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:
- commodities and stagflation,
- more woes for the automakers and
- potential bank mergers.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Commodities Move Diminishes Stagflation Woes
Originally published on Wednesday, July 30, at 10:18 a.m. EDT
Now that gold has taken out $900, there will be a flurry of stories about how the commodities are just collapsing, and at the same time, if we get an employment number that is not a totally chaotic decline -- as indicated by
-- we will get the continuation of this rally.
Gold has gone down pretty much relentlessly, which is what is supposed to happen in the slowdown, and it eliminates something you haven't heard a lot about lately: Stagflation.
One of the reasons I am growing more and more bullish is that the "stagflation" scenario that was so in our faces just a few weeks ago is banished when you see natural gas at $8, oil at $120 and gold below $900. The case for stagflation is diminished, which allows you to buy so many stocks that you have to think:
Wait a second, I can even go back to the high-multiple plays like
Research In Motion
Of course, any end to stagflation makes people bullish on the financials although we know that until the CDO medicine is taken, that's a tough sell for all but a handful of banks including the fortress four of
Bank of America
, with the last two having the wherewithal to be able to withstand the big writedowns ahead because of their deposit base.
I think that yesterday's rally in the
is a function of the breaking of the commodity grasp and a return to the high multiples that dominate there. I reiterate that biotech is excellent here, but what is most encouraging is anything with a plus-20 multiple that has momentum. It also is a better environment for the
Watch the stagflation strangulation. It's heading off the radar screen:
At the time of publication, Cramer was long Pepsi.
The Other Troubled Automaker
Originally published on Friday, August 1, at 10:51 a.m. EDT
There's a really big problem out there. It's a big earnings issue, with losses that are potentially very threatening to the market. The company is not even public. I am talking about the losses that we have to believe are happening at privately-held
Cerberus constantly reiterates that things are going swimmingly, and that we have to be happy about the progress at
. The company is so tight-lipped that there is no information to the contrary, and its reputation is impeccable so how can we question it.
Trouble is: the GM portion of GMAC keeps getting talked about and you have to admit it is pretty ugly. A $2.5 billion loss according to the numbers just released. The leasing part of Chrysler is supposedly "going according to plan," as this private equity firm insists endlessly. That's a hideous thought.
What would be the impact of a potential failure of either of these? I think it could be the big headline risk. Obviously, we may not even learn about it until we get a possible bankruptcy filing.
Right now the firm is cocky enough to make me think that maybe it has a printing press and can just print money. But it does seem like the chips are falling badly for this firm, and I want to keep reading about the autos for any hints of recognition that maybe things, alas, are
"going according to plan."
At the time of publication, Cramer did not hold positions in any stocks mentioned.
Banks Are Missing a Chance to Merge
Originally published on Friday, August 1, at 2:57 p.m. EDT
Where are the takeovers? Where's the darned private equity when you need it? Why aren't banks buying other banks and then writing down the mortgages like
Bank of America
did to Countrywide and then flipping them?
One year after my rant heard round the world, I am stunned at the declines and stunned that no smaller clean bank is stepping up to buy a large dirty bank that has a great deposits. How can someone not buy
here? How can someone think that its deposit base isn't worth something that now we have the FHA dumping ground for mortgages? Is that what all the volume's about? Takeover? I think Bob Steel can keep it independent, but I would be salivating about this one if I were Jamie Dimon from
I keep thinking that the thing that is sorely lacking in this bank bottoming is some sort of combination that shocks you, like we got in 1990. I know the
scared the shorts with its anti-short-selling campaign, but come on, clearly there have to be some banks out there that realize this is a once-in-a-lifetime experience and a free-for-all without any antitrust action.
In fact, if you ask me what I was most perturbed about on my bottoming thesis, it's that now that we have seen the employment number, where the heck are the combinations? Without them, we meander up. With them we take off, like in 1990, when we had our first 50% up move -- had that -- and then the pullback -- had that -- and then the takeovers.
Bring 'em on.
Oh, and while I am at it, would some of these homebuilders swallow their egos and merge? We need that to happen, too!
At the time of publication, Cramer had no positions in stocks mentioned.
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
Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer),"
click here. Click
here to order "Mad Money: Watch TV, Get Rich," click
here to order "Real Money: Sane Investing in an Insane World," click
here to get "You Got Screwed!" and click
here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by
TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.