TheStreet.com's Jim Cramer says the bad news is relentless, and people are discouraged. Each day seems to be filled with so much disappointment. The American Axle (NYSE: AXL) (Cramer's Take) strike, for example, has now pretty much shut down General Motors (NYSE: GM) (Cramer's Take), and I see no signs that AXL can defeat the union. Given how heavily dependent the Midwest region is on GM for steady income, this one can only exacerbate the terrible real estate market and hence the terrible mortgage delinquencies that pockmark Indiana, Michigan and Ohio.
Or the loss of the Absolut brand for Fortune Brands (NYSE: FO) (Cramer's Take). Fortune needed to win this one because its home improvement business is falling off a cliff. This was a vain attempt to diversify a division that has always helped the company in tough times.
Or the Vytorin studies, nothing new, as we knew that parts of the medical community doesn't approve of the drug, but the analysts had held out hope and we have and are going to see repeated downgrades of the stock. I am telling subscribers of Action Alerts PLUS that Schering (NYSE: SGP) (Cramer's Take) stock, at $16 -- where it is surely headed -- has now lost more than half its value, which reflects the pulling of the drug. As 50% of the company's earnings are reportedly from the drug, perhaps that's a fitting decline. I think SGP is worth a lot more because of the purchase of Oraganon. I have been very wrong. My solace: So many others have been, too.
Or the newspaper advertising business, with declines of historic proportions. It is such a bad business and is so glaring in its decline that, with the demise of private equity, you can't own any stock in the group.
It goes on and on.
Relentless.
And I understand how people are leaving this market in droves. It's just too darned hard. I understand that $100 billion in outflows -- the number that the Financial Times says have been pulled out -- has gone to the sidelines even though the sidelines make almost nothing. It's just that bad of a market.
I do believe that there is a level where it is going to bottom and it's that level we hit several times this year. But it is the least fun, least opportunistic, least attractive moment in years. Only a portfolio with massive and fundable dividends has even a chance to not lose you that money.
What a miserable time. Maybe this is what this bottom feels like. Just a maximum amount of pain.
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Schering-Plough.
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Reader Comments (Page 1 of 1)
3-31-2008 @ 10:13AM
Pete said...
You want relentless? We have been seeing this in Michigan for the last two years, the rest of country is finally catching up to what we have had to endure.
Thank god for opening day, at least we have one thing to smile about.
3-31-2008 @ 11:11AM
clem591 said...
Cramer why don't you explane the Federal Reserve?
Is the Federal Reserve A goverment intity?
Who is on the board?
How are they selected?
Do they have a global background?
Is it possible they did not know the mess they were getting us into?
Do you think they planed on the euro being the new world currency?
3-31-2008 @ 1:25PM
Danny W said...
Why oh why do you still post articles by this CROOK,LIAR THIEF. This clown and liar needs to be investigated by the SEC immediately. Anyone following this CROOK is a fool. He is the ultimate contrarian do the exact opposite to what he say's and you have a chance of making some money. He is now and always has looked after his crooked friends on wall street. Shame on AOL.
3-31-2008 @ 11:48PM
Adele Roberson said...
One thing I will never buy is a drug companies stock.I read some interesting things about this in the Sunday paper.
Seems that there are not any really new drugs in the last five years. They are just old drugs, gussied up with new names that the drug companies could sell for more money. The drug companies spent more on advertising in the last five to ten years than they did on research and development.
The drug companies always tell us that their drugs cost so much because of the high cost of bringing these new drugs to market. However, the paper said that most of the research and development is done with government grants and
subsidies being paid by taxpayers money.
I am fast losing any faith I had in the government of this country. We work hard to support ourselves and our families, we are paying exorbitant prices for our food and everything else and pay our damn taxes... only to be taken for a ride by our government officials and all the other crooks that hang on to the public trough.My neighbor told me she has been paying $147.50 for a thirty day supply of a no-good drug.and the drug companies spend millions of dollars a year sending Doctors on trips and entertaining the Doctors with lavish parties.