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:
- How investors can make or lose everything in a single session, and
- The world's effect on the Fed.
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Market Stuck in Weird Mode
Posted at 3:33 p.m. EST on Friday., Sept. 26, 2014
Was Wednesday real? Thursday? Today? Are any of these days real?
Can we add Wednesday and Friday together and subtract Thursday or asterisk it as a day when high-yield hedge funds were trying to lay off risk for fear of the unknown?
None of this is easy. But I will say again that this market puts a huge premium on oil being up. And when it is up, it is very hard to knock the market down. I also think that the long lines for iPhones in Istanbul, Amsterdam, Madrid and Geneva makes you feel that Apple's (AAPL) "bend gate" is just something dreamed up by reporters after nine people complained. I think it is an even smaller story than the antenna fracas or the "map gate" issue in previous iPhone versions.
Plus, the easiest trade in the world -- shorting Yahoo! (YHOO) -- was made difficult by Activist investor Starboard Value's letter that is calling for a wholesale change of direction for the company.
Both of these hot button issues from yesterday were made cold upon reflection and activism.
And there are some stocks that have been down in a straight line that are actually bouncing, such as the drillers and the independent oils which, for once, are taking a breather from the endless selling.
I think investors should lighten up into these rallies -- simply because we know from Wednesday to Thursday nothing happened except some must have found about Bill Gross's departure from Pimco. Markets that can drop on a dime are not markets that you can be wedded to -- especially when we will be receiving a crucial employment number at the end of next week.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AAPL and MMM.
The Fed Is Operating in Another World
Posted at 2:52 p.m. EST on Thursday, Sept. 25, 2014
Numbers are too high. They are too high because of Europe. Because of Russia. Because of China. Right now the rest of the world is a huge drag and Europe is the Achilles' heel.
There is an other-worldliness to the Fed right now and it has to do with the rest of the world. We know that rates should be higher here because we are better off than we were when we first took the rates down. Unfortunately, the rest of the world is worse off, so the idea that we can somehow just be an island unto ourselves (as Matt Horween says, no man is an island, nor is a country) seems silly to me.
Yet our views about the Fed are all dictated by a series of loud hawks who have been wrong the whole way but aren't called out for it other than by me. Believe me, it is easier to stay silent about how wrong they have been than to take them on.
The idea of a fed funds rate at 4% while Europe is going down and China's going down is typical of someone who runs money who wants the market to go down.
I am not a dove. I think the Fed should be selling bonds, not buying them. But the hardliners don't even mention that; they only want to talk about a 4% fed funds rate.
Why do I think that it's just money managers talking their book and chronic hardliners who have been wrong forever? It's pretty simple. Many could be right about an unsustainable boom in some parts of the economy as well as bubbles in high yield bonds because so many institutions need income. And they wander in there without any knowledge. So you would be pretty much be mandating a recession if you took rates to 4%.
Who in his right mind other than someone who is so rich and out of touch would mandate a recession? What kind of sadistic tomfoolery is that? I can't even grasp the cynicism of such a view because it is so counterintuitive to all of those $35,000 a year people who are on the cusp of getting more work.
Instead these people should be worried about small business expansion -- where the jobs are created -- and the Affordable Care Act. They should be worried about imported deflation and lowered earnings from Europe.
They should be concerned that many of our industrial stocks are now factoring a sharp turn down. You don't get the immense declines in United Technologies (UTX) or Eaton (ETN) unless things have really gone off the rails.
Remember, If Russia and Germany/U.S. can get a peace deal going, then we will reverse course. But the news flow of late is much worse than it has been. The Russians are surely going to cut off the natural gas and they could kick out the money men. They don't seem to be as worried about committing economic suicide as we thought.
Remember, after every rally to ask yourself if Russia is coming to the peace table. Because the other table, the one we seem about to be seated at, is a total non-starter. And it is something that would bring earnings down all over the globe -- including the earnings of companies headquartered here. And they are hardly considered to be levered to just the U.S. or they would, alas, be much higher.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the stocks mentioned.