TheStreet.com's Jim Cramer says there are problems, but nothing looks dire. The setup is pretty good here. We've got a mildly oversold market with lots of June money expected to come in as CDs roll over and people realize that the cash rates are so bad. We have no earnings news, which is good, given that unless you do a lot of business overseas without a lot of raw cost escalation (think everything from Emerson (NYSE: EMR) (Cramer's Take) to Heinz (NYSE: HNZ) (Cramer's Take)) or you transport or mine oil, minerals and agricultural goodies, you aren't doing all that well.
We have the possibility of some stability in energy, as $130 has been difficult to punch through, even though we have not been able to build any inventories yet despite all we hear about how people are driving less. And the expectations for the employment number are so weak that if we get any job creation we are going to begin to hear that maybe the economy is on the mend.
Again, that's considered antithetical given the sinking home price/escalating food and oil price one-two punch. But, as I said last week, there is a finite nature to the bad loans.
We've got plenty wrong. However, I would argue that we have always had plenty wrong. If anything, the amazing moment here is that there isn't more wrong and more difficulties. There are a number of banks on the 52-week-low list, but no one has failed other than Bear, and we are now getting a fuller picture of Bear falling under its own incredibly poorly managed weight. (The outrage here simply can't be strong enough.)
Can Downey (NYSE: DSL) (Cramer's Take) and IndyMac (NYSE: IMB) (Cramer's Take) bring us down? I don't think so. The Ohio banks? Not a chance. I don't want to buy Lehman (NYSE: LEH) (Cramer's Take), but the notion that it is really sickly -- deathbed sickly -- doesn't seem in the cards. It's just the crummy stock of an earnings-challenged company.
These aren't calamities.
RELATED LINKS:
Coming Week: Bulls Grow Louder
Don't Buy This Housing Report
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 had no positions in the stocks mentioned.
Why isn't Bank of America updating its shareholders on CEO situation?
Before the bell: Futures sharply lower on Dubai's debt problems
Will Rich Ross really have a positive impact on Disney's movie operations?
Reader Comments (Page 1 of 1)
6-02-2008 @ 12:12PM
Michael Schneider said...
There's a lot of money around- trillions on the sidelines in addition to new money that should be doing something. The question may be whether the money will go into stocks or commodities.
You are probably right that things aren't as bad as they seem for consumers but since you posted both oil and commodities are taking off. We may soon see if the $130 level remains a stumbling point for oil.
6-02-2008 @ 12:24PM
william lindblad said...
Jim, stay optimistic - someone has to.
6-02-2008 @ 2:07PM
Gary E. Sattler said...
Might I borrow those rose colored glasses you're wearing, Jim?
Things look an awful lot different from down here in the trenches, my friend.
Do you pay your own bills, or does your accountant do that for you? C'mon Jim, you deal in percentages all day. How have your percentages of net income, versus discretionary income been tracking? Have there been any necessary budgetary adjustments at your household? How does your cost of living compare to 18 months ago...hmmmm?
Optimism is great, but realism is essential. You remind me of that little ROTC guy in the movie Animal House, who is tearfully screaming "All is well!" as all hell breaks loose around him.
You keep painting a rosy picture Jim. I'll keep telling it like it is.