Higher Confidence Number Is a Huge Plus

Consumer confidence up? How can it be this important? Because, again, the secret to ending a deflationary spiral like that we are in is to have consumers spend, spend and spend some more.

You have to go back to the Japanese comparison to understand the significance of this number. In Japan, consumer confidence never returned after the stock market crash, and people hoarded money. They simply wouldn't part with it.

Two-thirds of our economy is consumption-based, so this number gives us hope that consumption can reignite even though employment and house prices are down.

How could it happen? Why is confidence up? I think it is directly related to the third month in a row -- at least at this moment -- that stocks are up.

That's a terrific sign, one that could mean that everything from Apple (AAPL - commentary - Trade Now) and Hewlett-Packard (HPQ - commentary - Trade Now) to Ford (F - commentary - Trade Now), Best Buy (BBY - commentary - Trade Now) and Kohl's (KSS - commentary - Trade Now) -- and their usual derivatives -- can maintain their momentum. It also gives us hope that people feeling better can offset the lost purchasing power from the new credit card restrictions, something that some economists estimate could be costing us $90 billion in consumption.

This number also shows that it doesn't take much to move this market upward. I cannot recall a time when the Michigan Consumer Confidence impact was this great.

Maybe the consolidation is running its course.

Random musings: Before the confidence number, the longs and shorts were banging down Bank of America (BAC - commentary - Trade Now), but it stopped at $10.90 when the good news came. That's important. That deal plus the Ford deal must hold. ... The speculators in Citigroup (C - commentary - Trade Now) continue to hold their own. The speculators in GM (GM - commentary - Trade Now) look like they will get nothing.

At the time of publication, Cramer was long Hewlett-Packard.

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