Former Giants Become Mid-Caps to Watch

Sometimes I sit back and I think, is it possible that Deere(DE Quote - Cramer on DE - Stock Picks) could trade down to be a $10 billion dollar company? Why not? It is only a $16 billion dollar company now. Ingersoll-Rand(IR Quote - Cramer on IR - Stock Picks) is only an $8 billion company. That's incredible, given its earnings power and its de-cyclicalizaton. Parker-Hannifin(PH Quote - Cramer on PH - Stock Picks), $8 billion. Eaton(ETN Quote - Cramer on ETN - Stock Picks), $8 billion.

These are just midsized companies now, profitable, well-run, midsized companies with lots of cash, doing very well. McDermott(MDR Quote - Cramer on MDR - Stock Picks) and Foster Wheeler(FWLT Quote - Cramer on FWLT - Stock Picks) are $4 billion companies. Fluor's(FLR Quote - Cramer on FLR - Stock Picks) only $8 billion. How can this be? How can it be? These are not the same companies they were when they were last this size. They are better, smarter, faster. They have great global businesses.

Understand that these companies diversified mightily from the U.S., and that was long considered good. But with Europe and Asia slowing, we are going to see earnings estimates come down hard, but not as hard as the stocks. But nobody cares.

Don't even go to the insurers. They have become a ridiculous, panicked group. All because of the usual gyrations of the behind-the-scenes credit default swaps and an irresponsible Senator Harry Reid from Nevada who said one insurer is about to fail.

Now, there are only two ways to look at what is happening. One is that a global credit crunch will not only wipe out earnings but wipe out whole companies. I find that hard to believe, because there is enough business worldwide that doesn't need huge financing to keep these companies thriving, although not at the pace they once were.

The other is that the managers have lost control of their money, that they sent out their returns yesterday and people saw them and they said "get me out, get me out now."

I think that the latter is a bigger issue than the former.

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