why? because interest rates were artificially low. it made sense for companies to borrow, accumulate cash and pay back and share. you need that incentive to go down. secondly, you need them to have more confidence about aggregate demand. greg, did you have trouble finding risks? what did you think about the forecasts about his risks to the economy? i agree. i would say you and your invest ors would make a resolution to not get faked out by washington. we come to the precipice and we fan and don t go over the cliff. there will not be a government shutdown in january. not a debt ceiling crisis later in the winter. we have a lot of hot air. when it comes to a real crisis, washington blinks. you made me feel happy, both of you. i feel better about things. muhammad and greg, don t go
senator from montana said a little while ago it will come down to this meeting whether or not we go off the fiscal cliff. he went on to say the pressure on all sides is red hot right now to come up with a deal. heading into this meeting, republicans like lamar alexander are trying to push more pressure on the president than the republican leaders. take a listen. we need two words, presidential leadership on not just taxing rich people. we could tax all the rich people and can you it their heads off and it wouldn t help the medicare fiscal cliff. we need to do both and the president has to lead it. if he does, i m ready to work with him and so are a lot of other republicans. reporter: now the white house response to all of that is that the president has been working to get a deal for weeks and weeks now, private negotiations with speaker john boehner and also phone calls. they believe inside the white house the resistance is that republicans do not want to raise tax rates. what we c
agreement. what we believe that they would ve been able to reach an agreement retroactively? congress is supposed to work well under the deadline. even if some of the fights we had last year, they ended up arguing. it is likely that a deal will get done on tax rates within a month or so. several republican senators are just talking with reporters about an hour ago. they said that most americans are going to get their tax rates they will stay low. whether it happens in last-minute deal now or part of tax reform next year. i think they are right about that. it can be a lot of pressure to take care of most americans and us. the question is if you go over the fiscal cliff immediately, next year you start with a lot more option for how to deal with it, rather than just a discussion of income levels.
year. do you think people who are checking their 401(k)s and what not, the pension plans, they don t really appreciate perhaps the gravity of what is about to hit them? no, they don t. most people surprisingly when you ask them how well they have done with their 401(k), they think they have done terrible but when they open their statements at end of the year they will be pleasantly surprised. one of the thing people have they have been scared and on the sideline. people making money are hedge fund and mutual funds. you re not seeing individual investors making money because lack of confidence unfortunately. gregg: how much money is on the sidelines. 2 1/2 to 3 trillion. u.s. corporations are sittings on $1.2 trillion. imagine if we get confidence back and corporations start spending that is trillions of dollars going into the economy. gregg: you say they re sitting on it. it has to be somewhere? what are they doing, nothing? a lot sitting in cash not getting anything and overseas
index score of 71.5 and just 65.1 in december. that s the lowest number we have seen since august. matt mccall is the president of penn financial group. he jones us now live. how serious is this? it is extremely serious, gregg. we re seeing numbers backdating going back to november. what we haven t seen yet, we won t see until january the effect of the uncertainty of fiscal cliff and potential of falling off the fiscal cliff will have on the economy and have on consumers and potentially lead us back into as you mentioned what a lot of economists believe, another recession. gregg: what happens when fourth quarter earnings come out? nobody is really talking about this. companies, fourth quarter ends in a few days from now. we haven t had many warnings come from companies but when you see consumer confidence falling, mastercard came out with their numbers on holiday sales only increasing .7%. well below estimates and historical averages and consumer is 70% of the