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 4, 2012 3:48PM
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Was buying GoldMiners this morning....Cancelled orders for Target...To get them.
Dec 4, 2012 3:47PM
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Maybe the "Too big to fail" is being applied by our politicians. Maybe if we get ourselves so far in debt that it is just ridiculous, all will be forgotten. Maybe the Chinese will forgive our debt if we can just get so far gone that obviously we will never be able to repay. Maybe Germany will bail us out. If our debt were manageable we would be expected to pay! So lets just make it crazy stupid and then how can anyone expect us to pay. I like it.
Dec 4, 2012 3:44PM
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No surprise here.  Nothing will happen until 2013 begins.
Dec 4, 2012 3:43PM
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Endeavour.....I almost had a seizure....Got the keyboard down on the floor with me...LOL.
Dec 4, 2012 3:42PM
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Seriously...Really...let the Republicans drive us over the cliff.  It'll take them 30 years to recover from the ride.  They have a choice...to raise rates on the top 2%, those making over $250K or raise taxes, massively over the remaining 98%.  The President campaigned on raising the rate on the top 2%, but the republicans are STILL in denial on who won the election.  The Republican party just doesn't get it.
Dec 4, 2012 3:42PM
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RF........A lot of Mothers have told their little children that.....
Dec 4, 2012 3:40PM
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And the LIBERALS, keep on spending....Damn...??

 

Is that who has the War Machines in their District....And give the Pentagon Carte Blanche.

Dec 4, 2012 3:37PM
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Tog, don't over rate IQ. Everyone in my family has a really high IQ. Mine is the lowest in the family. One day I said to Ma. God is not fair, he gave me a lower IQ. Why doesn't he make people equal. She said, because he made you unique. Thanks to my dear mother, I have a lot of confidence.   
Dec 4, 2012 3:36PM
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Bob..skull dicker....Here's the deal dude...

 

That half the Nation....That you heap little praise on...Along with that idiot, moron(Morman) that ran for Prez.....IS WHAT MAKES THIS COUNTRY TICK..

 

Without them.....We would be nothing and still living with the Indians.....IMO.

No disrespect to the Indians...I am.

 

Dec 4, 2012 3:36PM
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 Rush the mouth said, blame  it on the microphone , I say blame it  in on intitlements and freebees for UnAmerica , Being  to civil. with other peoples money is stealing. Jimmy is like Rush , half bad information . There is to much talk . 2 many gurus like every one on this page . Cash out and buy a farm, or fishing boat . In Oklahoma we all have guns and if there is nothinig good to say we smile and shut up .  If everyone in congress holstered a gun Jimmy would have had something else to write about
Dec 4, 2012 3:34PM
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Look at California, 160 Billion or so in debt and the liberals keep on a spendin.  Maybe they hope to make it up on volume?   Kind of like holding your foot down on the accelerater when you are out of gas.   I'm lucky I'm old and don't have to learn this new economics.
Dec 4, 2012 3:26PM
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I hope the Republicans stick to their guns - Detroit, as are other cities are broke, and have declared bankruptcy...what amazes me is the pushing forward of these entitlment programs that bring our ruin closer by the day. Stay the course conservatives - lets take the pain now. Oh and send out additional "flamers" for Greece and the European contintent to get their acts' together....what a joke!!

Romney was CORRECT!! Almost half of this great Nation are gold-bricks that want the checks to keep arriving in the mail. Good Lord - four more years; wonder if we will survive it.

 

 

Cramer is a liberal hack.....

Dec 4, 2012 3:25PM
Dec 4, 2012 3:25PM
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It aint over till Barney Frank sings.
Dec 4, 2012 3:24PM
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Electing Obama was like taking a knife to a gunfight.  Perhaps a Lugar would have been a better choice.  :)   This is a political satire do not jump out the window.
Dec 4, 2012 3:23PM
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Royal.....My eyes have turned somewhat Hazel.....But still got a little tail left.
Dec 4, 2012 3:21PM
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JIM....who ??........Sweet Geezus.
Dec 4, 2012 3:21PM
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I am sticking with it's all grand standing, the deal is already done and both sides are making the situation look so dire so they can go back to the extreme right and left and say they had no choice. 

Unless the cliff is the deal....

Dec 4, 2012 3:19PM
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Tog,  I probably wouldn't recognize the devil if he was wearing blue eyes and blue jeans. LOL
Dec 4, 2012 3:17PM
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Maybe...No one should be allowed to vote, IF their IQ is under 80.....hmmmmmm.

 

And maybe no one should be allowed to comment with an IQ under 110.......hmmmmm.

 

Just sayin'.......Delky ??

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