Cliff. Wall street, tripledigit gain, up 120 point on the industrial average. Banks in the lead, 13,353. Last trade in the Dow Jones Industrial average on volume which was modest. Nasdaq composite up and 3053 and the s p 500 picks up 16 points, better than 1 on the Standard Poors at 1446. Markets continuing higher at the close. Are there more gains ahead . We bring in right now Liz Ann Sanders from Charles Schwab and alan gael and eric steuben from russell investment, darryl pearl from epoch investments standing by who will give us a reaction to the oracle earnings once those numbers cross the wires. They should be coming out momentarily. Heres the number to look for, 61 cents a share on earnings is what were expecting on revenue of 9. 02 billion. As soon as we get the numbers well see how oracle is doing. Liz ann sanders, deal or no deal . Whats your take on all of this . Well have a deal. In the first step of the process and then whatever the makeup of the deal will become more important as we go into the beginning of the year. The devil will be in the details, but i do think we get some semblance of a deal. It may not make either side terribly happy but that might be the measure of a decent deal if both sides run happy. A great couple of days here with tripledigit moves on the Dow Jones Industrial average. Alan gael, you want to buy into it or sell it . I would say that its a little vulnerable here. I think clearly both sides are now moving in the same direction, but now its so the conversation is about numbers, and i think we still have a good ways to go, and quite frankly i dont think the cumbaya chorus has started just yet. Tend to agree with you. Oracle is out. The revenue that were getting is 9. 1 billion in revenue, looking better than the estimate which was 9. 02 billion in revenue. The, expectations, of course, 61 cents a share. Weve got the revenue. Were going to get you the earnings per share. 64 cents a share that were going with here. 64 cents a share is nongap. Even on the top line and the bottom line, it looks like the numbers are better than expected on oracle. Lets get right to jon fortt, breaking down the numbers and david epoch, david pearl, whats your take, my apologies, caved, give us your take on these numbers which are just coming out. Good numbers which beat even the whisper estimates which was a little over 9 billion and 62 or 63 cents. Even from the optimistic crowd. Whats really important is this company is almost a bellwether given that this quarter included the first month after the president ial election. Most of the fiscal cliff uncertainty, and yet they were still able to pull out what really looks like a good revenue quarter and a very good earnings quarter and imagine what would happen if the economy started to get better. They have a government business, and thats been slow. They are actually getting year over year increase for the first time in hardware since they brought sun micro, actually shrunk that business, so it is looking really good, and its at a 20 discount to the market. So would you buy this stock at these levels, 33 and change . Yeah, absolutely. This is a very Steady Company with above average growth at a below average value, and i think most industrials in tech look very, very cheap if youre at all bullish. All right. Let me get to jon fortt here with more head lines. Stock on the move. The oracle shares rallying on the heels of these numbers. Last time i checked people were worried about market share losses for big data. Because theres so much unstructured data out there from cell phones and cars, et cetera. It doesnt look like they are losing market share with these numbers. What do you think . No, lot of good news in here, maria, particularly the licensed Software License and cloud revenue coming in at 2. 4 billion. The street was looking for 2 been the 2. One ding here, the hardware product revenue, the consensus was for 810 million in revenue. It came in at 734 which is quite a bit below what the street was looking for. Overall though operating margins to my eye at 47 , and the street wanted just shy of 46 , so across the board pretty good news, also considering the negative currency impact. That knocked about a penny off of eps, what it would have been had we been looking at constant currency. Also had an impact on revenues so they would have been up around 18 i think it is in revenue. All right. Everything looks to be on track here with this stock on the move in the extended hours. Seeing a pretty good rally. 2 rally on oracle on the heels of these numbers which once again you heard are better than expected. Back to the markets or the broad market story with Liz Ann Saunders and eric, small versus larm. What do you think of the outperformer in 2013 . You want to go small cap or large caps . I think you probably want to own both. Its a pick them race in 2013 between large and small. I think frankly this is going to be a market in 2013 where the market does discriminate between Good Companies and Bad Companies in terms of their actual results. Weve seen that so far this quarter. Id expect that to continue a little bit less emphasis on the macro themes. Liz ann, do you want to invest differently if we go over the cliff versus not going over the cliff . Whats the strategy going into year end and going into 2013 knowing that youre not a shortterm trader, but is the strategy changed if we go over the cliff . Well, look, i think that the market would probably sell off in the near term. Im not so sure in the medium term that that should change your strategy, but i do think it certainly sends a message that politicians in washington are as dysfunctional as they appear to be, so i think politics as a macro driver i think stays very much in in the picture under those circumstances, and i think it does put a damper on psychology, investor psychology, business psychology, so it absolutely does come into play. Were certainly not telling our investors in the very near team ie between now and year end to trade around a possible outcome. I think that is a relatively dangerous thing to do. And alan, do you agree there . What do you want to be exposed to going into the new year from your standpoint . Well, i would say that, first of all, im neutral on equities in my ridgeworth allocation Strategy Funds and its because of the fiscal cliff. If you look at the underlying fundamentals, the Housing Market is getting better. Europe appears to be moving in the right direction as is china so the fundamentals are moving in the right direction, but the truth is if washington messes this up, we could go into recession the first part of next year, so thats whats keeping the cautious one on equities. Ultimately i think we will finish higher for 2013, but weve got weve got to get past this fiscal cliff, because if we dont we go into recession, and i will go underweight stocks. All right. We will leave it there. Gentlemen and liz ann seaners, good to have you on the program. Appreciate it. Thank you. Thanks so much. Sticking with the market and the economy, ceo cofounder ken langone. Thank you. Merry christmas. The cofounder of home depot, a financier, a guy who has his finger on the pulse of global business. Thats why we wanted to have you for the whole hour. Very nice. Thank you and Merry Christmas to you as well. Whats your take . Just got the numbers from okay. Here we are, every day worry after worry after worry on this fiscal cliff issue, and we see the numbers from the corporate sector blowing the cover off the ball, time and time again. Look, there are corporations that will do well, especially now because you look at oracle. Companies are aggressively figuring out ways to lower cost. Technology is the most effective way to lower costs over the long term, so im not surprised by a company like oracle doing as well as they have done. On the other hand, business in general is not exciting. Its okay. Its just moving along. Its its not a recession, but it certainly isnt boss trart. Which is why the whole fiscal cliff debate will be selfinflicted and push us into recession and sort of get us off traction. Do you agree with the fact that businesses have been waiting reluctant to put money to work and once we get into the new year that changes . Lot of money is free up . Look, all the businesses that i know make decisions not based on what washington is going to do, take god, because who the hell knows what washington is going to. Do they make decisions based on what they think they can do to impact their business oh, pand their business, so whether its cost savings or whether its revenue growth, the governments there. I am not as boss mettic about the effects of the fiscal cliff. In fact, i could argue over the long term lets have the battle now. Go over it. Go over the cliff . Lets go over it. You know, if i were a republican, id say, okay, im going to put my offer on the table. The best i can do. I think theres a lot of ways to deal with the people of 250 and below about their taxes. Carve that out. Take that off the table. Its no longer now a political issue. Okay, mr. President , and by the way, my fervent wish is that this sitting president. Does well. Be the best president weve ever had in the history of the country because if he does, that all of us here, all of us all over america, will be a lot better off. We all win if he wins, so lets understand politics are over. The election is over. Its been decided. Hes it. Mr. President , i want you to be the very best thats ever sat in the white house, but we now have to come to the issue of when we deal with our structural problem, and we have a very serious structural problem. What is it . Spending. Well, we need entitlement reform. Take away Social Security from guys like me. Raise my taxes. Nothing will change in my life, and i speak for a lot of people i know. I say when i say i speak, im in the same position as a lot of other people i know. Are you saying 250,000 group or 1 Million Group . This is the debate right now. No. What im saying is do something to not disturb the taxes that people at 250 and under are paying. Leave them alone. Now they are off the table because the president keeps saying what a horrible thing to force these people to pay higher taxes. Theres got to be a creative legislative way to deal with that. Right, right. And then say, okay, now, let talk about the fat cats. Raise my taxes, go right away. Understand something, maria. You get nothing, effectively nothing, out of going after the heavyweights. Right. Youre not really putting dent in anything here. Youre not real moving the needle in terms of debt and deficit reduction which is the goal. The numbers are in the masses. Right. So, for example, take the age limit minimum from 65 to 67. That gets you 1. 5 trillion apparently. Theres other things, too. Means test Social Security. All of a sudden i dont get Social Security. My lovely wife elaine doesnt get Social Security. You noey what . We dont need it. Thank god weve done well. America can use that money in better ways. The devil is in the detail. Talk about this throughout the hour with home depot founder and financier ken langone. I want to get your take on the tax story of 2012. Does it make sense to sell the house that i want to sell, sell the stocks that i made money on, knowing that my Capital Gains is going to go up . Ill ask you about this coming up in the show. Is that all right . By all means. Up next, kentucky senator rand paul will speak with us exclusively. Well get reaction to John Boehners plan b. . Whats his plan b. Well talk about that. Not too pleased about it and the worst ceos of corporate america. Herb greenberg wants to weigh in on whether theres still hope for companies on his list. Ken langone will chime in on that knowing a thing or two about what makes a good ceo and leveling the field. Small investors, looking at high frequently tradings where the little guy stands a chance by the hie performance programs used by the big boys on wall street. Stay with us. Welcome back. As i mentioned ken langone is with me heroes my special guest. The president changing who he thinks is wealthing to those earning 400,000 a year, not 250,000. Speaker boehner is threatening to a plan b to avoid the cliff with a vote onration rates on those only making more than 1 million but kentucky senator rand paul says entitlement cut, not tax hikes, should be the focus. Senator paul, good to have you on program. Thanks for joining us. Glad to be here. Im here with ken langone, cofounder of home depot. We want to ask you about where you see things going. Give us your take on where the negotiation stands right now. What can you tell us . I think its a real bad idea to raise taxes. We have a struggling economy, and i think well have the opposite effect. I think the economy could become more sluggish with increasing taxes. You may get less revenue if you raise tax rate. That being said, i dont know where we are. No one is calling me up to give me any information on this. Ill find out if you find out first, you call me, okay . But were not really part of the negotiations. Thats being done by a couple of people, and i real think in the end as republicans we need to continue standing for what weve already stood for and thats that you stimulate the economy by leaving more money in the private sector. What about boehners plan b . Ken . Let me go back to what senator paul said. Look, in reality i dont believe people making 1 million in the year, are going to do anything. I just dont believe it. I think what you mistake here it matters whose money it is. Thats sort of a pejorative or a moralistic way of looking at it. The economy doesnt care whether rich people have it, middle income or poor people have it, the economy cares whether the money is in the efficient sector, the private sector or you give it to government. When its inefficient and bad use of money to take money out of the private sector taking it from rich people, middle class or poor people, just a bad idea. Senator, all due respect, our taxes are going to go up. They have to go up. Like it or not, what im saying a person making 1 million will pay the higher tax and will still spend as much money. I think ill give you examples of where it has made a difference. You know, we went after to punish rich people several years ago with a special tax on yachts. What happened is the rich did change their habits. They went to the caribbean and bought them for the bahamas and the people who lost their jobs was the people making 50,000 a year selling, you know, making the yachts. If a guy makes 35,000 a year selling mercedesbenz and i make 250000 a year, do you think i change my habit and wait another year to buy another mercedes . That makes the guy hurting 35,000. Were all interconnected. The economy doesnt care whether youre rich or poor. Right. Its just less money in the productive sector. Senator, i get that, and i think ken is making the point that he doesnt necessarily expect major Behavioral Changes on the Million Dollar set. Of course not. Let mesk t t t t ts. Given the fact that we are eight days away from the end of the year, eight trading days left until the end of the year until we go over the fiscal cliff, given the fact that both sides are digging in, the dems do not want to cut enough on entitlements and the republicans do not want to raise taxes, isnt it time for something to give . I mean, seriously . Lets be very clear. What are you willing to give on . Lets be very clear what the democrats want to do on entitlements. The president said entitlements are off the table because we dont have enough time to do it, so they are not serious at all about that. I will compromise. I think we can compromise and look at military spending from the republican said and say not every dollar spent is wise or sacred. Amen. I think we can also look at means testing. If the president says the rich are not paying their share share, all for means testing Social Security and means testing medicare, but i will tell you that the leading democrats in the senate have said Social Security is not broken. They wont look at the age and they wont means test because they think these programs are not broken. Thats how far apart we are and why its difficult to find a compromise because they dont think entitlements are broken. Will you go along with the speakers plan b and that is allow the 1 million and lower set to not see any tax increases and then the others above 1 million will see their taxes raised and then youll deal with spending cuts later . This is your party. John boehners plan b. Will you go along with plan b. If you separate the taxes into two different bills and let the democrats have a tax increase basically on the upper side, ill vote no, but they can still get what they want by separating the bill into two pieces. That may happen, but they have already out of hand dismissed the 1 million level, so we have to find a level that they wont dismiss, and i dont know how demanding they are, because if they say 250 and we dont goat 250, then its the democrats who are unwilling to get unless they get everything they want, it seems to me the intransigence is on their side then. Senator, i happen to think that the real issue is entitlements. What i think we need to do is get the issue of taxes off the table. Plan b sounds perfect to me because were saying, hey, all right. Lets take care of the people making 250 or less. Your life is not going to change at all. Now what do you want to do, mr. President . What do you want to do, democrats . We will not it could happen, but they have already dismissed it. I mean, harry reid said he wont vote on plan b and so has the president so its kind of become a moot point. I agree theres a way to bifurcate or have two different tax votes and allow the republicans still to vote no on these and the democrats vote yes on one of them. The deadline expires and the president gets what he wants and we move on to other issues. There is a way to let that happen. Can the house of representatives pass a law, pass a bill, that will protect the taxes of people of 250 and below, just the house . They can pass both of them. In fact no, no. And then it will go to the senate and it will fail. Good, good, hold it. Thats what you want. Let them be in the position of not taking care of the i agree with that. So have the bill. I agree. I think boehner is on spot. Hes once again showing his smarts. I agree with you. The only p