No Banks, No Rally

The darn banks aren't complying with Doug Kass' call! I look at the best of the best, and I shudder to think that Obama has caved to the AFL-CIO, which wants nationalization, as well as to the populist rhetoric to string up the bankers.

Wells Fargo (WFC - commentary - Cramer's Take), JPMorgan (JPM - commentary - Cramer's Take) and U.S. Bancorp (USB - commentary - Cramer's Take) are going to be the battle lines here. They don't have China going for them, as the minerals and infrastructure plays have. They don't have oil going for them, which can be a powerful driver. They don't have the balance sheets going for them, a la tech (although it sure doesn't matter when the herd thunders out of Pepsi (PEP - commentary - Cramer's Take) and General Mills (GIS - commentary - Cramer's Take)), and they have the government dead against them.

I keep thinking back to what Sheila Bair said to me at the Town Hall meeting last week. She made it very clear that if we adjust interest rates for most of the "whole loans" that are owned by the banks -- typically higher quality than those that were syndicated -- they can make it without being nationalized. But they sure act as if the hidden agenda in the mortgage bill is to strip these banks of the right to enforce contracts involving mortgages in any case that a borrower might want.

You know my plan: 4% for everybody with a cut in mortgage principal coupled with a certificate of equity that gives the banks a fighting chance to stay alive because it counts as capital. It's not radical. It is part of my forbearance plan that, when coupled with giving the banks -- even Citigroup (C - commentary - Cramer's Take) and Bank of America (BAC - commentary - Cramer's Take) -- credit in return for a promise to pay, could improve things mightily, especially with the TALF plan to get-asset backed securities moving. Citigroup may already be too far gone thanks to Geithner's relentless quest to have no guidance and no plan, a la Lehman, Bear, Fannie (FNM - commentary - Cramer's Take) and Freddie (FRE - commentary - Cramer's Take), Washington Mutual and AIG (AIG - commentary - Cramer's Take).

But nationalization is a totally unacceptable alternative that the president simply hasn't taken off the table.

I reiterate that there can be NO RALLY WITH STAYING POWER without JPM/WFC/USB going up. In fact, these are too easily pushed down by the ProShares UltraBear Financials (SKF - commentary - Cramer's Take)!

No banks, no rally. I just want to keep that front and center for Doug to mull and you to decide.

At the time of publication, Cramer was long Pepsi, General Mills, JPMorgan and Wells Fargo.

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