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:

  • How the math doesn't work with oil
  • How Wells Fargo and John Stumpf really have no mutually good outcomes

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Cramer: This Oil Math Does Not Add Up

Posted on Sept. 29 at 6:57 a.m. EDT

This alleged freeze of OPEC production seems to me like the final act of desperation on the part of these oil-producing countries to keep oil from breaking back below $40 on its own weight.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

Think about it from their point of view. Once again, going into the OPEC meeting this week, we heard from the Saudis that they weren't going to cut back unless Iran cut back. Iran had been threatening to go from 3.6 million barrels a day up to 4 million with the addition of foreign capital.

The alleged deal -- and I say alleged because the Saudi oil minister Khalid al Falih specifically exempted Iran, as well as Nigeria and Libya, from the November agreement -- left the Saudis no choice but to cut back, or oil would most surely crater when these three intransigents got to their new levels. Remember, both Libya and Nigeria have seen their oil production cut by rebels.

You just need to do the math. Libya was producing 470,000 barrels per day two years ago. It had recently fallen to 292,000. Nigeria had been at 1.9 million barrels a day before the insurgents cut production to 1.4 million. The Iranians are at 3.6 million going to 4 million perhaps in a matter of months. So, OPEC was on target to produce about 1 million more barrels per day by year end than they did in August. So 33.2 million -- the current production -- was going to go to 34.2 million without some sort of a deal, which would most certainly have crushed the market.

Now, why do I think this deal is more talk than action, and why did oil only go to the $46 region on the deal announcement -- back to where it was before the most recent foray down to the low 40s?

Because if the oil production freeze beginning in November of 2016 is 32.5 million to 33 million, and Iran, Libya and Nigeria have not agreed to freeze production, than who is going to cut back the minimum of 1.2 million barrels needed to get to the 33 million minimum target?

I don't think the Saudis will give up all that share. I don't see the Iraqis cutting back.

We haven't heard from the Russians who are going full out. The U.S. has stabilized at a production level that is 1 million barrels lower than its peak of 9.6 million -- and is about to go higher because of lower production costs.

So, the deal by itself is just chimerical. But, by saying it, OPEC managed to keep the price from plummeting -- as it was about to.

What could actually make the production freeze work? Higher demand.

It's in the interests of all producers to have oil higher. So they are going to keep up the talk.

But the physical market, where demand is stable to slightly weaker, is not going to comply without real cuts -- and we know that no country is talking about cutting production to the point that oil could get anywhere near the 33 million mark from the 34.2 million that OPEC was about to produce.

That's why I am calling it a desperate action to stop oil prices from collapsing again. They can't reveal the details because there are none.

So, don't get too excited. If you want to profit off it, go to the oil companies that have continued to lower their breakeven: Pioneer Natural Resources (PXD) - Get Report , EOG Resources (EOG) - Get Report , Apache (APA) - Get Report , Parsley Energy (PE) - Get Report , PDC Energy (PDCE) - Get Report and SM Energy (SM) - Get Report . They would be the beneficiaries of anything that keeps oil in the $40s, which this statement might have done.

But remember, by November we will know the target can't be hit without a big pickup in demand -- and once again crude will be fighting to stay above the $40 level, where production from the U.S. keeps coming back on line because of the 43% increase in rigs in the Permian since the country's rig-count low earlier this year.

Cramer: Wells Fargo's Stumpf Goes Down as the Bank Goes On

Posted on Sept. 29 at 1:10 p.m. EDT

A long time ago, a very good lawyer explained to me that "the institution must be preserved." That's the mantra of all businesses, and right now, I promise you, the board of Wells Fargo (WFC) - Get Report is getting that message from counsel.

That means in the next day either John Stumpf, who is being raked over the congressional coals like I can't remember ever happening, will be told either to get his own counsel -- meaning he will ultimately be fired -- or be embraced as the embodiment of the institution itself. The problem, of course, is that the institution is now linked to behavior that no bank can tolerate, the behavior of Congress in an uproar.

In this environment, preserving the institution means to begin parting with Stumpf because the board will most likely determine that he's detrimental to the bank's overall image. (Wells Fargo is part of TheStreet's Action Alerts PLUS portfolio.)

I think it will be highly unusual for the bank to try to ride this one out with all of this heat because the board will feel pressured to eliminate the person who presided over this fiasco simply because, as each representative has said over and over, he was either clueless that customers were being bilked -- no matter how much was involved -- or he knew it and encouraged it. There's nothing in between with Congress. It's black and white. There's no subtlety, and they are trashing the embodiment of the institution, so the board would seem to have no choice.

Could the board stand with him? It could say it will conduct an independent investigation, but that would involve suspending Stumpf because he's the chairman of the board, so it couldn't be independent.

It could demand that all his pay from the time he knew about it be returned, hoping that somehow makes the institution look better.

Or they just fire him and blame the whole thing on him, which is ludicrous but preserves the institution best.

Again, I believe the board is saying, "We have to preserve the institution, and we have to do it as quickly as possible," which means they separate themselves from the man.

That's just how it works unless Stumpf owns the company. But he doesn't, and the members will have to go against counsel to keep him. When I look at this board, I do not think it is possible that they will have the guts or even the desire to override counsel.

So Stumpf most likely goes. I am sure counsel believes he's a liability to the institution, and the institution must be preserved at all costs, even to a man who has given his whole business life to the company and, I believe, would not have condoned this kind of behavior. But then again, that's now irrelevant to the circus that's tarnishing the institution every second it goes on.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long WFC.

Cramer: The New Third Rail of Investing

Posted on Sept. 28 at 2:59 p.m. EDT

This should be a halcyon time for so many different groups. Instead it's a deadly time and it's truly hard to get your arms around the toxicity of the moment. Specifically the banks, restaurants and retailers should be on fire by now; instead they are houses on fire and there's no letting up on the flames.

What's happening with these beleaguered groups as the quarter winds down?

Let's start with the banks. It was clearly the stated policy of the Federal Reserve coming into 2016 to raise rates several times because the emergency levels that we came into the year with are certainly not in keeping with the rate of employment growth.

You could argue that given the job creation, which is so strong, and the price of housing, which is so robust, we should have seen rates up to as much as perhaps three-quarters of a point if not more from where they were a year ago at this time. Instead, we have only had one hike because there's so much else that's not strong or awry in the country and the world.

For example, we got a durable-goods number this morning that showed almost no growth whatsoever. That's on top of various PMI numbers that are weak and retail sales growth that's pretty sickly. Of course, the rest of the world is taking rates down, so if we take rates up our dollar would, theoretically, skyrocket, making our exports even more anemic than they are.

Inflation is pretty much nonexistent and digitization keeps costs low, as do bountiful harvests that have caused intense food deflation. We've rarely seen such pricing pressure on foodstuffs and it is impacting every aisle, including even the natural and organic aisles, as the problems at Hain Celestial (HAIN) - Get Report can partially be tied to.

It doesn't help that China almost imploded, that Brexit fever swept through Europe and that oil threatens to break down, something that did happen back in February, causing the Fed to halt any attempts to take action. "If it isn't one thing, it's another" has been the Fed's mantra, so there's been no increase since December.

That's caused immense pain for the group that had the most to gain from rate hikes: namely the banks, which at this point were supposed to be coining money because of how much they were going to make on your deposits. It just didn't happen and numbers that are soon going to be reported for the group will most likely prove to be too high, as the stocks are saying.

But it's more than that. There had always been a couple of offsets to the net interest margin; for example, the augmenting or profit by offering more services to each customer, services with a steady fee stream.

That, until a few weeks ago, was called the virtuous cycle of cross-selling, and the more aggressive, the more accounts opened per person, the greater the profit. But now because of multiple transgressions by Wells Fargo (WFC) - Get Report by employees opening far more accounts than customers knew, cross-selling has become the vicious cycle that the bank must somehow stem.

Of course, that's pretty bloodless. What we are really talking about is taking away the premium that Wells Fargo's stock has enjoyed vs. other banks because of what is now regarded as fraudulent cross-selling. Will it take its toll at the top? The board of Wells Fargo has managed to cut some of the compensation coming to CEO John Stumpf and the now-retired Carrie Tolstedt, the so-far silent leader of the bilking division, but it's not clear if the lawmakers who are to grill Stumpf tomorrow will be appeased. If there isn't some break in the momentum to this story, it is possible that Stumpf could lose his job and the cross-selling that has helped profitability will lose its champion.

Either way, no one is going to pay as much for the stock of what was once regarded as the premium bank, which then trickles down to what the whole market will pay for the banks. That means a huge chunk of the S&P 500 is in the doghouse with no recovery or reason to own them in sight. Quite a switch from the narrative we thought would be playing out.

It gets worse. The European banks are a disaster. The London banks, which seemed to be gaining footing, have seen their core franchises obliterated by Brexit. Some of the more well-known Italian banks are coming to grips with their potential insolvency. And Deutsche Bank (DB) - Get Report is in dreamland where it somehow believes things are all hunky-dory despite relatively low reserves and very relatively high legal problems.

Deutsche Bank has historically been totally clueless to the ways of the American way of justice when it comes to banks, which has basically to stick it to them for mortgage transgressions from the Great Recession. Hence why, without much due process at all, Bank of America (BAC) - Get Report , JPMorgan (JPM) - Get Report and Citigroup (C) - Get Report paid $17 billion, $13 billion and $7 billion, respectively. Now it's Deutsche Bank's turn and the Justice Department would like it to pay $14 billion for its role in the crisis. Deutsche, which has between $5 billion and $6 billion in legal reserves, regards that suggestion as an opening bid that must come down. Today's statement that CEO John Cryan gave to a German media outlet, though, is one for the books, saying he hopes Deutsche Bank will be treated, and I quote, "with the same fairness as American banks that have already agreed on a compromise." Huh? Has he talked to any execs from those banks or their attorneys? That's the last thing he should hope for because, if history is any guide, Justice will miscarry big time. My advice to Deutsche Bank: Shut up.

The second sector that should have been rosy? Restaurants and retailers. Holy cow, have these stocks been bad. We got a pre-announcement last night of a dreadful number from Sonic (SONC) , a very consistent fast-food joint, which comes on the heels of a devastating number from Cracker Barrel (CBRL) - Get Report . Both of these companies should have been beneficiaries of lower gasoline and higher consumer confidence. Nope, not at all. And the pin action off those results has sent the stock of every single restaurant chain into the gutter.

Retail's no better. Credit Suisse (CS) - Get Report downgraded the already beaten-down Macy's (M) - Get Report today from Buy to Hold. Its miserable trajectory has been a harbinger for most of the rest of retail, save the price-cutting Walmart (WMT) - Get Report and, of course, the Death Star of retail, Amazon (AMZN) - Get Report . Even the retailers that had been making a stand, like Urban Outfitters (URBN) - Get Report and L Brands (LB) - Get Report , have been smacked down beyond all recognition. This is all very extraordinary given how plentiful jobs are and how much spare change there is in the consumer's pocket because gasoline has stayed a lot cheaper than most of the oil prognosticators ever dreamed. Oh, and Nike (NKE) - Get Report , the once most steady of apparel companies? With U.S. sales flagging, it feels as retired as a Nike missile, even as I do think it's just a matter of time before it regains its stature, it just needs to acknowledge that it has lost it first. (Nike is part of TheStreet's Trifecta Stocks portfolio.)

These stocks have become the third rail of investing. In other words, if you can avoid touching them, I would advise you to do so.

Of course, not all is lost. Tech's been strong. The semiconductor stocks are up 18% vs. a 3% gain for the S&P 500. The FAAA stocks - Facebook (FB) - Get Report , Amazon, Alibaba (BABA) - Get Report and Alphabet (GOOGL) - Get Report -- have been running, but the latter got slapped with a sell call by Wedbush that reverberated mightily. It's Apple (AAPL) - Get Report that's been the real star, with the stock rallying from $95 to $113 on a host of news stories, including higher sales and average selling prices for the iPhone 7 than expected, an exploding phone from competitor Samsung and a new initiative with Deloitte, a huge information technology consulting company that could make the enterprise, the stickiest customers out there, tilt at last toward what their employees use, Apple. Watch this deal: It isn't tactical or one-off. It's strategic, which means it could move the needle by taking the pressure off this whole "how many cellphones did you sell this quarter" treadmill. Wouldn't that be a godsend? (Wells Fargo, Citigroup, Facebook, Alphabet and Apple are part of TheStreet's Action Alerts PLUS portfolio.)

As the quarter winds down, we have a paradox of banks and retailers and restaurants devoid of footing while tech's got legs. It's the opposite of what could have been expected and it's a major reason why things feel mighty gloomy even as it looks like we are going to get out of the worst month of the year pretty much unscathed.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long WFC, C, FB, GOOGL and AAPL.

Cramer: Why Buy Nike When Foot Locker Is So Much Cheaper?

Posted on Sept. 28 at 7:15 a.m. EDT

The long knives were out for Trifecta Stocks portfolio holding Nike (NKE) - Get Report and it really didn't matter what the company had to say. A combination of a 1% gain in North American futures orders -- considered to be the best indicator of future growth -- and a 200 basis point decline in gross margins did the company's stock in despite tremendous growth in China and Europe.

It's a tough comeuppance for a senior growth company that has grown its revenues from $16 billion in 2007 to $32 billion today, and not just because people saw it coming. There has been a huge amount of downbeat chatter about the slowing of North America in the last few months.

But the hidden culprit, the return of Adidas (ADDYY) to the fore, never even came up; the company told the same rosy story as if all were well, and that, more than anything else, rankled the bulls on the stock who were looking for a short-term short cover pop.

It was weirdly reminiscent of the U.S. decline below 5% for Action Alerts PLUS charity portfolio holding Starbucks (SBUX) - Get Report , another rarity; yet, unlike Nike, CEO Howard Schultz was willing to call it disappointing. If you don't hear mea culpa off a big miss -- the cognoscenti was looking for plus 5% -- then you tend not to think the company can turn its fortunes any time soon.

Worse, when you hear explanations that offer one-time reasons for the decline in gross margins, instead of newfound competition, as well as a dismissal of futures orders as an accurate measure of the future, you get downright worried, despite the fabulous Chinese and European numbers.

These are uncharted times not just for Nike but for its analyst acolytes who have, deservedly, always found reasons to buttress staying long the shares of this terrific company. While Adidas wasn't fingered as part of the problem, we did get some subtle questions on the call about whether athletic apparel had approached a slowdown mode.

I wish the analysts had forced an athleisure slowdown mention on the call, but I think that you would have heard that Nike is not about that, it's about sports performance and innovation, they go hand and hand and everything else follows. They've always started with the athlete, and there are 7 billion athletes, so the total addressable market's still up for grabs.

Here's the issue I have with that: we are in some new era, when millennials and younger people may not buy into performance in this country as much as they once have. Sure, Jordan still sells, arguably better than ever, and the Tyrie, KD and Lebron are hitting numbers.

However, something's not resonating in the U.S. to explain the slowdown, and the refusal to admit that there is one makes it a heck of a lot harder to figure out.

Is the business going away from Nike? Is it going to Growth Seeker portfolio name Under Armour (UA) - Get Report ? To Adidas? Is it going toward the Stan Smith tennis shoe of Adidas, which, I think, is barely in the performance footwear category and is certainly not at the forefront of innovation, Nike's real hallmark?

Sure, there were some excellent call-outs on the exchange. I like what I heard again about Flex and quick-to-market shoes. I keep warming up to the HP Inc story, because of the emergence of industrial 3D printing. Nike's involvement with the watch, facilitated through Apple (AAPL) - Get Report CEO Time Cook, who is on the board of Nike, resonates.

Still, though, I struggle to come up with reasons to buy it right here at 23x earnings when I can pick up the sportswear panoply at Foot Locker (FL) - Get Report 14x earnings. That's clearly the play here, not Nike.

On a broader issue, I searched for a takeaway for Lululemon Athletica (LULU) - Get Report , which is now stylistically run by the great Lee Holman, late of Nike, who is pioneering a broadening of that company's efforts.

The fact that I don't find one, I think, is actually bullish for LULU: it confirms that the apparel company is simply not a competitor but is going for a whole new brand of non-performance, based on yoga with a sidelight of spinning and casual clothing. The gritty performance vs. the holistic mindful athleisure standard's more in play.

Suffice it to say, until Nike admits of the slowdown, you can't solve the slowdown. Foot Locker encompasses the ultimate win if there is no slowdown as Nike contends, and its weakness is a better investment than a hobbled but unperturbed Nike when, alas, it should be perturbed.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long SBUX, AAPL.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long WFC, C, FB, GOOGL, AAPL and SBUX.