Session. And the s p 500 down 6. 70 points at 1409. December a historically good month for the markets. The s p has risen 8 of the past 1 years in the final month of yeert. With fears of the looming fiscal cliff, can the trend continue . Were bringing in mike from Yahoo Finance and cnbc and yahoo have a Business Alliance to share and coproduce editorial content and gordon along with bob pisani. Gordon will be along momentarily. Michael, let me start with you. You say this markets preoccupation with the fiscal cliff is overdone. Do you think we go back to the trend and that is that december is a good month on the upside for stocks . Definitely one of the tail winds. All else being equal, probably definitely a strong point for the market. I think this market is laboring to look through the interim noise. You had decent pmi numbers, with the ism disappointing and i think the market is trying to assimilate all this. One thing i take encouragement from, things like junk bonds, small caps have not been phased, treasury yield has not collapsed. That means the Economic Outlook is not being downgraded with asset markets the way you might expect if they really feared the fiscal cliff was going to hit. We certainly dont think consumers are fearing the fiscal cliff because they keep buying and buying ahead of the holidays. Bob, let me get your take on this. Before you go into december as a ho whole, i know earlier there was a fair amount of stock to buy. What happened at the end of the day, bob . The important thing is we had a lot of buyin balances but met with selling. The volume picked up, heading toward 650 million shares. I think heavier on the volume side. Buy orders were matched with sell orders. We got a counterproposal on the fiscal cliff. The bad news is they are very far apart. The other thing, theres a dawning realization were in a new era of austerity. American austerity is beginning in 2013 and thats beginning to dawn on a lot of people. Gordon is with us. Let me ask you the same question, what happened at the end of the day here . You had about almost a billion to buy and ended lower. Tell us how the end of day finish and what youre expecting. End of days have been spectacular here. Friday is the craziest closing identify seen down here for a long time. Youve seen a lot of activity coming in for the liquidity event, posing imbalances not just being met but reversed. Thats the order of trading of the day here going forward. If you look at the month i think well see muted action in response to whats happening in terms of the fiscal cliff. Theres enough arguments to believe it will sustain at these levels but i think well pick up serious action in the last ten days of the month and we could see significant volume come down here. Thats what you want to see and thats what youre expecting end of the month there. Lets talk about allocating capital. What do i do in the face of uncertainty, fiscal cliff, global, how do you want to allocate capital . Weve been advocating clients stay diversified and the clear recollection that Central Banks had desire to increase wealth effect among stock and bond holders. Have you to be careful of longonly actions. We had implemented hedge funds into our investors portfolios, looking for nondirectional strategies like long short equity, currencies, assets that arent as directly influenced or dont have as much beta in them relative to typical equity and bond portfolio. Great point. I guess, you know what, if i had to pick who is the face of 2012 for the year, you know how time does the person of the year, whos the face of 2012, i would say Federal Reserve, ben bernanke, he was there all year, stimulus, got to be there till 2015. Is that the only thing we have going for us in terms of certainty in this market right here . Theyre certainly the biggest player. You know, we have a fed meeting coming up on the 11th. That will increase volatility in the market into the marketplace. That comes back to our desire to ask clients to keep fully allocated to their investments, not try to market time this market too much, given volatility we expect. I would agree with your observation, maria. I think one of the big problems we have is if you look at this president obama proposaproposal contains fiscal stimulus republicans object to. It will be hard to get fiscal stimulus through this year. Monetary stimulus from the Federal Reserve is very much alive. Absolutely. Let me get your take on what we see happening here because we have breaking news on oracle. Once again, more Companies Paying a dividend this year not waiting for next year because they want to be sure investors have a chance to get attacked at 15 Capital Gains tax or dividend tax as opposed to much higher because we know that taxes will probably go higher in 2013. Oracle is accelerating payments of 2013 dif dens. Theyre going to pay second quarter, Third Quarter and Fourth Quarter dividends this month. Gordon, what has that done to trading and investing environment . All these special dividends. Oracle is doing it now, second quarter, Third Quarter dividends this month so investors can get taxed at the 2012 dividend rate. Its bigger than that because its not only the corporation themselves but corporate executives. Cashing out options looking for preferential tax treatment there as well. Thats just prudent corporate management. You cant fault them. Stocks paying special dividends have been outperforming the spx in the time period since this started happening. In some ways in the convoluted way its been a positive for the market. Oracle is down, though o this news. Oracle is down right now. Gordon, you make a really good point. Thats where the performance has been, the conditions paying these special dividends. When i see an announcement like this, you as an investor, would you buy these Companies Paying special dif depends to make sure the tax rate is a low rate versus what we may see in 2013 . Certainly it might be an opportunity short term, over a short horizon. Im not sure i want to lend to those companies. Im the bond cio, so im not sure i want to lend costco, as an example, a bond issue, a very low rate so they can pay their shareholders. But i understand the dynamics of it. I understand the politics and economics of it. It makes complete sense for them. Makes it a tougher hurdle for me as a bond investor to think about lending them money when proceeds are used as a dividend effectively. Fair enough. Thank you, gentlemen. We appreciate it. Well see you soon. Thanks, guys. December may historically be one of the better months of the year for the market but you wouldnt know that today. Bertha coombs wraps it up. We basically had all but one s p sector today closing in the red. Still had pretty big winners. Verisign, registering domain day. Dell with the best day of the year on a goldman upgrade. P pitney bowes replaces ceo. And equifax buys a company for 1 billion. Equifax hitting alltime highs, one of the few that held onto the days gains. On the downside, netflix. Wall street journal piece says big risks in commitment to original programming and what that will mean for profit margins. Meantime, materials, the days worst sector, that weighed on owens illinois. Piper jaffray cut outlook seeing same store sales down 30 next quarter. The company will look to make 1 billion in cost cuts in 2013. Making that announcement during investor day. Exelon, utility, one of the big dividend payers not getting much of a boost. With a 6. 9 yield. Take a look at the stock today, how utilities continue to get hit. Back to you. Isnt that interesting, bertha . 6. 9 . Who would say no to that in this environment of rock bottom days. Is it possible to make money in these companies after dividends are announced . Our money pros give you strategies for dividend payers. Does the Defense Industry have any defense if we go over the fiscal cliff and its starved of billions of dollars in contracts or are massive job cuts unavoidable and on the horizon . Then that millionaire next door, he may no longer be a millionaire, or she f we go over the fiscal cliff. Our wealth editor robert frank tal lis up the casualties coming up. Youre watching closing bell on cnbc. This is america. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. A passionate belief, and the foundation on which Merrill Lynch has been built. Today, our Financial Advisors lead from a new position of strength. Together with bank of america, they have access to more resources than ever before. A steadfast commitment to help you achieve your financial goals in life. Thats the power of the right advisor. Thats Merrill Lynch. Who doesnt want a special dividend . The hits keep coming. Oracle announcing it will accelerate payments on three quarters worth of dividends for investors who hold the stock as of december 14th. Now about 100 companies and can counting have announced more than 22. 5 billion worth of special dividends in the Fourth Quarter. Presumably to get ahead of higher dividend taxes if the fiscal cliff deal is not out. Right now, dividend taxes are at 15 . If we go over the fiscal cliff, they could go up to 44 . Today several more companies jumped into the pool, including satellite tv provider dish. Whats interesting with many like dish, for example, even if you dont own the stock, you have until december 14th to buy it and still git that special dividend paid out two weeks later. Should you be jumping in . Should you buy a stock just to capture that dividend . Cnbc contributor ron says its tough to pull off. Ron s this a smart strategy for investors to pursue . Whats your take . I expect large i traders can do these things more efficiently than individuals. Back in the 1980s japanese investors got special treatment for dividend payments. It was well better than what they got for Capital Gains. They used to engage in strategy called dividend rolling or dividend capture strategies where they would buy the stock one day before it went ex dividend, captured it, sold the stock later. I would suggest that unless you really want to own the stock, particularly some like dish, i wouldnt try to play around with this stuff because dont forget, the stock goes down by the amount of dividend paid out on a particular day. Can you get trapped in some of these strategies by being too cute. I hate to go against fundamentals. Youre cautious about buying those stocks for special dividends. What are the risks . Have you to remember, the reason you have a special dividend is because there might have been better than expected earnings or might be some restructuring you already announced. It should come out of your cash. Right now whats happening with these special dividends is theyre not. A lot of companies are borrowing money to do it. When you start borrowing money, that might impact the companys growth moving forward. They want to offer these special dividends. A lot of times it is, because the current shareholders can really cash in on their shares based on current tax rates. Like the las vegas sands, ceo owns 51 . He convinced the board to did a special dividend. He pockets 1. 2 billion and only pays 15 tax on it. It cost the company 2. 4 billion to do that dividend. Again, thats the trap. Is it really helping the Company Getting anything from the special dividend . Thats a good point. In fact, what were hearing now is that Larry Ellison will get a sweet payout of about 199 million based on the stock at oracle because of this dividend. Theyre accelerating the dividend. Hes pulling his income forward, taxed at a 15 rate whichcy Smart Financial engineering thing to do for anybody who already owns the stock. You dont buy stocks typically, historically you have bought stocks for the dividend as part of a total return investment but not for a special dividend or accelerated dividend like in the case of oracle. Whats your take, ron, on the reason to buy dividend payers . Lets say hipt cal we go over the fiscal cliff and dividend taxes go from 15 to 40 . Does that take away my incentive and reason to buy a dividend payer . Yeah. I would buy a stock you expect or a company you expect to be buying back shares next year because i expect Capital Gains tax, there will be a substantial difference between the two. Its a good point. Andre, whats your take on that . Do you think well see more buybacks as opposed to dividend payouts . Who gets hit in the higher dividend tax . I think ron makes a really good point. When you come in and buy this stock back, obviously youre delivering the shares so that gives shareholders more profitability on their actual shares. So i think who really gets hurt are the Companies Buying these companies because they wanted that extra dividend. The price will drop down to where it was before the dividend was announced. Unless youre a trader and trying to somehow be sneaky or cute and try to capture a little profit, you might be stuck with a stock that isnt worth owning. Good analysis. We appreciate your time tonight and well see you soon. Could going over the fiscal cliff destroy the housing recovery . Theres a little nonprovision which could derail the comeback for sure. Find out what the head of prudential real estate says. You might want to hear what he has to say in terms of the mortgage market. 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[ laughs ] all americans face increase in taxes. To fall off the cliff could decrease the number of millionaires. If we go over the cliff, the wealthy would almost certainly become less wealthy. The more important impact is that fewer americans would become wealthy. Lets go through the numbers. The u. S. Has around 5 million millionaires with a total net worth of 18. 8 trillion according to insight in london. If we go off the cliff, next year the population of millionaires would drop by 315,000. Their fortunes would drop by 240 billion. If we get a deal but its bad for the economy, the millionaire population would drop by 26,000 millionaires. If we get a deal and its good for the economy, millionaires would grow by 230,000 and their fortunes would soar by 1 trillion. Yo under score the cost of the cliff, if no threat of a cliff at all, the number of millionaires would grow by 443,000, a 9 increase. The difference between no cliff and going over the cliff is more than 750,000 millionaires, or about 1. 3 trillion in worth, the gdp of canada. Im looking at the impact of Economic Growth on millionaires, not attacks which could reduce that growth but a cliff deal alone could be worth 1 trillion in new wealth and new millionaires. Another reason why the folks in washington should keep on talking. Really interesting stuff. So, while we have you, robert, lets talk about what we learned on oracle, announcing plans to pay out second quarter, Third Quarter and Fourth Quarter dividends this month. What is ceo Larry Ellisons cut on this . Is it 199 million as reported a minute ago . It sounds like its around 200 million. You had that great interview with him where hes talking about his dream of buying the lakers. This might help him do that. 200 million. His tax savings alone on this, if dividends are now at 15 and they go up to over 43 , his tax savings alone, just by doing it this year, over 60 million just on the tax savings. This does make sense for those really big shareholders like Larry Ellison. You know, hes the ceo of the company. So, you know, we could look at him and say, okay, well, hes saving all this money but the savings ripple through, right . Absolutely. If youre a shareholder youre saving a huge amount of money, particularly if the dividend goes to 44 . Absolutely. His take of this is a tiny portion of the billions of dollars that american shareholders throughout this market are saving. You look at Something Like sheldon addleson. This is spilling through the market and well see a lot of accelerated income for shareholders this year. Well leave it there. North rupp grum mond ceo talking about workers could be out of a job. Well talk to the ceo of a