Alcoa Takes the Wheel

It is a testament to how bad Alcoa (AA - commentary - Trade Now) has been run that no one thought they could do well despite a dramatic increase in the price of aluminum from quarter to quarter. Think about it -- did anyone think that Alcoa could deliver, despite the fact that aluminum went from 67 cents a pound to 83 cents a pound, a jump of 24%?

I was dumbfounded myself to see them not disappoint. It's been since the late 1980s and early 1990s that this company has made a lot of money, and it almost never seemed to matter what happened with costs of alumina or energy input costs or labor costs, you knew they would get it wrong.

More on Alcoa

Bellwether Surprise

That's why it is shocking to me to read of the impact this upside surprise from this dubious company is having on the markets around the world. We are so gripped by commodity fever that a boost in Australian rates and a good number from a terrible aluminum producer can ignite still one more overseas rally that will, at least at the start, propel us higher.

Alcoa, under Klaus Kleinfeld, who started as CEO in May 2008, reminds me of International Paper (IP - commentary - Trade Now) when John Faraci took over not that long ago. Both men decided the companies had billions in fat to cut out and just wouldn't stop until they excised it.

Both men were right.

I think the only real takeaway is how good Kleinfeld might be, just like the only real takeaway for IP is how good Faraci is, because business really is terrible for both of them.

But if the market decides that the gains are a sign that the economy is recovering, who am I to stand in its way?

At the time of publication, Cramer had no positions in the stocks mentioned.

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