With FinReg, Only ‘Moron’ Companies Deal With US Banks
It is not the content of the legislation so much as the bad publicity surrounding financial regulatory reform that will hurt US banks, Cramer said.
Senator Blanche Lincoln, Democrat of Arkansas, plans to limit over-the-counter derivatives, but the move will not have as much influence on market mentality as the “shocking loss suffered by the credit-card companies.”
With such ill feelings towards Wall Street today, the Mad Money host eyed an opportunity in German-based Deutsche Bank . Germany’s market is up by 3% right now, and even if the Euro Zone breaks up Cramer thinks the Germans will come out ahead. Deutsche Bank would also profit from financial regulation, Cramer said. From currency swaps to short-term interest-rate protection, DB would be able to offer its clients an array of services American banks could not.
“There will simply be no reason whatsoever for a major corporation to stick with an American bank,” Cramer said. “It would be foolish when they can simply cross the street and take their business to Deutsche Bank.”
If that were to happen, Cramer thinks American banks would only be good for savings accounts and home mortgage loans.
“This is Lincoln’s Marshall Plan to help European banks,” Cramer said. “She’s doing her part to toss out the great money men in New York.”
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