of appetite or weight. Patients who weigh less than 110 pounds may experience more side effects. People at risk for stomach ulcers who take certain other medicines should talk to their doctor because serious stomach problems such as bleeding may worsen. Patients may experience slow heart rate. Thirty days of exelon patch free for your loved one. Access to trained nurses for you. Call 18559991399 or visit exelonpatchoffer2. Com. Can i still ship a gift in time for christmas . Yeah, sure you can. Great. Wheres your gift . Uh. Whew. [ male announcer ] break from the holiday stress. Ship Fedex Express by december 22nd for christmas delivery. [ male announcer ] tis the season to discover the kid in all of us. Enjoy Free Shipping and great values on your Holiday Shopping from l. L. Bean. Hi. Im steven ye, located in new york city. Im annoyed. Im annoyed with the fiscal cliff. Were looking at not knowing whats going to happen. We fall off this cliff, and everyone gets affected. Theres no trickledown effect, its more like a slush. We will lose income. The question is, housm income are we going to lose. If we fall off the cliff, the fear is that we fall off the cliff. Not slowly glide down the cliff. Big government at this point needs to understand that we should be able to trust you to do the right thing. Put politics aside. Think about us, the people. Thats why we have government. Fix it. All right. Were looking at a tripledigit gain here on the dow at this hour. Up 109 points, a game of 13 points there. The nasdaq really the outperformer up by 1. One and a third points. Andy lapierre is managing director with the group. What happens in the next few days will determine whether or not we have a yearend rally. Were having a rally already, melissa. Absolutely. The market the next few days will determine whether the market is correct in its willing suspension of disbelief, or whether in fact were going to have to take back some of this optimism. Well, if you believe, chuck, that the markets are rallying in anticipation of a resolution, and the markets have been climbing slowly in anticipation of a resolution, what happens when there is one . I think the only thing to worry about is we might get a deal, but the quality of that deal really sustains worries for investors well into early next year. By that, im obviously talking about the notion that we might get a deal where republicans are essentially forced to cave to the president on revenues. But we dont get much entitlement spending cuts and reforms. And the republicans as a result, you know, refuse to extend the debt ceiling. And well hit that debt limit, were already there, frankly. But we, frankly, cant play games with it much beyond valentines day. It will be like groundhog day, well have six more weeks of bad weather. Chuck raises an important point here. What a good deal means for the markets. Is a good deal effectively going to suck demand out of the economy . Because what happens to entitlements presumably will be facing further down the line. Immediately you are going to talk about tax cuts in the first paycheck i beg your pardon, tax increases in the first paycheck presumably for people earning 250,000 or more. And thats just the start, isnt it, andy . I think actually a good deal for the market is a grand bargain of sorts. I dont think it will be 4 trillion. But 2. 5 trillion would be the best outcome for markets. That is less fiscal tightening, which would help the markets in the near term. But i also think that if you think about entitlement savings down the road and having people stay in the work force longer, because it wont be as jen rours a benefits package, i think thats progdp. People will be working longer. Thats not sucking something out of the economy. Chuck, forgive me, but im quite concerned that maybe the market has lost sight of what the underlying state of the economy may be here. Goldman sachs, as a result of its Financial Services conference, they say clarity around the fiscal cliff may help with the margin. But theres no pentup demand that would aid growth next year. Chuck, is Goldman Sachs right . Are those attendees of that banking conference correct . Wouldnt that be interesting if in fact, simon, we rally past the fiscal cliff. We get a deal that somehow buys a new market, and then get into early next year and realize that the economy was weakening on its own. Of course, we are going to get at least some gdp hit already, because were probably still unlikely to see an extension of the payroll tax relief. So that would be really funny if after all of this, the correct position was to have bought stocks and held them through the second half, and to sell into a rally after a very weak fiscal cliff deal. The health care, lets remember, the health care is on the way whether we like them or not. People will be paying more come january the 1st, chuck. Theres no question about it, simon. But again, theres still we cant lose sight of the fact that this is delicate, this last bit of negotiation. If what andy is talking about to happen, a grand bargain, its very delicate to put that together in a way that doesnt disappoint liberals too much in the house or conservatives too much in the house, we could still have a t. A. R. P. Moment there. I think andy agrees with that. Absolutely. Its tough to get that balance, where you get roughly half of republicans and half of democrats to vote for a deal like that. Chuck and andy, thank you. Thank you. Delta airlines is buying a 49 stake of Virgin Atlantic. It has huge implications for the power base within airlines, particularly overseas. Obviously transatlantic flights and the feeders on the east coast. Delta ceo will join us live at 11 40 to give us his take on the deal and what it means for the future of those airlines and more. Squawk on the street will be right back. If Congress Fails to extend the payroll tax cut this will result in an 85 billion revenue increase for the federal government over fiscal year 2013. Try running four. Ning a restaurant is hard, fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chase. She also likes to ride her bike. She knows the potential for making or losing money can pop up anytime. Thats why she trades with the leader in mobile trading. So shes always ready to take action, no matter how wily. Or weird. Or wonderfully the markets behaving. Which isnt rocket science. Its just common sense. From td ameritrade. We have a complicating factor for the markets. The greek debt buyback ended at 5 00 a. M. Were getting detailed it may have fallen short albeit by a small margin of what the rest of europe was asking of athens. It therefore complicates whether theyre going to get their cash. Finance ministers will discuss it tuesday evening. More on that at the european close. For the moment, Rick Santelli in chick for the Santelli Exchange. Good morning, simon. What an interesting day. What an interesting week in some perverse way, interesting times. Lets refer to one program i talked about two weeks ago on the Santelli Exchange in a segment called tag, youre it again. It is about tag. Transactions account guaranteed program. T. A. G. Well, bait and switch a common term. The title of this piece is bait and skate. Because, once again, the magic number is 250,000. Sound familiar . Ill tell you what it means. We have 1. 6 trillion in noninterest bearing accounts that the senate wants to put up for a vote on the t. A. G. Program to extend it two years. Yes. To extend it. It was supposed to sunset like many Government Programs are supposed to sunset. But sun doesnt set sometimes when the government sticks its nose in the capitalist tent. So heres the way i see it. The bait is once again the wealthy, the 250 grand. But the real wealthy skate. Yes, they do skate. Ill tell you why. Because 250 grand is the limit for most americans in terms of a guarantee by the federal government on their monies. But on these t. A. G. Accounts, it is unlimited. Now, lets think. Money markets. A lot of wealthy, really wealthy put their money in money market accounts which, by the way, also have issues with guarantees. But this one is unlimited. And many would say, well, it isnt really. It isnt really a money market account. Where are Interest Rates right now . How much money do you get in your money market account . It is. So this money guaranteed by the u. S. Is going to see the wealthy plow their money in these institutions, guaranteed. And who guarantees it . All the other people that arent necessarily wealthy. So, once again, the faux rich get thrown into the ditch. Because the way i see it, whether its the super wealthy on many levels, and i hope everybody becomes super wealthy. Once again being confused with the upper middle class. These issues never go away. Heres what i worry. All these big bailouts, we talked about aig today. Yeah, it worked out. At what expense . What did we give away . What moral hazards did we create . Lets not create another one. If the super wealthy want guarantees, lets not give it to them. Lets put it to work the way capital ought to be and create new enterprise. Markets going to watching the speaker of the house. John boehner is going to speak from the floor of the house. Not a brepresser. With an update on fiscal cliff go negotiations. Thats coming at noon right after the gavel. In the meantime, youre looking at the final shipment of twinkies. Behold. But where are these cream filled snack cakes . Were going to tell you how you can get your hands on one after the break. Yuck. Twins. I didnt see them coming. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. [ engine revs ] [ male announcer ] the mercedesbenz winter event is back, with the perfect vehicle thats just right for you, no matter which list youre on. [ santa ] ho, ho, ho, ho [ male announcer ] lease a 2013 c250 for 349 a month at your local mercedesbenz dealer. At your local why they have a raise your rate cd. Tonight our guest, thomas sargent. Nobel laureate in economics, and one of the most cited economists in the world. Professor sargent, can you tell me what cd rates will be in two years . No. If he cant, no one can. Thats why ally has a raise your rate cd. Ally bank. Your money needs an ally. All right. Dow is up triple digits. Were going to have a lot to talk about tonight on fast. Mission critical continues at 5 00. Also fiscal cliff and munis. Could america become a Net Energy Exporter . Dennis gartmans thoughts and his take on the run up in prices of copper. The short list of which banks are next besides Morgan Stanley to pay dividends or buyback. See you again tonight. Meantime, more of our special coverage of Mission Critical, the fiscal cliff, live from washington, starts now. America, were on the edge of the fiscal cliff. Billions are at stake. And your money hangs in the balance. While washington quarrels with itself, time is slipping away. The only solution for our government to put differences aside and put real compromise on the table. Rise beyond disparity. Rise past adversity. Rise above. This is a cnbc special report. Mission critical. Rise above dc. Our special Mission Critical rise above dc coverage continues right now. All day long we are here in Washington Holding lawmakers feet to the fire on the fiscal cliff. Heres what we know right now. In terms of some of the moments from this morning, senator mark warner from virginia saying compared to the size of our economy and the drastic steps that have been taken in other countries the current proposals are relatively small and government should just step up and get a deal done. Senator bob corker, though, hesitant about signing any deal if theres not some sort of agreement about increasing revenue. He says theres no guarantee enough will be done about entitlements down the road. And as he looks in on the process, Grover Norquist maintains theres no better reason to raise taxes now than there was in the past. It all gets down to a pretty stiff standoff. Carl, weve been watching this this morning. Weve been saying all day long that this is the time to be optimistic because both camps, the prince pipals on both sides had gone somewhat silent. We had not heard the same posturing, rhetoric thrown out. Now we are getting word Speaker Boehner will be speaking on the house floor at noon about this. Carl, if you read the tea leaves here, the people have been saying silence is a good thing. If hes speaking out now, i dont know if thats a good sign or a bad sign. Although based on what he was tweeting just about 25 minutes ago, the speaker tweeted, the gop has offered a balanced plan. Now the president has to respond with a balanced plan that cuts spending and can pass. Maybe thats the most important thing, passing in the house. From an optics standpoint, its going to happen on the floor of the house. As he gavels in the session. Its not going to be in front of reporters who can toss him a curve ball here and there. Maybe things are getting delicate enough he wants to do this within the sanctity of the new floor. This whether its with warner, with Scott Garrett today. There is work going on. We just dont know how much. Reporter thats absolutely right, carl. A lot of people have been drawing similarities between the current fiscal cliff negotiations and that debt ceiling standoff from last year. So we have one former insider who joins us right now. Hes been through this before. He probably knows how to read the signs better than just about anybody out there. Bill daley was the white house chief of staff under president obama during the debt ceiling negotiations last year. Mr. Daley, thank you very much for joining us this morning. Thanks for having me. Reporter we were just trying to figure out what to make of this. All morning long weve been saying its relatively good news that we havent within hearing from the principalprincipals. What does it mean now that Speaker Boehner is going to be addressing the house at noon. I think its a strong sign there is movement. I dont know that. Im not on the inside. I dont know whats going on. I doubt the speaker is going to stand up and speak to the body and say nothings happening and were not going anywhere and just give a partisan speech. So im hopeful that thats what this means. I think it would be damaging to a process that has been basically as it was in 11, a pretty quiet going process kept in secret if all the sudden this becomes anything but that process. I think a very public negotiation does not help getting this done. In what is a relatively very short period to sort of get this stuff done with the holidays coming upon us. Thats right. 230 d 20 days until that deadline. There are going to be a lot of days that people arent in session and arent working through some of these arenas. Youd be surprised, becky, how the smell of air fuel will motivate members to get moving around the holidays. Come the 20th, 21st, 22nd, into christmas eve, those are great motivators because of family obligations. We hope. Reporter bill, the one thing that has surprised me so much is how much has been played out in front of the cameras to this point. How much rhetoric has been out there. It seems to me that that really fires up both parties bases. And i dont understand how that can be constructive at all. In fact, it seems incredibly detrimental. How do they talk themselves out of the boxes they put themselves in . I think its also a commentary on sort of our Politics Today and how you govern. In all due respect to the media you demand more of a public process. You demand that whether its through leaks or through keep pushing your sources as you do. Because thats your job. It makes it very difficult. Especially the longer this goes on to keep control of these situations. So i would hope that the speaker and the president , who can do this deal, can get back together personally and try to get this thing done. And then as we said in 11, basically everybody in leadership in the congress is going to have to hold hands and kind of leap off a ledge having some faith that politically theres a net to catch them all at some point. I understand the negotiations behind close ed doors. Maybe sometimes thats a good thing. Grover norquist was here earlier today. He said hed like to see cameras let in on the whole process so that nobody can mislead or not do exactly what theyre saying behind closed doors as well. Is that a good idea or bad idea . Thats one of the silliest ideas ive ever heard in my life. Obviously thats from somebody who doesnt want a deal. No wonder he suggests that. Because he doesnt want a deal. Reporter his contention is its worked in florida where they do have sunshine laws. Great. But i just think that at this stage of a fiscal cliff to go and have a what are we going to have . A reality show here . Let everybody and their brother show up . Well have snooki jersey shore all over again. Housewives of washington, d. C. They can come in, too. Reporter not a bad idea. Thats great entertainment. But part of our problem with governing today is some people view this as entertainment. There are real people out there that are suffering. Theres going to be as you know better than anyone real consequences if this thing doesnt get settled in a very short period. Thats not right. This is what people were elected to do. Do the hard things. Make the tough decisions and move on. The American People want that. Reporter bill, we had senator conrad with us earlier today. He suggested along with senators warner and senators corker that if we dont get 4 trillion plus in terms of the total package thats between revenue cuts or spending cuts and revenue increases that its a failure. Is that true . If its not 4 trillion plus should we look at this as i dont know if you could say its a failure. Obviously it would be i think the markets would tell you whether it was how disappointing it was. Look, any progress is helpful in this situation as youre digging yourself out of this hole. I wouldnt say its all or nothing. I think if youre not in the range of 4 trillion or more as a total package, and dont forget, theres been substantial cuts to the discretionary budget over the next ten years that this congress, republicans and democrats, at the president s direction, led last year. So theres a big down payment. But weve got a long way to go in those cuts. So i think theres a no doubt if we dont do 4 trillion or more, which is very difficult, i think the market will not be as enthusiastic. I sure would not be wanting to put a number out there. I dont think its helpful that somehow theres a failure if a certain number is not reached. I think its going to be important what the mix is and whether or not at the end of this people have faith that the systems come together. And then we can see growth in our economy. Weve got to get growth going. Its not just about solving the problems of the past with deficit. But how do we stimulate and cause some growth here . Thats everyone watches your shows, thats what they want to know already absolu know. Reporter absolutely. Thank you very much for your team. Coming up in the next hour, we are handing the reins over to maria bartiromo. We are expecting word from Speaker Boehner at the top of the hour. Carl, after you heard from mr. Daley what do you think . I was just tweeting his line about the reality show and the idea of cameras in the room. When you get bill daley making a snooki reference, becky, you know its a good news day. There you go. A lot to come still. A check on the markets. Dow currently up 105 points. The best day of the month even though weve only had seven trading days so far. More than that, if we close higher thats five straight for the dow. Weve not done that since the middle of march. Got to go back to springtime. S p up 11. Nasdaq up 38. Goldman meantime initiating coverage of retails today. Michael kors, gap. The firm says gap is the favorite of the retailers as it sees continued positive brand momentum. Then theres Dollar General falling after disappointing results for the quarter. Its gross margin did come in below expectations. Delta air lines making big news today. Officially buying a 49 stake in Virgin Atlantic for 360 million. Company is in the middle of a News Conference in new york right now. Our phil lebeau is there live with the latest. Phil . Carl, as we speak, so is Richard Branson. He is talking via satellite from somewhere in the caribbean. The press conference taking place in new york city. Theres Richard Anderson who has just taken the podium here in new york city. Theyre going to be announcing not only the outline of the terms of this deal but a little bit of the philosophy behind why delta is buying this stake. Lets take a look at the terms of the deal. Delta buying 49 stake in Virgin Atlantic. Basically buying the Singapore Airline stake. Thats 360 million is how much its costing. The Virgin Atlantic brand remains. Thats critical here. Just a few minutes ago Richard Branson said ignore all the speculation that im going somewhere. Im going nowhere. He plans to remain ceo of Virgin Atlantic. Why is delta doing this . This is all about increasing exposure to the london market. Specifically the slots at heath row. When you look at all the flights that are going to be added to the Delta Network through its alliance here with Virgin Atlantic from the new york market, this is very, very lucrative for delta. Particularly when youre talking about the corporate customer. As we take a look at shares of delta, were not really seeing much reaction to this deal today. In large part because for the most part it was baked in. Although a 5 bump is one theyll certainly take at delta. Dont forget, well talk with Richard Anderson first on cnbc at 11 40 about a half hour from now, carl. The thing you need to keep in mind about this deal, this is all about keeping that exposure to europe, particularly for the corporate customer. Thats the lucrative customer they want to court between new york and heathrow. High margin business. Nice dove tail between that story, phil, and the willie walsh, Richard Branson knee to the groin as to whether Virgin Atlantic lasts five years. Im headed over there. I hope somebody asks him about it. Im sure they will. See you in a few minutes. We mentioned Dollar General moving lower. That is dragging down some other discount names, too. Mandy drury. The ceo is making more comments about Dollar General this morning saying despite a strong start to the holiday season, he has rarn weekly sales fluctuate as much as they have recently. The cfo, by the way, carl, sayisay ing company will be cutting prices on certain items which has raised some concerns about margins. In fact, it does seem to be putting pressure on competitors like dollar free. Youve got Family Dollar as well moving lower today. Electronic retailer best buy, as you can see on the board there, also in the red by nearly 3 . Coach at the bottom of the board there also just marginally lower. Goldman sachs did today resume coverage of the stock slapping wit a rare sell rating on coach with a 58 price tag. Thats what were watching. As we say, retailers on the run. Run of the worst performing sectors on the s p today, carl. Back to you. Mandy, thank you so much. Tech companies are holding a lot of cash. Thats definitely no secret. But just where is all that cash . Youd be surprised. Were going to tell you after the break. First, Rick Santellis working on something for a little bit later in the hour. Hey, rick. Absolutely. And i think whats appropriate on the first day of a twoday fed meeting is to talk to a trader who has an opinion on the fed. Well be dealing and talking with art nolan at the bottom of the hour. And in his opinion, more financial alchemy on the way. Is he right . Is he wrong . Tune in and find out, bottom of the hour. [ male announcer ] fee a shadow of your former self . Cmon, michael get in the game [ male announcer ] dont have the hops for hoops with your buddies . Lost your appetite for romance . And your mood is on its way down. You might not just be getting older. You might have a treatable condition called low testosterone or low t. Millions of men, fortyfive or older, may have low t. So talk to your doctor about low t. Hey, michael [ male announcer ] and step out of the shadows. Hi how are you . [ male announcer ] learn more at isitlowt. Com. [ laughs ] hey you wont take our future. Aids affects us all. Even babies. Chevron is working to stop mothertochild transmission. Our employees and their families are part of the fight. And were winning. At chevron nigeria, we havent had a reported case in 12 years. Aids is strong. Aids is strong. But we are stronger. And aids. Aids is going to lose. Aids is going to lose. Its no secret big Tech Companies are holding a lot of cash. Billions, in fact, most of that cash is sitting outside the United States. Jon fortt is live in san jose with more on that story. I spent some time searching if latest sec filings to see just how much cash is in overseas Bank Accounts where its not subject to u. S. Taxes. Heres a snapshot. Microsoft, 87 of its cash. Cisco. Oracle at 80 . Apple at 68 . Google at 64 . Thats important to note. The reason why these companies have so much cash overseas is that theyve been Global Growth stories. When microsoft sells product overseas the proceeds go into accounts over there. Dont come to the u. S. Unless microsoft needs to buy something here. You can see it plays out in a company like apple, too, where International Launches and International Retail expansion have become far more important than the u. S. Where growth is concerned. Just five years ago apple had 58 of its cash in the u. S. This is actually a big issue for a company like cisco where John Chambers has been very straightforward about saying if the federal government lets us repay treeuate this cash, bring it to the u. S. Without a big penalty, well use it to hire and grow in this country. If not well hire less and, by the way, keep making bigger overseas acquisitions, too. All of this gets a bit dicier when you consider a lot of u. S. Companies have gotten pretty good at avoiding tax on International Sales by using havens like googles bermuda subsidiary and amazons strategy of basing european operations in luxembourg. It raises the possibly a repatriation they are doing what fiduciaries do. Jon fortt in san jose. Apple rebounding today. Still suffering from a nearly 10 loss over the last two weeks. Up next, well find out whats next for apple shares and if the stock is a buy here at 549. A little bit later delta ceo Richard Anderson will join us live to talk about the new stake in Virgin Atlantic. Were back after a break. She keeps you guessing. Its part of what you love about her. But your erectile dysfunction you know, that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. Do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in Blood Pressure. Do not drink alcohol in excess with cialis. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, seek immediate medical help for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a 30tablet free trial. How theyll live tomorrow. For more than 116 years, Ameriprise Financial has worked for their clients futures. Helping millions of americans retire on their terms. When they want. Where they want. Doing what they want. Ameriprise. The strength of a leader in retirement planning. The heart of 10,000 advisors working with you onetoone. Together for your future. Take a look at apple today. Managed to get over that hump of 540, 541. Currently 548 and change. Off its high of 705, of course, certainly a topic our Capital Markets editor Gary Kaminsky has touched on quite a few times. Another go today. We are. Due to popular demand request lets get right to it. Joining me is tom mcclellan, editor of mcclellan report. Market newsletter. Tom, we showed some charts recently you had sent on to us. So i know youve got a number you want to share with the viewers. Lets get right to it and explain why you think this is so relevant to apple today. Well, the amazing thing is that apples share price pattern, not the company, but were talking about the stock price, seems to be replicating the history of what we saw with rca in the 1920s. Rca was the giant tech darling of the 1920s. It was putting a radio in every home. It was the leading innovator. It was a Great Company then and it continued to be a Great Company afterwards, after it topped in 1929. But the Price Patterns are nearly a match. What that tells me let me jump into that. When we showed this chart you showed some time ago a lot of people wrote in how can you make a comparison to a stock in the 1920s. You had a stock market crash during the period, a number of other things. As a technician how do you sort of correlate between those type of events and the charts of a stock price . I get those questions a lot. And people who write to me angry emails tell me the two companies are not similar at all. The two times are not similar. I say, yes, thats true. But the patterns are similar. What a stock price pattern tells you is not so much about the company. It tells you about the people that are invested in it and how they are behaving and what the resemblance is saying to us is that the behavior of the investors in rca in the 20s and the behaviors of investors in apple now is almost exactly the same. Theres a set of fezziphysics involved in putting in a top. In terms of the apple rca comparison you believe that the top in apple has been made . I do. Were getting a nice pop thats right on schedule this week. A lot more damage to come next year. Its not going to be a good time for apple, the stock. Apple the company is still a Great Company. Theyre still innovating, still doing great things, still going to be doing business for a long time to come. Apples share price is falling into the same pattern that weve seen lots of times before. You also look at apple microsoft. What does that chart tell you in terms of, again, the technical read on those two names . After looking at the resemblance to rcas share price from the 1920s which i was able to do with some help from the folks at Global Financial data. They got me the data on rca. We looked back at what the resemblance was to microsoft in 2000 at the top of the tech bubble. We see the same resemblance. Right now were getting that pop on kind of the right shoulder that microsoft had. Apple is making a similar pop. We have a decline coming ahead according to what microsofts share price pattern did in 2000. Its following the same dance steps. All right. So, i mean, clearly we know what your viewpoint is on apple. While we have you here, tom, in terms of the overall market, equity markets, i know youve been looking i think with euro similars. Give us a sense of what you see for the s p looking at the charts here. 2013 is not going to be a great year. We look at the commitment of traders data for euro dollar futures. This is not the euro versus the dollars. Its euro dollars, an Interest Rate product. Commercial traders do, that tells us a year ahead of time what fund flows in and out of the stock market are going to look like. Weve got a big decline coming up now. Another top in may. A giant flushing sound after may and into october of 2013. Not going to be a great year. Which is not is a surprise in the first year of a new president ial term. Its typically not a good year. Not like the third year which is always up. But the third year quite often has trouble and things are shaping up for that to happen again this time. Tom, thank you for your information, for sharing with us. We appreciate it. Well see you again soon. Carl, i must say, you have to always remember the difference between neck echnicals and fundt am ales. Toms got the strong opinion in terms of looking at microsoft and rca. Again, it is a technical read. Apple and rca. Different eras, different epics. I just went to the apple store over the weekend, upgraded three of my kids phones to the iphone 5. Its hard to as a consumer, and he said the company is different than the stock price, but, again, its the type of thing important for viewers to understand. A lot of money moves in and out of names simply based on technical movements. Its a great guest. A few moments left in europes trading day. The close over there. Theyve had some news. Whether its about greek buyback or Investor Confidence numbers. Well get that close in 3 1 2 minutes. Dont go away. Son to discover the kid in all of us. Enjoy Free Shipping and great values on your Holiday Shopping from l. L. Bean. Monarch of marketing analysis. With the ability to improve roi through seo all by cob. 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. Im going big. [ male announcer ] good choice business pro. Good choice. Go national. Go like a pro. [ male announcer ] good choice business pro. Good choice. Welcome to the world leader in derivatives. Welcome to superderivatives. A minute to go until europes close. Simons here with yet another illustration of the collision between reality and how the market reacts, simon. Essentially were trading relatively optimistically into the close in europe. We do have breaking news of what is happening with greece. The buyback has gone through. Theyve raised over 31 Million Euros billion euros at face value. It would appear they had to pay more to get the debt off the u. S. Hedge funds and the greek banks and everybody else. Therefore theyre short by about 450 Million Euros on their targets. Eurozone Conference Call is about to start with the finance ministers to sort out exactly what they do. In general terms around europe today there is optimism. Youll see that in this close. Europe shutting down. The european markets are closing now. Remember yesterday and all that concern we had about where italy might go with the resignation of mario monti. Greece is higher. Por sh gal is higher. Spain is higher. Its a good day for investor sentiment. Strongly it was revealed today. Optimism over what the fed is going to do in the United States tomorrow. Optimism there will be a deal on the fiscal cliff. You have optimism that the recapitalization of the banks is going to be delayed by another year according to the bank of italy. And you have optimism as well on mar of election promises as we now face the pros wekt of a much earlier election in italy. To that end it is fascinating. Sylvia berlusconi has come out today warning about the germano center of politics. In other words, too much of a focus on what is happening from germany and the austerity inspired by angela merkel. In particular, he is drawing attention to this. Which is the spread of the extra that investors demand to hold italian bonds over german bonds. Ive shown this to you a couple times. Over the last year its been a mainstay of a lot of the italian business broadcasts internally. They say our bonds are currently trading so many basis points above the germans on their hourly bulletins. That was one of the reasons why at the height of it berlusconi was kicked out of power. Hes saying now this is a total calm. Italians essentially should ignore it. He said the spread is a con. Back to you, carl. He is back. Silvio is back. As we head into the final fomc meeting of 2012 fed policymakers have traders on edge. Want to get to Rick Santelli on that in chicago. Im on edge, all right. Lets do a summary before i bring my guest and friend art nolan in. December 5th you have a 2. 86 trillion fed Balance Sheet. You have 1. 65 trillion of treasuries within that. You have 884 billion of mortgagebacked securities. Of course, you have an Unemployment Rate more dramatically affected by beaming the unemployed to mars. But it is just a bit under 8 . Why do we have to keep going down this road . Why do we need to be printing more . What is the fed accomplishing . And, you know, as you said, where are more leeches . The one thing, they do the same thing over and over again. It just doesnt seem to be working. They keep coming into with bigger amounts because they have to to have the same effect. They have to come in with more amounts every time. They keep coming in with it. Theyre already projecting the Balance Sheet at the end of next year might be 4 trillion. Let me stop you there. The reason it will probably be 4 trillion and its kind of been stuck just under 3 trillion for a while is because the sterilization of twist ends. Right. Why dont we talk about that. The market is expecting them to replace big twist, selling of short term securities to buy the long term with an actual bond buying program. Hence the expansion. The expansion. Especially since the mortgage back has no limit on it. So the next program it does have a limit. It has the issuance. That doesnt seem to stop. Because many days they have purchased more than a new issue market has created in mortgage backs. So the next program will directly add to the mortgage backs additions to the Balance Sheet. You know, the interesting thing about that is no ones, you know, two years ago we were talking about an exit strategy. No ones talking about an exit strategy now. They were running through exercises. Lets do a little exercise here. The conventional wisdom is that theyll never sell this Balance Sheet whether its close to 3 or close to 4 trillion. Just let it run off. Okay. What happens when two, three years down the road inflation starts to rear its ugly head . Normally you see mad sells. Pulling money out. Does that force an exit . I wonder if were going to have to wait that many years. At some point if you get any inflation what tools ben bernanke has said many times they have the tools necessary to do this. I dont know what those tools are. If you cant if you dont want to sell your Balance Sheet where are you going to go with it . The irony here is Interest Rates probably would have been low anyway due to the uncertainty in the world. Europe. Our fiscal cliff. Now with this position, they have an unwinding issue. So the saga continues. Carl, back to you. All right. Rick, thank you so much. David faber has joined me here onset with breaking news as well. I want to update people on a story weve been following for a couple of months now. Sprint and clearwire. They are moving closer to a deal under which sprint would acquire the roughly 49 of the company it doesnt already own according to people close to the situation. While a tedeal is not imminent e companies are involved in active negotiations and could announce an agreement prior to the end of the year. Given the complexity of the relationship between the two companies, the governance agreements, the ownership structure, not to mention sprints pending deal to sell a majority stake to softbank, most sources caution a clearwire acquisition is still fraught with difficulty. In recent days sprint has has significant conversations with a number of clearwires big shareholders. Bright house, intel and come cast, owner of nbcuniversal, aimed at purchasing their stock at roughly 3 a share according to people familiar with the conversations. Now, the price that sprint would offer for the roughly 488 million shares that are held by the public, well, that remains unclear. While a special committee of directors might agree to a similar price, it remains to be seen whether a tender at that price would succeed. Sprints intention as i previously reported has been to acquire what it doesnt own of clearwire in order to add that companys muchneeded spectrum to its own as it embarks on life as a subsidiary of soft bank. Soft bank is hoping to close its deal to acquire 70 of sprint by march or april. Sources tell me sprint hopes to close a deal to buy clearwire simultaneously. Hence why they would want to announce something in the not too distant future. The deal would require the consent of soft bank that is to buy clear wire. Perhaps more importantly, any deal between sprint and clear wire, well, that would need to be conditional to the closing of the soft bank deal. You dont want sprint out there potentially alone owning clearwire, of course, adding yet another layer of complexity. Clearwire which has 5,000 in debt is still in need of liquidity. It did not call its first lien notes yesterday as it might have been expected to do to remain an independent company. Any purchase by sprint would dramatically lower clearwires borrowing costs, something already reflected in the price of bonds. We watch the stock. When it comes to clearwire its really the bonds that tell much of the story trading well above par. Well continue to watch this but did want to bring people up to date on what is the very latest. Is this all meshing the way you thought it would . It is in many ways. Again, it is very complex. It doesnt mean it will necessarily happen. My sources close to this deal, originally it told me it is sprints intention and hope to buy clearwire. They need spectrum. They want to add all these new features. You need spectrum to do it. Which is why you hear pcs as a conversation or other things. Clearwire gives them at least spectrum as they continue to have to grow that company with the hope, of course, being they will close the soft bank deal in the First Quarter, end of the First Quarter next year. When youre a man and you want to be number one, you need spectrum. Bandwidth. Pisani is here at post nine. The markets acting like theres a deal coming. Or its near. Good heavens. Were right at the highs of the day here. Weve been moving up. John boehner, speaker of the house, will be talking about 12 00. Hes supposed to update us. Put up the dow. On the negotiations on the fiscal cliff. Obviously optimism is running high right now. Were up five days in a row now on the Dow Jones Industrial average. As far as what the markets are doing, were being led today by tech stocks. Apple is having a decent day although it still doesnt have a trading range. At least not in my opinion. Its trying to trade between 500 and 600. I dont know which way its going to go. Texas instruments having a very good day. Rauzed their Fourth Quarter outlook. Theyre getting out of the mobile chip market. Altera is okay. Two sectors having a big day. Defense stocks, number one. Who would have thought . What sequestration worries are there . This is a historic high. The philadelphia defense index, the main index everyone watches in defense stocks, historic high today. All the big name defense stocks are to the upside. Raytheon, northrop, rockwell. All are up and outperforming the market this month. Who would have thunk it . Say what you will. These stocks are having big worries on sequestration. Put up my two main points and ill tell you what i think is going on here. Even though the threat is looming here theyre ignoring it. I think regardless. Everything i read indicates theres budget uncertainty and slower bookings comes from all the defense names. Frankly them trading at a slight premium to the market now strikes me as a bit odd. Nonetheless, thats whats going on. Let me also mention the airlines. Because the Airline Index is hitting a 52week high today. There is some general optimism. Delta, theres actual deals. Kell t delta is buying into southwest. 49 stake from singapore. Good commerce from some of the airlines recently. Let me show you what i think is happening. More consolidation coming here. Were talking about some of the deals here with lcc making an offer to amrs creditors. That could be a big factor. Theres more consolidation coming. The booking trends have improved recently. As for hurricane sandy, very minimal impact. Finally, delta and southwest are hosting an investor Day Conference this week. A lot of people are expecting some fairly optimistic commentary from them. The airlines, business bookings are looking pretty good. Add airlines to housing as well as whats going on with autos as industries that are showing some signs of improvement right now. Absolutely. You mentioned boehner speaking at the top of the hour. In the past few moments the obama 2012 Campaign Staff has tweeted the following. If your taxes go up, republicans will have made a conscious choice to let that happen. We have no way of knowing if this is somehow related to what the speaker may say in 20 minutes time. Might just be yet another echo of an existing talking point. Thats going to be one more tea leaf to read in the next half hour. When we come back, Delta Air Lines buying a 49 stake in Virgin Atlantic today. Well talk to the ceo about the deal and what it means for the airlines future after the break. Again . Its embarrassing its embarrassing we can see you carl. We can totally see you. Come on youre better than this. All that prowling around. Yeah, youre the king of the jungle. Have you thought about going vegan carl . Hahaha you know folks who save hundreds of dollars by switching to geico sure are happy. How happy are they jimmy . Happier than antelope with nightvision goggles. Nice get happy. Get geico. Fifteen minutes could save you fifteen percent or more. [ male announcer ] when gloria and her Financial Advisor made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. When you want a Financial Advisor who sees the whole picture, turn to us. Wells fargo advisors. But im still stubbed up. [ male announcer ] truth is, nyquil doesnt unstuff your nose. What . [ male announcer ] alkaseltzer plus liquid gels speeds relief to your worst cold symptoms plus has a decongestant for your stuffy nose. Thanks. Thats the cold truth you know it can be hard to lbreathe, and how that feels. E, thanks. Copd includes chronic bronchitis and emphysema. Spiriva helps control my copd symptoms by keeping my airways open for 24 hours. Plus, it reduces copd flareups. Spiriva is the only oncedaily inhaled copd maintenance treatment that does both. Spiriva handihaler tiotropium bromide inhalation powder does not replace fastacting inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with spiriva. Discuss all medicines you take, even eye drops. Stop taking spiriva and seek immediate medical help if your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain, or problems passing urine. Other side effects include dry mouth and constipation. Nothing can reverse copd. Spiriva helps me breathe better. blowing sound ask your doctor about spiriva. Kochling up on halftime, riding the rally. A top strategist tells us the one thing that has to happen for stocks to rise another 5 by years end. Amazon soar mr amazon soars more than 40 in 2012. Buy more or sell . As lawmakers try to rise above should you sell this years winners ahead of tax changes . Trade rs are naming names. I love names. Meantime Delta Air Lines buying a 49 stake in Virgin Atlantic looking to increase its exposure in the uk. Phil lebeau joins us with the ceo of delta in a first on cnbc interview. Phil . I am joined by Richard Anderson, ceo of delta. Youve Just Announced the deal with Virgin Atlantic. This is all about the access to europe and heathrow, correct . Its really about the access to the uk u. S. Marketplace. Its by far, by 200 , the largest market between europe and the u. S. And deltas had about an 8 market share. With this transaction, we get to second place with about a quarter of the market. A lot of people looked at Singapore Air when it had 49 , which is what youre buying. They said Singapore Air never could really maximize the profit potential. What can you do that Singapore Air could not do . Is it about that access between new york and london . Yes. And its about geography. Singapore is a long way away from london. And the traffic flows between singapore and london are light. A couple hundred people a day between singapore and london. Whereas the traffic flows between the u. S. And uk for business travelers represent 2 billion in annual revenue. So its massive. Massively larger, and the geography is a lot closer. Youre expecting approval perhaps by the middle of next year. Once that happens when will you say, okay, lets modify some of the flight schedules in terms of theres 31 daily flights right now for Virgin Atlantic between europe, the uk and north america. Will you modify those to maximize new york and london even more . We will do we will take steps once we have the appropriate government approval, and weve had implementation of antitrust immunity, you would expect in 2014 that we will begin to maximize the slot portfolio, Virgin Atlantic and the fantastic brand that sir Richard Branson has built, to leverage it even more to the u. S. I want to talk more about Richard Branson. He made it very clear hes not going anywhere. The brands not going anywhere. Willie walsh has taken to making disparaging remarks. You said during the press conference youre not real keen on what hes been doing. Correct . I think thats been going on between ba and virgin for a long time. Sir Richard Branson has built a phenomenal pran chfranchise. The key value in the franchise is his leadership and the brand hes built. Thats core to what our investment is. We have to have him, the virgin group, and their great product and great employees to be successful in this joint venture. So he is key to the tranks action. As you said up there you dont know what the english term is for it, but you have a term in texas for it. We do have a term in texas for it. But Families Watch this show. One last question. Youre growing your corporate business by about 10 . Thats Phenomenal Growth in this market. Are you seeing any slowdown at all in corporate demand for flights right now . Corporate demand is quite strong. You know, when we look at our survey, so we base these on actual data, booking data, unit revenue data, forward looking, plus surveys we do with corporations, and the outlook in 2013 is quite strong. Richard anderson, ceo of delta on a big day as they buy a 49 stake in Virgin Atlantic. Guys, back to you. Phil, thank you so much for that. Good stuff. When we come back, how does a store specializing in gadgets and gizmos say successful . Well talk to the ceo about the Holiday Retail season, consumer and a lot more when we come back. [ male announcer ] at scottrade, we believe the more you know, the better you trade. So we have ongoing webinars and interactive learning, plus, inbranch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. Our teams have the information you want when you need it. Its another reason more investors are saying. [ all ] im with scottrade. From hovercrafts to pocket projectors brookstone has quirky gadgets and gizmos. Steven bebis is ceo of brookstone. Hes letting us know what best selling gadgets will be this holiday season. Good morning to you. Good morning. Before we get to some of the products i want to ask you, it seems like it would be the ultimate in a discretionary item. And that if you were cutting back on a Household Budget you might cut back on Something Like this first. Is that true . Not really. Because a few things. First of all, we offer great value in our products. So our products last a lifetime. And consumers are cutting back, they think about something that they can enjoy and keep in their family for a long time. Our products improve the quality of your life. And so as they stay home, we have wonderful products like our wine aerator. I was just going to ask you about that. One of the first things thats on this list for 49. 99. What is it exactly . Yeah. Its ill show it to you right here. You actually put it in the bottle. And you aerate the wine in 30 seconds. Right in the bottle. It aerates the wine. You dont have to decant the wine. Right in the bottle. Reduces the tannins. And you can enjoy wine instantly. Its a great item. For a wine connoisseur. It says across all prices the aerated wines were found to taste better. I think wine connoisseurs probably agree with. Tell me about this hdmi pocket projector. Almost 300 bucks. 299. Fits in the palm of your hand. You can connect it to any smartphone. Ipad device. You can watch a h definition movie with a 50inch 50 to 60inch screen on the wall. And its rechargeable. And so you can actually watch a full length movie without having to plug it in. Wow. Finally, the max 2 dual node percussion massager. You have to have a massager if youre talking brookstone, right . Exactly. Were known for massage. We have great products. What better product to get someone for the holiday. Something they can use every day in their home to improve the quality of their life and improve their health. Its an amazing, amazing device. You ever this ones cordless, in fact. Before i let you go, you ever done any studies as to the ratio of people who come in to browse, try something out and actually buy something . Its very high. I mean, its very exciting interactive store. You come in, try the products. You can actually demonstrate them and see how you like them. So we have a very high conversion rate. Stephen bebis of brockstone in newton, massachusetts. Happy holidays. Thanks so much. Thanks for having me on the show, carl. Thank you. A quick check of the markets before we go to break. Dow is up 114. Again, five days straight. We havent done that since the springtime. Talk more about it in a second. By the way, up next, four years ago today Bernie Madoff was arrested for running the biggest ponzi scheme in u. S. History. Are we any safer today . Well talk about it after a quick break. Ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. [ male announcer ] break from the holiday stress. Letfor an idea. S a grand idea called america. The idea that if you work hard, if you have a dream, if you work with your neighbors. You can do most anything. This led to other ideas like liberty and rock n roll. To free markets, free enterprise, and free refills. It put a man on the moon and a phone in your pocket. Our countrys gone through a lot over the centuries and a half. But this idea isnt fragile. When times get tough, it rallies us as one. Every day, more people believe in the american idea and when they do, the dream comes true. Were grateful to be a part of it. [ male announcer ] tis the season to discover the kid in all of us. Enjoy Free Shipping and great values on your Holiday Shopping from l. L. Bean. Want to take you to lansing, michigan. This video shot a few moments ago where the state legislature is considering making michigan the 24th right to work state. Basically restricting unions in what is obviously a stronghold of organized labor. This is the scene outside the capitol which has already been closed because it was filled to capacity. An estimated 10,000 people demonstrating outside where its about 25 degrees. Also several School Districts in michigan have been closed as the teachers there have gone to lansing to join the rallies. Quite a scene today in michigan. Meantime, time for a Capital Markets oped. Gary, we mentioned madoff. Its hard to believe its been four years. As a matter of fact, david and i were just talking about it offset. It was 3 00 four years ago today. I got a phone call. Youre not going to believe this. They finally got madoff. Faber and i had been chatting about it probably for close to a decade. Remember, within the industry, the numbers, the performance, this was something that wasnt unknown. But just people were shocked. Again, that day that four years ago, david, can you believe it . No, we cant believe it. Finally nailed him. Heres the thing. Madoff wont happen again for the following reason. Investors are smarter now. Whereas the assumption that you could generate a 1 every month, be up 1 no matter what else was happening, even if there is somebody out there with a black box that can do it which i dont think there is, nobody will ever just take it for granted as a result of what happened with madoff. The other thing, too, anybody who has money in a fund, theyre no longer since madoff going to allow that money to just sit there. Theyll use custodial accounts, avd dvp. Assets directly at that fund. If they do, shame on them. Cover in the journal is about Financial Advisers who cannot get their clients to buy stocks. They site the facebook ipo. I dont know if they cite madoff in particular. Do you think it had a dulling effect on enthusiasm even to today . It did. But remember that also happened at the time when the market hit the lows. We talked about it yesterday. Cited many of the reasons why many think the stock market will go higher. You pointed out the