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Aug.13
3:37 PM ET
Thursday, 13 Aug 2009
Cramer: A Mortgage-Market Recovery?

John Paulson’s interest in Bank of America [BAC  Loading...      ()   ] is getting a lot of attention, Cramer said Thursday, but investors should look at the hedge-fund manager’s stake in Regions Financial. Johnson’s move could be a sign of things to come for the mortgage market.

“I think this is the big trade,” Cramer said of Regions [RF  Loading...      ()   ].

Paulson, who bought 35 million shares of RF, made big money by shorting mortgages ahead of the credit crisis, the Mad Money host said, but RF is a “living, breathing mortgage.” The move shows that Paulson’s strategy is changing, and it could mean that once-toxic loans are becoming a profitable investment again.

Elsewhere in the market, Cramer urged FDIC Chairwoman Sheila Bair to ease up on Citigroup [C  Loading...      ()   ] CEO Vikrim Pandit. The government is “up big” on its investment in the bank, Cramer said, and Pandit should be given the chance to run his company without pressure from Washington.

Walmart [WMT  Loading...      ()   ] reported a better-than-expected quarter and spoke of a great back-to-school season, something media reports had doubted would happen. Cramer predicted a similar earnings beat from J.C. Penney [JCP  Loading...      ()   ], he said.

Lastly, the market has seesawed between positive and negative closes this week, and Cramer said he thought Thursday’s trading session would be no different. After a 120-point gain yesterday, he predicted a pullback today, but that didn’t happen.

“It’s pretty interesting how strong this market is,” Cramer said.

Cramer's charitable trust owns Bank of America.

Call Cramer: 1-800-743-CNBC

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