Old Hand

Cramer's Lightning Round - Citigroup is Uninvestable (12/8/09)

No, man.

Bad press is only part of the problem. Chesapeake is on the wrong side of the supply and demand equation for natural gas. There is too much gas and too little supply. Guess what.

Apple Overvalued? Here's What Else You Can Get for the Price

This is a totally bogus, to be kind, way to evaluate the problem.

If you think the stock is overvalued, then what you have at risk is the difference between fair value and over value, not the entire amount.

Next, we have the stocks on this guy's list. Cisco is laughable. This company has created essentially no shareholder value in recent years.

How Larry Summers Lost Harvard $1.8 Billion

There is not much news here. Summers has always been known for thinking he is the smartest guy in the room, making snap judgments and shooting form the hip.

More troubling is the fact that Summers has made a ton of money giving advice to Wall Street firms creating and selling toxics. He was one of the key people, Greenspan, Rubin, and Leavitt, who pushed for deregulation of markets in 1999. This, of course, led to disaster.

Now, he is on the other side of the table in charge of re-regulating what he deregulated.

In short, among all of the clowns in town, Summers has no business at Treasury.

Hero of the Day: Jackie Ramos

In 2003, I attended a conference held by Goodwin Proctor. The centerpiece was a discussion by senior leaders of BAC, AMG, Pioneer, and Putnam. The person speaking for BAC was Brian Moynihan, then in charge of strategy for the company.

The stunning thing was that not once did Moynihan use the words customer or client. He spoke only in totally abstract terms like product, channels. The panel was out of the twilight zone.

But, sure enough, Moynihan is on the short list to lead BAC.

MOTSS.

What if Steve Jobs Hadn’t Returned to Apple in 1997?

Spot on, dude.

Your comments about getting the NeXT deal are very interesting.

When the history of the computer industry is written, Steve Jobs will occupy a position of importance well above Gates. Not that Gates has not been important. Gates has been important, in a very negative way.

The pivotal decision in the PC industry was IBM's product strategy of putting an open hardware architecture on the market. The killer app was Lotus 1-2-3.

Gates has been an outstanding monopolist. He managed to get away with inflicting a piece of junk on the market, getting hundreds of millions of users hooked on this junk. His junk has been bug-ridden and glacially slow to evolve. Gates' junk is based on an incoherent theory of OS design that has been wide open to hackers. Very importantly, the defects in the junk Gates has pushed on the world have caused untold costs for end users and OEMs.

I believe that Gates and Microsh*t should rightfully have been the targets of the largest class action products liability and antitrust case in the history of the world -- past and future.

Why Krugman Is Wrong About the Yuan

Of the points made in this piece, perhaps the most telling is that the US has very little to export to China, or to anywhere else for that matter. This situation will not change quickly; because, like a large vessel, it has a large turning radius that requires product redesign, process re-engineering, and distribution systems. None of this changes quickly. So, once again, US companies will continue to suffer from horrendous mistakes made by short sighted leaders and boards of directors.

Moreover, companies that can benefit from a weak dollar, such as heavy equipment and commercial aircraft manufactures, simply do not employ a significant percentage of the work force in the US. Why? Something like 80 percent of all jobs in the US are created by smaller companies, and there are more than 10 million of these. With few exceptions, these companies do business within the US.

A weak dollar does, in fact, impact all companies and all individuals in the US. The most pervasive impact is that of the cost of importing oil. This cost shows up literally everywhere in the US economy.

There is nothing I can see to suggest that the US can in any way export its way out of this recession. To become competitive, the US will need to go through a fairly long period of internal adjustment, and in the process, US workers and families will need to adjust to a new reality, a lower standard of living.

The price we will pay is a direct result of horrendous economic policies of the right wing from 2000 - 2008, and the wastage of national treasure on wars without end and without benefit.

Sadly, Obama and his crew are simply performing damage control. Political wrangling about financial system reform in congress and massive expenditures by financial firms on lobbyists is criminal. Of all things, the US economy absolutely depends upon a stable and predictable banking and financial system. It is, in effect, the circulatory system of the economy.

I think the reality is that a real global change in the strategic position of the US is going to be some time off. Meanwhile, we must find ways to get out own house and order and recover from the body blows of the past two years.

There is no other choice. Devaluing the US dollar is not the answer. A devalued currency is always the sign of internal weaknesses in an economy. That is what world markets are telling us.

Not Everyone in China Wants to Buy an iPhone

"Everyone in China ..." is a silly statement to make. There is no reason to expect that adults in a country of nearly 1 billion people would make a buying decision for an iPhone or any other product for that matter.

The key point is the enormous size of the market in China and the fact that target customers were located in a handful of giant cities with existing infrastructure.

Hair cut these markets by any reasonable number, and you still end up with an enormous business opportunity that is much larger than than the individual markets of the US or Western Europe.

We should live so long as to be sitting on top of this kind of situation, which Apple surely is.

Lehman's Demise: Trading Floors and Credit Run Amok

This is a really terrible interview. The interviewer asks a question, for example the first one, and they he continually talks over the guest.

As a result, this video rambles all over the place.

Horrendous form. This guy needs to learn how to keep his mouth shut.

A Refutation of Modern Economic Theory

Young man. You have absolutely no clue what can happen in the real world when powerful forces, including "exogenous variables," shake the foundations of world economies.

You should have been on the track during the late 1970s and early 1980s. The exogenous variable here was the Arab Oil Embargo and the birth of OPEC. There followed the most massive peaceful international transfer of wealth in history. At the time, this triggered massive core inflation accompanied by a severe recession. The inflation of the day was alleviated only by Volker and severe monetary restraints. The effects were to deepen the recession, but inflation was brought under control. By any measure, this was the black swan of its day.

Today's black swan is the destabilization of the world financial system by a relatively small handful of people.

Finally, there is very little new under the sun in economics.

Jobs' Integrity: A Reason to Buy Apple

Uncle Miltie is correct.

But, I would make one other observation. You can easily tell someone who places little value on his or her time by the fact that they (a) use a Windows machine (b) ignore the long and continuing history of junk put out by Microsh*t and (c) indicate in their comments they have no clue what coherent architecture and essentally much flawless software mean to people who do serious work with computers.

Good luck, moron.

Who Will Win the Smartphone Wars?

Apple, dude.

Software beats hardware any day of the week. It always has. Apple also has dramatically deeper technology in hardware.

Is the iPhone SDK 3.0 Really All That?

Moron.

Have you actually had your hands on the SDK?

If you had looked carefully at the release, have a clue about handhelds, and have any experience in software engineering, you would never have suggested the 3.0 was not substantive.

Better to be thought a fool than open your mouth and confirm it.

What's Cramer Got Against Microsoft?

Anyone, even a novice, looking at a PV cart for this company can see that Microsh*t has been a very bad investment over the past three years.

The wheels are coming off the company.

Without recurring revenue from operating system, this company would be in serious financial trouble.

"The AIG bonuses are [a] rounding error, and a done deal," Yves Smith writes. What should really upset taxpayers is the proposed public/private partnership, which will grossly overpay to take distressed assets off banks' books. "This is billions to avoid price discovery, which is what is needed to assess the magnitude of the problem, attract private capital and do triage on sick financial firms."

I hate to say it, because it is so distasteful, but this piece is spot on.

The other key issue people should be thinking about is what changes need to be made to the regulatory system to prevent anything like this from happening again. The most obvious are reinstating Glass-Steagal and reversing provisions of the CMA of 2000 that made CDS lawful after they were outlawed in the aftermath of 1929.

Phil Gramm is patient zero in the legislative actions that opened the doors to abuse. This guy is now discredited, and he is getting very old. Hopefully, he will never, ever be a player again.

GE's Immelt Thinks for Himself: U.S. Not Shifting to a Service Economy

Say what?

Pick up the Statistical Abstract of the US, and you will see that the US is a service-based economy, and it has been for the past several decades.