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Cramer Thinks Deflated Dems Can't Hurt Banks

Cramer said, “Did you know that one of the only sectors beating this market this year is the health care sector. Isn’t that amazing?”

This is a sector with a bull's eye on its back ever since President Obama took office and is now one of the best performers out there in a market that's finally showing some spunk, with the Dow today soaring 111 points and the S&P 500 tacking on 1.3%.

When the drug and health care outperformed today, Cramer recognized a pattern, one that investors can use to try to make money right now. As it turns out President Obama's bark is worse than his bite. He can send stocks down, but he doesn't have the power to keep them down.

So far the President has failed to get any healthcare legislation through Congress, and even when Congress passed its anti-credit card legislation, the CARD act, stocks got slammed in anticipation, but they rallied after the passage of the actual bill, and have since gone higher. Cramer thinks this pattern signifies a true bottom after withering attacks from the President. So with today's second consecutive rally, Cramer told viewers that he is releasing the presidential dog pen on Goldman Sachsand JPMorgan Chase . These stocks soared today as this pattern at last is becoming visible. This whole two day rally, Cramer said, is really about the banks, not just because of a turn in housing, but because the President's rants on banks from now on will mean nothing when it comes to earnings per share, and "that's what matters."

With this pattern investors have a chance to make money whenever the President bashes an industry and knocks the stocks down because Cramer thinks Obama and the Democrats don't have the “clout” in Congress to pass anything that comes close to Wall Street's fears.

Here's the pattern in detail: with health care the stocks got pounded as health care reform was supposedly nearing fruition this fall. United Health Group, one of the HMOs that's exposed to Obama-Care, took a 20% dive from $29.22 on Aug. 25 to $24.04 on Oct. 5 of last year. Humana , another HMO with even more Obama-Care exposure, fell 12% from $40.67 on Sept. 16 to $35.91 on Oct. 8. Even WellPoint, which would have been virtually immune to Obama-care, took a 19% hit from Aug. 25 to Oct. 8. But as time went on the proposals in Congress became more and more muted, and investors realized that the earnings of the HMOs weren't as endangered by Congress as first feared. The stocks rallied, with UNH rising 42%, Humana up 40%, and Wellpoint up 46% from their Oct. lows.

The pattern can also be seen with the credit card industry after Obama signed the Credit CARD Act. Just take a look at Capital One Financial , which is the fourth largest issuer of Visa and MasterCard credit cards in the U.S. It is a company that gets 60% of its total managed revenue from U.S. credit cards, and stood to be one of the biggest losers from the bill. Other companies like Bank of America and JP Morgan have larger credit card businesses, but credit cards make up a much larger proportion of Capital One's sales.

Now, Capital One got trashed in part by Obama's bark, falling 35% from $31.34 on May 8, shortly before Congress passed the CARD Act, to $20.45 on June 22, a month after Obama signed the legislation into law as investors feared the worst about what the reforms would do to the credit card business. Again Obama's bark turned out to be a whole lot more frightening than his bite, even though most of the major provisions of the CARD Act go into effect later this month, Capital One's stock has been able to soar to $37.31, up 83% from the credit card bottom, in part because of improving trends in credit, delinquencies, and charge offs, but also because Wall Street over-reacted to the legislation that Obama ultimately was able to obtain.

And now with the investment banks under attack, Cramer thinks this attack is going nowhere as well, and Goldman Sachs and JP Morgan Chase are going to live long and prosper if the pattern seen with health care and credit cards pans out.

The bottom line: when day after day President Obama attacks an industry, that's a great buying opportunity, not a time to sell. In other words, when it comes to Goldman Sachs and JPMorgan Chase, Cramer thinks it is time to buy.

Cramer's charitable trust owns Bank of America, JPMorgan Chase and Goldman Sachs.

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