From hope to hopeless on budget talks
We have to determine where the market can find firm support on a definite lack of real negotiation.
It's going to get old real soon. That's how I am starting to feel about this Washington situation. If neither side is choosing to negotiate in earnest on the fiscal cliff issues, then the market will have to reach a level where everyone has figured out there will be no earnest negotiation, and they aren't selling regardless.
Last week seemed incredibly confusing. On the one hand, there was plenty of talk about how a deal could be reached. I keep thinking about that comment from Goldman Sachs (GS) CEO Lloyd Blankfein in particular -- the one that said the sides were real close. How could he say that if it weren't at all true? Wasn't it based on something? How about all of those CEOs? Don't they make any difference? We thought they did last week.
On the other hand we have the perception that, if Washington was near a deal, something critical broke down -- because the positions got further apart over the weekend.
What happened in those intervening days, when the business leaders were hopeful and when President Obama went to the Pennsylvania toy factory? Did Treasury Secretary Timothy Geithner misjudge things and play too much hardball?
- Also see: 'Mad Money' recap: reasons to worry
I am thinking like this because it is highly unusual to see a situation go from hope to no hope in three days without anything really changing.
I have to tell you that, behind the scenes, the presidents' people are very certain that there will be a deal -- so certain that it's a bit daunting. Maybe that's what the business leaders were imbibing.
To me, the important thing is how quickly the complete transformation was made. This went from last Wednesday's happy belief that a deal will be struck, to a harder line by both sides Friday, to a total collapse by Monday. That last stage was on the heels of a Republican offer that someone would put out only if they wanted to end talks. Sure, I am certain some people thought Monday's Republican gambit had some substance, but to me it was more of the same.
Get that "total collapse" offer into the market. Figure out where there is no hope -- and then the market will have some firmer footing, which is certainly lacking right now.
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 and has no positions in stocks mentioned.
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Producer, CNBC.com In an election that often focused on debates about class warfare, President Barack Obama was favored over multimillionaire businessman Mitt Romney in eight of the nation's10 wealthiest And his margin of victory in all eight counties was greater than that of the national vote, in which Obama was leading by 50 percent to 48 percent with 97 percent of precincts reporting. The findings are based on a CNBC.com analysis of Census Bureau numbers on average annual household income from 2006-2011 and results from Tuesday's elections. The 10 richest counties accounted for 1,337,700 votes, or about 1.1 percent of the national popular vote. In none of the richest counties was the margin of victory wider than in California's Marin County, just north of San Francisco, where the president won by 74 percent to 23 percent, with all precincts reporting. In Marin, the average annual household income is $128,544. The two richest counties where Romney won were in New Jersey: adjacent Hunterdon and Morris counties in the northern part of the state. Romney won in Morris by 55 percent to 44 percent and in Hunterdon by 59 percent to 40 percent. However, Somerset County, which abuts Hunterdon and Morris, went to Obama by 53 percent to 47 percent. —By CNBC's Paul Toscano
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Fairchild
Heavy cuts would cause deflation. The stock market would crash and the real estate market. The bounce real estate has came from QE3, All the stimulus money pumped up the financial markets. I don't agree with you. Obama wants inflation, or all the stimulus would be a waste if we have deflation.
Delmar...That is beneath you...What are the rest of the so-called esteemed leaders doing ??
Trying to backpaddling, name call and pull off piddly press conferences..?
They LOST....
And now they cannot use as an excuse...."Gonna get Obama out of office in 4 years."
About the ONLY agenda they had the last 4 years.....PATHETIC..
AND AMERICA ISN'T BUYING IT ANY MORE....
Does anyone recognize that the "fiscal cliff" represents $500B "savings" per year over 10 years.
This means we bring our deficit from (depending on which figure you believe) $1.35T to $850B per year? So in 10 years, even with this "unimaginable" cliff, we will still rack up $8T MORE debt.
I am sure they will compromise at some point. Obama's "plan" is to raise taxes $1.6T over 10 years. The GOP "plan" is to cut spending and raise revenue $2.2T over 10 years. Both plans lead to downgrades and default in 10 years.
Where is a "real" plan to balance the budget, ever?
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