This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Big Banks Deserved Downgrades, Says Cramer

Stocks in this article: CGSMSWFC

NEW YORK ( TheStreet) -- Lindsey Bell interviews Jim Cramer regarding the downgrades of international banks. A full transcript appears below:

Lindsey Bell:
Citi, Goldman, Morgan Stanley were all downgraded to neutral from buy at UBS. Now these stocks have run 30 to over 50 percent each since the June low. So was this the right call?

Jim Cramer:
Yes. I think that the international banks are challenged on multiple levels and are in the crosshairs of the government.

Lindsey Bell:
Okay.

Jim Cramer:
I think that, as much as I like Citi, 60 percent of it's business overseas in the emerging markets and they're not coming back as quickly as I thought. Goldman and Morgan Stanley, the profits...the return on investment...just aren't as great as they used to be. The book value is in excess of their stocks and people are attracted to that. We like the regionals. I like Wells Fargo. It's been stalled...33/34...34/35. They own 30 percent of the mortgage market. They could even take more. I like Key because Key's back from the dead. The regionals are linked to housing.

Everyone says, well Jim, you talk about housing forever. Remember we have 1.7 million housing starts. As housing comes back...and we know from the existing home sales that we got yesterday, it's coming back...that just makes the regionals more attractive. I want to levered to housing and autos, not to international. The call's right.

Lindsey Bell:
Shouldn't quantitative easing, though, help these international banks as well?

Jim Cramer:
Yeah but you know, earnings power.

Lindsey Bell:
Is that priced in?

Jim Cramer:
Earnings power is not as there as it used to be and I care about earnings power.

Lindsey Bell:
Okay.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,390.52 +195.10 1.13%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,630.7410 +64.6030 1.41%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs