You have john boehner talking but he is optimistic a deal can be reached. This comes on the heels of yesterday when you had harry reid expressing caution about the fact things ar were nt going that well. We are seeing the market to the downside, they have improved and you can see it spiked up. Alaska mitra said to them. Dagen speaking of House Speaker john boehner, he said he is optimistic. Im optimistic we can Work Together to avert this crisis sooner than later. Connell we also want to show you this, this is skepticism from who you would think would be a major player in the deficit talks. I am really worried we have a probability we could go over the cliff, and that would be catastrophic. Not to go over the cliff, we have to compromise, have to have revenue. The problems are real, the solutions are painful, no easy way out. The only way you can do this ifs to have a balanced approach and that is where people are headed. Connell matt welch is here. What do you make of all this, matt . There is nobody at the table actually interested in cutting the size of the government. That seems strange to democrats who think were living in some sort of mythical age of austerity. We had a really good shot. George w. Bush used the hell out of spending four years. I dont think john boehner is ultimately interested in it. Talkiig 110 billion, the smudge of potential cuts and theyre negotiating it away without any entitlement. Dagen are we past the point with no return . Will we become even more of a nation centered around our government that does not promote private business . Will anybody ever fix this . We will fix it. Everything is ultimately fixable, but they set up, the people at the negotiating table, what theyre going to do is means test everything. Means test tax rates essentially. They will have less in terms of production but were never going to means test government until we have a different type of people in capitol hill. Connell they pass it before the end of the year. Many times these things are fixable and you are forced to fix them. When the bond market comes out, the rates start going up and you say now we have got to get going. It is tough to make the argument over and over again when you are not forced to do that. We will not have the rates overnight suddenly, but we might have come january 1, and it will be an increaaed tax rate and were soft economy. If we actually pay for the cost of government as we have right now, the cost of government is recession. If you pay the size of government now. We will have recession in this country and that blows peoples minds a little bit more. I dont see them being forced. We have all of these yeartoyear fixes and patches and delay it here. This whole process is an example of doing that. Dagen you talk about the needing to be different. Some people might talk about fixing our debt and deficit problems, but when it comes down to it, they dont want to give up tax rates, pay anymore, and when you talk about cutting government they get up in arms about cutting spending. That is definitely true. A few politicians who are talking honestly about this stuff and have been able to win a few elections. People like rand paul might lead it. Scott walker of the world, there is a reality we will have to conform to. Theyre not all being punished at the ballot rocks. We will see a double dip recession and some of the effects of responsibility. There will be more and more politics available for that. Connell weve already heard from boehner today. Whoever theyre playing to until the end of the year. As always, thanks a lot. Dagen you have seen stocks playoff the progress or lack thereof on the fiscal cliff. Yesterday afternoon, after a little upward movement in the stock market, senator harry reid came out and expressed disappointment on the lack of progress with the automatic tax increases and spending cuts, and the reverse happen again today. Getting a bit of a bounce after john boehner sounded optimistic on getting a deal together. Chief investment strategist at like rock. It doesnt seem that bad. The market bounced back a little bit, but do you see increased volatility, much wilder swings, potentially, getting closer to this day . I think the risk is we will have a lot of days like today where the market bounces around and were moving on every uttering out of washington. We get positive comments, negative comments, and any more clarity of when the compromise will happen, what it will look like the market is likely to be hostage to what is going on in washington, d. C. Dagen are you actively telling them to make changes to their portfolio . Based on what could happen . I think there are some Asset Classes that are more resilient. Fixed income looks expensive, but they look attractive on a regularelative basis including t bonds. It would make even more sense if weewent over the fiscal cliff. Dagen they have had an incredible run in recent years and the category averages, if you look at longerterm muni bonds, california and new jersey can we have had doubledigit returns year to date so far. They arent getting a little ahead of themselves at this point . There are places we would like to avoid, generally the national based muni fund, but it is a relative gain. Yes, they look expensive, but you will have investors with a portion of allocations and fixed income. Compared to other alternatives, the treasure market, they actually look incredibly cheap. Even before you take into account the tax advantage. Right now were in a relative gain, on a relative basis at least it looks attractive. Dagen we sell dividend stocks for the possibility it could go up significantly for wealthier americans. I think it depends on the segment the dividend faces. There are portions of it, utilities look very expensive. These are stocks that have defensive characteristics, have done very well the last two or three years, but in general no, dont the dividend space is any more risk than the broader stock market because people will have a lot to worry about besides their dividends. Were looking at potentially economic recession. Many of them have defensive characteristics. They do better in a slow economy even if you take into effect the tax rate is likely to go up. Dagen have a Great Holiday season. Connell this Knight Capital story, already confirming reports of Charlie Gasparino that it has a proposal that are, but now we have a new development, a competing offer. Dagen Charlie Gasparino, what do you know . The deal is likely to happen today. Actively shopping the firm last night in an attempt to get the bid is higher than what was stated in the press. Numerous reports about Knight Capital going for 700 million. It is what we know now is the other ajor player is now coming to the table, run by the former head of the nymex. Here is what we know. Sources tell the Fox Business Network that likely to present its bid sometime later today. Almost a hostile bid in a sense. They filed out with the exchange commission. They plan to go to the board of directors of Knight Capital and say this is our bid which is 3. 50, half cash, half stock. They plan to present a dual 3 per share allcash for the board of directors. Getco will basically fire john joyce. You are done. What i understand is the Management Structure is they win. He is one of the top three executives at the newly combined Knight Capital group. That is an enticing move. Some of the interesting things, he tried to shop this, that is an interesting move, not with plenty to talk to black rock about it. I dont think anybody else will buy it. They clearly got a good bid out of getco. Theyre still over a billion dollars deal, it is all cash, and it is 3 plus. We should point out the we wille it public tomorrow, we will see the paperwork being filed tomorrow. They are a big Owner Company when Knight Capital had the trade 400 some million dollars, would have led to bankruptcy words not for massive capital infusion. I would just say because theyre on the board, back up a minute, last year you had basically a bailout. A bunch of partner scott convertible stock. That is pretty good. They own a chunk of the firm, like 20 . From that Vantage Point they have a major seat at the table. The problem is there are other investors. What theyre going to do is they look at getco. You have to believe the earnings, the combined deal when the two companies together, you will get stock still 3. 50 deal, they will say maybe, maybe not. If you do the deal, getco comes public. They buy it outright which means mayye it will become public or not. As you know, he came out and gave a Conference Call to investors. One thing, which means they are not all right. Enforcement division issued a notice to the firm saying the firm did not have control, theyre issued this against the firm. Though this means the staff believes full commission can charge you with some sort of a fraud charge. If that happens, that is really if they have to settle a fraud charge, that could essentially put them out of business in a sense big investors, most of the other investors are public investors. A lot of them could not mess with a fund, theoretically you can get thrown out. Dagen the Justice Department is not going away either. Connell the powerball deal half a billion dollars. How unbelievably rich. Dagen no ts new smart phone priced to sell. How does it stack up against the new Android Phone . As we go to break. Connell dr. Nicole at the exchange, i know youre looking, the market has itself turned around a little bit. Nicole the three of us are talking about John Boehners comments, each time that washington lawmakers of any sort makmay commentary pertaining toe fiscal cliff is a market moving event. John boehner being optimistic a deal can be reached. The Dow Jones Industrial now off 30 points having been down more than triple digits, down 113 points so a complete turnaround. It shows to the worries wall street and americans have. Back to you. Dagen 2012 on record to be one of the hottest 10 years in history. Major shrinking of the sealand to the record temperatures, the findings released at International Climate talks, and blamed it on farreaching climate changes. Mitt romney finally gets to go to the white house. Not the way he imagined, of course. Reporting governor romney will have a private lunch with president obama tomorrow. Thisll be the first meeting for mr. Romney and the president since the election. Connell all the mayhem over the power ball deal, we will hear why so many people may just be throwing their money away. Dagen the newest smart phone. Is it flying off of store shelves . 100 with a contract. Is it even worth that . Walt mossberg is here to tell you yes or no. And they look at how the world currencies are faring against the dollar. Copd makes it hard to breathe, but with advair, im breathing better. So n i can be in the ene. Advair isclinicallyp siificantly improve lu function. Unlike moscopd medicions, advair contains both an annflammatory and a longactinbronchodilat woing together to help improve your lung function all day. Advair wont replace fastacting inhalers for sudd symptoms and should not be used more than twice a day. People with copd taking advair may have a higher chance of pneumonia. Advair may increase your risk of osteoporosis and some eye problems. Tell your doctor if you have a heart condition or high Blood Pressure before taking advair. Ifoure still having difficulty breathing, ask your doctor if including advair could help improve your lung functi. T your first full prescription free and save on refills at advaircopd. Com. Connell the development of the lottery everybody seems to be talking about. The jackpot up to half a billion dollars, a second highest amount, second only two Mega Millions drawing. You think this lottery is taking advantage of people . Our mission is to get government out of the gambling business. The biggest policy failures. The fact that lotteries people are like a stealth tax. People paying in and the government is raising revenue that way. It is not advertised that way, but you seem to take it a step further than that. It represents government found it a lot easier to provide people funds than real opportunities. Instead of doing the hard work it takes to reform our schools, reform the Pension System and so forth, we have come to gimmicks like state lotteries. This is a government program, so that half billion dollars jackpot they keep talking about, it represents the losses of millions of americans. Connell as i said coming in, everybody is talking about it. They go out in the street, i guarantee you talk about the powerball in five minutes or less. You know what, i understand what you are saying, but it is fun. 2, whatever. I dont mind. The government raises a few bucks. Maybe i win something. What this embodies is about representing a public voice of American Government today, this constant calls to lose their money. Buy savings bonds. The Consumer Federation of america showed more than one out of five americans think the most practical way to build wealth is to play the lottery. This is the american dream. Connell 175 million or some idiotic number in terms of what your odds are of winning. Come on. This is not about if the staff at fox business has a pool, this is not a social game. People paying hundreds of dollars on the tickets. State lottery makes 80 of their money. Connell the alternative, finish your point, the alternative to this is what . People say the lottery is there to raise money for education and other things, which we need to raise the money, the alternative you think is what . The alternative is a government based on real prosperity and fair taxation across the board. Theres a reason why states have the higher taxes, worst budget deficits, increased personal debt. We have to look at the issue of the gamut. It represents this Powerball Jackpot really embodies how outofcontrol it has become. Connell thank you for coming on and sharing it with us once again. Thank you. Dagen if the president wants mr. Obama expected to speak in moments on the tax cuts he wants to keep and he wants to raise maybe. Nokias newest smart phone. Walt mossberg on the good, the bad, and man, this thing is heavy. Calls are skyrocketing for holiday travelers, use that as an excuse to not visit to develop his who you can take or leave. Connell lets go back to nicole. What do you have . Nicole taking a close look, heavily traded on washington. A name when i bought my breakfast this morning it was a hot topic. Now down 0. 13 at 31. 22. Bp has suspended new contracts with the u. S. Government according to the Environmental Protection agency. This is not good news for bp. Everybody is familiar with back in 2010 we had the big oil spill, 11 workers that died. Now the question is integrity, they pleaded guilty to charges, the agency of the Environmental Protection agency talking about the lack of Business Integrity they have seen and demonstrated. This is somewhat of an ethics issue out on th only the disastt what followed after that. How much oil spilled, this is why they are now being suspended from the contract. Dagen thank you, nicole. Connell john boehner move the market little bit with his comments within the last hour. The markets are on edge with anything to do with the fiscal cliff situation. But in terms of technology today, nokias new smart phone is in high demand. Easy stories of it driving off the shelves. How does that match up against Everything Else out there . Dagen mr. Walt mossberg. First and foremost, terrific to see you. If you would like, i can Say Something kind of calling about the fiscal cliff. Dagen yes, please. Connell that would be great. Why dont we just talk about the phone. Dagen lets send him in and clear out all the bugs. Drop it off a cliff, it might break something. Bye people, you mean you. So heres the deal. This is the flagship phone from nokia, and one of the flagship phones for windows 8, microsofts newest version of the ceel phone operating system. In my test, i found it worked quite well. All the features i tried, almost all of them worked for the well. The camera is very good, the screen is fluid. It is by far the best functioning of these phones i have tried, and it stands up very well. As you pointed out, the only cost half of what a typical iphone or Android Phone cost. Those are usually 200 with a twoyear contract, this is 100 with a twoyear contract and twice the memory. That is great. There are two problems. It is thick and heavy, it is really heavy, 55 heavier than an iphone 5, 33 heavier than the new google nexus. And a lot thicker the payout when you are comparing. When you put it in somebodys hands. I have been doing that in the studio, people go nexus, cannot believe how heavy it is. The second problem is the apps windows 8 problem, not a nokia problem. About 120,000 apps, there are 700,000 for the other two platforms. And a number of popular apps you might want like dropbox and google drive. Starbucks, a number of them that arr not on here. Youre giving up some variety and quantity in apps. Dagen would you give up in terms of weight and the lack of apps, do you think the lower priceprice at 100 is enough to offset that . It seems like a pretty good deal for somebody who wants a smart phone and just does not want to pay for one. There are much lighter Android Phones for 100, and you can buy the iphone fo 4s. So for me, because this is a mobile, portable device you put in a pocket for the first, i think the thickness and the weight to me personally would not, would be too much for me to want to buy this instead of one of the others. I recognize people look at the tradeoffs differently, did not try to cite it up for everybody, just type to lay out here are the tradeoffs. Dagen here is the lowly iphone 4s. The other great operating system. And youre good to go. Thank you, it is good to see you. Co