Jim Cramer's Best Blogs

Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:

• increased consumer confidence,
• the importance of having skin in the game, and
• tech's outperformance.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

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Higher Confidence Number Is a Huge Plus
Posted at 10:48 a.m. EDT, May 26, 2009

Consumer confidence up? How can it be this important? Because, again, the secret to ending a deflationary spiral like that we are in is to have consumers spend, spend and spend some more.

You have to go back to the Japanese comparison to understand the significance of this number. In Japan, consumer confidence never returned after the stock market crash, and people hoarded money. They simply wouldn't part with it.

Two-thirds of our economy is consumption-based, so this number gives us hope that consumption can reignite even though employment and house prices are down.

How could it happen? Why is confidence up? I think it is directly related to the third month in a row -- at least at this moment -- that stocks are up.

That's a terrific sign, one that could mean that everything from Apple (AAPL Quote) and Hewlett-Packard (HPQ Quote) to Ford (F Quote), Best Buy (BBY Quote) and Kohl's (KSS Quote) -- and their usual derivatives -- can maintain their momentum. It also gives us hope that people feeling better can offset the lost purchasing power from the new credit card restrictions, something that some economists estimate could be costing us $90 billion in consumption.

This number also shows that it doesn't take much to move this market upward. I cannot recall a time when the Michigan Consumer Confidence impact was this great.

Maybe the consolidation is running its course.

Random musings: Before the confidence number, the longs and shorts were banging down Bank of America (BAC Quote), but it stopped at $10.90 when the good news came. That's important. That deal plus the Ford deal must hold. ... The speculators in Citigroup (C Quote) continue to hold their own. The speculators in GM (GM Quote) look like they will get nothing.

At the time of publication, Cramer was long Hewlett-Packard.