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Fat cats were the real reason behind today's big market sell-off, Jim Cramer told viewers of his "Mad Money" TV show Thursday.
He said Obama's seemingly endless obsession with punishing wrong-doers is systematically contributing to the biggest wealth destruction America has ever seen.
According to Obama, just about everyone is a fat cat, making ill-gotten gains at the public's expense, and needs to be punished immediately. However, he continued, if everyone is evil, who's left to do the business of America and create jobs for the economy?
After being in office less than two months, Obama's already taken aim at the drug companies and medical device makers, saying they routinely overcharge Medicare. Oil companies and drillers have been on the hot seat, accused of windfall profits and destroying the environment.
Everything in the real estate market as come under fire, said Cramer, as has the defense industry, auto industry, and manufacturing sector, which is now under attack for polluting the air with carbon emissions.
Obama all the banks, big and small, along with the insurers, are bad, he said.
Who's left? He said the only sectors not touched by Obama's rhetoric are retailers, technology companies and food and beverage firms. He said government employees are the only real winners in Obama's stimulus plan.
So with everything under attack, and all at once, is it any wonder the markets are devaluing by the day. Cramer said sometimes you need to spare the rod to save the economy.
Cramer said he solved the curious mystery of
, an information technology company that was riding the wave of national security spending, only to crash March 3 after its chief financial officer resigned and analysts downgraded the firm.
Cramer said that although Mantech had the right thesis of improving the security of public and private computer networks under a pro-security president, it betrayed investors. The
Investors Business Daily
predicted the 9.9% decline in the stock a day before it happened.
According to Cramer, the chart of Mantech held all of the clues. Up until January, he said, Mantech had performed strongly in a down market. But then during the week ending Jan. 30, the stock tried to stage a technical breakout, only to fail and retreat to the bottom of its weekly range. Cramer said this signals that big institutions were looking to sell rather than hold.
In the following weeks, shares of Mantech rallied back, but on light volume, only to get hit with another round of selling. This time, however, the stock plunged below its key 10-week and 40-week moving averages, clearly showing that the big guns were getting out. This is what IBD saw, said Cramer. The day after, the stock tanked.
Cramer said the fundamentals at Mantech were also signaling trouble. The company made a total of nine acquisitions, but saw no expansion in its operating margins. Cramer said this is atypical. Usually when a company acquires another firm, there are synergies and cost savings that grow margins.
The company also has a two-tier stock structure, said Cramer, another red flag that he avoids at all costs.
Cramer said the bottom line is that you can spot trouble before it happens, but only if you know what to look for.
Cramer spoke with Peter Swinburn, president and CEO of brewer
to find out how that company is fairing in the tough economic times.
Swinburn said that case volumes were actually up at Molson Coors for 2008 and characterized the company's business as "surprisingly resilient." He said Molson Coors is now the second largest beer company in the U.S. and is preparing to ramp up advertising for its signature brands, Coors and Miller.
When asked about the company's large cash position, Swinburn said the company is always evaluating where best to spend its cash, and said returning cash to shareholders is always an option they favor. He noted the company's $100 million investment in a pension fund in Europe as just one of the recent investments Molson Coors has made.
Finally, when asked how falling costs for raw materials affect the company, Swinburn said that due to hedging last year, Molson has not seen much upside yet, but noted that by the second half of 2009, the company will begin enjoying much of cost reductions.
Calling Molson Coors one of the few Obama-resistent companies left, Cramer recommended the stock.
Cramer told a viewer to take a pass on
and pick up some
, which he also owns for his
Action Alerts PLUS portfolio.
Cramer told a second viewer that he's not worried about the dividend at
Kinder Morgan Energy Partners
since the master limited partnership has more than enough cash flow to cover the payout.
Cramer was bullish on
United Parcel Service
He was bearish on
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At the time of publication, Cramer was long Wal-Mart.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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