From another cash infusion . Ben pace says hes expecting the Federal Reserve to announce another round of stimulus at the meeting next week. Is that what the markets really want right now . Ben pace joins me along with chris heize and rick santelli. Ben, lets talk fed policy. You think the fed announces qe4 next week . I think its the fact the twist operation is ending at the ends of the year, and they dont feel compelled to incrementally tighten that. That means it has to be replaced. Thats the qe4, the fact theyll continue to buy to continue to be just as easy as theyve been since the september 16th qe 3 announcement. So you think its a continuation. Whats the impact on the market, do you think . Is it priced in . Are we expecting that . What do you think . I think its generally priced in. The thing that concerns me the most is the effectiveness of Monetary Policy here is starting to get less and less as time goes on. The shock and awe impact we havent really seen. Its more of a fiscal problem right now. The monetary authorities have done pretty much what they can. The fiscal authorities have to get together and find a solution. Chris, what do you think . How are you navigating this anticipation of the fiscal cliff and beyond . I think ben is on to something in terms of the effectiveness of it. Over the last few years, Monetary Policy was a catalyst to move money into the marke on a Capital Allocation basis. You saw the jolt in the market, then it plateaued. Heading into next yeerar, monety policy becomes part of the base. The jolt is fiscal policy. A little transparency on that front. The big switch is on. I think they going to use more words than action. Theyve been using that very effectively. And it actually moves markets. Just the language. He didnt buy one bond. He said three words and spanish and italian yields drops three basis points. What were the three words . Whatever it takes. Thats good. Markets like whatever it takes, i guess. Rick santelli, loeets talk job. Thats tomorrow. Some noise in this report. Early thanksgiving, Hurricane Sandy. Is this rally at the end of the day having anything to do with any anticipation of the jobs report . What are you looking for . No, i dont think so. Were looking for almost exactly half. We had 171,000. The consensus is 85 to 90,000. Were looking at half. I understand that, you know, superstorm san difs a horrible event, and i am sure its going to take some jobs out, but its going to also be a bit of an excusetrending well. Ill give you an example. Wells fargo gallup does a small survey. On hiring, Small Businesses dropped to the lowest level of opt miimism in four years. It doesnt matter what ben bernanke does. I think his programs have long since not really helped the employment side, but the fiscal cliff is doing obvious damage. Thats going to make what Everybody Knows is coming. We ran out of two years to sell. Theyre going to go from a twist to outright purchases. Its fully built into the market, but it isnt going to help. The fiscal cliff is going to do more damage to the psyche of job creation than anything that ben bernanke can do. Any expectations in terms of the jobs numbers . What do you look for . Were looking for better than expected. Rit, the sandy effect will be there. You should see actually better job growth next year, and that also becomes that second catalyst into the marketplace that could put the s p at an alltime high next year. What about the fiscal cliff though . If we take out the mortgage deduction, which is being hotly debated in terms of the exemptions and loopholes, does that stop this housing recovery in its tracks . If you pick a midpoint between 0 and 3. 5 and call it a fiscal slope, 1. 5 drag next year is equivalent to the drag we have this year from the overall private sector. Without housing as a major tail wind. Next year housing should be closer to a major tail wind. Theres a little bit of a buffer zone there. Ben, what about you . You think are you worried about the cliff . Yeah, i think you have to be. Its one of the reasons we took a little risk out of our portfolio. We think there will be a resolution, a grand bargain the at the end of the process that will take some gdp growth off of 2013, but not that much. Not that much to derail what we think will be positive risk asset markets in 2013. All right. How do you want to be allocating capital . The money, of course, recently just in the last couple trading sessions has moved into financials. Is this an area you would step into . What do you think . Were market weight the overall financial sector. It is underowned. Its underloved. Money coming in is going to propel the prices a little higher. The housing turn is real. If you see the transparency rise next year, multiples should rise on 108 earnings. Youre looking at 1600. Should benefit the financials. Energy is a wild card next year. Thats what we should be allocating. Rick, if we go over the fiscal cliff, you have to believe there will be a lot of hoarding of assets, sitting on money. Maybe we get more action and fixed income. I think what nobody is talking about, you with allude to it constantly, and im in your camp. The damage is done. Its evident by many of these reports. Even if they come up with a 13th hour settlement, even if they come up with good reform, some of the adjustments that have already been made or have been in the process of being made have already done a lot of damage that we didnt need. We already shot ourselves in the foot on this one. In terms of housing, you know, the shadow inventory thats been tied up in litigation, we could see as many as 20 million of those come on the market in 2013. Even though i agree with the guest, theres a lot of different forms of the housing market. Some of them are going to be under pressure due to this avalanche of shadowed foreclosure in 2013. Ben, the groups you want to own in 2013 are what . From an overall Asset Allocation perspective, we like emerging marketing wetiequities. I still think high yield and emerging market debt are two good asset classes. We would stay overweight commodities. All right, well leave it there. Gentlemen, good conversation. Up next, apple rebounding after yesterdays big selloff. I want to get to bob here with a look at the big moves before we take a break. Over to you, bob. We hit the onemonth high on the dow, maria, led by some of the tech stocks like ibm and intel. Apple was the big story. We ended positive, but just barely. Apple, 50 lost in the last two days. Today, huge volume. 40 million shares. Thats twice normal. Company telling nbc, brian williams, theyll Start Building some mac computer lines here in the United States. Big interview on that tonight. Lets take a look at some of the computer hardware stocks. Nice turn around. Remember that disaster with dell and hewlett a few weeks ago . Theyve been moving up in the last several days. Look at this move and this turn around. Apple to the downside. All the others in the month of december to the up side. How about the airlines . New high for the airline index. Jet fuel costs are low. Capacity is constrained. Im hearing booking is returning to normal after sandy, after a hit for them. Those stocks up. U. S. Airways up. Southwest has been on fire recently. Finally, the insurers. First down day in a long time. In the last couple weeks, generally all of them have been to the up side. This is the first down day in about two weeks. Back to you. Thank you so much, bob. Watch out for year end window dressing. Were not talking about the lovely holiday displays. Were talking about what some Money Managers do to their portfolios to drum up better returns. Then we relied on audited financials. Not exactly brand x accounting firm. Hewlettpackard Ceo Meg Whitman putting d, liotte in the line of fire. The ceo will sit down with us. Finds out from the ceo of ppr about what hes expecting for christmas. Youre watching the closing bell on cnbc, first in business worldwide. If we want to improve our schools. What should we invest in . Maybe New Buildings . What about updated equipment . They can help, but recent research shows. Nothing transforms schools like investing in advanced teacher education. Lets build a strong foundation. Lets invest in our teachers so they can inspire our students. Lets solve this. 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. Welcome back. Its a performance enhancing trick called window dressing used by managers to boost their yearly returns. Joining us to protect your money and the risk, understanding the risk better, is ronn ensana. Good to see you. What exactly is window dressing . Lets get right to the source of this issue. We see it every year. Explain it. If depends. Weve been doing this for 28 years together. When we first started talking about it, it was a way for a Portfolio Manager not to look dumb. This is what theyre talking about in the wall street journal today. This is the viagra for Portfolio Managers. You buy that stock, sell it when the quarter ends, and boost your returns and. Ly your f and potentially you. What do you think, art . The problem is that if youre a regulator and you come in and say, ron, why did you buy so much of that stock in the final ten minutes . He would report, because i like it. I already own it. You see how much i like it because i own it. That was the primary defense. You havent seen a great many big prosecutions in this area. Interestingly enough, one of the areas that they did, oh, about 25 years ago, prosecute some folks on was running a options portfolio. They marked the stock up to make the options more attractive so they got a bigger bonus from their firm. They closed the stock on the strike too, right, art . Absolutely. The options owners wouldnt make any money. Thats right. Are you expecting, ron, that were going to see various sort of techniques at year end to make the portfolios look better . I think now that this has become so public with the wall street journal article, it focuses on the movement of very thinly traded stocks. One thing to watch out for is they dont invest in this microcap world that is so easily pushed around. They were talking about one stock in the article that had a market value of 36 million. Any individual can move a stock with that kind of market cap. You want to stay away from funds that invest in those types of securities. You dont want to necessarily trade them yourself, because you can be on the wrong side of that trade as the manager in question may be taking advantage of your position on the other side. So it sounds like the both of you are not really necessarily seeing a big impact from this right now. No, i dont think so. I will tell you over the years general Market Conditions can work against you. You might want to move something up, but if its a bad i did fda the market, sometimes window dressing with look like window washes or window breaking. Thats funny. Art, you wrote today about what were seeing in terms of tax changes and withholding. Talk to us about that. The fiscal cliff, one of the things if were really going to go over it and change the tax basis, the treasury has to call on Corporate America to change the withholding tables. All of us get taxes withheld. If theyre going to change what rate im going to be taxed at, theyre going to have to change that table. Thats not an overnight process. Certainly, the treasury cant afford to let that go too long because everybody will be underwithheld. Theyll get a big tax bill. There will be a riot among the people if that happens. What im watching is the treasury. If they get nervous enough, theyll ask them to change the tax tables. So far it looks like they smell a deal and havent asked for it yet. You think were going to get a deal . I think they may try to push it to the end. The other thing im watching for is the 17th when the president is due to take his family to hawaii. I dont think he wants to be in hawaii without a deal. Something is going to come up. Ron, what about you . I thought the resignation of senator jim demint, who was a staunch conservative, which was a surprise departure, tells me the republicans in many ways are throwing in the towel on this deal. Hes a guy who fought tooth and nail against this thing, against raising tax rates. You may want to work from the outside in, which is the way the press is portraying this. It looks like too many republicans are beginning to throw in the towel. They may finds a compromise that isnt necessarily clinton era tax rates, something in between. But it looks like the makings of a deal. With every change on the republican side, more and more likely to happen than not. All right. Well see about that. Well be watching. Obviously, very, very important for the markets. Thanks. See you later. Lets get to bertha coombs. One company with big moves after the bell. Over to you. Maria, amarin is falling after the bell. Some had suspected them to solicit a bid to buy itself out. It has a drug thats a fish oil drug thats prescription. They say theyre hiring a sales staff and they still expect to present more details to the fda in february 2013. Some disappointment, clearly, there. Maria. Thanks so much, bertha. Well keep watching that. Up next, the stock market and america. 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Since then, not much progress has been made. We want to talk more about that exclusively. Hes here with me to talk if he still feels that way about fiscal cliff. Good to have you on the program. Deloitte ceo. Thanks so much for joining us. Thanks for having me. I want to get to the president and your meeting and really zero in on the fiscal cliff. Before we do that, i want to get to the situation around hewlettpackard and autonomy. Of course, hp taking a massive write down on the acquisition of autonomy. Ceo meg whitman throwing deloitte under the bus in some sense because the firm was among those charged with examining the books before the deal. What can you tell us about what you did in terms of overseeing the books at autonomy and what do you say now that shes charging this fraud . Sure, maria. Unfortunately for us, that matter has been turn the over to investigation and the authorities. Believe it or not, thats one of the things im not on the hot seat about. Thats part of the u. K. Member firm. Of course, this is an issue at the form. Its a big deal. Its important to us. Unfortunately, we cant comment on that. Our member firm has put out a statement. We believe we held up to professional standards. During that time, there was no questioning on the part of hewlettpackard in terms of saying, hey, did you find anything . It just seems like it came up from nothing. Now all the sudden its fraud with this 8 billion write down. Again, i cant comment on it. I wish i could, but i cannot. All right. Let me move on to your meeting with the president about the fiscal cliff. Sure. It was optimistic. President very inclusive of business. He was open to a broad set of solutions that included all aspects, not just revenue, but spending and entitlement reform. So you actually felt that you saw a difference. You say it wasnt always like that. You saw a difference in the president in terms of listening and perhaps taking advice on whats to be done fiscally . The president had made comments he was trying to embrace the Business Community. He was very constructive. Where do you think we come out on the fiscal cliff . Are you expecting the economy to go over the fiscal cliff and see these taxes go high hadder and spending cuts take effect . My personal view is im still optimistic. I think the conversation has been constructive since. Do we have a solution on the table yet . No. But im optimistic well get to a framework. Why . Theres been enough dialogue. Theres been movement. Everyone seems to recognize the problem. Everybody realizes there has to be a revenue component, spend component, entitlement reform component. For us, the Business Community and all the ceos, certainty is the greatest stimulus for us. Do you support tax rates going higher . Me personally, as an individual, more importantly the Business Community, which im part of. We support something inclusive. If rates were higher in a videocasset vacuum, im not sure wed be supportive of that. We have to make sure the consumers, those who spends a lot of