Cramer on the China Quake

The devestation is tremendous, and the rebuilding will be huge.
By Jim Cramer ,

Jim Cramer discusses the earthquake in China and what it might mean for U.S. equities in these two blog posts from earlier today on RealMoney.Click here for a free trial, and enjoy up-to-the-minute commentary all day, every day.

Earthquake Recovery Can Change China

6:49 a.m. EDT

Is it Katrina all over again? Or is it bigger? Much bigger? That's what I am thinking about this Chinese earthquake.

Katrina distorted the U.S.'s growth pattern for more than a full year. The raw materials, the effort, the work, the reconstruction affected businesses from small-scale retail to refining and infrastructure.

We don't really know how China works, although a lot of people tell us they do. To me, the Chinese are always a day away from revolution or civil war and the trick of the government is to stay one step ahead of the posse. (Chinese hands will dispute that, but you have to appreciate that it takes a special skill to be wrong for more than a century and still maintain credibility.)

That means massive reconstruction: bricks, lumber, cement, steel and all the trimmings. Massive imports, not controlled by the Chinese and their little negotiation games like they play with iron and steel and coal. Just full-bore buying and something that could take growth for China back to the levels that everyone thought it couldn't absorb without more inflation.

Cramer: Think Infrastructure After China Quake

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I know that it is simplistic to think that we will get our fair share of orders here, but just like we didn't expect the price of chicken to be moved dramatically by ethanol, there is only so much chicken feed to go around. This could stimulate another round of price increases for building materials like steel (

US Steel

(X) - Get Report

) and all that goes into it (

Cleveland-Cliffs

(CLF) - Get Report

,

Vale

(RIO) - Get Report

,

BHP Billiton

(BHP) - Get Report

). Everything from elevators --

United Technologies

undefined

-- to fire prevention to copper wiring, which is why I started buying

Freeport

(FCX) - Get Report

again yesterday.

The theme gets new life from this earthquake which, when the smoke clears, will be revealed as the largest reconstruction project the world may have ever seen.

The groups seem overextended, as overextended as the financials are crushed.

But it doesn't matter. The raw materials remain in short supply, the ships in short supply, and the situation is combustible like Katrina, and could add more than a percentage to Chinese growth.

Worth playing.

At the time of publication, Cramer was long FCX.

Consider These Plays on the China Rebuilding

10:42 AM EDT

Why not take advantage of the decline in

Deere

(DE) - Get Report

that has terrible pin action in

Cummins

(CMI) - Get Report

and

Caterpillar

(CAT) - Get Report

and

Terex

(TEX) - Get Report

?

All of these will be candidates for the gigantic rebuild in China (particularly Cummins), which Bob Marcin has been most articulate on, and these are much less U.S. plays for construction than Deere. In fact, that's been the big change at CAT and the reason why it powered from $68 to $84.

Cummins just reported a great quarter, so that's not much of a risk. Terex is dirt-cheap. CAT has the best leverage to China and to all of the big oil projects going on around the globe. You have already seen the reversal in

U.S. Steel

(X) - Get Report

, which is part of the Chinese rebuild.

This rebuild will soon obliterate any worries about U.S. demand. You can only imagine the kind of heavy equipment that will have to be bought for that rebuild, and with a weak dollar, the orders will go to the U.S. manufacturers of heavy equipment -- NOT Japan -- which is really important because otherwise the geography would dictate the orders going much more to the Japanese.

Random musings

:

Apple

(AAPL) - Get Report

MasterCard

(MA) - Get Report

and

Research In Motion

(RIMM)

are telling you direction, as always.

At the time of publication, Cramer had no positions in the stocks mentioned.

Jim Cramer writes about all the stock trades in his charitable trust for TheStreet.com in Action Alerts Plus. Recent stocks he's traded in this account include Verizon (VZ) - Get Report, Abbott Laboratories (ABT) - Get Report and Freeport-McMoRan (FCX) - Get Report.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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