TheStreet.com's Jim Cramer says this administration's hallmark is coming too late to the party.
A headline came over the wires yesterday, and it caused me to throw my hands up in shock: The SEC is debating new short-selling rules for the market.
I said to myself, "They have to be kidding."
How can they be so obtuse?
How can they not get what is going on?
When the market bottomed on July 15, three things occurred:
the Congress got religion on the housing bill, and the president went along;
gasoline and oil peaked; and
the SEC finally decided to crack down on the reckless bear raids that were making it impossible for our financials to refinance.
The financials then rallied huge, just huge, and the prudent ones, like Merrill's (NYSE: MER) (Cramer's Take) John Thain, took advantage of the short-selling crackdown and first, brilliantly, said he didn't need capital, exacerbating the plight of the shorts, and then jammed on a gigantic equity offering that will let Merrill get through this period.
TheStreet.com's Jim Cramer says there's a big disconnect between the trade, orchestrated by the funds, and the real-world demand.
How can anyone actually own oil or natural gas through this relentless assault on price? I know when it was going up, the talk was that all of these new funds were indexing trillions to commodities and it was just going to stay there, and that's why there was a new level of oil demand.
Can those same accounts come in every day and take this relentless pasting no matter what the news? And do they believe the news, that they are losing money today because some storm went to Daytona and not to New Orleans?
Yesterday, I had Jim Hackett, the CEO of Anadarko Pete (NYSE: APC) (Cramer's Take) on "Mad Money at the Half," and he was flabbergasted at the activity in the futures pit and how unrealistic it has become. He's focused on natural gas, where he says the demand at $8 by industry -- the glass makers and chemical companies and steel and aluminum users -- is voracious. But the futures themselves just keep going down, regardless of the demand.
TheStreet.com's Jim Cramer says lower gas prices mean the numbers are too low.
People are missing this retail move. They are missing it because the market is deciding right now that the guidance companies are giving is just plain wrong given the $3.50 at the pump (although premium's a lot more expensive). They are also recognizing that the strong are surviving and thriving and taking share in a radical fashion -- witness Lowe's (NYSE: LOW) (Cramer's Take), which must be killing Sears (NASDAQ: SHLD) (Cramer's Take) and the mom-and-pop shops out there.
When I met with Lowe's last year, they told me that they have picked up share in every downturn. They did not know when the downturn would end or when you would see the results, but they were confident that the longer the downturn lasted, the more likely they would be to have pulled away from their competition.
Rival home improvement chains Home Depot Inc. (NYSE: HD) and Lowe's Companies Inc. (NYSE: LOW) are scheduled to report quarterly results this week. Not surprisingly, given the ongoing housing slump, analysts surveyed by Thomson Financial on average expect both companies to post earnings lower than in the same period a year ago. For Home Depot, that's 61 cents per share, down 20.8%, and for Lowe's, 56 cents per share, down 16.4%. Meanwhile, cabinet maker American Woodmark Corp. (NASDAQ: AMWD), for whom Home Depot and Lowe's are major distributors, is also expected to report lower earnings: 11 cents per share, down 67.6%.
The presidential campaigns have prompted much discussion of energy policy and alternative energy sources. Some solar-energy-related concerns are scheduled to report this week, and expectations seem to be high. Trina Solar Ltd. (NYSE: TSL) is expected to report 81 cents per share earnings, up 67.9%; ReneSola Ltd. (NYSE: SOL) is expected to post earnings of 32 cents per share, up 62.5%; and Suntech Power Holdings Co. (NYSE: STP) is expected to have earnings of 32 cents per share, up 21.9%. Even China Sunergy Co. Ltd. (NASDAQ: CSUN) is expected to have swung to a profit of 3 cents per share, from a per-share loss of 14 cents a year ago.
TheStreet.com's Jim Cramer wonders why no one's cheering about this -- the headwinds are gone.
This is an epic collapse of commodities, one that is cutting every investor to the core. It is as if whoever was actually buying them -- not trading them, not speculating in them -- has vanished. That's how little demand there is. It is as if everyone in the world who was being paid in dollars now actually wants those dollars. It is as if all demand leading up to this moment for the last several years was all phony and disappeared. It is as if any country that was hoarding minerals and oil and grain no longer needs them. And it is as if every hedge fund in the world had purchased everything to sell into that demand and is now long the stuff and dying.
To me, all you need to watch is gold. The fact that gold could not hold that long-term trend line, that it sliced through $790, tells me that we are not done with this great unwind.
What's amazing is how silent it all is. We heard about how horrible this commodity rally was for the world every step of the way. With each dollar up of each commodity, we heard how it would destroy the Western world. How many times did you hear that the weak dollar would be the end of us?
TheStreet.com's Jim Cramer says that as consumers try to stretch their dining dollar, Darden, Yum! and McDonald's will benefit.
We all know we are overstored in this country and over-restauranted. There are tons of players -- so many that the competition got too hard. Now they collapse. That Uno might miss a payment, that Bennigan's and Steak & Ale are going away, that Bakers Square and Village Inn have filed for bankruptcy: All say the industry is in big trouble.
We read all of these horrible articles every day about restaurants, and yet we see that the stocks of Yum! and Darden hang in great, particularly the first, which gave hideous guidance and yet is now higher than it was before it told people commodity costs were hurting it. McDonald's? How many stocks just hit their 52-week high?
TheStreet.com's Jim Cramer says struggling banks can be shorted to oblivion now that the rules won't be enforced.
Memo to the FDIC: Watch your back. The SEC just flipped its allegiance to the bad guys, the guys who want to break not just certain banks, but your bank! That's right, with the scrapping of the emergency rule that eliminated naked shorting, where you don't have to find the stock, and with the end of the vigilance against bear raiding, the SEC may have just caused a run at the FDIC.
I had hoped that the SEC would see that these financials have been manipulated to unreasonable levels, making the confidence in all institutions so low that nobody wanted to give them money. The rule change -- which when you think of it, wasn't much of a rule change as much as an enforcement of the way things are supposed to be, where you actually have to find the stock you sold short first so you don't fail to deliver -- worked!
It gave the system some breathing room. I think the rule change might have saved Merrill Lynch (NYSE: MER) (Cramer's Take) from being shorted into oblivion so it couldn't have done its deal. Lehman (NYSE: LEH) (Cramer's Take) didn't do a deal, those bad boys be back on the griddle now for unknown European exposure. AIG (NYSE: AIG) (Cramer's Take) wasn't protected in the first place and I believe will need to raise $10 billion to $15 billion in the teens to cover its European exposure. Now there's little hope at all for Fannie (NYSE: FNM) (Cramer's Take) or Freddie (NYSE: FRE) (Cramer's Take), as their stocks will be blitzed into oblivion and Hank Paulson will have to start the planning of cash infusions as opposed to what he said last Sunday -- why did he say that, for heaven's sake? Maybe he's too close to John "We don't need capital" Thain from their Goldman (NYSE: GS) (Cramer's Take) days.
TheStreet.com's Jim Cramer says all that money has to go somewhere, and this is a likely destination.
Clash of the ideals! Oil's down, and what can you buy when there's so much bad bank news? What can you buy when Wachovia (NYSE: WB) (Cramer's Take) is boosting reserves and Morgan Stanley (NYSE: MS)) (Cramer's Take) is still being pursued by authorities and JPMorgan (NYSE: JPM) (Cramer's Take) says July stunk and UBS (NYSE: UBS) (Cramer's Take) is so tarnished that you can't believe it was once the most conservative blue chip out there.
The answer is tech, of course!
Wait a second. Would anyone mind if we actually had a reason to buy tech beyond the Kindle, the device that made Citigroup gaga about Amazon (NASDAQ: AMZN) (Cramer's Take) -- not that you needed a device to do that.
Sure, we have pre-seasonality. Remember, you are supposed to buy tech at the end of the summer, not that anyone waits that long.
Today was a volatile day in the markets as stocks started out flat to slightly positive early on, went negative, but then came back throughout the day. Traders had no real economic numbers, but oil trading under $115 and gold down another 3% has traders cheering beyond any lagging economic numbers.
Amazon.com Inc. (NASDAQ: AMZN) rose sharply in today's final minutes. An analyst at Citigroup noted that the company could sell as many as 380,000 units of its Kindle e-book reader this year, which could in turn increase its Audible subscriptions and could raise its e-book sales. Shares were up over 9% at $87.86 in today's final minutes.
This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Mr. Softee below in the comments.
You would be hard-pressed to find a professional stock trader today who didn't know that "Mister Softee" is Microsoft (NYSE: MSFT) . The nickname is so widely-used among investors that it seems to barely need explanation. But there is actually a quite simple reason for the derivation of the moniker. Here is how I imagine it taking hold:
Once upon a time in a land known as Manhattan, some Wall Street traders were enjoying some after-work beers. After about the fifth brew, these professionals began to gain insights, as they so often do today, into weighty topics.
They pondered the amorous tastes of Ginger and Mary Ann from Gilligan's Island. They debated whether "Freebird" or "Stairway to Heaven" was the greatest rock song of all time. Then, one of the traders had the burst of insight that the ticker symbol for Microsoft ("MSFT") has some of the same letters as beloved self-serve ice cream Mister Softee. And so, one of the most ubiquitous bits of Wall Street slang was born.
TheStreet.com's Jim Cramer says people think the banks can't sustain the rally. Here's why they're wrong.
Sometimes, someone has to give the bullish, "On the other hand ...". There's a wide perception that the banks' good fortune of making money on the net interest margins -- the principal source of earnings besides fees this quarter -- can't last. Our old colleague Peter Eavis spells things out pretty succinctly and, shocker, bearishly in The Wall Street Journal this very morning in an article that should have you salivating for when the short-selling restrictions come off the financials and we can free-fire zone 'em again.
But how about the, "To be sure ..."? How about the, "On the other hand ..."? Or how about, "Some observers do point out ..."?
Nah, that would water down the article or even kill it outright.
Indulge me, for a second, on what I thought would have been a more provocative story for this stage in the rally, which is: Given all the bad news about earnings and losses and bad loans and auction preferreds, how the heck did the banks rally? Was it all a big joke, or is something else going on?
Then, from there, you say, "OK, what am I missing, because this net interest margin can't be banked on as people think it can be."
The Street.com's Jim Cramer says people have more money in their wallets again, and that can only be positive.
One-time stimulus? Or multi-time pump break? Last night when I was filling up for $3.67 a gallon -- a month after paying $4.10 at the same pump -- I found myself thinking that I didn't have to go to the ATM after the fill-up. I had something left. I didn't feel that way about the stimulus check, which came and went.
When Wal-Mart (NYSE: WMT) (Cramer's Take) said yesterday the effect of the stimulus check was over, people freaked out and trashed the stock well beyond reason. (I will buy more of it today if I can for Action Alerts PLUS.) But Wal-Mart was reacting to the end of that one-time stimulus.
If oil keeps going as I think it will, we are going to see gasoline well below $3.50 -- we have it at $3.60 now with oil at $110 -- and that part of the tax, a real tax that impacts all Americans, will be gone. The oil decline and, more important, the nat gas decline, still haven't registered in peoples' minds. The idea that it is possible that gasoline might go to, say, $3.00, is in no one's model. That your heating bill could be the same or less doesn't matter to the bears, either.
TheStreet.com's Jim Cramer says this administration's hallmark is coming too late to the party. 
Rival home improvement chains 
Today was a volatile day in the markets as stocks started out flat to slightly positive early on, went negative, but then came back throughout the day. Traders had no real economic numbers, but oil trading under $115 and gold down another 3% has traders cheering beyond any lagging economic numbers. 
This post is one in a series on prominent company nicknames. 
Here are some highlights from this past week's 
The Street.com's Jim Cramer says people have more money in their wallets again, and that can only be positive.
Cramer on BloggingStocks: The SEC's waffling will be deadly
How Fannie and Freddie will fail
Stupid question: Can the U.S. handle more housing stress?
