This Day On The Street
Continue to site
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

Take Advantage of the Fiscal Cliff

NEW YORK ( TheStreet) -- The "Fiscal Cliff" is nonsense.

It's completely man-made, and it's not really a bad thing. It's deficit reduction. You know, cut spending and raise taxes in equal measure. Get out of the red.

The measure would, over two years, cut our annual deficit by nearly three quarters, according to the Congressional Budget Office. ( See this chart on Wikipedia for more. )

So what's the problem?

The problem is that with the economy still weak, it's too much too soon. All this talk about "Rise Above" partisanship is aimed at weakening the package, not strengthening it. It's all about deciding who won't have to suffer, because in this package everyone does.

There's also nothing magical about the Jan. 1 "deadline." If a deal to limit austerity comes on Jan. 5 instead of Dec. 31, it makes little economic difference. If it comes at the end of January, the damage will still be very limited. It's only if it never comes that we go into recession.

The likelihood of recession is why the CBO numbers are wrong. Austerity is not a path to prosperity, it's a limit on growth meant to achieve some other end. If we do go down this path, everyone on both sides agrees we will have a recession, and more unemployment, which drives deficits up, not down.

So a deal will be had. Everyone wants a pony and the deal will be about who gets their pony back.

But you can still make money off this. Because the media has everyone panicking, because talking about this like it's a crisis instead of a little too much of a good thing has already sunk consumer confidence and ruined the Christmas sales, according to Reuters .

For example. I've wanted to buy some (AMZN - Get Report). I sold at a profit, at $230/share, but figured it would fall again and it didn't. Even with the panic so far it's still near $248/share. So if this nonsense slides into late this week, and stocks fall hard, I may be able to get a bargain.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.19 -1.04%
AMZN $670.90 -0.06%
JPM $61.57 -1.58%
XOM $87.94 0.00%
FB $118.06 0.54%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs