GO
Loading...

Stop Trading!: What's Killing the Banks?

Friday, 20 Jun 2008 | 3:23 PM ET

The Dow Jones Industrial Average on Friday is “hideous,” Cramer said during Stop Trading!.

Stop Trading, Listen to Cramer!
Mad Money host Jim Cramer shares his stock picks with CNBC's Erin Burnett.

A big part of the problem is the financial sector. As problems continue to mount for banks like Bank of America and Citigroup and mortgage insurers like Ambac , value-investor mutual funds that thought they were getting in a bottom are learning the hard way that they were wrong.

"The losses that these mutual funds are suffering, and the pullout that they're having, is causing a lot of what we see,” Cramer said, “which is the endless selling."

"The value guys seem to have run out of capital," he said, capital that was propping up a troubled sector.

Cramer switched gears quickly to recommend China’s Gushan Environmental Energy. "The Chinese need alternative energy more than we do,” he said. “And I would look to them” for new innovations.

Rio Tinto CEO Tom Albanese stopped by Stop Trading! to talk mining with Cramer. The CEO said China’s voracious appetite for all commodities would continue to fuel his firm’s business.

If Toyota Motor succeeded in making a battery-powered car, that would only further drive up demand for commodities like copper and aluminum. And such a car could soon be a reality, said Albanese. “We see this coming [in the] next generations" of vehicles,” he said.

As much as Cramer likes RTP, Vale is still his favorite mining stock, calling it "cheapest in the world right now."



Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

  Price   Change %Change
BAC
---
C
---
GU
---
RIO
---
7203.T
---

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.