Editor's Note: This article was originally published on Real Money at 6:00 a.m. EDT on May 13. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.NEW YORK ( Real Money) -- So the Federal Reserve does have a plan to stop buying bonds. You mean it isn't just going to go cold turkey? You mean it isn't just going to wreck everything without any thought? That's what I thought when I read the Wall Street Journal piece about how Chairman Ben Bernanke is all set with a plan for ending the third round of quantitative easing. The premise of the piece, in itself, implies that he hadn't even considered it and would never do so. The article, to me, was a "duh." Still, I am sure plenty of people will say "Look, he had a plan. When there's a plan he must be ready to use it." Now, it is true that there could be some reason to believe that, say, 3%-yielding stocks won't be as competitive with bonds if Bernanke decides to stop buying and start selling like a madman. But it is entirely possible that there will be actual buyers of bonds, given the widespread interest in fixed income all over the globe. If you ask me, I believe the whole bond-buying theme, initially so important, is no longer as dicey or as dangerous or as germane as it once had been. That's because I simply do not believe rates are going to go up so much, given that government bonds worldwide have declined so much in yield. If anything, I think the worrisome investing place -- besides bonds that are well above par and the funds that own them -- might very well be the corporate market, where the returns have truly been pathetic. You see, if I am right about the receipts of the government, you may not have as much supply out there as you think you might. There's demand for bonds away from Bernanke, and it's possible there isn't as much supply as there had once been. In fact, I would rather pay for a stock with a 3% yield with upside than a 2% corporate bond with no upside whatsoever. It's the competition in bonds that is in trouble -- but, from what I can tell, there's been a tremendous issuance already, so it might not be as big a deal anyway.
Cramer: Fret All You Want
May 13, 2013 | 10:39 AM EDT
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV