Stop Trading!: Cramer Hearts Rush Limbaugh?
Jim Cramer seems to be joining the rising chorus of critics, conservative talk-radio host Rush Limbaugh among them, who are expressing their dissatisfaction with President Barack Obama’s stimulus plan. While many in both Washington and on Wall Street had high hopes for the spending bill, it largely “did nothing,” Cramer said.
“There’s really nothing here,” Cramer said of Obama’s plan, which the House passed Wednesday evening. “It doesn’t put anyone to work. And it doesn’t build any bridges. And it doesn’t fix the bank situation.”
Any worthwhile economic stimulus would attack problems in the existing-homes market, Cramer said, clearing up the foreclosures wreaking havoc on asset-backed paper and collateralized debt obligations. A focus on struggling financials like Bank of America would also be needed. Wednesday’s rally only proved that good news for the banks is good news for the markets. And lastly, job creation through infrastructure spending, which would put people to work at firms like Caterpillar , is another solution.
Cramer said he agreed with Nucor CEO Dan DiMicco that not enough money in President Obama’s stimulus was going toward infrastructure. In fact, the bill didn’t address any of the three key problems Cramer mentioned, he said.
One group that wasn’t a part of the stimulus package was the housing sector. Cramer pointed out that what looked like bad new-homes sales numbers Wednesday were actually “very positive.” Fewer new homes means shrinking inventory, and that’s just what we need. There hasn’t yet been a major bankruptcy of a publicly traded homebuilder, he said, and “until we get one, we are not going to get to that bottom.”
Finally, Charles Schwab, a repository for a lot of consumers’ savings, was “the long-term winner here,” Cramer said. He thinks the stock is down more than it should be right now.
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