Why Play Retail?

Retail's just awful. It has been awful for the last three weeks ever since this crisis spun out of control. The market's oversold here, so I am reluctant to say, "Just dump it," but it shouldn't be this high. There's too much uncertainty.

Four that I watch and think are 2, 3, maybe 4 or 5 points too high are Ralph Lauren (RL Quote - Cramer on RL - Stock Picks), Nordstrom (JWN Quote - Cramer on JWN - Stock Picks), Phillips-Van Heusen (PVH Quote - Cramer on PVH - Stock Picks) and Gamestop (GME Quote - Cramer on GME - Stock Picks). I don't think any of these companies is doing that well. The discretionary buying is terrible. I think the expensive hardware will not be selling at GME, and that one -- even as low as it is -- can go lower.

I think Best Buy (BBY Quote - Cramer on BBY - Stock Picks) -- as low as it is, and despite Circuit City's (CC Quote - Cramer on CC - Stock Picks) problems -- will not be able to go higher. That one seems like a good sale to me even here. You know I don't like Target (TGT Quote - Cramer on TGT - Stock Picks) and prefer Wal-Mart (WMT Quote - Cramer on WMT - Stock Picks), which is where people go to in stretched times. Staples (SPLS Quote - Cramer on SPLS - Stock Picks) also seems too high to me. If you are buying Staples, it is because you think the others in the category are going under. This is not a Circuit City situation.

Given the sudden turndown of the consumer, I just don't see why anyone would want exposure to this group other than the trade-downs -- Wal-Mart, Costco (COST Quote - Cramer on COST - Stock Picks) (which will probably only be doing so-so because it has some discretionary electronics, but it is still cheaper to shop there), Urban Outfitters (URBN Quote - Cramer on URBN - Stock Picks) and TJX (TJX Quote - Cramer on TJX - Stock Picks), the latter now being controversial because of the most recent bad quarter.

Random musings: You have to understand that this plan is the only thing going to end the mortgage madness. You can fret all you want about the marks and the need to raise cash, but you are missing the point here: The healthy banks can sell the mortgages that are bad, the ones that can't will be seized and then the mortgages dumped into the program for refinancing. This stems the foreclosures. That's what it is about, stemming foreclosures. That's always what it has been about.

At the time of publication, Cramer was long Wal-Mart and Costco.