With Tough Fed, Exit the Gold Stocks

Anytime the Fed is this vigilant, I just don't want to be in gold. I believe this tightening today, in the wake of Katrina, and before Rita, shows me that this is, indeed, the same Fed that took things overboard in 2000.

The gold stocks that have been going up were going up in anticipation of a less hostile Fed, a generous Fed, a kind Fed, a good Fed.

Nope. Bad bet.

That's why I wrote in Columnist Conversation that I believe it is time to exit the gold stocks. Stay with oil, they aren't making enough of it, but gold, it's just a matter of time before it comes down.

I am all for the China resources plays, nickel, molybdenum, copper, oil, because of supply concerns. I am not for gold, except when you have a cushy Fed.

After today, anyone who believes we have a cushy Fed is just dreaming.

Random musings: Holy cow! You mean if Whirlpool (WHR - commentary - Cramer's Take) had just waited, the leveraged buyout would have broken down and it could have paid far less for the darned thing? That's what Whirlpool's stock is saying. ... No, I am not giving up on Capstone (CPST - commentary - Cramer's Take), but I defer to Will Gabrielski. ... Remember the old days, when Latin America would get sick when the Fed sneezed? Check out Brazil and Colombia -- but then again, they have oil!

---

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Capstone Turbine to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

---

James J. Cramer is a director and co-founder 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 ActionAlertsPLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." Cramer appreciates your feedback and invites you to send him an email by clicking here.