something today because stocks are higher after what has been a rough week. "power lunch" counts down to the president and that begins now. scott, thank you. a busy hour ahead. breaking news of course, as we've been saying, president obama set to lay down his starting points on the fiscal cliff debate and what the economy needs to stay in recovery mode. a setting rich in theater coming just hours after the speaker of the house, boehner, made his case. >> indeed he did, ty. thank you. i'm sue herera, along with my partner tyler mathisen. john harwood and eamon javers are in washington as we countdown to the president's statement in a few minutes. we're hearing that the white house has invited congressional leaders for a meeting at the white house next week on the fiscal cliff. that seems to mean, john, to me anyway, a little bit of progress. what type of tone do you expect, john, the president to take in this next address? >> sue, i expect him to be

conciliatory and reaching out to republicans the way john boehner has tried to strike that mode on capitol hill. two different white house specialists just told me the president will walk out here and announce he's invited the bipartisan leadership of congress to the white house next week to begin talks on the fiscal cliff. i have to think there is a possibility that they can really make some headway, if not solve the problem before the end of the year. at least get started on a solution when you have john boehner talking about raising revenue, not just revenue from growth but revenue from actually raising more money from people at the top. that is a place where the white house potentially could find some common ground, guys. >> did he really say that, john? because as i was listening to it, i was listening for the signals that suggested that what the speaker said day before yesterday and then today was -- is he really going to go for more revenue as an active part of tax reform, or more revenue

merely as a derivative of greater economic growth? >> i think that if you look at all the statements the speaker has made, tyler, i believe that he has said he's willing to take new revenue from closing exemptions and deductions and from economic growth. so i think the key there is both. this is a door that was opened by chuck grassley, the republican veteran member of the finance committee a few months ago saying that republicans needed to accept an absolute increase in revenue. that is to say, static revenue in budget lingo in washington, in addition to revenue from growth. and if that's where john boehner has gone, it sounds to me like that's where he's gone, that is promising for the negotiations. >> eamon javers is with us as well. eamon, do you agree with john harwood's assessment? is that what you heard as well? >> yeah. i think john has really nailed it here. i think you have to go at the exact words that speaker boehner said when he was talking about what he is opposed to here when he's talking about what he

doesn't like. he keeps saying we're against raising tax rates. he doesn't not say we're a against raising taxes. i think there is an important nuanced argument here that the speaker is making which is that he is against raising the overall rates but he's not opposed to raising more net revenue in to the federal government by closing some of those loopholes, some of what they call tax expenditures in the code. if they can find enough of those to boost overall revenue while lowering the official rate, it's going to have a net impact of making some people pay more taxes, no question about it. but boehner will be able to claim to have had a political victory in bringing down tax rates. there's a linguistic thing going on here with boehner that you have to really listen to the exact words of what he is saying. >> how do we get past, john, the idea that the president basically campaigned -- we had an election and he may want to say, hey, guys, aren't you seeing that i was re-elected here and i have been saying all along that i am going to let those rates on upper income

earners, those lower rates expire and return to what they were before the so-called bush tax hikes. is he ready to give potentially on that if the answer is, well, maybe we can let rates stay where they are so long as the share of taxes or additional revenue comes from the ultra affluent, in his parlance, i suppose. >> i don't know that he's going to go there, tyler. i'm just saying that i think on principle, so long as additional revenue comes from that group, i don't see why the white house would not be able to go there. you are correct, he has campaigned both in his statements as president and as a candidate for two years saying those top rates are going to go up. he has a pretty strong hand. 60% of americans in the exit polls said they think taxes should go up. but there's more than one way for taxes to go up. i think if you're a president looking to negotiate with republicans, try to get off the dime, it is a possibility that going on exemptions, deductions,

loopholes through tax reform is a way to go. the white house has always been interested in tax reform but has made the case that it is not really achievable other than on the corporate side. even on the corporate side it is difficult. but if they get signals from the house and senate that in fact some sort of significant tax reform might be possible, i think you could see an opening there. >> very interesting. the dow jones industrial average gained a little strength after mr. boehner's comments. they are interpreting it, according to traders i've talked to anyway, as an opening, if you will, which john, you really just mentioned. but eamon, we expect this event to happen momentarily, but how much influence do you think, if any at all, the congressional budget office detailing what might happen to the unemployment rate might have on these particular discussions? i mean they said that if all -- if we go over the fiscal cliff, that we might see an unemployment rate spike to above 9%. do you think that that pushes it

a little bit for both sides to really get together and get something done? >> well, look. unemployment over9% is definitely an eye opening figure. but i think the folks in washington know this is a bad deal. they know it is a worst case scenario if we go over the fiscal cliff. there are some in both parties who argue that it might be best to actually go over the fiscal cliff for a variety of tactical and ideological reasons but most folks in washington, sort of where the center of gravity is politically, they think the fiscal cliff is a bad idea and they don't need necessarily another report from cbo to underscore that for them. i think what we're seeing now is this opening from boehner and i think it is probably easier now for barack obama to give up on the raising rates idea as long as he's getting more revenue from the republicans. that's probably something that is easier for the president to do in this case than it is for boehner to do. so i think what the white house is going to do here is try to figure out what can we offer now as a very visible sign that we're willing to compromise

here, we're willing to offer something of our own. they need to match what boehner's just done. >> eamon and john, let's reset the scene there in the east room of the white house, as some individuals described as ordinary americans take their positions behind the podium where the president will appear, we're told, within about 90 seconds to discuss the state of play on the fiscal cliff. as you certainly know if you've been watching cnbc, as we sort of push politicians on both sides of the aisle to rise above partisan rancor and lockstep ideology, this is another sort of step in that drama. earlier today, speaker boehner once again saying that he was open to the possibility of increased revenue if for the -- for the federal government if it took place against the broader context of tax and entitlement reform. and there is the president and the vice president.

>> thank you. thank you, everybody. thank you. thank you very much. thank you so much. thank you. thank you very much, everybody. everybody, please have a seat. thank you. well, good afternoon, everybody. now that those of us on the campaign trail have had a chance to get a little sleep, it's time to get back to work and there is plenty of work to do. as i said on tuesday night, the american people voted for action, not politics as usual. you elected us to focus on your jobs, not ours. in that spirit i have invited leaders of both parties to the white house next week so we can start to build consensus around the challenges that we can only

solve together. i also intend to bring in business and labor an civic leaders from all across the country here to washington to get their ideas and input as well. at a time when our economy is still recovering from the great recession, our top priority has to be jobs and growth. that's the focus of the plan that i talked about during the campaign. it's a plan to reward small businesses and manufacturers that create jobs here, not overseas. it is a plan to give people the chance to get the education and training that businesses are looking for right now. it's a plan to make sure this country is a global leader in research and technology and clean energy, which will attract new companies, and high-wage jobs to america. it is a plan to put folks back to work, including our veterans, rebuilding our roads and our bridges and other

infrastructure, and it is plan to reduce our deficit in a balanced and responsible way. our work is made that much more are urgent because at the end of this year, we face a series of deadlines that require us to make major decisions about how to pay our deficit down. decisions that will have a huge impact on the economy and the middle class, both now and in the future. last year i worked with democrats and republicans to cut a trillion dollars worth of spending that we just couldn't afford. i intend to work with both parties to do more, and that includes making reforms that will bring down the cost of health care so we can strengthen programs like medicaid and medicare for the long haul. but, as i've said before, we can't just cut our way to prosperity. if we're serious about reducing the deficit, we have to combine spending cuts with revenue and that means asking the wealthiest

americans to pay a little more in taxes. that's how we did it -- that's how we did it in the 1990s when bill clinton was president. that's how we can reduce the deficit while still making the investments we need to build a strong middle class and a strong economy. that's the only way we can still afford to train our workers or help our kids pay for college, or make sure that good jobs and clean energy or high-tech manufacturing don't end up in countries like china. now already i've put forward a detailed plan that allows us to make these investments while reducing our deficit by $4 trillion over the next decade. i want to be clear. i'm not wedded to every detail of my plan. i'm open to compromise. i'm open to new ideas. i'm committed to solving our

fiscal challenges. but, i refuse to accept any approach that isn't balanced. i am not going to ask students and seniors and middle class families to pay down the entire deficit while people like me making over $250,000 aren't asked to pay a dime more in taxes. i'm not going to do that. and i just want to point out, this was a central question during the election. it was debated over and over again. and on tuesday night we found out that the majority of americans agree with my approach. and that includes democrats, independents and a lot of republicans across the country, as well as independent economists and budget experts. that's how you reduce the deficit. with a balanced approach. so our job now is to get a

majority in congress to reflect the will of the american people. and i believe we can get that majority. i was encouraged to hear speaker boehner agree that tax revenue has to be part of this ekwigqua, so i look forward to hearing his ideas when i see him next week. let me make one final point that every american needs to hear. right now, if congress fails to come to an agreement on an overall deficit reduction package by the end of the year, everybody's taxes will automatically go up on january 1st. everybody's. including the 98% of americans who make less than $250,000 a year. that makes no sense. it would be bad for the economy, and would hit families that are already struggling to make ends meet. fortunately, we shouldn't need long negotiations or drama to solve that part of the problem. while there may be disagreement

in congress over whether or not to raise taxes on folks making over $250,000 a year, nobody -- not republicans, not democrats -- want taxes to go up for folks making under $250,000 a year. so let's not wait. even as we're negotiating a broader deficit reduction package, let's extend the middle class tax cuts right now. let's do that right now. that one step -- that one step would give millions of families -- 98% of americans, and 97% of small businesses the certainty that they need going into the new year. it would immediately take a huge chunk of the economic uncertainty off the table and that will lead to new jobs and faster growth. business will know that

consumers, they're not going to see a big tax increase. they'll know that most small businesses won't see a tax increase. and so a lot of the uncertainty that you're reading about, that will be removed. in fact, the senate has already passed a bill doing exactly this so all we need is action from the house. i've got the pen ready to sign the bill right away. i'm ready to do it. i'm ready to do it. the american people understand that we're going to have differences and disagreements in the months to come. they get that. but on tuesday they said loud and clear that they won't tolerate dysfunction, they won't tolerate politicians who view compromise as a dirty word. not when so many americans are still out of work, not when so many families and small business owners are still struggling to pay the bills. what the american people are looking for is cooperation,

they're looking for consensus, they're looking for common sense. most of all, they want action. i intend to deliver for them in my second term and i expect to find willing partners in both parties to make that happen. so let's get to work. thank you very much, everybody. thank you. all right. >> president obama with his opening play with respect to the fiscal cliff and notably, sue, he said i'm not wedded to every detail in my plan. i am committed to being open. he went on to say, though, i am not going to do anything that is not balanced. we have to ask people like me to pay a little bit more. he then went on and talk about the loomingics spiration of the so-called bush tax cuts and reiterated his position that those rates should be extended for those earning less than $250,000 a year, but not for those above that.

>> i think, you know -- i'm not so sure how conciliatory the president sounded, at least to wall street, because we dropped 40 points when he said basically he refused to accept any approach that isn't balanced and that the majority of americans agree with my approach. we've come back off of those lower levels, john harwood, but i don't think that wall street views the president as bending all thatch. what was your interpretation of it? john? >> sue, he did not sacrifice his position that top rates should go up but he did not insist on that either. what he said was, i'm open to new ideas and he said he wanted more tax revenue from the top. that is not to the same as drawing a line on tax rates as an irrevocable position. so i thought the president was trying to speak from a position of strength.

that's why he had average people there reflecting the fact that he just won the election but i think he left the door open precisely what we were talking about before he came out which is some sort of negotiation around the idea of higher revenue from top earners, not necessarily higher rates. >> i heard the same thing, john. let me bring eamon in on that. his very considered avoidance of the word "tax rates," eamon, may be, might'nt it, where the compromise possibility lies. in other words, more revenue comes in, more of that revenue comes in from upper income earners, but it does not necessarily involve a heightening of tax rates. >> tyler, that's going to be the crux of this deal whether it comes together later on this year. you can see both speaker boehner and president obama trying not to box themselves in to corners here. president obama here not offering as obvious an olive branch to the republicans as boehner did on his side. boehner's was a little more a

abject in tone. the president talked about being willing to hear some options on reform in health care. of course reform means cuts in this context. he's talking about entitlement cuts there, even obliquely. that is a concession to the republicans so that seems to set up these negotiations as a deal between entitlement cuts and revenue raisers. i think we can parse through the nuance here an see where this thing is going. >> john harwood, do you think, given what we've heard from mr. boehner this morning and now the president, do you think they can pull this off and get this done by the end of the year knowing so well the way washington works? >> i think it would be very difficult. i wouldn't bet on that. what i would bet on is a start, a signal, the beginning of a process that would result in a solution some time early next year. can always be surprised. i have to say, i was surprised

by how quickly john boehner after the election extended an olive branch to the president. so not out of the question that they could do it but i would not expect that, sue. >> john, we're going to listen to the remarks earlier today of john boehner. this is sort of -- if it were a test question, it would be compare and contrast. let's listen to mr. boehner. >> the problem with raising tax rates on the wealthiest americans is that more than half of them are small business owners. we know from ernst and young it would slow down our economy. >> he's saying the problem with raising tax rates. the minute you start to hear speaker boehner talking about raising taxes and not following it up with that word "rates," that means the deal is maybe getting a little further away. as long as he is talking about the problem being raising tax rates, i think you can see a path to a deal still here.

>> john? >> i agree with that. i think that's exactly the point. that's why boehner said "rates," and it is why obama said "revenue." they're feeling their way toward a way to have a conversation, not easy. we've seen for the last two years it is not easy. but the climate is better now than it was before the election. >> all right. folks, thank you very much. john and eamon, we appreciate your being with us. sue, over to you. we're going to take a look at how the floor of the nyse is performing. we did lose a little strength when the president was speaking. we've almost regained it, about half-way back. we'll talk about that. >> plus, we're going to have two members of congress weigh in as well, one from each side of the aisle. you know who has thoughts on the cliff? jpmorgan ceo jamie dimon. he's going to be with us on "the closing bell" today at 4:00 p.m. back in two minutes. if lawmakers do not come to a deal on the fiscal cliff, the

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economy to go off the fiscal cliff, the impact aid program which supports low income school districts would be cutly almost $100 million affecting 52,000 students. welcome back to "power lunch." let's check the stock market's reaction to the discussions in washington. and the president's statement. art cashin is director of floor operations with ubs financial services. art, how do you feel after the president's statement and mr. boehner's comments for that matter? the dow was up 63. it's now up 20 points. what's it telling you? >> well, really interesting phenomenon we're seeing here in the power of the press, particularly your media and that was, while boehner was speaking the market traded rather nervously and in fact gave up some small ground. when the president came out to speak the market again went nervous and gave up over half of its gain. in both cases it was only when people like john and eamon came out and said, it's still open,

there is still some room for conciliation that the markets began to take heart. now they're sorting through the idea, how much of this was prenegotiation posturing. was the fact that the president spoke in front of a room full of supporters rather than reporters a way to say, hey, i got elected and you guys have to pay more attention to me. so for now, they're concerned how much is just posturing before the negotiation and how much is real muscle with i'm not crossing this line. luckily nobody set a line in the sand. otherwise we'd be down 200 points. >> that was my next question. what are you expecting in terms of market volatility as these discussions continue? the president saying that he has invited business leaders an leaders of both parties to the white house next week to discuss it. i would think that's a positive for the market but how much volatility is inherent in this particular period of time? >> well, it will continue to be.

again, if somebody takes the wrong word or goes in the wrong direction -- what the market does not want to hear is that people have decided to fold their arms and that there is the line in the sand. we have all heard exactly what you guys are talking about, one is using the word rates and one is using the word revenue, and that can find a common ground. if it begins to look like that's not going to happen, then we'll see even more vulnerability. so for now nothing solid for the bulls to hold on to except hope and always a concern that somebody says the wrong word. >> all right, art, thank you so much. talk to you a little bit later. art cashin. now a "market flash" with bertha coombs. >> this is a day when we only have three components in the s&p 500 that have hit new highs. among them is adt. it's the home security firm. it was respun off from tyco just last month. it is at an all-time high, up nearly 20% since it was spun off last month.

it will be reporting earnings the tuesday after thanksgiving. for the week it is a big winner as well. while the s&p is down about 2%, adt is up about 3%. >> thank you very much. you heard the president just a few moments ago. now for a republican response and we have representative scott garrett, a republican from new jersey, the vice chairman of the house budget committee. mr. ryan is the chairman of that committee. congratulations, by the way, on your re-election. glad to have you here. >> thank you very much. >> were you encouraged at all by what the president said? >> i'm encouraged that he's saying he wants to reach across the aisle and try to come to agreement. just before i came on, i got the little "rise above" logo. >> we'll be happy to see you wear it. i'll help you put it on. >> that's good because we didn't see that quite candidly during the last year or so from the administration. the republicans came out with specific plans on how to deal with this and we never got that. if he's coming to the table now, that is great. that's when the american public is looking for. all the talking points out there

say that's what we need do. >> we've been trying to parse language, the speaker's language, the president's language, the distinction between rates and revenues. >> okay. >> tell -- give me a guide post here. what are these guys saying? >> when you talk about revenues as speaker boehner was saying -- i think did he extend the olive branch, if you will -- he is saying if we can do some of the reform we've been talking about for the last year-and-a-half or two years, you could actually see revenue go up in the country. why? because gdp has been lower in the last several years and the amount of revenue coming in is around 15%, 16% of gdp. it can get up to higher levels that it used to be, around 18% or 20%. you see that happen? that means as the economy expands, so does revenue into washington and you'll see more money flowing into the government. >> is he saying merely that in the context of a tax reform and an entitlement reform that he's proposing here, that the heightened revenues would be a derivative of that reform rather than a target of some of that

reform? in other words, you see what i'm saying? spl sure. i think he's saying -- i can't speak for the speaker. i'm not the speaker. he doesn't want to see rates go up, and at the same time when you say that, i would say that if you just simply do away with a whole series of deductions or credits, my effective rate goes up at the same time. so if you do away with deductions and credits which republicans have proposed a long time ago, you have marginal rates that have to go down proportionately so that you don't begin to see an effective increase of taxation on the economy. remember one thing that president obama said when he was candidate obama last time. he said during a recession is never the time to raise rates on anybody. so do you not want to raise rates either just by the number going up or by effective rates -- >> of course the congress at budget office yesterday saying if we go over the fiscal cliff, that we will go into effectively another recession. and unemployment will go up. scott garrett, final thought. >> i would say we've already gone over one fiscal cliff. what's coming on january 1 is

not a cliff but a wall of higher tax rates. we've already gone over the fiscal cliff of spending already by this administration. >> congressman garrett, thank you very much. sue? the dow jones industrial average has now moved into negative territory. we are down about ten points on the dow jones industrial average. where's the money going? well, marginally it is going into the gold market. gold prices are closing right now. i think about a $5 gain there. sharon epperson is track being the action at the nymex. >> gold is above $1,730 an ounce right now at a three-week high. again the fiscal fears here in the u.s. are definitely supporting the gold price. we have seen gold perform relatively well this week. in fact, it's probably one of the best performing commodities here at the nymex and we are seeing new buyers coming in to the gold market as well. that's what traders are telling me looking at contracts beyond this year, into 2013. so that is also supportive. copper prices meanwhile are falling even though we got positive data out of china on industrial production. the fears again of the fiscal cliff certainly outweighing what

we're seeing in china at the moment. there's been a lot of action the last hour or so in the energy market, particularly in rbon gasoline futures here. keep your eye on natural gas. it is going to get a little warmer here on the east coast causing a little slide in gas futures. bertha coombs has a "market flash." >> standard energy stock hitting a new low today despite they did report record production yesterday. one of their big shareholders, tpg axon hedge fund is calling for big changes there on the board and the ouster of the ceo and founder tom ward. the company says it is trying to create more shareholder value but they dispute some of the claims made in the letter by that hedge fund. nonetheless, one more time. tom ward was the co-founder of chesapeake energy along with aubrey mcclendon. you know he's embattled as well.

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welcome back to "power lunch." we're on the downside right now on the stock market. let's check the trading action down at the nyse. mary thompson is on the floor for us. >> a fast fade in the markets in the wake of the president's -- or during the president's comments, i should say. some here on the floor saying the president really didn't take a conciliatory tone at all and that he was basically presenting himself as a winner, most notably pointing out that we have to ask the wealthiest to pay a little more in taxes. it was a central question during the election. a majority agree and now we have to get a majority in congress to bend the will of the people. s&p 500 as the president started speaking was up 11 points. right now it is holding on to a gain of just about three. nasdaq was up 30, it is only up 14 now. the dow is up 60, now down just about four points right now. hmos taking a bit of a hit as he said we'll look at reforms to cut the cost of health care.

banking index has been a leader throughout the day. but it, too, along with the broader markets pulling back during the president's comments. consumer discretionaries and utilities have been laggards throughout the day. ma mody is at the nasdaq. >> we are off the highs. the nasdaq up about 15 points. apple seeing a little bit of a relief rally, though to put that into perspective, it is still trading below its 200-day moving average and it is still officially in bear market territory. in order to get out of that it's got to cross across 564. right now we're trading at 548. qualcomm extending its gains after that better than expected earnings report yesterday. also want to point your attention to nvidia. it reported earnings yesterday. they weren't very impressive, lou however, it did initiate a

dividend. an interesting time given the uncertainty around the dividend tax reform. >> seema, thank you. to chicago and rick santelli tracking the action at the cme. >> i really do think that the president and obviously the market movement was all predicated on the center of the universe being stock prices. if you look at intraday, 1:00 eastern, interest rates moved a little lower but really the big move on interest rates was earlier in the session when you saw a 10-year note touch a 1.57% yield. the s&p 500 chart clearly shows a downside to equities that probably was the reason you had a downside to the trade in terms of yield on the fixed income. last, but not least, you see that the dollar index did kick up a bit. traders saying they're not sure exactly what's going to happen with regard to fiscal issues, but without a doubt they continue to pay attention as taxes have a big outsized influence on the state of the economy. back to you, sue. >> rick, thank you very much. president obama, you saw him just a few moments ago, pushing

for a balanced approach to resolving the fiscal cliff. is this possible with a divided congress? representative peter welsh is a democrat from vermont and is the chief deputy whip. he says democrats should be willing to go over the cliff to force a deal with republicans. congressman, the congressional budget office says that might push the unemployment rate to above 9%. are you ready for those consequences? are you ready for the loss of jobs if indeed we do go over the fiscal cliff? >> no, i'm not. my position is this -- that the best thing, the most responsible thing, is for us to get a deal, a balanced deal. that's eluded us for the past two years. the congressional leadership, speaker boehner and the president are talking about cooperation. so if they're successful in negotiating a deal, that's, by far, best for america, best for the economy. my position though is that let's hope they succeed but if they don't, we have to have a plan b. and one option that i find unacceptable is simply erasing

that january 1 date and once again see congress avoid doing its job. my alternative, if we fail to reach a negotiated agreement in lame duck, and that's a tall order, would be to have the january 1 date take effect, and then we would all be under enormous pressure to get a balanced approach that included revenues, restraint in the pentagon and domestic discretionary. >> we saw the stock market sell off by about 40 points during the president's speech. wall street was convinced after mr. boehner's comments earlier this morning that some are interpreting as an olive branch, that perhaps there would be a move towards more common ground. now we see that wall street is interpreting the president as not as conciliatory as some thought he would be. do you think that we will be able to get some sort of agreement by the end of the year or given what we've heard this morning do you think it is further away than ever? >> i don't think it is further

away than ever but i don't know that it will come by january 1. there are practical challenges ahead. i was very pleased with speaker boehner's comments. in my view he wants to reach an agreement. his challenge is the conference that when he was doing the grand bargain negotiations with the president. that was the high point of hope. it fell apart once he went back to his conference. so if they are able to keep an agreement and president obama clearly wants to, that's great and that's what should be our first objective. but there are enormous challenges. what's the level of pentagon spending. the republicans have a totally different view on entitlement. then there still is the revenue battle. so i hope they do, but if they don't, i do not want to see congress once again blink and just evade its responsibility by pretending that this is something that can be kicked down the road. >> where are you specifically willing to compromise and where are you not willing to compromise on this issue? >> well, i'm willing to compromise everywhere. there were 100 of us in the

house. 60 democrats and 40 republicans who sent a letter to the super committee when they were trying to come up with 1.2 trillion inn in debt reduction that said, go big. go for $4 trillion. we had democrats saying that that meant we had to have reforms in the way we do our entitlements, it had republicans saying we had to include revenues because we obviously knew that the only framework that has the potential for political and substantial success is with everything on the table. and that's the key. if everything's on the table, then all of us are going to have to give something. all of us, i believe -- republicans and democrats -- have been hearing during this election, why don't you guys get together and get something done? >> all right. thank you so much for joining us. congressman peter welsh, we appreciate it. time for a "market flash" with bertha coombs. >> we're watching google. a number of reports say that it appears there has been some sort of disruption to accessibility in china. google, of course, over the last couple of years has stopped censoring access in china.

appears this morning for several hours that china access was down according to several reports and the google transparency report website that looks at such things. we're waiting for confirmation from the company on what the situation is. back to you. so, what does a company do when it loses its biggest name? julia boorstin is tracking just one such company. hi, julia. >> hi, sue. well, facebook may have tripped when it went public, but did its ipo leave private trading -- private share platform -- second market which trades private shares in even worse shape. i'll have that after the break. ♪

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so what's your next steak going to cost you? and 007 is back but is he better than ever? one thing's for sure. skwot fuller's taking product placement in movies to whole new heights. we'll debate that, and plenty other things coming up top of the hour, guys. back to you on "power lunch." >> thank you, mandy. see you at 2:00. second market. it's become a hub for private companies that are considering going public. facebook was a charter member of that organization. now julia boorstin has exclusive information on how second market is doing now that they've lost their biggest name. hi, julia. >> reporter: that's right, sue. we have the exclusive data for second market's third quarter. facebook's ipo didn't steal the majority of second market's trading activity. trading activity dropped by about $100 million between the second and the third quarters. but the fablt that facebook's ipo along with groupon and zynga's went so badly might actually give second market a second chance. those disastrous ipos and the impact they've had on valuations

are prompting companies to hold off on an ipo or a sale. so they're placating employees whose net worth is tied up in the stock. company led events are nearly all of its trades now. 80% of buyers were companies and 75% of sellers were current employees in the third quarter, a sharp contrast to the facebook era when it was nearly all former employees cashing out and very few companies buying. the private companies are getting older and bigger. the median company trading on second market has 600 employees and a market cap north of half a billion dollars. and these are no longer social media companies. 70% of deals were in consumer electronics companies and nearly 20% were for e-commerce companies. so the question is what do buyers want. second market is for accredited investors. it is no longer a consumer web and social media. biotech and pharmaceutical companies took the first place with over $77 million of interest from potential investors. sue?

>> julia, thank you. there may be no crying in baseball but what about politics? president obama along with a bunch of other politicians showing a lot of emotion lately. so is it now okay to weep in washington? we'll talk about that. and tonight on "mad money," a salute to america's veterans. aig's robert benmosche will be on "mad money" tonight at 6:00 p.m. and 11:00 p.m. eastern time. back with more "power lunch" in a moment. tdd#: 1-800-345-2550 let's talk about low-cost investing.

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it took picasso under three hours to paint "still life with tulips." $41 million shelled out for that painting last night. portrait was one of the standout at sotheby's big action in new york this week, along with several other picasso works proving that the artist can still pull in very big bucks

from very big buyers around the world. all totalled -- sthat's pretty darn good. cnbc.com's editor is here. president obama setting the stage for a showdown with republicans over the fiscal cliff. are more party clashes about to erupt. what did you hear, john? >> i didn't hear an obama who is about to cave on any of his points. and i haven't heard any caving from the republicans. so i think we're going toward a clash. think this was a vote for a clash. election put us right back in the situation we had before and i don't think there's any difference. this was not a compromise election. it was a clash election. >> i think the president does feel he has the mandate from the voters.

to me he was throwing down the gauntlet saying he appreciated mr. boehner's comments, but that the majority of americans agree with him and that those of us who make more money than others will have to pay -- >> the house republicans think that they got the majority. they say, look, we're in control of the house. don't tell us that you won that election. we did, too. so everybody's going to stick to their guns. >> i think that's why we're seeing the dow jones industrial average all over the board today. >> as you point out, sue, the stocks went way down right when he was speaking. then they came back, curved up a little bit. next, a big drop in groupon as growth slows. does this signal the end of the daily deals model? >> i think they've always had had a pretty tough model to work with here. it's a crowded model. everybody else wants to get in on this thing, too. they had a lot of room to run in the beginning and that room has just been chopped out now. >> i think you're absolutely right. we see the likes of guilt group having to kind of rejigger their

business model as well. i think it is a tough space, i think it is a crowded space and a lot of people are wondering whether or not this companies survives -- >> have you ever done anything on groupon? i confess, i have not. >> not just groupon but living social and i get a lot of these things but i can't remember the last time i even opened their e-mails. i get them, they just go in to my in box and i end up deleting them. >> that's the problem. that speaks volumes. >> people use it a couple times, never come back. >> if the net editor is -- digital carney isn't there! carney, the magnificent. finally, tears with no fears, at least in washington where politicians are no longer seemingly afraid to openly show their emotions. yes, we know -- >> there it is. "tears for fears." that takes you back. >> remember 1968, i believe it was ed muskie wept -- >> i don't remember 1968, tyler. but i will say -- >> oh, will you stop that!

really? >> i don't think we need more crying in washington. i think if anything, we could probably use a little more stiff upper lich ap and a little less water falling from the eyes. >> i think it is much more acceptable now for a man to cry, whether they're in political office or not, than it was when muskie -- >> i have to tell you, if you come out, hang out with my friends a little bit, you're not going to see a lot of crying. >> what are we going to see, john? >> i don't think that -- >> if you go over the fiscal cliff, you will. >> i just -- i don't think you're going to have a lot of boardroom ceos crying, investment bankers don't cry at their desk. politicians might think -- >> i've seen some investment bankers crying at their desks. i have. >> usually on the way out the door. >> or on the wrong side of a deal. let's move over to bertha coombs for a "market flash." >> we're watching jcpenney, the

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let's give you a snapshot of where the markets stand right now couple minutes before 2:00. dow industrials -- really doesn't tell the story, higher by eight points, nasdaq by seven. s&p by five. >> we started the day under some pressure, then we came back and moved to the high of the day up about 60 points. when mr. boehner came out earlier and some say offered an olive branch. we dropped 44 points when the president took what wall street is interpreting anyway as a harder line onnen c econcession the republicans. the net-net part of that is to washington. wall street wants you to make a deal. wall street does not want to see us go over the fiscal cliff. so for what it's worth -- get