Transcripts For CNBC Power Lunch 20121128

The president , by the way, weighed in on the debate this morning as well. Sue, a busy day down here in washington. It sure is, ty. Indeed it is here as well. We are going to be joined by a very special guest, noted author and investor nassem taleb. After dropping more than 100 points in the early going, the dow sittingality the highs of the day. Its been an extremely volatile trading session, were up just about 80 points or so. Bob pisani joins me from the floor of the nyse. Bob, theyre parsing every word coming out of capitol hill and House Speaker boehner giving a boost to the markets a bit ago. He did. He is a little more optimistic. But were being blown around by the headlines. Look at what happened. In the last two days on headlines coming out of the congress, first yesterday senator majority leader reid said there was little progress being made on the fiscal cliff. That was yesterday afternoon. We lost 50 points on the dow. Even though mr. Reid said he was hopeful a deal could be reached, damage was done. Senator mccobble said democrats should be more actively involved in the debates. He said the president was traveling around the country having complain like stops, he should come back to the capitol and make a deal. Today representativeboehner saying he was optimistic a cliff deal could be rachd. The market rallied nicely on that after disappointing new home sales results. Just in the last hour, weve rallied because the president has come out and said he would like to have a deal on the fis calf cliff by christmas. Thats exactly what the markets want to hear. They want a timetable for when a deal can be reached and they want it before the end of the year. We move up to the highs of the day on that news. A deal by christmas with a bow on it perhaps, bob. Dozens of ceos as we mentioned earlier meeting with congressional leaders right now to discuss how to avoid the cliff. Theyre part of a group called fix the debt which is calling on our elected officials to step up to solve the nations fiscal challenges. A eamon javers speaking with them on capitol hill. I want to build on what bob pisani just said. There is no question markets are hanging on every word coming out of this capitol hill fiscal cliff debate but im not sure markets are getsing this right. Listen to the Speaker Boehner sound bite that rallied the market earlier this morning. Then on the other side i want to explain what he was actually saying there. Take a listen. Its time for the president and democrats to get serious about the spending problem that our country has. But im optimistic that we can continue to Work Together to avert this crisis and sooner rather than later. Now the market rallied on boehner saying he was optimistic. We saw a nice little balance in the dow jones after those comments came automatic. But the markets should not necessarily be rallying on everyone of these statements because lot of them are simply boiler plate, place holder kinds of statements that members of Congress Typically make. Speaking of people up here on capitol hill, i also talked to Goldman Sachs Ceo Lloyd Blankfein who told me or not way into the meetings today of what his vision is what the deal should actually be cut should look like. You dont want to burden people who are the least able to afford it. At the same time you dont want to disincentivize the economy and being too restrictive and cut off growth. It would be easy if there was a right and wrong. Everything is right here so it is a matter of judgment, what proportion you come back in these things. But i think both sides have to be touched in this, entitlements have to be touched and revenue has to be touched. Thats the message Lloyd Blankfein is delivering right now to members of congress on the hill and what hell say to the president later on today. As eamon mentioned, the president will not only meet with mr. Blankfein but a number of other ceos at the white house later today to sell that fiscal cliff plan to them. President earlier today out speaking about it. Our chief washington correspondent john harwood is live at the white house with some details on that. Hi, john. Reporter hi, sue. I echo eamon. I think wall street ought to pay a little bit less attention to the statements that are coming out every day because weve got a long way to go on this roller coaster ride. Weve got a live picture of jay carney briefing at the white house right now. Thats the beginning of the Public Events at the white house along with the president s remarks earlier. Later those ceos are going to make their way up to the white house, have a private meeting with the president. The president has already said that trying to build on momentum that hes gained from the election made the point today that congress ought to take a deal offered by democrats to go ahead and extend the bush tax cuts but only for the people below 200,000 in income. Heres the president. The senates already passed a bill that keeps income taxes from going up on middle class families. Democrats in the house are ready to vote for that same bill today. If we can get a few House Republicans to agree as well, ill sign this bill as soon as Congress Sends it my way. Reporter this is the president trying to take advantage of having the high ground in Public Opinion but weve heard from Erskine Bowles in the last 24 hours that the white house is privately showing some flexibility on the issue of the top tax rates. The administration believes they have to go up swla to get money they need to strike a deal, but not necessarily to 39. 6 according to Erskine Bowles. John harwood, thank you. Investors of course watching the fiscal cliff chess match very closely. As bob showed us, the markets are moving on every bit of news. Will there be a compromise to talk about that on capitol hill, senator john hovan, the former gove govern. We just talked about how markets, investsers and public are watching everything you guys are saying here. Probably watching what youre saying right now. Are you aware how closely theyre watching and how sensitively theyre acting and reacting . I think so. Look, we need to get a bill deal. It is very important that we avert fiscal cliff and do it by not only getting progrowth tax reform but entitlement reform and better spending control and get the kind of deal in the 4 trillion range thats going to provide certainty and get our economy going. Because ultimately we need to get people back to work and it is that growing economy thats going to create the revenue that gets us out of the deficit. A 4 trillion deal would be your goal. I want to focus on maybe something that hasnt been talked about as much, and thats entitlement reform. And the big one here would be medicaid and especially medicare. If you had to tell your democrat colleagues, here is the one reform that i think you should make to medicare, to reduce the growth and expenditure there, what would it be . Would it be increasing the eligibility age . Would it mean that the wealthy have to pay more . What would it be . There are any number of those things. You say to people at or near retirement, were not going to change it for you. But for younger people, they want a change. Theyll support it because weve got to make sure these entitlement programs are solvent both now and for the future. So i believe we can come together in a bipartisan way and do this. Its got to be part of a package in order to get the job done. I couldnt agree with you more on that because the history of American Workers over the past 24 years is that we have adjusted to reduced benefits, to changes in our benefits plans, if were given time to get used to it. Lets talk about defense cuts. This, too, is an area, as mr. Bowles says, we spend more on defense then the next 16, 17 countries combined. What Defense Program would you be willing to see cut. I know there are sensitive issues in your state about the Nuclear Arsenal there, even some transport planes that the air force would say we can do without but you support . What would you see cut there . I think we can look at some of our overseas bases and some of those kinds of things. I think there are areas we can find savings. But remember under the budget control act weve already reduced spending on the military by half a trillion dollars which is why i dont see the sequestration. I think we can find savings in a good, solid, sound prudent way but lets prioritize, whether it is the military or anything else. Again weve already made a commitment to reductions in the military through the budget control act. Lets talk a little bit about revenues. One of the guys los at the heart of this whole debate is a man named grover norquist. Did you sign the grover pledge . No, i did not. I was a governor for ten years. Ive got a long track record of not only holding the line on taxes but reducing taxes. And i believe that we have too much at the national level, too much taxation, too much regulation but, no, i did not sign the pledge. Let me ask you about the idea that revenues are on the table as the speaker has said. Im curious what that really means. Does that signal a willingness on the part of the gop to see some peoples taxes go up, or does it mean that the revenue increases will derive from Economic Growth and Speaker Boehner and republicans are reaching out to the administration. Speaker boehner has said well put revenue on the table, not through higher tax rates but through closing loopholes and limiting deductions. That accomplishes exactly what the administration has demanded. But that means somebodys taxes will go up. Sure. If you close loopholes an deductions. Well make sure rates dont go up so you dont impact Small Businesses or middle class americans who obviously are struggling to get going and get back to work and get our economy going. But by closing those loopholes, your higher income people will effectively pay more. So that accomplishes what president obamas asking for. Now he has to reach back and say, yes, were going to find some savings to truly senator hoeven, i know you are aware of our rise above campaign here on cnbc. Here is a button. We hope you will wear it proudly. This is a north dakota edition of power lunch. Well, whether to say with the norquist no tax hike pledge is now hot debate for republicans as you can see right there in washington. The once belle of the ball is now being pushed aside. Politicos chief White House Correspondent mike allen spoke with mr. Norquist this morning. Welcome to power lunch. Mr. Norquist didnt seem to soften at all. As a matter of fact from what ive read, he kind of bristled. One quote from the debrief will you this morning was the party cannot have its fingerprints on the murder weapon, meaning raising taxes. How do you see this all playing out . We just heard from a senator who did not sign his pledge. You know, is mr. Norquist now really be pushed aside by the party . Grover norquist is a survivor. He has a business, 7 million budget. Spent 25 million in campaigns this cycles. He doesnt want to be seen as a deadender. He doesnt want his power to melt away bite by bite win the views like that. What we saw today was him providing a little path for republicans and, yeah, that very colorful point about the murder weapon, but he went on to say that republicans need to push for reform which Speaker Boehner has been doing, and to be clear about it, and he said the deal needs to be able to pass the laugh test back home. And he says it needs to be done in public. He wants it done on cnbc or on cspan the way some people wanted the Health Care Deal done. So his argument is that if republicans are up front about what they want and what theyre pushing for, theyll be able to survive whatever deal they ultimately have to go along with. You say mr. Norquist wants to see it done in public. Isnt that what we are seeing to a certain extent right now . We had Speaker Boehner out making his comments earlier today. We saw the market move on that. Then we had the president out with a number of every day americans standing behind him making his case and saying that he wants a deal by christmas. Does that particular process of having both sides come and take the microphone help the process or hurt the process, do you think . I think it makes no difference to it. The real discussions are going on when were not there. And as you were pointing out at the top of your coverage, you have to sort of read between the lines of what theyre saying. If you really are going to be tough with someone, why not go out and be nice on camera. Sue, i can tell you from our reporting we think theres more progress than people have sort of been able to see so far. I think that they are on a path to be able to do that deal by christmas. Their real deadline is december 23rd. They want to get out of here. All right, on that note, mike allen, thanks. Coming up, an interview you do not want to miss because when he speaks, wall street and Global Investors sit up and listen. Author of the black swan, nassem taleb joins us at cnbc headquarters. Hes just written a new book. Well talk about that and get his take on the fiscal cliff and the drama playing out in washington and the markets. He has some very interesting opinions. Back in a moment. Over president obamas first term, the federal debt to gdp ratio increased over 19 . It is projected to increase over 20 by the end of his second term. Er you can stay in and share something. Or you can get out there and actually share something. The lexus december to remember sales event is on. This is the pursuit of perfection. Can i still ship a gift in time for christmas . Yeah, sure you can. Great. Wheres your gift . Uh. Whew. [ male announcer ] break from the holiday stress. Ship Fedex Express by december 22nd for christmas delivery. Welcome back to power lunch. Im Kayla Tausche with a market flash. We saw the market turn into the green following the president s remarks. Thats been really good for the Consumer Staples sector which is to the up side by. 75 . We have stocks like costco, safeway, walmart. Those key retailers in the Consumer Sector all rushing to the up side. Kayla, thank you. Nassim taleb spotted the financial crisis of 2008 before anybody else did. He is the author of the black swan, it was a groundbreaking look at highly improbable events with massive repercussions. His new book is called antifragile things that gain from disorder. It is nice to have you back with us. Pleasure to see you. Thanks. Very honored. Tell me what antifragile is. What does it mean . All right. When you ask people whats the opposite of fragile, theyre going to tell you solid, robust, resilient, adaptable, all that stuff. Its not true. Antifragile is something that gains from disorder, not something thats safe. Something that requires disorder, requires volatility, requires vulnerability, requires some kind of stress up to a point, of course. Can you give us an example of what sort of things are fraent fragile. I started my life as an option trader. For a long time i thought of nothing except in terms of hes short volatility, long volatility. If you had an option portfolio thats gabd frined from turmoil ibtss hurt by turmoil. I realize there are applications to real life. Theres nothing organic that doesnt require some amount of disorder. Your bones, they want stressors. If you dont send stress to your bones, theyre going to become brittle. The same as people go to the health club to stress their muscles. The same thing applies to the economy. If the Restaurant Business had no stressors, you would be eating now soviet style cafeteria food. Right . But you have basically three categories that you can put things into. Some things are fragile. Some things are robust meaning they can withstand shock. And then the antifragile is what can really gain from volatility and stress. Exactly. And the economy the problem is people misunderstand the economy. The mistake the economy is something that used to be like the brooklyn bridge, strong and robust. You have to gain from errors. Thats not how we got here. Otherwise youd have Something Like soviet russia, built from topdown. We took some of the key stressors from the markets that are out there. And there are a number of them these days, certainly. Wed like you to go through and tell us whether theyre fragile, robust or antifragile. Start with the fiscal cliff because it is what everybody on wall street is watching. Is it fragile, antifragile or robust. For me it is a good thing because the economy requires once in a while to be shaken and people to be scared. Otherwise we got trouble. Sort of livg theke equivalent o forest that hasnt had forest fire in a while. You need once in a while to jolt the market so people realize that there is something wrong and we have to do something about it. And we need these fiscal cliffs and similar situation to shake politicians. Because they have no skin in the game according to you. That is a big problem. Theres some category of people who have the up side and no downside. And effectively, they have the downside is borne by us april 15, tax day. We pay the bill. Yes, that is a stressor. We have a downside. Like long volatility, we benefit from this order and the rest of us are antifragile. You want to eliminate that symmetry in society. At no time have we had that many people in power in mallkind wnk is no skin in the game. Politicians benefit from disorder, they ultimately save the day. They want society to be fragile so they can come in, save the day. We have that transfer fragility from the bankers to us from these people and my whole idea it actually became obsessive idea for me is how do you reestablish with very simple rules some symmetry in society and eliminate because we have so much Systemic Risk coming from the fact that some people have nothing but up side. Europe would be speaking of Systemic Risk. Think of the best country in the world in my opinion from standpoint of fragility. Perhaps the mostantifragile one is switzerland. The mayor is responsible and ashamed when he makes a mistake. Unlike someone in washington. Where the country is appropriate the most successfully one in mankind. Is europe learning from switzerland . The fragility of e okay is past. In the process of breaking. And gradual and slow transformation into if you want europe to survive, it is going to move to something closer to switzerland. How about eequipped and the middle east . Thats another big stressor. Egypt is a prime case of what i let me invent a word here gran greenspanization of something. Egypt, the policy of the western world was egypt by propping up mubarak to have stability, quote, unquote, was account of greenspan stability we have, that kind of pseudo moderation. Things were brewing under the surface and now we pay the price after 40 years of sadat and the other fellow. So now we have to pay the price. Whats going to happen . Nobody knows. Even the players dont know. We still dont know. I dont think it is going were going to move to democracy overnight. Were going to have turmoil. I dont know whats going to happen but thats identical to the trying to eliminate overstabilization of something makes it weaker. Thats what we have in egypt. The key message is you need volatility, you need stressors in the system, and you need companies and you need markets who can survive those stressors and thrive by them. Exactly. We need to encourage people to take certain classes of risk. We need more small fluctuation and fewer big crises. In fact we have the exact opposite. Things are smooth but with big very quickly. You said four rules. Can you give them quick to us . Remember the first one is the economy, dont mistake the economy the economy is more like a cat than a washing machine. The second rule is small is beautiful because it is less fragile. Decentralize that small. Third rule is skin in a game to make sure that nobodys antifragile at the expense of others. And a fourth rule i mean i have like six or seven rules. Let me pick one at random a good rule is that by antifragile. No. Very important rule is to make sure that bailouts help individuals, not companies. In fact we have the exact opposite. Were going to have social unrest if it continues. That is a great place to leave it. It is a very interesting and thought provoking book. Nice to have you back with us. Thanks for inviting me. Pleasure to have you. Antifragile. And i think it is going to be a best seller, ty. Thank you very much, sue. Congressional leaders meeting with americas ceos at this hour to discuss solving our fiscal mess. Theyre going to hold a press conference shortly and we will take it live. Before that though, were going to speak with democratic senator kent conrad of north dakota. Hes chairman of the Senate Budget committee. Whats he willing to compromise on . Plus, the gold trade break down and we will head live to the nymex to find out how traders are positioning themselves right now. Well be right back. Maybe New Buildings . What about updated equipment . They can help, but recent research shows. Nothing transforms schools like investing in advanced teacher education. Lets build a strong foundation. Lets invest in our teachers so they can inspire our students. Lets solve this. Well that was uncalled for. Folks who save hundreds of dollars switching to geico sure are happy. How happy, ronny . 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Tdd 18003452550 please read the prospectus tdd 18003452550 carefully before investing. Tdd 18003452550 about a halfhour ago we had a 35 million 5year note. Hard to refute the notion at 1 00 eastern when that auction ended we saw a bit of a rally pushing yields down. Only about a basis point. Had the dollar index been under pressure today, as proactive as the next chart shows, Euro Currency Short Covering rally, unchanged on the day. We had a very solid opening many hours ago in the yen versus the dollar. You see on that chart of the dollar yen. Even though the dollar index is only off. 1 , it continues to hover around 80. 5, very pivotal levels. Gold has been breaking down in a riskoff trade. A big one. Prices getting ready to close right now. Sharon epperson is tracking the action for us at the nymex. Selloffs seem to have abated a little bit at this point, sharon. Looks like well close down around 25 here in the gold market but we were down as much as 36 and much of that selling happened right at the open of floor trading. Of course as you mentioned, it is a riskoff day pretty much across the board in commodities but it is definitely most pronounced here in the gold market. At least in terms of the intensity and volumes that were seeing. Were looking at the biggest one day slide for gold weve seen in about three weeks. Were near a twoweek low for the gold price. I want to bring in a veteran trader who trades gold futures here at the nymex to find out what happened at the open. We saw such heavy volume. Seeing it nearly double the average daily volume already today in gold. A lot of that came at the open. What triggered the selloff . Well, gold has been in the midst of a riskoff trade. Lets step back to yesterday. Somebody stepped in and bought 15,000 to 20,000 front month puts. Whether for protection or initiation, very hard to tell. On the open we saw 13,000 contracts hit the open and sell it down 30. Do you think this has anything to do as well with the fiscal cliff and if so, why wouldnt the anxiety over that cause more buying in gold . I think the fiscal cliff is looming. It is kind of in the background. But the selloff is really triggered by the put buying from yesterday. Some kind of fund liquidating. Well send it over to you. Well speak with a key player in the fiscal cliff negotiations, senator kent conrad from north dakota just joined me. Plus Warren Buffett saying earlier on cnbc saying under his plan hed pay a 35 tax on all the money he earns. Good move . Well discuss it when we come back. Try running four. Ning a restaurant is hard, fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. 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I noticed stocks that are multiindustry. These are companies that work across many boundaries, Many International borders and sell a lot of different products to a lot of different industries. Were all stronger today. Johnson controls, eaton corporation, Companies Like that. Right near multiminute highs. Thats certainly a very good sign. Retailers continue to report relatively good news. We had positive comments from American Eagle and express, all those stocks up 4 , 5 , 6 , 7 . Express up about 11 . Again, a little bit of a disappointment because their current numbers werent that good but quarter comments for the Fourth Quarter were very positive. To the nasdaq now where Bertha Coombs is following the big movers over there. Consumer discretionary strong here. Green mountain coffee after much better than expected earnings up 25 near the highs of the day. Costco is issuing 3 billion in debt in order to pay a special 7 a share dividend ahead of the fiscal cliff. R. I. M. Started lower after losing a court case to nokia, a ruling. But it is now positive in a big turnaround today. Groupon, the ceo came out saying whatever rumors are that the board is looking at may be getting rid of me, i would look at getting rid of me if i fail. Starbucks has a new coffee 7 a cup. 80 a pound. Called geisha. A silky fought feel. President obama says he believes the framework for a Debt Reduction deal can be reached by kras map. How realistic is that given all the partisanship and rhetoric . Joining me senator kent conrad, democrat from north dakota and outgoing chairman of the Senate Budget committee because hes retiring. You said earlier all these ceos are really down here just to recruit you in retirement. Right . Thats been my understanding. Thats why theyre here. Were you in one of the meetings earlier today. What was the tone of it . Who was there . How did it go . What did they say . Hereere about ten senators in the meeting that i was in. There were about equal number of ceos from some of the largest institutions in the country. What they were saying is just do it. Get a deal. Understand the urgency of this matter because they believe that if we dont get an agreement at least a framework agreement, that there will be real consequences in terms of slipping back into recession, losing jobs, losing growth in the economy. Do the senators get it . Do they specifically get the idea, as weve seen already today, when the speaker speaks, miss pelosi speaks, the president , the markets go up and down. Right now when they are listening to you, theyll probably going whats conrad saying, hes a key player here. I better listen. Do they get it . Yeah, i think most do. But look, we understand there is a certain amount of posturing because this is a negotiation. The deal is never done until its done. And this absolutely can be done. It can be done in time. So much homework has been done behind the scenes, whether it was bowlessimpson or group of eight or the special committee. So a lot of the hard work is done. Have the differences been narrowed . Yeah, absolutely. No question differences narrows in two days. One, a most republicans at least many now recognize revenue has to be a part of it and it has got to be real, it cant be phony. And i think most democrats recognize youve got do something on the entitlement side of the ledger in terms of spending. Because thats the part of spending that is growing most rapidly. So lets go to that. Youre an outgoing senator. So you dont have to face the electorate again should you choose not to. Specifically on medicare and medicaid, what is the single reform that you think would do the best job that you would urge your fellow democrats to accept as a way to slow the growth in medicare spending . Is it raising the eligibility age . Raising the amount that the wealthy have to pay, copays, et cetera, what is it . Look, i have voted for all of the above and i did it when i was running for reelection. It wasnt a political thing with me. I believe deeply that we got to get the country back on track. Were borrowing 31 cents of every dollar that we spend. Clearly thats not sustainable. We know that our debt is now over 100 of our Gross Domestic Product and headed higher. So we know steps have to be taken. The Fastest Growing part of federal spending are the health care accounts. Were spending 1 in every 6 in this economy on health care. The specific way to cut that, what is it . My number one recommendation yeah. Would be better coordination of care for the chronically ill. 5 of Medicare Beneficiaries 5 use 50 of the money. Mostly end of life care. Right. A lot of it end of life care but a lot of it is not end of life care. It is for the chronically ill. People with multiple serious conditions. We do a very poor job of coordinating the care for those people. As a result, a lot of money is wasted. One final question quickly on farm subsidies. Which ones could you see cut . Direct payments. But beyond that, i supported legislation here in the senate, passed the senate, save 23 billion out of agriculture. That committee has done more on deficit reduction than all the other committees combined so far. Senator conrad, heres one of our rise above buttons. Now if you wear it, were going steady. I understand that . Senator kent conrad, congratulations on a fine year and good luck whatever you do next. Wait a second. Im wearing a rise above button. I thought we were going steady, ty. During tylers interview with senator conrad we moved to the highs of the trading session with the Dow Jones Industrial average up about 86 points. We pulled back just a few points, up 78 points on the trading session. Lets recap for you some of the other big headlines that have been driving todays session. Steve cohens sac capital receiving a wells notice from the s. E. C. Saying it may take civil action against the 14 billion hedge fund. This comes after former sac Portfolio Manager Matthew Martoma was accused of running a 276 million Insider Trading scheme. Two firms are making a play for knight capital. All week long on cnbc were looking at the power players in washington. We are asking their constituents whether or not they are rising above to help solve the fiscal cliff. Jane wells is live in the House Minority leaders home state. Reporter sue, coming up were going to go to Nancy Pelosis district to ask her constituents what they think of her, what they want from her, and if theyre actually worried the fiscal cliff will happen. Pg with the emphasis on lunch when we come back. In october 2004, our National Debt was 7. 4 trillion. Today that number has more than doubled to over 16 trillion. [ male announcer ] tis the season to discover the kid in all of us. The memories that last, start with the gifts that last. Enjoy Free Shipping and great values on your Holiday Shopping from l. L. Bean. I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. [ male announcer ] break from the holiday stress. Ive been a superintendent for 30 some years at many different park Service Units across the united states. The only time ive ever had a break is when i was on maternity leave. I have retired from doing this one thing that i loved. Now, im going to be able to have the time to explore something different. Its like another chapter. Welcome back to cnbc. Weve got a market flash. Were watching shafrs time warner. Thats twx. Stock climbing higher. It is up about 1 today to 46. 85 but it is a sixyear high for that stock, largely fueled by speculation about a new president for cnn coming in at end of the year with lots of speculation whether that would be former n eer nbc alum jeff z. Were having a little bit of fun with todays Yahoo Finance poll. The big Powerball Jackpot is out there. When you win tonights drawing what will you do first . 24 said quit my job. 13 said pay my taxes. 16 said donate to charity. But 47 change my phone number. Cant blame them for that certainly. Now to Brian Sullivan for whats coming up on a very special edition of street signs today. Hi, brian. Hey, sue. It is going to be champagne wishes and caviar dreams on street signs today because our recovery road trip wraps up. We are in the number one city for the stock market over the past year. All ten stocks at our cnbc index were higher year over year. We have got a great guest lineup. Weve got the mayor, some ceos, weve got a billionaire who owns a local football team. I cant give it away because youd know where i am. We have the beluga, it is going to be a whale of a show. Whale of a show. Indeed, a whale of a show. Have fun well see you at 2 00 p. M. Ceos are meetsing with congressional leaders to discuss fixing our fiscal mess. They are expected to hold a News Conference just moments from now as you look at that podium. Were looking at the power players in washington and asking their constituents whether or not they are rising above to help solve this fiscal cliff issue. Jane wells is in los angeles focusing on House Minority leader Nancy Pelosis home state of california. Reporter hi, sue. Nancy pelosi is a crucial part of the discussion to avoid the fiscal cliff, representing one of the most liberal and successful cities in america. What do folks back home in San Francisco expect her to do to avoid what some say will be an economic catastrophe. For nearly 20 years, kurt has been serving up breakfast at dotties true blue diner. Running a small business, especially a restaurant, is not for the weak. So he wonders why washington cant get its act together. If i ran my business the way the government is run, i wouldnt be in business. Hes a constituent of one of the most powerful people in washington, nancy pelosi. Heres a news flash. Not everybody in america believes economic armageddon is at hand. Not even former mayor gavin newsom, californias lieutenant governor. I dont know why im not losing sleep over it. I think there are good people on both sides of the aisle that theyre mature enough to get something done. Kurt agrees when i asked if he was preparing for the fiscal cliff. He answered bluntly no. I think there are a lot of of square tactics. Jane, thank you very much. We are waiting a press conference to be held by the people who have organized this sort of flurry of activity on capitol hill today by academics, Business Leaders and other policy experts. Groups name is fix the debt. It is spearheaded by Erskine Bowles and maya mcginnis, two people who have been very involved in the conversation about what to do to keep the country from going over the fiscal cliff and get us on a longterm path towards greater budgetary taxing, spending, budgetary stability, sue. Indeed, ty. Im going to be fascinated to see what those ceos tell us and whether or not and what reception they got from the white house and what ideas they think might be able to bring both sides together. Were going to take a quick break and well be right back. The News Conference will begin then. Producing cleaner electricity, putting us to work here in america and supporting wind and solar. 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It is maya mcginnis, one of the organizers of fix the debt, the campaign thats organized some 60 ceos, heads of nonprofits, academics and others to come up on capitol hill today to talk about solutions to the fiscal cliff problem. Im joined now by john carney of cnbc. Com, bob pisani. Well listen in as warranted there to the press conference thats taking place on the hill. Sue is with us. Bob, weve been asking some of the senators today whether they are aware of how closely the markets are watching every little twitch, every little statement that comes out of anybody on Capitol Hills mouth. I think that they are. I hope theyll be more aware after events like today. I noticed jim gorman, ceo of morgan stanley, telling them get to your congressman. We support that idea, the rise above pins. Not telling anybody to support a specific deal but a deal needs to be made. I think more pressure thats put on them, the more you hear ceos speaking out, more events like this, the better it is going to be. It is a little bit bizarre in having people like james gorman and Lloyd Blankfein telling the federal government to get their house in order. Thats what i was going to say. A year ago Lloyd Blankfein was being vilified in Rolling Stone and other publications. And now hes down at the white house giving the president some advice. I believe this is mr. Bertolini of aetna. This nation is one grand bargain away from leading the world out of ifts recession and dominating the worlds economy for the next 50 years. So we had very comprehensive and frank conversations today with leaders of congress. The good news is that everybody understands the urgency about what needs to be done and how quickly it needs to be done. Secondly, they have a good idea what the issues are. There arent a whole lot. Theyre pretty much around what do we do about revenue and what do we do about entitlement reform. The bad news we are running out of time. My latest calculation, were 802 hours away from having a big problem that will send the economy into recession and put people out of work. And we dont want to see that happen. So we encourage congress and the would you be all right. Saying john carney, maybe you can comment on this he said there werent a lot of issues and that everybody has a good grasp of what those issues are. But theyre two big ones, right . Taxes and spending. They are two big ones. We have two parties that are diametrically opposed on how to solve the problem so there may not be a lot of issues but theyre biggies. One of the very interesting facts about this whole debate is that both sides are wrong. Democrats think that if we dont that well have to cut spending if we dont raise taxes. Republicans think that if they keep taxes low, spending will stay low. I showed on cnbc. Com thats not true at all. Actually low taxes go with high spending historically. So the whole debate thats taking place around false premises that neither side seems to be aware of. I think were going to have a deal. I dont know how you feel, tyler, but the pressure now is really building and i hope listen. Jim gorman might have been a poster child for wall street excess along with Lloyd Blankfein a year ago but for sure this kind of pressure is going to be needed to get a deal done by christmas which is what president obama said he wanted. We will see. Well continue to monitor the headlines that are coming out of this News Conference and the markets response to it. We were up at the highs of the trading session a short while ago, up 86 points. Right now the dow is up 76 points. Coming up in the next hour 54 companies announcing special dividends in november. Real motive behind those is coming up on street signs. Back in a moment. [ male announcer ] this is steve. He loves risk. 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And a santa to boot [ chuckles ] right, baby. Oh, sir. That is a customer. Oh. Sorry about that. [ male announcer ] break from the holiday stress. Fedex office. Or that printing in color had to cost a fortune. Nobody said an allinone had to be bulky. Or that you had to print from your desk. At least, nobody said it to us. Introducing the business smart inkjet allinone series from brother. Easy to use. Its the ultimate combination of speed, small size, and lowcost printing. Syou know, ive helped alot ofof people save a lot of money. But today. sfx loud noise of metal object hitting the ground things have been a little strange. sfx sound of piano smashing roadrunner meep meep. Meep meep . sfx loud thud sound awhat strange place. Geico®. Fifteen minutes could save you fifteen percent or more on car insurance. The markets right now are awaiting with the market up 80 points, theyre certainly waiting for any more news out of capitol hill. But we are also moments away from the feds beige book report on the economy. As a result of that, the markets may respond to that, too. Were up 80 points on the Dow Jones Industrial average, up about 6 on the s p 500 and up almost 12 on the nasdaq composite. I think we should rename that beige book 50 shades of beige. How does that work for you . Were going to be covering all afternoon the ongoing discussions here on capitol hill that have basically wrapped up for now among people in congress and the business community. And at 4 45 today the action moves down the street, down pennsylvania avenue to the white house where more of the folks from business will be talking about the fiscal cliff. All right, ty. That will do it for us on power lunch. Breaking news on the economy moments away on street signs. Hello and welcome, everybody, to a very special edition of street signs. We are just seconds away from breaking headl