TheStreet.com's Jim Cramer says you should look at the moves in these stocks to see how the Fed's move took effect.
Didn't take long for people to start questioning why the market didn't do better after the cut, did it? The papers drone on about this concept and the papers are written by people who don't trade for a living.
If they did, they would know that we had explosive, once-in-a-lifetime moves in the Banks Index and the Housing Index last week that weren't repealed. Go hit up some of those stocks or the index, go hit up where a Wells Fargo (NYSE: WFC) (Cramer's Take) or Wachovia (NYSE: WB) (Cramer's Take) traded or a Lennar (NYSE: LEN) (Cramer's Take) or a Toll (NYSE: TOL) (Cramer's Take). Those stocks are so far off the bottom it's incredible.
How could anyone say the rate cut had no effect? In fact, the move is so astonishing in its strength that I am sure, if you trade, you said to yourself, "Oh my, that's the power right there of the Fed, the ability of a big-cap stock like Wells to trade from $24 to $30 or for Wachovia to trade from $28 to $36 or BofA (NYSE: BAC) (Cramer's Take) to trade from $33 to $40 where it was able to place billions of dollars in preferreds so it can live to play another gain."
Do these writers follow Toll, or maybe Ryland (NYSE: RYL) (Cramer's Take)? How about KB Home (NYSE: KBH) (Cramer's Take)? These are gigantic moves all because of the Fed.
At the same time, one look at a Wyeth or a Glaxo (NYSE: GSK) (Cramer's Take) or a Colgate (NYSE: CL) (Cramer's Take) or a Pepsi (NYSE: PEP) (Cramer's Take) shows you the direction of the steady growth players. They have been killed, crushed, more than any other stocks. That's because the market is making a bet tha there's a bottom in the economy.
If that isn't evidence enough, the retailers and the restaurants took an unimaginable run. Darden (NYSE: DRI) (Cramer's Take) went from $20 to $28! Brinker (NYSE: EAT) (Cramer's Take) went from $15 to $19 despite a terrible quarter.
Which brings me back to the beginning: How is this disinformation allowed to get through editors? Is it some sort of bias, bias to the negative? Is it some sort of lack of rigor that is astonishing after all this time?
I don't know. I just know that the people who read this site or watch my show or trade for a living are most grateful that the general media hasn't picked up the truth because the more wrong stories like these are, the more money that will be made.
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Reader Comments (Page 1 of 1)
1-28-2008 @ 9:33AM
Rob said...
He smokes weed.
By the way I want to read my blog for a much more indepth perspective.
It is amongst the Top-3 best financial blogs.
http://www.wallastoninvestments.com
1-28-2008 @ 9:37AM
midnightyacht said...
cramer your a total idiot.the slide has just begun. what will they say when there is no room to drop interest rates anymore. good luck.
1-28-2008 @ 9:45AM
william said...
They have to safe the banks the voters money are in the banks.
1-28-2008 @ 12:50PM
noelmark said...
How would you like to deleat HUD, the mortgage market proved it can loan money to the people that can't pay,and go bankrupt, that's what HUD was doing, with your tax money,now we don't need HUD , let RON PAUL do his job, Hes is not a repubican or a Democrat thay cant support him, you get the same old thing, Don't take their crap, FIGHT BACK With Ron Paul
1-28-2008 @ 1:14PM
Darlene said...
Mortgage rate cuts did not happen. And if they did it only a few short hours and they went up again. I checked my banks rate before the 3/4 rate cut. The rate for 30 year was 5.65. The rate was cut and the rate dropped to 5.61 and then 5.5 and for a few hours I did not catch to 5.3; then back to 5.5. Next day was going to refi and the rate went up to 5.7 which is above the rate before the 3/4 cut. This I guess is blamed on the foreign stock market going up. I am really wondering how homeowners can refinance to get the low rates if the interest rate is not dropping. Other rates which have dropped have a bigger APR which I guess means they have increased the financing costs and added it to the loan. The government needs to have some control over the rate so the small person attempting to refinance at a lower rate rate can benefit from the fed cuts. I have two mortgages to refi and I do not want countrytime. Has them come to the home 3-4 years ago. They quoted one rate on the phone and the refi costs. Next day they come and have new higher rates, large refinancing charges and more add on costs. You really need to go into detail on this so people do not get eaten up by what appears to be a lower rate and in reality the rate is very much higher after they add all the commisions on for the company and the loan officiers pockets. Most people do not understand how these loan companies make big bucks. It is out of hiiding it from the consumers who do not know how to analyze the rate they are charged which has all these additional added fees. But now how do we get the banks to really lower their rates for the consumer unless one has a banker who is truthful and the person helping the borrower understand what is really happening
2-15-2008 @ 2:48PM
carpenter said...
fed droping rates helps the rich. not the middle class. rates are cut for the banks that borrow money at 3 percent intrest rate and then turn around and lend it out at anywhere from 7% to 37 % thats why its in there best interest to have people with not so good credit. its a multi billion dollar scam! cramer has become an insider turn coat, he was originaly a modern day robin hood until he got a big head. and now he is trying to be an optomist for the wealthy class he has had on his show. WE ARE IN RECESSION!! i cant believe some fools have the gull to say we are almost in a recession. its only getting worse. flush out the billion dollar corporate thieves, hell just flush out the million dollar corporate thieves and there will be enough money to go around. country wide offered its ceo 1point some million dollars to stay on untill march, when the deal with bank of america is to go through? THATS THE PROBLEM RIGHT THERE PEOPLE. HE SHOULD BE STRUNG UP, NOT GIVEN A BOUNUS. these people new this was going to blow up in someones face, it needs to be corporate americas face not hard working americans. im not proud of my country right now. our gov has failed us. i first five years of your mortgage goes straight to intrest. these corprate thieves got caught but if we dig to deep we will find out who started countrywide, or how many campaign contributions were given by these companies. thats why the fed isnt investigating or bringing charges. im sick to my stomach with this government that protects corporate america. can any one tell me what the hell corporate wellfair is? what a farse! if a company claims a 10.7 million dollar loss for the year, how do they stay in buisness? because they still made 57 million that year, its just not as much as they expected to make, so with a 500,000 dollar campain contribution, that 10.7 million dollar loss can be written of of there taxes, making them pay about 2% in taxes while the working class pays 25% discusting. want more facts?
1-28-2008 @ 1:18PM
noelmark said...
Has goverment got so big that it will take all the money that the people have, how long will your money last at the rate they are taking it,, you have tryed all the others, and we have lost billions,
why ? did you vote for spending any of your tax money for this, this is not new it.s been going on for 40 years, let's put a stop to it, vote for ron paul
1-28-2008 @ 3:56PM
Bernard B said...
Ron Paul's association with racism and other fringe issues makes him unelectable. At least I sure hope so. Just because he say's some things that make sense doesn't make him a viable leader. He is history or we are in deep trouble.
1-28-2008 @ 3:57PM
Jim Minix said...
Ron Paul, there was a Ron and a Paul in fifth grade, they are both dead and so is RON Paul. Politicaly speaking.