ETFC's Not a Buy Off SCHW

Tomorrow E*Trade (ETFC - commentary - Cramer's Take) reports earnings and I can see the angst on the people's faces at the firm. It has to take some charges, actually many charges, to bring its mortgage portfolio up to date -- the bigger the better! -- but it is painful as all get-out because this would have been a fantastic quarter.

I say that because that Schwab (SCHW - commentary - Cramer's Take) quarter was a thing of beauty with lots of trading and a lot of money in. Just perfect.

And E*Trade's would have been, too, if it weren't for the mortgage exposure.

I like Mitch Caplan a lot and I am quite confident that he will put all of these mortgage problems behind them over time, including nagging worries in home equity loans. I believe that The New York Times overdid the worries and drove the stock down big off of questions about E*Trade's actual solvency, which I think is ludicrous. The company will survive and thrive.

But normally I would be saying to you that given how great Schwab's quarter was you should be buying E*Trade ahead of its quarter.

Nope. No can do.

Have to clean things up a lot more to get there.

Random musings: The single biggest large-cap beneficiary of this surge in oil is the new Transocean (RIG - commentary - Cramer's Take). It is amazing to me that this stock is not at its 52-week high. I own it for Action Alerts PLUS.

At the time of publication, Cramer was long Transocean.

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