I heard it five times this week, twice Tuesday in a Wall Street bar, two times during the day chatting with investors and then last night at dinner with a pal, an old pro trader from down the block. All said the same word, as if programmed, like pod people in
Invasion of the Body Snatchers
All of the people who used this term were older, friends from the days of trading, wizened veterans of other terrible markets and of course, people who came of age during the Jimmy Carter years, where the unlamented president
and how the country was going in the wrong direction, coincidentally in large part because of failed energy policies that produced gas lines and a lack of energy independence. He talked about a dispirited America where people for the first time thought that the next five years would be worse than the last five years. When you read the speech -- it can be Googled simply by typing in "Carter" and "malaise," the speech was that well-known, and, yes, well-scorned -- it resonates today as if it were given by the man in the White House. I am surprised he's not giving it, but he knows better: Carter never recovered from it.
Malaise. The recognition that things are out of control and there is no getting better. The recognition that the president and Congress can't create jobs and that we can't stop the spill. The recognition that things are out of our hands. One true presidential historian/arbitrageur invoked the "pitiful helpless giant" speech, a true throwback, a miserable speech by Richard Nixon green-lighting the disastrous Cambodian incursion in order to defeat the indefatigable and ultimately undefeated North Vietnamese. Given our inability to subdue the Taliban, though, maybe the analogy's not that off-base.
It sure feels like we are stuck in a malaise and have been reduced to a pitiful helpless giant, hobbled this time by high debt, huge taxes, an anti-business agenda that is freezing job growth and an intractable economy.
To me, the coincidences are leading to what you see on your screen -- a collective sense of ennui and "it isn't worth it" because things aren't getting better, they are getting worse. That's how you get a market that interprets everything negatively and people who are fleeing, not going toward, even the best of values.
I do not mean to be political. It's not like the Republicans are proposing breakthrough strategies to get things done and break the malaise. But I do hear it, especially from people who have come back from Asia, where the can-do attitude of the '80s and '90s or even the '40s and '50s reigns.
Yesterday's rank insubordination by a key general in, of all places, a
interview -- ???!!! -- crystallized the moment, didn't it (no pun intended). I only heard two things: one that it was right for Gen. McChrystal to be fired and two that McChrystal was right for what he said. Given that a plurality of my colleagues voted for President Obama, the conclusions were pretty grim for what one soul called a "failed presidency."
Look, in this country it is never too late for Obama to reinvent, broom the people who have been setting his agenda, tack toward pro-growth, although his one attempt to break with the orthodoxy came when he embraced offshore drilling -- a luckless failed presidency?
And I am confident that the spill, if contained, would provide a lift and a revaluation of the malaise. However, I am NOT confident that
will be able to contain the spill. So many maddening things being done wrong by one company that I think will have to file for bankruptcy because of its gross negligence and the sheer size of the claims. I have to marvel that the BP public-relations team struck back today with an obvious riposte, as I have begun to read stories about how a bankruptcy from BP would be a true blow to the U.S. economy because of the role it plays in drilling and finding oil.
Claptrap. A bankruptcy filing is to eliminate the possibility that BP would have to be liquidated. It is a peaceful and orderly way to transfer the equity to the claimants while the bonds have a chance of paying off.
This isn't short-term. I am not looking at red futures or weak European quotes, despite the fact that the situation there no longer seems to have systemic risk and by this time I would have thought Greece would have been booted from the EU. Seems pretty strong over there, even though I think that a slowly weakening euro may be in the cards because the leaders over there want to boost exports.
Nevertheless, I keep coming back to the malaise, where even good news is filtered badly: a rising home price obscured by
weak sales that should be extremely weak because of an expiration of a credit that paid for a year's worth of interest or maintenance charges, or whatever it was applied to.
This malaise, like the Carter malaise, starts from the top, although Carter's speech was a thinly disguised attempt to blame the American people for the malaise and their unwillingness to sacrifice.
I think it has to
at the top with a recognition from the president that jobs have to be created, uncertainty removed, the agenda shelved. He obviously has no intention WHATSOEVER of doing that. And I am not saying this as someone who favors or is opposed to Obama, I am saying it from the litmus I always use: Is something or someone good for stocks or bad?
His administration is proving to be the champion for those who don't own stocks and perhaps never will. Or, worse, he thinks that the average working person saves in CDs -- is he unaware of the 25-year campaign by all to have retirement savings and college tuitions paid for by now-tattered stock portfolios?
I point all of this out because when I say this market is going nowhere, I think it is going nowhere because of Washington, not corporate America, not the public sector, not the private sector. The companies we have heard from this week are brimming with cash, with the
setting the tone of terrific earnings and the
setting the tone of worldwide dominance.
But it hasn't mattered.
That's what we are dealing with. You want to put the conversation in stark footing? Corporate earnings aren't mattering because P/E's are shrinking from the malaise.
My most Republican of friends didn't stop with Carter and pegged the era as most similar to the 1930s, where deflation, not inflation, was the problem. I think that's too extreme, but empirically not easily dismissed. I just think that no one reading this thinks the next five years are going to be better than the last, even though we just experienced a hideous
There's just no sense of any control.
To dig in your bearish heels, though, is to see the market fall to 9700 on the
and we get some wakeup calls: BP containment, presidential recognition that job creation and not cap-and-trade or financial reg or amnesty or Card Check -- all part of his pro-union agenda -- can help break the malaise and put us back on the right course.
As my old friend Steve Galbraith, a great stock thinker, wrote in a remarkable piece of research for Morgan Stanley, "Look for the union label and sell," a commentary on how companies that were union-dominated were good sales.
Well, what happens if the president wants to put the union label on more businesses? What happens if he thinks it's right?
Guess what. He does.
Which perhaps is ultimately what this market is saying -- look for the union label and sell -- because the president's wearing such a label, so bizarre given what we know about unions and profits and lack of success of the enterprises dominated by them.
Forget my politics. Forget anyone's politics. The malaise is here.
And the stock market knows it more than anyone.
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At the time of publication, Cramer was long Apple.
Jim Cramer, co-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 co-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 "
," "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.