! Finally companies are taking matters into their own hands about these crummy closes that so confuse people. Finally we are getting some discipline.
Every morning I go over the stocks that declined the most on a percentage basis the day before. This morning when I was riding in I saw that MBNA had dropped dramatically. As MBNA is a major issuer of credit cards I figured business must have turned down. Something had to have gone wrong. I told our head trader that because of the MBNA collapse we had to be extra careful of the banks, all of which might have credit-card problems.
Fortunately, MBNA issued a statement this morning talking about that closing price and pointing out that it was a markdown. The stock hadn't really fallen. There were no problems at MBNA. In fact things are quite good.
As you know, I think that these markups and markdowns are happening way too often. The exchanges seem helpless to do a thing about it. But the issuers are not similarly constrained.
Kudos to MBNA for taking matters into its own hands. I hope other corporations act accordingly. It is about time we put some truth back into closing prices.
Secondary barometer showing real strength today. The deals are all holding and jumping to premiums. Good sign short-term.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. 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