Two Scoops of Betrayal

We caught a nice relief rally today. A relief from what? I say from betrayal. The selloff over the last week, this nasty decline, is being traded behind the scenes. Nobody really wants to say it aloud, but this perceived sellout, or at least a sell-down, of both the economy and Wall Street is by President Obama.

The betrayal can be identified in two forms: the stimulus package, which seems to have been drafted as pure hokum by Rep. Nancy Pelosi (D-Calif.), who suddenly seems in charge of the government's economic plans, and the incredible focus on executive pay, which makes us realize that whatever bank plan Obama might have could return to the Freddie Mac/Fannie Mae model of screwing the preferreds. That would be devastating for all who invest in bank stocks and basically end the capital-raising abilities of even the good banks, or at least the ones that are perceived as strong like Wells Fargo (WFC - commentary - Cramer's Take), JPMorgan Chase (JPM - commentary - Cramer's Take) and US Bancorp (USB - commentary - Cramer's Take).

In the selling of the common stocks, we are saying it is the intention of the administration to AIG these banks.

Both tangents -- the Pelosi factor and the punitive factor -- are helping drive a market with bad earnings down to levels that we all sense could be devastating to financials, which are still big in the S&P 500 when you add up all of the names.

Remember what moved a lot of cyclical? The possibility of $300 billion to $400 billion in infrastructure spending, which would spur huge demand for infrastructure plays like Granite (GVA - commentary - Cramer's Take) or Jacobs (JEC - commentary - Cramer's Take) and the machinery plays like Deere (DE - commentary - Cramer's Take) and Caterpillar (CAT - commentary - Cramer's Take). That's gone -- $30 billion doesn't cut it.

Every bank is hobbled -- which is why I want forbearance, not nationalization -- but if you are being punitive against execs, why not be punitive against investors who misjudged the risk? That's a rational approach. We know that Tim Geithner is not a friend of banks or he wouldn't stand for this stuff. The "now is not the time for profits" line is just a killer to Wall Street, which backed Obama because he was more sophisticated than McCain.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

At the time of publication, Cramer was long JP Morgan Chase and Wells Fargo. Jim Cramer is co-founder and chairman 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.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.