♪ >> four more years! four more years! four more years! stuart: no change. pivotal election leaves the balance of power in place but democrats gained the upper hand. good morning, everyone. 50-48 is the popular vote. 303-20 sick in the electoral college with florida still not

called. four more years. democrats gained 3 to seek in the senate, republicans controlled the house. that is where it stands now. democrats have gained clout and leverage. what now? obamacare goes forward, taxing creases very likely and so does a lot more debt. tough to oppose a tax-and-spend president who just won reelection. as for stocks, selling off. this is the day after the addition of "varney and company". th real vice, for real goals. the us bank wealth management advisor can help you. every step of the way. from big steps, to little step since 1863 we've helped guide our clients, so they can take the steps to help grow, preserve, and pass along their wealth. so their footsteps can help the next generation find their own path. all of us serving you. us bank

>> tonight in this election, you the american people reminded us that while our road has been hard, our journey has been long, we have picked ourselves up. we have fought our way back, and we know in our hearts that the united states of america, the best is yet to come.

stuart: he said it, you heard it. the best is yet to come. how does another term translate for the economy? the president wants take increases on the wealthy and has more leverage to do that so higher taxes as part of any deal on the fiscal cliff. then there is the point. $16 trillion now going to $20 trillion under the president's plan. ed butowksi is with us. do you agree? more taxes, more debt? >> without question. more taxes means less money to grow, less money to grow for small business owners, less jobs, more printing of money, costs go higher. when you print more money your costs go higher. stuart: the economy. what happens to the economy? if we get higher taxes and more debt? >> more of the same but a little worse because we have this economy spiraling out of control negative. stuart: more taxes, more debt and you don't like what it will do to the economy. but you are restrained the day

after. >> i am working hard to be constrained. stuart: you may event later. thanks very much. let's move on. so much for the romney rally. it is gone. with stocks weighed down, is this the obama sell-off? are other factors involved? the dow will open lower. some industries that taking on the shin, telling the financial story of this election coming up next and so is karl rove. what went wrong for romney? he has an answer. >> this election is over but our principles indoor. i believe the principles upon which this nation was founded are the only sure guide to a resurgent economy and new greatness. 4g lte is the fastest.

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such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. stuart: we are 50 seconds from the opening bell and when it rings you can expect the dow jones industrial average to go down about 120 points. yesterday it was up 130 and some of us were calling it a romney rally. did it work out? is today and obama stock? there's one other factor we have to bring to your attention. around 7:20 eastern time this morning the man who runs european central bank, mario groggy -- mario draghi said

european financial crisis about which we said nothing for about the last three months apparently is beginning to hurt the german economy and that is serious news and bad news for the stock market. is it the germans? is it an obama sell-off? i don't know but when that bell rings and it is raining now you will see the dow dropped 120 points from yesterday. we ought and running. the opening trend is to the downside. a loss of 20 points. ten seconds worth of business. watch it go down 100. governor romney was a friend of a coal industry and cold countries were disappointed at the obama victory. how did coal stocks open? nicole: coal stocks terrible this morning. look at names like arch coal, financial, peabody energy, you might remember romney said i love coal and the next day coal stocks were flying. that is not the case today with

president obama back in office selling off. stuart: coal co. tucker's financial victims of the election yesterday. i want to move on to at&t, putting $14 billion in wireless networks. the stock is moving. nicole: all little pressure this morning, basically you can see the stock with the down arrow expanding wireless broadband networks, $40 billion in the investment. at the same time raising the dividend. the commitment to the future. stuart: when you raise dividend and spend $14 billion and down goes the stock. hold on. we are down 120 points for the dow industrials as expected. another stock alert. very likely we will seek a onerous banking regulations. dodd-frank going to stand and bank stocks are lower this morning. look at percentage losses, 2% down from big names that you

know. next case. shall we start the post-mortem? start with the last rasmussen told the released yesterday. governor romney, president obama neck in neck, 49 for romney, 48 for obama. last night when all the numbers were in the let durrell college showed a much bigger gap. the president took 3 and 3, ronny 206 with florida and counted. karl rove, former adviser to george w. bush, was all over the place on television the last three years i do believe. so tell me. >> almost as often as stuart varney. stuart: what went wrong? >> a lot of these raises were tight and fell to obama. one is tactical. this is mostly a tactical election. they had very good ground game and played defensive ball the entire time but essentially they

got most of the people who voted for him last time around. he is the first president to win a second term with a smaller percentage of the vote that he won in his first election. only two stake in the union, hawaii and mississippi where he increased his vote and did so at less than 1/4%. stuart: i find it hard to swallow that a president is reelected who has a failed record in most areas of policy, but he is reelected. i cannot call that a tactical loss. >> two strategic things. on the issue of the economy and exit polls will not be correct until noon today, but if you're a top issue was the economy, 59% of people said the top issue was the economy romney won 51-46. we should have done better. we need to make a better case for consistent economic policy. stuart: economic policy was the key issue, and republicans still

loss does that mean things like social issues were a lot more important this time around than you expected? >> they were less so. would manage its characteristics. a vision for the future, 29% of voters said was the most important characteristic. ronny 54-45, should have done better. shares my values, a 55-42. pretty good number to that question. strong leader. 61 romney, 38 obama. cares about people like me. generally i can to not worry about that question because it is generally 55-45. this does 81 obama, 18 romney. he was a rich guy who didn't care about ordinary people and that made it hard for him to make the economic case. the key moment was may 15th through june and july and august when he was on the receiving end of all kinds of ugly stuff about being capital, being a rich guy. in a fact he responded and i didn't think it would be as

powerful but when you get a number like that you have a lot of people resistant, still felt he is a rich guy who doesn't care about me. stuart: you do not share my view which is a fundamental view that america has changed? in the last four years we have become more like europe and the majority of people want stuff from the government and the other group to pay for it. that is a fundamental shift in you don't think i am right. >> i disagree with you to a degree. we have become more dependent on government over the last four years but i don't see it being a majority of the american people. we save 47% of the american people don't pay federal income tax but a lot of people don't pay federal income tax are older americans living on social security and accumulated earnings of a lifetime and arts scared to death about the debt. stuart: 47% in fox news exit polls last night, 47% say they want to tax the rich more.

[talking over each other] >> another question was do you think we should be raising taxes when the economy is fragile and i bet you a dime to dollars it would have been 60-40, should be raising taxes. independent swing voter the cable holding conflicting opinion that the same time. they say tax the rich thinking it is donald trump and don't raise taxes on anybody because it is not the time to be doing it and they are fully capable of holding those opinions. stuart: what will you do the next four years? [talking over each other] stuart: a great pleasure. thanks for being on the show today. let's take a look at a few more issues on about last night. first cup, a tax proposed by governor jerry brown in california, tax increase. wouldn't you know, president -- residents of the formerly golden state voted for governor brown's proposition, proposition 13. they are going to get a tax increase. michigan, voters rejected a proposal that would have changed the constitution and guarantee employees the right to organize

and collectively bargain. a loss for the unions in michigan. colorado, they voted for the use and regulation of marijuana recreation league. 53-46. more on that with the judge who is celebrating this.com. he is libertarian. we want to dig deeper on these numbers from yesterday. from the exit poll president obama won the latino vote overwhelmingly, 71-47. along with the conventional wisdom was this would be closer. even a tie but the president won by 11 points. young voters under age 30, 60% for the president, 37% for romney. joining us, the marist institute for public opinion. welcome back. i was wrong in all three areas. latinos, women and youth. why -- not why, but why was i so wrong.

>> you didn't listen to me before the election. it was a very close election but there are -- stuart: did you call it? [talking over each other] >> we were doing it state-by-state. we didn't have -- stuart: when did you call the latino note for obama? >> among cuban-americans in the last hole they were slightly for ronny but should have been overwhelmingly for romney. there's a lesson to be learned. it speaks to the brand. stuart: did you call the women's vote correctly? 11 points for president obama? >> some polls show the gender gap has gone away, enthusiasm, in the closing days the gender gap and enthusiasm getting equalized slightly more in romney's favor but the turnout speaks to the fact ground game and early vote, a big difference. stuart: i kept coming after you before the election you were on the show very frequently, kept

coming after you. you were not quantifying this intensity factor, the turnout factor, the excitement factor, the enthusiasm factor. i kept saying you haven't quantified it. i was wrong. >> i like you. i want to come back. it is your show. it is fine but there are lessons to be learned. on the polls side there was a little bit not from you but from others a little shoot the messenger kind of outlook. stuart: i didn't do that. >> october pollsters are in season apparently. that wasn't very nice. i think there's a message here that has to do with the brand of republicans, people like jeb bush and others talking about that, talking about women and young people and latinos. there is the need -- [talking over each other]

stuart: when you were right and i was wrong. come back on the show occasionally. >> someday i may be wrong and you may be right. stuart: got to move on and tell you what is new at 10:00. another storm bearing down on the east coast today. a nor'easter, high wind, snow, rain and coastal flooding. major airlines cancelling flights and down the east coast seaboard including united which has canceled most of its service as of noon today but the east coast is still in shambles after sandy. staten island, n.y. one of the hardest-hit areas. how much worse will it get there? we will get live to staten island. it is 9:40. i have seven early mover is the day after. better than expected profits at kraft and that stock is up. the electrical componentsmaker, juniper networks business, look at that. that is a somewhat down $7. the software company live person

lowered its outlook for the year. it is down. the team apparel retailer the buckle authorized a special dividend of $4.50 a share. it is up $0.13. household productsmaker belies what it profit outlook. usually goes down. today it is down. better than expected profits of a tech company pro search and networks. better than expected profits. is it up? yes. it is up. the porn shop operator easy corp. says weakness in the gold market and regulations in texas where it is based will hurt earnings. it is down 10%. that is your seven earlys. dow industrials down 177. that is a sellout. will the obama sell-off? we will discuss. obama's victory, takers have taken over. the makers are the minority. am i right? has american ideologically fundamentally change? former presidential candidate herman cain is next. >> we spent too much money on

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stuart: a sell-off is after the election with obama second term. we are down 180 points at 1,062. obama wins, obamacare lives, health insurers are down. look at at not and well point. the utilities right. >> at the end of the year, it will jump dramatically and cost for utilities do business. stuart: that is what we have been talking about. taxes will go up including a higher tax rate on the payment of dividends. >> it will be a dramatic increase, 15 to 39. stuart: i have a sharp rise in the price of treasuries and sharp drop in the yield down 11

whatever that means, 11 basis points. that tells you what? >> we have a weak economy and the week europe and a lot of money printing on the way. this is not good. stuart: it is a reaction to the obama victory? >> i don't see anything else except what is going on in europe. stuart: stocks down, bonds up, this is largely a reaction to the obama victory. >> without any question in my mind. stuart: many people are concerned about a second obama term. the market as you just heard. will there be more government spending? will we become more like europe or greece? maybe that is what people voted for. maybe america has changed. joining us is former presidential candidate herman cain. i will keep this work because i want to know if you agree with me. i think america has fundamentally shifted over the last four years and will shift even more towards europe in the next four years. am i on to something? >> you are absolutely right. it is not just a they want to be

more like greece and europe. this country has changed in that it is now more divided. president obama's victory was a popularity contest. if these numbers are right he spent $1 billion to win a popularity contest over substance. many of the people who put him over the finish line, especially in the battleground states, they looked past this week economy. they looked past the high unemployment rate and past the fact that unemployment is going to go up, taxes are going to go up, businesses going to contract. stuart: what do conservatives do now? what should john maynard do now? dig in his heels and make no compromise on tax increases with the president? can he do that? >> i don't think he can do that but here is the thing i would encourage john boehner and the republicans in the house to do. don't compromise on bad solutions.

people talk about you ought to be able to compromise in washington d.c.. that is true but don't compromise on a bad solution, on something you know is going to make things worse. on some of these issues they should dig in their heels but it is good for the country or good for the economy, find a way to compromise. stuart: always a pleasure. sorry to cut it short but i did -- i have so much on my plate this morning but come back and see us again soon. 9:49 or morning gold report. where are we the day after with the price of gold? we are a $17.21, up $6 today and back above 1700 firmly. and perhaps the biggest upset of the night, elizabeth warren wins the senate race in massachusetts. maybe the country's ideology really has changed. sandra smith, charles payne coming up next. how can voters of a free market decide to elect a candidate who said this while running for office. listen to this again. >> there is no body in this

country who got rich on his own. nobody.

stuart: elizabeth warren beating scott brown in massachusetts. sheaths -- use the one who said this. >> nobody in this country got

rich on his own. nobody. you build a factory out there -- a stuart: that wasn't her greatest hit. we are sure you remember the controversy over her native american heritage. she was elected. before you start, i am going to suggest liberalism won and is gaining ground. if you elected as the warrant to the senate, liberals are winning. >> if there's any point that marked that last night this would be one of them but remember what this does for business and banks and wall street. elizabeth warren has been a harsh critic of business in general and business does not see this as good. you wonder why the stock market is down? has been like this last night. elizabeth warren. this is serious for anyone who owns businesses out there. charles: liberalism has the wind at its back. when a liberal candidate wins in mississippi i will say it is all

over. the bastille liberalism is kennedy's old seat. i claim scott brown as much as elizabeth warren. scott brown paced me off from the beginning. got elected by the tea party anderson is a got to washington he kicked them to the curb and wanted to play it down the middle and heavy price. he made a huge mistake. the first couple of votes -- stuart: when you want conservatives to be conservative, dig in their heels and stand on principle and the what they are, no compromise. is that opposition? charles: be what you are includes some compromise but not totally this the people who got you in there. i have my own theory. i think it will get a lot worse for the republican party until they figure out a way to make black hispanic people believe they like them. all the questions being asked, economics, none of that matters. if people don't think you like them they will never vote for you. stuart: that is what the polls early mayor an offset on the show ten minutes ago.

you have to repress and the republican party. it before you can't just show up at the naacp and try to make it happen. stuart: don't you end a pandering? charles: coca-cola spent $5 billion a year to tell us we love something we know we love. they spent five billion -- stuart: sticking around for the next hour? keep your energy up. new at 10:00, the watchdog will into the question did and stream media help president obama win? of course they did. that is coming. battered by hurricane sandy the northeast prepares for wind and rain and snow, and nor'easter. we are covering it. impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowerice. invest with confidence. request a prospectus or summary prospectus

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stuart: new at 10:00 at america prepares for four years of president obama and northeast braces for another storm, and nor'easter packed with rain, heavy wind and even snow in some places. an area of the country still hurting big time from hurricane center in the. we are talking about that in a couple minutes. the big story for those of you under a rock for the past 12 hours, barack obama reelected president. he has 303 like for college votes, more than enough to win. florida hasn't been called yet. here is what the president said during his victory speech. >> tonight in this election,

you, the american people, reminded us that while our road has been hard, and our journey has been long, we have picked ourselves up, we have fought our way back, and we know in our hearts for the united states of america the best is yet to come. stuart: the best is yet to come. let's look forward. here is what is coming up at the end of the year, this will cliff. big tax increases coming. the national debt is going to keep growing, $16 trillion now lend the president's own plan put it to $20 trillion at the end of the second term. we talk about this throughout the entire hour. we are doing it with this company. sandra smith is here, charles payne, nicole petallides on the floor of the new york stock exchange, and that is a sell-off. can i call this an obama

sell-off? is down 210 points for the dow jones industrial average. there are two sectors telling the post-election market story this morning. tell insurers and coal. the healthcare stock, up and down or sideways? nicole: they are down and leading the s&p 500 to the downside, names like etna to the downside, humana down significantly, well point. on the other hand when you look at hospital care, doing well because of big and higher payments. stuart: obamacare stays in place in a second obama term. tell insurers down, hospital stocks are up. turn to the energy sector specifically coal because mitt romney was a big friend of coal he was defeated. i am guessing this morning coal stocks are down. how far? >> returning to the energy sector, it is doing terrible. when you look at things like

alpha and natural, peabody energy, energy stocks overall not only cold but also energy stocks you see them all with down arrows. stuart: those are two industries directly affected by the election yesterday. thank you very much. dow is falling further. we are down 218 points. that is a sell-off. in new storm coming to areas hit hard by hurricane sandy, and nor'easter. rain, snow, more coastal flooding. i don't have to tell you it is coming at a time when a lot of people are without power or homes. elizabeth macdonald live on staten island right now. i want to relate this to the election. we did some exit polling and 42% of people said the storm was a factor in the election and 15% said it was the most important factor. you were standing on staten island waiting for another

storm. liz: let me set the scene. we were in the heart of the business district in staten island. less than a mile away, presidents have described what can only be described as a terrifying wall of water that not just went up the block but through the sewage pipes and the plumbing system and started getting their houses and wrecking their homes and small businesses. un charles and sandra have talked about the american entrepreneurial spirit, the idea you are not victims but struggling in a common cause, small business here, trying to rebuild and feeling they're going to be sucker punched by at nor'easter that is bearing down. winds a picking up and temperature is dropping. as i enter this bill and not want to show you the water line. this is how high the water can and it ruined the businesses in the area where as joe's lobster

house which has been around for four decades, he is rebuilding. you can see this business was gutted and you can see and hear in your the ceiling, it is intact. what you are going to see is hot water can and try to find joe bruce of who ran his business the better part of two decades. is he here? you can see here how deeply the business has been gutted. what concerns you about a nor'easter coming in? >> not much. everything already happened to us. this is a business. i am not worried too much about it. what happened happened already. we are fixing it. we don't have electric now. i don't think what will come this height to worry about that again. liz: the local community relies on businesses to get information about what the government is doing. the have power in their homes and whether the power is coming

on. >> people have no homes. tonight if my home is okay i am going home. these people have nowhere to go. dado know the next thing. i am going home to warm house. liz: joe has been trying to get his business up and running. we will give it back to you and give live updates throughout the day. stuart: give joe our best wishes. the right thing in a tough situation. thanks. did hurricane sandy and the media's coverage of the relief effort help president obama in the election? sandra: that was hard to watch with some alarm you all the president did become very presidential land appeared to lead the presidents of those areas through this difficult situation, some will argue he called short in following through because there's a lot of suffering in that area. stuart: chris matthews said saying god for the storm because it clearly helped president obama. it wasn't just 13 sandy. the mainstream media backed

president obama on several issues throughout the campaign. joining us is brent basel of media research. did the media help president obama? of course. you told us many times. here is my point. may be the establishment media reflects a change in america, a change to american society. when they get out and held president obama rhee distribute and beat on his side to that effect they simply reflect underlying trends in our society. emma right? am i completely wrong? >> if you look at the philosophies of voters out there, only 18% called themselves liberals. people don't subscribe to this redistribution policy obama has. what happened was this. the press was out of control this year in its agenda to elect barack obama. it did it two ways.

the dimensional way, through the politics by commission. they introduced a new bias which was the bias by omission. they stopped reporting news. if it went against the narrative. two questions we have to determine still, what at the end of the day was the actual impact of the bias which means to what degree did the american people bought into it or see through it because there was so much attention given to it and the second question is going to be was this the press's waterloo? was this there i watermark? given that it is going to be a huge issue the next four years and with the explosion, the greater explosion on the internet and fox news you may see this as the beginning of the end of the old media. stuart: you think this >>. clearly the media helps president obama. you think is going to change. >> there is no way that this

left-wing media represents the beliefs of the american people. there is no way they do. there is no way in which the media can look themselves in the mirror and saves a were reporting news in this cycle. to the degree the american people recognize that reality so too are they going to turn off this media. look what happened this year during the debate. what happened to your network's audience? exploded in growth. that says something about the market. stuart: i hope you are right. [talking over each other] stuart: will the president walked across the aisle. will you want to reach across the aisle. and compromise. is he going to do that? what kind of man is president

obama. joining him as the man who knows him well, the author of the amateur. you have written extensively about the man's character and personality. is he the kind of guy who reaches across the aisle and compromises? >> i don't think so. we had a personality, character, temperament that is unsuited for that kind of give and take. can't imagine barack obama doing what president reagan did, picking up the phone in the evening and calling tip o'neill and barack obama's case calling john boehner and saying have a drink with me and we will work these out. stuart: could he not be magnanimous in victory? >> the fellow is driven by out megalomaniac view of his role in history which is he going to come into our lives and transform the country into

something other than what it has been. that brings up the second reason i don't think he will reach across the aisle. first his temperament and character and the other is ideology. his ideology is far left, and this is the guy who with his wife, michelle obama, senior adviser valerie jarrett has put a far left agenda and will continue to do so. stuart: i don't think he needs to compromise. he got the political clout and moral authority. stuart: charles: he might have lost the popular vote. even though -- stuart: it was 50-48 popular vote. he won. charles: we still have florida. 5748 popular vote? very close. not overwhelming mandate to go out and do whatever he wants but the point i was going to ask, you talked about his legacy is

his legacy more important as a president or as a hero to the left? if he becomes a lame-duck president early on because going over the fiscal cliff, i am still a hero to my core or does he care more about being a hero with respect to other presidents in history? >> i see him like woodrow wilson in his second term. woodrow wilson went out and stumped the country for the league of nations. i think barack obama is going to stomp the country for his agenda. i think he is going to have as much luck as woodrow wilson did which was zero. stuart: he is a hero to left. [talking over each other] >> given his character i think so. stuart: all of our viewers are listening to what you say and their reading through the lines. that means taxes are going up across the board. they are going. the debt will go up and expanding its cuts, a promise of spending cuts at the end of the

term or after his term is over. >> we will see a very contentious second term. one of the words that was not used in the newspaper this morning, talking about the election was ben gauzy,benghazi will rear its ugly head, that person will be asked by the house and senate, will you make the interoffice memoranda available to us? will you give us complete access to all the state department documents. i see this going on for months. stuart: very contentious stuff. gives us a lot to talk about. appreciate you being with us. colorado and washington state vote to legalize marijuana, the first to legalize it for recreational use. will the federal government step in? the judge is next. could scenes like this be coming to an end?

>> smoking -- that will teach you boys a lesson. we are going to stand here while you smoke the whole bag.

stuart: a shark market sell-off and you have to think it is related to president obama getting another term. the day after the election where he was reelected and we're down

225, barely above 13,000. gold has been rising recently, dead flat today. a lot more money printing. 17-14 for gold, not much movement today. oil taking a big hit down $2 a barrel. wears oil right now. roughly $85 a barrel. is that right? will actually might be up. the national average down $0.35 a month. look at soda scream, a bright spot, in your own home. it is up. back in 90 seconds with the judge.

stuart: some people will be cheered by this. a silver lining to the election results. teps to reach yours, with us with real advice, for real goals. the us bank wealth management advisor can help you. every step of the way. from big steps, to little steps. since 1863 we've helped guide our clients, so they can take the steps to help grow, preserve, and pass along their wealth.

so their footsteps can help the next generation find their own path. all of us serving you. us bank stuart: some people will be cheered by this. there may be a silver lining to the election results. colorado and washington state became the first stage in the nation to legalize recreational marijuana use which the federal government prohibits. judge andrew napolitano is here. let's be factually accurate. colorado, washington state, now say within their state you can smoke weed just to get high. for get medicinal purposes. you can do it. judge napolitano: and they permit growing marijuana. the first issue is political. in both states the legislature

lacked the political will or courage to do this on its own. the state of colorado the legislation defeated it. the public at a referendum -- stuart: referendum or legislation? judge napolitano: and the the washington state constitution supersedes -- supersedes the legislature's rejections of is the law of the land. stuart: in california have medicinal marijuana all over the place and in came the fed's and said you are doing that wrong. will the fed's come to colorado washington state? judge napolitano: that is the constitutional issue because the federal government prohibits all use and possession of marijuana for all purposes. some very minor exceptions for laboratories and things like that but for the general public is out. the government of course have discretion what laws to enforce and where to enforce them and the justice department exercised that discretion in unique and bizarre ways as for example

shutdown medicinal marijuana facilities that were lawful and licensed under california law, in oakland and san francisco but permitted them in new jersey. why shut them down in california and permit them in new jersey? stuart: republicans basically lost last night. a pretty big loss. they have got to realign. would it be a good idea for the republican party to save enough with the old, we are gung-ho for the legalization of marijuana? judge napolitano: republican party will be able to expand its base in areas where it needs to, among people of color and young people, to embrace that as well as embrace a social agenda between you and your maker. we are here for freedom. stuart: when you are libertarian. you are for the legalization of marijuana. other drugs too? a and youuthink it will be politically a plus for the republican party to say legalize

pot? judge napolitano: the reason barack obama won in colorado is because a lot of pro marijuana votes went to dig carried johnson. stuart: on the same voting list? judge napolitano: the same day, it was the second -- no one knows what the president's views are accepted justice department and forced the laws and amend -- i think libertarian virtues would appeal to areas where the republican party learned last night -- stuart: i think the libertarian wing, branch of the republican party is going to be more powerful after this. you are deathly silent. judge napolitano: a battle for the heart and soul of the republican party. for example, mitt romney as conservative as he claims to be or might there have been a standard bearer whose views were

more crystallized? charles: i heard a lot of people search republicans -- does the main electorate -- are they prepared to collect a hard-core conservative or was a moderate -- he came close, take out a few things -- judge napolitano: times change but the most successful republican in the post world war 2 your a was considered by the media to be the right wing republican totally out of touch with the populist ronald reagan and the big hearted libertarian from west cooled to the center by people around him one of whom -- sandra: different times. judge napolitano: these are times that call for more freedom rather than less and this live and let live would be more popular today than reagan's years. stuart: a silver lining hanging over you this morning. [talking over each other] stuart: thank you very much. next, my take on compromise in

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>> don't compromise on bad solutions. people say you ought to be able to compromise in washington d.c.. that is true but don't compromise on a bad solution on something you know is going to

make things worse. stuart: fat was herman cain and our last hour with advice for the republican house. to into "varney and company" at 9:20 eastern. to the big board, this is an obama sell-off. we are down 242 points, barely holding 13,000. we are going to get more taxes, more debt, markets doesn't like it, obama sell-off down 243. apple shares lower today. down about $14. nicole: holding on with apple, you see at 565. no where near $700 to tide back in september but a couple things. in asia where they make the iphone, just saying they are not able to meet the quality standards, the shipment requests, the demand of apple so basically apple wants the lots and can't deliver. that is a huge problem of supply

and demand. we heard tim cook saying they sold record amount of the ipad mini watched with record-setting is. can't meet the demand and as they posed a holiday season that will be a factor. meantime shares approaching the market territory, in the election mode from the $700 mark we saw. that is terrible. you want more you can't get it. stuart: down 150 points from that high of just a few weeks ago. to the big board we are down 248 points putting us below 13,000. we thought the struggling economy would be the deciding factor in the economy. maybe it wasn't. at 10:35 we bring you the issues voters really care about. but when here's my take on compromise which might be the key word as we face an economic crisis at the start of president obama's second term. will the president compromise on tax increases? why should he? tax the rich.

that was the centerpiece of his economic policy and his victory get him the political and moral clout to push that policy through. the president is more than leverage, he has a history of not changing course, not compromising. for four years he has insisted that the rich food should pay their fair share. why retreat? he has never retreated before. even though the policy was an abject failure. remember green energy solyndra? didn't retreat, he doubled down. don't expect compromise on taxes the matter the impact on the economy. next, republicans. will a compromise on taxes? they retain firm control of the house and john boehner has consistently refused to consider raising income-tax rates. i suspect there will be compromise on the republican side. it will not be called compromise. it will be called cooperation. a convincing win for president obama. a solid democrat majority in the senate leaves house republicans out on a whim. they are not in a strong

negotiating position. they will compromise cooperative. bottom line, tax increases look very likely. spending cuts in the long-term, maybe. certainly a lot more debt. black

stuart: with the dow jones

industrial average down, there is some speculation of what will a second obama term mean for economic policies. clearly he has the leverage to push through higher taxes, and i personally think if you look at his own plan, we will get a lot more debt. is that the big deal in a second term economically? more taxes, more debt? let's bring in a former advisor to president clinton, liquid gas on the fox news channel but you and i have never sparred before, have we? >> good to be here. stuart: i do think i can make a case a second obama term means he will get his way and tax the rich. how much of a tax increase on the rich will it be? >> all of these things have to be negotiated in the senate and john boehner's team in the south. he has been very clear about his

economic plan going back to 2007. a balanced approach to pay down the deficit over time. raises taxes on wealthy people, things like education infrastructure and create growth. stuart: how about spending cuts? this is my opinion. any spending cuts i think would take place way in the distant future. promises of cuts, not immediate cuts. you get an immediat immediate ts and distant spending cuts. >> be surprised if that were the case. the president in the debt ceiling be a lefty or agreed to cut a trillion dollars over 10 years of spending. mitt romney attacked the president for cutting $716 billion out of medicare. the only person who informed entitlement program in america is barack obama. those are cuts. a trillion dollars was

$100 billion per year beginning immediately over 10 years. on the medicare thing, tens of millions of dollars for cutting medicare by $715 billion so he has already proven he is willing to take spending cuts in order to get the deficit down. i would argue his plan for deficit reduction is much more realistic than anything that romney proposed over this last campaign. i think there's a lot of room to work with and the democrats will insist on defense cuts, something republicans don't want. that will be an area of contention read stuart: tax increases for sure. a wonderful point. if you look at the budget, they're lootheirlook at the prec plan says we will have $20 trillion of total debt in the year 2016.

an extra trillion dollars each and every year. you will not contest their own figures, will you? >> no, but i also think that is unacceptable. making sure the economy is growing. one thing we did not have was the economy is growing. enormous positive economic signs, a 30-year high in some polls. stuart: enormously positive? we have seen the housing market finally housing values and housing authorities. stuart: you cannot say the signs are enormously positive. >> you one, you don't have to keep campaigning. it is not enormous. the jobs number came out at a five-month low.

gdp will probably be revised to less than 2%. let's not lie about this. what is compromised to say we want the tax people, small business owners, where is the 38.5% of the population that doesn't want this? where do they get something out of the deal? >> there are many ways to reduce the deficit. three things we have to do to reduce the deficit over the next 10 years. we will have to cut revenue. if we don't do all three of those things. >> everyone says that for what has happened is reforming medicare and a program that takes in 20 years from now, but defense spending tomorrow. it has been tried. the couple republican presidents fell for that. i don't think they will fall for that. speak of the democrats have shown they will do the things needed to reduce the deficit.

republicans have shown they're unwilling to do anything needed to reduce the deficit. when we came into the white house we had huge deficits and turned them into a surplus. it has been the democrats over the last 20 years. you will see progress made on this. >> bottom line, market down 250 points, in the face reality we face a fiscal cliff at the end of this year. what is your best guess the market is interpreting bad news lies ahead. what is your forecast? speak to what is interesting about the fiscal cliff, it is actually misnamed. it is fiscal salvation. it is an economic option. pushing us back into recession. i think the thing that the two parties have the ability in the next six months to find an

interim staff that rolls is over while i try to negotiate a bigger deal. let's hope i come back in april or may were celebrating a grand bargain between the two parties are we made substantial progress reducing the deficit while growing the economy. stuart: i think there i there'sa positive agreement, progress. speak of the debt is 20% lower this year than last year. i don't agree it will be in the way that you are describing. stuart: 20 trillion by 2016. >> it is getting better. stuart: you are talking about the deficit, i'm talking about the accumulated debt. 20,000,000,002,016. simon, it was fun, come and see us again.

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now look at the stocks moving. the for-profit hospitals that higher no longer have to worry about bad debt with uninsured patients. coal stocks down. the gun stocks, worried president obama will come after gun rights, could be strong demand for guns. back in 90 seconds. axiron, the only underarm treatment for low t, can restore testosterone levels back to normal in most men. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur.

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plus get up to $600 when you open an account. stuart: insurance companies are lower, now look at this, more fallout from obama's reelection, defense stocks way down. how much? nicole: they're all under pressure today. on a day where if you noticed the selloff, down 240 points ofn the dow jones that show. talking about all of these areas, especially airspace. we talked about the current administration on welfare and food stamps than social security, medicare and national defense. stuart: that is a sharp edged one. thank you very much, indeed. more on the financial fallout the day after the election. joining us in new york for a change, usually in chicago, in new york today.

live and in person. >> i thought i could brighten it up. stuart: what is your reaction? what is your financial reaction to the reelection of president obama? >> it will be more of the same. i don't see any good changes along the way. we have been locked in the trunk of obama's car for so long, when he finally came to open it up, we were just glad to see him. that was a result of last night. going forward we will not see any big changes, financial money toward the market, anything right away. we definitely have a bigger chance of going to the recession. stuart: is there any asset class

that will do well in the second obama term? gold, treasuries. >> you have to get your swagger on. those are the things that will really benefit. stuart: those are hard, tangible assets and you think it is coming, why? what about a second obama term that gives us inflation? >> as long as we have paper, that will not stop. the government told you you have to buy real estate. we will not have the end of activities in. we don't have a solution, the a solution talk about is this. we're both saying the same thing in different terms.

the only way out of the technological revolution or energy revolution. stuart: but president obama will keep printing. >> there is no stopping inside i bet he will print until he leaves office. >i think obama will continue to print as long as he is in office, that will not stop anytime soon. we have a real problem in our hands. >> technology or the energy revolution with the big money managers i have been talking to after the election have been saying the same thing in the form of natural gas. >> we don't see an end to this anytime soon. the end is true growth. as far as i don't have the truee growth, it will continue. the true growth will be something bigger than we can imagine.

we just don't know what it is. natural gas will be it. stuart: you know what they are demanding, but i put this jacket on. not going to do it. it looks good on you, scott. you are a real, genuine farmer, right? you're a cattle farmer? >> now we just have cattle. corn and soybeans. stuart: notice how i shifted the subject. >> very good. stuart: good to have you in new york. it is the biggest story of the year. more on the election next. bob...

oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

stuart: throughout today's program we have pointed that two certainties of an obama second term. this is an obama shutoff, down 285 points moving well below 13,000 as of now. 7.9% unemployment, rising national debt, republicans have a lot working in their favor but despite all of that they couldn't cash in.

so what does the g.o.p. do now, how does it repackage itself? any suggestions for the g.o.p.? >> it is going to be a difficult stretch, finger-pointing. i think it will not be resolved anytime soon. they have two paths. moved considerably to the right, the other is to be much more conciliatory of immigration issues. stuart: i misread this entirely. i was 100% wrong. i didn't realize how the tipping point has affected us because now we have 47% of the population that gets something and once more. it is voting in that style, once that to fund the government with their vote. i think america has shifted, wouldn't you say? >> i think the biggest shift is demographics. we're in an environment where

the democrats get 72 or 73% of the hispanic vote, republicans cannot win a general election. republicans have to some less strident on immigration or they will continue to be a minority party. stuart: they have to reach out to minorities in america. >> there are not enough old white guys like you and me to win an election. stuart: you don't think the economy is any longer the key issue? >> sure it is a key issue. i said to you in many intervie interviews, i thought republicans made a compelling case to fire obama. i think rummy should have been much more complicit i on what ty should do. stuart: how is it we reelect a president with a high rate of unemployment, a very low

economic growth and exploding national debt? how did we reelect that person? >> there are about 10 answers. it was may, june, july for the obama campaign went savagely negative on romney and romney did not hit back. that was where romney got defined in states like ohio. the scar tissue throughout the election was apparent last night in ohio. stuart: thank you for joining us, appreciate it. down 290 at the moment. it is a happy highlight reel coming up next.

stuart: cheered up with a nice rosy glow on the highlight reel. >> seems like this could be coming to an end. >> smoking the reefer.

stuart: voting to legalize marijuana. you favor the legalization of marijuana? >> yes. stuart: other drugs as well? >> yes. stuart: the first to legalize it for recreational use. >> and then came the feds, have exercised that discretion in unique and bizarre ways. >> we will stand here while you three smoke the whole bag. >stuart: the dow was down 300 points. i'm calling it an obama selloff, does anybody want to argue? >> they were touting the rally as an obama rally. stuart: they thought it was a romney rally because they thought romney was going to win. he didn't. >> you're right, this is an obama selloff, point blank. stuart: dagen and connell, it is yours.