The anti Christ movement finally got the last thing that was halfway going right in this country. Now their work is pretty much down. It is here that CJ's fears can be realized.
From Cramer:
In the end, everything fails. In the end, oil goes down and gold goes down and copper goes down and grains go down. In the end, banks fail and brokers fail and toxic debt defaults and some of the insurers go under.
And that's what is happening now. Gold's getting killed and so is copper. All of the hiding places are getting flushed out, which is why I finally said Tuesday, "Enough with the agriculture."
While it is happening, you see drastic price declines that you never expected. Breathtaking. This is what happens when everything goes wrong.
Which it is.
We are in the heaviest, most intense deflationary spiral of our lives. The commodities held up because of worldwide shortages and probably won't go down as much or as hard as people expect.
But we have to recognize that the Fed fought and lost the wrong war. It was deflation, the vanishing of earnings power and borrowing power. The banks, as you can see, are pretty much out of money to lend. The homeowners are digging in, the ones who are left that haven't walked away from their homes .They are now cutting back on every conceivable form of spending and choosing to go to Wal-Mart (WMT - commentary - Cramer's Take - Rating) for what's left. That's what the decline in Target (TGT - commentary - Cramer's Take - Rating) and Kohl's (KSS - commentary - Cramer's Take - Rating) is about and why Home Depot (HD - commentary - Cramer's Take - Rating) can't rally, or Lowe's (LOW - commentary - Cramer's Take - Rating), or of course Sears (SHLD - commentary - Cramer's Take - Rating).
We can't hasten it, although I am sure many of you want to. We can't make the process go faster. As long as Ambac (ABK - commentary - Cramer's Take - Rating) can fire its CEO and get a new one and make noises about raising capital, probably at outrageous rates, the AAA rating fantasy continues.
We can't seem to get any closure whatsoever on the toxic residential mortgage debt, and it doesn't take a genius to see that credit card and auto debt are next.
You can pick stocks for trades into short-covering moments -- the markets tend not to go down in a straight line -- but I know I am resigning myself to the across-the-board bear nature of things right now.
It didn't have to be this way, obviously. If the Fed had recognized that oil and food were huge taxes on the consumer on top of the mortgage resets, then something could have been done. But it didn't.
So now we have to do two things:
Sense when it is really oversold and negative and buy.
Sense when optimism creeps back and sell.
Today's typical. Intel (INTC - commentary - Cramer's Take - Rating) wasn't good, but it wasn't bad and it wasn't PCs that were the problem. Apple's (AAPL - commentary - Cramer's Take - Rating) doing great but it is a source of funds. So an overreaction to tech is probably a trading opportunity.
I remain convinced that if you can find some growth with some yield you will also have a winner. And stocks that fall below their net worth or are so attractive to competitors that need growth will still get bids. We see that this morning with Oracle (ORCL - commentary - Cramer's Take - Rating).
Otherwise, though, there is nothing good that is happening.
I know many people think that I have always been a permabull because of my enthusiasm when there are things that are going right. I could care less about what people think of me, or I would never have started this very public career about stocks.
Nonetheless, I have prided myself far more on recognizing when nothing's good and being short or being on the sidelines.
Ladies and gentlemen, like a few other times in my 29 years -- 1979-1981, 1987 and 1990 -- there's nothing good happening.
Don't pretend.
It will just cost you money. Why didn't I recognize that nothing good was happening at Dow 14,000? I was looking at oil and copper and ag and was determined to make money in them.
I did.
Now, for the moment, those are not working.
For Action Alerts PLUS, I have raised pretty much the maximum amount of cash I have ever had. The only stuff I am buying is stuff that does well in a disaster where the Fed slashes: Annaly Mortgage (NLY - commentary - Cramer's Take - Rating), or is so misunderstood because of press headlines that I have to: Schering-Plough (SGP - commentary - Cramer's Take - Rating).
Otherwise I recognize that six months of pain could be upon us. That would be about a year of this. That's what the stats say should be the timeframe. The prices?
That's another story. |
