Jim Cramer's Best Blogs
NEW YORK (
) -- 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:
- why banks need help to move higher;
- why gold stocks still have room to rise; and
- good news on the economy.
for information on
RealMoney
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Banks Struggle to Get Out of Trouble
Posted at 2:06 p.m. EST, Friday, Dec. 3
Best of three?
That's my thinking on these banks. I said that I would begin to believe they have bottomed if we had two up days. We got those two up days as of yesterday, courtesy of a
Goldman Sachs
(GS) - Get Report
push, but so be it.
Seems like business as usual. They are giving some back.
Here's the hard thing for me. Even a cursory look at the banking index (BKX) chart shows that it bottomed in August. We are so far away from that level that you have to take heart that things are good here.
But they need a compromise in Washington as much as anyone, and without it, they will have a very hard time going higher.
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In other words, they are in no man's land, and President Obama, in a bizarre twist, just flew to Afghanistan when almost everyone I know who follows politics said this would be the weekend when he would personally nail down unemployment benefits if the jobless rate were high.
So while two out of three days ain't bad for a lift in the banks, and we have clearly bottomed vs. August and they are cheap as all get-out, they need a lot of help to move higher. They are not getting it.
So we are back to "Lots of better groups out there," without only health care being as bad as this huge drag on the
S&P 500
.
At the time of publication, Cramer had no positions in stocks mentioned.
Gold Stocks Still Have Upside
Posted at 11:17 a.m. EST, Friday, Dec. 3
How crazy is this move in gold? Not crazy at all. The gold market smells a deal in Washington that will certainly cause a budget buster, at least when it comes to the dollar. It smells more QE2 when it comes to Ben Bernanke, to help keep unemployment from going over 10%, and it smells tremendous demand out of China -- up 35% year to date -- with no sign of any waning of interest. No price sensitivity.
I suspect much more demand out of China, as well as India and Russia in 2011, the first two as both jewelry and havens against inflation, and the latter as a hedge against chaos. China and India benefit from the middle-classification going on for certain, and that is a very long-term secular trend.
That wouldn't matter much if we were finding a lot of the stuff. Incredibly, though, despite the much higher price, we aren't seeing a lot of new finds or the opening of old mines, some of which in this country at least are having a hard time getting permitted.
Meanwhile, the sum total of all gold stocks remains well below 2 times
Apple's
(AAPL) - Get Report
worth -- about 1.5% as of this writing. And get this, fund managers, according to some terrific ISI data, are still only 0.6% invested, well below historic norms at other times when gold stocks have rallied. A doubling of that position, which would be about half the historic norm, would eat up about 16% of gold worldwide -- at this pace, that's 10 years' production.
The desire to "peg" the price of gold to some other commodity is the knee-jerk way that we always see happening. Yet, as I told Alix Steel in a video yesterday, there is virtually no correlation to much at all, particularly the oft-mentioned dollar. Gold has gone up big with the dollar going up and gone up big with the dollar going down. There is a long-term connection between gold and lower rates, something we have today, and that has been demonstrated multiple times, but still, the rally today feels end-of-the-year-ish, with too much "bad" happening in this country, drawing people to our "counterfeit" printing operation, as Ron Paul, the most discussed representative in the House other than the leaders, would say.
I have been an unabashed bull on gold, and we have a substantial but not big enough holding in
Novagold
(NG) - Get Report
-- not big enough because it simply took off on us. I remain committed to Novagold and to
Agnico Eagle
(AEM) - Get Report
and to
El Dorado
(EGO) - Get Report
. The latter has the best mines in the most well-endowed gold country on earth, China, but the first, our
favorite, has the largest untapped gold mines in the free or at least not-chaotic world, where it can be expropriated at the drop of a hat.
At the time of publication, Cramer was long AAPL and NG.
Growth Trumps Woes
Posted at 1:25 p.m. EST, Wednesday, Dec. 1
We hear endlessly that housing prices are declining precipitously, even as I struggle to understand how a 0.9% decline is "precipitous" in any world other than the one in which the housing bears and their reporter/commentator acolytes live.
We know that houses aren't being built at any level remotely even approaching anything we've seen since we were a nation half this size. That matters to industrial production for certain. Commercial construction is down, too. That matters for the GDP.
But there are two areas that have been compensating. First, retail spend. Sure, it isn't capital expenditures. We love those. The only major capital goods sales we are making in this country are export-driven, because our economy is so sluggish. But retail is HUGE, and it is undeniably strong.
The second, the one not talked about, is auto production.
Ford
(F) - Get Report
today, after its terrific sales, announced it is boosting production. When a big company like Ford boosts production, that can be as much of a needle-mover as many, many new houses. Especially when it looks like
GM
(GM) - Get Report
must boost production, too.
In fact, in the old days, we used to link GDP directly to auto builds. That could happen again without a doubt given this pace. Remember all the jobs that the auto companies create, and remember they are in terribly hard hit areas. Oh, and as my friend and colleague Matt Horween points out, the demand is really strong in trucks, the most lucrative part of an auto company's arsenal. Translation: Numbers are too low for Ford and GM.
Given that we are seeing undeniable hiring since the elections, I suspect the consumer will only be getting stronger. I know that housing is a drag, but how much of a drag can it be if the pool of available new housing is shrinking rapidly and the pool of used housing is tied up in court and the consumer's getting stronger? As the mortgage purchase numbers are starting to show, we might very well be experiencing an
increase
in pricing soon, not a decrease. Few believe that. But there is such a thing as supply and demand.
People have to recognize this economy's newfound strength. They have to recognize that with strength comes more tax receipts, more hiring and fewer credit woes, as growth can cure some credit woes. It also encourages people to take risks and sop up damaged assets.
One of the most difficult issues for people -- bulls and bears -- to comprehend is progress, as in, "How do I factor progress, improvement, betterment, into my stock thinking?" It's not easy, because progress is ethereal. But mankind has produced progress. We have cured ails with progress and growth. There is the possibility that people can get it right that progress and growth occur.
The woes we are dealing with is undeniable, but so is the growth we are now experiencing. Growth vanquishes woes -- not all woes, but many of them. That's why we are going higher. Sure, Europe can derail, but be mindful that the last time Europe got hammered and then turned it was because the central banks and the IMF united to stop the contagion. They are doing it again, and they are in better shape to do it than they were the last time. They are saying all of the right things right now, which is why we just got a second wind to this rally.
Don't out-think it. But do think it.
Random musings
: Interesting and compelling idea: Buy 1,000
Santander
(STD)
December 10 calls. If we get a big short squeeze, you catch a double, and you can sell common against the calls to capture a potential swoon if you are still a bear on the name.
At the time of publication, Cramer was long GM.
Jim Cramer, founder and chairman of TheStreet.com, writes daily market commentary for TheStreet.com's RealMoney and runs the charitable trust portfolio,
. He also participates in video segments on TheStreet.com TV and serves as host of CNBC's "Mad Money" television program.
Mr. Cramer graduated magna cum laude from Harvard College, where he was president of The Harvard Crimson. He worked as a journalist at the Tallahassee Democrat and the Los Angeles Herald Examiner, covering everything from sports to homicide before moving to New York to help start American Lawyer magazine. After a three-year stint, Mr. Cramer entered Harvard Law School and received his J.D. in 1984. Instead of practicing law, however, he joined Goldman Sachs, where he worked in sales and trading. In 1987, he left Goldman to start his own hedge fund. While he worked at his fund, Mr. Cramer helped start Smart Money for Dow Jones and then, in 1996, he founded TheStreet.com, of which he is chairman and where he has served as a columnist and contributor since. In 2000, Mr. Cramer retired from active money management to embrace media full time, including radio and television.
Mr. Cramer is the author of "
Confessions of a Street Addict
," "You Got Screwed," "Jim Cramer's Real Money," "Jim Cramer's Mad Money," "Jim Cramer's Stay Mad for Life" and, most recently, "Jim Cramer's Getting Back to Even." He has written for Time magazine and New York magazine and has been featured on CBS' 60 Minutes, NBC's Nightly News with Brian Williams, Meet the Press, Today, The Tonight Show, Late Night and MSNBC's Morning Joe.