"The ups and downs of retail have been well defined as being the Achilles' heel of the economy," Jim Cramer said on TheStreet.com TV's Wall St. Confidential Web video Thursday.
Chairman Ben Bernanke doesn't see this because he's worried about inflation, said Cramer.
reported a bad number, which the discount retailer said was due to
cutting prices dramatically, which, in turn, cut into Family Dollar's margins.
"If you're Wal-Mart, here's what you do," Cramer said. "You say, 'OK, one of our competitors is Dollar General and they just went private. They have been nipping at us. They're like ankle-biters. Let's lower prices and wipe them out of business. They just took down all this debt.'
"My prediction is that Dollar General will be the first of the recent crop of leveraged buyout private equities that fails," he continued. With the Wal-Mart strategy and the Family Dollar import, Cramer said he wonders whether Dollar General will become "Penny General" by Christmas.
When asked if it would have been better for Dollar General to remain public, Cramer said that one of the things he doesn't like to do anymore is call people idiots. He believes Dollar General "made really bad judgments" as to where it could load the debt up.
"The fastest to fail when it closes will be Dollar General, and the second fastest will be
," Cramer said.
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