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How many ways can I explain that what's going on is massively deflationary? How about by pointing out one of the most sensitive stocks to deflation:
Prudential (PRU Quote - Cramer on PRU - Stock Picks). Take a look at the move this stock has had from its lows. It's almost a 50% move! That's remarkable. It is a sign that everything is worth less than it was a couple of months ago!
I have long used the price of conservative insurance companies -- and PRU is a conservative one -- as a gauge of inflation. Now, I know that
Barron's had a positive article about PRU this weekend, but all you really got was a rehash of what an analyst has been saying. That's not behind the gain.
This company is a bulwark of deflation. Why anyone thinks that inflation is still a problem after looking at that chart is just nuts.
They are paying back your claims with strong dollars, and your claims aren't going to be as high as you thought because of the value of replacement.
Keep an eye out on this stock. It could signal when deflation ends. From the looks of it, though, we have a ways to go.
Random musings: Perhaps the blown-up hedge fund Ospraie has completed its liquidation? We know they weren't done yesterday and we also know that you are supposed to send the proceeds out on the fifth business day of the month -- that's been the protocol, so it would sure make sense. I think they were long the
Oil Service HOLDRs (OIH Quote - Cramer on OIH - Stock Picks).
At the time of publication, Cramer had no positions in the stocks mentioned.
Jim Cramer
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