Cramer's Stop Trading! It's the Principle of the Thing (1/8/09)

Stocks discussed on Cramer's Stop Trading! TV program, Thursday January 8.

Citigroup (C), Wells Fargo (WFC), Trinity (TRN), Quanta (PWR), Owens Corning (OC), Electronic Devices

On Citigroup’s proposal of a Senate bill that would allow federal judges to alter the terms of a mortgage to prevent foreclosure, Cramer says without major adjustment of the principle, it is “all fluff.” However, host Erin Burnett received news by the middle of the show that the federal judges will be allowed to adjust the principle. Cramer said that while he was initially against adjusting the principle because of issues involving contract law, “It is too late for contract law. We’ve got to get things moving here.” Cramer thinks the legislation will be good for other banks, particularly Wells Fargo, which has more mortgage exposure than Citigroup.

While Cramer is beginning to admit he is skeptical about Obama’s ambitious plans, his statements about developing alternative energy and making buildings more energy efficient will be good for Trinity, Quanta and Owens Corning, even if they turn out to be just talk. He also likes Energy Conversion Devices which is a “classic American company” and has come down substantially.

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Comments

[Norman Lepo...:]

I remember when Cramer recomended C as the "safest of them all" when it was at $50 and this was after the subprime meltdown started. It was a "buy, buy, buy." Just another reason I never watch CNBC when he shows up.

Jan 09 08:54 AM

[grbn:]

“It is too late for contract law. We’ve got to get things moving here.”
Let's ignore the law, give troubled homeowners a free ride, make the rich and evil banks pay the loses, and redistribute wealth, all so we can feel good about ourselves and it's easier on Cramer. Selling your soul, if ever had one. Change is here.

Jan 09 09:42 AM

[frflyer:]

Redistributing wealth
- You mean like has been going on for the past 25 years with supply side economics and regressive taxes?
You mean like the $700 billion for financial institutions?
Yeah I'm dubious too. Dubious of anyone who is so ideologically stuck in their thinking that they have come to see anything that hints of sharing or cooperation, or that aids anyone other than the very wealthiest, as communism or socialism or whichever label is handy. Wages for workers have declined 12% in buying power since 1978, while executive pay went up about 800%.
89% of the growth in wealth from 1983 to 2004 went to the richest 20%. The rest of us, the 80% got 11%, the top 1% got 33% of the growth. In 2005, the richest 1% had an increase in wealth larger than the entire wealth of the lower 20%. Reaganomics doesn't work period. It's had 25 years to prove itself and has been an utter failure for 80% of Americans.
Is that "redistributing wealth"? Labels are just labels, they make it easier to not think things through when doing so may go against your cherished beliefs.

If Dwight Eisenhower were alive today, some would be calling him a socialist, because he spoke out in 1952 for the interests of working people. and they would be calling him unpatriotic for suggesting that we keep our eyes on the military industrial complex. Yeah that Eisenhower, the former Republican President and Allied Commander in Chief of Europe.
You are proobably one of those history revisionists who claim the New Deal didn't work. There would be no middle class without the New Deal, it's what made it possible. What stalled the recovery under Roosevelt during the late 30 s was when he became more fiscally conservative, instead of trusting the programs he had initiated. The other reason it took WW2 to get us out of the depression was because of the depth of it, not because Roosevelt's policies weren't working. It's not an accident that he was elected three times.

Jan 09 12:31 PM

[grbn:]

who pays the cost to the banks for the loan write off?? who do you think a liberal judge will side with? why don't you see that more government control is less individual freedom. why don't people see the problem here. why do losers always look to the government for solutions, (never mind, only a loser would defend this). this housing mess and credit crisis was created (in part) by the Dems who forced their government policies for easy loans on the banks. Get the govt out of our lives!

Jan 09 12:44 PM

[consumerons...:]

I think I get it. Redistributing wealth from the poor to the rich is OK. Sarah Palin taxing the shit out of the oil companies and cutting every man, woman, and child in Alaska a check for approximately $3200 while the rest of us down here were being severely squeezed by $4-$5/gallon gas was OK. Damned Hypocrites. Haven't the jobs been disappearing ever since we first heard of the term "trickle-down economics?" And the Republicans aren't the only ones at fault. Extremists on both sides are to blame. Factory workers that think they should be able to earn as much as highly trained, highly educated doctors and engineers are to blame, too.

Jan 09 01:04 PM

[Bubba2:]

When do people take responsibility for their own actions? This mess has been caused by greed on the part of consumers who felt they "deserved" to own expensive toys, take expensive vacations and generally live beyond their budgets. It was supported by the greed of some lending institutions who saw an opportunity to "serve the public" and supplied the money. The government policies encouraged these excesses as a way to fuel economic growth and help politicians keep their jobs. In general, the economy was living beyond it's means and now we have to pay the bill.

Now, politicians are choosing to bail out large companies such as Citibank, General Motors and Wall Street brokers because it hopefully saves jobs and looks good in the headlines. They also salvage the Investors who own these large companies. These are the same investors who allowed their company to make risky investments. What ever happened to fiscal responsibility on the part of the Board of Directors?

This pattern of excessive spending, growth and decline will continue to repeat itself until our country learns to be more self-sufficient. How many times can the American taxpayer bail out those who choose to make irresponsible decisions? We continue to allow consumers and companies to take excessive risks without experiencing the potential of loss, especially for large corporations. Maybe they should be allowed to fail in order to clean out over production and let the best companies survive. (I believe its called a capitalism) Maybe banks should be required to make sure a borrower can repay the loans the receive. Maybe we should all learn to live within a budget (including the govenment).

Jan 09 04:24 PM

[sr9web:]

"major adjustment of the principle"

??

Do you mean "principal"...?

Jan 09 11:11 PM

[stox2buy:]

Can any one suggest a few potential 10 baggers other than Thermogenesis (KOOL)?

Thanks in advance.

Jan 10 01:48 PM