AOL Money & Finance

Cramer on BloggingStocks: Stock rally brought to you by the G-20

More

TheStreet.com's Jim Cramer says spending by the G-20 has served as a backbone to the stock market rally. Will the G-20 keep it up?

The world's largest buyers of everything are converging on Pittsburgh and all anyone wants to know is if they still have an appetite. After taking down about $14 trillion in everything from bonds, to stocks, to infrastructure plays, to guarantees, are the nations that make up the G-20 finally about to stop their buying spree?

Nothing's more clear to me, as these heads of state convene in Pittsburgh, that, other than some slight demand out of China, very few real buyers of stocks are willing to credit real economies with any real activity. Most people I deal with are willing to give the 3000 points off the bottom some credence provided that we accept that they were bought and paid for by governments and not by "real" buyers.

In other words, even the bulls think that the main reason why things have "worked" since March is that the central bankers have printed money they didn't have -- again with the exception of China -- and when they stop the bear market will simply resume.

For them this rally's been doomed from day one. They either have to stay short or sit on the sidelines until the central bankers see the futility of their ways and pull back. At that point the market will come crashing back down to where they started pumping or go lower even and all avoidance of the gains will be vindicated.

These G-20 camp followers do not believe there is any real demand in the system and they do not believe that there will be any real jobs created. They think that the housing bottom isn't real because it is all subsidized by G-20-like buying around the globe and they think that the auto industry would sink back to 8 million sales from what looks to be about 10 million in sales right now.

I don't agree with these people. I think the G-20 poured lighter fluid and, at times, gasoline, on embers and they have subsequently caught fire, because the consumer turns out to be able to do a little spending on her own.

The fire isn't raging hot enough to start hiring people yet. Some of that in this country is, I believe, the fault of the president who hasn't made jobs a priority and has only talked about them being a priority. Somehow health care, not jobs, is the priority, making it harder for people in this country to feel the hope that I believe others do because health care is one of those issues that costs money and jobs and doesn't create them, which is what we need right now.

But I think we should take heart from people like Charles Bunch, the CEO of PPG (NYSE: PPG) (Cramer's Take), who, on my "Mad Money" TV show last night made it clear that not only has he done all of the firing that needs to be done but that the next move he will make is to hire people because business keeps getting stronger and stronger.

Of course, his business is now moving more toward Asia, so it is not clear where he will hire. And I can't blame him if he decides to hire in other places because of the uncertainty of taxes and health care costs in this country.

During this period when PPG's business improved, Bunch's stock went up 18 points. Funny, it is possible that a lot of that may have been because of G-20-like spending. Maybe some of that $14 trillion?

But you know what else? If you caught some of those 18 points they count whether they were brought to you by the G-20 or not.

You could have sat them out. No one would hold it against you, except for, maybe, your investors if you're running money professionally. Because not everyone was as picky about what might have driven those 18 points -- the government or corporate or consumer buying.

Remember that when we see the G-20 statements Tuesday. You can be skeptical that they might soon cut the money off -- even if they say they won't.

However, don't be so skeptical as to say that you won't have any of the points they are giving out.

It's just not worth it to fight them.

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 PPG.

Reader Comments (Page 1 of 1)

Add your comments

Please keep your comments relevant to this blog entry. Email addresses are never displayed, but they are required to confirm your comments.

When you enter your name and email address, you'll be sent a link to confirm your comment, and a password. To leave another comment, just use that password.

To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br /> tags.

Symbol Lookup
IndexesChangePrice
DJIA+30.6910,464.40
NASDAQ+6.872,176.05
S&P 500+4.981,110.63

Last updated: November 25, 2009: 05:43 PM

BloggingStocks Exclusives

Hot Stocks

DailyFinance Headlines

Latest from BloggingBuyouts

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

WalletPop Headlines