Tuesday, May 24, 2011

Cramer's New List -- Before the Market Will Rally

#1 Suggestion

First, I wish Greece would just default already. It's so inevitable. If this happened, think about it, we could rethink this whole process. Let some of these European banks that own too much of this bad government debt go out of business. They never raised the capital that our banks did anyway. It's time for Europe to take the medicine, and get with the program. We all will survive this default. But this finger-in-the-dike nonsense must end once and for all. A failure of imagination. Come up with a two-tier currency. I don't care. Let's move on.

#2 Suggestion

Second, I wish the federal government would force the exchanges here to raise the margin rates on oil. All the President has to do is suggest... and believe me, the exchanges would cave. You could send oil prices down to $85 in a nanosecond. I wish I could guarantee something, but I'll tell you something, this would happen... And then what would happen? Gasoline, down to $3.25. An immediate spending impetus for the whole country. Recharge the nation.

#3 Suggestion

Third, I wish China would recognize that the inflation side of things isn't as important right now. They just had a bad industrial number that came out last night. The slowdown... they're engineering a slowdown... Maybe enough is enough, central bank. The whole commodity complex is collapsing. The Chinese seem a little oblivious. Love those guys, but come one. The world needs your help.

#4 Suggestion

Fourth, I wish the US government would take advantage of these incredibly low long-term interest rates and refinance its debt, so that we don't have to worry about the IMF someday coming here, because we can't roll over our short-term paper. That is the current Grecian problem. The Treasury Secretary could be a hero for this. He seems to be willing to sacrifice long-term considerations for short-term borrowing costs. I know. I've heard him say it. $200 billion. You know what? A small price to pay, versus having the IMF here. Come on, Tim, you're better than that. I know you are. You're one of the good guys.

#5 Suggestion

Fifth, I wish that we could recognize the opportunity that the glut of natural gas in this country represents... an opportunity to choke off OPEC by forcing trucks to switch from diesel fuel to liquefied natural gas.

#6 Suggestion

Sixth, I wish stocks would just get where they have to go... to levels where the values are so obvious that they would have to be taken. That would require them to become accidental high yielders, giving people a chance to earn some income while they own stocks. Hey, you know something? It's already starting to happen. Have you seen where Nucor, the great steel company, is? It now yields 3.5%. Most stocks have further to fall, and endless bidding up of the staples... it's now beyond reason. I mean, come on.

#7 Suggestion

Seventh... oh here's a tough one... I wish the underwriters who started a social media bubble last week, with their ridiculous under pricing of LinkedIn, would be castigated by the SEC. The SEC always takes a handoff approach to this stuff. It was so obvious that this moronic deal would cause another bubble, that I know it made me feel much more negative about stocks than I like. Believe me, there's nothing inevitable about the social media bubble. We are not doomed to repeat the mistakes of the dot-com era. It can be stopped. Come on, government. Get your hands dirty. Get involved. You're involved with the bank and mortgages. Get involved with underwriting before it's too late, and the whole dot-bomb process begins again, ruining the asset class that is stocks, even more than it already is.

#8 Suggestion

Eighth, I wish people would stop trashing Ben Bernanke. He is single-handedly keeping the financial system afloat, against an onslaught of foreclosed properties that are crushing the banks' balance sheets. Bernanke's been the best Fed Chairman of our lifetime. Give the guy a break.

#9 Suggestion

Ninth, I wish that a bunch of these stocks that trade in triple digits would just split already. Look, I know splits are totally cosmetic... that they create no real value. But I have to tell you, these stocks are being viewed as targets of opportunity for short sellers, and they are also the easiest ways for managers to raise money. A simple split would make their stocks more stable, and accessible to homegamers before they're driven out of the game entirely.

#10 Suggestion

Finally, I wish the President would come home and say to congress, no recess until you raise the debt ceiling and agree to some big spending cuts. We have a chance, right now as a nation, to assert ourselves as the world's most financially stable place. If we could only reach some sort of major debt agreement, the world is ours to win.

The bottom line...

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How outrageous is my wish list... as outrageous as it is common sensical... Everybody in this market knows that every one of these open-ended issues, and the problems they are causing for stocks. And until they are resolved, we can't rally. It's too bad, because we could easily take out the highs, if we got all 10 of these points. Then again though, this asset class has no supporters in Washington these days. So don't hold your breath. I say let the market come down until we get some of these points resolved. And then find yourself in a great situation, and great shape, to take advantage of the aftermath.