China Stimulus Plan Is Another Piece of the Global Puzzle

I love a good stimulus program, and this Chinese program seems more like the real deal than most. We often talk about the big decline in Europe, but the stunning silence about China has led many to conclude that perhaps China's economy is slowing to high single digits.

The size of this stimulus plan, $586 billion, says to me that the issue isn't high single digits but whether there is any real growth at all.

We have misjudged China repeatedly on the downside almost as much as we did on the upside.

Throughout this decline we have said that it was

1. an attempt by the Chinese to stop pollution,
2. an attempt by the Chinese to marshal forces and get ready to rebuild areas devastated by earthquakes,
3. a cessation of work for the Olympics, and
4. a cessation of work until after the Special Olympics.

In each case we have stressed the temporary nature of the absence of the Chinese.

Meanwhile, they cut rates slightly, although they are still so high and they ignored the "hints'" of a stock market down 70%.

I think things like a stimulus and much lower rates matter tremendously. These are not pushing on a string. The decline in the minerals and oils and golds keep flashing, "Be careful, serious recession." The endless emphasis on liquidity must morph into demand, most notably worldwide demand for the GEs (GE - commentary - Cramer's Take) and the Emersons (EMR - commentary - Cramer's Take) and the Intels (INTC - commentary - Cramer's Take) and the Caterpillars (CAT - commentary - Cramer's Take) and the GMs (GM - commentary - Cramer's Take) (more on that one later). This helps.

We do not have any "real" demand in private industry right now. The paralysis is stunning.

Chinese stimulus is a nice piece of the puzzle.

We need many more of them to stay out of a tough worldwide recession.

Random musings: Still one more article in The Wall Street Journal saying that Tim Geithner tried to do everything right and has been stymied. No one seems to care that he was supposed to be regulating Lehman and that he had more insight than anyone else. No one seems to care that he directly said no to more Lehman aid. I want to be this guy. He never leaves any fingerprints and is so loved by the media. I reiterate that we are dead if he becomes Treasury secretary.

At the time of publication, Cramer was long GE.

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Know What You Own: Cramer mentions Intel -- other semiconductor companies include AMD (AMD - commentary - Cramer's Take) and Texas Instruments (TXN - commentary - Cramer's Take).

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