Dazed, confused by budget talks, market swings
We come into this session bewildered by fiscal cliff negotiations and betting the market is set up to fall.
Could it be that the U.S. economy is so smoking hot that we don't need to worry about higher taxes for all? Maybe the defense budget doesn't matter as much because everyone sees the profligate nature of the Pentagon, with its ridiculously expensive fighter planes. Maybe the employment benefits don't mean much because people are working off the books anyway. Maybe, with all the little charities and state programs out there that can make up for the federal dollars, we are wrong to be so fretful. Maybe it's all made up by the media -- and, if we didn't know any better, we'd see the changes as mild and realize the whole thing is overblown.
Look, if you are not wondering about these sorts of things, I think you must be brain-dead. Thursday's half-decent rally, coming in the face of horrendous retail numbers and a lack of progress in the talks, makes us feel that the whole thing doesn't matter. Either that or, after the debt downgrade, the public has just become conditioned to believe the consequences aren't meaningful, or that they will be avoided. Or, at least, they've been made to feel it has nothing to do with the stock market -- no more than how much the now-evident China expansion has to do with the Chinese stock market.
Think about it. In the span of a day, we started by thinking there was definite progress, and then went to thinking there was no progress. Then, by the end of the day we came to this realization: Not only was there no progress, but things have grown worse -- maybe much worse -- with a proposal from the Democrats that basically says, "Taxes are going up and benefits aren't being cut." I mean, Thursday was a day when everyone actually seemed to throw in the towel. President Obama's game plan was very old-fashioned tax-and-spend, and the market lapped it up.
So we come in here Friday, dazed, confused and betting that the market is set up for a fall.
Yet it's very rare that we see a tape that allows you can get off a short like you can here. Perhaps the buyers are propping stocks up; it is the end of the month. Or perhaps they mistakenly believe, now, that the sides have grown farther apart -- that a deal is in the works for the weekend.
I'll say it. It makes no sense to me.
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.
More from TheStreet.com
"I make the argument that going off the -- as you call it the curb, I call it the slope, the press calls it the cliff, is actually the best deal progressive Democrats are going to get. And here's why. One, we get the Clinton tax rates on everybody. Will it cause a problem? Yes. There will be a short recession, and it will be painful. But two, we get defense cuts. Republicans are never going to agree to that. And three, there are some human services cuts, which we're not going to like. But it's the least possible damage."
"So, I think the fiscal curb, as you call it, is the best deal that progressive Democrats are going to get. And I think it's the best deal in the long run, not the short run."
in capitalism you pay your workers the least amount possible to maximize profits...
the chinese communists ironically grasp this concept of competition and are knocking us out....
number of bankruptcies due to health care expenses in
maybe we capitalists dont know what the hell we are doing
We have to cut spending and increase taxes, who cares if we go with the default cuts (fiscal cliff) or a plan the government comes up with.
Everyone know the out come. Why do the markets act like there is something the government can do to fix this.
I'm so sick of people looking to the government to fix our problems. Do people really feel we should make this problem bigger and pass the problem on to our children? Have we not spent enough of our children's money?
Someone made this comment on a post of mine the other day, sorry I forget your name and I am too lazy to go back and check but if you are reading this you get all credit, it is a scary thought but could be true;
What if the cliff is the deal..........
Kind of a scary thought, both sides can make it seem like they didn't give in.......
When you think about is there a deal that will hurt less then this? Tax increases, spending cuts, and military cuts, no matter how you slice them they will hurt so really is there a deal that they could reach that is going to be better then this? You want tax increases and spending cuts? Here you are, enjoy!
FLUSH.....I've been trying to figure out WHO is behind the "curtain" for a long time...
Last time I "thought" it was Cheney...?? Probably wrong...
Obungles is on a Road Trip selling his wares..Big Deal..Presidents shouldn't be sitting around the House all day...
And Numnutz Boner is crying and pointing fingers back at the other House...Sweet Jeezus...
Why are we paying for these people...??
Maybe if we did TARIFF goods coming into this Country, then we could use it to FUND the FOREIGN AID that we send back to them anyway.
I call that a Win-Win.
But overall "protectionism" has never worked that well..
I see some or someone stating the Administration...Is doing the same as they did the last 4 years...
I'm not letting any of these s-o-b's off the hook, what the hell is the matter with you...?
Congress HOLDS THE PURSE, and the PURSE STRINGS....
There are dozens if not hundreds of House and Senate bills and Administrative proposals sitting piled on desks of the various Leaders, that can't make it through Committee or brought to the floors.
You must wake-up and smell the coffee or tea, or get off the weed you are using...
THEY ARE DOING NOTHING, EXCEPT POINTING FINGERS....
Here is how it works, The poor leech off the government, the rich put a dollar general in the neighborhood and sell the crap to the poor and get the money that they got from the government.
So now the rich don't want to pay tax on the money they got from the poor, that the poor got from the government. Most of the rich get the money from being a vendor to the poor. The trickle down and trickle up and around and around she goes .I am getting dizzy and confused. LOL
I SEE THE THAT WE ALL GATHER AT CRAMER'S TROUGH NOW, MY OH MY.
THAT SWILL SURE IS GOOD...
Not really following the Military Spening thing...Not sure a lot of others do either..
Expenditures for an F-35 Jet have more then doubled or something like that??
Cancel the f****in order for lack of performance.....Piss on them....Let Lockheed/Martin find another sucker...We don't need the goddamn planes anyway...For what??
And the guy that said we went into the MidEast, without any Armour for our boys and girls..Hmmm.
Have you looked at any pictures of what they are wearing or have on their backs...
I'm surprised they could walk ?
They have more protection and communications, then in the Last 3 Wars combined.
Night vision,day vision,cell phones,some carrying laptops, almost full body armour...
Average vechicles that are almost beyond reproach..Speciality Vechicles built in some Congressman's or Senator's District down South that cost in the millions..
We have enough fire power and Reconn that we don't even have to go in their Country to destroy it or specific targets...Hell in fact, we can sit off shore to accomplish the Mission..
I almost think the Military has taken all thinking or common sense away from the soldier, and they are too comfortable and lakadaisial(sp)...Therefore get injured or killed....IMO.
The sense of being of being indestructible is not a wary feeling....
We need to find a way to bring the jobs back to America. After the huge amount of unsafe products coming from overseas markets (from dry wall, to baby formula, to dog food), could we pass a STRONG law that denies a company its right to sell its products in our markets if: They do not follow our EPA rules and regulations, follow our OSHA safety rules, follow our child labor laws, food inspection and regulation, and all the other regulations companies in America have to follow. Doesn’t matter where the factory is in the world, it wouldn’t be a tariff. For the health, safety, and welfare of our citizens, you will not be allowed to sell in America. We wouldn’t be telling other governments how to run their manufacturing sector. If they want to let companies manufacture crappy and dangerous things fine, sell them in China, let the Chinese government protect its citizens. If the company doesn’t follow our rules (not the government of the country the company is in) you will not be allowed access to the American markets. It might not be so profitable to take a company overseas to take advantage of a corrupt or weak government just to escape our manufacturing laws to, sicken, injure, pollute, work children, and kill the local populace for pennies a day just to make more money. (Bhopal India disaster, Bangladesh textile fire). This might offset the shipping costs to get their products to America and make it cheaper to manufacture here again. We would also be doing the world a great service.
My take is that the Pols on both sides of the fence are giving us just enough hope that a solution will be reached so that they have enough time to bail out of any long positions they are holding and getting short on just about everything before they pull the rug out from under everybody.
All of the supposed talks are just the ultimate insider deal before we all get totally screwed by the ultimate market manipulators-THE CONGRESS OF THE UNITED STATES.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
The Fed may start tapering in just a few months. Here are a few of the likely winners and losers.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.