One topic of conversation on Monday's segment of CNBC's Stop Trading was covered bonds. In response to the proposed bill, Jim Cramer said: “Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) should join this.” “While I really appreciate the notion of the covered bonds,” Cramer said, “I'd like to make sure that the notion of our banks not having runs on them is solved first.” “We have to solve the current problems before we worry about this next solution,” he continued. “And I think it's great as a great sideshow, even as a terrific distraction from our real problems, which is to worry about the next IndyMac.” “In 2012, this is going to be the answer,” Cramer said of covered bonds. He disagrees that they’re the solution we need now.
Target (NYSE:TGT), Costco (NASDAQ:COST) – Costco warned last week that this quarter’s profits would be lower due to higher energy costs. If Costco is bad, Cramer said Target is worse. Cramer said he would “get out of Target.” He also noted that “of all the retailers rolling over, the one that rolls over best is Target.” “Target is absolutely roadkill,”
Verizon (NYSE:VZ), AT&T (NYSE:T) Cramer remarked that the two companies were “so hated it's scary.” Some have grown sour on Verizon’s FiOS service, while others think the expensive Apple iPhone could hurt AT&T. Verizon will be hurt because they don’t have iPhone. He moted “whatever line was bad, the analysts decided to drill down on.” Both companies reported good quarters as far as Cramer is concerned, but the analysts saw problems. He says “They are despised by analyst.” With both stocks at these levels, that leaves room for a big mutual fund to move in and start buying until Verizon’s at $40 and AT&T’s at $36, Cramer said. Then both names should get upgraded. He’s not willing to back away from these stocks, especially when they offer 5% dividend yields. “The analysts are lemmings in these situations,” Cramer said.
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