Cramer's Mad Money - More UltraShort ETFs? (4/28/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday April 28.

Cramer's Outrage: More UltraShort ETFs? UltraShort Financial ETF (SKF)

While he has long blasted UltraShort ETFs as damaging to investors and to the economy in general, Cramer was incredulous that ProShares is asking the SEC for permission to create 94 new ETFs and wants $3 instead of a "mere" $2 short leverage. Cramer pointed to the havoc UltraShort Financial ETF has created in the financial sector and made a renewed plea that UltraShorts should be banned.

CEO of ICI Homes (ICI), Mori Hosseini

Cramer has predicted a housing bottom by June 30 and asked Mori Hosseini if he is seeing signs of a recovery. Hosseini responded that prices have stopped declining since February and he sees a pattern similar to the housing recoveries of 2001 and 2005. The company sold 80 news homes the first week of April and Hosseini attributes this to the fact that in spite of the downturn, it still makes more financial sense to buy than rent. He expects a housing recovery, but would not make a concrete prediction.

Mad Mail: Lam Research (LRCX), KLA Tencor (KLAC), Novellus (NVLS)

A viewer asked how Lam Research could be up 7% after reporting a 7% decline and Cramer says the semiconductor is bottoming. He added KLA Tencor and Novellus are buys even though he doesn't like the companies.

Off the Charts: Yum! Brands (YUM)

Cramer presented Rick Bensignor's technical thesis that Yum Brands is heading for a pullback because its chart is showing resistance. However, Cramer says the fundamentals win hands down in this case; Yum is geared for monster growth, especially in China,has a strong balance sheet and declining raw costs. Yum surprised the street by posting a 4.5% increase in operating income, while a 5-6% decline was expected and the company reiterated its guidance. Cramer would wait for a dip before buying.

Bristol-Myers Squibb (BMY) and Fortune Brands (FO)

Why does Bristol-Myers' stock price fall 4.3% in spite of its strong quarter while Fortune Brands gains 3.9% after cutting its dividend? Cramer explained expectations going forward mean everything and past performance doesn't count too much, especially when the sentiment is overwhelmingly bullish and defensive stocks are getting punished. Many are expecting a recovery in six to nine months and are opting for more cyclical stocks in anticipation of the turnaround. Buyers would rather get in now than wait for Fortune Brands' stock price to tick up 20 points before it increases its dividend.

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Comments

[twitee:]

In the last two month, the market is not following the technical or fundamental indicators. The market is one sided upward and it is manipulated by banks and media, CNBC (GE which owns the CNBC).

The CNBC news anchors are not providing honest and unbiased news, but injection their own biased opinions to pump the financials and the market up.

I wonder if Cramer would be switching positions as usual, when summer crash occurs...

Economy has not bottomed, but the market manipulation by the banks and the fed will cause an even bigger crash, and destroy the credibility (if any) of the corrupted banking system…... what they have done is to postpone the inevitable by few month.

Apr 29 12:10 PM

[Fitz919:]

There is so much spin coming from the Govt, and supported by the gullible media that my head has been spinning for about 7 weeks.

Twitee: Is so right!

Why did Paulsen and Bernanke force the merger of B of A and Merrill Lynch? Why is no one coming down hard on them for doing it? Why are CFOs committing suicide? Why are we buying our own debt? Why has the Govt. made it so difficult to pay back TARP funds? Why is Geithner pushing the public/private partnership plan to buy up bank's toxic assets, when everyone knows the relaxation of mark to market accounting rules has rendered his plan DOA? Since the banks can value these assets as high as they want them to be...they are the geese laying the golden eggs for the banks...they'll never sell. Why does Obama's plan to rescue 9 million home mortgages, create mortgages which reset in 5 years? Hasn't he learned anything from Sub-Prime, Alt A, and Option Arms which have ruined our economy?

Not only do we have a corrupt banking system...we have a corrupt Government running it. And their downfall, in the form of a new market low, and if we are lucky a market bottom are not far away.

When lies and spin cause the market to run up as it has, the truth is the only thing that will bring it back down to hard cold reality.

Apr 29 05:03 PM

[Michael Del...:]

"I wonder if Cramer would be switching positions as usual, when summer crash occurs..."

I hope so. As long as the market is going up, whether caused by lies or spin or CNBC hype or not, I am along for the ride. I don't care what the reason is. If we get a crash this summer, a smart trader would start to short. I do not short, so if the market crashes this summer, I will just be out (in cash) waiting for the next run up. I gave up trying to be right while fighting market trends a long time ago.

Apr 29 05:59 PM

[maxschactman:]

Cramer's "picks" have become such a laughing stock he's down to pleading to the SEC to ban short ETF's.Traders routinely short his picks and he knows it.Wait for the final "pop" n' go short.EZ money.Now if he can just get 'em to throw in the uptick rule and reinstate the ban on shorting financials he can get a market that only goes up.That's the only way his picks will make money.His reputation got slaughtered in that John Stewart interview,and rightfully so."Caught on tape" admitting he manipulated stocks when he was a hedgie mgr.Probably wants to force traders back into individual stocks so his hedgie buddies can play more games.He's a charlatan.The Sham-Wow version of "financial" news.And frankly,I think he's a couple of slices short of a full sandwich.Some days he's foaming at the mouth from like a rabid dog.
I have a strong feeling his ratings are taking a hit and his days are numbered.I mean c'mon,how much longer is CNBC going to waste 60 precious minutes of prime time on this nutcase?

Apr 29 11:56 PM