Kudlow style. First up tonight, stocks look very optimistic today. The dow gained 208 points. The s p 500 surged by 20 points. Lets go to liz saunders and brian, the cofounder of shelter capital. Welcome back. I want to quote you from my pal and your pal who said on the air this morning on cnbc that if we get a resolution of if we extend tax rates, jeremy said the dow can hit 17,000 next year. 17,000 next year. Liz ann, i ask you what do you make of that. Im wearing the. The i do think that the market would react. A true sign that we would have a compromise here. What do you think about 17,000 . You and i havent talked in a while. Is such a thing possible . Yes. Dont ask me for a time frame but i think its certainly possible. I think when you think about how this rally has been for three and a half years and many of the participa participants have been sitting on the sidelines. It is, in my mind, easy to envision in light for evaluation. But i think we have got some short term things to get through. On the other hand, the New York Times . Do you read it . Sometimes i do. Every once in a while. They say investors are rushing to sell in order to avoid higher dividend tax rates. The tax rate thing is not going away one way or the other. We have certainly seen a lot of selling. The stock market is up 10 but the bond market has not really responded like it has in the past which tells me that people are taking money out of the Capital Markets which concerns me for any type of sustainable rally. We might have hope and optimism of people coming in. Its too early to move. Who knows what could go right, who knows what could go wrong. I just dont see how you make the bet. Talks about the earnings will be maybe 100 or maybe less than 100 therefore he doesnt think that the market has much upside at all. Earnings are the mothers milk of stocks. What do you make of that . What about earnings . Like were not dependent on the fiscal cliff enough. If you look at various scenarios, a full can cliff. You go anywhere from no mathematical impact up to 4 or so impact on gdp. That will immediately affect earnings. I think the range could go from up a decent amount to probably down double digits. Answer the question on what happens with the cliff and id have a better sense of what happens with earnings. If you cant answer the question, i want you both to weigh in on this. Thats the problem. And i think a lot there is a lot of criticism that analysts are whistling past the graveyard. That may be the case. I dont know that they are in lalaland. I think much like businesses that are holding back on capex and hiring until they figure out what the Playing Field looks like, i think analysts are doing the same thing. I think it will be a resetting. It may not be bad but were not there yet. So i think analysts are digging our heels in. I dont think anybody knows or can know right now. Maybe we will know 12 00 midnight. Do you find gold in this story . You certainly buy gold here. That is a really good day. If you want to play levered gold. We know that certainly the Federal Reserve the going to continue to print money. The bank of japan will announce something if not tonight then in the next month or so. That is the global theme. The one thing that i would say about the fiscal cliff and affecting earnings Going Forward is i think its affecting earnings right now. Businesses are already starting to lay off. Theyre not spending. This is something that we talked about in the summer, larry, that its already impacting Business Decisions now. Whether we go over it or not is going to be incidental. Whats your favorite investment right now . I think you want to just keep around whatever your core Asset Allocation is. Our message has been stay relatively defensive but dont go all the way to the defensive end of the spectrum. We do like health care. We do like technology. We do like financial. So its a little bit of a mix. But were not out there telling any of our investors to be hero heroes. Do you buy gold . I agree that the fed is probably going to keep the pedal to the metal. We may see an expiration that they add to qe3 or whatever you want to call it and maybe buy up those purchases. I hear both of you saying that. Brian says buy gold. You know. Thank you for that. Now folks, walmart in the news tonight taking action against the Retail Workers Union for generating flash mobs and picket lines at the stores. The National LaborRelations Board is getting involved and calling this a top priority. Were going to get you updated but before that, now lets look closer at the optimism about a fiscal cliff deal. Is it a real deal . All right. Baker, ill start with you. Im not sure where you are. But, president obama has made it very clear. He wants 1. 6 trillion dollars of new revenues over the next ten years. Okay. I would argue in order to get that number, hes going to have to raise tax rates, which the republicans dont want as well as put caps on tax deconductions or loopholes. So therefore we have a mess on our hands. Not too much of a mess. Im enjoying the show. Were talking about the tax rates going down to the clinton era. Were creating 3 million jobs a year. The economy is growing 4 a year. We take away a few of the tax loopholes. That sounds good to me. Basically we have a lot of people running around like chickens with their heads cut off. The economy collapsed because the housing bubble burst. This is all loo loo land here and it is not enough to get worried about but it makes for good news. It makes for great news. I also, tim geithner says we can get a resolution of all of this in two weeks. But geithner insists that tax rates must go up. So do the democratic leadership. So Speaker John Boehner is going to be a lonely guy. I think the republicans ought to hold firm against any tax rates. President obama is striding around like he has a mandate for tax hikes but look at House Republicans. For 20 years the House Republican message has been against any tax hikes. Voters now where House Republicans were on taxes and tax hikes and the republicans retain their large majority so they absolutely ought to hold out against any tax hikes. Thats a stalemate. Speaker boehner has said close some loopholes. Okay. There are good loopholes and bad ones. The House Republicans ought to make sure that there is at least 3 or 4 of every spending cut for every dollar of loophole closing. There is no spending cuts. Thats the thing. They have got to hold firm against that. Theyre talking about 400, 500 billion in revenues, maybe more. Thats the republicans obsession. I didnt hear any spending cuts at all. The loopholes cuts in military spending. They wont do it. President obama has gone along with that. But the republicans wont. There are spending cuts. Let me point out a couple things. The end of the year let me say one thing. I would take the sequester. I want to say for the record. I would take the whole spending cut across the board. Now please continue. Okay, so, again, in terms of where we are in terms of the deal, if nothing happens, the status quo is that taxes go up. So president obama doesnt have to bargain here. He got reelected and for the record, democrats got 500,000 more votes. So you dont have too much of a mandate. I would hate to go out and call that a mandate. Where we sit is taxes go up january 31. You have to give president obama a good reason to move from that. I think republicans have a lot of leverage here. The government runs up about the debt limit in a few months. Democrats want payroll tax cut extension. Democrats want a lot of things, too. I think there is a lack of seriousness on the spending cut side. Harry reed senator majority leader said hes not touching Social Security at all, which is ridiculous. I didnt hear many republicans promising to cut Social Security in the campaign. Theyre not serious, either. But we need major spending cuts and i think its unfair to be talking about tax increases when everyone knows there is so much waste and unneeded programs in washington. People want to cut Social Security . Not republicans, not democrats, here in washington we have people who want to cut Social Security . Its the largest federal program, Social Security is. Its larger than defense. Cut Social Security, cut medicare, were going to freeze. Let me get one in here before we go. Im reading in the papers today, the Financial Times that they want business tax loopholes, socalled tax loopholes closed. No rate reduction on the other side. They just want to close them down. Of course were talking about oil and gas and coal. They want 150 billion in revenues. Thats going to be on top of the 400 or 500 billion dollars. Tax rates may not go up but theyre not going down. I tell you, to me this has stalemate. The reason i like this segment very much is the fact is stock market people think this is going to be easy. Mr. Obama called a couple of ceos over the weekend. Id say right now there is just as good a chance for a stalemate as there is for a solution. Last word . Im willing to bet we will get something patched over before the end of the year. Worst case over you go over to january 1, 2, 3, no big crisis. Weve been through this stuff before. Thank you very much. Coming up on kudlow, with israel and hamas on the verge of a ground war, a cease fire could be within reach. Is either side really ready to back down . The country is on the verge of attacks that could throw us into recession . Yes. Ultra leftist now calling for a 91 tax rate. It is, folks, easily the dumbest thing i have ever heard and dont forget free market capitalism is the best path to prosperity. Im kudlow. Well be right back. Americans believe they should be in charge of their own future. How theyll live tomorrow. For more than 116 years, Ameriprise Financial has worked for their clients futures. Helping millions of americans retire on their terms. When they want. Where they want. Doing what they want. Ameriprise. The strength of a leader in retirement planning. The heart of 10,000 advisors working with you onetoone. Together for your future. There are new signs that an end to the fighting could be close. Negotiations underway with egypt, israel, and turkey in karyo. Can israel really trust egypt or turkey . Martin fletcher joins us now. Larry, its been another day of bitter fighting between palestinians and israels. They have been continuing to bombard targets in gaza. Over 110 palestinians, several hundred wounded. The palestinians at a lower pace than before. The rockets fired at israel today. No serious damage done today. Successfully intercepted those rocketsment all of the attention is on the question will israel invade gaza with its army or will there be a truce. There is intense negotiations especially in the arab world. Trying to get israel and hamas to agree to a truce. But the question now is what will come first . Truce or a Ground Invasion . Very close call. Everyone, of course, hoping that a truce will take place but an israeli invasion is very much on the coards. Now lets get some good analysis. We have dan, coauthor of startup nation. Dan, welcome back. You know, this whole business about this discussion israel supposedly negotiating with turkey and egypt. A former israeli imbas dambassad in an interview that the rise emboldined hamas in the first place. So how can they negotiate in good faith. You looked at a percentage of unemployment, particularly among young people, its in devastating shape. The last thing the Egyptian Government wants is a war in a region thats on its border in the gaza strip. Thats certainly not in the interest of revitalizing the egyptian economy. The west has considerable leverage. You look at the billions of. Thats, from the United States government. There is leverage there that we have with egypt. However, the reality is, one, president is not evektive. This is all new to him. And two, he is an idealogical soul mate. With hamas. Absolutely. And other regional players. This guy has made nasty statements about israel. What im reading and hearing, dan, you tell me if this is right. That israel itself doesnt want a ground war. But i dont think israel how can they trust these guys in egypt and turkey . I just dont believe that. But the israeli people dont want a ground war. Youre absolutely right. The last thing the israeli people want is a ground war. If you look at from the perspective, one of the big myths is that hes a trigger happy warmonger, highly militant israeli prime minister. If you look at the history of israeli premiers back to the founding of the state, he is one of the most cautious leaders. He is the one leader who actually rarely takes military action and he has been so singularly focused on dealing with the threat from iran, the last thing he wants right now is to get bogged down in a messy ground war with gaza when he knows he has got to be dealing with iran in the next eight to nine months. Having said that, the next question is did israel get done what they needed to get done . Knocking off the high command, knocking off the military units and getting to the missile sites. Did they get done what they needed to get done . Based on the conversations i have had with people on the ground they have not gotten it done yet. If they reached a cease fire agreement tomorrow they could still be back exactly where they are now weeks from now. Unless they get to an agreement which they think is truly enforceab enforceable. Do you expect a deal in the next 24, 48 hours . No, no, no. If you look at the comments coming out of the Egyptian Government, they held a background briefing today for the press. Some of the rhetoric they used in defense of hamas. They are comparing hamas to george washington. They were calling israel terrorists. This does not look like a government that is ready. That is the whole bloody problem. You just nailed it. Thanks for helping us out. Good to be with you. Big business versus big labor. A black friday worker walkout, the nations largest retailer is fighting back. But can customers expect business as usual at walmart on friday . I dont spend money on gasoline. I am probably going to the gas station about once a month. Last time i was at a gas station was about. I would say. Two months ago. I very rarely put gas in my chevy volt. I go to the gas station such a small amount that i forget how to put gas in my car. [ male announcer ] and its not just these owners giving the volt high praise. Volt received the j. D. Power and associates appeal award two years in a row. With the spark cash card from capital one, sven gets great rewards for his Small Business how does this thing work . Oh, i like it [ garth ] svens Small Business earns 2 cash back on every purchase, every day woohoo so thats ten security gators, right . Put them on my spark card why settle for less . Testing hot tar. Great businesses deserve great rewards [ male announcer ] the spark Business Card from capital one. Choose unlimited rewards with 2 cash back or double miles on every purchase, every day whats in your wallet . Heres your invoice. So are federal workers underpaid . Let us keep the pay freeze in place. Were going to debate that in about 30 minutes. Now facing a black friday worker walkout, walmart is fighting back tonight. The retail giant taking its case to the National LaborRelations Board. Courtney has all the details. Walmart warehouse and store workers announced their intention to stage protests during black friday. Walmart filed for an injunction to stop worker protests, claiming the protests are picketing with the intent to get walmart to recognize a union. Employees are famously nonunion. The group is getting advice from the united food Workers International union. Supporters are taking action to support walmart associates. Walmart says the tactics orchestrated by the ufcw are unlawful and will protect associates and. Less in terms of priorities for legal authorities. The Agency Confirms it has sent representatives to headquarters to galter affidavits from walmart officials. Then they will decide whether to file a pe addition with the District Court for an injunction, stopping the protests on walmarts behalf. The goal is usually 72 hours but this case is more complicated than most. All right. Thanks to courtney. My question is why is it that the unions and the left hate walmart so much . Walmart gives low consumer prices, good product quality. Its like a middle class tax cut. Entry level jobs, great training for the future. It is such a great free Market Company that has done so much for this country. Maybe because it is that that the left hates it. Will they do the unions bidding or will they do their job . Up next is the economy doing better or worse . Where does the socalled recovery go from here . Hey did you know that honey nut cheerios has oats that can help lower cholesterol . And it tastes good . Sure does wow. Its the honey, it makes it taste so. Well, would you look at the time. Whats the rush . Be happy. Be healthy. That bringing you Better Technology helps make you a better investor. With our revolutionary etrade 360 dashboard you see exactly where your money is and what its doing live. Our etrade pro platform offers powerful functionality thats still so usable youll actually use it. And our mobile apps are the ultimate in wherever whenever investing. No matter what kind of investor you are, youll find the technology to help you become a better one at etrade. Welcome back. In this half hour, a 1950s style 91 tax rate . 91 tax rate . Thats what ultra left economist wants but he forgot that in the 50s, we had three recessions and i think he forgot about the depression, also. Meanwhile federal workers underpaid by a third . Think agai