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:
- what President Obama should do to create jobs;
- why it's time to buy gold; and
- where the big banks should be placing their focus.
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, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
How Obama Can Get Jobs Back on Track
Posted at 1:13 p.m. EDT, Thursday, August 12
No urgency. We never hear any urgency from this president when it comes to jobs. You want to know how to get those jobless claims down? Here we go:
Obama needs to go to the Gulf and said, OK, we need some compromise here. We know that we had an outlier in BP , but we need to keep America on the move and hire people.
We need to get domestic in our fuel and not just coal. We have abundant natural gas; we just have to get it to the right places, so we need pipelines built, just like in the 1930s, and put people to work. We need to allow fracking and encourage drilling safely, because it will create hundreds of thousands of jobs. We have to accept that the perfect is the enemy of the good, and as much as we like solar and wind and conservation, we need to compromise.
We need to ask the winners, the Fords , the Caterpillars , the Disneys , the Cummins , the JPMorgans , what they need in order to hire people.
We need to call in the banks, and even though we may not like them, we need to call in the CEOs into a room and say, "Solve this housing crisis for us. Do it in an expedient way. We can't do it without you, Bank of America , Wells Fargo and JPMorgan. You are too important to the issue."
We need to help our exporters get more deals overseas, and we need to finance those customers to use our products. Start with aerospace and move further.
We need to get the public sector to take some pension hits to make it so we don't run out of money. It is a shame, but we need to get behind a more realistic public-vs.-private pay scale and pension, because the risk to public-sector employees is nowhere near as high as it is for those in the private sector.
We need to fund small businesses that are profitable and want to expand. We need to guarantee some loans made by the banks to them.
We need to offer 1% financing from the FHA for people who want to stay in their homes for the next three to five years until we are past this crisis.
We need to temporarily remove the obstacles to hiring, such as a payroll tax exemption for new hires.
We need to keep the Bush tax cuts as they are until we are back on our feet.
Other than the FHA and the small-business initiatives, there isn't much here that is common ground with the president. And believe me, the president is calling all of the shots. Every country that is doing better than us, which is pretty much every country, has worked hand and hand with private industry to ask what needs to be done.
Our CEOs get called in for photo ops -- and believe me I know, because I speak to the ones who have been called in -- and then they are berated or derided.
It's ridiculous. We know it is true.
If we were serious about creating job, it would mean compromising the agenda. But compromise is the way business works, and compromise is anathema to community organizers -- the background of this president.
I understand this. As a union member, as an agitator, as a provocateur at one point in my life, part of me applauds the president for his principle. But it isn't the part that has anything to do with creating jobs, putting people to work. It is the part of me that says there is great inequality in the country, and I want it to be changed by taking from those who have and helping those who don't.
The problem is that the only way to do that now is to compromise on principles and create jobs.
And that was anathema to me when I was in my 20s.
We elected me. With hair. In my 20s.
I am doing my best!
At the time of publication, Cramer was long BAC, CMI and JPM.
Get Your Gold On
Posted at 11:13 a.m. EDT, Thursday, August 12
Lords of Finance
, one of the greatest books I have read during this era, is basically about the love affair with gold among the great powers -- and whoever could find the most of the metal had that power.
The U.S. had a bountiful supply of gold. Therefore it was ascendant. It was worshipped well in excess of its political or military power -- which was basically nil, by the way. Your paper meant nothing, your gold meant everything.
The Spanish Civil War
-- best book by Anthony Beevor -- the Republicans squandered their gold, sending it to Russia, which doomed them as hostage to the Communists, and made it so that natural friendships (like the British and the Americans) were out the window. The peseta could buy nothing, certainly not arms, and certainly not men.
We don't think of gold in this country like these great powers did then. But the future, great powers, India and China, do. They want to be the U.S. in the 1920s. They want to be powerful. They equate that power it with gold.
The middle class in India and China shares that focus. You make money, you buy gold. Jewelry. Any form that's allowed. You do that because you have little faith in the government and, again, the paper. You do it, well, as bling -- to show you have it.
In India, wedding season means buying gold. We are going into wedding season. In the totalitarian state that is China, you can get away with buying gold and not raising signs of sedition if you buy it for holidays as presents and wedding accoutrements.
This is the future.
There is one problem. In the 1920s and 1930s, we had gold. We had mines. We had gold pretty much in abundance. Not as much as we had in the 1840s, obviously, but enough that you could talk about the Comstock load, and Homestake meant an in-the-ground private Fort Knox.
Now? There's no real gold to speak of in the U.S. Maybe when we get to $1,500 we can open up the old Kennedy and Argonaut mines. These twin mines, in Jackson, Calif., defined the gold rush. The Argonaut closed after a horrible accident. The Kennedy is a tourist attraction. The gold was deep . Now, too deep.
There's gold in Canada and Mexico. It's being dug. Probably an average of $450 per ounce? But the easy gold has been found in these democracies.
Where do you find gold now? In places you don't want to go to. In places that are on the verge of being Venezuela. In places like Mauritania, one of the two countries that Kinross spent $7 billion to buy a company that has mines there. Mauritania? Familiar with it? Two coups in five years. Multiple attempts to eliminate slavery. Perhaps one of the least-stable places on Earth.
Kennedy, Argonaut, Mauritania. What's wrong with this picture?
Now remember, for 17 of the last 20 years, gold has gone up in September, all about the buying seasons by the middle classes of China and India. The stocks have rallied 8% on average each year.
Yesterday gold got hammered. The circumstances for gold today aren't that different except the dollar didn't roll over ... yet. But I think that as we get closer to September (we are only 19 days off), you are going to hear about this outperformance. Which means the dip must be bought.
I am partial to the
SPDR Gold Trust
. But at these prices I am saying that
is right, that
is right -- new name -- that
is right (even though its mines are in countries that I would not say are all that bankable).
Nineteen days without worrying about the
or the double-dip or the euro or China. Nineteen days and then you are in a cycle of its own.
I have been proselytizing gold for five years. It's up 50%. Lots of people are saying that I am too late, that I should say take profits. Or, as my critics would say, "You like gold now?" Totally and deliciously and viciously oblivious that I have been pushing gold forever.
Get used to it.
I got 19 days to get you in it! (Thanks to Alix Steel and Matt Horween for their help on this, as well as U.S. Global Investors.)
: Chinese container demand stronger than ever. But who cares. That's like saying that 100 out of 150 metropolitan areas have home price increased. These do not fit the thesis. They just don't work. They are wayward and one off. And the thesis must prevail. I apologize for bringing up some bullish factors. I promise to do it only when I have them.
At the time of publication, Cramer held no positions in the stocks mentioned.
Big Banks Should Focus on Dividends
Posted at 2:55 p.m. EDT, Thursday, August 12
They ought to do something with the money! I could be talking about the techs: Tell me
shouldn't have introduced a dividend with all of that cash. Shouldn't
raise its dividend, making it harder to short?
But, no, I am talking about the banks -- specifically, the large-cap banks that are sitting on huge amounts of capital and not loaning much of it. Just sitting there ... waiting.
It should be translated to dividends. Or the banks that have minuscule dividends, such as
, should raise their dividends.
Think about it. The large banks have remarkably clean balance sheets and are well-funded with low-cost funds, similar to low- to no-interest bearing accounts, and very little hot-money CD's.
People keep moaning about the low net interest margins being not so hot, but core lending spreads this quarter are showing some huge improvement, although the book of business is obscuring the trend by its shrinkage. Non-performers are coming down nicely.
So we have to ask ourselves, does JPMorgan Chase really need 15.8% total risk-based capital? Why can't it raise that dividend. What's wrong with
that they have meager 0.7% yields? Are they afraid of the government -- of Senator Blanche Lincoln, who no doubt has moved on to some other issue that could get her re-elected in the fall?
Someone's going to break ranks, and someone is going to give us a nice raise. And that's going to move the needle for certain.
At the time of publication, Cramer was long Cisco, Intel 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.