don't drink too much. >> we'll have you all bk with us as well. >> and eat a pickle before the drink. >> be back tomorrow morning and watch our show tonight. starts at eleven o'clock with bill and megan. happy new year! >>. >> clayton: triumph amid the turmoil. stocks and the economy surviving a year of dramatic twists and turns. uprisings in the mideast, a tsunami in japan. a debt crisis in riot-filled europe. and here at home, a near government shutdown followed by a downgrade. despite it all, the dow pulling out a 5 1/2% gain for the year and the jobless rate finally trending in the right direction. and fast forward to 2012. are we looking at a boom or a bust for stocks and jobs? hi, everyone, happy new year, i'm brenda buttner, let's get

right to it. the bulls and bears this week, gary b smith, tobin smith. jonas max ferris along with mike norman. welcome to everybody. gary b. time to toast to an economic turn around in 2012. >> what did pink say? let's get the party started, brenda. and i can come up with current-- >> oh, very good. [laughter] >> pink is still current, right? listen, i think the underpinnings are there as opposed to what most or many people think of a very good year in 2012. look, and let's kind of take them one by one, quickly. unemployment is not great, but at least leveled off. housing starts, the other big part of this equation was up almost 9% in november. households have a lot of cash onened had a. debt levels are compared to household net worth are the lowest they've been in like 20 years and companies have a lot

of cash on hand. so, it's the green sprouts. i think we can finally start using that in reality are there for really a terrific 2012. >> todd. are you in such a celebrity tri mood? >> definitely not, brenda. look, if all of those things were actually true that gary b was talking about, the market would have been up 5,000 points this month and that definitely wasn't the case. look, you have to look at just history alone and that's what economists are going to be focusing on going into 2012. first of all, this gdp rate. 1.8% print, but year over year, 1.6%. go back to 1948 the first government could compute domestic gross product. anytime they're over 2%, u.s. economy ends up in recession and you tack -- you talk about the debt out there. realistically, people still have a tremendous amount of debt and therefore, they're not saving and not going to be able to spend the way we want

them to spend and therefore spruce up this economy. we're in for tough times, you guys. >> jonas, this will be an election year and historically government doing anything it can to get people feeling good. >> well, you're seeing we're not going to get any tax increases in all likelihood this year, all the temporary in the same place and nothing is going to derail the slow recovery and in addition, as gary said. the biggest they think our economy looks good compared to the rest of the world right now and includes the markets, many of the markets are down 20% this year and we look good compared to europe and compared to japan. it's not a great economy, but it's relatively good and keeps your costs to capital low and borrow is low cost or buy a home for the government or for corporations it should drive things along and continue, the slow upward-- >> and it's in the room, jonas, the way you're

sounding, we're not that great. 1.8% print is not good. any way you look at it. >> what country looks better than us, including the stakt right now. >> i don't know, maybe chinese looks good right now. growing at 8%, hey, i would like-- >> the stock market tanked and huge inflation problems and some bureaucracy there. i don't think they're looking better than america right now. >> we're not having is right now. >> mike, what do you think of the growth? >> i can't think of any pop star lead in as compared to gary b. but, however, he's probably prepared for that for three days in advance, but listen that's true, a snapshot what happened last year and conditions leading up until now. i'm not all that sanguine going into 2012. brenda, you said it's an election year and politicians are going to do everything necessary, you know, to make things good. the problem is what they think is the right prescription, you know, cut back, spending

cutbacks, fiscal contraction, that's not the stuff that you see big booms and recoveries come out of. and so, i think we're going to see a lot of what we have seen you know, in 2011. we're going to see weak growth and not going to see much improvement on the employment side and the job side and still see sort of a chop why i side ways market through 2012. so, it's going to be frustrating for a lot of people and clearly going to be questioning for people who are looking for jobs because there's not going to be a big job boom and it's going to be frustrating for investors, but that's probably the best we could hope for. >> okay, toby, i know you're going to be popping some bubbly, do you see some reason to pop some bubbly because of our economy, because of the market next year? >> well, let's look at our economy because it's not the monolithic thing. there are a variety of pieces of the economy that are doing fabulous and obviously, the shale oil gas revolution, at about 150,000 jobs net-net,

that's a big positive. if you were involved in any of the computer sciences aen programming and you know, being in san francisco as i'm going to be next week and the companies that we work with, the hardest thing for them to do is hire people. it's not money, it's not demand. it's hiring people and you have to balance that again, as mike norman says the government is contracting, and you could make that also to be a positive thing and so, the growth that we traditionally got from health care and from government. is not going to be there because of the obama care and things and so we're going to get it is in real businesses and the glimmer of hope that we're missing, there are real businesses that sell all over the world ap that has real high value and those are the things that are growing. >> yeah, the problem is that consumption is still 70% of our economy. hey, it's great to talk about fuel oil, but it's not big enough to support, you know, a big increase in gdp. so that's the problem and people don't have jobs and it's income is actually going down. we've seen negative income and

recent statistics and that's not a good figure to look at if you're expecting people to consume more, it's not-- >> but what we follow is the top 20% and whether we like it or not. the top 20% of earners in the united states are responsible for about 70% of discretionally spending and we follow that very closely and that number, you know, has hit a bottom ayn is on the way up and that means that the real net spending power in the united states is the, you know, it's slightsly growing. we're not going to have 3% growth. >> and that equates to 1.8% gdp growth and it's not that-- let me get somebody else in here. >> 2 to 2 1/2. >> and jonas haven't the employers used as much, got as much productivity growth as they can from their workers. >> and the age of a slow economy, they've laid off people and switch to overnight. you're not going to add on a full-time employee right away. going to overtime and you

don't know how long it's going to last and you can for a while, but at some point you reach the maximum hours, you can get on one person and hiring full-time. the survey seems to be they don't think they're going to hire the people this year, but that could change as the year progresses and seeing the unemployment rate going down in the hardest states, in the bubble, like california, and four months in a row, it's down double digits, but eventually they're going to have to hire full-time people and pick up. >> i'm hearing a lot of if's from you guys, if, if, if. if you look at the data, nothing supports a growing economy. you with a nt to talk about history going into an election year, the dow was down in 2008. not looking good next year, i'm sorry. but first of all, in the immortal words of adele i was able to come up with-- >> no, first of all, i think in due respect to todd. he points out the things we've seen in the past and that's logical, it's kind of like the companies in the survey

saying, well, they don't expect to hire, you know, a lot of people in 2012 because everyone seems and always makes the default reaction saying, well, what's happened in the past, well, surely that trend will continue in the future. that's how we got the bubble for crying out loud in 2000. everyone thought the internet bubble would go up and up and up. and you can't dismiss todd, have a lot of debt on hand? they have a lot of debt. that's erroneous, first of all, the least amount of the debt na the last 20 years. >> gary b-- >> and now gdp is higher than it was at the top of 2008. to mike's point, consumer spending continues to be strong. yes, not as strong as it could be. strong and increasing rather than decreasing. >> and i'm sorry, the rock star gets the last word, all right. it's the one big threat to a

rebound this year, gas prices, rising as iran is threatening the world's oil supply. can we break iran's grip on us by breaking ground on the keystone pipeline? the cavuto gang is on it. first, pay thousands now to get hundreds of thousands in retirement without working another day for it? another government pension hurt that might spark a taxpayer revolt in 2012. ♪ [ woman ] ♪ what i want this season ♪ if you'd like to try and guess ♪ ♪ it is something very special ♪ i would readily confess [ dogs barking ] ♪ 'cause all i want this season ♪ ♪ is something from your heart ♪ la da da, la da da [ male announcer ] thinking of others this holiday season, travelers.

>> good morning everyone, live from america's news headquarters, i'm jamie colby. there's an update on the search for a missing maine toddler, and it's taken a turn for the worse. police are now saying that they have found evidence suggesting foul play was involved and now treating her disappearance as a criminal investigation. the 20 month old vanished from

her father's house two weeks ago, and he is not being called a suspect. and nearly ten new fires overnight in hollywood, california, believed to be set by the same person or group of people who torched nearly two dozen cars thursday night into friday morning. those flames spread to several nearby homes, including a home once occupied by rock star jim morrison. police urging the public to be on the lookout. i'm jamie colby, happy new year everybody, now back to bulls and bears, keep it here on the fox news channel. see you in 30 minutes. the election season kicking off just three days from now in iowa and neil is all over it on the fox business network, and tune in for the results special guests, herman cain, iowa's governor and president obama as former economic advisor austan goolsbee and alan west and none other than donald trump.

tuesday on fbn at 8 p.m. eastern. you wonder what the candidates have to say about the pricey government presidential perks? public workers in 21 states buying what's called air time. pay thousands of dollars upfront, and get tens of thousands, in this case, hundreds thousands more when they retire and you know who is picking up the difference? you, the taxpayer. toby, you can't make this stuff up. >> brenda, you can't. and what's amazing is that people are having a hard time understanding why we're cynical about our government, about our leadership. and then we bring something up like this, that is, is sort of egregious in multiple ways. the math doesn't make any sense and number two, a sense of entitlement and sort of came up with this idea for air time from coming up the marriage from your air card, for crying out loud. and the idea that you can sneak this under the rug and pay this and nobody did the math is the epitome of everything that makes us just

go nuts in this country. >> i don't know, it sounds kind of like annuity. >> that's exactly what it is, an insurance run annuity, pay now to collect something later down the line, based on abbing tear -- actuarials and rates of return that the money is going into. the problem is nobody can predict or nobody did predict. ten, 12 years ago when these things started to get into effect, that we were going to have the worst economic down turn since the 1930's and that the stock market would have done nothing over that ten year period. it happens to be exactly the same thing as if an insurance company does not have enough in premiums to pay out after a natural disaster like a hurricane or an earthquake, that's unpredictable as well and the fact of the matter is, people paying in to receive early retirement and there's nothing wrong with that, in fact, it frees of the labor force for younger weeks who want to come in and the problem is the economy has

been stagnant for a long time and the investments did not pay off. it's not a bad program. >> todd, what do you think? >> i don't know how it's going to alleviate the pressure for the younger generation to come in there, mike. >> and-- >> well, hold on though, because when the pensions are this much and talking about half a million dollars in year, in i have. the safe program and guaranteed 4.5% interest. it's clear that nobody from wall street or any other banker from half a brain would predict that, 4 1/2 per year, so if you start thinking about the local municipalities and on the finances how can they hire again? i don't see where the money is coming from. >> i've got to get everybody in, how can they get the math right? >> first of all, i will say that the s&p 500 has the math wrong and pension and when they return-- >> sure, no, question. >> it's not just the government. i could say that this could turn and work in the benefit of taxpayers in the state if

we had massive inflation, and/or the stock market took off. and 322 a lifetime would be a bad trade off. they need to fix the calculation and that's all that's wrong with it. they're estimating too high a return as there are corporations for pension in america. >> lots of them. >> they need to have people pay in more to get the benefits and it shouldn't cost anything, if it's done right, it will be net-net whether you did do it. >> what do you think, gary b. weigh in here. >> i think that jonas has it right, as dos mike, and it's probably not a bad problem. and here is the problem i have with it though. and if it works out against the taxpayer, and there's a huge upside that they pay out. unlike a company, the public is the back stop. that's the problem. and the public could be on the hook for millions of dollars, i don't mind the program, if the public wants to be involved like with the private company wanted to do this, but that's where, that's where it-- >> oh. >> and draw a line. >> woo we're there left

holding the bag. >> thanks for joining us. do you want to know how good these guys are, picking stocks and making your money? stay tuned, we've got their best and worst calls. who made you a 50% profit and what they'll name now next. [ mujahid ] there was a little bit of trepidation, not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids. it's my world. that's my world. ♪

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>> coming up, the gang is in the hot seat. best and worst calls from 2011 how you can p

>> it's the most fair and balanced way to make money on tv. how you can still profit from them right now in the

scoreboard. best call first and toby, you're going to kick things off. talk about a strong call. digital realty trust was at play in september and since then, it's built up 26%, do you like it? >> i still like it, brenda. you know, last year, or 11 was about not losing money, and 2012 the same way, dividends and growth, i love it. >> all right, on to number two, gary b, in april you said master card charged of serious gains and you were right. take the profits and cash out or keep buying. >> i still like it, brenda. in fact, i would keep buying, when people stop using credit cards to make purchases then you can sell. until then i like it. >> and now for the number one goal in 2011, jonas, in april you said techs up 20% profit. well, it fired up even more, with bhp bilton bought it out

in july. should viewers keep it on buy bhp. >> i do not like about. hp, in mining, due for a slowdown and. >> thanks, guys. we do the bad and good on bulls and bears, the worst for last and starting with the best of the worst or something like that. toby, you're up first, you said micron technology was the name to own in 2011, but more like the name to miss and it's down 22%, what happened? >> well, it had, we had a bad, bad numbers because of issues that had nothing to do with micr micron, but the industry, and it will do well in 2012. >> okay, number two, gary b, back in june you said goldman sachs shrugs off the government investigation, since down down 33%, time to worry? >> i don't think so. look, i still, 2008 for a lot of these financial stocks.

i still think goldman is among the best of the bunch. if you have it, hold it. and if you don't, i would consider buying it. >> for the the worst call, jonas, you had the best of the best and worst of the worst. and you said dial in sprint nextel and it's down 57%, explain yourself, mister. >> and swing for the fences you're going to strike out once in a while. let me tell you, it's speculative and for the next two years, but still a merger acquisition, highly speck a latiff could be a pop though in the next year. or goes to zero, one-- >> okay. >> and okay. well, thanks for taking the heat, guys. you'll only get the fair and balanced grilling right here. and now time to look forward. so put down those new years noise makers and pick up your 2012 moneymakers. and they may double before the

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>> a special 2012 prediction, gary b. >> and mine are straight forward. and building up, i think that amazon is going to have terrific numbers to report and i still like the stock. i still own the stock up 40%. >> toby, bull or bear? >> i'm a bear there, way too much expense. >> your prediction. >> i like this, and that's the way they work and lay low-- >> jonas, bull or bear. >> i don't like that one. >> what do you like, your prediction. >> jp morgan chase up 30% and people weigh back in. >> and for the dow, where is the dow in a year. 12,1217 right now. >> 12,500. put money on it. >>