Jim Cramer's 'Stop Trading!': Lehman, Thornburg Got It Right
Banks should use today's rally as an opportunity to issue preferred stock and raise capital, Jim Cramer said on CNBC's "Stop Trading!" segment Tuesday.
"These preferreds work," Cramer said. He praised
Thornburg Mortgage
(TMA)
and
Lehman Brothers
(LEH)
for raising capital today and suggested that
Wells Fargo
(WFC) - Get Report
and
Wachovia
(WB) - Get Report
follow suit.
Cramer said he had liked
Countrywide
(CFC)
preferred paper when the mortgage lender issued it. In fact, he said he likes preferred stock generally. "The only time I saw it violated was when
Hovnanian
(HOV) - Get Report
got rid of its preferred," he said.
Timing was important to the successful sale of shares. "If it were a down day today, we would not want" to buy preferred stock, Cramer said.
Of Lehman's efforts to raise capital, Cramer said, "Brilliant of them to place it with people who cannot short. ...
CEO Dick Fuld is a very smart man, and he did indeed do the right thing."
Cramer called for more banks to take advantage of the day's bullish action. "We need to see financings right now. Right on the heels of this," he said. Cramer said that
National City
(NCC)
was probably ripe for a takeunder.
He also noted that
Fannie Mae
(FNM)
and
Freddie Mac
(FRE)
"are running. Take advantage of the short squeeze and issue preferred," he urged.
On news that
FedEx
(FDX) - Get Report
was aiding
British Airways
in reducing a backlog of baggage at Heathrow Airport, Cramer said, "FedEx is remarkable. ... The stock is now up more than 10 points from where it disappointed." Of the broader market's rally today, he said, "This one feels like up 500. Someone at some point better start believing in these rallies because they are powerful."
At the time of publication, Cramer had no positions in any of the stocks mentioned.
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