Focus more on Capitol than capital

During the shutdown, politics influence the stock market more than news from individual companies.

By Jim Cramer Oct 11, 2013 10:24AM

A politician counting money in front of the US Capitol Building © Antenna, fStop, Getty Images"Stick to stocks, Cramer!" logo


I get that a lot these days on @JimCramer on Twitter and my response, uniformly, is: I wish I could.


Believe me, I don't want to have to attempt to know Washington. I don't like politics. I had to do politics on Kudlow & Cramer, and I disdained it. First, you had to be uniformly polite to everyone, deserving or not. Second, what you asked was meaningless to them. They said what they had to say and no more. I was not left or right. I was dead center. No one wants dead center down there. It was impossible.


That said, right now politics is all that matters. So you immerse yourself, you use your contacts in Congress, the Fed, Treasury, whatever you can. And you set out to try to figure out what matters and what doesn't. You do that because of days like yesterday when news from individual stocks was meaningless. Think about it, the only stock that reacted to news of any sort yesterday was L Brands (LTD), and it was negative. Otherwise, what did it matter what any company said? The futures were in control and stocks were playthings.


Think about what has happened since President Obama got elected. Sure, the market's been strong, but that's really the doing of the companies themselves, which have worked hard to be free from Washington as best as they can, and the Fed, which has been most supportive of the wealth effect. There's been nothing good from the president or Congress for stocks that I have seen and I know first hand that what's good for stocks may actually be regarded as bad for the base, the people who support President Obama through thick and thin. This is very different from Bill Clinton, who I can tell you first hand cared greatly about the stock market and was fascinated by it.


Neither party in Congress is any good for stocks at all that I can tell. The Republicans used to be reliable when it came to oil and gas. Now they just back the Keystone Pipeline, which is becoming meaningless except for Canadian crude and while I personally believe it would be good for America, Green has become a religion, which is why I think that it will never be built under this administration.


But the rest are because the president isn't focused on it and the EPA just wants to put coal out of business. Tough to take on every fossil fuel at once.


So you have no choice but to try to figure out what's going to hurt you next from Washington.


It wasn't always this way. My friend and writing colleague Matt Horween predicted here that politics is what will matter most under Obama and that the federal government would amass tremendous power under Obama. I think that's true and it is often unchecked power because the media doesn't seem to ever want to be tough on the guy. That means capital doesn't have a friend in the White House and you can tell that the bankers are paid lip service for their intrusion into his life. The oil guys don't have a call into him at all. The rest of industry seems totally cowed by the president, scared, gunshy, afraid to get involved. How in heck could it take until Tuesday for the retail industry lobby group to get involved in a debate that would have left 80 million people without checks to go buy things starting in 19 days? How could they not be directly pressuring recalcitrant congresspeople?


One reason is that they know it probably doesn't do any good. The Republicans who want to starve the beast respond to the electorate that sent them there. Only by going against social security directly -- the way the president at last framed the debate -- can they lose because that's an entitlement and they don't call them entitlements because they are voluntary on the part of the government.


The president, meanwhile, is pro labor. He can't even harness the group to do his bidding. He probably hates Wal-Mart (WMT). Hillary Clinton was on the board of Wal-Mart. It was located in Clinton's home state.


More importantly, it's pretty obvious that the president is a divider and stocks and stock owners are not on his side of the ledger. He was voted in by his base and it is difficult to see why he should alienate them. I don't blame him. He ran on who he really is and the people elected him.


But that makes politics even more important. You know, he isn't sitting there talking to Jamie Dimon about putting people to work. I don't think he has a back channel to John Stumpf at Wells Fargo (WFC). His inputs to the stock world are horrendous.


So, yes, I would like to stick to stocks. But if you do that, you got everything totally wrong for the last month. If you stuck with stocks over the last few years you lost out on every decline we have had, meaning you sat through it and created very little value for those people who are active in the market. You went down 19 percent in 2011 and then went back up and it sure wasn't because of earnings. Same thing last year when you went down 7 percent. Those were price breaks created by Washington that first had to be avoided and then had to be exploited.


Reluctantly, we have to focus more on the Capitol than on capital. I would like earnings season to be different. But that's wrong, too. It's a sideshow right now, albeit an important one. Easiest way to put it?


You gotta know both.

Jim Cramer's headshot

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long WFC.

More from

Oct 11, 2013 11:07AM
""So you have no choice but to try to figure out what's going to hurt you next from Washington.""

And therein lies the overall problem.
We are living in historical times "" THE TRANSFORMATION OF THE U S A "" into an entity that our  Forefathers  escaped. Repression and Control is the Agenda. Tax at every turn (ACA), demonization of the job creators and the wealthy for their fair share of RE-DISTRUBUTION  to the
Until we Get FRESH Bodies in  D C , not the ""RULING CLASS"" Our  Country will continue down this road to decline 
Oct 11, 2013 11:18AM

Jim, in your article you claim the media doesn't want to be tough on Obama. The facts are that the administration has cracked down on leaks and seized the records of the e-mails and phone calls of reporters covering the White House. Obama promised more transparency but has gone the other way.


The line about the president sitting down with Dimon and talking about putting people back to work is a hoot! Jamie Dimon could care less about the working man, except how he can induce them into taking on more debt and enrich the banks!

Oct 11, 2013 4:02PM

" a relatively new model of reimbursement program" ........ Do you think that is a rational argument LOM......... good god


It's just code for this is how you get your waiver. Waivers are susposed to be temporary but we all know how that shlt works.

DOW up 91 right now, so Wall St. does not fear the effects of sequestration, the shutdown, or the debt ceiling?
Who, or what is actually good for the economy right now? Is there a unanimous vote for something by both partys? It's not obama, or congress, or wall street. The only thing I can think of is jobs.

Pretty much our stock market is driven by the free money from the Federal Reserve.


QE3 will never end and interest rates will never go up because the US economy is dead and nobody is doing anything to correct the economy.


You can not fire everybody making $80,000 a year and up and replace them with minimum wage workers working only 29 hours a week and expect your economy to recover.


Our leadership wants the US to fail and as to letting the illegals into out country legally that just shows you how much they want to destroy this country. Already half of us speak a different langauge then the other half. Nations are suppose to be united not divided.


Kiss your life style goodbye in about two years when the US collapses.



Oct 11, 2013 11:17AM


I usually find your articles informative but this time I could hardly follow what you were saying. I found myself having to re-read sentences to make sure that I had not missed anything so that it made sense. I had not missed a thing as there just was not clarity there. I would suggest a good edit although I know you have deadlines. Thanks for trying, as you were convincing in conveying your frustration.

Oct 11, 2013 6:38PM
LOM...As usual you have posted some very nifty profound and erudite opinions which reinstate my faith in the integrity and intelligence of our current society. As you know most of the posts are very derogatory and completely insipid. A  cursory evaluation would lead one to believe that we live in a country of  half wits and morons. I, for one , do not have your commendable patience or suffer fools easily, hence I'm no longer posting. At my age every day is a gift not to be wasted on fools. I would feel remiss in not congratulating you for your superlative insightful essays. Best of luck mon ami.
Oct 11, 2013 5:13PM
You know (if you have read my previous work on here) I am not an advocate for the real slouches in our society, regardless of where they are stationed.   Everyone ought to be able to stand for themselves, but I have also been a paid worker in some areas (and volunteer in others), dealing with some who absolutely couldn't manage their own lives.  For these people some channels ought to be configured to where they can seek and receive assistance, given that they have bona fide issues.

The ACA (for one thing) means that a relief has been issued in the name of the people which
seeks to redress many of the traditional criticisms we have been pronouncing against HC in general, to wit; they keep driving up costs, they keep paying their CEOs too much, they keep giving pre-established, recurring or even new problems the boot, etc etc.  At least these issues have been resolved via the new law. 

Yes, the devil is in the details, and that never changes.  But dlh, you must remember there really is no such thing as 'benign neglect' ...all neglect is not benign, but ensured to cancel the original problem or dissolve it somehow ( similar to the ostrich trick of burying the head in the sand).
We have no other options but to medically insure everyone we can, and soon.

For that reason, I am opposed to ad hoc maneuvers to relieve CONgress of their capability to go onto the ACA or for those corporations large enough to relieve themselves of their responsibility as well.

Oct 11, 2013 11:06AM
The market manipulators can't help themselves ...
Oct 11, 2013 1:53PM
"DOW up 91 right now, so Wall St. does not fear the effects of sequestration, the shutdown, or the debt ceiling?"

It 'thinks' it doesn't. It's arrogance is it's confidence. We can crush that. We need to. Remember that so far- the rest of the world has watched and waited, when it looks like their own hope is lost too, they help us BBQ these losers and feed the chars to the sharks. 90 million recovered jobs- TODAY, or else. 
Oct 11, 2013 1:44PM
Yes both parties you would think should agree on jobs.  Good non-minimum wage jobs while were at it.  
How?  Infrastructure spending is a start, retraining of adults for jobs that are actually needed.  3-4 million jobs in the USA are unfilled as they can't find trained workers, mostly in advanced manufacturing plants, heavily automated, the jobs are a cross between programming and maintenance of these high tech automated processes, good jobs too.
Continue the domestic energy expansion.
End the shut down and sequester, they forced layoffs without the departments having a say in how or who was laid off.  Tell the departments that the same amount of money needs to be cut but let them figure out how the cuts should be made so the impact on employment could be mitigated.
Crack down on illegal immigrant hiring with more inspections and bigger fines. 
End tax credits and subsidies for companies that outsource.
Not holding my breath on any of these ideas.
Oct 11, 2013 4:17PM

If you were putting your hand on the stove "NO" would be a good response.

Oct 11, 2013 1:50PM
Two days of throwing somebody else's money into the Black Hole of Wall Street. Even if there was a shutdown solution... we still have no economy, no revenues, out of control financial tyranny and a new Civil War brewing that will replace paper and button pushing with running for your lives. WHAT is the incentive to end America, grubbers? 
Oct 11, 2013 5:20PM
Same to you, sir.

Thanks for taking the high road in our discussion, unlike so many of the paid impolite
blog fleas on some of the other sites.  I gotta run, too.  Daughter #2 coming into town,
so must socialize, er.....clean her room for her. 

You have a great weekend.  See you Monday.

Oct 11, 2013 5:17PM
Well............ I'm out now. Nice to discuss this with you. Have a nice weekend LOM.
Oct 11, 2013 4:28PM
If this thing f's everything up are we going to have to hear ........... "It's Bush's fault"... just tell me that.
Oct 11, 2013 3:57PM
Pretty much, TOG....Glad you had  a rewarding day in the fields.
Yes, they are all on there, back and forth about Obama being
America's Hitler or some such rot......Plus, there is a lively
debate about Obamacare...

Even VolckerFan is there, backing the ACA and some fellow named Chris C,
both of whom are providing some very rational argumentation about the pros
of the law.

It was nice to have something else to do today, as well.  Have a fine weekend.

Oct 11, 2013 4:30PM
dlh, some practical advice.  If you dont like it, dont buy it.
Just pay the fine, which will not exceed the cost of the
insurance for about 5 years, then get it.  Of course, this
means you will be on the IRS radar, so....

If you were really in charge of yourself, you should
already have your insurance so as not to be a burden
on the system, which I have seen crashed over and
over in Calif with my own eyes by the illegal and non-
covered segments of the population.

Oct 11, 2013 3:29PM

DLH:Is surfin boy your big concern?I can think of a lot of things more important.I left this

morning and you and others hit me below the belt.Is that the new policy of the GOP.Lincoln

would be so proud.

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