Pool of Savings Is Deep

What's the big takeaway from the moment-to-moment of this market? There's one and it is a huge one: there's money. There's money left. There is money around.

The money into bond funds and into stock funds is pretty impressive. We read today about the money into hedge funds, the latter really important after Madoff and the terrible returns of the hedge funds.

This change, this actual cash in the bank that can be deployed, is something that amazes me wherever I go, whether it be talking to the people at Citigroup (C - commentary - Trade Now) or talking with the people in real estate -- I am seeing many distressed cash deals occurring ahead of me when I try to buy.

I am also seeing that there's a huge amount of money ready to buy mortgage bonds and to buy asset backed bonds. Plus, watch this Emdeon deal that's about to occur from General Atlantic. That would be the first of the big venture capital/private equity deals that I have seen that could make you great money. That's another positive sign right into the heart of the summer.

The idea that there's money, any money at all, after the horrendous beating people have taken in their home values and in their stocks is amazing. I can't believe that the pool of savings is that big.

One answer I get over and over is that people actually saved some of their bountiful earnings in the last few years before the collapse of finance. Second, there are plenty of funds that either pulled out ahead, went into cash or simply didn't play last year that are back and into action.

Of course, there's the big caveat -- all the refinancing that has to be done in commercial real estate and in private equity. I think that's a bunch of hooey. If the Fed keeps rates moderately low, people are going to need yield and a basket of commercial real estate bonds and private equity paper might be the trick. In fact, the "cheapness" of that paper will make it too attractive to ignore.

People are paying up right now for this paper -- hence the gigantic margins for everyone from Citigroup to Goldman Sachs (GS - commentary - Trade Now) on fixed income trading. That is this sidelined money trying to get in at 70 cents on the dollar for all of this kind of paper. That's right -- when I check around I get 70 cents on the dollar.

So stay tuned to this money issue. It is more shocking than any other thesis. Money, money left. Money not shredded. Money that can go to work.

Who would have thunk it!?

Random musings: Seeing a cooling in the buying of the worthless: Sirius (SIRI - commentary - Trade Now), Fannie Mae (FNM - commentary - Trade Now) and Freddie Mac (FRE - commentary - Trade Now). Ambac (ABK - commentary - Trade Now) and PMI (ABK - commentary - Trade Now), both big spec plays, are really cooling here. All these are positive signs for the bulls.

At the time of publication, Cramer was long Goldman Sachs.

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