Jim Cramer fills his blog on
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:
- the Goldman Sachs show trial,
- Apple's iPad, and
- positive signs for the banks.
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, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
When Will the Goldman Show Trial End?
Posted at 9:34 a.m. EST, Jan. 26, 2009
What is the goal of the endless investigations of
? What is supposed to be accomplished? I have a theory. Once again, this is all about
Notice how none of the investigations center on all of those who bagged Wall Street about what AIG really owned and really insured. Notice how the London office, which made the guarantees that broke the back of AIG, is never talked about in these hearings. Nor are the professors who verified how safe the model was and how so many mortgages had to go bad to trigger the insurance that it was almost impossible to see it happen.
Nah, the focus is on the beat that
The New York Times
hit endlessly. The focus, once again, is on Goldman Sachs.
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That's right, it is just like the stories that
The New York Times
reported that somehow Goldman Sachs got preferential treatment from the government when AIG paid out on Goldman's insurance. This whole exercise in AIG-flogging is not about how AIG made good on saving the European banks that were insured by AIG's London office. Those are
Nope, it is all about Goldman. Again about Goldman and about its ties to government.
It is about getting the suddenly despised Treasury Secretary Tim Geithner to admit that he checked in with Goldman over and over, that Hank Paulson (formerly of Goldman) made sure that Goldman paid out, and it is about closing the link to make sure that the taxpayers know that they saved Goldman and that's what makes Goldman's obscene profits so horrid.
It's about Goldman's Bavarian illuminati hold on the government that enabled the firm to be able to get off scot-free. Congress, the regulators, the president -- everyone wants to play gotcha with the survivor.
It's almost as if Goldman's officers would be better off if they had crashed and burned like
Think about it. Instead of the winners being called down to Washington, how would you like to hear from Jimmy Cayne, Dick Fuld and Stan O'Neal? How would you like to hear from Frank Raines from
? How about Kerry Killinger from Washington Mutual? How about Chuck Prince and Bob Rubin from
? If you really cared about cleaning up the mess, wouldn't that be more instructive?
You know what you would hear? You would hear about reckless mortgage lending, about batching bad mortgages into faulty instruments and about liberal -- some would say outrageous -- credit given to hedge funds to lever up these instruments so that they could make immense profits on a consistent basis by buying these bonds and pocketing the difference between their high interest rates and the low repo rates. That was the culprit with Lehman, Bear and
. Washington Mutual simply lent badly. You would hear about underwriting standards and greed.
No, that would be too constructive. Instead we just hear about how Goldman Sachs got favorable treatment because it owned the government. We are hearing about a powerful minority of financiers who really control the government and the country, reminiscent of another time and another country, and it is revolting.
But make no mistake about it, that's what these hearings and headlines are all about -- taking down Goldman and all who helped them at AIG and the government. I hope Tim Geithner gets what this is about, this stupid, endless show trial.
I wish Goldman would just give the money back now, but it is too late. Just like it was too late to restrain bonuses.
At least you know now what this is all about: influence, wealth, power. Not about recklessness, what really caused the crisis, and not about the explanations we need to hear about what really went on so we could fix it.
And believe me, the explanations do not touch on intelligent risk management and insurance to be sure that you are not brought down by the foolishness of others.
At the time of publication, Cramer was long Goldman Sachs and Cooper Industries.
iPad Will Get the Bodies Through the Doors
Posted at 2:29 p.m. EST, Jan. 27, 2009
OK, how's this for a takeaway on the
iPad: I want one. I need one. It will make my life better.
And I think that not only am I not alone, I think that this is one of those devices that will bring people into the stores, and when they get there they will buy more than this device.
Sure, there is much, much that we don't know, although our blog by
Jason Schwarz is extraordinary. And I know that I like my
Kindle and I like my iPod, so I have to figure out whether this is
I also have a Mac Air, and I want to know what functionality this has that the iPad doesn't. But you know what?
I have to go to the store to see it.
Isn't that, in the end, the true takeaway? The sales per square feet of these stores is out of control!
Now, the stock is down $10 from where it ran yesterday. The market's awful. I think the stock isn't done going down, and I don't trust this rally off the bottom. If you bought calls and sold common yesterday on the spike, I wouldn't cover anything yet, unless you did it one-for-one, then you have to take some in.
That's the way it trades, and not the way the iPad works. Caution until Monday.
Sell the hyped-up sizzle, buy the steak tartare.
At the time of publication, Cramer was long AAPL.
Six Positive Signs for the Banks
Posted at 3:54 p.m. EST, Jan. 28, 2009
Can the banks lead us? They have certainly killed us. Let me offer a couple of encouraging comments about the group.
First, the President did not use the State of the Union to bash them and referred to many of the problems as if they are in the past. Perhaps because it was prime time, he did not bring out the Volcker rule, which is really the
rule. Sure Joe Biden laughed about the banks as if they were a Rodney Dangerfield punchline. (I would have said Jay Leno, but I don't even know who is funny anymore.) It felt peak-like after the Geithner grilling. Obama didn't embrace Volcker last night -- I didn't see him there -- he embraced Geithner. I think that's very reassuring. He's a sophisticated regulator.
Second, as we tally the cost of the bank tax, it is not wiping out profits if things get a little better. We are seeing some numbers from banks that seem downright tiny.
Third, they have all reported, and the vast majority does not need to raise equity.
held the print price. (Too bad the government didn't sell when it had the chance because that would have made up a lot of money that the taxpayer might lose.) No more supply would be terrific. Only
seemed be poised for a deal. I was thrilled to see this move in
by the way. I don't see Geithner demanding more dilution with more offerings. Sure, if unemployment spikes to 11%, we may need more. But it hasn't hit it yet!
Fourth, many of the banks reported that the fourth quarter was either the last bad quarter or the first OK quarter. Remember, you can't wait until banks say everything is hunky-dory. You will have missed the move. We know that from 1990-1991.
Fifth, even if the Volcker rule is enforced, which I don't think it will be because Barney Frank's against it and it has to go through his committee, you now are seeing bank stocks sell at levels on earnings that are downright ridiculously cheap. Goldman Sachs has traded at 10 to 12 times earnings. It is currently at five times earnings. At this pace, you will see the earnings over a four-year period amount to a higher amount than what the stock is selling for.
, the real bellwether of the banks post-Volcker rule that can hurt Goldman and
, has been outperforming the market.
I think this outperformance,
, is so important that it tempers my negativity -- and that's an awful lot of negativity to be tempered.
At the time of publication, Cramer was long Goldman Sachs and JPMorgan Chase.
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.