Of 2013. Well show you how you can cash in today. Im happy to be back from washington. Im happy sue herera is at the center of the action im just a happy guy, sue. Im glad to have you back, too. It happened just before noon. Once again the markets tanking, a steep dive after discouraging words from washington on the state of the fiscal cliff. This time it was House Speaker boehner speaking with reporters after meeting with treasury secretary tim geithner. Eamon javers is in washington with the latest. Eamon, the sentiment down here is these guys should stop talking and start crafting a deal. Reporter thats the sentiment here in the hallways of capitol hill as well, sue. I can tell you that. We are starting to get a little more clarity on whats going on here today. I just had the chance just a few moments ago to buttonhole senator harry reid here in the hallway, asking him a very specific question. I said did treasury secretary tim geithner come up here with a new specific offer for republicans . Is that what he laid down on the table for Speaker John Boehner today . Reid told me no, there was no specific offer here today from geithner to the republican side. He said that the president of the United States made the democrats over two weeks ago and theres been no new specific offer since then. I think that explains a little bit of why we saw this reaction from Speaker John Boehner a little while after he met with geithner. Take a listen to how boehner described todays events. Despite the claims that the president supports a balanced approach, the democrats have yet to get serious about real spending cuts. And secondly, no substantive progress has been made in the talks between the white house and the house over the last two weeks. Sue, on a lighter note, it looks like there are negotiations going on up here. I just saw a plate of lunch being brought in to the room where we believe that secretary geithner is sitting right now. Were also seeing some of the aides go in and out of that room as well. So clearly deals are being crafted here. I saw rob nabors, the legislators aide from the white house in Mitch Mcconnells office ws office, but something is happening here and were just trying to stay out in the hallway and parse it all out, figure out what the horse trading is all about here. Or get a hoefltd person who brought in the sandwiches and see what he or she heard. I wanted to slip my iphone on it the to the lunch plate as it went in excellent idea. Thank you very much. Maybe they should be serving kennys recipe of today which is eggs and purgatory. Because this is what this market feels like. It feels like its in purgatory right now. It cant figure out when its going to be able to move decidedly higher or move decidedly lower. You know what its telling you . Its telling you at any whiff of positive news, any sense that there is going to be a deal, a deal that it believes, the market wants to move higher. It just wants clarity. Any sense of this confusion or lack of clarity and we see what happened. Right . Right after boehners quote. He made some good points. Republicans realizes taxes are going to go up, everyone realizes whats going to happen to rates. What we still dont know, what are the democrats proposing to really cut. Put on the table, get it out there and let us know what it is. How volatile do you think this market is going to be the longer this goes . I think if youre the day trader type you absolutely trade it because you love volatility because thats how youre going to make money. If youre the longterm person, i dont think you chase it at all. I think you remain patient, stay on the bid side, let prices come to you because i think they will come to you. The longer this goes on the more frustrated this market is going to get. Then it will start to make et cetera own own and we know what happens then. Thank you, kenny. Eggs and purgatory, tyler. Thats the recipe of the day. I think it is quite apropos. House Speaker Boehner voicing his disappointment over the state of the debt talks. So is there still a chance for a deal before the end of the year . Here to explore that and more, representative bill paskcrell. Welcome back. Glad youre with us. You just heard the points of view there from Speaker Boehner, from kenny pu. What spending cuts would you be able to adopt right now as part of the spending cuts program . There is no question that the president offered in his budget if you remember very specific cuts to the military which were acceptable to secretary panetta and the military establishment. If we dont do these things right now, then obviously were going to be facing acrosstheboard cuts for the military and thats something that none of us would really want. I dont. Perhaps you misunderstood me. I was asking about the entitlement programs. Let me drill down one more time on medicare and medicaid. What specific changes to save money or slow the growth of spending in medicare could you endorse right now . Would it be raising the age for full eligibility . Would it be increasing copays . Would it be doing something about the end of life expenditures which now consume 25 of medicares expenditures, go to the 5 of individuals who are in their last year of life. The latter part of what you just said is something that we should be looking at. Remember, we were scared off the subject two years ago, tyler, looking at the end of life expenses. And that turned into panels that were going to decide who lives and dies which was totally ridiculous. Theres nothing in the Health Care Act which even comes close to that. But that is an area i would accept. I do not accept if we had to vote tomorrow, i would not vote raising the age. Why not . Americans life expectancies are so much longer than they were in 1965 when medicare was begun. Because then you create another problem. You create a problem for those people who are young weather they come to that age when they have to retire, now you have whos going to cover them, wheres the coverage going to be for the health care . I think youll create a larger problem if you do it that way. I said that when i first came to the congress and i say it now. But there are some things we should be looking at. But why hold the middle class hostage to the changes we know that have to come to medicare without hurting beneficiaries why do we have to do that . Let me slip in one question about the revenue side. Many companies have been paying dividends to get ahead of what they clearly must suspect is going to be an increase in the tax rate on Dividend Income and potentially on Capital Gains. Do you foresee that the tax rates now 15 on dividends and Capital Gains lsh will be higher in 2013 . I believe it should be on the table and he believe youll see some changes in there. We handle personal income very differently than earned income. Thats why we have a skewing of the tax policy against the middle class. We got a smaller milled class because of how we tax american people. I want to first of all preserve 98 of those tax cuts for the milled class and then we can debate general tax reform which we definitely need. Theres no two ways about it. Congressman pascrell, thank you again. Breaking news from the bond market. You saw the headlines cross moments ago. 30 billion in 7year notes up for auction. Rick santelli, we have a bid to cover ratio of 2. 81 . That 2. 81 is above the 10auction average. This is around 2. 74 . Actually, close to the 40 106auction average. Directs 19. 7 that is a record high since they brought the 7year back in february of 09. I cant find a higher direct bid. The yield 1. 045 , right in the middle of the bid offer we give this auction a bplus, solid auction. 99 billion is now behind us and considering the issues of fiscal cliff were going to be looking to handicap a whole lot more auctions over the next several years. Back to you. Absolutely. Breaking news now. It concerns microsoft. Lets go out to jon fortt. Jon . Hey, sue. Microsoft has officially announced the pricing for surface pro. Thats the version of microsofts tablet that runs an intel core i5 chip. It was anticipated that this would be higher than the surface which started at 499, 599, and indeed it is higher. It is 899 for the 64 gigabyte version. For the 128 gigabyte version, 99. 99. Surface pro is backwards compatible, it will run windows 7 apps and also done pen input. Is sort of the cadillac version of microsoft surface. Priced at a premium until tablet market. Well have to see how it does and it doesnt arrive until 2013. New positive signs on the u. S. Economy to tell you about. It grew faster than expected in the third quarter. Gdp expanding at an annual rate of 2. 7 topping last months estimate of 2 . Our senior economics reporter Steve Leisman is here. What struck you about this report . I remember the day before yesterday you were saying dont expect that kind of performance in the fourth quarter. Exactly. Ill take it. We can get to 2. 7 . It is better than 2 . I dont love how we got there. Big parts of that was Government Spending at the federal side. Also you had inventories go up. What you didnt have is we marked down Consumer Spending and business spending was negative. I want to do 3 , 3. 5 , 4 with strong Consumer Spending and strong business spending. Those will be a sustainable path for the economy. Cant let you go without a little fed speak. Mr. Dudley, new york fed chief, speaking this morning. Some important comments. Hurricane sandy was directly in his district so he made some comments about it. He said that the damage was worse than first anticipated. Thats something weve been talking a lot about. Original number was 50 billion. Its in the 70 billion to 90 billion range. It is probably going to shave a quarter to half a point off gdp. You talked about the fiscal cliff which he says congress and the president must address. He says because were at the zero balance, Interest Rates were zero, the effect of the fiscal cliff is getting much worse than if the fed were not at zero. Because they could do something. The only positive thing which dudley did not talk about but it is something thats on the radar is that, as the fiscal cliff fears rise, Interest Rates fall on the 10year. So the effect the fed would have from easing is already in already happening as a market reaction. Steve, thank you. When jeff kilburg is not fired up about the irish he is fired up about what mr. Dudley said today. Why . Absolutely. He came out with very dovish comments. He lass a permanent vote and he is quite the confidant of ben bernanke. So he flatout gave a winkwink, theres Something Big coming in less than two weeks. Hes been a dove for a long time though. No change but just to hear it articulated gives you some sense of it does. This could be a onetwo punch. If the fomc comes out with additional measures, subsequent week later, all of a sudden they have the fiscal cliff resolution, bam, we could see a test of the 1,460 of the s p. Is there story in the journal about more action possible out of the fed. Taking a look at shares of Advance Auto Parts reportedly the auto parts retailer put itself out for auction but the bids it received werent to its liking. As a result that auction has failed. Its shares are down 6. 5 . Look at some its competitors in that space. Weakness pretty much across the board right now. Auto nation down 3 . Pep boys down 2 . Advance auto parts the weakest performer, off 6 1 2. Fears of retailers heading into the holiday season. And new signs that the online daily deal business is still struggling. Courtney reagan on the retail beat, Julia Boorstin looking at job cuts at Living Social. Courtney, youre up first. Well, black friday was no match for super storm sandy. The storm really taking the wind out of the sales for november samestore sales. Ill tell you who got hit the hardest and who is faring a little bit better. Julia. More pink slips in the daily deals space. Can Living Social and groupon adapt to harsh new realities . Ill have that story coming up after the break. [ male announcer ] the markets keep moving. Make sure the news keeps coming with thinkorswim by td ameritrade. Use the news links breaking stories with possible breakout stocks, options with potential opportunity, futures and forex with indepth analysis. Its an allyoucaneat buffet for all things trading. Thinkorswim by td ameritrade. It doesnt just deliver news. Its making news. Trade Commission Free for 60 days, plus get up to 600 when you open an account. Tiffany losing its sparkle with investors. Stock getting walloped after missing earnings estimates. Highend jeweler also cutting its outlook. Tiffany not alone. Latest Sales Numbers show other retailers are struggling as well. Courtney reagan on the retail beat in chicago. Courtney . Reporter thats right, tyler. Were here on the magnificent mile in chicago in front of tiffany. As we look at these samestore sales for november, that earlying up of black friday was no match for super storm sandy really hurting retailers much more than what was expected in the aftermath we know many of them had to close up their stores and then later clean up. Wait for the power to return and that hit them much harder than expected. November samestore sales increase of 1. 6 comes at about half of wall street had expected. Macys one of the hardest hit by the storm with comp sales down 0. 7 . Ceo terry lundegren says thanksgiving weekend did see record volume and macys remains on track to deliver very strong sales in the fourth quarter. Target posting weaki inin ininw sales. Theyre hopeful for the holidays. Limited reports comps up 5 still beating expectations. The specialty retailer says one to two percent Percentage Points were lost due to the storm. All of gaps grandz outperformed last years november numbers. Cyber monday will be counted in december so well have to see if that helps a little bit but now this just makes december more important than ever before. Santa really better bulk up. There is some concern that retailers may overpromote and that could hurt margins because of what just happened. In the month of november. Courtney, thank you very much. Staying with the consumer theme now, daily deal website Living Social is cutting 400 jobs. Thats about 10 of its workforce. It comes as groupons board of directors gathers today to discuss, among other things, the future of its ceo. Julia boorstin is taking a closer look at the future of the struggling daily deal businesses. Reporter well, sue, growth in the daily deals businesses has come to a screeching halt and the companies are trying to adapt to a whole new world. Living social blaming its 400 layoffs on the fact that it grew its Employee Base by more than two times sorry, more than ten times in less than two years, saying it is freeing up its resources for critical investments and marketing, mobile and other areas. This after amazon blamed its investment in Living Social for a loss of 169 million in the third quarter. Groupons board will debate what direction to take the company when it meets today with andrew mason saying with the stock down 80 since the ipo, hed be surprised if the board is not considering replacing him. Hes slur to defend hure to def leadership in the face of the companys accounting issues, european struggles. Today groupon announced it is Major League Baseballs daily deal site as groupon looks to sell more exclusive experiences and rely less on lower margin commodity style deals. Groupon and the boards two most powerful members are not commenting on these reports that mason may be heading for the door. As long as they back mason, hes going to stay. Julia, thank you. Those hard times for the daily deal websites, groupon and Living Social that we just talked about, are you a fan . Let us know. Go to finance. Yahoo. Com and vote. Results later on power lunch. Also a little later well talk about a new player in the retail space. Deals and loyalty spaces a well. It is called belly. Its founder and ceo joins us along with Venture Capitalist jeff jordan, still ahead on power lunch. Belly, sounds right up my alley. Im sorry to say. The top ten trends of 2013 and stocks that stand to be the big winners. Plus, cnbcs rise above road trip continues. Next stop, nevada. Jane wells looking at how snaene majority leader harry reids state is handlingle upcoming fiscal cliff. [ male announcer ] this december, remember you can stay in and share something. Or you can get out there and actually share something. The lexus december to remember sales event is on. This is the pursuit of perfection. Or that printing in color had to cost a fortune. Nobody said an allinone had to be bulky. Or that you had to print from your desk. At least, nobody said it to us. Introducing the business smart inkjet allinone series from brother. Easy to use. Its the ultimate combination of speed, small size, and lowcost printing. We are gathered here today to celebrate the union of tim and laura. Its amazing how appreciative people are when you tell them they could save a lot of money on their Car Insurance by switching to geico. They may even make you their best man. May i have the rings please . Ah, helzberg diamonds. Nice choice, mate. And now in the presence of these guests we join this loving couple. Oh dear. Geico. 15 minutes could save you 15 or more on Car Insurance. Welcome back to power lunch. Im Mary Thompson with a market flash. Shares of lazy boy, shares off just 12 . The companys earnings missed expectations for last quarter because of higher costs. Revenue came in a little bit shy of expectations. Nevertheless, the company feels confident enough about its Business Strategy to reinstate its quarterly dividend. Off 11. 75 . Cnbc traveling to the home states of key congressional leaders involved in the fiscal cliff negotiations today. Nevada, senator harry reids home turf. Jane wells is