The U.S. markets will not have a sustainable rally until General Motors is saved, Cramer said during Monday’s Mad Money.
Add Ford and Chrysler to that statement as well. GM’s failing alone could cost the U.S. economy 3 million jobs – and that’s a lowball figure. Washington can funnel as much money as it wants into shoring up the credit markets, the other key to our present crisis, but what bank’s going to make loans to the unemployed?
If the auto industry fails, millions of people will miss mortgage payments and watch banks foreclose on their homes. Credit-card defaults en masse will follow. Consumer spending will come to a virtual stop. And Wal-Mart and Family Dollar will continue to be the retailers of choice.
And all those losses in your 401(k) over the past couple of months? You won’t make that money back if GM and company go under. So if Hank Paulson and the Treasury, and Ben Bernanke and the Federal Reserve, so vigorously propped up the banks, then Cramer sees no reason why they shouldn’t do the same for the Detroit. It’s a sector as integrally important to the fate of the U.S. as any lender or insurer.
So unless you want what Cramer called an unlimited bear market – such as Monday’s Dow action where the index opened up 200 only to drop 273 despite China’s stimulus plan announcement – then you should be rooting for an auto-industry bailout. To do otherwise is to root against your own 401(k), and any hope of a full recovery.
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