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.

By Jim Cramer Dec 4, 2012 10:02AM

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Radius Images JupiterimagesIt'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?

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.

 

JimCramer's face

 

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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299Comments
Dec 6, 2012 4:14PM
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Does obama give  give f==== about the middle class!!!
Dec 6, 2012 2:35PM
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Final consumption sales tax only - no item or person exempt – When a family goes into a grocery store and buys $100 in groceries and the clerk adds $5 for local tax, $7 for county, $15 for state tax, $35 for federal tax and $45 to pay off the federal debt, the crap will come out of the American peoples head about the cost of government.

 

Then give the American people the right to directly decide what they are willing to buy through government, (by pass congress). Socialism, liberalism, high government spending will end. In 4 years the American people will reduce government spending by 35% and increase the productivity of our tax dollars by 400%.

Final consumption tax would make America made products and services more competitive. Taking taxes off business will bring business, their money and jobs back to America. Also, if the fed were to make the(real) inflation rate between a deflationary .5% and 0% inflation foreign money would move to America and keep interest rates low in a free market.

Dec 6, 2012 9:51AM
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When one hears the vile, arrogant, name calling, it simply points to the further need for education instead of indoctrination in our nations attempt to solve our problems through cooperation and not racist  division.  The example if some who have been enabled by the lies put out by FOX as facts does not stand up to  scrutiny.  There are still those  who don't believe the  POTUS was born in this country. These people believe the lies because it fits their agenda, and they don't want the facts.  If they would just ask themselves if they think that the wealthy/powerful in their party would not be able to produce evidence to prove their acusations they would realize they have been  lied to for political purpose.   
Dec 5, 2012 11:46AM
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You now have your wish to see Obama out of office in 4 yearsJ It’s time for a new agenda for the rebups. So now that you know fear mongering doesn’t work (AKA the last Repub regime Cheny Bush, notice not Bush Cheny), it’s time to come to the table to work on solutions. Get a grip and come to reality.
Dec 5, 2012 9:27AM
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Barack Obama fared well across the country Tuesday night, winning 332 electoral votes en route to a second term as president. Nowhere did he perform better, however, than in states that place the highest emphasis on education.

Of the 10 most educated states,  measured by the percentage of residents over 25 years old who have a bachelor’s degree or higher, Obama swept all 10. Conversely, among the 10 least educated states, Obama lost 9 states.

Here are the 10 most educated states, with those Obama won underlined. The percentage of residents over 25 with a college degree is in parentheses:

Most educated states

Least educated states

Massachusetts (39.1%)

West Virginia (18.5%)

Maryland (36.9%)

Mississippi (19.8%)

Colorado (36.7%)

Arkansas (20.3%)

Connecticut (36.2%)

Kentucky (21.1%)

Vermont (35.4%)

Louisiana (21.1%)

New Jersey (35.3%)

Alabama (22.3%)

Virginia (35.1%)

Nevada (22.5%)

New Hampshire (33.4%)

Indiana (23.0%)

New York (32.9%)

Tennessee (23.6%)

Minnesota (32.4%)

 

 

 Obama Wins 8 of the Nation’s 10 Wealthiest Counties

  Text Size

  Published: Wednesday, 7 Nov 2012 | 10:35 AM ET

 

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 the richest, Massachusetts' Nantucket County, where average annual household income is over $137,000, Obama won by 63 percent to Romney's 36 percent with all precincts reporting. The richest county in Romney's home state is also where, just prior to accepting the Republican nomination, the former Massachusetts governor held a$75,000-per-person dinner fundraiser.

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

 

 

 

Dec 5, 2012 9:25AM
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Classic Wrote:

THE FAIURE OF AMERICA

 ALL BY DESIGN=============================================================
 
 
Classic what's a FAIURE??, LOL.
Dec 4, 2012 8:20PM
Dec 4, 2012 8:02PM
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Forward over the cliff........neither side will be satisfied with anything less/
Dec 4, 2012 8:02PM
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Barry is overplaying his hand.  Before the election he and his ilk were pressing for $800 Billion in new taxes on those nasty "rich" people, now it's ballooned up to $1.6 Trillion and that doesn't even include the massive tax hike on high wage earners buried in Obamacare.  Sorry Barry, your bluff has been called.  Then again, if you've read excerpts from Barry's memoirs, going over the made up "fiscal cliff" is exactly what his father dreamed about with regards to the evil colonialists......
Dec 4, 2012 7:59PM
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Does anyone remember the "Super Committee" and their failures? Why were their salaries paid if they didn't accomplish anything? In my line of work, if I don't do my job, I would get fired. If I hire a mechanic, I expect him to fix my car. Why should we expect any less from our elected officials?
Dec 4, 2012 7:49PM
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None of the current breakdown of negotiations surprises me a bit. People don't fully realize the cancer we have on our country with the extreme Right in congress. The Right in Washington don't understand, or want to understand, what real compromise is. They have totalitarian minds. Typically, one of the tactics they use is to twist things around to make it seem as if it's the OTHER side not compromising. Any intelligent assessment of the facts and the ability to think critically, along with a logical grasp of what fairness and balance means, can easily see through their baloney. These extremists are con-artists and frauds, out only for themselves and their wealthy special interests. 
Dec 4, 2012 7:48PM
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All the Democrats fault.  They stand by their entitlements and their twin sacred cows of medicare and medicaid, crippling deficits be damned.
Dec 4, 2012 7:47PM
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You guys voted for it now we all have to live with it
Dec 4, 2012 7:41PM
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Didn't we learn anything from the Debt Ceiling negotiations? They always make a last-minute compromise so the constituents think they battled as hard as they could. They're probably sitting behind closed doors drinking beer and laughing at us for worrying about it.
Dec 4, 2012 7:38PM
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This is what happens when you have career politcians playing to their base. It has nothing to do with

what's best for the country, but to get re-elected. Term limits are the only answer

Dec 4, 2012 7:35PM
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When we hear the words "revolution", "comrad", "guns", and many racist solutions, it can only mean that the radical element in our society  is barking again.  What has Limbaugh or Nordqiust ever produced, manufactured that benefited America?  It is just greed and lust trying to hold on to what they have inherited in most cases. 
Dec 4, 2012 7:16PM
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Who actually thought it would be different, same President, same parties controlling the house and the senate?   Term limits would fix the lack luster lifers and remember, their wallets are getting bigger while the rest of the working stiffs wallets are shrinking!

Dec 4, 2012 7:14PM
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What do we expect with TIMOTHY GEITHNER at the helm. We need someone that REALLY CARES about this country. Too many BUDDY BUDDIES working against us.
Dec 4, 2012 7:01PM
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Cramer, when are you going to realize that people are BSers, particularly politicians and CEOs?  Honest people aren't elected or hired, so when they tell you something, you must take it with a grain of salt.
Dec 4, 2012 6:34PM
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Wonder when we will get TRUE leadership - from anyone. A blanket tax rate for everyone without loopholes or deductions allowed would be fair for all and a reasonable way to increase incoming $$ to help balance budgets - as long as welfare (created by dems) and other freebees to those who only want a free ride. Somehow Social Security needs to be replenished to from the $$ "borrowed" by the dems.

As suggested below regarding congressional salaries, I also believe that they should pay into Social Security, etc just like the rest of us and have to live on that once they retire - no free lifetime healthcare either.

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