Sometimes, the Consensus Is Wrong

Sometimes it just hits you. You will be reading an article about some fund manager somewhere who sounds perfectly intelligent and you will spot it, the holy grail of the moment -- THE CONSENSUS. I won't mention the fellow's name -- it is unimportant -- because he's good at his job, but the thoughts he is currently expounding sound like many others I hear, to wit:

1. Oil prices will fall to $80 a barrel.
2. The dollar will rise when the Fed stops cutting rates.
3. GDP growth in China will slow.

First, let me just say that those events would be bullish for every domestic company in our universe, including the financials, and we would have a miracle bull market where less than 20% of the market -- ag/mineral/oil and gas/infra --collapses and fully 80% of the market can rally (I am including the health care stocks because, somehow, they have been seen to become hostage to the weak federal government, and in this scenario I don't see the federal government as worried about cutting back spending).

So, as someone who has to talk about stocks all of the time and has an innate bias -- because I am not a hedge fund operator -- for stocks to go higher, I want this scenario to play out.

But let's take a look at it, because it is what I think the vast majority secretly believes in, and when you get a week where oil falls hard (albeit from really high levels) and the dollar rallies it seems like everyone believes in it out loud and the consensus pops out of the closet.

First, oil. Once again the consensus REFUSES to take into account how little oil is being discovered and how much is being pumped. We just sent oil man Dick Cheney over to Saudi Arabia in an attempt, no doubt, to get them to pump more. Believe me, they want to pump more too. It doesn't matter. Iraq is supposedly more pacified, and while all we hear about is the inevitable stealing of all the money coming from the fields -- typical of the incompetence and corruption that is endlessly worth banking on -- they are pumping more than they have and it doesn't matter. No areas right now are out of commission because of natural disasters or terrorism. Still doesn't matter. The hedge funds have had to unwind their 30-to-1 leveraged hoarding of oil and it STILL doesn't matter.

So what if a few million more people carpool. So what if we keep taking our food supply and shoving it into our tank. It doesn't matter. Don't you think that Exxon (XOM - commentary - Cramer's Take), Chevron (CVX - commentary - Cramer's Take), Conoco (COP - commentary - Cramer's Take), BP (BP - commentary - Cramer's Take) and Royal Dutch (RDS.A - commentary - Cramer's Take) are pumping all they can, because no one believes oil is sustainable at these prices save perhaps Jim Mulva from Conoco?

That's why I think the $80 is a fantasy. It's just too bullish for everything but oil. You believe it? Go buy AMR (AMR - commentary - Cramer's Take). Your money.

Next, the dollar. I think the dollar will rise when the economy gets stronger, but I think the issue with the dollar is how many we print and how little we save and how little we tax and how much we spend both as people and as a nation. Look around at the countries with strong currencies and you will see good growth and self-control, which under this administration has become a joke. I know I can barely contain my contempt for their decision to debase the dollar. They figure no one goes away, I guess.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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