Consumer discretionary stocks up the most. Utilities the biggest losers. And while individual trading sessions may have been choppy, it was another month of low volatility. The vix remained below 20 for the fourth consecutive month and thats the longest streak since february of 2007. A big part of the market story has obviously been a big topic dominating the sunday talk shows. Tim geithner arguing republicans need make the next move in negotiations. Republicans have said that they dont like those reforms or they would like to do more. And if thats true, then they should tell us what they would like as an alternative. Build on those, tell us how. But we cant react to anything until we see the details of the proposal and we need it on the rates and revenue side as well as on the spending side. Weve given them our best view what makes sense for the country. Meantime john boehner says that his party has a plan and he has already offered dozens of alternatives. You can cap deductions at a percent of income, that would be one way to get there. Could you eliminate certain deductions for those wealthiest in our country. Joining us on the topic is david walker. Hes on his way here right now. And in Global Market news, a lot of talk about china this morning. A final reading of hsbcs manufacturing purchasing managers survey for china rising in november, first time above the key 50 mark which indicates expanding rather than contraction. Its been since october of last year. Also abroad greece announcing it will buy back bonds through a dutch auction. The set up whether allow athenss to assess the level of demand before setting a final bryce for the deal. Part of the countrys efforts to cut its about a along debt. And in germany, merkel is not ruling out the possibility of notifying greece some of its debt once athens finances are in better shape. Angela merkel told a german tabloid that the question of the socalled haircut can be revisited. In the past, merkels government had ruled out forgiving any debt. In corporate new, ubs is reportedly close to a settlement. The New York Times says the swiss bank is expected to pay horn 450 million over claims that some of its employees submitted false libor rates. Thats pretty huge story and we will take a look and ten to see what happens with this. Also Morgan Stanley trader is under investigation by cme regulators over trades and treasury futures four years ago. At the time he was employed by goldman sachs. Hes now head of global Interest Rates products at Morgan Stanley. The probe is aimed at establishing whether haddens late trades hat manipulate closing prices and made other trades more profitable. Also Singapore Airline says that it is in talks with interested parties to sell its 49 stake in Virgin Atlantic. Delta is reportedly among the potential suit ors. Delta is said to want to gain access on injury gains landing rights at london heathrow. Biggest International Hub h around. I think an dwderson is really g. Its profitable and we had the story about the older jets. Just if you have financial flexibility, you can do things like this. You sold me on the idea of plus i started thinking about being the first on the new planes. And theyre not super old planes. No. And you redo the insides. Its different than its like an old house sort of. Delta totally lost its way. After being a really good airline through the 60s and 70s, brought in some mckenzie type and anyway, lets talk about macao. Growth rates in the Worlds LargestCasino Market have drdr due to lower spending from big gam blers. But overall revenue has remained solid. Are you still going without the middle name . I have no middle name. Thats right. Except for the one that joe has given you. You have given me one. Richard fing burnstien. No g. Is that not sghool barrcool . Barry, do you have a middle name . Charles. What happened with you . Do you have sisters . No. Nobody in my family has middle names. My parents didnt. So this is a listening line of generations upon generations of generations upon generations. Richard bernstein is pretty common. You dont put a middle name in there all right. Chinas privately owned Dalian Wanda Group says its in talks with a wellknown hotel chains for acquisition opportunities in the United States. We just call it wanda. Wanda has interests in real estate, tourism and Department Stores that bought u. S. Based Movie Theater chain Amc Entertainment for 2. 6 billion back this september. Glad i know this so that when i see it ill know what im talking about. Wandas chairman says his company will invest 10 billion in the United States over the next can decade and is in talks with famous hotel brands for acquisitions in places like washington, d. C. , new york and los angeles. And the strike at the port of Los Angeles Long Beach is entering its seventh day this morning. Contract talks between Clerical Workers and shippers have resumed. The walkout is dramatically slowed activity at the nations a busiest cargo complex, dockworkers have refused to cross picket lines. This is a big deal. I dont know if you think this will have Economic Impact down the road. National Retail Federation is worry that had it will spread to the east coast just ahead of the Christmas Holidays when so many people are out shopping. Really a bad time for them. It could. L. A. And long beach, biggest port in the United States. Did you see on the waterfront . You dont mess with its the Clerical Workers that are striking. It is . Im not afraid of that. The dock workers dont want to cross the picket line of the Clerical Workers. Oh, ill cross that line. I thought it was the guys with the big boxes and they drop boks on you if you cross that will do you remember that . I lived in hoboken and i saw parts of it. The chief executive of News International will be stepping down at the end of the year. Tom ran the scandal that hit the british arm of news corp. Hes been with the company for more than 20 years. We mentioned once again you did see a down month for at least the dow, down by about half a percent. This morning you do see modest green arrows. Dow futures up very moderately as are the s p futures and the nasdaq futures. If take you a look at whats been happening in europe, youll see a similar story there. Actually a little stronger gains. In france, the cac up by about twothirds of 1 . In germany, the dax up by 0. 4 and ftse in london is up by a quarter percent. In asia overnight, you did see the hang seng down by about 1. 2 . Shanghai composite down, as well, down by 1 . In consider rea, the kospi up by 0. 6 . Oil prices have been a little weaker. Down by about seven crept cents. And ten year note yielding 1. 61 . Thats been stuck in a tight range for quite a while. Take a look at the dollar this morning. Youll see the euro at this point is still above 1. 30, 1. 3029 even though the dollar down across the board. Dollaryen at 82. 10. Gold prices this morning are up by about 8. As the fiscal cliff approaches, were wondering what we can expect from the markets. Our guest hosts again barry knapp and richard bernstein. Barry, youre concerned about the direction the talks have taken. Yeah, its interesting as i actually traveled through europe last week, there is all this focus on the timing of getting a deal. But there is not nearly enough focus on what does the deal actually look like, whats the composition of the deal. And in fact the europeans were very amenable to my point of view on this, which is you think back to a year ago when monti gets named technocrat tick Prime Minister of italy, he comes out with a package two thirds tax hikes, one third tax cuts. And i remember saying do you think this will work, theyre raising the v. A. T. Tax and i understand italian Household Debt isnt that high, but they were trying to tax their way out of a massive debt problem and in fact receipts went down, consumption fell to 4. 25 annualized rate and the situation got much worse. Today italy has zero nominal gdp grets. And theyre funding at 4. 5 . That is a bad business model. Spain same story. So when you bnk our package and whats been offered so are far which appears like 1. 6 trillion in tax hikes against 400 billion of entitlement cuts over time, thats an even worse mix than the twothirds onethird european structure that really has gotten a negative reaction. How much is because of the mix and how much of it just this is what austerity looks like . Is the money in capping deductions or raising marginal tax rates . Its in capping deductions. But thats tough because you have to tell someone no like the housing lobby or charitable contributions. Capping deductions seems line the easiest. It should be, but remember, youll have lobbyists pushing you on it. So thats tougher decision rather than raising taxes on one small part of the population and then on the spending side, making those long term spending cuts is the only way of stabilizing debt. The sink guegle biggest driver medicare. So if we dont make those tough decisions now, all weve done is a european style kick the can down the road and, you know, its tough to cut entitlements and its tough to cap deductions. Austerity doesnt have to look like just taxing your way out of it. If you want to not work, you just tax your way out of it. I think we have to remember that this is politics and not economics going on here. Thats the most important thing i think people have to remember. And we know we want more revenue and cut spending. Thats why we have the problem to begin with. You have to accept that issue. Le politicians arent willing to accept that issue yet. Both are at extremes. If you accept theyre both at exseee extre extremes, how did we raise revenue. Because the politics, not because of economics, they will not raise marginal rates. Although we have heard some people say they would go along with that. I agree. The center is actually saying that. But i think so if the democrats know that, which everybody knows, give on that. Let them get reelected, let them not wraz marginal tax rates. But ask for Something Else. Get Something Else that will actually raise revenue the way we need to raise revenue. Anything short of marginal rates, heres the times today, obamas end to giving in. Theres a big piece in the journal also about that quoting all these leading democrats saying the president has to hold firm this final theyre tieing a whole four years to this, the way this goes, so goes the next four years. So far hes under enormous pressure to stand pat. And boehner i think is under even more enormous pressure because a lot of people see boehner if the house as the last best hope for a voiding what a lot of people think is a calamity. But leadership isnt calling the other side names. I think when you talk about the big four, boehner, reid, pelosi no, not them. Obama is on the legislative branch. We have to give him a break on that. But there are four big people. Those four people couldnt be more inept. Its boehner the mcconnell and pelosi and reid have nothing to do with whats going on between boehner and obama. To some extent thats true. Reid is the guy that pushed obama to extend the bush tax rates in 2010. So reid would i suspect im starting to like him more. I thought of him as senator pat geary from godfather 2. But Everybody Loves harry. Theres a song Everybody Loves harry. Anybodies that that has anything to do with casinos loves harry. Just a quick question. You were a big cap guy for a long time. Now dividends rates where going up. Are you still a big cap guy . Ive been a small cap guy. Ill tell you you why. When did you switch . This is a while ago. The reason why, number one its a growth story. Do you like the natural gases play ms in small cap . The way weve invested, we havent been looking at producers. Were looking at users of natural gas. I think thats been a little bit better. Well hit that break at 6 50, the one that we keep lets do it. And write a six minute tease for that break. Im going to have time to read the entire thing and people at the end of that tease, no one will leave before 7 00. Because we never listen to the producers. The only reason people watch us is for those teasers. Audience of one has been catching us missing. No, i think its audience of two. And one guy beats up the other guy. They beat up each other. Coming up, the ceo of cantor fitzgerald. Plus if youre looking to beat the Holiday Shopping crowd, head to toys r us. The store opened at 7 00 a. M. Yesterday and wont close until christmas eve. Thats 543 consecutive hours. Longer than their marathon last year. A major announcement this morning from cantor fitzgerald. Acquiring one of irelands largest independent stockbrokers, dolmen. Were joined by sean matthews, the ceo. Good morning. How does this help cantor . Were trying to expand our distribution. There are a lot of opportunities where we continue to bolt on to our already big franchise and get into more countries and add content to our customer base. Have you got relatives from that place . Do i have a few. Coincide with the resurgence of the fighting irish . Im not a fighting irish fan, so hopefully not. Is dolmen all over the uk . Thats correct. Theyre predominantly in ireland, but you look at ireland right now, theyre actually going through the reforms. Theyre trying to inject money in a credit fashion into their economy. And we certainly think we can bring our fixed income expertise and continue to help them. That would make sense for cantor. Ireland was the mfwill first they were in trouble, then the model for the world. What got them into trouble again, housing or real estate or something or bad banks or and now again theyre kind of a model for everyone on how to handle it. Is that basically the last five years . Absolutely. Certainly was a real estate bubble there. Now there are austerity measures being put in place and theyre actually following through on the austerity measures. So certainly theyll come out first and actually look pretty good. So where is the most business for you for cantor in ireland, what will you be doing . Certainly its an equity based firm. Well bring our fixed income expertise, probably become the primary dealer there. The Irish Government will continue to have to have bond issuances as well as corporate debt will start to become a much bigger part of their economy. Who else looked at this firm, do you know . Im not sure. It wasnt an auction process . It was not. I like the management of dolmen. How is cantor positioned for the fiscal cliff . Are you just strapped in and ready to go over the other side. I think taxes will go up, twll be a lot of conjecture overs next 30 days or so, and then tell get a reality to that we have a problem, we have to tighten our boot strap, figure out how to actually inject money into the economy and how to cut some of the costs out of our government. You want to inject money into the economy and cut costs at the same time. How do you do that . Certainly you look at the perspective youll raise taxes on the higher end, but youre also going to have to cut some of the fat in the government. And that takes time. We need corporations to actually drive us out of this problem. The government isnt the solution here. The government is not the solution. Correct. Well, they are part of the problem. Before a private sector solution, it seems like we have to get over this problem in the near term. Its a huge amount of money just being sucked right out of the economy on january 1st. I dont disagree with that at all. At this point, its a one in in two chance, one in five chance, whats the chance we go over . Roeprobably one in two, one s three. There will be some sort of resolution. Getting down to the last minute kind of mentality, but certainly i think there will be a solution. I think next year youll be in a low growth environment again and really if you look at the economy, were probably going back to the 90 style economy where you had 3 , 3. 5 was really good growth. 2 growth which were experiencing right now is pretty good. Full employment might be 5. 5, 6 like the old days. And i think with that being said, weve got to to get a little bit closer to those numbers to really have the economy start to take off. And i dont think were that far in there. Any much those numbers we would take. I dont know whether we are or not. Wishful thinking for cantor. Certainly would help you guys. Why didnt you Like Fighting irish . They were on tv every week when i was a child and id like to see alabama win. Alabama won last year. Thats okay. All right. Thank you. See you later. In fact in some of the squawk sports news this morning, dallas beating philadelphia in sunday night nfl game. 3833. Tony romo threw three touchdown passes to break troy aikmans career franchise record. And the jets beat the cardinals 76. New york scoring the lone touchdown after mark sanchez was benched with tim tebow on the sidelines with a rib injury, greg mcelroy got the call. And last night i think rutgers could beat either one of those teams. Up mcelroy came in, as a long as a jet fan, i will tell you it was a moment to be there for. Did you watch where those passes were going, though . Its a w. It waumt sbepgs snt intenti grounding, but it was as far away key have thrown the flag this guy. He was not in sync with the patterns. Did you see the clorowds . It was great. He was at alabama about. Thats right. And hes a good looking young i saw a highlight and i was half watching it and they said this is why they run play action. Open up the space for sanchez. And i watch him throw the ball and its an interception. I thought what are they talking about . I know that its getting im starting to feel bad for sanchez. He has a guaranteed contract. I know, but hes over there taking notes and hes happy when the guy gets a td and hes just a team guy. I like him. When we come back, tis the season. It must be time for a jobs report. We whet