Consumers feeling fear of fiscal cliff

The macro concerns are finally reaching everyday Americans.

By Jim Cramer Dec 13, 2012 10:28AM

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MedioImages CorbisWas Wednesday the day when it dawned on people that without a deal, consumers could be in real trouble? Was it the day when it hit the market that the regular guy is concerned?

 

I have to tell you that the comments from Wal-Mart (WMT), on top of the comments from Dollar General (DG) Tuesday about gross margins, tell me that everyday Americans are now starting to figure out they have to be worried, even if they are not sure exactly what to be worried about. They know we have a big budget deficit. They know, as they did when the debt-ceiling crisis occurred, that something bad is going to happen, and they know it might be something bad happening to them.

 

So that's who pulls back.

 

We may now be past the point of who is to blame and more to the place of "I don't care who is to blame -- do something." That's why, contrary to many people, I was quite contented with what Ben Bernanke is doing (read on TheStreet). He knows that sudden austerity is coming, and the last thing the country needs is a guy who is going to raise interest rates now because we had some good housing data. I think he recognizes how fragile the construction and auto rebounds are, and he needs to send a signal that he is not a Jean-Claude Trichet figure who wants to start raising rates as soon as possible.

It drove me crazy to hear so many people talk about how the real problem now is how Bernanke will get out of this position when things get better.

 

To me, what's pertinent is who is going to hire if everybody gets a tax increase and if instant and stupid spending cuts cause 2 million jobs to be lost.

 

Bernanke knows that austerity is good incrementally but hideous all at once and without thought. That's why he coined it a fiscal cliff, for heaven's sake. So don't blame him. He knows that consumer and business confidence is falling. He knows the cliff is coming.

 

He just wants to make the landing as gentle as possible, although when you jump from a cliff without a rope, the results tend to be less than optimal.

 

Cramer'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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204Comments
Dec 13, 2012 1:17PM
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There's going to be a deal, and it's going to come at the last possible second.  I was really annoyed by that until I heard why.  If negotiations end early and a deal is reached, whoever didn't get everything they wanted looks like they just gave up.  In the environment, if the GOP allows the tax rates to increase without taking it to the edge, their constituency interprets that as them not fighting hard enough.  If there are spending cuts impacting a broad number of people are agreed to before the bitter end, it's interpretted as Obama selling them out.

 

We're not talking about reasonable people that are willing to accept "This is the consensus we came to, and we jointly feel that this is a fair way to go."  Both sides have rabid elements that will once accept giving up anything if it's right up against the edge of disaster.

Dec 13, 2012 1:12PM
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MG......You can keep calling Hitler a socialist until the cows come back to the city...

But I'm going to keep believing, that Adolf....Strayed from his Marxist beliefs...AND many would

 

consider him a Dictator or Tyrant as he matured, until death.

 

The old "Absolute Power" problem, your buddy 57 States has not crossed over to the"darkside" yet.

Hitler had surpassed his Socialist attitude, long before the end..

Dec 13, 2012 1:02PM
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I thought there would be a deal this year and am still optimistic.  But, if no deal is struck by 12-31-12, there is another plan in the works that has worked to change politicians minds...the old style demonstration.  I do not mean the kind that everyone does today via email, tweet, twack, etc., the real live in-person demonstration in front of Congress and the White House with thousands of us Middle Class folk, like me, that cannot stand it any longer.

 

Here's the date:  August 28, 2013

Here's the place:  Washington D.C.

The march:  Middle Class Rights march on Washington

***MARK YOUR CALENDAR***

Dec 13, 2012 12:58PM
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Thumbs up if you really don't want to send 20 F-16's to Eygpt as part of an aid package.
Dec 13, 2012 12:54PM
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Not really sure I/we understand "all" ramifications of the "fiscal cliff", but I understand enough..

The term CLIFF bothers me; I have fallen over small hills or ravines...But all I have in my mind, is "Thelma and Louise" and that didn't end well or pretty...

We have several humungous(sp) figures,rates and amounts thrown around...

As an investor and a retiree....I feel something pressing against my back.

I hope the people (all) that make the decisions, feel the same thing...

 

My biggest concern is that we could default as a Nation again,be downgrade by all..And the WORST,

Go back into a deeper Recession......Losing everyhing for another 3-6 years. 

Dec 13, 2012 12:51PM
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The fiscal cliff will hit those who depend on the government for their living.

It will take out the takers. not the makers.
Dec 13, 2012 12:46PM
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No, dlh2448, I oppose growing government more by increasing anyone's taxes.

Taxes SLOW an economy.   They have historically always caused economic contraction.   Which is common sense.    Taking money out of the productive private sector means less economic activity.  Thus it increases unemployment and slows GDP.    Reducing taxes, has the opposite effect.

Liberals can complain and argue all they want, but this economic law will not change.

They must think the economy is going gangbusters, if they want to slam on the economic brakes.


Dec 13, 2012 12:40PM
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Sounds like enough of everyone is on board for higher taxes on the rich... now if they can just agree to spending cuts it will fly.
Dec 13, 2012 12:35PM
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The new claims came in lower today. The numbers are being hailed a a huge improvement. May I caution that we now have a much smaller universe of employed as the worker participation rate has declined precipitously over the past several years. Thus these numbers must be held up against a smaller workforce and are understated proportionately.  
Dec 13, 2012 12:31PM
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Kinda think the term "socialist" included in the Nazi's name, may have been somewhat of a misnomer, unless you were of "pure Aryan blood"....Then take and destroy all or anything immigrants had acquired or built....Distributed to the Rich Capitalist/Industrialist that were left, supporting the War on Europe..

A reverse socialist conundrum ??....Actually one could say many were not really immigrants.

 

Even our own Joseph Kennedy, Ambassor to England....Wasn't really fond of the idea of attacking the Germans...But old Joe, had a Catholic/Jew thing going on also.

Until or maybe even after he was recalled back to the U.S.

I would have called it "trickle up economics."

Dec 13, 2012 12:28PM
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Latest  NBC Wall Street Journal Poll....75% including 61% of Republicans favor higher tax rates on the wealthy......It's time the top 2% pay their fair share.
Dec 13, 2012 12:27PM
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Hey Boehner ---- NBC/WSJ POLL   75% say they are ok with raising taxes on the rich !!!
Dec 13, 2012 12:26PM
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quote from mirage "Nazi' are SOCIALIST's, hello National SOCIALIST Party...  Socialists are part of the left.  Nazi's went after their Rich class (Jews)...  "

so dumb it needs no comment!
Dec 13, 2012 12:26PM
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Consumers fearing fiscal cliff? Hardly. Consumers don't think about such things. Even if they did, it is now falling on deaf ears, as the story has been over-reported for months.

I think the real story is that Cramer shorted some stocks and is now hyping the fear so he can cash in.
Dec 13, 2012 12:24PM
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CNBC strikes again ---- Kaminsky quote "the wealthy are the most generous people in the world" .....

well kaminsky (aka bilbo baggins)  --- do you recall a fellow by the name of madoff -- he was very charitable - problem was he had STOLEN most of that money .....

Btw Harry Reid he said you DO NOT give any money to charity - I am betting you give more than he does so can you please force him to apologise on AIR !!

CNBC says "Rise Above" while they attack one side ....... dooshbags !
Dec 13, 2012 12:16PM
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Why not charge 7.65 % on all of an individuals salary?  If the limit is only 7.65 % on 80K let's say, that would only be 6.120. But if that person is actually earning 3 million the tax paid would be $229,500.  Plus not only would the employee pay this but the employer would also!  And this additional money would not only pay for Social Security and Medicare, but every other tax shortfall out there!  Plus, the people that are earning these kind of big bucks should not qualify for Social Security in the first place because of all the money they have.  Yes, give them Medicare, but forget the Social Security!!!!!!
Dec 13, 2012 12:09PM
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Sounds like everything you buy Mirage, is made in China, Maylasia or Mexico..?

Factory equipment and supplies too ??

**edited** Yes, I was going to add Japan to the mix of Foreign suppliers, but didn't think it was a fit.

 

Yes, that is a good thing for our American Economy.

Dec 13, 2012 12:06PM
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I am in the group of people who think the fiscal cliff is needed. The majority of the people in this country that voted evidently have not been paying attention. The president or the republicans have NOT proposed any significant spending cuts to date. The 16 trillion dollar debt is not going away anytime soon and it is obvious that raising rates on the top 5% will not even put a scratch on the debt. The eventual outcome of a deal between the two parties will be increasing government spending and eventual bankrupcy for the country. Our children and grandchildren will be paying for the excessive nanny state spending for decades, while the fools in D.C. haggle over pennies. Maybe we ought to offer the Chinese the state of California in exchange for the money we owe them?
Dec 13, 2012 12:05PM
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Amazing - the teabaggers are getting stupider by the day - mirage is actually arguing that the nazis were socialists because the word "socialist" is in the title of the party.  

So mirage does that mean the "tea party" are all about tea ....

You are aware thet the nazis were funded by the uber wealthy german industrialists no? Their version of the koch brothers, rupert the bear murdoch, DICK de Vos, etc etc etc ....

Forrest Gump would be the smartest guy at a tea bagger rally !!
Dec 13, 2012 12:04PM
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When will people realize that W/S as well as the government promotes this fear every time a budget is enacted or raising the debt ceiling?  Worrying every time this happens is complete ridiculousness! I don't know who is more ignorant, the government, wall street or the investors who believe all this fear b/s that is being spread?
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