The market doesn't fear the fiscal cliff
It likes the coming together that we will see after we go over it.
Yes, it does all seem crazy. And while there are still two more trading days after today, the logical question to ask is: "If this is austerity on the horizon, why do markets seem to like it so much?"
Think about it like this. We know that we wanted Europe to put through pretty much what going over the fiscal cliff does, and those of us who think that growth is important don't like their plans. There's no growth stimulus. Austerity has led to lower interest rates, but those rates are really a function of central bank intervention.
Can our stock market really like a plan that has no growth kickers in it? So, logically we should be going down, not up.
Maybe the market is totally oblivious, and while we can make judgments that the market likes the fiscal cliff from the action, we can also presume the market doesn't know what it is talking about except for retail, which has been rolling over. But that's a tough fiscal-cliff-to-blame call because retail's been weak the whole season, a combination of ultra-warm weather, worries about the cliff and Superstorm Sandy.
This leads me to the most likely scenario: the market likes the coming together that we will see after we go over the cliff with the Republicans fighting vigorously for tax cuts and winning. That's why the sellers aren't dominating.
Makes sense. Grover Norquist really wants that. Some say he wanted the Plan B, but that's just nonsense. He wants nothing but tax cutting and that's what he can bargain with the president on through his committed minions. Turns out he was the most powerful man in Washington after all. Always will be, as long as the GOP owns the house.
Also, let's not forget how much the market is in love with gridlock. We know the next battle will be the debt ceiling and that will create another push for still smaller government and more rancor, which, while distracting, should no longer scare us because that's about debt downgrades that don't seem to matter so much anymore.
So, here's the bottom line. The market doesn't fear the cliff because good things come off it -- middle class tax relief -- and the rest is the long-sought agenda of fiscal conservatives everywhere.
We all acknowledge that a recession will be caused by the cliff if we don't get middle class tax relief, but if we do the fact that we didn't sell off big says that we will get it.
Those who don't believe in this thesis should be selling or shorting retail. The numbers are too high.
That's the best hedge I know.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.
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Well I didn't notice any Santa Claus rally, so I hope he is hiding in the woods around the Pine trees.
I suspect we will have an "Eleventh Hour" deal of sorts, with re-openings and ajustments in the coming weeks....NOBODY wants to get stuck with a downfall on their resumes...
Plenty of soapboxing and finger pointing...But we will know who's at fault when the dust settles..
There will be NO HIDING..
If a Partial or an Acceptable agreement is reached over the weekend...I look for Santa to come out of the woods...
I will take NTU's bet, that if that happens?....I'll take his figures on the upside.
But I've already made the bets and they are down..
BTW, yesterday was a good day at the Tables..Close to 200 upside.
Cramer can't grow anything on top of his head because the fertilizer between his ears won't even support veg life. What a worthless twit!
The people seem to be as evenly dis-united on solving the "Fiscal Cliff" thing as our irresponsible and feckless government.
I for one hope we do go off the "cliff."The American People have been held hostage to the extortion of endless wars since 9/11 and the bogeyman of terrorism. These tarpheads wouldn't stand a chance on American soil, but we are supposed to be so afraid. Nuts to that. Let them come. there are parts of this country that no terrorist would let themselves be caught dead in.
The American People (that's all of us) have been held hostage since we allowed the "too big to fail" and the "too big to jail" to extort one bailout after another from the American People (in the guise of the FED). Let the thing fail.
Are you not as tired as I am of one extortion racket after another? Regardless of what happens, do you think the politicians will stop getting their pensions, and their health care, and pay checks? Not as long as they continue making you pay their taxes.
Time to call the bluff of our criminal shyster politicians and banksters. Let the thing go over the cliff.
At least we get some peace and quiet. That alone would be well worth the end of everything. Oh, the joy of peace and quiet. Think of it.
The past few weeks the only "rallies" in the market have been because someone SAID something about a possible deal.
It's a W O R D market,when they like what they hear,UP.Facts and actions seem to have very little effect.
david carver (crazzy dave):
You must be related to Nicky Manaj by throwing around the race card freely like that !
BTW: my office manager of 25 years is BLACK .
Unfortunately, I will be absorbing her work load when she retires at the end of this year & I won't be able to rehire someone on account of the inaction by congress. But don't worry about her; she is a wealthy woman in her own right, and she attained that by HARD WORK EVERY DAY !!!
Now go back down to your basement, eat a twinkie & see if you still get your 'check' next month !!
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