Obama Gives One to the Taxpayers

President-elect Obama has shown his true colors today: He actually favors the taxpayer over the bank executives and shareholders. He is actually trying to help the homebuyers, not the people who make a ton of money working at banks or owning stocks in them. And with his little note to Congress on TARP, we got the TARP ripped off the bank group, and then, ultimately the stock market.

Hey, that's cool. I can get into that. But not without the recognition that this is a deadly statement for banks, just deadly. Might as well shoot 'em like lame horses.

The government had just come up with a plan to help banks and allow shareholders to thrive, the Citigroup (C - commentary - Cramer's Take) rescue plan. Right now it looks like that's the last of them. From now on, if you take money, you go zombie: no real incentive to work there vs. other banks that don't need help, no real incentive to invest in the banks, because no dividends. We will have a nation of living-dead banks that might as well be owned by the government. A bunch of post offices with ATMs.

It's morally terrific that the Democrats have taken over if you are a homeowner or a homebuyer. As you are getting the stuffing kicked out of you, so will the bankers get the stuffing kicked out of them. But you cannot take Schadenfreude to the, well, to the bank. It just isn't all that investible.

The market was holding in (other than the oils, which are in their usual free fall policy when they are not going up limit, like bad trading commodities). You had some soft-goods plays doing well, you had some financials -- notably Morgan Stanley (MS - commentary - Cramer's Take) with its pantsing of Citigroup to get the retail business for a fraction of what it would have gone for two years ago -- and you had some lower-gas-price winners.

But the "memo" from Obama on TARP funds pretty much says, "We obliterate the legacy of Hank Paulson," which by the way is a legacy of saying to Congress, "We will help struggling homeowners and then giving beefy checks to a lot of the guys at the banking country club," which, I believe was restricted because I have not heard of any Madoff damage.

I say good riddance to the old way if you don't own a bank stock, but if you do, the world just got a heck of a lot worse for those banks that may need to go back to the government's window a second time, as Citigroup had to do. That deal, by the way, will go down as the last great taxpayer giveaway. From now on, taxpayers will be the winners, homeowners and homebuyers could be the winners, and anyone who owns a financial could be hammered beyond all recognition.

At the time of publication, Cramer was long Morgan Stanley.

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Know what you own: Cramer mentions Citigroup. Other companies in the banking industry include Wells Fargo (WFC - commentary - Cramer's Take), Goldman Sachs (GS - commentary - Cramer's Take), Merrill Lynch (MER - commentary - Cramer's Take), U.S. Bancorp (USB - commentary - Cramer's Take) and Bank of America (BAC - commentary - Cramer's Take).

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