Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK ( TheStreet) -- It's becoming increasingly apparent there will be no federal budget deal by January, Jim Cramer told "Mad Money" viewers Wednesday. So if the nation falls off the proverbial fiscal cliff, investors need to be ready with a game plan. Cramer said compromise appears to still be the enemy in Washington, with several congressmen digging in their heels and sticking to their previous vows to never raise taxes, no matter how desperately they may be needed. He said the current scenario feels much like the passage of the Troubled Asset Relief Program, or TARP, a few years ago, where politicians only got on board with the plan after the market fell by 10% and they realized just how bad things would become. Cramer predicted the markets will see their first leg lower during the last week of the year as nervous investors liquidate positions ahead of the new tax rules. Afterward, Cramer said, we're likely to see further declines every Thursday as jobless claims begin to rise. So how can investors protect themselves? Cramer said all stocks will feel the pain of the cliff, but those that will recover first will be those with the biggest gains before the cliff. He said the housing recovery will continue on, which means stocks like Home Depot ( HD), Sherwin-Williams ( SHW) and Whirlpool ( WHR) will bounce first, as will the high-yielders like AT&T ( T) and Verizon ( VZ). Be ready to scamper out of the abyss, Cramer concluded, because after the markets fall by 10% or more, these stocks will be the ones to help us recover.