Cramer on BloggingStocks: Forget the small banks

Posted Apr 27th 2009 9:50AM by Jim Cramer
Filed under: Market Matters, JPMorgan Chase (JPM), Regions Financial (RF), Wells Fargo (WFC), Cramer on BloggingStocks, U.S. Bancorp (USB), Financial Crisis

From TheStreet.com Network

TheStreet.com's Jim Cramer says he'd sell the regionals, but this group is mired till housing sales tick up.

Is it SunTrust (NYSE: STI) (Cramer's Take)? Maybe it is Key (NYSE: KEY) (Cramer's Take)? How about Regions (NYSE: RF) (Cramer's Take)? Maybe Huntington (NASDAQ: HBAN) (Cramer's Take)? Fifth Third (NASDAQ: FITB) (Cramer's Take)?

Oh, who cares? Frankly these are all small, nothing banks that you could short and probably do pretty well with, if you can borrow the shares. None of them is really important, and incredibly, all of them can easily be made delicious morsels for a JPMorgan (NYSE: JPM) (Cramer's Take) or a U.S. Bancorp (NYSE: USB) (Cramer's Take) or a Wells Fargo (NYSE: WFC) (Cramer's Take) without a lot of money spent by Treasury.

But in forbearance mode, that doesn't even have to happen. If all banks "have" to raise capital, but with an amorphous deadline, why not string 'em out? Who cares?

You should sell these banks, of course, but that's been the right path to take for months and still will be.

The issue is consequence. And I hate to tell the bears, but none of these banks is consequential. The whole process is being gamed perfectly by Geithner/Bernanke, and the result will be a muddle-through that I suspect won't make money in these banks for the longs or shorts, as much as my bias is to sell these.

Start focusing on national housing sales. Stop focusing on specific banks. And you will do better.

Random musings: I don't know how to play/not play this swine flu yet, or whether it should be played.

Jim Cramer is co-founder and chairman 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 JPMorgan and Wells Fargo.

Tags: featured, fitb, hban, jim cramer, JimCramer, jpm, key, rf, sti, usb, wfc

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Reader Comments (Page 1 of 1)

4-27-2009 @ 11:40AM

Morten said...

Cramer is more wrong than he is right, so who cares what the guy says!!!!

An average financial guru, turned bad comedian

4-27-2009 @ 12:44PM

Iridium said...

Oh thats just great Jim. Lets make sure we only have three mega banks. Lets see how well they treat consumers then.

I can't wait for the fees when we get three major banks. I'm sure the days of making any interest on deposits will disappear. In fact you will probably have to pay the bank 10% a year for keeping your money in a savings account.

You are a total blatant socialist pretending to be in favor of capitalism. You are part of the shadow gorup that controls the market. You are thier little errand boy.

4-27-2009 @ 2:43PM

ian_tomlin said...

"Cramer is more wrong than he is right, so who cares what the guy says!!!!

An average financial guru, turned bad comedian"

I would say he is more right then he is wrong, but its easy for detractors to point out peoples mistakes especially in such a bizarre game like this.