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Thursday,
April 9, 2009
(Cont'd from
above)...
Jim (cont'd):
How can we be up 246
glorious Dow points…
when we are supposed
to be in a bear
market… I mean
aren’t stocks
supposed about to
collapse… just you
wait and see…
actually the reason
we can have a move
like we did today is
precisely because
stocks still reflect
this negative
attitude… and do not
reflect at all the
notion that the
economy actually
could be on the
upswing… most of the
big money… the money
that basically
determines stock
prices… particularly
the trillions of
dollars in hedge
funds… is way too
defensive… or has
made gigantic bets
against the market…
that are now
crushing the
performance for
their investors...
I have been saying
that all we need in
order to go higher…
were some little
signs that things
were indeed better…
that maybe some of
the governments
programs are
working… and that
housing is on firmer
footing… meaning
that people can sell
their homes… meaning
that transactions
are actually
happening… I stand
here everyday and I
try to give you
little signs, little
morsels, that some
things are better…
that, well how about
a good number from
Red Lobster, Olive
Garden, or maybe
Ruby Tuesday,
Chili’s, or how
about California
Pizza Kitchen…. we
got all of those
this week… how about
some nice sales from
Whirlpool… great
results from
Research In Motion…
dynamite quarter
from Best Buy…
unbelievable Bed
Bath & Beyond
results… upside
surprise, Corning,
Taiwan Semi, Xilinx…
but no, come out
here, people keep
dismissing the
compinion of
evidence… as being
what is known as one
off… anecdotal… they
are wrong… the bears
are wrong because
there are just too
many positives…
there is too much
imperical, not
anecdotal, imperical
evidence that when
put together adds up
to something very
special and very
big… a turn in the
economy.
Never the less the
so called smart
money just refuses
to pay attention… do
you know what those
bears are doing…
they are digging in
their heels… the
bias has become so
negative… that every
company that says
something good is
doubted… even
thought the facts
have changed and the
situation has
clearly improved…
the idea that the
economy could
actually be
recovering… how
about this one… that
many of the Federal
programs could be
actually catching
fire… that Bernanke
and Geithner, both
of who at one time I
relentlessly
criticized, before
they came around to
my view, and got
pro-active… could be
getting it right…
all of these notions
are held to he
heretical… if they
are even thought of
at all… I have got
to tell you, this is
not pan gloss, we
are not Polyanas in
Cramerica, I am not
wearing the rose
colored glasses.
We have to become
less negative… the
fact just won’t let
us go any other
way…. today we saw
the pain of staying
bearish… because the
bullish stage coach
just pulled out of
the station… and the
name of that stage
coach… Wells Fargo…
today the giant
nation wide bank, a
huge originator of
mortgages,
pre-announced a
much, much, much
better than expected
earnings… the kind
of profit figure
that was so huge
that we can’t ignore
it anymore… after
that number we got a
colossal animal
switch for the
bears… the bull is
now the elephant in
the room.
What happened here…
how did Wells that
was supposed to be
so bad… get to be so
good… how did a bank
that everyone had
written off come
roaring back to
life… isn’t this the
bank that noted
let’s nationalize
the bank bear,
Nouriel Roubini,
went after saying
and I quote… “Wells
Fargo took over
Wachovia. It doesn’t
work, you can’t take
two zombie banks,
put them together
and make a strong
bank”… memo to
academia…. (bites
the head off of a
bear)… that is what
Cramer does… the
answer to how they
pulled it off…
simple… housing is
bottoming… I just
act like a child
just to amuse them
now… it is the way
to get back at
people… anyway,
people are lining up
to get mortgages…
$100b in
originations from
this one bank alone…
and Wells Fargo
because of it’s
acquisition of
Wachovia, the two so
called zombie banks
has become the
dominant mortgage
player… along with
Bank of America,
which soared more
than 30% today.
Why is this so
important to the
over all market…
because what has
plaqued the
government more than
any other issue…
what has been
intractable for
friend buddy pal Tim
Geithner at the
Treasury Department…
for Sheila Baer at
the SEC… and for our
much hallowed hero
Ben Bernanke at the
national Fed… I am
actually one of the
guys who likes these
people… I actually
think that they are
good… anyway, there
has been no place to
put the bad banks…
no banks that are
strong enough to
hand off the real
zombie banks to… the
ones that can’t
handle the stress
test… no more of
that today… nope…
today’s announcement
from Wells Fargo,
look out zombie
banks… I now
calculate that to
mean that they can
earn $2.30 a share,
I put a decent
multiple on it, and
I am telling you
this bank is trading
north of $25... it
can take on any
losing bank the
government wants to
give them.
I think the same
thing can now be
said about JP
Morgan, which bought
Washington Mutual… I
am glad that I own
for MCT… Wells and
JP Morgan, or else I
would feel left out…
like so many hedge
funds today, here is
a shocker… I know
believe that Bank of
America could be in
much better shape
than we thought
because of its
mortgage business…
now, bears put your
fingers in your
ears… I am not
listening… but Ken
Lewis could end up
being a hero… not
the most villavied
executive since John
Fane and Dick Foe,
fortunately left the
stage… with this
enormous sea change
you can bet that the
Wells Fargo’s of the
world will be buying
the brain dead banks
left and right… and
the government can
then in turn sell
the bad loans that
Wells Fargo and the
other strong banks
don’t want to the
public private
partnerships that
Geithner is
establishing… I am
telling you right
now… from Geithner’s
one time biggest
critic, that this is
a brilliant plan…
and it will work… I
don’t know anyone
else that says that…
it will work.
Because of the
transformational
nature of Wells
Fargo’s earnings
power… if it weren’t
for this crisis,
believe me… neither
Wells nor Bank of
America would be
able take this
mortgage share… they
have got about 50%
of the whole nation…
you are never
supposed to have
more than 10% of
anything when you
are a bank… this is
a strategy that
looked like the NBC
show “The Biggest
Loser” , let no one
say that I am not a
team player… but now
at least could turn
out the biggest
winners… with a
government endorsed
happy mortgage
oligopoly… that is
right… the market
has changed… and the
bears simply do not
want to understand
it… but the facts
are forcing them to…
they thought that
the sell off we saw
earlier this week,
pure profit taking,
was a sign that we
were going back to
the bad old days…
when in fact it was
just the sort of
shallow pull back
that is endemic to
bull markets…
something that I
said immediately…
but as I told you, I
was bombarded with
hate mail… bombarded
with hate mail the
next day from the
bears… they don’t
understand…. the
bears simply do not
understand that the
market now likes
good news… and will
react accordingly by
going higher every
time we get another
Wells Fargo… and
listen up… there
will be many more
Wells Fargo’s… and
that is why we can
rally like this.
Because stocks
mostly reflect the
relentless
negativity of people
like Roubini… and
that fellow Mike
Mayo, that I warned
you about… the
analysts who earlier
this week rattled
the very bank stocks
that are rocking it
higher by telling
you to sell them
all… I told you not
to worry about him…
today’s market
reflects the fact
that things have
gotten better… that
we are no longer in
a garden variety
depression… and
could get even
better still… and we
have got more room
to run… sorry we had
to call out the
bears… but we are
not here to make
friends with Yogi
and Boo-Boo… we are
here to try to help
you make money… we
have reached a
turning point… where
the people that are
trying to keep you
out of the market
are doing you more
harm than good now…
they are yelling
fire in a no longer
crowded theatre,
even though the
sprinkler system has
already kicked in,
the fire department
has arrived, the
blaze has been put
out… but they are
still encouraging
you to leave all of
your belongings
behind as you flee
the building… and at
this point the bulls
are going to steal
your stuff and
trample you if you
try to come back in.
Now is the not the
time to be afraid of
stocks… instead you
should be afraid of
the bears who
haven’t changed
their minds… who are
still acting like
the incredible 24%
rally that we have
had… a bull market
in itself… never
happened… do not let
these people scare
you out of owning
some stocks right
now… they do not
know what they are
saying… and they are
not making real
arguments… just
relying on innuendo
and the fact that
anyone who has been
bearish over the
last year has built
up a lot of
credibility with the
press… the news from
Wells Fargo today…
game changer… game
changer for the
psychology of the
market… finally a
company has proven
definitely that
banking can still be
a massively
profitable
enterprise… one
where you make money
every morning when
you come into the
office and turn on
the lights… the
bears can no longer
write this off as a
blip… it is a huge
piece of evidence
for my contention
that things are
finally getting
better.
Here is the bottom
line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
You cannot wait for
the perma-bears to
come around… do not
wait for the all
clear… I am telling
you that things are
getting better… not
worse… the
depression is over,
the recession still
is… but one day
soon, that too will
pass... It’s time to
drop the negativity,
I believe the
economy is on the
right track...
The Dow
up 246... I say
bears beware the
banks that are bad
will now go to
Wells… the Geithner
plan is going to
work.. you heard it
here first…
actually, I am the
only guy saying it.
[verbatim recap]
[end of segment]
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