Jim Cramer: Why the Cliff Makes the Short Side Look Good

Editor's Note: This article was originally published on Real Money on Dec. 3. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.

First, let me say, I hate politics. Second, let me say, I like profiting from stocks. Call me a profiteer, but you have to recognize that because we elected a president who favors tax increases and spending cuts, and because I have never heard any Republicans even be willing to say "tax increase," let alone vote for one, then you have to accept that going short beats going long here.

In other words, I am urging you in this column to recognize that no compromise means fiscal cliff jump, and cliff jump means lower profits for companies, and lower profits for companies means lower prices for stocks.

That's not GOP. That's not Democrat. That's just ineluctable.

What I don't like is that when I go on Twitter, Republicans disagree with that judgment.

Look, you can say that the president is going to cause a recession because we elected him, and he favored tax increases on the wealthier cohort. Romney didn't favor it. He's boxed by that vote.

The Republicans are boxed by their pledge not to disagree with the president by a pre-existing agreement to Grover Norquist's pledge.

One is a pledge to the electorate. The other is a pledge to Norquist. I think there is nothing wrong in putting it like that. It is not simplistic. It is simple

I don't care whether you agree with that judgment. I am simply saying that if you agree with it, there will be prolonged period where the short side might be preferable to the long side, because the president, right now, does not have enough pledge-breakers to get a deal done.

And what does a world look like with no deal?

There are three consequences. The first that is many will see less money from their paychecks, because more has to be withheld by law for everyone.

Maybe that doesn't matter as much as it sounds. I mean, if oil prices soar to $130, I think that would be a more important detriment to the health of the economy than just that increase.

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