Good morning, Varney Company viewers, we have a treat. Nicole is at the stock exchange, futures are traded up a bit. And president obama is cutting his vacation short to continue talks on the fiscal cliff. Joining us now is Dan Henninger from the wawr wall street journ. Does he want to go over the fiscal cliff . Some are saying he needs more than he would just get from the rich guys. I doubt that he wants to go over the cliff. And i must say, president obama has repeatedly referred to himself as the unique politician, hes different than everyone. There is no politician i know would want to get into a situation like this. And barack obama marchs to his own drummer and its possible, but i kind of doubt it. You wrote a piece in the wall street journal, called no guardrails, you said the old society kept the politicians in order in washington, selforder and selfrestraint. All of those disappeared as a result of the me generation and you say that obama is the epitome of a the me generation president that he sees things from his perspective and wont bend. The original metafor, you do have guardrails on a highway, people drive 75 Miles Per Hour and occasionally someone gets out of control and drives too fast and you dont want them going over the cliff so to speak, you want to protect them. Well, that was, i argued back in the 1960s, remember when people were sit inning in the universities, a nonnegotiatable demand. A thing called nonnegotiatable demand and that was society and people became more selfrighteous and selfdirected rather than understanding we had to operate within certain rules. I do think it has infected washington. I mean, i would call president obama one of the most selfrighteous president s weve ever had. David president reagan, for example, stood for concrete things and didnt bend on the principles, because they had the guardrails that allowed them, it made it easier to negotiate with people they disagreed with. For example, tip oneill, the democrat made a deal for the huge change in our tax structure. There seems no possibility of a deal like that being made now. Well, the republicans clearly feel that theyve been disadvantaged by president obama and they actually, i dont think, trust him or the democrats anymore because of the experience they went through with the Affordable Care act. Obama care, theyve got nothing out of it so they feel they will be hung out to dry if they do a deal. You know, there are so many pots and plans clattering around the chamber and what bothers me he is the lopsidedness of the debate. How about the g. O. P. For decades never said we are the ones delivering the middle class tax cuts. These are middle class tax rates that were enacted undergeorge w. Bush. We own these for the middle class, not the democrats. Why isnt the g. O. P. Stepping up for that. I guess because they have no historical memory, a democrat hasnt done this since jfk. Back in the early 1960s. And he got a huge amount of protest. Clinton lowered the Capital Gains tax and because of that a huge boom in the stock market. The tax cuts barely passed at the early part of 2000. Why didnt they make them permanent and we could have avoid this had kind of discussion . Tax policies extremely difficult. They put it through the socalled reconciliation process, which doesnt require 60 votes. Reconciliation laws, sunset after ten years, theyre not permanent and thats why this one is sunsetting, rather than having done a, you know, a longterm tax reform bill. And tax reform is very difficult. Why cant we get sunsetting on spending, and no sunsetting on tax cuts. We shouldnt be, thats what we should be sunsetting are the spending bills. We should be talking about wind energy that needs to be sunsetted, soon. You bring up the side of the cliff that no one talks about. The sequester, the automatic spending reduction, i dont think it would be a bad thing if washington took the sequester and showed that they could cut spending. Because we have a never budget balancing act going on with the journalist pointed out the secret gang of six meetings, thats budgeting by, secret gang of 12 meetings. And quickly thats what we use today call blue smoke and mirrors in washington and thats why people are upset at washington. Dont trust them. David good to see you. Well, the numbers are in and you were not shopping as much as last year, apparently. Holiday retail sales were basically unchanged from last year and sandy, of course, and the connecticut shooting got some blame, but what about no jobs and no money . Coming up, the opening bell, futures are up. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All onhinkorswim from td ameritrade. From td ameritrade. I played a round of golf. Id in the last five hours . Then i read a book while teaching myself how to play guitar; ran ten miles while knitting myself a sweater; jumped out of a plane. Finally, i became a ping pong master while recording debut album. How you ask . With 5hour energy. I get hours of energy now no crash later. Wait to see the next five hours. David asman, in for mr. Varney. Were minutes away, dow futures are trading up. So at least at the beginning it may be a good trading day. Now 15 seconds away from the opening of the dow, nasdaq and s p 500 have been down the past two sessions, but as we hear the opening bell he, the first tick will probably be to the green side. Lets check the board right now. We have no first trades. At 13,000, seems to be hovering around 13,000 for a long time, doesnt it adam . It does, because people are waiting, we have five days. David five days for the fiscal cliff, thats going to change everything. I agree with adam in trading. David were trading up just a tick now shall barely noticeable tick of 7 points. Well tturned out to be a disappointing Holiday Season for retailers. Retail sales up only 7 10 of a percent two months before christmas compared to last year. Thats the weakest result since 2008 which was right after the recession hit. Those numbers, according to master card spending pulse, nicole has some retail numbers, are they suffering, the stocks, as a result of these figures, nicole . Right weeks, were seeing sof them mixed and j. C. Penney and macys, you see the push and pull happening as the retailers are trying to find their footing. The point. Story here, dave. You look at the number. Rise of 7 10 of a two months ao months coming into christmas. Thats the weakest since 2008 when the recession hit. It just shows you that consumer remain nervous, theyre not out there spending frivolously, theyre penny pinching, trying to get the best bet. And i like the title on the board there, youre not spending, thats true. People held back. David there are a lot of issues. Ill take it to the company. Theres sandy and the fiscal cliff. Im not saying perhaps we should hold off saying that the consumer is nervous because spending pulse which did this survey and put out this expectation, even pointed out that in the northeast, in the mid alantic region because of hurricane sandy, spending was drastically lower than they would have expected so this could be a result of people being shocked by the superstorm not necessarily consumers being afraid. David and theres also, by the way, the shooting. The interesting thing, too, National Average for retail spending, 2, 2 1 2 growth from last year, the average nationally for the last decade or so has been about 4, 4 1 2 growth. Foot traffic still remains pretty strong meaning people are coming out to the malls to mange out and possibly not spend. David what bothers me, saying that the fiscal cliff is stopping people. Youre asking people shopping less because of i dont know, anybody, i dont know anybody, the fiscal cliff directly stopping people from shopping. These surveys, keep in mind that the National Retail federation is Still Holding with White Knuckles to the prediction well have increased growth of spending, and 586 billion dollar seenlz. So nrs has not changed its forecast. Shopper track has. Shopper track on monday went down from 3. 3 to and shopper track has devices in stores that track it. David what does your gut tell you a mediocre year. Yeah, but im optimistic. David personally i see anecdotal, fewer people than i saw last year shopping. I do it all online, and down for you. David well, if congressional leaders fail to come to some kind after agreement by the end of the year, tax rates go up, at least for everybody to pay taxes. Did the republicans miss a opportunity to sign on to a promise the president made last year not to raise tax rates and what about Nancy Pelosis pledge pledge. Nick from the daily caller, did republicans miss a move here . I think they missed a opportunity if you go back to 2010 when they sweep the house and had the president in a position where he could support a permanent extension of the bush tax cuts, and they only went for the the extension for two years. David why is that . Only go for two years as opposed to a major change in the tax code . Maybe they were hoping that they would win the president ial election in 2012 and then have a upper hand event. But you know, they didnt go for the permanent rates, the bush era tax rates when they had the chance in 2010 and the sequester, the automatic spending cuts getting lost in the conversation are something they pretty much set up with the democrats in 2011. Well, here specifically, here is about the millionaire cut off figure because of course, now the president says compromise going out to 4,000. Here is what pelosi said in may of 2012 to speaker john boehner. Democrats believe those earning over a Million Dollars a year should expire and we should use the resulting revenues to pay down the deficit. Has anybody called her on that, hey, look, youre only for raising rates for millionaires and above before now youre into the 400,000 level . I called her on it last week, and she avoided the question and didnt answer it directly. She said, we were trying to smoke out, that was her quote, smoke out republicans and steny hoyer himself mentioned that it was a ploy. So, i think they were trying to get republicans to agree to the millionaire tax increase and then see how far it will move even more. And its politics, david. David yeah, yeah. By the way the millionaire tax, only, it would basically raise money to cover eight days of Government Spending, but you know, david and adam, weve had the letter from nancy pelosi. Do you really believe it was a ploy to smoke out the republicans . Because nancy pelosi in her letter is equating millionaires to big oil, special interest and corporations. Why doesnt the g. O. P. Capitalize on that they really want middle class tax hikes when theyre talking about raising taxes on the 250,000 plus crowd well, i think Speaker Boehner and the republicans in the house would be able to get some democrats support for the millionaire tax increase which i dont think they did enough of and they had to call off that vote as we all know on that plan. But some democrats would support Something Like that, but were talking here about the leadership speaker minority leader pelosi and you know, she, because now its republicans proposing it, now they seem to be backing away. They might be able to get some conservative leaning or moderate democrats to support Something Like that. And the president , as we know, the white house has signaled they would even take 400,000 increases over david here is what gets me about the president. I grew up in washington so im cynical about the process, and familiar with politicians breaking promises. The president said just a year ago when he was talking about changes in tax rates, he suggested there wouldnt be need for changes in tax rights, even of millionaires, lets play the tape. What we said i was, give us 2 trillion in additional revenues which could be accomplished without hiking taxes, tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions, and engaging in a tax reform process that could have lowered rates generally while broadening the base. David all right. Now, that was in july of 2011 and then a couple of week a couple of months later came out with the budget, saying the tax system should be simplified and work for all americans with lower rates and brackets. The president has come out time and again saying we shouldnt raise any kind of rates. Is anybody calling him on that . Well, a lot of republicans are wondering whats different now . We still have a sluggish economy, why the change in position . , but the president was out on the campaign trail, time and time again saying individuals and families specifically making over 250,000 a year should be should get tax increases so hes sticking to that position, like i mentioned before, the white house seems to be signaling that they would move in the direction of 400,000, those making over 400,000 increases there which may be something that congress could agree on and get through. But again, were going to have the conservative wave in the Republican House saying no increases, so, boehners going to be in in a position do i get democratic votes and risk speakership. Boehner is between a rock and a hard place, no doubt. David good to see you, from the daily caller. Good to see you. David government subsidies are suppose today make something more affordable for consumers if they work right. Thats not the case, especially for socalled green energy and wind power. Noi, thnow, the taxpayer, you, e out billions more. Find out how much and when at the top of the hour. Meanwhile, back to nicole, netflix is blaming amazon for outages that hit the streaming Video Service right at the worst time, Christmas Eve we all want to see the movies, more than 27 million subscribers could have been affected after a outage at a Amazon Web Service center in virginia. How is all of this affecting stocks, nicole. The stocks slightly to the down side. Thats the point. Christmas eve a lot of people are home or ready to access their online services, this is a huge source of revenue for netflix and to have a outage, particularly on a key night like Christmas Eve, not good news there for netflix, and you see it below 90 bucks. David all right, nicole, well be keeping close watch see how netflix is affected. And now i have your seven early movers looking atling th at thet winners and losers, bank of america, a huge move for bank of america. Moment depot up 46 this year as well. Disney up 33 this year. Jp morn, the bi morgan the big. Up. Imcdonalds down 11 . And the biggest dow loser Hewlett Packard down 45 for the year of 2012. Well, iphone versus android. Kindle versus ipad. Apple, google and amazon all going to war in 2013. Who comes out alive . And dont forget facebook, theyre in the mix as well. Telecom ceo is next to tell us mo he thinks will come out on top. [ male announcer ] at scottrade, you wont just find us online, youll also find us in person, with dedicated support teams at over 500 branches nationwide. So when you call or visit, you can ask for a name you know. Because personal Service Starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. Our support teams are nearby, ready to help. Its no wonder so many investors are saying. [ all ] im with scottrade. Announcer you never know when, but thieves can steal your identity and turn your life upside down. Hi. Hi. 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Call the number on your screen now lets take a look at the big board, well up to 35 points on the dow a couple of minutes ago and now pulled back to 21. The futures were positive, but they indicated a move much bigger to the Positive Side than what were seeing now, and again, in the past couple of minutes weve seen a pullback. The high was 35 is now at 21. Take a look at oil trading way up over the 90 a barrel mark. Look at that, up 2 1 2 , 2 pushing it well above the 90 a barrel mark and weve heard that this is going to happen and ironically this comes just as were getting kind of a slowdown in the price of gasoline, even though its still at Prices Higher now than it was about a year ago and still, it is eventually probably going to reflect itself in the price of gas. Oil up over 90 a barrel. Well, apple makes iphones and makes computers, google is it