Banks Have Bottomed

The run in the banks could be related to much news here:

1. A potential takeover in the works with Bear Stearns (BSC - commentary - Cramer's Take);
2. The huge refis that have spurred demand for real estate a tad in January (read Ryland Homes' (RYL - commentary - Cramer's Take) conference call);
3. And of course, the idea that the Fed will cut again, which we think is necessary to avoid a financial -- not economic -- calamity.

We also are seeing a gigantic amount of volume on the exchanges, and the smart institutions themselves -- CME (CME - commentary - Cramer's Take) is the smartest -- are buying.

I continue to believe that this market is too negative and too willing to overly discount the same information over and over and over again. (Witness that McDonald's (MCD - commentary - Cramer's Take) went down $10 in anticipation of a weak December and we get it -- no analyst disagreed ahead of time that such a fate would happen -- and it goes down another $5!!!)

I see a lot of good news in the financials based on refis and the chance the Fed will cut again. Just the action in Bank of America (BAC - commentary - Cramer's Take) is heartening, as heartening as it was disheartening to read the conference call. But that was then, before the big capital raise.

Now, barring a total Countrywide (CFC - commentary - Cramer's Take) catastrophe -- which hopefully will cause them to walk away -- this one's not going back to its old lows. Nor is Wells Fargo (WFC - commentary - Cramer's Take) or Wachovia (WB - commentary - Cramer's Take). I think they have bottomed. Of course, this move could be reversed if the Fed doesn't do anything or does only a quarter of a point, but I don't think that it will lead to a crushing. Too much momentum.

Random musings: I have a new theory for Wilbur Ross' blabbing about Ambac (ABK - commentary - Cramer's Take). He's not blabbing at all, it is ABK that's blabbing to make it so it is too expensive for Ross to buy and Ross can't really deny it. Makes sense, given that management doesn't have the big takeover package and wants to entrench itself at all costs. ...It's amazing that McDonald's is down that much given that it is a foreign company with a domestic tail! ... Watching NYSE Euronext (NYX - commentary - Cramer's Take) move up a point and change is painful given the fact that so many people were shorting it ahead of a Nymex bid. No covering, there. ... Don't look now, but GM (GM - commentary - Cramer's Take) looks like it is breaking out. ...Tyson (TSN - commentary - Cramer's Take) is a sign once again about how stupid the corn-based ethanol gambit is. ...

At the time of publication, Cramer was long NYSE Euronext.

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