Why Everyone's Buying Banks

You can fight this logic, but you can't fight this market.
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Bank stocks as peace plays? Dumber things have happened. Ever since the breakdown of Asia two years ago, I have noticed that the BKX, the big bank index, no longer trades with rates, with Fed calls or with, yes, earnings. It trades with the mood of the foreign markets.

If there is talk of peace, people buy banks. If there is talk of Brazil doing better, people buy banks. If there is talk of Japan doing better, people buy banks.

Right now, we have all three happening, so what are people doing? They are buying banks!!

Let's say you think this logic is spurious. Maybe you think that banks should trade as a function of the yield curve or their multiples. All I can say is that I fought this battle for a year before I decided that what the

market

thought was more important than what I thought.

That's why I am buying banks -- for a trade, of course. Because I am a trader.

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 the stocks mentioned, although holdings can 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

letters@thestreet.com.