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:
- financial regulation,
- skinning the PIIGS, and
- the expiration of the homebuyer credit.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
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Let's Get Financial Regulation Over With
Posted at 9:35 a.m. EDT, April 26, 2010
Financial service regulation needs to get off the front pages. Until then, I think that
Bank of America
will be totally stalled. (Leaving out
I have described its situation in a previous piece.) While I think that
will benefit right out of the chute when it passes -- and I say "when" because there is no way the Republicans are going to win this battle against the Public Enemy No. 1 (Wall Street) -- the big firms aren't going to suffer as much as they already have with the credit card and overdraft changes. In fact, those issues have mightily affected earnings per share at the big banks, and yet the stocks are all substantially higher than they were when it passed, something that I think will happen again to the banks I just mentioned.
Right now the regionals, which were supposed to be so hobbled by what turned out to be straw men of commercial and residential real estate, have zoomed ahead of the majors precisely because of this headline risk, which is FAR MORE POWERFUL than the earnings risk. I marvel at how far
have roared from their quarters even though their quarters are simply of the "less bad" variety.
I think that only after the regulations get passed can you see multiples put on the big banks again. As for the actual changes, perhaps more collateral has to be put up, some hedge fund units spun off and more disclosure made. There is a possibility that the huge gross margins will vanish on the "baskets" that are now so discredited because of Goldman's fight with the government. I also think that we are going to see continued populism against the banks even when this is through. The difference is that the people won't care anymore and the estimates will become meaningful again.
Let's get it done. Hopefully today. The worst will not happen -- the breakup into small banks, the stripping of investment banking from commercial and retail banking. Then, with that off the table and the earnings hit quantified, the big banks will catch up to their smaller rivals. Oh, and of course, the buying opportunity off this one might coincide with the big slug of Citigroup that
, something that makes for a terrific deal for those who feel as I do.
: Could the health maintenance organizations make things tougher for themselves than
are making them? When I read UNH's quarter, I was embarrassed for the industry that they made so much money. Now it's Humana, which has more Medicare than any other player in the industry. They, unlike their banking brethren, taunt the government, and with that will come lower multiples on higher earnings. ...
does what it can do, show gigantic earnings power on higher sales. What a remarkable company. And to think that last year at this time the bears had the company pegged as a cutter of its dividend. You get leverage to the global economy, and this quarter shows that mining and oil activity are getting very hot. ... Doug Kass is out with an important piece out about
a potential top of the market. I always like to use these pieces as challenges to my own bullish position. You should, too.
At the time of publication, Cramer was long Goldman Sachs and JPMorgan.
Assume the PIIGS Go Belly-Up -- So What?
Posted at 9:34 a.m. EDT, April 28, 2010
Maybe set your day up like this -- presume the following: outright defaults in Greece, Spain, Portugal and Ireland. Add a bailout to Italy.
Then ask yourself, do you still want to own
? Do you want to sell or take profits in a
? Is that scenario too daunting to own
through? Is it enough, plus the Washington intrusion, to shake you out of
Bank of America
Because if you think it is, SELL NOW. Sell what you can into the morning's mild weakness.
Because it is pretty clear that all of these things are going to occur.
If anyone really believes that the sellers and shorts don't own these stories and can move these countries' bonds around all they want, you are being naive. If you think that in the next month you are going to wake up to anything but these stories, you are nuts. If you think these directly affect U.S. equities, the U.S. economy and the fortunes of these companies and will cause an unwinding of all of the positives, then, again, YOU MUST BOLT. You simply cannot wait -- we are only a few percent from the high.
I won't blame you if you do. It certainly is the easiest course of action. You can sell everything in May and go away! You can watch deliciously from the sidelines as countries with really great food go belly-up.
I am not doing it. I am adopting a "this too shall pass" attitude and am focusing on the incredible earnings power of companies like
and DuPont and
, where revenues are just starting to accelerate. None of these companies is counting on Europe. None of them. In fact, Europe is not as important on the margin as Latin America for some companies, like
, to give two examples.
Anyway, I have a motive: I want these people who don't see the dominos out of the market because they are going to panic at a much less opportune moment. Nothing wrong with leaving the table after big gains.
No one can blame you.
Me? I just expect all of these bad stories to play out and yet I still like the companies I am listening to. I just want room for the better prices these woes are going to give us as the clueless begin to realize that all of these countries are going to default.
And if they don't?
We go MUCH higher.
At the time of publication, Cramer was long Bank of America, Honeywell, Intel and JPMorgan.
Expiration of the Housing Credit Is a Nonissue
Posted at 2:45 p.m. EDT, April 29, 2010
Everyone's fretting about the end of the housing tax credit. Everyone except all of the executives of the companies involved with housing, the
, as well as the
( FO) and the
. Oh, and after today, the
The cottage industry of people who refuse even for a minute to accept that the bad news in housing peaked nine months ago and that the problem-loan issue has been dealt with so effectively that we have seen the peak in bad loans at the banks -- they simply don't see what is going on. Other than a couple of really hard-hit areas in Florida, we have now seen a bottom, plus or minus 5%, in the pricing of every major area in this country. We have house price appreciation in many areas. We have multiple bidders in many areas. And we have a
chairman who is not going to let rates go higher until employment, which dovetails with housing, gets stronger.
This morning on
The Today Show
I said that next year a housing shortage will be upon us. I have been laughed at already about this, with several people asking if I am nuts, especially with the expiration of the credit.
I let the stocks do the talking. Every single entity related to housing is flying. Go listen to Owens Corning, which was remarkable for housing. Fortune Brands, Standard Pacific,
Stanley Black & Decker
. And now Weyerhaeuser. We are still building homes at a rate that is equal to when we had half the number of people in this country. We are about to have immigration amnesty, which should take people out of the shadows and into buying homes. We have pent-up demand and we have banks that are keeping people in their homes because they know that house price appreciation and employment will wipe this problem out because prices will have to go up when it occurs.
In the end, this tax credit issue will be like "Cash for Clunkers." After it went away, car sales soared.
I am betting the same will happen with homes.
And all of the stocks mentioned will go higher.
At the time of publication, Cramer was long Stanley Black & Decker, Weyerhaeuser and Home Depot.
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.