You Can't Dismiss China

The most "dismissable" part of this advance, the one that I keep hearing about as a reason we shouldn't trust it, is that it is all "driven by China," as if somehow therefore it is phony and has to end.

To me, this is a preposterous analysis. I would think that anything driven by U.S. is phony and had to end. But China? They have trillions in reserves. They have a population where hundreds of millions of people don't have the most rudimentary of appliances. They have shovel-ready projects galore. They don't have unions or municipal bonds or problems balancing their state government budgets or runaway pensions. They have no legacy industries or big health care problems (at least when it comes to affording it, not when it comes to quality, which is probably pretty suspect). They have proved time and again that they can grow their economy at about 8% and when it falters they can get it right back on track, which is what they have done this time again.

Why is Chinese stimulus so universally derided? If I hear Intel's (INTC - commentary - Trade Now) doing more business in China, I am thrilled. We have replacement demand, but in tough times you can stretch out replacements. They have actual first-time demand. When I hear that China's spending again, I like to think about the prospects for SanDisk (SNDK - commentary - Trade Now) and for AMD (AMD - commentary - Trade Now) and for Apple (AAPL - commentary - Trade Now). If "we" are spending again, I have no doubt it will end up in some cockamamie place that doesn't matter, because although no one says it out loud, it is now becoming clear that the stimulus didn't work or is working slowly or isn't getting to where it is supposed to be.

Nah, a Chinese stimulus is real, and if I hear one more analyst bemoan that it is business that will go away in China when the stimulus ends, I will scream. If you get an economy turning around and people feeling better, they hire, and when they hire, the recession's over and natural demand begins.

That's far more likely to happen there then here.

We should save our judgment for this country, not the communists. They are the best capitalists in the world.

Random musings: Yes, if we shrug off CIT (CIT - commentary - Trade Now) it will be a moment of tremendous strength for the financials. Pretty obvious.

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

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