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TheStreet.com TV Recap: A Lack of Antitrust

TheStreet.com Staff

The economy is still waffling and to some degree decelerating, despite a perception to the contrary, Jim Cramer said on The Street.com TV's Wall Street Confidential video Webcast Friday.

Workers in the housing cycle are starting to get laid off, following the hit the sector took last summer, Cramer told Aaron Task, the host of Wall Street Confidential. And the auto numbers are so bad, with Ford (F Quote) and General Motors (GM Quote) each employing 50,000 workers too many, Cramer added.

When people see a number -- the retail sales number, for example -- they believe the economy is better than expected, Cramer said. But then they see Ingersoll-Rand (IR Quote), Caterpillar (CAT Quote) and Black & Decker (BDK Quote) and realize "the strength of the economy is vastly overstated."

Even though Lennar (LEN Quote) is up, if market-players read the company's statement, they'll understand there is not one region it is not pulling back from, he said. The camp that said the Fed was about to tighten has been discredited and should own up to it, Cramer said.

However, when Task said the notion that the Fed is going to ease in the spring is controversial because of current inflation pressures and rising commodity prices, Cramer said he is a big believer in the inventory cycle.

Inventory Build

Therefore, Cramer believes we could have slower growth in inflation year over year.

There have been periods at beginnings of years in which people made cyclical projections, numbers got really high, people bid up the stocks, and by mid-February, they realized that they had taken the estimates too high, he said. "That could be happening again."

'Benign Oligopolies'

There are a lot of industries in which there is a "benign level of investigation," which is what causes these numbers to go so high, Cramer said. He said he believes the railroads divided the country into a bunch of regions and decided not to compete with each other. Similarly, Cramer also said there are "benign oligopolies" developing in the airline industry, where companies have decided not to compete.

While there would have previously been investigations into both of these industries, now the Justice Department is looking the other way and is not focused on it, he said. "There is no antitrust division anymore in the country."

Companhia Vale do Rio (RIO Quote) has created a monopoly in nickel production, Allegheny Technologies (ATI Quote) has no competition in titanium, and Google (GOOG Quote) is developing a monopoly on Internet searches, Cramer said.

"We all have to accept the fact that there are nascent monopolies that would have previously been busted," he said. "We are in a period where all branches of government support high profits."