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While Washington debates the "fiscal cliff," a collection of austerity measures due to kick in January 1 unless Congress intervenes, Microsoft (NASDAQ:MSFT) is facing its own fiscal cliff, the end of a full quarter with Windows 8 in the mix.

Just as Wall Street doesn't know how Washington's fiscal cliff will turn out, the same is true of Microsoft's. The company insists all is well, that Windows 8 is matching the successful Windows 7 so far. But OEMs like Asus are starting to complain about their sales figures and my old colleague Zack Whittaker at ZDNet says a Christmas fail could have disastrous knock-on effects for the company.

Bargain Bin may call that hate, or it may be hell, but these are facts, and whether you call them hate or hell facts are stubborn things.

Microsoft's response has, ironically, been political. It has hired Hillary Clinton's former campaign strategist, Mark Penn, and begun running negative ads, mostly aimed at Google (NASDAQ:GOOG). A Microsoft site called Scroogled charges that Google's search results, especially for shopping, can't be trusted, and urges consumers to make Bing their homepage.

It would be nice if Google's search engine were Microsoft's problem. It's not. Apple is Microsoft's problem. And Microsoft's main response to Apple has been a collection of commercials for Windows 8 that try to ape the youthful look-and-feel of Apple ads, but wind up looking sad.

There is another response from Redmond, one that does seem to promise better financial times. A new version of Windows for the enterprise, dubbed "Windows Blue," may be on its way, say some analysts, and revenues from that upgrade could make up for losses elsewhere

Still, PC sales are down 10% from a year ago, while sales of "post-PC devices" - tablets and phones - continue to skyrocket. Even if Microsoft manages to ship (and sell) the 5 million Surface tablets it claims it will, that won't make up for PC losses, with only China's Lenovo posting sales gains.

I'm certain that the advice from Microsoft fans here will be to stay the course, and I've still got my little stake in the company, but the Wintel age is continuing to fade and I may well bail in January. How about you? I'm suspecting that Washington will survive its fiscal cliff better than Redmond will.

Active traders may even be lining up in Microsoft's short side. That has been the way to profit in 2012.

Source: Microsoft's Fiscal Cliff