Jim Cramer and Doug Kass debate the direction of the market.


Jim Cramer
Path of Least Resistance? Down
8/4/2008 2:41 PM EDT

This blog post originally appeared on RealMoney on Aug. 4.

We are in free-fire zone for anything cyclical, anything with any economic exposure. That's because market participants are trying to beat a recession and have ZERO exposure to the economy, and in the hedge fund case be aggressively short the economy through anything with any points to it.

I say "points to it" because it is too juicy not to be short, say, U.S. Steel ( X) or any rail. I couldn't believe the upticks that Barron's gave you with its recommendation of perhaps the most extended group out there now that oil and gas has collapsed.

At times like this, you can take on any cyclical company that could suffer from the endless "demand destruction" cliché that everyone thinks is happening. I am not disagreeing with any of this. This is the first recession we have had where hedge funds are dominant players in the market, and they have to show they know how to play the downside -- it is so easy to knock these companies over it is amazing.

But it is open-field running, because the buybacks aren't working, there is very little dividend protection among the commodity plays (not that the dividend of, say, an AT&T ( T) matters, because the quarter was perceived to be of such low quality) and there is simply no reason to own anything right now. There are no takeovers, as people think there is no financing to do anything. There are no stock-for-stock deals, because the companies don't believe their stocks should be given away down here.

So what happens? We have to go back to being radically oversold before these stocks stop going down, and we are nowhere near that. It is easy right now to say, "There is no hope."

I would rather say, "There is a trade coming up to the long side after we go down a lot, but right now the short side is the easy side."

At the time of publication, Cramer had no positions in the stocks mentioned.


Doug Kass
The Anti-Cramer, Part Deux: Game On!
8/5/2008 10:08 AM EDT

This blog post originally appeared on RealMoney Silver on Aug. 5.

Right now, I find myself again at the polar opposite of bearish Jim "El Capitan" Cramer.

Indeed, I expect that, sometime over the next several weeks, we could have an up 3% daily move in the indices.

The short table is crowded by a lot of amateurs now, from my perch.

And ignoring the schmeissing in the price of oil (something I always have thought of as crucial to the bullish case) could be harmful to your financial health.

At the time of publication, Kass had no positions in the stocks mentioned.


Jim Cramer
We're Not So Different, Doug and I ...
8/5/2008 12:39 PM EDT

This blog post originally appeared on RealMoney on Aug. 5.

Nothing like some fisticuffs on the site, but I do want to clarify my position vis-à-vis my friend and colleague Doug Kass, because I don't believe we are all that far off from each other -- nor do I want to be, given that he has the hottest hand I have seen in years and has become so much read that people should be subscribing just for his insight.

I believe the collapse in the commodities is incredibly bullish for the rest of the economy. I also believe the collapse is not done, and that the commodity stocks are reflecting most of that collapse and can be bought on a wide scale.

Most important, I reiterate my call that the bottom was put in July 15 on the financials, and we will not take that out, which is, again, incredibly bullish.

With commodities declining, I have been saying happier days are here again, and I have been focused on buying the companies that benefit from the decline: Kimberly ( KMB), UPS ( UPS), Disney ( DIS) and the like. Again, I think those are great ways to play things.

So, I believe commodities are coming down, but the stocks are reflecting a lot of that decline -- not all of it, but a lot of it -- and the financials' stabilizing is allowing for new leadership, which often leads to dramatically higher prices.

Vince Farrell and I are really on the same page now when it comes to RealMoney contributors, and I believe that while Devon ( DVN), National Oilwell Varco ( NOV), Freeport ( FCX) and Foster Wheeler ( FWLT) are oversold and due for a bounce, they are still under liquidation.

I like them for scarcity value and a belief that there will not be massive drilling cancellations and petro product cancellations, because I do not believe oil will go through $90 and nat gas through $7, where the longer-term thesis is at risk. I want to buy FCX at $75, having bought some already at the bell yesterday.

Love Doug, he's got the hot hand, but I reiterate that my bottom call is an important one to me; I am not backing away from it, and I think he respects that call greatly. It isn't a "best man win" situation. I think it is a "best men win" situation!

Random musings: People getting the pump significance and buying the retailers. Good to see.

At the time of publication, Cramer was long Devon, National Oilwell Varco, Freeport-McMoRan and Foster Wheeler.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.


Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.