Transcripts For CNBC Squawk On The Street 20121221

Cramer and david faber. This could be a very big day in the markets. The day after the attempt to pass plan b in the house has failed. We saw the futures down as much as 200 points. Right now were down 162 on the dow. The s p looking to lose about 19 at the open. Most notely were seeing a spike in vix futures. Its indicating more volatility ahead. Europe, largely taking the cues from here in the United States, and the news last evening about plan b. We are seeing a 1 loss in italy, germany is down by. 9 . Of course, futures as you saw are taking a hit on concerns that a deal will not be reached to avert that fiscal cliff. An attempt by House Speaker boehner to avoid that class and pass the socalled plan b tax bill. That failed. The measure that would have kept current tax rates for those making less than 1 million a year. It never even made it to the house floor. Speaker boehner is scheduled to hold a News Conference about an hour from now. Of course, well bring that to you live. Here we are. Here we are once again. There was no real plan b. There was no real possibility of this. The republicans, the vast majority signed a pledge, they will not vote for tax increase. Who would think they would suddenly turn around and vote for a tax increase. They pledged not to. The speaker said they might. I dont care. Unless its some sort of a plan to show how hes really you know, youve got to negotiate harder. Because look what im dealing with. These guys do you suddenly think theyre saying, all of a sudden were for taxes. No tax increase. They cant do it. You cant twist their arms. Theyre elected. They dont think theyre elected because of president obama. They have safe seats. Theyre not going to do it. Lets stop talking about it. Maybe they can vote for a tax cut. They cant do that either, they hate each other too much. Super bowl. Do you think president obama will go into his inauguration with no deal at all . Is he in charge . Weve kept the charade up for too long. What charade is that . The charade that there is a government. That they agree to things. They react to a stock market plunge and react to furious citizens. But, what, do they react to the goodness of the republic . How long are we going to keep this up, goodness of the republic . Is the last time we had this partisanship. How did that work out . In your view, cramer, are things that much worse today . Even if plan b was taken up in the house, that it wouldnt pass the senate, that president obama would shoot it down anyhow, so plan b was largely inconsequential, are we actually worse off . Does it show the deeper ridge in the Republican Party than anybody expected and were much worse off in terms of thinking about achieving a grand bar bain . I dont think theres a rift in the Republican Party. I think boehner knew this wouldnt pass. Hes not a clueless man. It doesnt look good as a result of having hes a gop. Having gone out there, created this plan b idea its cynical. The economy is down today, and people are losing faith that he can control his party and caucus as much as anybody. He has a commitment to not raise taxes from his people. I think its really, really important to point out in the last few days there was actually a belief, ive been saying super bowl, super bowl, super bowl, its the paycheck. There was a belief something could be done. I think the administration felt there was. And they did start saying, listen, we dont have a consensus, things have regressed. The consensus is simple. The gop will not vote for tax increases, but they will vote for tax cuts. Its not like theyre going to suddenly say, wow they have to wait until people are agreed. Maybe they have to wait for the stock market to be down more. Is it a september 2008 moment were facing here, thats when House Republicans voted down the First Bush Administration plan for a bailout . When we dropped 778 points . Are we sort of at that moment right now . Your atm machine wouldnt work that monday. There would be lines around 9 corner from almost every bank. We were in a 1932 situation. Because of Everything Else around us. We were focused on congress ineptitude at that time. And we got more scared by their unwillingness to pass the t. A. R. P. I have tremendous faith in our economy. We had great numbers yesterday. We had a good head of steam in housing and durable goods. Better than expected at least. I think you could cool the economy a little bit. But unlike 2008, where i was worried that my paycheck wouldnt cash and my bank would fail, unlike the debt ceiling i know that. Im saying it is a very, very different time now, no doubt about it. The only thing being were relying on our leaders in washington to try to craft some sort of solution. Did you have quotes around the word leader then . Im only watching your lips. If you were to type that, would there be quotes around leaders . Yes. Thank you. I rest my case. Im willing to take those quotes off. If they show that they are truly leaders without quotes. I come to work every day, my tallahassee paycheck, still in my wallet. I was a reporter. I made 137 a week. And if i had seen that go down to 127, i would have been angry. That was my subsistence. There are people who play for dinner in this country and their subsistence are on the line and theyre going to be furious. But theyre not going to get furious until they see their paycheck. Its going to impact gdp in the first quarter, and the second quarter. Americans are feeling like theyre protected from the democrats . Because theyre in lower income households . But they wont be. Their paychecks will be less because the payroll tax cut will be gone. The amt, also gone. That will affect lots of people, not just highincome people, everybody. Potentially 30 million people. You dont know until the end of the year. The likelihood we go into next year without a deal lets talk about the overall market and the sense. Economy. You guys were mentioning, you ladies and gentlemen, were mentioning a number of the positives. Its funny, ive had conversations with people on the other side of it. People have been getting, socalled bowled up. Corporate profits, theres concern about that, and even with this little spate of m a we made a lot of yesterday, theres still a lack of confidence. I had marty on last night from paychecks. Largest provider of checks to Small Businesses. Bad quarter. Yeah. Confidence. Can we play that . Yeah, lets listen to it. This is mr. Musy. Is washington the most difficult thing that you face at paychecks . All the attention on the fiscal cliff and no action is really producing, i think, a dampered view from small business, and theyre just kind of waiting on the sidelines right now. What youre seeing in our clients, theyre not opening up their second location, theyre not hiring more employees. Its fairly quiet. Yeah, there it is. Thats fiscal cliff. He had been building a head of steam. And suddenly hes talking about Business Building tailing off. Washington, washington but do you ever hear them they talk about the job creators. You have to protect the job creators. They spoke to the president , i thought the president was starting to understand this. But this is about etiology. This isnt about the war between the states that are gop, and the states that are democrat. Etiology does not get solved in a back room. It doesnt. It gets solved by the actual citizens saying, i cant pay for dinner. I cant pay for dinner. Ive got to stay, and i cant go to brinker, ive got to go get mccormack spice and hamburger helper. Thats when it changes. The likelihood we dont reach a deal, helps the outcomes of the discussions youre talking about happening, and we start to see Corporate America have fewer profits. Look at oil. Thats a good barometer. You know, well see signs that of but paychecks, right there, right in your falgs. The business formation is really cut back. Because of this. Who knows what tax season will be. Who knows how things are going to be treated. Look at the outflows that have happened over the past couple three weeks out of municipal bonds. We dont know, people dont know if there will be the Tax Exemption or their exemptions will be limited, so it will be a choice between mortgage deduction, or municipal bonds, and, you know, were seeing the money come out. People are being cautious. Im also hearing from hedge funds that people are selling their games. Theyre selling their games and reentering the new cost basis. People are uncertain and theyre taking every precaution they can right now. Like david said, theres also a you can make a case, things are feeling kind of good, were not going down, were actually going down, were looking at the cliff, but it looks like theyre going somewhere. And everybodys going to mention autos and housing, gdp number wasnt that bad. You dont know until you see your paycheck. But i do wonder whether the other side of that is perhaps not is going to be focused on a bit more. Not just fiscal cliff. Do you think theyre going to say, hey, theyre not that bad . Do you think people will say its not that bad to go over the cliff . I think theres already an expectation look, i wont be here. Im going to be away. But youll be here, and well be here is this a package thing . Are you still going to go ala carte . The motto in my family right now for no particular reason is, spend it all. Its not the end of the world. Were here, david. It looks like its going to be 2013. Well find out if its really happen. Paying close attention to the paycheck, too, but well be all right. Were seeing a sharp pullback in the seconds leading financials across the board. A bit higher in gold. Treasury deals are rising. All the expected sort of reaction. What we ought to have is dramatic music behind us as we talk about this. Oh, there it is. Maybe like some game time music. Okay. Well continue to be all over what is shaping up to what could be a rough morning on wall street. Covering the base limits. Speaker john boehner will be giving a News Conference in less than an hour. Well bring you those comments live. Meantime, lets take another look at futures. The dow looking to open lower by 170 points. The s p 500 looking to give up 19 at the open. [ 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. 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Whether it be nike, walgreens, where do you want to start . Walgreens, david. People think of drugstores as recession resistant. I think the whole dialogue is whos recession resistant because of the fiscal cliff. This is a company that is so confusing, because the numbers look good, but numbers did not look good, but theres a deal that walgreens is doing. The Alliance Boot deal that occurred earlier this year. A complicated deal in its own right, buying some of it now, some of it later. Let me just take a look at this, theyre taking 13 cents was the socalled miss here. But 7 of 10 of that is from the timing of the Alliance Boots, and the dilution from it. There are accounting issues in a sense how they went about dealing with that dilution. They close this deal, but walgreens and cvs are taking share. Theyve really changed their stores. Much more food, much more going for a broader move like target and walmart did. A lot of supermarkets are being hurt by this. And this is really important. Express grifs wan an outfit that had a tiff with walgreens. Youve got a couple of quarters that are bad and then, boom, now theyre back together. I prefer cvs to cal greens. But i do not think this deal will get hammered. Well keep an eye on walgreens. I want to talk about nike and red hat. These are the two best stories of the day. If they stay up, i think what youre going to say is maybe things are not as bad with fiscal cliff. China not as bad as we though, u. S. Very strong. So nike, if it goes back to 97, it means were going to have a real bad couple of days in my view. Look at red hat. Red hat is a Technology Company that is deeply involved in the cloud. They, too, had a better than expected number, as did oracle in the cloud. So these are my two tales for the trading today, david. If you pick the best of the best and they go down, youll really have a couple of when it comes to the socalled cloud play and the use of it in the competition here, is that one of the key names . Yes, it allows you to manage cloud in a cheap an antimicrosoft business. Their partner is sales force. Com. Im really using these as tells. In other words, these are the ones where theres natural buyers. As we just found out how good things are. It wasnt like we found out a month ago. We just found out last night. If they have resilience, the market is going to be more resilient than people think. If they give up the ghost, i think next weeks going to be difficult, too. All right. Well be watching red hat, nike, walgreens. Well also be keeping an eye on r. I. M. That is a result of whats going on in washington. Take a look at the futures there in the s p. 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[ dog barks ] because right after they get married, theyll find some retirement people who are paid on salary, not commission. Theyll get straightforward guidance and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade. Take a look at the futures. Dow looking to lose 184 points. Of course, this after the attempt to pass plan b fails in the house. Speaker boehner is expected to have a News Conference at 10 00 a. M. Eastern time. When we have that press conference, well bring that to you live. Lets talk a little bit research in motion, the blackberry maker with a loss on the quarter. The company saw its first ever drop in its Subscriber Base and said it was changing its fee strek tur. The ceo was asked how long it would take to see if next months launch of the blackberry 10 is a success. Were transitioning. This doesnt happen overnight. We still experience strong sales in many of our regions. I think we have a certain period of time, several quarters, where we will transition from 7 over to 10. Several quarters is not the kind of time frame that investors like to hear, jim. This was one classic one, where the headlines were all good. But you have to listen to the Conference Call. This is more than don chambers and cisco. Heres the guidance, and they dont give it to you in the release. You had this kind of things are looking better, and then subsequent things looked worse. The company does have great Subscriber Base. I was looking at this as a netflix situation. They still have the great Subscriber Base and the great product and theyre changing their fee structure. Its been a cash cow for research in motion and they change it to a tiered Service Revenue model and people dont know how to make heads or tails of that, and what their cash flow is going to be. He said in the squawk box interview, cash is a concern and cash will increase over the next several quarters. Cash went up as a release of working capital. Which is not the greatest reason for cash to go up. Because youre just doing less in some ways. So you have more cash as a result of that. Very tough for a lot of investors to value this. Throw your hands up. Youre dealing with intellectual property. Which is inherently difficult to value. It just becomes hard, and harder given that guidance, i guess. Which is harder to value, herbal life or research in motion . I think when bill said this is blood money, were going to donate all profits to charity, it sort of gave him a little bit more credence. It wasnt a personal gain that he was seeking. He just wanted to bring an issue to light. Whether or not its true, that was the impression. I will tell you this, listen. Ackman is seeking to get a lot of lockedup money. Permanent capital, right . I think hes got 1. 6. Thats where hes going, in terms of permanent capital, not the Hedge Fund Structure anymore. Hes extraordinarily good at garnering attention. Hes very smart and very eloquence. You know that, bill. Absolutely. Im not taking away from his argument at all, but i do want to make the point, even if hes giving the money it charity, there are other benefits that will accrue to him as a result. Hes trying to get permanent capital there, going a different route than other hedge funds. Hes a charitable man. We dont really know the profits from this trade grg to charity. Did he cover it yesterday . Now i want to know, is he a 501 c3 hes got going . Were going to hear from the company on january the 7th, i believe. Yes. And january 9th hell of course, to save the people from working for the company, because save those people, who wanted to simply be millionaires, or hundred thousand airs, or whatever. Thats his words. There is such a thing as cautious interference. I cannot see the wiping the business out. There are laws on the books that make it so you cant do that. Does Michael Johnson sue ackman . It sounds like he might want to. Heres what he said in the press release about ackman. Distorted outdated and inaccurate information. Thats why they went to the analysts meeting in order to refute all of ackmans claims. This is something well continue to watch. Herbal life trading a little bit higher, so well watch that. Several states and the white house, observing a moment of silence, exactly one week after the School Shootings in newtown. Connecticut governor dannell ma malloy to ring their bells. The nasdaq with a moment of silence prior to the actual trading day. The bell has rung. Over at the nasdaq, intest corporation, temperature managements products for semiconductors. No surprise here at the open, the nasdaq is now down almost 2 . 1. 8 , the loss at this early hour. Shares of apple are down 2 . Across the board pretty much. These are sharp losses, jim. I would point out, if you want a stable situation, sussex petroleum is a limited partnership that gives you great yield. Im looking for people to be able to pullback and say, listen, what is safety here . Is safety pepsico, General Mills, safety yield . Or because we go over the fiscal cliff, yield doesnt have the same value. Im trying to figure out right now in realtime what this market is telling us. What its telling us is were not done going down. If boehner throws more lighter fluid on the situation, if not actual high octane, then i think we go take another dip down. Yeah. Were seeing very steep losses, no surprise, across the financial sector, a sector that has been leading the way for the entire yeartodate. Bank of america is at 1115, down by more than 3 . After a fresh 52week high. The stock more than doubled yeartodate. Heavy losses in the home builders. No surprise there. This sector would be hit very hard should there be no deal, or an adjustment to the mortgage interest deduction. Were seeing losses at about 2. 5 . And Energy Shares are also down by 1. 5 . This is crucial. I was talking to dan dicker, trying to get a sense about the real economy, and whether the inventory is building in oil. Thats a good sense of the real economy. The real economy has been very hard to pin down on a daytoday basis. But oil has been a good tell. Look, interesting buying, i dont know, lets hear the speaker, lets recognize that there are always people who dont realize that it failed last night. Theres always someone out there who is hopeful. And you have to squelch all hope before youre going to be able to dictate be able to figure whether things are at a discount. Lets take it from here, lets assume we get nothing prior to the end of the year. Do we have more days like this, or is this the day in which we sort of capitulate to that reality, and everybody says, you know what, next weeks the holidays and then we have new years. You know, what happens is, you cant have these investment committees act immediately. You cant have the firms come out and say, listen, were lowering our gdp. That happens a couple of days from now. You have to recognize jpmorgan is going to come in or morgan stanley, then you can get involved. Volatility index of note is getting close to 20. A level we havent seen in quite some time. Remarkable rise of the vinx so far this year. Were wondering, where is the volatility of the market, the pending fiscal cliff discussion. Here we have it. Its been up by about 9 . These markets will not bottom all at once. What will happen is, if people think theres a recession, youll see bids for the drug stocks today. Youll see a bid for General Mills today. We wont have that conversation as of yet, a recession. This market is not a catastrophe. Im saying that its more business as usual. Those who think its catastrophic are making a very big mistake. The economy is stronger. Washington is screwed up. That is not news to us. There will be some deal eventually. Just not soon enough. There will be no miracle is what i think. It will come in february. Youll have a pause, but it wont be horrible. People shouldnt panic. They shouldnt panic. In reality, we have, what, a 1 decline on the dow . Weve got what on the s p 500 . My computer wont cooperate. 1 decline on the s p 500 as well. And in the past month the s p 500 has been up 4 . So this pullback happens in context. You have to give back what the opium is to brian solvens. Do you start at a couple percent for when people thought there would be a grand bargain, when the grand bargain fell apart last year we took a hit. All im saying is, its not great in washington. But you cant go and sell everything. Because its not great in washington. Because it hasnt been great in washington. There was a perception when president obama won fairly big, that it would improve in washington. But the people who were voting on this are beholding to their constituents and have taken a notax increase pledge. The president won a lot of votes, and it just doesnt work like that. Well be seat agnew congress in well be seating a new congress in the new year. The house will be republican, the senate will be democrat, but not the 60 votes to override but we have to give back some of people are buying stocks because they thought there was going to be a deal. They have to rethink that. I mean, a lot of hedge funds are thinking, im okay, theres really no news between now theres a pact among all the research firms, dont issue anything, dont do sells. These guys are obviously not focused on that in washington. You have to roll back some of whats happening. Right. Some of whats been good. Not all of it why were you laughing when i said you said panic was a bad strategy . I was thinking of animal house when kevin bacon says, everybody be calm, and then he gets run over by that is this more that movie is close to my heart, faber college. Youre right. Mike faber from homeland may or may not be back. Animal house, bill murray, im trying to be a professional. Im sorry. That just went through my head. Thats okay. Better than taking the brain on spongebob. Eric cantor, youll be happy to know, the gop leader tweets, we will not Adjourn Congress until a credible solution to the fiscal cliff is announced. Revised the house calendar. So weve got that going for us. That is helpful. These guys want it lower. Cantor yesterday was fiery. And again, this partisanship, jpmorgan said unbelievable research on how partisan we are. Thats where they get the i mean, the civil war thing was not something i dreamed up. Thats how difficult the lincoln couldnt solve it. Part of the take your children to sweat shop work day . Anyway, lets check with bob pisani with more on whats moving today. Lets talk about what the trading days going to look like. That was the main topic of conversation overnight and through this morning. I would note, folks, i know this is not a good open, but we are well above where we were at the close last friday. So we were 1413 last friday at the close, 1427 now. I think on the s p 500. Okay. Its a bad day, a down day, but were still actually above where we were at the close last year. Were up for the week on the s p 500. I think the problem now is going to be talking about what the rest of the days going to look like. My sense talking to everybody is, theyll try to sell at most of the rallies that go on, just to protect themselves for what weve been seeing here. Thats going to be a problem. Because i know youre hopeful maybe well get a move up toward the close. I think selling into the rallies is going to be a general problem. I specifically was talking to people about that today. Weve been rallying. The biggest problem that we have had is the bullishness and the complacency. Weve been talking about the rallies going on, the fiscal cliff deal, seasonally time up of the year. Individual investors, those that still invest are more bullish than theyve been recently. Melissa, you just mentioned the vix. Its around 20, the highest level its been since july right now. Those assumptions have changed a little bit right now. I think thats the big problem. That high level of bullishness and complacency that weve got. Some people think we have a shot at a deal. The president and representative boehner are essentially in washington alone at this point. And a deal could still get done. Youre not far apart on tax hikes, debt ceiling and entitlements. The ball is now in reids court. I think thats what the speaker of the house is going to say at 10 00. Reid could craft a bill in the senate that could then be passed to the house of representatives. The pressure will be on them to do something. The great irony of all of this is that john boehner is going to make the deal. This is what the hopes are for the bulls, boehner will make the deal with his arch nemesis, nancy pelosi to get the bill crafted through the house. So folks, we are already well off the lows. The dow still down 115 points. The s p 5001429. Remember, the close last week, 1413. Jim, back to you. Thats a nice path. That would be great. A very civil path about solving the cliff. This would be terrific. I hope that happens. I just think that when we say that, we mislead people to some degree because there are some people who dont want a deal. So anyway, stocks off to a weak start. Here we are, hovering around a 175 yield in a tenyear. As you look at these three charts, a 24hour chart, oneweek chart, threemonth charge, we were at 180 yesterday. We were at 170 a week ago. Were at 175. Its like were getting to the point where a lot of the big horsepower behind the selling that pushed Interest Rates up to a couplemonth path, high yields on the long end, may be over. If we look at the foreign exchange, we see similar kind of em any ti or issues going on. The dollar has been on fire, for example, against the yen. Here we see its relinquished some of that upside. Its still up smartly for the week. Euro, a little bit of mean re version on these trends. Confidence has had weird positive movement of late. Well see if its negatively impacted. And of course, the end of the supply, probably changes the dynamics a little bit on the treasury post, the supply that we just auctioned in twos, fives and sevens. Thank you, rick santelli. Speaker john boehner will give a briefing. And well be speaking to a conservative lawmaker who has been outspoken against the gop leadership. Find out whether hes willing to make concessions. Fers im Sharon Epperson at the nymex. Oil prices down almost 2 here for the wti contract. Brent crude prices below 109 a barrel. After plan b went bust, and the oil rally fizzled, we did see wti Oil Prices Top 90 a barrel at the close yesterday. That was the first time that happened in two months time. Now theres a great deal of concern about energy demand. Were also looking at the reaction in the gold market where were seeing a little bit of a Short Covering bounce here in the gold market. But that may have more to do with the slide weve seen over the last several weeks, particularly in the last week where gold prices are near a fourmonth low. Gold, though, holding above the 1650 level. Back to you guys. Thank you very much, Sharon Epperson. Lets look at the dow heat map. There is one component in the green. And that is verizon. But largely in the red here, ibm is down by just half a percent. Thats helping the dow to be the smallest loser, if i can say that. The smallest loser in terms of the major indices. The nasdaq were down 1. 5 . Interesting sort of separation between the indices. Technology a weak spot here. Its very early. It is. Very early in the day. Boehner will speak in a moments time. If he throws a bomb and says theres no hope, i think you have a second leg down. If he says, we need to get this solved by the end of the year, people will say, you know what, i wont sell anymore today. I dont envision a scenario where they do a radical turnaround. People want to take their profits before they leave now. Its obvious that this boehner press conference is very important. Yes, it is. Still, there are individual stock stories, even amongst the huge move lower. We still have nike shares holding on to its gain. Up 4. 5 . Very, very good. China not as bad. That really matters. It matters they can hold on to their gains. Thats the one to watch throughout the day. If that starts giving up its gain, youve got to start to rethink. Whatever happened with nike before, doesnt matter. All that happens with nike now is the january sales. Thats what im trying to gauge. What are people saying about january sales postcliff. And that is why nike is so important. We have the most uptodate information from a shoe retailer. If people say that was rear view mirror, thats why im focused on that so much. Derivative trades of nike is also a bright spot. Footlocker down by a fraction of a percent. Whats good for nike could be good for these retailers. R. I. M. Shares down 17 . The guy just gave a r. I. M. Cliff. The blackberry cliff. Interesting series of events. They were well received by the market afterhours. The stock started to trade up, as much as 8 . They started to speak on the Conference Call and gave guidance. Clearly not what the market or investors were hoping for. But that stock is down. He said, look at auflt big money from the service. That might not be there. We moved to the tier tiered system. The challenge is they have to run the company as costefficient as possible. Use the least amount of money as possible. He now says it will happen over a period of several quarters. One and a half years. This stock came off of lows of 5 or 6 bucks. Apple, ill second your ap e apple. Apple going back, testing maybe, you know, critical levels. What i heard from research in motion is apple is doing better. You could look at it that way. And say, oh, smartphones, i would like to buy apple. And android doing better. Really, really better. Heres a favorite you know and love. There he is. Youre an oppositional person. Thats what you are. Oppositional . Thank you. Breaking news on Consumer Sentiment just moments away. Also, ahead, cramer with six stocks in 60 seconds. Look whos back. Again . Its embarrassing its embarrassing we can see you carl. We can totally see you. Come on youre better than this. All that prowling around. Yeah, youre the king of the jungle. Have you thought about going vegan carl . Hahaha you know folks who save hundreds of dollars by switching to geico sure are happy. How happy are they jimmy . Happier than antelope with nightvision goggles. Nice get happy. Get geico. Fifteen minutes could save you fifteen percent or more. All right. Time for six in sixty. Mr. Cramer, we start with big lots. Down on its luck. One time, the reason they included this, was the takeover names. That fell through. Its an inexpensive stock. Never one of my favorites because youre in some ways going up against everyone, target, costco. Watch if it stays up again. Tipco. He lowered guidance and then beat the lower guidance. Theres the guidance right there. I tend not to like this situation. He just lowered it too much. Day after the big deal, ishares up yesterday. Theyre hanging in there. Yeah. Despite the diversity on the dill lu dilution, i think youve got a powerhouse. Very interesting. Gold corp downgraded by credit suisse. Dont like it. Mcd, wells likes it. Youre going into recession. Fiscal cliff, maybe its an interesting idea. Finally melaknox. People say, intels coming in. I like the fact it was downgraded by a firm. Be careful. Very hot. We will talk more about ice. But first over to mr. Santelli who has breaking news on Consumer Sentiment. Rick . Were looking for university of michigan, and it should come out momentarily. 72. 9. So 72. 9 on university of Michigan Sentiment survey. Of course, this is the december final. Its going to be comped to 74. 5. But thats a little bit disingenuous. It really should be comped at 82. 7. That was the final reit to last month. We definitely take a bit of a backup here. How does 72. 9 fit in. We Vice President been below 72 point 9 since july. It was 72. 3. Maybe a little bit of a disappointment. Of course, last nights issue with the vote, obviously didnt make the survey. But it will make the survey of what the markets try to define for the rest of the day. Back to you. All right. Thank you, rick santelli. Jim, you know, lets talk about whats on mad tonight. Tipco is one of these stocks, theres a bunch of them, i mentioned red hat. These are companies, s. A. P. , oracle, you bring them in and you save money. You go to harrahs, and its put together by their team. You know when you go into amazon, david lets say you like books on gardening, the next thing i know it puts you in four other gardening books. I chose what you would never be. You chose correct. I have never gardened in my life. Thats fair to say. But it looks like a very nice thing to do. We also talk about i. C. E. There are a lot of articles that said basically all this place is a tv studio. Thats not true. Were going to talk a lot more about that in the next hour. Youre going to stay with us. Ill stay for Speaker Boehner. But i dont think its fair to say this is just a tv station. Speaker of the house coming up with a News Conference just minutes away. Well carry it live. Were back after this. Mr. Margin . Dont be modest, bob. You found a better way to pack a bowling ball. That was ups. And who called ups . You did, bob. I just asked a question. It takes a long time to pack a bowling ball. The last guy pitched more ball packers. But you. You consulted ups. You found a better way. Thats logistics. Thats margin. Find out what else ups knows. Ill do that. Youre on a roll. Thats funny. I wasnt being funny, bob. I know. And im here to tell homeowners that are 62 and older about a great way to live a better retirement. Its called a reverse mortgage. [ male announcer ] call right now to receive your free dvd and booklet with no obligation. It answers questions like how a reverse mortgage works, how much you qualify for, the ways to receive your money, and more. Plus, when you call now, youll get this magnifier with l. E. D. Light absolutely free. When you call the experts at one reverse mortgage today, youll learn the benefits of a governmentinsured reverse mortgage. It will eliminate your monthly mortgage payments and give you taxfree cash from the equity in your home. And heres the best part you still own your home. Take control of your retirement today. Theres a live look at capitol hill. Were waiting for comments from House Speaker john boehner. He could not get enough votes for his plan b to avert the fiscal cliff last night. Well bring you the comments as soon as they begin. Actually, hes approaching the podium right now as we eagerly await what he has to say. As you know, the house did not take up the tax bill last night. Because we didnt have the votes to pass it. Not the outcome that i wanted. But that was the will of the house. So unless the president and Congress Take action, tax rates will go up on every american taxpayer. And devastating the defense cuts, will go into effect in ten days. The house has already passed bills addressing the fiscal cliff. After the bill, replacing the president s sequester with responsible spending cuts and did it last may. We passed a bill to stop all the tax hikes on the American People to take effect january the 1st. And we did that on august the 1st. And we proposed plans over and over again that democrats used to support. I dont want taxes to go up. Republicans dont want taxes to go up. But we only run the house. The democrats continue to run washington. What the president has proposed so far simply wont do anything to solve our spending problem. He wants more spending, and more tax hikes that will hurt our economy. And he simply wont deal honestly with entitlement reform. And the big issues that are facing our country. We need significant spending cuts, and real tax reform to address our longterm debt problem and pave the way for longterm growth and real growth in jobs in our country. Well continue to work with our colleagues in the house and the senate on a plan that protects families and Small Businesses from the fiscal cliff. Again, i think we saw last night yet the next chapter in this saga of trying to resolve this situation of the fiscal cliff. It is clear that our conference has been consistent in its commitment to doing something about the spending problem in washington and the mounting debt that has resulted. We stand ready to continue in dialogue with this president to actually fix the problem. I hope that we see our colleagues on the other side of the capital can do likewise, can get serious to try and address the real problem of spending, so we can get on about the business of growing this economy and get people back to work. Mr. Speaker . A lot of the arguments that you made in favor of the bill, the multitrillion dollar tax cut, to rescue all but a fraction of taxpayers from a tax increase, also would apply to the president s proposal. Are you willing to give the president s proposal a vote . Listen, the president and i have had a series of conversations. I told the president on monday, these were my bottom lines. The president told me thhis numbers, 1. 3 trillion in new revenue, 850 billion in spending cuts was his bottom line. That he couldnt go any further. And so we see a situation where because of the political divide in the country, because of the divide here in washington, trying to bridge these differences has been difficult. If it were easy, ill guarantee you, this would have been done decades before. But we have to find a way to address this significant spending problem that we have, and we need to find a way through tax reform to begin to grow our economy in a way that will create more jobs in our country. What is the path forward . Are you going to be speaking with the president further . Let me reinforce this question. Are you ruling out putting on the floor for a vote to build a path through the senate and all those tax rates under 2 250,000 it continues to sit in the United States senate. We dont have the senate bill. We do have a house bill that sits in the senate, the extended tax rates for all americans. And weve been waiting since august 1st. If the senate wants to act on that bill, well wait for it. Are you going to be speaking to the president in negotiations forward . What are we going to do now . Im interested in solving the major problems that face our country. And that means how should we do this, the Senate Leaders and the president will continue to have to Work Together to address those concerns. After the sequester was ordered on january 2nd, the leaders in both bodies can bring up a resolution to head off the sequester. Considering the dire nature of these circumstances, have you given consideration to that . I have not given consideration to it. We have a spending problem. And we have to address it. And were not going to address it by kicking the can down the road, which is what youre suggesting. Speaker boehner, mr. Cantor has suggested that the house would stay here until the job was done. Theyre obviously going home for christmas. Are you quitting . Absolutely not. Listen, im proud of our members. They do a great job on behalf of their constituents. And frankly, a great job on behalf of our country. What mr. Cantor outlined last night is that the house would come back if needed. And were prepared to come back, if needed. Speaker, it sounds like youre walking away from talks with the president. No, no. Listen, i did not say that. And nobody ought to read anything into this. Weve got differences, but the problem the countrys got big spending problems. And weve got to get serious about addressing them. The first time Something Like this has happened during talks with the president , why should he have faith that when you negotiate with him the president knows that ive always been able to deliver on any promise ive made with him. The concern that i had was time was running short. And the idea of the taxes ought to go up on every american taxpayer, i thought was wrong. And trying to address the tax issue i thought was very important to do it now. So that we dont have taxes going up on every american, and hurting our economy. Sir, are you mr. Speaker, you said here yesterday, you expressed confidence that you were going to pass that bill. Sure did. What went wrong . Listen, there was a perception created that that vote last night was going to increase taxes. Now, i disagree with that characterization of the bill. But that impression was out there. And we had a number of our members who just really didnt want to be perceived as having to raise taxes. That was the real issue. Now, one of my colleagues the other night had an analogy of 100 people drowning in a pool, and then he was the lifeguard. And because he couldnt save any of them, does that mean he shouldnt have done anything . His point to them is, if i can go in there and save 99 people that are drowning, thats what i should do as a lifeguard. But the perception was out there, and a lot of our members did not want to have to deal with it. Mr. Speaker, given that you really do not have the vote to raise tax rates, are you willing to pass a bill with the majority of democratic support at this point . As i said, the house passed a bill to extend all of the current taxes. We did it on august the 1st. Its been sitting in the senate. We passed a bill to replace the sequesters. At some point the United States senate has to do something. And what we were trying to do this week was basically jumpstart, and try to kick into gear some action by the senate to avert these tax increases going into effect on january 1st. Mr. Speaker, with all due respect, what impact do you think bringing up a bipartisan grand bargain, that you could strike with president obama, would have on the future of your speakership . Well, listen, at some point were going to have to address the spending problem that we have. But we cant cut our way to prosperity. We need real economic growth. Many of us believe on both sides of the aisle the fundamental reform of our tax code will help us get our economy moving faster and put more americans back to work. And more americans with other tax rules. How we get there, god only knows. But all ive done is, eric and i and our team here are committed to working with our colleagues on both sides of the aisle, both sides of the capital and the white house, to address this. Mr. Speaker, if i could follow that. Last week i asked you if you were concerned about losing your speakership. And you said you were not. In light of what happened last night, if youre not concerned, should you be . No, im not. You all heard me say this, and ive told my colleagues this. If you do the right things every day for the right reasons, the right things will happen. And while we may have not been able to get the votes last night to avert 99. 81 of the tax increases, i dont think they werent taking that out on me. They were dealing with the perception that someone might accuse them of raising taxes. Merry christmas, everyone. Thank you. Speaker boehner ending, what was that, about a tenminute News Conference, wishing everybody a merry christmas. About the nicest sentiments that we heard during that tenminute conversation with the speaker. Chief washington correspondent john harwood is in our nations capital. John, let me start with you. He said there was a perception the vote would increase taxes. Our members just didnt want to deal with it. Give me your take. My take was a couple of things. First of all, the speaker said he was not ruling out continued negotiations with the white house. He did not rule out bringing up a bill that would have that could passion with with a signi amount of democratic votes. Finally, he was indirectly critical of his own members, saying that they voted down his plan b because they had the perception which was incorrect that it was going to raise taxes. Now, by the same logic, the speaker said that the bill that he offered last night didnt raise taxes. The president s proposal also does not raise taxes. Why . Because it simply would extend the tax cuts the bush tax cuts for people under 250,000, for everybody else he would simply let current law take effect. And how, in your opinion, john, since youve been following this as closely as anybody, where are we on this, given what happened with plan b . I think there is still a possibility that you could see in the senate a bipartisan bill passed with the acquiescence of the republican leader, if not the support of mitch mcconnell, that would have that it would extend tax cuts for most americans, but not all, that would have some spending cuts, some entitlement cuts in it. That would get sent back to the house. The fallback is a tiny deal that would simply do a onemonth delay of the sequester, which would do a temporary extension of most of the tax cuts, would extend the doc fix for under medicare and also extend unemployment benefits. But the speakers hand has gotten weaker here, and he indicated that he still has some flexibility in terms of how hes going to approach this, even at some risk to his speakership. After the vote last night, or the nonvote last night, after they walked out of the recess, i spoke to a very Senior Member of mr. Boehners staff who said to me the following. If the senate sends over a middle class tax extension bill, whether its 250,000 or 400,000, which seems to be the range, because last nights thing didnt work, all right . That extension of the middle class tax bill will pass the house of representatives, period. It will pass. It will need democratic support and it will get a lot of democratic support. It will lose some republican support. But there will be republicans who vote for it. The point i want to make, in talking to this chap as well as some other contacts is, the game is not over here. Were not going to fall off the cliff. It may be delayed, because of what happened last night. You may go into early january. But thats not the big problem, because the tax rate schedules are not going to be adjusted right away. People are not going to hurt. What is not likely to happen, in my opinion, is that a 500 billion tax hike will occur because of no extensions. And its that 500 billion tax hike which has recession written all over it that would damage the stock market. I dont think thats going to happen. I think a bill is going to pass. I dont think it will have much spending cuts in it, not entitlements in it, it will be narrowly focused on extending middle class tax cuts. And well revisit things in 2013. I agree with larry kudlow. Smaller deal. Smaller deal is not bad for the market. Is it good for the markets . Well, i mean, do you want to go buy stuff here today . I dont know. Okay. We have a little selloff. John, does that sound plausible to you as well . It does. I agree with larry kudlow on the tax portion of this. What i dont know is exactly how the spending portion gets handled. You could see a very tiny plug where some spending cuts worth a couple of months of sequester that are targeted allow the across the board sequester to be turned off. But i still think that there is going to be some in a bipartisan deal that passes the senate, whether its next week, or whether its in early january as larry suggested, i think there is the prospect of larger cuts than that for the simple reason that, as republicans have been saying, we do need longterm spending reductions. And i dont think congress is going to walk away from that. I dont even think the president wants to walk away from that. The question is going to be, whats the ratio and how does it stack up with the tax cuts . You know, john may be right. I dont think they know right now. And i think theyll be negotiating. This aide told me the house will reconvene when they get a piece of legislation from the senate. So thats why im a little skeptical this is going to get by january 31st. Were only talking about a handful of days here. December 31st. This is a stock market point to what jimmy was talking about, i continue to believe, based on my understanding, that the extension of most of those tax cuts will occur, and that the big whale, the big 500 billion whale, with the money sucked out, because nothing is extended and everything expires, that whale is not going to happen. And thats why i, jimmy, would stay with the stock market fundamentals here and worry a little bit less about the politics. Because youre going to get an extension in the next month. It may not happen by the 31st, but in the next month. I will never disagree with my old partner. Larry, i think thats right. I agree with you. I dont think people who sell and panic here are making a good move. I think theyre making a bad move, larry. You know a lot more than i do. I agree with that point of view, though. Thank you. Go back to you know, listen, can i just say, the economy aint that bad. No. Thats the thing. I know we have a slump in Business Investment spending. But when you look at the gdp report yesterday, you look at the housing stuff coming down, you look at some decent consumer activity here, the economy aint that bad. And therefore, jimmy cramer, profits may not be that bad. I agree. I agree with you. Thats a good way to leave things. All right. We will do just that. John harward, of course, thanks. And our thanks to larry kudlow. Jim cramer, thank you for sticking around. Oh, with the speaker and john, absolutely. We should note that the markets are off their session lows with the s p 500 now down by about. 9 of 1 . Stocks coming off session lows after Speaker Boehners remarks. The dow now down by about. 6 of 1 . Art, great to see you. Great to see you, melissa. Are we off the lows because of what the speaker had to say a few moments ago, or are the buys higher in the last trading day before the weekend . I think the door wasnt slammed. I dont think boehner came out and slammed the door. I think there is a middle ground here still. Fortunately the middle ground is going to be with bipartisan support. The balls been tossed over to the senate. Its harry reids turn now. But something will get over to the house to have bipartisan support. Democrats need a chance to vote on something in the house. And i think thats why the market is moving forward a little bit here. I think thats what we learned at 10 00. What are the odds, in your view, of us reaching a deal before the deadline . About 20 . 20 . Yeah, maybe. We just kind of ran out of daylight here. The senate has the 72 hours before you can get something pushed forward and it has to go to the house and agreed upon and signed. My guess is this is something where we go past the calendar turn and come back and retroactively fit something in. But thats not the end of the world. I think if we get something done in the next 30 days, i think thats something the market can sort of get us out of. The context of the market move today is in the past month or so, the s p 500 has been up about 4 . There is an argument out there that it might be good to see a pullback in the markets. Where do you stand . Are you surprised at all were seeing some profit taking today in areas that have seen the biggest runups . No, not at all. Think about it. Put it in the proper context. You said the market was up 15 in the summer. We gave back 7. 7 in the selloff. We rallied back 4 from there. We probably have, with the disappointment in the fiscal cliff not happening better the turn of the calendar, more down side than up side. Remember, too, that lays in groundwork of paying attention to the fundamentals weve ignored and upside as we turn the calendar to 2013. Weve ignored a lot of good news in china and europe. So i think that in january, we get this behind us. I think the market probably has some reflex rally and upward buys. Certainly its going to affect the economy in the first half of the year, but the second half of 2013 will look a whole lot better than the second half of 12 did. Good to see you. Happy new year. Same to you. Research in motion stock falling today. Can the blackberry maker turn the r. I. M. Story around . Well explore that next. You cah mild to moderate alzheimers, youll also care about our new offer. You get access to nurses who can help with your questions. And your loved one can get exelon patch free for 30 days. If the doctor feels its right for them. It cannot change how the disease progresses. Hospitalization and rarely death have been reported in patients who wore more than one patch at a time. The most common side effects of exelon patch are nausea, vomiting, and diarrhea. The likelihood and severity of these side effects may increase as the dose increases. Patients may experience loss of appetite or weight. Patients who weigh less than 110 pounds may experience more side effects. People at risk for stomach ulcers who take certain other medicines should talk to their doctor because serious stomach problems such as bleeding may worsen. Patients may experience slow heart rate. Thirty days of exelon patch free for your loved one. Access to trained nurses for you. Call 18559991399 or visit exelonpatchoffer2. Com. So why exactly should that be of any interest to you . Well, in that time thereve been some good days. And some difficult ones. But, through it all, weve persevered, supporting some of the biggest ideas in modern history. Like the transatlantic cable that connected continents. And the panama canal that made our world a smaller place. We supported the Marshall Plan that helped europe regain its strength. And pioneered the atm, so you can get cash when you want it. Its been our privilege to back ideas like these, and the leaders behind them. So why should our anniversary matter to you . Because for 200 years, weve been helping people and their ideas move from ambition to achievement. And the next great idea could be yours. Research in motion shares, of course, down sharply today after the company warned in terms of guidance, that during its Conference Call after reporting not bad numbers. John spoke to the ceo earlier today. And he knows a lot more about this than i do. John, take it away. Yeah, david, r. I. M. Stock initially popped after hours in the revenue loss per shares issue. As we dug into the details in the Conference Call, things began to look a lot less rosy. Two issues in particular. R. I. M. s Service Revenue and 10 device sale. Its more than a third of r. I. M. s overall revenue these days, more than 70 of gross profit. Enterprises and carriers pay r. I. M. For security, device management, that sort of thing. I asked what happened to Service Revenue as we transition to blackberry 10 next year. He insisted the installed blackberry 7 devices will keep the Service Revenues propped up. That Service Revenue isnt going to go away. That stays intact. We will continue to sell devices into the market. We will continue to do this over the next months. So the transition period from blackberry 7 to blackberry 10 is going to be probably one and a half to two years. That introduces another problem. My analysis is r. I. M. Subscri r subscribers number will have to come down because it lags the device sales. Device sales are down by more than half year over year. And as that comes down, so does Service Revenue. Something hines didnt fully address. Thank you very much, jon fortt. We now have confirmation that the president as expected is going to nominate john kerry, the senator from massachusetts, democratic nominee in 2004, as secretary of state to replace hillary clinton. This has long been speculated that he would be this choice. Especially since susan rice, the u. N. Ambassador who ran into a lot of criticisms from republicans over the benghazi matter, had taken herself out of the running. So pretty much john kerry was the only candidate. The question is, what happens to the rest of the National Security team. I havent gotten any word yet as to whether there is a defense secretary replacement for leon panetta, but we do know john kerry is going to be named secretary of state by the president today. John, another question, of course, is what happens to that senate seat in massachusetts, does scott brown choose to run again and move that senate seat from the democratic column to the republican column . Any insights this . Well, thats certainly a possibility. Scott brown hasnt ruled that out. But you have a democratic governor there who has talked about a number or theres been speculation about a number of people who could be candidates for that seat. Either by appointment or in the special elections. Dont know how quickly the special election would take place, but everybody from barney frank to young ted kennedy, the son of the late senator, so were going to have to see how that plays out. Certainly democrats are in a strong po in massachusetts, but of course, they were before scott brown was elected in 2010. John harwood, thanks for that update. More analysis on the blackberry maker. Underweight on research in motion with price target of 7 a share. Will, good to speak with you. Good morning. Thanks for having me. I want to get straight to the issue of the Service Revenue, 36 of total revenues for research in motion. When hines talks about moving into a tiered system into next year, how concern does that get you, and how are you modeling Service Revenues for next year . I think its a significant concern for us. Frankly, this is something we called out as a meaningful concern for us over the better part of the last year. As we look at the company here, theyre stuck between a rock and a hard place. They need the 10 to succeed to retake share from ois and androids. Its been the golden goose for the company. We expect the Service Revenue to decline over the next several years. By how much . Well, i think thats a number that remains to be seen. Thats been tough to gauge. As you look at our model, i think that number could be down, you know, 10 next year, perhaps more. I think as you move into fiscal 15, you have more of a full year of blackberry 10, and greater penetration. That number could actually accelerate to the down side. It determines what other services they sell into the carriers and thats still unknown. Will, whats your sense in terms of barclays had an interesting note out the other day saying there have never been three makers having to survive the same time. Do all of them have to survive . No, i dont think they do. And they dont all need to survive. R. I. M. s profits, look at their business today, theyre generating no growth profit. As you move to blackberry 10, youre betting on their ability to actually make profits on hardware. They havent proven that ability in recent quarters. Will, thanks for your time. Thanks for having me. In the wake of the tragedy in connecticut, gun control and Mental Health care taking center stage. Connecticuts former attorney general and current senator has been a vocal advocate for action, joins us live. [ male announcer ] at scottrade, we believe the more you know, the better you trade. So we have ongoing webinars and interactive learning, plus, inbranch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. Our teams have the information you want when you need it. Its another reason more investors are saying. Ll ] im with scottrade. Welcome back to squawk on the street. Breaking news on the hostess bankruptcy proceedings. Right now, in a court in downtown manhattan, a judge is hearing an update from the company, as to whats gone on since they filed for bankruptcy roughly a month ago. Weve got the following details. The plant winddown is substantially complete at this point. About 87 of the facilities that hostess owns and operates have can completed their winddown. Theyre waiting to see if theres a resurrecting for a bid for the company. The company has received in their words numerous bids for all of their brands and all of their major facilities. Dolly, draks and Hostess Brands will all have separate bidders, although they anticipate three to four what they call packaged bids which could be for multiple brands. They see bids to get feel for price, but it seems it could take a little bit of time for things to come together, melissa. So more details as soon as we get them from the judge from downtown manhattan. House Speaker Boehner saying moments ago he has not walked away from talks with the president. Senior economics reporter Steve Liesman joins us now with more. In that press conference just a few minutes ago, the speaker holding out at least some hope something could still get done, either before the end of the year or shortly after that. The speakers main points is the house is ready to return when needed. He suggested the house would vote on a senate bill. He did that toward the opposite way saying he hasnt seen one yet. And saying he has not walked away from talks with president obama. Now, from the white house side, it seems the president has changed his goal to only a tax deal and perhaps only a tax deal for those making 250,000 and below. Not the 400,000 number he offered to boehner. You figure it out from this Statement Last night from a president ial spokesman. The president s main priority is to ensure that taxes dont go ul on 98 of americans and 97 of Small Businesses in just a few short days. It looks like they are trying for just that, 250,000 piece, and below. Continue the tax cuts from the bush administration. The speaker did say the failed vote will not endanger his speakership. And while we may have not been able to get the votes last night, to avert 99. 81 of the tax increases, i dont think they werent taking that out on me. They were dealing with a perception that somebody might accuse them of raising taxes. Melissa, i think things are not good, but maybe theyre not as bad as we thought before. In that, the speaker remains ready to continue talking with the president. Back to you guys. All right. Steve liesman, thanks for that. Sure. Our cash and director of floor operations with ubs is here on the set. I was reading your poetry. The christmas poem . The traditional presentation. You are quid a word smith. Thank you for that. Here we are, of course, were counting down, ten days away from the end of the year. These guys in washington just dont really seem to be able to get it together, do they, art. Give me your take. No. And that was what frightened markets this morning. I think we went to the lows because there was a concern that the government had become almost fully dysfunctional. Certainly on the republican side. And there is also some concern that with this chess game being played, that the republicans might get pushed into a position of being a modern wiig party, to become to lose their efficacy as a political power. And that would not be good, because we dont want things all onesided. It was those fears that took us to the low. The fact that boehner came out and said some things that are being interpreted as keeping the game open, somewhat reassuring here and thats why were stable. Keeping the game open, at the same time there still exists the sort of rift in the party where you have these, i dont want to say extreme elements, but republicans who say no tax increases. Why does it make anybody feel any better . Because at the end of the day it cant pass within his party, so it wont pass at all. I tend to agree with you. But i think just the fact that nobody showed up with a black eye or threatened anybody with a club, people are hopeful. And i think the seasonality of things, you like to be a little upbeat at this time of the year. And theyre hoping they can get it through. I have said for a long time, they should have probably kicked the can a little further down the road by taking a whole deadline and moving it out so that they could have a long time to negotiate. But its common sense. We come back on the s p, in part weve heard analysis from john kudlow, and john harwood in washington, d. C. You know, we may not get something this year, so to speak, but we could get at least the stop gap measure early next year that does not allow taxes to rise on everybody. And then we move on from there. The concern is that the economy is fragile enough, that even that little bump over, you could try to get it back in a week or two, that it might be too much. The ironic thing is, most of the Economic Data thats been coming out in the last few days have been pretty good. So at the very least they could harm it. Pretty dangerous when you take a whole nation on a bungee cord and you dont know how strong that cord is. Weve got about five trading days left before the fiscal cliff deadline. What do you expect in the next few days . I think today we were dominated a little bit by quadruple expiration. The volume has already done as much volume as we do in a full day these days. And we dont know what will be market on closes. They could be an important sign here. Weve got an abbreviated session on monday. And usually the day before christmas has a slide upward bias to it. But the tension of this thing is going to dominate all the way through until new years. Art, good to see you. My pleasure. Art cashin. Our countdown of the best and worst trades of 2012 continues today. One that continues to pay off for investors, scott walker is here. Hes got the big reveal. David, thanks so much. We go right to the wall and start today with aig. Hard to believe that a company, aig, nearly went out of business during the financial crisis, and needed every bit of a government bailout, would be a wall street darling now. Stock is up 51 yeartodate as the treasury has exited at a big profit. The company has done some exiting, too. Recently divested its sake in aia, hong kongbased, and sold more than 65 billion in assets. More capital has pleased investors. The ceo indicated the possibility of a dividend next year, reiterated yesterday with maria on the closing bell, if the companys Capital Position warranted such a move. Investors would like to see even more selloff of stock. There are big names in this one. Not just fast money halftime steven weiss. They think theres value in a continued gain in shares next year, could prove them all right. David, melissa, its been quite a stunning turn of events for aig. And throughout the day today, were going to continue our big reveal. Well have a couple more coming up during the halftime show, which begins obviously after you guys are finished at noon. Look forward to it. Scott wapner, thank you. He opposed boehners socalled plan b and has been one of the most outspoken opponents of the house of representatives leadership. And gun control and much more. [ male announcer ] when it comes to the financial obstacles military families face, we understand. At usaa, we know military life is different. 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You know, the Political Landscape on this issue really has changed, almost seismically as a result of this harrowing tragedy. I think a lot of my colleagues, and i talked to some of the republican colleagues who are rethinking or revisiting their position, have reacted with tremendous emotion to this tragedy, as all of us have. And all america. And theres been an outpouring of support to newtown, a quintessentially new england town thats rallied together, showing tremendous strength. But also resolve that there should be some action. And i hear again and again and again from people in newtown, people in connecticut and across the country, you must do something. And i think that reaction will prompt action in congress on a ban on assault weapons, also on the highcapacity clips. Both were involved in this tragedy. As well as the Mental Health efforts, stronger enforcement, and of course, a closing of the gun show loophole that means that 40 of all gun sales in this country involve no background checks whatsoever. Senator, will you be a part of the conversations with Vice President biden as he goes about trying to craft a potential bill at least, given what we heard earlier from the earlier this week from the president , and can it really pass . There should be a conversation involving all sides. And it should be bipartisan. Because theres nothing partisan about public safety. Nobody asks a policeman when he arrives at the door, are you a republican or a democrat, when hes trying to help somebody in need. I think theres a very good prospect for something happening, obviously next session. Well be introducing some of these measures on the very first day. And the change, or at least openness in position of senator manchin of west virginia, senator warner of virginia, the majority leader harry reid, very graciously said that he was open to a new discussion and debate. So i think there are indications of changes on this issue that will prompt a very strong likelihood of action. Nobody can predict with certainty. Senator, a past ban on assaults weapons yielded some tweaks in the way guns are manufactured, so that there would be loopholes, so those guns could still be sold. How tight do you think the new regulation will have to be, and what sort of lessons are you drawing from past bans, and the writers of those laws . Excellent question. And i am somewhat knowledgeable about the weaknesses in both the federal law that expired in 2004 and the current connecticut law, because i helped to advocate for that law, and then defend it in court when it was challenged on constitutional grounds, while i served as attorney general. And the challenge is to write a law that does not have exceptions or exemptions that the gun manufacturers can use to continue to sell these military style weapons. Remember, they were designed the m16 and the m4 for combat purposes. And then adapted to civilian use. But they have the same purpose, which is to kill and maim innocent human beings. Theyre really beings. They are really not used predominantly for hunting. The challenges, and i think it can be done to write a law without exemptions or exceptions that in effect swallow the rule. All right. Senator, well leave it there. Thanks so much for your time. Thank you. Senator Richard Blumenthal of connecticut. It is the last weekend for shoppers to hit the stores before christmas. Find out which retailers have the most riding on their Sales Numbers in the next few days. Well name names. Coming up. And cut very good. People are always asking me how we make these geico adverts. So were taking you behind the scenes. This coffee cup, for example, is computer animated. Its not real. Geicos Customer Satisfaction is quite real though. This computeranimated coffee tastes dreadful. Geico. 15 minutes could save you 15 or more on car insurance. Someone get me a latte will ya, please . And with my bankamericard cash rewards credit card, i love em even more. I earn 1 cash back everywhere, every time. 2 on groceries. 3 on gas. Automatically. No hoops to jump through. Thats 1 back on. [ toy robot sounds ] 2 on pumpkin pie. And apple. 3 back on 4 trips to the airport. Its as easy as. [ man ] 1. [ woman ] 2. [ woman ] 3. [ male announcer ] the bankamericard cash rewards card. Apply online or at a bank of america near you. It is the final day of the Holiday Shopping season and retailers have one last chance to capitalize on lastminute shoppers. Courtney reagan is back at hq with more. David, retailers are hanging a lot of holiday hope on this weekends shoppers. After a strong start on thanksgiving and black friday most analysts think its been a less than impressive season since. While the lull isnt exactly a surprise it could be more hurtful this year as retailers started off the Holiday Season already limping from hurricane sandy. As the rhetoric in washington over the fiscal cliff escalates and that deadline looms ever closer, consumers are paying attention to negative book ends, to the most important retail season of the year. If you look at the confidence figures, the retail sales figures, the data is what it is. People are aware of it and it seems to be impacting their spending in a negative way. The last saturday before christmas is referred to as super saturday. This year the term could take on an enhanced meaning. Super saturday has the chance of being the number one shopping day in 2012. Consumers could spend 40 billion between today and tomorrow, 10 more than black friday and saturday at least by Mastercard Spending pollster projections. Retailers are pushing longer hours, bigger deals. Toys r us staying open for 88 straight hours until 10 00 p. M. Christmas eve. Macys will stay open continuously from this morning at 7 00 a. M. Until sunday morning at 7 00 a. M. Stretching the oneday sale to 48 hours. Target wont lock its doors until 9 00 p. M. On Christmas Eve and will give away gift cards with certain purchases this weekend. Best buy will let you buy online up to 3 00 p. M. On monday and still pick up in stores by monday evening. Some retailers could be asking santa for a christmas miracle. David . All right. Thanks very much, Courtney Reagan back at hq. Still to come, why quick could be the name of the game next year when it comes to media. And later, congressman Tim Huelskamp joins us to talk about the fiscal cliff and how he feels about Speaker Boehner stripping him of his spot on several committees. Squawk on the street right back. [ male announcer ] its simple physics. A body at rest tends to stay at rest. While a body in motion tends to stay in motion. Staying active can actually ease arthritis symptoms. But if you have arthritis, staying active can be difficult. Prescription celebrex can help relieve arthritis pain so your body can stay in motion. Because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. Plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. Celebrex can be taken with or without food. And its not a narcotic. You and your doctor should balance the benefits with the risks. All prescription nsaids, like celebrex, ibuprofen, naproxen, and meloxicam have the same cardiovascular warning. 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Joe doesnt know it yet, but hell work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From td ameritrade. The media landscape keeps shifting. Julia boorstin has a look at the Media Industry in 2013. Media giants newscorp buy cbs and Internet Companies are on the hunt for digital revenue in 2013. Move over, sleeping cat videos. This will be the year of professional video. Youtube will invest more in its Digital Studio partners helping them draw viewers and ad dollars. On the flip side broadcast net works will invest more in sports and live events. The only content not threatened by growing, online options. The landmark Netflix Disney deal lays the foundation for a high stakes distribution battle with Digital Companies like netflix competing on the same Playing Field as cable and satellite tv for the first time. Theyre not the only ones. Amazon prime, google, microsofts x box, apples itunes, hulu, and new red box instant will all throw more money at content including original shows translating into more revenue for media companies. Apple will launch a streaming Music Service supported by ads. This as more top artists follow the likes of taylor swift, going rogue to control their own music distribution. That. Was Julia Boorstin with her predictions for 2013. As for the markets here were still off of session lows after Speaker Boehner gave some remarks, some market analysts said he didnt entirely slam the door and that is a good sign. Were down about 12 on the Dow Jones Industrial average, s p as well the nasdaq faring the worst of the major three, seeing some losses at apple and research in motion down 16 , david. That should be interesting to watch also in 2013. And maybe 2014 according to the ceo because it is going to take that long to gain some traction. The key of course is surface revenues and what is going to happen. Heres what you might have missed if youre just tuning in. Welcome to hour three of squawk on the street. Here is whats happening so far. Oh, my. The first zombie might be somewhere waking up right now and walking toward squawk box. I think we have a certain period of time several quarters where we will transition from blackberry 7 over to blackberry 10. If there is going to be a rabbit pulled out of this hat how will it happen . Maybe a dead rabbit pulled out of the hat. Oh, no. Fatal attraction. There was no real plan b, no real possibility of this. The republicans, the vast majority signed a pledge they will not vote for a tax increase. Who would vote they would suddenly turn around and vote for a tax increase . There are people who play for dinner in this country and their subsistence is on the line. And they are going to be furious but they cant get furious until they see the paycheck. Because of the political divide in the country, because of the divide here in washington, trying to bridge these differences has been difficult. If it were easy ill guarantee you this would have been done decades before. The squawk on the street countdown to christmas is in its final week. Are you ready . Ho, ho, ho. All right. We want to go straight to the nra News Conference which has just started. Lets listen in. To avoid such events in the future. Like most americans, we were shocked by what happened. Like all americans, weve been discussing all of the various options that are available to protect our children and at this point we would like to share our thinking with you. For that purpose, id like to introduce wayne laperriere, our executive Vice President. Thank you again for being with us and at the end of this conference we will not be taking questions, but next week we will be available to any of you who are interested in talking about these or other issues of interest to you, so contact us, please, at that point. Thank you very much. Wayne . Good morning. The National Rifle association, 4 million mothers, fathers, sons, and daughters joined the nation in horror, outrage, grief, and ernest prayer for the families of newtown, connecticut. Who have suffered such an incomprehensible loss as a result of this unspeakable crime. Out of respect for the families and until the facts are known the nra has reframed from comment. While some have tried to exploit tragedy for political gain we have remained respectfully silent. Now we must speak for the safety of our nations children. Because for all the noise and angerdirected at us over the past week nobody has addressed the most important pressing and immediate question we face. How do we protect our children right now . Starting today . In a way that we know works . The only way to answer that question is to face the truth. Politicians pass laws for Gun Free School zones. They issue press releases bragging about them. They post signs advertising them. And in doing so, they tell every insane killer in america that schools are the safest place to inflict maximum mayhem with min risk. How have our nations priorities gotten so far out of order . Think about it. We care about our money so we protect our banks with armed guards. American airports, office buildings, power plants, courthouses, even sports stadiums are all protected by Armed Security. We care about our president so we protect him with Armed Secret Service agents. Members of Congress Work in offices surrounded by Capitol Police officers. Yet when it comes to our most beloved, innocent, and vulnerable members of the american family, our children, we as a Society Leave them every day utterly defenseless, and the monsters and the predators of the world know it and exploit i it. That must change now. The truth is nra, stop killing our children. Its the nra and assault weapons that are killing our children. Do not arm teachers. Weve got to end violence. Weve got to stop the killing. Stop the killing in our schools. Stop the killing in our malls. Stop the killing in our streets. The nra is killing our children. Weve got to stop the violence. Violence begins with the nra. Stating the true facts. They are the perpetrators of the crimes taking place in our schools and on our streets. The truth is, that our society is populated by an unknown number of genuine monste monsters people that are so deranged, so evil, so possessed by voices and driven by demons that no sane person can ever possibly comprehend them. They walk among us every single day. And does anybody really believe that the next adam lanza isnt planning his attack on a school hes already identified at this very moment . How many more copy cats are waiting in the wings for their moment of fame . From a National Media machine that rewards them with walltowall attention and a sense of identity that they crave. While provoking others to try to make their mark. A dozen more killers, a hundred more . How can we possibly even guess how many given our nations refusal to create an active National Data base of the mentally ill . The fact is this. That wouldnt even begin to address the much larger, more lethal criminal class killers, robbers, rapists, gang members who have spread like cancer in every Community Across our nation. Meanwhile, while that happens federal gun prosecutions have decreased by 40 to the lowest levels in a decade. So now due to a declined willingness to prosecute dangerous criminals, Violent Crime is increasing again for the first time in 19 years. Add another hurricane, terrorist attack, or some other natural or man made disaster and youve got a recipe for a National Nightmare of violence and victimization. Here is another dirty little truth that the media try their best to conceal. There exists in this country, sadly, a calloused, corrupt, and corrupting shadow industry that sells and stows violence against its own people. Through vicious, violent video games with names like bullet storm, grand theft auto, mortal combat, and splatter house and heres one. Its called kindergarten killers. Its been online for ten years. How come my Research Staff can find it and all of yours couldnt or didnt want anyone to know you had found it . Add another hurricane. Add another natural disaster. I mean, we have bloodsoaked films out there like american psycho, natural born killers, that are aired like propaganda loops on splatter days and every single day. A thousand music videos, and you all know this, portraying life as a joke, and they play murder, portray murder as a way of life. Then they all have the nerve to call it entertainment. But is that what it really is . Isnt fantasizing about killing people as a way to get your kicks really the filthiest form of pornography . In a race to the bottom, media conglomerates compete with one another to shock, violate, and offend every standard of Civilized Society by bringing an even more toxic mix of reckless behavior and criminal cruelty right into our homes every minute, every day, every hour of every single year. A child growing up in America Today witnesses 16,000 murders and 200,000 acts of violence by the time he or she reaches the ripe old age of 18. Throughout it all, too many in the National Media, their corporate owners, and their stockholders, act as silent enablers if not complicit coconspirators. Rather than face their own moral failings, the media demonized gun owners. Nra has blood on its hands the nra has blood on its hands shame on the nra ban assault weapons now ban assault weapons now n nra what is your reaction to these protests . Rather than face rather than face their own moral failings the media demonized lawful gun owners, amplify their cries for more laws, and fill the National Media with misinformation and dishonest thinking that only delay meaningful action and all but guarantee that the next atrocity is only a news cycle away. The media calls semiautomatic firearms machine guns. They claim these civilian semiautomatic firearms are used by the military. They tell us the 223 round is one of the most powerful rifle calibers, when all of these claims are factually untrue. They dont know what theyre talking about. Worse, they perpetuate the dangerous notion that one more gun ban or one more law imposed on peaceable, lawful people will protect us where 20,000 other laws have failed. As brave and heroic and as selfsacrificing as those teachers were in those classrooms, and as prompt and professional and well trained as those police were when they responded, they were unable through no fault of their own unable to stop it. As parents, we do everything we can to keep our children safe. Its now time for us to assume responsibility for our schools. The only way the only way to stop a monster from killing our kids is to be personally involved and invested in a plan of absolute protection. The only thing that stops a bad guy with a gun is a good guy with a gun. Would you rather have your 911 call bring a good guy with a gun from a mile away or from a minute away . Now, i can imagine the headlines, the shocking headlines youll print tomorrow. More guns, youll claim, are the nras answer to everything. Your implication will be that guns are evil and have no place in society, much less in our schools. But since when did the gun automatically become a bad word . A gun in the hands of a secret Service Agent protecting our president isnt a bad word. A gun in the hands of a soldier protecting the United States of america isnt a bad word. When you hear your glass breaking at 3 00 a. M. And call 911 you wont be able to pray hard enough for a gun in the hands of a good guy to get there fast enough to protect you. So why is the idea of a gun good when its used to protect the president of our country or our police but bad when its used to protect our children in our schools . Theyre our kids. Theyre our responsibility. It is not just our duty to protect them. Its our right to protect them. Five years ago after the Virginia Tech tragedy when i said we should put Armed Security in every school, the media called me crazy. But what if what if when adam lanza started shooting his way into Sandy Hook Elementary School last friday hed been confronted by qualified, Armed Security . Will you at least admit its possible that 26 little kids that 26 innocent lives might have been spared that day . Is it so abhorrent to you that youd rather continue to risk the alternative . The press and the Political Class here in washington, d. C. So consumed by fear and hatred of the nra and american gun owners that youre willing to accept a world where real resistance to evil monsters is alone, unarmed, School Principal left to surrender her life, her life, to shield those children in her care . No one regardless of personal political prejudice has the right to impose that sacrifice. Ladies and gentlemen, there is no national one side fits all solution to protecting our children. But do know this president zeroed out School Emergency planning grants in last years budget and scrapped secure our schools policing grants in next years budget. With all the foreign aid the United States does, with all the money in the federal budget, cant we afford to put a Police Officer in every Single School . Even if they did that, politicians have no business and no authority denying us the right, the ability, and the moral imperative to protect ourselves and our loved ones from harm. Now, the National Rifle association knows there are millions of qualified, active, and retired police. Active reserve and retired military. Security professionals. Certified firefighters. Security professionals. Rescue personnel. An extraordinary corps of patriotic, trained, qualified citizens to join with local School Officials and police in devising a Protection Plan for every Single School. We could deploy them to protect our kids now. We can immediately make americas schools safer, relying on the brave men and women in Americas Police forces. The budgets, and you all know this. Everyone in the country knows this. Of our local Police Departments are strained. And the resources are severely limited. But their dedication and courage is second to none, and they can be deployed right now. I call on Congress Today to act immediately to propoappropriate whatever is necessary to put armed Police Officers in every Single School in this nation and to do it now, to make sure that blanket safety is in place when our kids return to school in january. Before congress reconvenes, before we engage in any lengthy debate over legislation, regulation, or anything else, as soon as our kids return to school, after the holiday break, we need to have every Single School in america immediately deploy a Protection Program proven to work. And by that, i mean Armed Security. Right now today every school in the United States should plan meetings with parents, school administrators, teachers, local authorities. And draw upon every resource thats out there and available. To erect a cordon of protection around our kids right now. Every school is going to have a different solution based on its own unique situation. Every school in America Needs to immediately identify, dedicate, and deploy the resources necessary to put these Security Forces in place, though, right now. And the National Rifle association as americas preeminent trainer of Law Enforcement and security personnel for the past 50 years, we have 11,000 Police Training instructors in the nra, is ready, willing, and uniquely qualified to help. Our Training Programs are the most advanced in the world. That expertise must be brought to bear to protect our schools and our children now. We did it for our Nations Defense industries and military installations during world war ii. We did it for very young kids with our eddie eagle Child Safety Program that is throughout the country in schools right now. And well do it again today. The nra is going to bring all its knowledge, all its dedication, and all its resources to develop a Model National School Shield Emergency Response program for every Single School in america that wants it. From Armed Security to Building Design and access control, to information technology, to student and teacher training this Multifaceted Program will be developed by the very best experts in the field. Former congressman Asa Hutchinson will lead the effort as National Director of the National Model School Shield program. With a budget provided by the nra, of whatever scope the task requires. His experience as United States attorney, director of the Drug Enforcement agency, and under secretary of the department of homeland security, will give him the knowledge and expertise to hire most knowledgeable and credentialed experts that are available in the United States of america, to get this program up and running from the first day forward. If we truly cherish our kids, more than our money, more than our celebrities, more than our sports stadiums, we must give them the greatest level of protection possible, and that security is only available with properly trained, armed, good guys. Under asas leadership, our team of Security Experts will make this Program Available for the world in protecting our children at school and will make that Program Available to every Single School in america free of charge. That is a plan of action that can and will make a real, positive, indisputable difference in the safety of our children and it will start right now. There is going to be a lot of time for talk and debate later. This is a time, this is a day for decisive action. We cant wait for the next unspeakable crime to happen before we act. We cant lose precious time debating legislation that wont work. We must not allow politics or personal prejudice to divide us. We must act now for the sake of every child in america. I call on every parent. I call on every teacher. I call on every school administrator, every Law Enforcement officer in this country to join with us and help create a National School shield Safety Program to protect our children with the only positive line of defense thats tested and proven to work. Now to tell you more about the program id like to introduce the head of the effort, former u. S. Congressman, former attorney for the Western District of arkansas and former administrator of the u. S. Drug enforcement agency, the honorable congressman Asa Hutchinson. Asa . Thanks. Weve been listening in to the National Rifle associations First Press Conference since the tragic shootings in newtown, connecticut. That was wayne laperriere, the nras executive Vice President seeming to blame gun violence, violence overall, on many aspects of society including the entertainment industry, the video game industry, and the Media Industry and, finally, concluding with a call to action for a National School shield program which would entail armed guards at every school. Lets take a check on how the gun industry is taking this news. Smith and wesson and stern ruger the two publicly traded Gun Companies out there. Not doing too much. Though the past couple sessions have been a fairly rough one for these two stocks. Lets bring in Hampton Pearson for more reaction on the News Conference. Well, a couple things struck me. Number one, no mention from wayne laperriere about if you will whats emerged as kind of a short list of policy options, gun control options in the aftermath of the newtown shootings. That is perhaps banning assault weapons, perhaps banning the high volume ammunition clips, or even putting efforts to shore up the background check system in this country. Instead, really the nra if you will sort of doubling down on the notion that guns in his words, the only alternative to the gun in the hands of a bad person is a gun in the hands of a good guy. Again, their solution going forward, and he minced no words on all of this, at least at a minimum, put an Armed Security person in every school in the country, even while it evolves to the National Program that you mentioned of a socalled National Shield as envisioned by the nra for our schools. So if anybody thought the nra was going to sort of back off or this was a paradigm shift in its basic positions about the right to keep and bear arms and defender of the Second Amendment if you will, but again, it was stunning and sort of in your face if you will as far as their initial response. And in part of a pledge that was made to offer, quote, Meaningful Solutions so that nothing like this ever happens again. That was in the nras Statement Released earlier this week. Hampton, it wasnt press conference. It was a public statement. Yes. There were no questions. There are going to be no questions, correct . I dont know if that was expected or that was the change that was made when it began. Well, it certainly was the change that was made and all we got was the pledge, well if you want to come talk to our top officials next week, well be more than happy to sit down in depth and drill down further on what they put on the table today. What is the bottom line . Does the nra reflect the gun lobby . Are we to believe this is the actual position of industry . I certainly think they reflect the position of the gun lobby. Right. As far as the industry i would think, too, there is significant support there, too. We will see what happens in the days and weeks ahead. But they are more than joining the dialogue. Theyve laid down their own markers as to their view of possible solutions. All right. Hampton, you know, Hampton Pearson reporting for us of course from washington. I would just point out as well the twitter sphere so to speak has just been nothing but this nra press conference. Ill share one from my friend mark cuban who tweeted quote i think the nra press conference is what the mayans had in mind when they said the world would come to an end today. Still to come, rick tackles the fiscal cliff with senator bob corker. Looking forward to that. Well be right back. Welcome back to the third hour of squawk on the street. I have the exact guest we need today, tennessee senator bob corker. Welcome, bob corker. I want to start out with a little bit here, know your players. When i go to a game i buy a program so you know the players. But misrepresenting the outcome of the election, listen, the president , more on social issues, the people of this country are concerned about deficits too. There was no mistake the power still remains to the fiscal conservatives in the house. By dismissing the fact that when you spend 3. 8 trillion and it results in going to be four years running of over 1 trillion deficits, to talk about 70 billion of savings or deficit reduction by taxing the upper 2 , the 7 nonsolution, well, they didnt take them serious. The media spins it and this is what happens. Im not surprised by the vote, senator. Are you . Republicans are unified wanting to reduce spending and especially focus on entitlement reform. So it is amazing, rick, in a country as great as ours where every developed country in the world knows our greatest threat is solvency, fiscal solvency, that we have to be in this position of leveraging if you will republicans, leveraging the white house, and vice versa. I will say that in spite of the fact there were differences over how to get there, i think that last nights vote did put leverage back at the white house and, again, i hate to even talk that way. Let me interrupt you. Okay. You know, when you look toward europes political system, there are coalitions. Right. I would now say they need to know that these players certainly have a coalition. Right. Can anything get through the house no matter what you just said about leverage if that coalition doesnt go along with a program that actually has some meat on the spending cut side . Can it . Well, heres the thing, rick. You know, the 1. 2 trillion in sequestration that begins in january is being retraded in all of these negotiations. And thats one thing you and i have talked about that, i know, but that is one thing that is being missed in these negotiations. The 1. 2 trillion in sequestrations is already in the bank. That is part of the 2. 1 trillion that happened last august. And whats all thats been happening recently is just retrading. What we want to do is build on that. We dont want to retrade whats already in the bank as it relates to savings. Fiscal conservatives arent buying into the retrade. The media buys into it. But theyre not. Lets take another issue. Okay. I was watching cspan after the vote and i saw senator van holland talking about how the tax increase is on the middle class. Why do they continue to mix these metaphors . Payroll taxes it was supposed to be temporary. Employment benefits. These are all issues outside the real argument. We continue to be disingenuous and the fiscal conservatives dont care if they get elected. They are there with a purpose. Do you agree this tax game is silly . Well yeah. I mean the payroll tax as you know is to pay for benefits that people are going to receive down the road and its really fascinating that people on the left that really want to see these, all of us want to see these programs obviously be solvent but now theyve bought into this notion of lowering payroll taxes. We know what that does. It makes these programs even more insolvent than they already are. Were going to have to go, senator. Last question. Real quick answer. Now the ball is in the senate and the president s hands. Will they look at what happened . Will they finally understand who theyre dealing with and put something forth that everybody can vote for that is balanced . And you say balanced a lot, media, but none of this has been balanced. Your answer, sir . Rick, i hope so. Im fearful. So die. The worst possible case is we end up doing something that is very minor and we continue to have this pale over our country where were not dealing with solvency in the way we should. We both know we have to deal with entitlements. We have to. Thats been the problem. Those have not been on the table. They have to be on the table for us to solve our nations problems. Ive been trying every day to push that forward, rick, and its still not front and center. I hope that the white house and every strategist in the white house will finally be honest about the true complexion of this country. They like social issues but they also like smaller deficits. Senator, thank you. Thank you. Have a merry christmas, happy hannukah and happy festivities for the rest of us. Merry christmas. Thank you, rick santelli. We should point out right now the s p 500 hitting fresh session lows. 1423 down 1. 4 as the fiscal cliff deal continues to solve. Is there room for compromise before that deadline . Lets bring in dan clifton head of policy research joining us from washington. Dan, what are the odds of any sort of deal . Well, i still think well get a deal before the end of the year. You got to remember that theres a lot of cata lists in place. That means we have to get something done. For example, the alternative minimum tax patch expired last year. If that is not fixed before the end of the year youll have 30 million americans get hit with the alternative minimum tax when they file their taxes with an average tax bill of 3700. At the very least we may see a very small bill that takes the can down the road but we should be able to get something that minimizes the amount of tax increases that come into effect on january first. I know that there are a lot of people out there who looked at last night and said, oh, were going off the cliff now. I think the probability went higher. It may make it a little more difficult to get a comprehensive deal. I still think the fundamentals are in place to try and get something done before january first. I mean, you know, just looking at the calendar would indicate there is a level of difficulty here. Sure. What gives you the confidence that anything is really going to be able to get done as we move into the holidays right now . I can understand how early next year certainly possible but why do you still think there is going to be able to get something done before the new year . Thats great. A great question, david. What i would say is that if we wanted to do a comprehensive deal, we saw the speaker come out today and said we need to do entitlements, tax reform. That is all well and true. Were not going to get that done by january first. But if were going to take Something Like the senate bill that extends the middle class tax cuts, keeps that a plchlt t patch from going into effect, then that could be done pretty quickly. It could be done basically in two days. They have plenty of time to come back and do that next week. That will minimize those tax increases from coming into effect. David, back to this point, if they dont patch the alternative minimum tax by december 31st those taxes are going to go up on 30 million americans and if not, and they want to delay it, it would have to force a delay in the entire tax refund season and push that out to may and june, something the irs has been warning these members that they cant happen. So at the very least you will see some small bill likely before january first. The amt. Im just curious about that. That would be for the 2013 income year though wouldnt it . So youre saying, for 2014 youd have to push out the deadline . Im saying the complete opposite. Okay. That patch expired at the end of 2011. Okay. Which means were going to get hit with it now. Got it. What were trying to do in the next week is retroactively fix it. This is how backwards tax policy is. It is also a catalyst to get that. A lot of battles to keep in mind here. Lets hope washington will act based on reason as you put forth. Dan clifton, good to see you. Great. Thank you, melissa. Well, markets are sitting near session lows thanks to of course uncertainty about the topic we were just discussing. Will we go over the socalled fiscal cliff . Well look into what is behind the sell off and take a look at some individual names as well. Right after this. Me, sir im gonna have to ask you to power down your little word game. I think your friends will understand. Oh no, its actually my geico app. See . I just uh paid my bill. Did you really . From the plane . Yeah, i can manage my policy, get roadside assistance, pretty much access geico 24 7. Sounds a little too good to be true sir. Ill believe that when pigs fly. Ok, did she seriously just say that . Geico. Just click away with our free mobile app. Look, if you have copd like me, you know it can be hard to breathe, and how that feels. Copd includes chronic bronchitis and emphysema. Spiriva helps control my copd symptoms by keeping my airways open for 24 hours. Plus, it reduces copd flareups. Spiriva is the only oncedaily inhaled copd maintenance treatment that does both. Spiriva handihaler tiotropium bromide inhalation powder does not replace fastacting inhalers for sudden symptoms. Tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. These may worsen with spiriva. Discuss all medicines you take, even eye drops. Stop taking spiriva and seek immediate medical help if your breathing suddenly worsens, your throat or tongue swells, you get hives, vision changes or eye pain, or problems passing urine. Other side effects include dry mouth and constipation. Nothing can reverse copd. Spiriva helps me breathe better. blowing sound ask your doctor about spiriva. With scottrader streaming quotes, any way you want. Fully customize it for your trading process from thought to trade, on every screen. And all in real time. Which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. Try our easytouse scottrader streaming quotes. Its another reason more investors are saying. [ all ] im with scottrade. Coming up at the top of the hour. Protection of your money as hopes fade in d. C. One of the premier capitalists in Silicon Valley joins us with the social media stock to watch in 2013. And do you dare buy shares of research in motion . Two najarians with two very different opinions and one heated debate at the top of the hour. A couple ponytails going at it, david and melissa, at the top of the hour. All right. Thank you very much mr. Wapner. Lets get to bob pisani with a look at what is moving here. Weve got a lot moving, most of it to the downside. 41 decline to advancing stocks. Very heavy volume. There will be s p rebalancing at the close. It is not the volume were concerned about but the fact were hitting lows for the day. Lets take a look. Remember whats happened. A lot of people are trying to game the system a little bit, buying right after the open, and the hope here is you do this slowly throughout the day and sell as you go into the close. That is not happening. When you go in this direction you break the lows there, that creates a little panic amongst these people because they panic very easily. The inclination is to sit, cover your position fairly quickly as you drop below the earlier lows of the day. That is the safe thing to do. Now you get a little brave and you start dropping much further than that and risk much bigger losses. So that is why it is a little disturbing to see it break below the earlier lows of the day. Lets move on and ill show you some of the big sectors today. Remember the big gainers . Builders, home builders, financials have been the big gainers. They are the weakest part of the market right now. Materials and industrials sort of the risk part of the business also to the down side. Of course your safe havens, your gold and of course the dollar all to the upside right now. The vix, highest level since going back into july. We almost hit 20 right there. Just a little shy at the open. You can see we dropped down, now moving back up here. I wouldnt call this a titanic move but a strong move given how low weve been in the last several months. So is the risk to the upside or to the down side for the rest of the year . A huge debate is going on. I wish i could be less wishy washy. Frankly there is a lot of disagreement, vehement bears and bulls out there. So the upside crowd have been arguing that a deal will likely be announced. They still believe it is going to happen maybe over the weekend or the next few days. The Economic Data slowly improving. We did see that of course with the durable goods numbers. Only six days left. Portfolio managers are unlikely to throw out the baby with the bath water with such good gains overall for the year. There is a very strong crowd arguing that actually the risks are to the down side and the reason here is, and i do think there is a very strong point. There has been very high levels of bullishness and complacency. Hedge funds are net long, longer than theyve been in a long time. Weve been showing you the investor index is showing very bullish sentiment overall. Very low, short positions on the street. The s p 500 has rallied 5 in the past month on hopes of a fiscal cliff deal as well as of course the seasonal play thats going on here. So a lot of debate on both sides. In 2013 our dear friend art cashin, i sat down with him across the street for 15 minutes. We talked all about china, japan, europe, and the United States where the stock market is going to be in 2013. Go to cnbc. Com and you can see on the right side the video screen there, nice talks where things are going. Art has a huge following here at cnbc. A longtime friend of ours. Well deserved. Coming up next vail resorts ceo rob katz. [ male announcer ] you build a reputation by not breaking down. Consider the silverado 1500 still the most dependable, longestlasting fullsize pickups on the road. And now weve also been recognized for lowest total cost of ownership based on important things, like depreciation, fuel, and maintenance costs. Get 0 apr financing for 60 months plus 1,000 bonus cash. Plus trade up for an additional 1,000. From outstanding value to standing the test of time, chevy runs deep. Winter storm draco moving across. Rob, it is prime season. What are your expectations as it gets started . Well, really terrific. Weve gotten over two feet of snow at all of our colorado resorts dumping snow in tahoe for the last couple weeks so the climate really here has changed. Weve seen a big shift from a tougher early season and a really strong experience, incredible conditions right now for christmas. And i understand youre also going to be opening a new gondola. Has that begun and did you have to tear the old one down . Where does that stand . Yeah. We actually had a four person chair lift right behind me and we just installed what were calling gondola one. It is a tenperson stateoftheart gondola. Reduces lines by about 40 . Really moves people up the hill quickly. Has heated seats, leather seats, wifi. Its really stateoftheart for the kind of clientele that comes to vail every year. Your clientele could see their taxes go up a lot starting january first. You know, we ask this of so many ceos. Are you concerned about an impact to your business as a result of taxes going up on everybody beginning next year conceivably . You know, i think what im worried about like many ceos is just getting a deal done. I think American People and our consumers understand there may be some tax increases but i think they want certainty and i think they want to see the two sides come together and do a deal so that people can start planning. Its the same thing we have for our company. Have you seen a lot of season pass purchases so far . Are people going day pass route . Just trying to understand whether consumers are feeling confident enough to actually plan on returning. Yeah. The good news for us is we did see some real growth in our season pass program. It is pretty unique for our company. We do over 40 of our lift ticket sales through season passes and they were actually up 5 to 7 depending on where you looked for the season. So actually, you know, we saw some real strength. No question the early weather here in colorado was a little tough. But now were seeing it pick up as we head into christmas and, you know, more storms on the way. So really shaping up to be a pretty normal, really terrific condition holidays for us. And long term, by this i mean quite long term, are you concerned at all about Climate Change, potentially Global Warming . You know, i think for me Climate Change is more about the planet and i worry about it as a parent and certainly hope that we do the right things to keep our planet healthy and safe for everybody, you know, for skiing i think right now we saw just two years ago one of the most epic snow seasons weve ever had. It is obviously about 10 degrees right here in vail right now so its not something we focus on day in and day out. We think we should be doing the right thing for Climate Change for all of us here, you know, on our great world of ours. All right. Well, rob, good luck in the season ahead. Rob katz vail resorts ceo. Markets are down sharply. Thank you. But off the lows after the break well find out what is ahead for the market next week and how you should be setting up. [ male announcer ] when it comes to the financial obstacles military families face, we understand. At usaa, we know military life is different. Weve been there. Thats why every bit of Financial Advice we offer is geared specifically to current and former military members and their families. [ laughs ] dad dad [ applause ] [ male announcer ] life brings obstacles. Usaa brings advice. Call or visit us online. Were ready to help. More on the markets. What do you make of the reaction today . Were taking our lead from d. C. If you really go back to the charts, since 2007 weve been taking our lead from d. C. So nothing really surprises me. Markets seem to be making the Retail Investor and the institutional guy flow back into equities, definitely holding on to your seat though for the next couple weeks. I think well have a little bit of a rough ride. People continue to buy the market. Yeah. Well, its a hard case to make that people are continuing to buy the market largely over the last month that is true but in todays session it seems people are throwing in the towel and saying maybe were not going to get that deal. If they were throwing in the towel you would see this market below 1400 in the s p, 1395 the big retracement point. I expect to revisit that sooner rather than later. But it just really shocks me that people step up and still buy even on the declining basis, we have had an incredible run. I cant believe were Still Holding on to 1400. What are you doing . You get more short . No. For me what i do is i sell my winners and i continue to but i hold a core group of stocks i really like holding. I bought google, lucky enough to buy it on the huge dip below 700. Still low google. In and out of yahoo, hewlettpackard. You buy them opportunistically trim them when theyre a little over priced and ahead of d. C. And i think that is what the average investor should do. The other thing going on potentially and we talked about this last night is people are walking gains from winners and reestablishing the position or establishing a new cost basis. There is a little bit of that going on into the end of the year. All jockeying around and counting at this point because no one understands what it is going to be like going into 2013. But i think you should really start to think about do i really want to own this company for the longer term . If youre thinking about recession what does well in recession . Utilities. So people even though it is a little counterintuitive when worried about dividends, i think utilities, probably a place to be looking. If youre really going down that road what does well in a recession . I