For melissa francis. Heres whats money tonight. President obama and congressional leaders try to pull off a fiscal cliff hail mary. Their lastditch meeting at the white house desperately tries to land a deal but the report he hadly not putting any new offer on the table. We have the very latest for you. Not even the fiscal cliff can slow down the u. S. Oil boom the production surge sets up huge windfalls for businesses outside the oil industry in 2013. Who stand to reap the biggest gains . Well drill down details so you can get in on this game. Iran launches war games in the strait of hormuz flexing its military muscle in the heart of the critical seaway for global oil supplies. Is iran just sabrerattling or gearing up for something much bigger . Even when they say its not, it is always about money. Adam and a good evening to you. Melissa francis will be back after the first of the year but right now lets look at todays market headlines of the investors were largely gripped by unfolding events in washington regarding the fiscal cliff. There was little optimism on wall street. Stocks fell for their fifth straight session. The dow, the dow fell below the 13,000 mark closing down 158 points. Fiscal cliff anxiety sent the socalled fear index, the vix, soaring more than 14 . It is now up close to 30 this month. Barnes noble was one of the few market bright spots today. The londonbased pierson learning company is investing 89. 5 million in Barnes Noble Nook media unit. Shares rally more than 5 on that news. But weve got to get back to the top headline of the day, nada, zip, zilch. President obama needing with congressional leaders at the white house ended a short time ago and the president is reportedly giving no new offer on the fiscal cliff. The House Minority leader said the meeting moved negotiations forward. So where do we actually stand on all of this . Fox businesss rich edson is at the white house with more and did they really move this forward and is that a good sign . What do they mean . Well, adam, theyre still assessing the fallout from this meeting, democrats and republicans. Leadership returned to the hill right now and basically what weve got from the start of this meeting according to a Senior Administration official president obama began by offering essentially what he laid out in a speech a week ago which is to keep taxes where they are for families earning less than 250,000 a year and to extend longterm Unemployment Insurance benefits that is basically just a small slice of what the president had been proposing for quite some time. The Administration Official also says that the president is putting it on republicans to come up with a counteroffer that they say can pass the house and the senate. If not, the president said, he wants an upordown vote on his proposal in the house or the senate. So congressional leaders left here. Other than House Minority leader nancy pelosi im now Hearing Senate majority leader harry reid has joined her in making comments back at capitol hill. Well let you know what they say as soon as that is transmitted to us. There are other directed comments they made little progress something they have been saying after the meetings the last few months. Adam . Were looking to turn around reids comments so we all can hear them. When you talk about the president he is upordown vote, someone referred to this as planc. Is this the offer you reported on a while back where he would move the bottom line tax increase to 400,000 for the upper incomes as opposed to 250,000 . Is that on the table. We dont know if that is the specifically the offer on the table. It started at president s opening offer 250. You could see a pathway forward to raise the threshold up to 400, 500,000 a year, any amounts below that dont get tax increase. Any amounts above that get tax increase. End of the year fixes preventing medicare doctors getting large pay cut. Amt fix, prevents millions of americans paying the amt reform kick that to next year. That is sort of the path aides were seeing some variation yeah that could actually pass the house or senate. Whether that was specifically discussed here or on the table we dont know that. Adam rich, stay there. I want to bring in a few of our guests to talk more about this. For more on the shock wave of the developments, lets bring in dan cato, Cato Institute and rick unger. Rick, let me start with you, are we optomistic both sides moved the discussion forward or is that a fancy way of saying they moved it forward and are ignoring each other. I say in a word no. Im not feeling it. There is little reason to believe well see something small or large before the end of the year. Adam dan, what do you think, will we see something large or small . If it is small something sufficient to avoid calamity and doom and gloom or apocalypse. Im less optimistic. Whether it is obamas tax increase, whether we get obamas tax increase tomorrow or get it a month from now the net result is still the same. Were going to have a less competitive economy because of what is coming out of washington. Adam chime in, rick said, nah why do you say that . You will get a tax increase. I think number will be closer to 500,000 before were done. Certainly closer than 250,000. This is, i dont know, for years ive had to listen to this, it is going to hurt our economy if we raise taxes on the top 2 . There are many things happening that can hurt our economy. The fact were having this conversation two or three days before the end of the year is hurtings our economy. Adam but weve seen that. Raising taxes isnt going to be it. Adam let me bring dan back in here. Dan, i want to ask you, raising taxes only raises 80 billion at best in a budget almost a trillion dollars over budget. So what do you to fix that problem . All we have to do to balance the budget in 10 years limit the growth of Government Spending so that the budget climbs by an average 2. 5 a year. In my mind, this isnt about the short term because whatever speed bump we go over were going to go over. In the long run that is what im worried about, how big is government . How much of our economys resources will be diverted and consumed by government . Because i dont want to become greece or france or one of these stagnant slow growth welfare states. Think evidence is very clear that fiscal policy does matter for an economys performance. Doesnt mean we have a recession if taxes go up but it does mean that government will be bigger and our growth rate in the long run maybe instead of 2. 7, it is 2. 6. That doesnt sound like much but because of compounding it adds up. Adam dan, i dont think there is any danger we become greece or france in a lot of ways. Were not a socialist country yet and greece is a whole different ball of wax. Rich, the discussion about the econy, the spending cuts that theyre talking about do put people out of work and that would have a negative effect on the economy, would it not . It would, adam. Real quick, a bit of news here. President obama will deliver a statement at 4 45, something i imagine well cover live here on fox business. Adam we will. 5 45 president obama deliver as statement here at the white house. As far as spending cuts are concerned, you see this argument, you typically hear republicans say, Government Spending doesnt create jobs. However when it comes to a number of defense cuts when it hits in their districts a number of them, if it hits companies in their districts well you have to stop defense cuts using an economic argument. When you talk about the 94 billion, well, yes there are economic effects that will be felt, the 94 billion in cuts down as sequester, you have to put that in perspective the sandy supplemental bill started out 60 billion. One storm could wipe out all the savings or. Adam that sandy supplemental bill is 60 billion, 45 billion according to taxpayers for common sense is stimulus spending that doesnt involve the hurricane. Dan, i will come back to you after we listen to sound bite from harry reid, Senate Majority leader commenting on the negotiations today. Here is what he said. Okay. We had a long meeting in the white house. It was very constructive. We hope that it will be bear fruit but that is what we hope ad lot. I think that the next 2 hours will be very instructive what were able to accomplish. Was there progress . Discussion of a concrete proposal . We talked about a lot of things. There is no concrete proposal at this time. We have a number of Different Directions well try to take and were going to see what can be worked out. Will you work on a piece of legislation . Pardon me . Is it a good sign or bad sign you guys are not talking much after this meeting . I hooe everything is a good sign. I had my confidence he destroyed on other occasions but i hope it is not on this occasion. What about timing . Timing is were out of time. We have to do it now. I said the next 24 hours will be very morn. With are you considering amending house revenue bill. Were considering a lot of things. Thats enough. Thats enough. Thank you, senator reid. Adam dan and rick, very quickly lets wrap this up. Dan, what i heard the majority leader say, Senate Majority leader say we have to save our phoney baloney jobs and he didnt offer anything, do you agree . Wellput. He didnt say anything at all why im worried. Were not greece now but we might be 25 years down the road with that socalled leadership. Adam rick you put it really well. Theyre all saying we have to save our phoney baloney job on both sides. I dont know about you but im fed up with it. Adam we have to source that quote. It is mel brooks. In all seriousness president obama will address the nation at 4 45. Well get a statement about the fiscal cliff negotiations. Well bring that to you on the fox business network. Everybody. Dan, rich and rick, thanks very much for joining us. We have to talk about stocks which got thrashed after word president obama was putting no new fiscal cliff proposal on the table. With the u. S. Closer to diving off the cliff than ever, monday is shaping up to be a pivotal day for the markets. Should you, should an investor look for their emergency parachute, or should you stic this thing out . Joining us right now, jonathan hoenig, Portfolio Manager at capitalist pig. Com. Spencer patton, chief Investment Officer at steel vine investments. Jonathan, i have no choice but to stick it out. Im a poor slob with a 401 k . So what do i do . I stick it out, right . Well, what the president is putting you through, adam, what harry reid is putting you through, harry reid thinks the next 20 four hours are important . Youre supposed to as investor be thinking long term. To leave this down to the last minute like this is cruel and is a distic to investors. One of the reasons you saw the tremendous drop today. You mentioned monday night being volatile. That is holiday day. It is thinly traded. With the fiscal cliff literally occurring you can bet it will be extremely volatile sunday and monday night. Adam spencer, if i were in individual stocks seems not it the time to sell them or will we see that. The important thing to keep in mind with stocks, one part we have to worry about is the fiscal cliff. We have taxes and spending to worry about there. But what the real issue is, in my opinion is the debt ceiling debate that is just around the corner. Adam oh, joy of joy. If we get some deal with the fiscal cliff which i think we will and our politicians are the worst even a Blind Squirrel will occasionally find a nut. They will get this done sometime by january 15th or Something Like that. If they do not extend the debt ceiling you will have close to armageddon at the end of february and march. Adam spencer i take issue what about our politicians being the worst. Our congress is the best Congress Money can buy. Dont forget it. Jonathan he is talking about armageddon because of the debt ceiling. I would be terrified if i were not in the market putting my toe in this. There will have to be buying opportunity if people panic and sell. Which market, adam . That can be the story of 2003 and headlines are obviously scary they have a tendency to sell stocks and buy bonds. That is the safe move. I think the reverse will be true in 2013 and stocks will look quite attractive versus bonds. A highly manipulated market government stepped in and tried to hold Interest Rates low. Once inflation starts to show its head, i think bonds, supposedly the safe asset that could be where the real danger lurks in 2013. Adam jonathan i will let spencer respond to that i heard similar comments last four years get out of bonds, get out of bonds. Spencer, what do you think . I dont see anything compelling about stocks. There is no panic in the market other than down a 150 point day. Were seven or 8 off alltime highs of the market. If you had a selloff of 20 or 25 that would get me more interested in stocks. But there are no valuations that are compelling, jonathan, go ahead. You havent seen panic but you havent seen a lot of investment either. Most joe sixpack investors sat out the rally. They have been it something in bond. Theyre putting money into bond funds, taking it out of stock funds. Even with todays selloff, most arage investors are undervested into the market where they have been in recent months and years. Adam i heard one analyst on competing network he expects correction to be 10 . He was saying five to 7 after the first of the year as people panic to try to figure all this out. You dont think that is going to happen . Stocks correct. Thats what they do but i think you have to try to look beyond the daytoday headlines and look for a 20, 30, 40 move. That canned happen when you try to trade off harry reids last sound bite but i do think if youre ready to withstand some risk with a portion of your portfolio stocks are the best asset class in town right now. Adam spencer you have 20 teches and the last word. All right. I think the risk reward is just not there. If youre looking for 20, 30, 40 in the stock market i think that is what weve seen off the lows in 2008. We had the generational move. Now it is time to wait and step aside. Buy housing. Invest in gold. Invest in commodities. A lot of alternatives. Stocks are the no the place you want to be. Find a diffent asset that will still do well in inflation. I would buy housing here. Adam spencer, give you one word, plastics. Spencer patton, jonathan hoenig, thank you very much. Just when you thought the fiscal cliff was a lot of fun we get the debt ceiling. That will be a load of joy, wouldnt it. Oil companies are not just the only winners from the u. S. Production boom. Billions of dollars are about to be dumped on a huge variety of businesses this year. Details whh businesses will see some bigtime gains and how you can get in on the action. Plus iran launches six days of war games in the strait of hormuz. Is the regime preparing to stir up trouble in the one of the worlds critical oil routes . More money coming up adam if youre just joining us it has been a wild day in those negotiations over the fiscal cliff. President obamas meeting with congressional leaders ended about an hour ago. The president will make a statement on the fiscal cliff at 5 45 eastern time. Well take that same live at fbn we have a picture of the white house for you and we will keep you posted when the president comes to the camera. The oil boom doing more than increasing chances well become energy independent. It is also bringing about booming investment in the transportation industry. A new report says estimated 45 billion, you heard me correctly, 45 billion bucks will be spent new, expanded pipelines, railcars, Rail Terminals and that is just next year. How do you get in on this, right . It is a windfall. But is it realistic . Well turn to andy lipow. Andy i would have assumed it was shipped by pipeline. What is it about railcar . It seems awfully 19th century to ship oil that way. It is new development in the oil patch but if you look at Oil Production in north dakota, we simply dont have pipeline to move that oil east and west coast where we have significant amount of refining capacity. Adam what saying invest in who . The rail coanies that ship oil or the companies that actually make steel for the tracks . What do i do with my money . Well we actually have both of them. In fact on the railroad front we have burn link ton northern owned by Berkshire Hathaway but other winners in this will be the union pacific, the kansas city southern. Up in canada we have both the Canadian Pacific and Canadian National who are looking to double their rail shipments of crude oil next year. Adam is this an efficient way to ship oil . There has to be cheaper way to do this . I would imagine an investor who can get in on that would make even more money . No doubt it is much more expensive to move oil by tanker car rather than pipeline but the fact of the matter is were not going to build any pipelines from north dakota through the rockies over to california. Nor are we going to build pipelines across pennsylvania, new jersey, to the few refineries on the east coast. So these guys are going to be sitting with rail supplies for quite some time. Adam okay. We talked about the rail companies. Who else. Are there Smaller Companies i might be able to start researching to invest in that will part of this 45 billion bonanza just next year . If we look to the pipeline companies, there is a number of big winners there, starting with Enbridge Pipelines because they have a Pipeline Network from canada all the way to the gulf coast which theyre going to expand. In texas weve got sunoco low gistics who has a number about projects as does magellan and theyre all going to benefit by more crude oil by pipelines. Adam okay. What about the surge in natural gas . Same players in that sector or do i have other opportunities in which to invest in. Well, on the natural gas side we actually see companies who want to convert their Natural Gas Pipelines into crude oil service. Among them we have Kinder Morgan who wants to move oil from the Permian Basin out