Debt mess is burying some hot numbers

Congress is making it hard for investors to play the really good corporate results of late.

By Jim Cramer Oct 16, 2013 10:22AM

US Capitol © Donovan Reese/Getty ImagesIt's too bad this is happening in Congress. On Tuesday night we got someTheStreet.com logo terrific auto sales out of Europe, numbers that were so good you easily could have seen earnings estimates getting raised for both Ford (F) and General Motors (GM).

 

We also had some figures out of CSX (CSX) showing the coal numbers couldn't bring down the rest of the growth because of intermodal transport.

 

Intel (INTC) sees consumer electronic demand bottoming out. While I don't want to own Intel, because its growth is too slow, I could make a case for owning a lot of consumer-related hardware names -- as well as the usual suspects, like Micron (MU), Best Buy (BBY) and even, yes, Hewlett-Packard (HPQ).

 

But what does it all mean? What are you going to do? Are you going to buy some Seagate (STX) off the Intel call and then discover that Sen. Ted Cruz has thrown a monkey wrench into the Senate plans -- or, if you are pro-default, that the Tea Party has stood up to the leadership and has voted down anything the Senate has sent over?

 

What good does it do to buy more Ford off of Europe numbers if you don't know whether Ford Motor Credit will be able to offer attractive deals in a default? Moreover, if 80 million checks aren't sent out by the government, will anyone care about the numbers being reported? People would be more likely to stop spending than they'd be to accelerate.

 

That's the key to the moment. People keep wanting to quantify what a default or a near-default or a technical default would mean. Here's what it would mean: Less business would be done, because the credit markets would be imperfect, in the same way that 30-day Treasury bills soared in yield Tuesday, particularly after Citigroup (C) said it had gotten out of near-term paper.

 

There will be selling pressure. Rates did go higher for that end, and on a default they will go higher for much of the curve.

 

If you think that's good for stocks, then go buy some CSX and some Best Buy.

 

I think it's bad.

 

Random musings: We saw unbelievably good numbers from Regeneron (REGN) last night on its cholesterol-lowering agent. That's good for Regeneron but bad for Merck (MRK), as it is three times more effective than Merck's option.

Jim Cramer's Headshot


At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long F.




 

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129Comments
Oct 16, 2013 10:34AM
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Just look at the increases in the Tulip Bulb er I mean stock market this morning.  Can you believe the opportunism and unmitigated greed that we see in our hour of history making?  Buffet calling for more debt.  The rich and internationals are gorged on cash and screaming for more.  The average Joe is scared to death. The rich versus poor scenerio can not be typified any better.  Most citizens believe debt is a problem but still scream for more as there seems no viable comfortable alternative but to borrow to pay for the fuel to keep the airplane in the air.  This is just the start of the financial chaos many of us predicted would occur.    Quite the show.
Oct 16, 2013 11:00AM
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The debt mess is burying some hot numbers?  Maybe.  But on the other side of the coin, QE is burying some terrible numbers.
Oct 16, 2013 10:51AM
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Those Tea Party congress people should all give up their government sponsored heath care plans.

Actually, we should make ALL congress people buy their own health care plans like little people need to pay for.

Oct 16, 2013 10:50AM
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Mr Cramer, yesterday you spoke honestly, today you sound like just another  reporter. 
Oct 16, 2013 10:47AM
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Get big money out of politics and start the game over. Then "we the people" may have a truly representative government.
Oct 16, 2013 11:44AM
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I wonder if they have managed to get 60,000 people signed up for ObummerCare yet.
Oct 16, 2013 1:30PM
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What if you're poor and insane like Veritas and due to your insanity you chose not to participate in ObamaCare ........... Who pays the penalty?
Oct 16, 2013 11:21AM
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The wife won $321.00 at the casino last Sunday.

 

Me?

 

I bought another box of Arm & Hammer laundry detergent.

The old box was 6.61 pounds, 3.00 kilograms.

The new box is 6.16 pounds, 2.80 kilograms.

 

This Sunday, I'm going to the casino and the wife can go to the supermarket.

 

 

Oct 16, 2013 1:08PM
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Question: If you don't work and get on ObamaCare with subsidy help and you need to go to the doctor but don't have the money for the co-pay....... What happens?

Oct 16, 2013 12:57PM
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We need to hear from Bill Fleckenstein. Cramer is incredibly biased. And somewhat of a buffoon I might add. 
Oct 16, 2013 10:32AM
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The country re-elected the lazy, arrogant, CORRUPT Imbecile '57 States'...   He is not up to the job.  He is acting like a stubborn brat.  If he thinks the house will cave in to his demand not to defund Obamacare, he is mistaken.  If he rather send the country into a recession/depression, then the fault is entirely his.  History will remember him as a weak president, devoid of leadership skills.  

In any case, not increasing the debt ceiling is a good thing.  It will FORCE a balanced budget now, not 10 years from now.  It will reduce government SPENDING by 25%.  All of Obama's new spending will go away.  The taxpayers will be much better off.  The democrats will not be able to BUY more votes with treasury handouts.  He will have to make the hard choices as to what to cut.  There will be NO NEW TAXES!  We will be better off in the long run.   He can start by firing HALF of the 'non-essential' government workers...  
Oct 16, 2013 11:38AM
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Yes, we were up 200 points and all is great on Wall Street....Well, not exactly, plenty of scumbags that will keep trying to bring these markets down.....Remain cautiously optimistic....If we had a real President all these stupid games would have been averted, sadly we have a socialist, incompetent amateur that is destroying our country slowly but surely....And Wall Street knows it very well....If the market would reflect the economy and job growth we would be lucky to be at about 7000 on the Dow as opposed to 15000....Oh well, thank you Lord....Remain alert...More later.
Oct 16, 2013 1:11PM
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Question: If you don't work and get on ObamaCare with subsidy help and you are a smoker but can't pay the penality for smoking........... What happens?
Oct 16, 2013 12:56PM
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Blue skies as far as the eye can see. Happy days truly are upon us. Rejoice!! Ben Bernanke and Harry Reid are our saviors. 
Oct 16, 2013 12:05PM
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I suggest Obummer trade in his ACA website for a "Big Chief Tablet"...... it will work better.
Oct 16, 2013 5:08PM
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The Repubs on TV sure are crying and bellyaching.I told everybody 3 weeks ago Obama

would outfox the Repubs.Even Ann Coulter said the GOP is in shambles.The Repubs

will lose a lot of seats in the Congress next year.The dog fight between the mainstream

Repubs and the TEA PARTY showed what clowns the Repubs have become.

Oct 16, 2013 1:54PM
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dlh and some others....We agree there are no easy answers to the overall dilemma about how to originate and disseminate health care to the nations' disadvantaged.  However, as another poster illustrated the other day, its up to the Republican party to inform enough voters of their platforms and goals sufficient to drum up the necessary representatives needed to repeal the ACA. 

What is going on right now, is clearly illustrative of how NOT to go about thwarting the will of the majority (at least the majority who could use good, semi-socialized HC conduits).  The economy of the major player in the global markets must not be held hostage to the wishes of a minority within the Right wing.  This is absolutely wrong.  What CONgress is doing to the markets, and to the small business as well as the laid off workers (and their overdue bills) is flat out unjust.  NOT while they decline to participate in the 'suffering rate' which they willingly inflict upon others without power.

I believe that when I call upon D.C. to stop playing games with the budget, the debt ceiling and authentic debt reform, I speak for the majority.  Our central problems - whether the European revolutions of the 1700s or the hostage-holding drama of today- are clearly indicated by the inflection point within society when Ideology Trumps the Individual.  If our CONgress is to get a grip on the proper remedies for our current financial malaise, we must drive that discussion forward with the next election process.  We must resume our control over our own destiny and in so doing, foster the next generation of politicians who will finally evolve beyond brinksmanship to a new vision of shared conflict resolution involving the "good of the people', more so than the 'lining of the personal pockets'.

Cramer does have one thing right today- Go beyond the numbskulls and look to the numbers.
Our economy is fundamentally sound and still moving forward.  The only thing standing in the way of the natural growth and better velocity we require is Washington, D.C.  So insofar as incumbency may be the problem, its not the sole issue.  Smart choices into the future which would not only aid the incumbent but the freshmen reps as well are the sine qua non of our democracy and it is WE who must resolve to change our ways...or lose our country with a horrible finality. 

Oct 16, 2013 12:20PM
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Buy on the rumor sell on the news has been around a long time.  Will we roll over on the news?  Interesting times.
Oct 16, 2013 4:39PM
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Why is everyone so confident that raising the Debt Ceiling is automatically going to mean that we can pay our bills?

As an example: suppose a family has a child going to college but can't pay the tuition.  The husband wants to get a HEL to fund it but the wife doesn't want to incur new debt.  They have their own debate and eventually the husband persuades the wife to agree that they raise their own "debt ceiling" and apply for the loan.  Then they go to the bank to apply for a HEL and are turned down for the loan.

It doesn't really matter if the Government agrees to let itself borrow more money - we still are dependent on there being enough willing lenders out there to lend us the money that we allow ourselves to borrow.  Am I missing something or is Someone Else's Money truly an unlimited resource?

Oct 16, 2013 10:36AM
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we'll see today come and go.  the next week or so nothing will happen. 

 

the "recession" will be a formality - shown in numbers but not felt by the regular person. 

 

time to buy stocks on sale?  then why are they up so high already today? 

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