But first lets get you up to speed on other stories. Joe was talking about apple. It has been a rough ten weeks for the most valuable u. S. Company. Shares tumbling more than 6 yesterday shedding 35 billion of market value. Among the reasons cited by analysts, a forecast by an Influential Research firm suggesting that the iphone and ipad maker is continuing to give up ground it rival the android gadgets. There were also unconfirmed reports that at least one major stock Clearing House was raising margin requirements. And then theres the fiscal cliff. Analysts citing fears about a hike in Capital Gains tax in 2013. Rick santelli has been talking about this, though, the things that were up in 2012, those are the things being sold now, whether that be gold or any number of assets that rose appreciably over the course of the last year. Well be talking about the future of apple and the outlook for its stock a little later this morning with Jonathan Geller of the boy genius report. Good old bump on the road on the way to a trillion dollar market cap. Got to 600 pretty easily. And now its back at 500. Above 600 i guess. Tough to get to a trillion dollar market cap. Cisco got to 600 billion once, too. Its at 100 billion. Apple still at 500. We talked about are they going to come out with the chartreuse slightly smaller mini ipad. And thats going to be the a lot of people waiting in line for that one. I do have to say, im in the market for a mini ipad. Not for the max ipad . No, i want something smaller to carry around, but bigger than my phone. I have a hard time seeing my wifes iphone, so the ipad was a solution for that. I want something thats smaller to carry around. I have an ipad at home, but i dont carry it out with me. Sgl the ipad is too bulky. Boy, the u. S. Consumer is fickle. We are. One of the ideas to continue to bring gay products by tesla. Remember when someone said that . But that just shows the absurdities weve reached. What would you do next . Theyre not sure he want to do tvs. Tried make a smaller ipad. Different colors . If you had told me a Computer Program would create a device to play songs, i probably would have told you youre crazy. Sometimes there are people smarter than we are. But theres no based on valuation metric, you cannot explain no reason why that stock should have dropped from 700 or whatever it was back to 500. Based on valuation. The penetration of the iphone in the total Smartphone Market is still down here. No reason that should have happened except that it does happen. Thats why i buy into santellis take on this. He was the one saying last week that the reason youre seeing stuff like that, the best thing he can do to explain it, he thinks that its because what you see are the big winners for this year when people are looking at Capital Gains, when theyre looking at ways to lock in their gains, theyre looking at the things that were up. Thats true. I had the early call on apple. I did. I knew at 200 that that stock was getting overheated. You and greenspan. Right. I was even earlier. Im so early i missed the whole move up. Exxon has a pretty good business. Theyre global, they got all these you know what exxon does. Oil. They sell fuel. They refine it, they produce it, they got global operations. And this was 60 more than exxon. Well see. Well call you early joe from now on. Yeah, a bad thing to be. Fast or early. Apples heavier than normal volume explaining a lot of the broader story. Accounting for the entire fall of 1. 1 . Meantime the dow enjoyed its best day inside severally last week. Travelers announcing plans to resume stock buy backs that it temporarily expanded. That stock up pretty sharply about 4. 5 . Citigroup gained ground on its announcements of job cuts. Talking about laying off 11,000 people. Citis news lifting the banking sectoroff all. Wall street journal suggests the new ceo still needs to set the a new path for the bank to follow and argues corbat is unlikely to get anything close to 100 Approval Rating especially if he chooses to postpone returning money to shareholders. There was a lot of different cross currents from what people were hearing yesterday in washington. Market well above 100. Ended up 85 for the day. I guess the demise of john boehner as speaker was greatly exaggerated. Did you see this New York Times piece . More support for boehner now than anytime in his speaker ship. Is thats setting up for but it is social media and twitter allows to you see these things. Sausage factory into the front of the kitchen. Exactly. Geithner didnt use the word marginal rates had to go up, just said rates. Rates are already going up. There will be a tax increase to people making more than 250 anyway because of the health care law. So the idea that somehow they will get a freebie is just crazy. California at 52 , new york and other places when you add up all the state and local taxes. Hawaii is above 50, as well. Hawaii is worth it, though. California is not bad either. Unless you need to drive somewhere. Right . And dont have a helicopter. Theres a reason the president takes a helicopter anywhere. You cant drive in d. C. Sdl those a boston in the city can get like that. Last night i was thinking in my mother was still alive, cincinnati versus here, she would see like ten cars an and go oh, i cant believe people if she had seen the line of buss that basically was a wall of about 60 buses, they get precedence to go in, and then like 16 other lanes getting down to one to go into the tunnel, and youre just sitting there, like no within in the world does this. I got stuck in a broken down truck in the holland tunnel last night. Its amazing how fast they get that truck up and out. They better because there are fumes and Everything Else. But if you try to go from pasadena at the wrong time in l. A. , its three hours. In other news out of the Financial Services industry, jpmorgan is naming cochief control officers the new positions are aimed at beefing up controls. Investigations gators still examining risk control surrounding the trading. Meantime office i have the control of the currency is expected to serve jpmorgan with a formal action alleging weakness in its antimony laundering system. In the front page article in the ft today, three former Deutsche Bank employees say the firm failed to recognize up to 12 billion in paper losses during the financial crisis. The individuals have made complaints to u. S. Regulators, including the sec. Employees say Deutsche Bank misvalued a large derivatives position known as leveraged super senior trades. Probably shall wiggle room. They allege its capital would have fallen to Dangerous Levels that might have required a government bailout. A lot of people werent marking things where needed to go. I have a lot of questions about this story. Its an amazing allegation. 12 billion in paper losses. A lawyer from one of the whistle blowers will join us at 6 50. In a statement to cnbc, the bank says that allegations have already been investigated and all accounting was proper. My biggest questions are the allegations say the bank was doing it 2007 to 2010 and nobody came forward until late 2011 to make any complaints. I just wonder if you had been complaining the whole time along we just had this discussion about how far away do you need to be to where its a false mark. At least 10 wiggle room. There were no buyers. If there is buyers, does that make it zero. Basel 2 created a system that if things became less liquid, there is no change in the actual value of of the underlying asset. Just couldnt sell it. So its a bit like saying my house is a lesser asset because i cant accept it right now even though i dont want to sell it right now. Who marks their house in the market in the middle of everyone did. Nobody marked it down in terms of what taxes you owe. We all live in new jersey, i think, so we know how that is. Also Standard Chartered expects to pay 330 million to secretary a case with u. S. Regulators who accuse the bank of failing to comply with sanctions against iran. The fine is on top of the 340 million already paid to new york state. The bank says the payment will further dent Profit Growth this year. And hsbc reportedly might pay a fine of 1. 8 billion as part of a settlement with u. S. Law enforcement agencies. The settlement could be announced as soon as next week and has to do with Money Laundering lapses. The deal could be a test case for just how big a signal prosecutors want to send to halt the list of flows of money through u. S. Banks. But that was billion with a b. Lets get a check on the markets this morning. After the moves we saw yesterday, the dow up triple digits at one point. That the poebts you can see that the futures are indicated higher once again after it closed up about 85. In europe, right now at least there are some green arrows. Best performer among those three indexes is the dax in germany. Up 75. You also see gains with the cac in france and the ftse in london. In asia overnight, you did see slight drop by the hang seng and shanghai, those were big gainers the day before. And in japan, the nikkei up by 0. 8 , kospi up 1 . Oil prices this morning are trading up about 28 cents, 88. 16. The ten year note this morning is sitting right at 1. 85 . You to you see pressure on the yield. Dollar down once again today. The yen at 82. 37. And the euro at 1. 30777. And gold prices at this point are up 1. 20. 1659 and ounce. Wonder what boehner and obama talked about on the phone. I think it went Something Like this. Your mother no, your mother. No, your mother. And then it went back and forth. Your mother to infinity. No, i think what happened is we realize that theres been an awful lot of theatrics. You dont think they said your mother . No. You dont think they hurled insults at each other . No. Actually, boehner was just a dial tone. You said im supposed to do what to myself . No, thats not boehner. On the economic front, i guess there are things going on. More Employment Data on the way. Tomorrow the big jobs report and then there was the issue of the fiscal cliff. 11,000 in citigroup. I wonder if we start seeing things before next year. People are not hiring people. And weve talked a lot about this, ceos have already had to make their plans known to their boards. So its had its impact. Getner says the Obama Administration is only too willing to go over the qulif. Cliff. Do they mean marginal rates, or just rates. Thats whats going to be worked out, the last minute deal thats where you find wiggle room. I guarantee you theres guys in boehners camp that are ready to go over, too. But hes been moving to marginalize those peel. This is his way of taking control of the party. The question is why do they care where the money comes from. If you have a revenue target, then fine. But we need 800 million in revenue. John wehner figured it out. And boehner can turn around and say i need 6 trillion in titlement cuts. And they can each take each others playbook and try and figure out what they would like best to figure out the number and figure out how to get there. I dont know. Both sides seem to be only too willing to do it. Theyre in the booking rove on fox because of that fiasco. Which made good tv, but apparent apparently, i dont know, but he says republicans will get the blame for going off the cliff, but the president will be weakened the most. And orrin hatch called geithners statement one of the most stunning and irresponsible statements that hes heard in some tile. Soo can the economy avoid the cliff and rides above . Anyway, senior u. S. Economist and managing director at ubs. Do you think well get a deal . I think well get a deal. Do we get it before the holidays or after for markets, it matters. Its been a drag for the last nine months. So the idea that there is more uncertainty now than there was six months ago, how does that work . There was no fiscal cliff deal six months from now and still no deal. So im not sure why we think theres more uncertainty. I would say if you really think about it the president has a lot of ways to delay the impact. For example, our withholding table dont have to get change order january 1. Even if you havent struck a deal, you dont adjust the withholding tables. For now you can delay the pain. So there is wiggle room in terms of when the impact has to be felt. But is there where wiggle rom the investing world who looks at the United States and says these guys are a bunch of keystone cops. This cost us with the last round of negotiations back in the summer of 2011 when the debt rating agencies said if you cant find some civil way to talk to each other, were going to cut your rating. It was nice seeing the ratings agencies make a comments on u. S. Democracy. That was helpful. I think, though, is there some deal that can be struck, yes. When does it get done, i think its probably less important to be better before year end. Equity markets are looking at it now. If they dont have something done by the end of next week, equity markets will say these guys are never going to get anything done. The fiscal cliff hits. The arguments i just pa about the withholding tables and cutting spending, are not generally talked about. A lot of people deny they can be done. Were confident they can. So the question then becomes whats the impact, where is the impact. And the impact is equity markets end of next week will say these guys arent going to get it done, we wont have a deal january 1, everything falls apart, thats assuming of course we all get past december 21st. So basically week and counting before you think the equity market really drops significantly . If we do get a deal done do, we just maintain the 2 that were stuck in with the high unemployment and not go down . Or does it actually allow us to start growing again . Is anybody talking growth . Were talking growth. Is it possible to ever get back to that in this environment . It is. You have a lot of problems with the piece. Do you briyou believe if you rote deficit two different ways. You either keep the government that you have and pay for it by raising taxes, or you kind of leave taxes where they are and you shrink government down to where it pays for it. Does it matter for the future and for growth which way you do it in your view . It does. If you put it all into like a tightening, so how much tightening occurs in the economy that would slow the economy, its far better to actually reduce Government Spending than it is to actually raise taxes. Although that hurts the economy, too. Everything hurts the economy. So its a question of which is most or least harmful and that tends to be cutting Government Spending. But i do think its although tim geithner would disagree with me. One side wants to keep the government and entitlements like we have it. And the other side wants to take away all the excess government i think both sides agree that you need to do both. Just a question of how much. We need to do both to do a deal. I dont think both sides dwre that its the right thing to do. Just to get a deal done. I think moderates in both parties people on the right think were plenty big. And there are other people on the left that would like to do more social even grow government and pay for it up to 70 . So there are people. All right. When we come back, well talk about why manufacturing optimism is falling and falling fast. But first, gangnam style is on its way to racking up 1 billion views on youtube. With one song, this 34yearold is set to become a millionaire and the dance is so popular that even alan simpson is doing it. Yeah. That alan simpson. Twins. I didnt see them coming. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Jay timmons is ceo of the National Manufacturing factors. A survey has troubling results. Jay, tell us about this because were trying to get a feel for how the fiscal cliff is actually impacting hiring at this point. Well, i think its impacting it quite substantially. Our Quarterly Survey with manufacturers industry week survey shows that the optimism index among manufacturers has plummeted from 88 in the First Quarter of this year to about 51 . 43 of manufacturers have contracted their Investment Decisions and about 36 have either paired back on their employment or quit hiring all together. Kind of dismal when you think about the impact of investment and hiring in the future and what that does to the economy. We spoke with bank of america, mr. Moynihan, and he said he talks to a lot of Small Businesses including a lot of manufacturers and theyre telling him that not only is this impacting 2013 plans, but if there is not a solution that comes early in the new part of the new year, theres not a solution early that deals not only with the fiscal cliff but also the fiscal abyss, that he expect this is to start affecting hiring plans for 2014, as well. Is that a serious concern for your Manufacturing Base at this point . I think it is a very serious concern. We did a survey, a study a couple months ago called fiscal shock. And it showed that weve already seen a 0. 6 contraction in the economy because of manufacturers concerns about the fiscal cliff thats coming up. And the report also showed that if we go over the cliff, meaning if we just go over it in the first few days of next year, that we could have a 13 cumulative contraction in the gdp between now and 2015. And 6 million jobs lost. Now, a lot of those will come from small and medium sized manufacturers who just arent willing to take the risk, but i think youre talking to doug in a little bit and Larger Companies like caterpillar and doug is the incoming chair