Speaking of building a thesis, how about this one? The battleground of the U.S. economy right now is the state of Washington. I am certain Costco (COST) - Get Report saw real weakness in this region these last two months. Amazon (AMZN) - Get Report and Microsoft (MSFT) - Get Report stockholders have to be spending less. Amazon and Microsoft option holders must not be spending at all! This region is a microcosm of what the Fed is targeting: Willy-nilly consumer spending based on the stock market.
That's why this
Costco news is good news, Fed-wise. Our long-side gooses would be collectively cooked if there were no slowdown in the last five weeks in Washington. That would mean that the consumer is just hell-bent no matter what.
We have to anticipate a slowdown if we are going to profit from it. We can't wait for some
GDP number to confirm it. This new information is still anecdotal, but it is more concrete than just people bemoaning the new "poor effect." (Silver-Lining Department???)
When this period is over, we want to see the following happen: We want the Washington economy to be led by
-- not just because we are long the stock, but because the Fed doesn't give a hoot about the health of the manufacturing economy. It has been sacrificed on the altar of the need to crush consumer spending. If Boeing can lead Washington out of a spending morass, that's the type of shift the Fed wants to see.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Costco, Boeing and Microsoft. 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