In the Great Tug of War, China Wins

Here's some real tension. The best stocks to play China with may be the worst stocks to own here. Look at Freeport (FCX - commentary - Cramer's Take) yesterday, which did that giant and hugely successful secondary. There is no doubt in my mind that housing starts won't even get to 600,000 this year, not after that travesty of a stimulus bill -- or when considering the reaction expressed by the stocks of Lennar (LEN - commentary - Cramer's Take) and Pulte (PHM - commentary - Cramer's Take) and, perhaps most hobbled, Centex (CTX - commentary - Cramer's Take).

There is also no doubt that China's stock market being up 35% means that Freeport's Asian arm, the biggest, will soon be getting huge orders.

Same with steel. U.S. Steel (X - commentary - Cramer's Take) looks awful here, as this $3 billion company (admittedly with a pension problem of billions) looks like death when it comes the stimulus package, but I would even buy it and scrap companies like Schnitzer (SCHN - commentary - Cramer's Take) -- remember them? -- off of China.

Or Caterpillar (CAT - commentary - Cramer's Take). Here's one that would be a short of the infra part of the stimulus, but I think is a long off China's need to construct big projects to put people to work.

Finally, Union Pacific (UNP - commentary - Cramer's Take). On America alone, there's no way you want that. We started buy it for Action Alerts PLUS this week, though, as a derivative China play. Why not, that market's up too much to ignore. It is now clear it will be the engine that pulls us out of this world morass, and we will be the caboose. I just hope it's UNP's caboose!

At the time of publication, Cramer was long Union Pacific, Caterpillar and Freeport-McMoRan.

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