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Jun.20
3:23 PM ET
Friday, 20 Jun 2008
Stop Trading!: What's Killing the Banks?

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

A big part of the problem is the financial sector. As problems continue to mount for banks like Bank of America [BAC  Loading...      ()   ] and Citigroup [C  Loading...      ()   ] and mortgage insurers like Ambac [ABK  Loading...      ()   ], 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 [GU  Loading...      ()   ]. "The Chinese need alternative energy more than we do,” he said. “And I would look to them” for new innovations.

Rio Tinto [RTP  Loading...      ()   ] 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 [TM  Loading...      ()   ] 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 [RIO  Loading...      ()   ] is still his favorite mining stock, calling it "cheapest in the world right now."



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