ISM numbers came in lowest since August of 2006. So, the economy is slowing down assauging frear of recession. Jim Cramer of Mad Money and The Street dot com, continues to spew nonsensical rants that will ultimately get a lot of people in financial trouble.
In today's blogs, Cramer talks about how the weak ISM number is a positive thing for the markets because he believes that the FEDS will cut interest rates soon. This from a guy who reminds you daily that he went to Harvard and worked at Goldman Sachs. Even a 12 year old will understand the dangers of unmitigated rising inflation. Cramer is so blinded by his perma-bull stance that he cannot see through this fundamental problem that faces our market today.
Take a look at his blog today:
How Weak Data Help the Market
04/02/2007 10:22 AM
Market's wrong here. We want weakness to augment the pressure on the Fed so this ISM manufacturing growth number --the slowest since August -- is a great reminder to the Fed about how precarious the U.S. shooting match is. Remember, we have two economies: the ROW (rest of world) economy, those companies that sell overseas, which is real strong; and the domestic economy, which is not good because it is levered to autos and housing and retail, the latter hobbled by newly high gasoline prices.
We have weakness coming in regional banks -- oh my are they good shorts, just go read the M&T (MTB - commentary - Cramer's Take) statement -- and we have New Century (NEWC - commentary - Cramer's Take) going out. Don't forget, we are going to get more bad news from NovaStar (NFI - commentary - Cramer's Take) and Freemont (FMT - commentary - Cramer's Take), if only writedowns and dividend cancellations.
Housing quarters were awful, far worse than these companies thought, and I suspect things will only get tougher given the homebuilders' insistence that they are all fine. As rates get readjusted -- and the peak to that is next year, not this year -- the supply will only increase.
That's why weakness is a godsend, because it gives the Fed a non-housing-related reason to cut.
People are so wrong about the Fed and inflation. It isn't worried about inflation, it's just trying to manage a crisis.
It won't be able to. Which is why it's going to cut, and we need weak data to make that happen.
Random musings: Memo to Countrywide (CFC - commentary - Cramer's Take) CEO Angelo Mozilo: No need to keep talking about the woes; we know them and you are just killing your own stock faster and harder than the market will kill it.
My position is that the FED will not cut rates in fears of stoking further inflation despite the troubles shown by the housing market and the recent weak ISM data. If anything, it will further prove to the FEDS that they must stand pat but be on guard to raise the interest rates to protect against inflation.
For those of you who have been following my Countrywide postings, Cramer is now doing his own form of damage control by pointing fingers at Mozilo. He advocated this stock as a buy but now he is changing his tune. His form of due diligence is trusting rumors and tips by the insiders and analysts, and we know how right they are at market tops and bottoms. Just as he advocated home builders and proclaimed that they have bottomed back in October 2006 and paraded CEOs from Lennar and Toll Brothers, he did so with Countrywide and Angelo Mozilo.
The desperation by Mozilo was palpable and evident today at 7:00am EST on CNBC today and for once I could see that Joe Kernan kept asking rather moderately difficult questions and if I wasn't mistaken, Mozilo sounded like a broken record with a scratch. He stuttered a few times as well. Why so nervous Angelo? Don't you think that the street has figured out your pump and dump scheme? Nevertheless, it is clear that even Cramer is becoming suspcious or irritated by Mozilo by making his memo: CEO Angelo Mozilo: No need to ikeep talking about the woes; we know them and you are just killing your own stock faster an harder than the market will kill it. Here is the first acknowledgement by Cramer that he is once again wrong and his sentiment to Mozilo is changing. I am giving Cramer just 2 more months before he will bash Countrywide, at which time it might be too late because Cramer is a contrary indicator. As I alluded to last few blogs past, Cramer has always done this, he will recommend a stock that is either a turn around story or a broken story for a recovery, and he likes the CEO, and they pump the company's story on his show, and later screw him and his viewers. Later, Cramer will say something like "feeling used by so and so...".
The writing's on the wall. The desperation of CEO Mozilo is palpable and real. I think that he should let go of his ego and come clean and save the long believing shareholders from maximum pain before it is too late.
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2 comments:
I just found your blog this weekend. I'd been thinking along the same lines but you fill it out with convincing detail. And the catalyst was Cramer's crazed interview with Mozilo. Thanks for sharing the good work
Thank you for visiting. I hope it helps. There are more to it than Cramer, though I believe that Cramer is dangerous. The real catalyst for Countrywide's problem is that they have been less than transparent about the operations of their company. I believe there is a scandal brewing in that company. As always, when you see a CEO who appears on TV more than once in less than 2 weeks to hype his stock, he is hiding something. Just think Enron with Kenneth Lay and Jeffrey Skilling!
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