Cramer: "We Can't Have Major Lenders Fail"
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Cramer: "We Can't Have Major Lenders Fail"
"We Can't Have Major Lenders Fail"
By Jim Cramer
RealMoney.com Columnist
11/7/2007 6:59 PM EST
"Yeah, you don't need me to know it is bad. Cisco (CSCO - commentary - Cramer's Take - Rating) said the wrong thing about financial services, certainly off message for Mr. Chambers. It would be one thing if the stock hadn't run, it has. Now it must go lower, even though it really wasn't that bad. It had been gunned, though, and everyone I know is hiding in tech.
I didn't like the revenue number from McDermott (MDR - commentary - Cramer's Take - Rating), and that's going to hurt the infra group. Someone's going to say that MDR could be the beginning of the end of the Shaw (SGR - commentary - Cramer's Take - Rating)/Foster-Wheeler (FWLT - commentary - Cramer's Take - Rating) move.
But in the end, it is the same thing it always is: mortgages. AIG (AIG - commentary - Cramer's Take - Rating), after the bell, is a black hole. Who the heck knows what they really have? Maybe they will even tell us.
Morgan Stanley (MS - commentary - Cramer's Take - Rating) wasn't any worse than the papers hinted, but they said it would get worse. Thanks!
In the end, it always comes down to the same thing: Are we going to avoid 1990 or not?
Today was a day when the answer was pretty loud: We aren't!
Will the government start recognizing the potential failure of major lending institutions? Doesn't sound like it from these Fed gov'nors! What do they need? What kind of road map do they need? What kind of cry from the heavens?
For heaven's sake, Washington Mutual (WM - commentary - Cramer's Take - Rating) was down four points today. That's what happened in 1990! Just like that. Don't even look at the mortgage insurers, you will get scared.
The center, frankly, ain't holding. In a 1990 scenario, we go down 12%. We revisit, if not take out, the summer lows. We have mitigating factors -- rest-of-worlders, high growers like Research In Motion (RIMM - commentary - Cramer's Take - Rating), Google (GOOG - commentary - Cramer's Take - Rating), Intuitive Surgical (ISRG - commentary - Cramer's Take - Rating) and the like -- but it can't offset the financials. At least not yet.
My advice: If the Fed doesn't shut up, if the Fed guys keep talking glibly, then get ready to check out those summer lows.
We've cut rates. It has helped some. Not enough. They have to keep cutting. Or more of these kinds of days are directly ahead. With no relief from the Fed, I think a 5% correction from here would be reasonable as part of the 1990 scenario that I so much don't want to have happen.
But if we get a sense that they might move to avert 1990, tomorrow's the moment to buy because it is still not too late to avoid 1990! "
(in www.realmoney.com)
By Jim Cramer
RealMoney.com Columnist
11/7/2007 6:59 PM EST
"Yeah, you don't need me to know it is bad. Cisco (CSCO - commentary - Cramer's Take - Rating) said the wrong thing about financial services, certainly off message for Mr. Chambers. It would be one thing if the stock hadn't run, it has. Now it must go lower, even though it really wasn't that bad. It had been gunned, though, and everyone I know is hiding in tech.
I didn't like the revenue number from McDermott (MDR - commentary - Cramer's Take - Rating), and that's going to hurt the infra group. Someone's going to say that MDR could be the beginning of the end of the Shaw (SGR - commentary - Cramer's Take - Rating)/Foster-Wheeler (FWLT - commentary - Cramer's Take - Rating) move.
But in the end, it is the same thing it always is: mortgages. AIG (AIG - commentary - Cramer's Take - Rating), after the bell, is a black hole. Who the heck knows what they really have? Maybe they will even tell us.
Morgan Stanley (MS - commentary - Cramer's Take - Rating) wasn't any worse than the papers hinted, but they said it would get worse. Thanks!
In the end, it always comes down to the same thing: Are we going to avoid 1990 or not?
Today was a day when the answer was pretty loud: We aren't!
Will the government start recognizing the potential failure of major lending institutions? Doesn't sound like it from these Fed gov'nors! What do they need? What kind of road map do they need? What kind of cry from the heavens?
For heaven's sake, Washington Mutual (WM - commentary - Cramer's Take - Rating) was down four points today. That's what happened in 1990! Just like that. Don't even look at the mortgage insurers, you will get scared.
The center, frankly, ain't holding. In a 1990 scenario, we go down 12%. We revisit, if not take out, the summer lows. We have mitigating factors -- rest-of-worlders, high growers like Research In Motion (RIMM - commentary - Cramer's Take - Rating), Google (GOOG - commentary - Cramer's Take - Rating), Intuitive Surgical (ISRG - commentary - Cramer's Take - Rating) and the like -- but it can't offset the financials. At least not yet.
My advice: If the Fed doesn't shut up, if the Fed guys keep talking glibly, then get ready to check out those summer lows.
We've cut rates. It has helped some. Not enough. They have to keep cutting. Or more of these kinds of days are directly ahead. With no relief from the Fed, I think a 5% correction from here would be reasonable as part of the 1990 scenario that I so much don't want to have happen.
But if we get a sense that they might move to avert 1990, tomorrow's the moment to buy because it is still not too late to avoid 1990! "
(in www.realmoney.com)
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