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NEW YORK (TheStreet) -- When in doubt, it must be bad. That's the market's mantra, Jim Cramer said on Mad Money Wednesday. But investors often forget there are two parts to the old saying, "Plan for the worst, but hope for the best."
So why it is that when interest rates fell again today, the markets automatically assumed the economy is slowing? Home builder Toll Brothers (TOL) reminded us that when rates are low, more homes get sold, and when more homes are sold, more homes need to be built.
Then there are the banks. Banks make money on net interest margins of the deposits they are sitting on, but have investors forgotten banks can also loan that money and make a lot more than net interest margins? Cramer said the scaremongers would have you believe so.
The fact remains that stocks aren't tanking as the Federal Reserve scales back its bond buying. The markets are actually flourishing as the federal budget deficit is shrinking. Even the IPO market is back on track, as JD.com (JD) showed us today.
A little skepticism is healthy, Cramer concluded, but the markets didn't get to new highs because things are bad. They got there because there are profits and prosperity to be had by those with the courage to look for them.
Off the Charts
In a special Wednesday edition of his "Off The Charts" segment, Cramer went head to head with colleague Carly Garner over the direction of crude oil prices. Garner's last call on oil prices was spot on, Cramer told viewers, which is why her current opinions matter.
Garner used a weekly chart of the West Texas Intermediary, or WTI, futures, along with the CBOE's commitment of traders, or COT, report for her analysis. Using those, she determines that the largest of traders are currently holding a record level of WTI futures, meaning the markets will soon run out of buyers, and fast.
When that happens, Garner predicts a $20 to $25 a barrel drop in oil could be possible as these large traders head for the exits en masse, leaving a vacuum in their wake.