This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

The Best of Kass

Stocks in this article: F

In understanding why we will likely see a timely fiscal cliff compromise, it is essential to also go back to the November election, in which the message was one of moderation, and moderation equates to an ultimate compromise.

Some market participants (and certainly the media) seem to be now incorrectly playing the last war (which took place during the budget deliberations in August 2011). By contrast, I believe that fiscal cliff fears are likely misplaced, as we are at the point of necessity, and my view is that both parties get this. Sleeves will be rolled up in the next three to four weeks, and the outcome will likely be a relatively pro-economy/pro-business compromise with multiple concessions from both sides.

Compared to the budget deliberations of August 2011, this time around neither party can risk the perception of being obstructionists in the negotiations. Americans clearly have voted with their feet, and they want and prefer compromise over drama.

Once Bitten Twice Shy

My bet is that having been disappointed once and with the domestic economic recovery still subpar, we won't be disappointed twice. Fifteen months ago, neither the Democrats nor Republicans thought through the consequences of their partisanship. This time, they have clear knowledge of the potential adverse impact of stalled negotiations regarding the fiscal cliff -- both with regard to the economy and our stock market.

Arguably, both parties are now damaged goods (though for different reasons) and have to prove that they can legislate for the common good rather than on partisan terms. They cannot afford to do otherwise; they are not likely to make the same mistake twice.

Both parties find themselves in trouble, neither party is trusted (the overall voter turnout was weak), and it appears that Democrats and Republicans finally might/should recognize that the serious secular financial and economic problems should be addressed in a more bipartisan manner.

In the debt negotiations during the summer of 2011, the electorate was appalled by the partisanship and lost confidence in our leaders. They must earn that confidence back by resolving some of their differences. (They will have another two years before the 2014 elections to posture on a partisan basis.) It is my expectation that both parties will likely move toward the center in the fiscal cliff negotiations and will reject the more extreme members of their respective parties in making concessions to each other.

2 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,876.08 +48.33 0.27%
S&P 500 2,070.39 -2.44 -0.12%
NASDAQ 4,794.0740 +6.7570 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs