Bank Notes - TheStreet

Close readers of this column know that I like the financials at the end of a Fed tightening cycle. That's a play right out of 1994.

The problem this time though, is that the banks bought a ton of brokerages since that cycle ended. And the brokerages are experiencing all of the signs of a classic bear market: dramatic retraction in volume, much-too-high staffing levels, a dearth of M&A in the U.S. and, worst of all, an end of high-margined underwritings.

Pure banks should begin to do well. But those with massive credit-card exposure may not hold up, because the consumer is winding down rather dramatically.

Bad sign.

Anyway, I still like the group theoretically, but the more I kick the tires, the less sure the companies are. And it is only getting worse as the quarter ends.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.