State of the Unions Address

The capitulation of Union Carbide and Union Camp tells you more about business models than anything else, Cramer says.
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If it starts with Union, buy it!

Lost in the shuffle of the long-awaited dot.com meltdown was the capitulation of still one more old-line commodity company,

Union Carbide

(UK)

.

Union Camp

and Union Carbide. Talk about venerable. Anybody who has traded for the last 20 years recognizes that these were two quintessential valuable properties that would remain proudly independent, no matter what.

Until they could not bring out any value for shareholders as independent entities.

Union Camp, before it succumbed to a bid, tried its best. It paid out a huge dividend. It restructured and spun off boring properties that didn't fit. It tried and tried and tried to make you money, even as its boring paper product line just didn't allow for growth.

Carbide also gave it the best shot it had. Carbide has been sliced and diced so many times -- in part because of corporate raids, in part because of the tragedy of Bhopal -- that who can blame these guys for running out of ways to bring out value? The company sure did its best, too.

But in commodity businesses that grow by single digits and are leveraged to gross world product, you throw your hands up after a certain point. And if you couldn't create a dot.com (notice the past tense in deference to the sudden cellar-dwelling nature of those putrid animals), you couldn't get your stock moving.

The capitulation of the Unions tells you more about business models than anything else. Nobody wants to be in the commodity businesses any more because it's been a whole decade where prices can't be raised.

Sure, there are going to be flare-ups. Gypsum board goes through the roof until more gypsum plants are opened. PVC has periods of quaint tightness. I am told by reliable sources that gift wrap has gone up in price.

But the legacy of the late '90s is that if you make a commodity, no one wants your stock. Except another commodity maker.

Random musings:

So last night, after our in-line skating outing (I just watched), my eldest daughter and I went on

eBay

(EBAY) - Get Report

, for what seems like the four millionth time, to look at Beanie Babies. After a half-hour of searching and looking, I said to her, "You know, one day, we may actually have to bid for something."

She paused, looked up and asked, "Daddy, what's bidding?"

Hmm, maybe that's why eBay keeps going down.

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

jjcletters@thestreet.com.