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:
- a bullish case for the dollar,
- the FHA and
- the big picture for financials and energy.
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The Buck's Bull Case
Originally published on Monday, July 22, at 2:27 p.m.
One hundred billion in euros for dollars, please! That's the
bill coming due for their acquisitions of American companies.
Right now, nobody seems to care that we are seeing some real demand for dollars from these companies. It is almost as if they don't matter. Plus, we sure ship enough dollars overseas because of oil that you can believe it doesn't matter much.
But I keep wondering how many more deals are out there, how many more deals will take advantage of the big declines. I wonder if the dollar won't strengthen simply because we may be sending fewer overseas because the price of oil is plummeting so hard and going lower.
To date, we have seen no industrial takeovers, which is the real shocker, especially when you get numbers like we got from
today. We have so many industrial companies that are simply shrinking daily because of buybacks and a weak dollar that it is amazing to me that we haven't seen these. I wonder if
didn't do defensive acquisitions in the last few weeks in order to ward off attacks by European companies that are hungry for U.S. properties. Those would have been natural to pick up. I also can't believe that
Rohm & Hass
hadn't been bought already.
There is a tremendous herd instinct in Europe once the companies there believe that the dollar has bottomed or is bottoming. They do not want to miss the bottom. I can only imagine the interest that
has right now in
(and, believe me,
if the darned Milton Hershey Trust didn't continually say the company's not for sale). These companies are all small-cap now that the dollar's come down so much and they have brought in so much stock.
I have always been concerned that we can't get a real bottom in the dollar until we stop printing so many, and that doesn't seem like it is possible. But we are seeing a lot of money being taken out of the stock market through these big deals (too bad we have so many financials hungry for money, because given the dearth of new offerings, we would possibly be talking about a stock shortage!), and we are seeing some fundamental demand for dollars.
These trends make me more bullish, not bearish. And I have to point them out.
: I'm so tempted to buy the
S&P Homebuilders SPDR
for a trade ahead of any federal legislation to help housing. ... I still expect that there will be more
, I am just saying we are now in better shape to handle them because of a few good banks. I am using Helene Meisler's judgment on the overbought/oversold case on the banks. ...
At the time of publication, Cramer had no positions in the stocks mentioned.
The FHA Can Get It Done
Originally published on Tuesday, July 24, at 11:27 a.m.
During the biggest decline in commercial real estate that this nation had seen since 1929, the government swung into action and created the Resolution Trust Corporation to sop of the bad loans and get things moving again.
The numbers we saw this morning in existing-home sales remind me of the same kind of gloom -- pervasive, ugly, even scary.
And guess what? We are getting legislation courtesy of the run on
(ironically the biggest "houses will never go down in value" yammerer out there) and the trashing of
that will start our own Mortgage Resolution Trust, except it will go by the name of the FHA.
With $300 billion in money to refinance loans, the FHA can take the job of the RTC.
Bank of America's
-servicing division will offload people to it, so will
. They might do it en masse, they might be able to do it. You will get a chance, by the way, to buy BAC off of what looks like the next big collapse/refinancing-if-lucky --
, the most reckless lender left.
The FHA is going to be the RTC, and that might be one big reason we have seen such a big run that now looks like it will have some retracement, based in part on this gloomy existing-home number, and in part from the
rise in oil, which is think is doomed (I am using a $110-$120 target for crude). Nat gas? $8.
Before you sell down the banks too hard or give up on them, remember that we had a 50% move and then a muddling and partial retracement off the top in 1990's bank market. I see the same because of the new Mortgage Resolution Trust, the FHA!
At the time of publication, Cramer had no positions in the stocks mentioned.
Picture Becomes Clearer in Banks and Energy
Originally published on Thursday, July 24, at 1:12 p.m.
Which is more vulnerable here,
American International Group
? Which would you rather sell,
I think all of these stocks are going down. But I think that I can put values on OXY and Conoco. I like buying stocks at six times earnings. I like buying companies that are buying back stock and can boost dividends. I don't like companies that have to issue stock or cut dividends including ones that have just been boosted -- recklessly, like AIG did.
It seems to me that we are getting closer to drawing a line in the sand for Big Oil where we want to buy stocks at six times earnings going to five times earnings. At the same time, we want to buy the fortress banks --
Bank of America
-- into the weakness, dabble with
when it gets to below what Bob Steel paid, and avoid the unquantifiables like Merrill and AIG, both of which I think need more capital.
And I am looking to sell
, which is not a fortress.
I am looking at this AIG and MER roll over and all the other financials with them. I am looking at oil crumble again -- and I don't want to bet on crude, which I think is going $110-$120, but I do believe that these stocks are going to be the ones you want to buy down every few points, along with
, and the cheapest of all,
Cabot Oil & Gas
. The latter two are nat gas, which is poison now but can't remain so once whoever is long gets out.
There is a pervasive long out there blowing out every second. The only thing I know is that $8.99 is supposed to be the long-term spot where industrial demand is, and we hit that level and bounced, but I am not a technician, and you don't want me to start being one at this age!
Anyway, I think that we can now be selective in what we sell in finance and selective in what we buy in oil. Do not need to scale-sell AIG, I would scale-sell Merrill, and I would scale-buy the major oil companies, lest you wait until they are in buying and miss it.
You know it is bad in Japan when they stop buying cancer insurance -- look at that
, and that's a great company!
At the time of publication, Cramer was long Cabot Oil & Gas and Devon Energy.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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