You hear some common themes on these conference calls we listen to every day. Two stand out large: Asia has returned as a growth area and Latin America has stabilized.
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These are huge turns in an intertwined economy and they are making for some very big shifts in investment dollars. First, the turn in Latin America and Asia means that some of these brands that have been in the doghouse for two years are ready to snap out of it. That, in large part, could explain the renaissance in the
Procter & Gambles
. These stocks have been punished severely for their newfound cyclicality. (We never thought people stopped using this stuff, but when things got bad they kept buying
PCs and stopped using expensive cosmetics.) So now that they have the wind coming to their backs, the move could be longer and louder than we had anticipated. Hence my focus on lots of these soft-good stocks lately.
Second, it helps explain the bond markets. Emerging markets need and chew up money. It is very hard to finance these markets internally. When I was listening yesterday to a couple of calls that focused on the turn in Korea and Singapore, I kept thinking that those hoping that bonds will see 5% again (and I am long them, but not for that target price), will be sorely mistaken.
Third, it helps explain why oil isn't going back to those old levels. These emerging countries use a huge amount of fuel. It is reasonable to expect that oil can trade down a couple of bucks, but the world will be too robust to allow much more than that.
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Oddly, apropos of the excellent discussion that
and I are having in the
boards, I don't think any of this translates into anything bad for either market. The bonds have already made a very big down-leg and I don't think there are 50 more basis points to go to the 30-year. The stock market needs these countries if only so we can recover from the incredible narrowness that has plagued us for so long.
The one conundrum in this view is the cyclicals. For some reason these stocks act terribly -- the blow up in
, even as it runs those nifty investor relations ads, the slowdown in anything truck-related, the continued pounding that aerospace and auto are taking -- are all symptomatic of tougher times ahead, not easier. Perhaps what is happening is that the
dot-com tightening is affecting those great companies at precisely the moment their emerging-market businesses might be getting better. Pretty ironic.
: If you haven't checked out
on the weekends, you are beginning to miss some really great stuff.
has a weekend edit team that is determined to change the way you think about business over the weekend. They are dedicated to answering your questions, solving your problems and exploring things well beyond what goes on during the week. They are preparing some contests that could be fabulous as well as a great new message board feature that I know will be drawing me in on spare moments. Also, the Sunday night reimmersion features, which get you ready for the week ahead, are priceless. And nobody else is doing them. I always go to
, or whatever they are calling it lately, in the vain hope that I can get a jump on things for the next day, but they are rigorous in denying in that edition anything that wasn't available Friday.
Oh, this just in. Got an early copy of
: Abelson's getting bearish! Hoo-hah!
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Colgate. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at