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Tickers in this article: F

The market's resilience in the face of early legislative posturing appears to be sending a strong message that the fiscal cliff will be resolved in a timely fashion by year-end.

Case in point: Yesterday Treasury Secretary Geithner (representing the Obama administration) delivered a one-sided proposal to the Republicans. His proposal offered $1.6 trillion in tax increases and only $400 billion of unspecified (and non-guaranteed) entitlement program cuts over the next 10 years. The 4-to-1 ratio of tax increases to spending cuts was a partisan and unbalanced proposal, far more lopsided than the tentative agreement made between the President and the Speaker of the House in 2011 and imbalanced relative to the Simpson-Bowles proposal (which had more in spending cuts relative to tax increases).

Upon release of this one-sided proposal, the market's reaction was muted, with S&P futures dropping by only 4 handles. (Since Thursday's 5:00 p.m. EST announcement, the modest falloff in futures has been reversed, and S&P futures are now up by three handles.)

Why didn't the market collapse upon receipt of the administration's proposal?

The answer is quite simple: The market recognizes that Tim Geithner delivered only the first proposal from the Democrats at the beginning of negotiations. The administration has absolutely no intention to stick to the proposal -- if it did, the House would soundly vote down the proposal and the full extent of the fiscal cliff's drag would be felt in the first half of 2013 (causing a recession and a sharp stock market fall).

The muted market reaction to the one-sided Geithner proposal makes sense to me.

Mind Your Investments, and Ignore the Media

There is little question that the schism between the parties is more venal than it was 20-25 years ago, which has led to the politics of division over the last decade.

Nevertheless, ignore the media's overhyped and extreme interpretations of both the Democratic and Republican Parties' gambits, especially in the early stages of negotiations (which is really more theatre and posturing than negotiations). And ignore items such as CNBC's promotional bug of the fiscal cliff countdown -- we have seen repeatedly, over time, other bugs that were killed off.

Being fearfully preoccupied with the first act of this fiscal cliff ballet could result in shedding investments that are attractive over the intermediate term. Instead of burying your head in the sensationalism of the media, try burying your head in balance sheets and income statements in order to find the next Ocwen Financial (OCN) or Altisource Portfolio Solutions (ASPS) .

It will be a more productive endeavor.

In summary, be fearful of the earnings cliff not the fiscal cliff.

At the time of publication, Kass was long OCN.