NEW YORK ( TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
  • the new theme; and
  • the not-so-dumb market.

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

We've Lost the Housing Thesis

Posted at 4:13 p.m. EDT on Friday, June 21

It was another one of those "could have been worse" sessions. But you know what? I think that this was simply a relief rally -- a relief that the interest rate on the 10-year Treasury didn't spike more than we had thought it would, and a relief that China didn't let its banks go bust.

Here's the problem with a relief rally. Now that we are relieved for Friday, we have to get all relieved again every day next week.

On Friday, underneath, we saw the continued unwind of the housing trade. All you had to do was watch Whirlpool ( WHR - Get Report). The shelling this one took is indicative of the pain that's ahead of us when we read that mortgage rates are about to go to 5%.

Sure, Whirlpool also has a big Brazil component, but this 7-point decline is all about the big speed bump in the road of the housing highway. When I see this, and a similar decline in Sherwin Williams ( SHW - Get Report), I know these stocks are truly rolling over and they aren't done.

What's going to take this theme's place? I have been championing the regional banks, the techs and the industrials, and they did well today. But the stars were the bond-equivalent stocks, and that's unnerving to me, too. I do not know how they can move still higher. They are still up huge, and they no longer have that dividend support now that the rates have moved higher.

So, to put it all together, we have lost the housing thesis, and we have some potential replacements, but they aren't yet able to take up the slack. Meanwhile, the consumer-packaged-goods stocks have given you a dead-cat bounce before what I fear will be still one more leg down.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.

Day 1 of the Big Change

Posted at 12:54 p.m. EDT on Thursday, June 20

The market sometimes is not as dumb as it can look.

Today we are witnessing a group of stocks performing better than they have in ages, maybe better, relative to the market any time in the last six years.

I am talking about the regional banks like BB&T ( BBT - Get Report), Huntington Bank ( HBAN - Get Report), M&T Bank ( MTB - Get Report) and Zions ( ZION - Get Report). I am talking about bedrock local banks, the ones that have been a huge drag, ones that are riddling peoples' portfolios from the old days. Take a First Horizon ( FHN - Get Report). That stock was at $37 a few years ago. Now it is at $11. Huntington went $24 down to $7. Or KeyCorp ( KEY), at $39 goes to $10.

And now they are going up? How can that be? With rates going higher?

You bet, and this move makes all the sense in the world. That's what's amazing to me. In the chaos that was the aftermath of the Fed, people figured out that now, at last, these banks and hundreds of others like them are going to be allowed to make the money that the Fed denied them for so long.

Banks, which are part of the financial cohort that represents fully 16% of the S&P, second after tech, have been a huge drag on the index. That's because banks make money in three ways: fees for services, loans and certificate of deposits. Now, fees have been terrific, especially when they keep getting raised all the time, as we know all too well. But loans and CDs? They have been horrendous. There hasn't been enough profit margin in loans and there's not been enough spread between what a bank pays you for your deposits and where it can invest those dollars.

Here's the issue with those revenue streams. Fees may be terrific, fabulous, but big bank investors don't care about them. They just seem to not count for anything. Loans? They can be terrific, but they carry risk and if the economy is troubled that risk might not be worth the effort if a bank is going to make so little on them.

But, the deposits. Now, that's something else altogether. Lets say you buy a 5-year certificate of deposit with your money because you don't trust stocks and you know that your bond funds are now losers or just because you are a conservative everyday investor. For the longest time banks gave you pretty much the same rate that they could invest in because the Fed kept down the rates from which they could profit.

Now, either the Fed can't keep them down or the Fed's letting them go up. Suddenly, the banks are paying you 0.81% on your 5-year CD, but they are investing it at levels that haven't been seen in ages relative to that CD rate, namely 1.38%. You may think that net interest margin, or NIM, isn't so big. But it is the differential that matters. These banks will now, after years of trying to scrape by, be able to make fortunes just turning the lights on and capturing that spread between the CD and the 5-year Treasury. That Treasury's rate has been going up, up, up, but the 5-year CD is actually flat. It's nirvana.

And that spread is all that the buyers really care about. Consider this Day 1 of the big change. Day 1 where investors can invest in banks and feel that they will have terrific year-over-year earnings, which will then lead to big buybacks and higher dividends, without much risk to make it happen.

That's why today's amazing. Usually it takes months for the market to figure it out. That's what happened in 1990-91. The investors took ages to understand it. Now it just took 24 hours. These stocks, red-headed stepchildren for ages, are, at last, the place to be.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long KEY.