talk about the fiscal cliff and politicians talk about the fiscal cliff. we're wondering whether mom and pops at home talk about the fiscal cliff. is a lack of a budget deal actually spooking shoppers out on main street? >> it is. walmart told us 75% of their customers have cite that had they are worried about the fiscal cliff. mandy, you and i were on last week talking about the luxury retailers and we called out saks saying business pre-holiday was particularly weak. what are the people in the stores telling me all week, saying that this is the worst pre-christmas they had seen in over a decade, and part of that was because their consumers are worried about the fiscal cliff, so note to the government. it does matter. >> yeah, but that's, as you say, part of it. laura, what else is going on? it just felt like we were going into a lackluster season here. what happened? >> i mean, there's been some discussion about weather trends as well, but whether or not we go over the fiscal cliff, consumers think next year we'll see higher taxes and lower entitlements.

over the cliff. ris and steven next. the next scott walker? michigan's republican governor ready to do plitical battle with organized labor in his state. what about a right to work law? straight ahead. [beep] [indistinct chatter] [kids talking at once] [speaking reign language] [heart beating] [heartbeat continues] [faint singing] [heartbeat, music playing louder] ♪ i'm feeling better since you know me ♪ ♪ i was a lonely soul, but that's the old me... ♪ announcer: this song was created with heartbeats of children in need. find out how it can help frontline health workers bring hope to millions of children at everybeatmatters.org. lou: the staffs of both president obama and house speaker boehner are talking, but there is still no word of progress on the so-called fiscal cliff or the president's ultimatum. silence indicate a deal in the works or something too ugly for them to contemplate?@ we'll have the latest for you from the white house. white house correspondent ed henry here in just moments, but, f

more now on the fiscal cliff. the industries with the most at stake in the budget debate is the defense industry. in a meeting today in washington, northrop grumman ceo wes bush with a dire warning. >> it would result in across the board cuts to both defense and nondefense accounts. and the interesting thing about this is the cuts are not tied to any military strategy whatsoever. it is completely disconnected from a perspective of strategy. in essence these would be meat axe taken to our national defense budgets. >> let's go straight to the front lines of the issue. task specializes in systems, engineering and integrate. president and ceo david langstaff is with us, among the defense contractors speaking out today in washington. he joins me now on the telephone. sir, good to have on you the program. thanks for joining us. >> thank you. glad to be with you. >> what's the potential fallout for task if we go over the fiscal cliff. how would you navigate this? >> first, it's just terrible policy to go over the fiscal

we're asking for solutions to the fiscal cliff. ining me now is alan greenspan, former federal reserve chairman and now with greenspan associates. nice to have you back on the program. >> nice to be here. >> thanks so much for joining us. you have said there's no painless solution to the fiscal cliff here. what do you think the best possible outcome could be? >> the best possible outcome as far as i can see is to take something like simpso/bowles that came out originally and get the issue resolved. i've never seen anything like this. >> you've been around a long time and seen lots of parties fight. >> they always come to go. the difference now is that -- not that there are more differences than unusual. if you go back, there's a lot of data that suggests this is not unusual. what is unusual is the republicans don't speak to the democrats and vice versa? back then, i mean, not that far. >> they went to dipper and went to lunch and discussed issues. >> when i was in the white house, tip o'neill and jerry ford used to be at each other'

over the cliff. ris and steven next. the next scott walker? michigan's republican governor ready to do political battle with organized labor in his state. what about a right to work law? straight ahead. the boys use capital one venture miles for thr annual football trip. that's double miles you can actually use. tragically, their ddy got sacked by blackouts. but it's our tradition! that's roughing the card holder. buwith the capital one venture card you get double miles you can actually use. [ cheering ] any flight, anytime. the scoreboard doesn't lie. what's in your wallet? hut! i have me on my fantasy team. if you're a man with low testosterone, you should know that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact. women, espially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unex

i am worried we will go over the fiscal cliff, in part to have a reset. if we any over, republicans could start talking about cutting taxes on the middle class, as opposed to keeping them up on the rich. and the democrats will could potentially get a better deal. we can see this has happened in europe. when you have this kind of brinksmanship over and over and over again, and you go back and forth, markets start to get very burden they've been very volatile. and i think businesses have been holding back on investments. you can see big capital spending by businesses in last four months has been way down, about 8%. there should be a boom going on right now. we have a construction market boom, we have an energy field that is booming. companies would be spend physician we could get over this cliff. >> schieffer: i'm hearing some liberal democrats will say let it go over the cliff. i mean, would they really do that? i mean, because what would happen, then you would have, i guess, the tax cuts would expire. but would they let these draconian cuts in, say, defens

the fiscal cliff. >>> the dow erases a 150 point decline on news that the house will be back in session on sunday evening. and time is rubbing out to avoid a strike at 14 major east coast ports. a work stoppage to cost the economy $1 billion a day. it's friday, december 28th, 2012. and "squawk box" begins right now. >>> good morning and welcome to "squawk box" here on cnbc. and it does feel like we're living a bit on the edge of the fiscal cliff, at least. i'm andrew ross sorkin along with joe kernen and becky quick is off today. our guest host this hour, ed kehone. he's the management associate portfolio manager and we are thrilled to have ed aboard for -- i think you'll be here for longer than an hour. you'll be here for the whole broadcast. >> as long as you need me. >> you're like -- how long were you at -- you were at prudential. >> it's owned by prudential, so i've been at peru don'tal for almost 15 years now. >> widely quoted. you know who has made a comeback is ralph -- >> akampora. >> i've seen

which would mean technically we'd go over the cliff. but he still thinks a deal will be struck but just not tonight. 2012, check. it's in the books at least for the markets, that is. and while the clock keeps on ticking, no deal yet. what is an investor to do in the new year? >> edward pangin with us, james buckingham, rick santelli. everybody on board to pick apart what has just happened and what may happen going into the new year. what do you think? are you hopeful to get a deal? do you want to buy stocks at this point what do you think? >> thanks for having me on. i think we're getting some closure on the fiscal cliff. but we want to look behind the scenes. earning estimates for the s&p 500 and the broader market. over the last tlie months you see negative pressure on earnings. that's led by energy sector and stocks. ex-financials. and what's also giving us a bit of pause heading into 2013 is the fact that these expectations are calling for about a 7% increase in earnings for next year which may not seem heroic on the surface, but it

we hit the cliff when that -- >> that would be the bottom of the cliff. >> this is the first time everhen it's more than just ushering in a new year, but it would usher in serious fiscal head winds. >> it would, but there's still a chance this is going to work. >> have you talked to anyone this morning? >> i did. i got a message this morning on my blackberry about ten minutes ago from our senate republican source who said talks with biden were good last night. they went late. that is a promising sign that there is still a chance. they didn't break down, but there's still a chance that biden and mcconnell can come out with some sort of a deal, maybe the income threshold would be $400,000, maybe it would be $500,000, but it looks possible that they're going to have something to announce later. we don't know that for sure. i suspect if they do come out with a deal, congresswoman capito would like it better than congressman meeks. but we will see. >> john, the latest thing we've read, i'm not a smart man, but if it was 450 and one was at 550, wouldn't 500 -- wouldn't it seem like that -- i

so i think going over the cliff is not our preferred choice at all. to get to a compromise, which as i said, will procollude taxes from going up on middle income americans, provide for the unemployment insurance. i they we also provide for the reimbursement of doctors giving services to medicare patients. butt fact of the matter is it's been very difficult to reach compromise. i think the president of the united states and is now through vice president biden trying to reach a compromise. a compromise by its very definition means that neither side gets exactly what it wants. the difficulty from the house of representatives last week the republicans indicate d that the wouldn't even be for any kind of a tax increase on those making $1 million a year. if they are going to continue on that stance, we are not going to get to a come bpromicompromise. but frankly at $450,000 the math will not work to get us on a fiscally sustainable path. it may get us to an agreement, but it won't get us to fiscal stainability. >> we'll have a lot more of theefz fights ahea

we continued on that with the fiscal cliff. lost because they became the party of illegitimate rape where liberals and democrats are once fighting a losing battle. now it's become what do we do in the case of rape and incest which is a total losing thing for them. >> when you're barely -- when you've barely had sex basically. >> right. now we're dealing with the party of glocks. when liberals try to take away everyone's guns, that's a losing argument for democrats. now it's everybody has a right to get a glock or bushmaster. i don't know if that's a winning argument long term or is good for the country. >> did the republicans learn anything? is there any lesson you would advise them to take into 2013? >> you know, i think that -- it's like dealing with children. you want -- you have got to be for something, right? this is the problem. the republican party, and we all have very good republican friends. i don't hate republicans like some people in the country do. i like republicans. by the way, i have to defeat somebody. >> put yo

the reason being, it looks as if we're going over the cliff. i don't think any thinks it's a long term problem. when the resolution comes, like doc said you will get a rally. we are sticking with long runs and picked up vix and s&p shorts and increased short positions against every one of our longs and will be there when the market rallies but protected for right now. >> you paid a little more than you would have a few days ago. the vix fear gauge has been spiking above 20 for the first time since july. >> exactly. when you see the vix spiking above 20, you say maybe things are getting a little hairy here and wanted to see it above 20 before we got long. >> joe, surely, you're not surprised we're expected to go over the cliff. many people have predicted that for years to come. are you sitting on the sidelines? >> i have nine names, some are financials. i believe when earnings roll around in a couple weeks, that's where we find the strengths. i'm not adding to positions. the apple position is at half size. i'm sitting and holding serve to your po

i think he sees a political victory at the bottom of the cliff. he gets all this additional tax revenue for programs. he gets to cut the military, and he gets to blame republicans for it. >> let's take the cynicism out of that, let's ask the question, is there in fact some benefit to going over the cliff? >> i think that there is. i don't think that the president does want to go over the cliff. i think he's made it extremely clear that he doesn't. and that's because he -- the president is not that much of a risk taker, he would rather come to a deal. he's eager to come to a deal. i don't think he's kidding, hen watts a big deal. he just doesn't have a partner on the other side. he's right and republicans know he's right. if you go over the cliff at this point tax rates go up, on dividends, capital gains and estate taxes go up. republicans want them down, they have to actively push to force them down. democrats only have to lower them for some elements of the population, certainly, the political situation is much better for democrats after january 1

if we went over the cliff, the demographic to show you, this if we went over the cliff, you'll see an estate tax of 55% on the part of the estate that is larger than a million dollars. the compromise here is a 40% estate tax with 5 -- the first $5 million of the estate exempt. so a real win here for republicans who were worried about the estate tax reverting to the $1 million exemption at 55% rate. >> now, can you just sort of explain -- can you sort of explain to people what the estate tax is, why it has been called the death tax and why republicans over years have just fought tooth and nail to try to reduce this thing. >> because republicans say it rewards success. this is something we have heard again and again about the capital gains taxes, and other taxes on investments, they say it rewards success. people like warren buffett and others who are on the left side of the argument, they say, look, living in this country is -- the -- this country has given them the ingredients to be successful, and, you know, should have to give back for that. there are two very different philosophies

especially the fiscal cliff. in this grim environment you can find sectors that are holding up better than you might think. poncy says the pull back in retail might be just the moment that you want to pull the trigger to this key sector index. wouldn't that be something? stay with cramer and we will be right back. >> coming up. something is brewing. starbucks has been serving up solid returns. but could concerns about its moving to tea mean it is time to layoff the caffeine or is this your chance to fill up your cup before the shares really get percolating? cramer is grinding through the facts next. >>> tomorrow we are going to hear from one of my favorite companies and it is starbucks. having its biennial analyst day. right now it is more than ten points off its high for the year. i think it could mark the beginning of the stock's next big rally. you can follow along at actionalertsplus.com. a service that i do with the street. tomorrow i expect a terrific story. i'll give you a preview. lots of people ask me how

david: teetering on the edge of the cliff. speaking of the fiscal cliff, talks on hold until after christmas and president obama and house speaker john boehner have not spoken since friday. lori: is there any hope for a deal? are you the last man there? >> a staff is here. the staff is in this but all eyes are on the senate when it returns this thursday to try and get a deal to avoid getting off a cliff the past friday before the president left for the holiday, he proposed a limited measure to avoid all of the cliff when speaker john boehner plan b. got scuttled. the president wants to extend the bush tax cuts and avoid some of the deep spending cuts. white house spokesperson says discussions continue between the administration and capitol hill. in july you may recall senate democrats passed an extension of the middle-class tax codes for the year. those folks making less than $250,000 per year at a cost of 157 billion. also passing the alternative minimum tax for $92 billion. mitch mcconnell is critical to hammering out a deal

obviously you can't let us go over the cliff on the debt ceiling. much more serious problem. this is really not a cliff. we call it the fiscal curve which is really what it is. >> catchy, governor. >> i know. >> but let's take a look at the larger issue here, this kind of absurdity of being here at the end of the year with this situation. take a look -- take a listen to how president obama put it on friday. >> this is deja vu all over again. america wonders why it is that in this town for some reason you can't get stuff done in an organized timetable. why everything always has to wait till the last minute. >> i think the president there was speaking diversely -- for virtually everybody in the country but i was struck, todd, when he said this town as if he doesn't live in this town and actually have a pretty important address in this town. >> the painful lesson of his first term, the limitations of change within washington are pretty severe and, you know, he's talked about that often in the campaign and that's one of the things he learned so it will

just two trading days left until the cliff. and it's not just the fiscal cliff. nd farms and dairy are set to get hit. >> the ports of the east coast and gulf coast are bracing for a potential strike. the potential for this, midnight sunday with a shutdown threatening to threaten 20% of the cargo traffic. >> and instagram feeling the sting of the flap around privacy with users, fleeing the site. how will this impact facebook? >> as we mentioned, dennis berman, "wall street journal" market place editor is joining us here on set once again for the next hour. good to have you back, dennis. lots to talk about between the cliff and other news. >> three days before the u.s. goes over the fiscal cliff, congressional leaders will meet with the president this afternoon. i remember standing on the white house north lawn last month, after leaders met with the president back then. things looked pretty promising. here's what they said after that meeting. >> i believe that the framework that i've outlined in our meeting today is consistent with the president's call for a fair a

let's start with the fiscal cliff issue. it comes to higher taxes, you seem to disagree with house speaker boehner when he says raising taxes on the highest earners will hurt jobs. can you elaborate on that? >> i think what the speaker is saying quite correctly is you don't want to increase taxes on the job creators. the problem here is the 1986 act that equalized corporate and personal rates. so the most important thing is to have an internationally competitive corporate rate of 25% and a territorial tax system and then individuals who have been filing their businesses as s-corporations or pass-through corporations can incorporate and get that lower rate. they can negotiate on the individual rates. >> so you don't think the ordinary income, then, the 39.6% that we're talking about, in that case, would apply to small business. they would fall under the corporate tax rate. >> yes, exactly. people forget that until 1986, corporate and individual rates were separate. a big part of the '86 act was to equalize them. there's a big

that will upset the rest of america but most consumers, they say fiscal cliff. >> what's the fiscal cliff. >> i don't know what that is. >> you are right. the business community is sitting on its cash, wall street waiting on every word and consumer as if nothing. but you know it comes home to roost. good to have you on the program. thank you so much. >> nice to see you. >>> american cars zooming along. some of the best news for the auto sector in years. what it means for your set of wheels. >>> living with lions, julie taymor with me on one of broadway's biggest payoffs as it marks a milestone. back in a moment. americans are always ready to work hard for a better future. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪ ke a closer look... ...at the best schools in the world...

as we approach the cliff, that's what we are talking about. >> the real cliff is america has become ath. >> happy new year's, guy. >> good to see you both. coming up, what exactly is going to happen if we go over the so-called fiscal cliff. what happens to your wallet. we will detail the five ways this is going to impact your family, your wallet and your finances. and also new york governor an drew cuomo is ready for a fight over gun control. he's even talking about confiscating weapons. how far is he going to go? all of that and more later. and sam donaldson tells tea party america this is not your country anymore. [ cheeping ] [ male announcer ] you hear that? that's the sound of car insurance compani these days. here a cheap, there a cheap, everywhere a cheap... you get it. so, what if instead of just a cheap choice, you could make a smart choice? like, esurance for example. they were born online and built to save people money from the beginning. it's what they've always done. not just something they cheap about. that's insurance for the modern world. esurance. now backed by allsta

as the debate wages on on how to get off the fiscal cliff. t one to make a pledge to a third party group. how do we get through the situation, find the best result for american people. there's a lot of opinions out there. we have to listen to all voices to come to a conclusion. that requires we don't shut any idea out before we come to a conclusion. >> there has been, i suppose a tremendous amount of attention on raising the top marginal rates for top 2% of taxpayers. one of the articles i read recently indicated raising those rates would be 4% of our total debt issue. the remainder has to be addressed in other ways specifically by going after spending. what spending cuts are you specifically willing to sign onto today? and most particularly with respect to medicare? >> i think we need spending reductions at every level of the federal government. as has been said many times, it's not that washington spends too little, it's that it taxes too much. so we're trying to find ways to reduce spending in all areas, domestic spending, defense, waste in

an incentive if we go over the cliff to get this done. because it is -- both sides have been preparing themselves for the blame game. it is in full swing now. president obama said, basically saying if we go over the cliff, he is really going to take aim at republicans more than he already has. >> they say it. their biggest priority is making sure that we deal with the deficit in a serious way. the way they are behaving, their only priority is making sure tax breaks for the wealthiest americans are protected. seems to be their only overriding unifying theme. >> now, ali, a poll shows republicans will bear more of the blame in this if we do go over the cliff. but the incentive to do something continues even if we go over the cliff. the expectation is come midnight tonight, this is not resolved, even if there isn't some sort of deal, a framework, there is still going to be work done and still be members of congress and the white house trying to wrap this up here in the next few days. >> polls show not only republicans will get the blame and t

the side of the cliff. that can't be good. that was a commercial, too, wasn't it? a guy in the back of a truck. white house spokesman jay carney had a different movie in mind today. republicans need a superhero to save them from this mess they're in. >> the republicans in the house have decided to run down an alley that has no exit. what i'm confident of is that they don't have at the end of that alley a bat plane to fly out to their own rescue. do you remember that scene? it was good. a good scene. >> does the president have a batplane? >> i can't talk about that. it's classified. >> joining me now is congressman chris van hollen of maryland. former dccc chairman. and i think he might be, knowing that this is a very serious time in american history, but there are moments of comedy coming out of the republican caucus tonight. congressman, there is breaking news from the hill right now. there will be no vote on plan b. the speaker has pulled his own bill. here is the statement his office has just released. "t

the nysc. >> hi there, ty. we're scaling numerous cliffs. we have the fiscal cliff, the milk cliff and the ranmar cliff. k around. will 2013 be a do or die year for big box retailers. which ones could be on the line. and it's prediction 2013. we're going to give you three of our big predictions for next year. i brought along a friend. top of the hour, folks, back to you on "power lunch." >> thank you, mandy. >>> back to our top story. congressional leaders heading to the white house in just about 1.5 hours in a last-minute meeting to try to avert the fiscal cliff. the debate on the hill has been downright discouraging. republicans and democrats resorting to name-calling as the year comes to a close. this is what we can expect in 2013, more partisan bickering? i'll vote yes. eamon javers is back with what may be ahead on the hill. >> reporter: 2013 is going to be the year that wall street lurns to love elizabeth warren. since she's been appointed to the senate banking committee says they think they can work with elizabeth warren. part of the reason is she's going to sit all the way down here as one of the

much more than the fiscal cliff. >> exactly. the debt ceiling is a cliff. the fiscal cliff is somewhat misname because as we said -- >> slope. >> slope. curb. go over and get back. it is not so bad. but, you know, there's no sort of we defaulted yesterday and today we are sort of undefaulting. it doesn't work that way. once you defaulted on your debt, i mean, you have really sent the world a message you are deeply dysfunctional and the president has said i'm not going to negotiate over that. i'm not going to allow that kind of threat to the credit worthiness of the greatest economy in the world. >> yet, that's where all of the republicans want to have their next fight. >> that's where they want to have the fight. give it to them or not. i suspect he won't. >> quite a few days followed by quite a few months. thanks so much for joining us. we appreciate it. >>> why do some washington power brokers want to go over the fiscal cliff? the political brief sing next. first, the amr moment of 2012 that left us all speechless. i'm not kidding. this literally left me s

or i think it will be advantage to the republicans to go off the cliff or the president to go off the cliff, that's like betting your country. there's stupidity involved in that. >> willing to go over the cliff, i guess they are but they also don't believe republicans are going to go over the cliff. >> he can win politically but the costs, doesn't you agree, would be tremendous not only to him but to the economy and to our country. >> and we want to bring in and say good morning to congresswoman diane black, a republican from tennessee, a member of the house budget and ways and means committee. congresswoman, is great to have you with me right now. as we speak, house minority leader nancy pelosi is giving her briefing this morning. weep put that up for everybody to see. when we talk about where we are in the staging of all of this, all the drama, the back and forth, the clock ticking, americans truly watching this, you think that the house would be in session today but you all closed up house day early, streamed out yesterday in a walkout. what gives? how do you explain this to the am

can they avoid the cliff? me are saying no, the president wants to go off of the cliff because some republicans are saying it strengthened his negotiating hand, some others think perhaps if the senate bill for extending cuts under 250,000 comes over to the house there could be house democrats vote for that and need 25 republican votes to pass that and make that the law so -- cheryl: is that reasonable? could that really happen? i am so silly, when i was listening to the last to speeches, are they proposing actual things that could happen? was that posturing or were either of the things we heard the senators say in the past 15 minutes real possibilities? >> good for you. you don't have to live in washington to see posturing, that is what is happening. people are trying to cobble something together to put a patch on this to avoid the fiscal cliff, i can't tell you with any certainty if they can pull that off. cheryl: maybe you can work something out. stick the next -- work something out. i wouldn't give you that

they were betting at this point we were going to go over the cliff. ds the -- over the cliff portfolio was the outperformer until today. they have crossed. so now it's gone lower. we hit the cliff and avoid it is going higher at this point. two things to watch for this week. we got all that treasury paper coming to market here. the yield has moved higher. but we'll see what happens there. then the other thing is natural gas at a two-month low and moving lower because of all the warm weather in the markets now. nat gas subpoena in fact we come off this low here. with the market up 20 points here, what do you make of this -- of our model portfolio fiscal cliff portfolios? >> i was very surprised that it crossed today. i mean, with very little activity, very little movement on pretty much any stock that it crossed today. i was surprised with that. i'm becoming a little more convinced that we're not going to have any resolution at all. i thought there might have been a compromise. i think the market has been reacting as ihere's not going to be anything. an

if we go over the cliff. e making over $108,000 a year. what happens to the economy? if we go over the cliff, we could end up recession. what if we don't go off the cliff? what's going to happen to the economy? >> very important to remember that the tax increases, they only hold if we go over the cliff and stayory t ory ver the for the full year of 2013. those are tax increases you will face when you fill out your 2013 taxes in april 2014. even if we go over the cliff briefly, for a few days or a few weeks, those you mentioned won't bite. if we go over and stay over, that will. this could mean a return to a recession ear type of scenario. >> the deal we're talking about, we hear the phrase grand bargain, could never get one done. is this more kicking the can down the road? >> at leastly deal we're talking about now, the one john harwood describe, it's kind of cutting the can in half and kicking half of it down the road. it would result in very large tax issues, the ones we were just talking about. even the min

are you going to let it go over the cliff? is that it? the senate. >> so without senate action, the house lets it go. >> the democrats control the white house and senate. where is their plan and proposal? >> have you been promised by speaker boehner he will not put anything out there unless the majority of the majority in the republican -- the majority of the majority of republicans agrees with it? >> i have not heard that. >> i haven't either. >> that's been sort of those unwritten rules. >> the reason it's unwritten is because it came about during the hastert delay administration where he had to have a majority of majority. # boehner hasn't operated in that manner. if there was a deal he thought could pass and achieve what needs to be achieved for america and that is the revenue side plus the spending side he would put that on the floor and let the house work its will. that's his greatest strength and greatest weakness because that makes it difficult to run the house from time to time. >> congressmen, thank you for joining us. maybe we'

he says there's no paperless solution to the fiscal cliff. thinks is the best possible outcome. that's coming up on the "closing bell" at 4:30 p.m. eastern right here. and we can save you 10% on ground shipping over the ups store. look this isn't my first christmas. these deals all seem great at the time... but later... [ shirt ] merry christmas, everybody! not so much. ho ho ho! this isn't that kind of deal. [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. she also likes to ride her bike. she knows the potential for making or losing money can pop up anytime. that's why she trades with the leader in mobile trading. so she's always ready to take action, no matter how wily... or weird... or wonderfully the market's behaving... which isn't rocket science. it's just common sense. from td ameritrade. >>> 90 seconds left. how is your day? here is wall street's day. folk yes so much on washington. optimism this morning. this is where speaker boehner spoke opening the house session and said things that spooked

the u.s. economy fall off a cliff? we've got a panel of washington insiders to give you the real story. >>> plus, a closer look at the markets including a best emerging market performer this year. if you invested in this index, you'di inbe up 50%. we'll tell you what it is and what could see a pop next year. >>> we'll bring you retail numbers as they trickle in. much coming up. [ male announcer ] it's that time of year again. time for citi price rewind. because your daughter really wants that pink castle thing. and you really don't want to pay more than you have to. only citi price rewind automatically searches for the lowest price. and if it finds one, you get refunded the difference. just use your citi card and register your purchase online. have a super sparkly day! ok. [ male announcer ] now all you need is a magic carriage. citi price rewind. start saving at citi.com/pricerewind. you can stay in and share something... or you can get out there and actually share something. ♪ the lexus december to remember sales even

keeping our eye on the cliff and the negotiations in d.c. follow me on twitter. >>> "halftime" is over. the second half of your trading day begins now. >>> the skies over capitol hill. what's going on there is landing like a led balloon on wall street. if you're losing money the last four days, you know who it is. senate majority leader harry reid says the u.s. is probably going over the fiscal cliff. he's planning a news conference. we don't have the exact time. when it goes, we'll go there. investors getting quite nervous. obviously the dow dropping below 13,000. the first time since early december. fear index is spiking the vick. what going over the cliff will mean for you and your money. we will talk about it this hour. >>> airline stocks flying high sitting at 1 1/2 year highs. will it be smooth skies for the industry next year in 2013. phil lebeau has the report. >>> how about housing? what a story housing has been this year. a milestone. home prices on track for their first year-over-year gain since 2006. is the worst finally over? so

harry reid says they're headed over the cliff. it is really about senator harry reid and mitch mcconnell? >> to develop the political staring contest democrats say republicans need to move and around rego. the president arrived this morning from hawaii and so with the top democrats and republicans but still no update to report. senate majority leader harry reid said it looks like we're going over a cliff and it is up to the house. >> speaker boner shed call people back to washington today and should not have let them go. they are not here. john boner cared more about his speakership than the financial footing. >> they're now working on a fiscal clear solutions they say the majority leader should talk less and legislate more. also mitch mcconnell says the leader is happy to review with the president what he has in mind but that a majority has not put forward a plan. when they do members will review legislation to make decisions on how fast -- best to proceed. >> it takes time for the house and senate to get something done. if there

that is the same day that we would go over the fiscal cliff. e treasury has certain steps they can take to avoid breaching the debt ceiling that will carry the government through february or march, but at the moment in a technical sense treasury secretary geithner is telling the congress we're hitting the debt ceiling at the end of this year which is the part of the, as i mentioned, part of an effort to get congress to step in and act, not only on the fiscal cliff but on the debt ceiling, bill. >> thanks very much for the breaking news. we'll keep monitoring the situation. thanks, john harwood. a look now at financial sector and whether or not you should put your money in the banks. >> 12 months ago there was a lot of buzz about the regionals, but now it's the big banks that have done really, really well. we have the president and ceo at bell rock capital and jeffrey hart. welcome back. >> cassandra, how did we get that wrong, those saying was not a good environment for about the banks, 2012, low interest rates, you know, the low loan demand but

here's what happens if we go over the cliff. you get more than $5 trillion in tax increases off the bat. and now here's what happens if we pass the sainted simpson bowles plan. you've heard of the plan. they have 2.6 trillion in tax increases. president obama's latest offer to john boehner has 1.2 trillion in taxes. that is half as much, less than half than simpson bowles, and less than a quarter of what is in -- simply going over the fiscal cliff. i think the tax increases are too little. they are what they are. and it's something to remember as we reach the edge and you hear a lot of complaints about the tax side of obama's offer. what he's asking for in terms of tax increases is not that radical, it's way less than if we don't reach a deal. contrary to what you may have heard, republicans want to raise taxes too. shocker, right? >> the superficial take on this, the argument between democrats and republicans is between democrats who love taxes, just want to tax everything. and republicans who totally grover norquist taxes, they

no one wants to go over the cliff. one wants to wake up on january the 1st with a nightmare on our hands. i believe that if geithner on behalf of the administration and especially the president gets serious about this, we will avoid it. otherwise, i think they better watch what they wish for. >> yeah, let me share with you what i was most struck by in that interview. i want to roll this sound bite here. this was actually -- this surprised me. listen to this. >> i want to understand the administration's position when it comes to raising taxes on the wealthy, those making more than $250,000. if republicans do not agree to that, is the administration prepared to go over the fiscal cliff? >> oh, absolutely. again, there's no process tespen agreement that doesn't involve those rates going up on the top 2% of the wealthiest. remember, it's only 2%. >> so there you go. there you go, senator. absolutely, he said. i mean, based on what i just heard, i think we're going over the cliff. what do you think? >> i'm not sure we're go

. >> barrasso said president obama is eager to go over the fiscal cliff. senator barrasso joins us. well, why do you say that? >> well, i think the president sees political victory at the bottom of the cliff in term of the increased tax money coming in that he can spend for other programs. i think he sees a lot the military which the democrats have been after for a long time and then he gets to do what he loves to do, is to blame republicans. my concern is that i actually see financial problems for our nation at the bottom of the cliff and that's why i want to get a solution. >> tomorrow do you think it's going to be the beginning of the emergency meeting at the white house, is it the beginning of a deal or is it a political drama? >> my concern is it may be a political charade by the president and harry reid and nancy pelosi. i hope it actually is the beginning of a deal because if we don't get it done now, we need to go and make sure that things get done so we don't raise taxes and taxes aren't raised for all these americans that are looking at it come ja

as we approach the cliff, that's what we are talking about. >> the real cliff is america has become aece. thank you both. >> happy new year's, guy. >> good to see you both. coming up, what exactly is going to happen if we go over the so-called fiscal cliff. what happens to your wallet. we will detail the five ways this is going to impact your family, your wallet and your finances. and also new york governor an drew cuomo is ready for a fight over gun control. he's even talking about confiscating weapons. how far is he going to go? all of that and more later. and sam donaldson tells tea party america this is not your country anymore. oh, really? we will check in straight ahead. with the spark cash card from capital one, olaf gets great rewards for his small business! pizza! [ garth ] olaf's small busins earns 2% cash back on every purchase, ery day! helium delivery. put it on my spark card! [ pop! ] [ garth ] why settle for less? great businesses deserve great rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or

the fiscal cliff, which companies get hurt the most if we go right over that cliff? elizabeth ma cdonald is here with the bottom line. what are we looking at for bad news for what companies? >> walmart hand capped this and have their score card. a number of companies will, you know, dive over the fiscal cliff, and i'm tired of the "fiscal cliff" term, pardon me, it's a manmade term, the fc, whatever happens january 1st. here's why they get sales from government contracts. that's the deal. it's not just the lockheed martins of the world. you'll see in here, humana, other health care companies, of course, medical device companies hit with the tax, but they have striker, for example, and there's a lot of sales from government contracts. you'll see in here, look at that, motorola, holdings in and waste management companies like waste management and republic services, ashley. ashley: what are the stock prices on the companies, iz? >> good point. goldman sachs warned since 2011 when that debt ceiling crisis hit in the summer of 2011 that triggered the fiscal cliff learning

goes over the fiscal cliff. speaker john boehner has called the house back into session sunday evening. house majority leader eric cantor is telling his members to be prepared to work through january 2nd. both sides are still far apart on taxes and spending cuts. harry reid says prospect deals by monday are unlikely. minority leader mitch mcconnell says there's still time for an agreement. >> republicans aren't likely to sign a blank check just because we find ourselves at the edge of the cliff. that wouldn't be fair to the american people. >> now, a new reuters poll shows americans blame republicans more than democrats or president obama for the fiscal crisis. and when asked who they held more response, 27% said the gop, 6% pointed to the dems and 30% said all of the above. for more on this, we're joined by christian schultz from barronberg bank. welcome. so we're going over the fiscal cliff. >> well, the consumer confidenc already be over the cliff in terms of confidence already. that might already be the first