Let's face it: July was awful

Between the terrible data on housing, autos and retail sales and the near financial death of the US, it's no wonder we're hurting.

By Jim Cramer Aug 3, 2011 8:59AM

jim cramerthe streetOK, July was an awful month. Awful for housing. Awful for cars. Awful for retail sales. Just plain awful. All made worse by the climate of fear stemming from a president and a Congress that told us we were about to die financially, and all I can say is: You don't feel great after having a near-death experience.

 

Not only that, but Europe was awful, too, particularly its banks, which are experiencing the kind of sell-off that we had around TARP. The declines are hideous.

 

You can't be that excited about Brazil, India or China either, because they are trying to raise interest rates to stem inflation, but it isn't working. Inflation is still going up.

 

So you can say we are on some sort of precipice and the stock market is doing its level best in eight days to build in the fall from the precipice. Here's the issue: Is there anyone who doesn't know this?

 

We have had a remarkable flight of money out of stocks. We have people who pulled their money out because you had to believe there was a chance that Social Security wouldn't be paid. We have people pulling their money out because of the logical belief that several major countries could default, of which we were one.

 

So people keep selling.

 

It's difficult to believe there could be anything that could come of stocks from this moment other than more selling. We have stocks that are just giving up the ghost, being crushed, obliterated. One has to wonder where the heck we would have gone if we hadn't gotten a bill!

 

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At a certain point we will see stocks reflect the worst of July. Bonds are already doing it. Bonds are saying we have seen the peak in earnings and then some.

 

Until then, we are going down. But at this pace it won't be long before we have factored in the past but not the possibility of a less grim future. It is possible that confidence can be bolstered by the notion that the government isn't going to be shut down.

 

So wait. 

 

If you are following our moves in ActionALertsPlus -- where we have our biggest cash position in recent memory -- or my comments on RealMoney.com, you should have done your buying already. No need to commit new capital here. No statement buys.

 

You should also be thinking higher yield, as we have a bunch of stocks that are on the verge of some really nice yields that also have good upside like Verizon (VZ), Conoco-Phillips (COP) -- which is breaking up -- Bristol Myers (BMY) or ATT (T).

 

Meanwhile, keep an eye on PPG (PPG) or Eaton (EV) or Dupont (DD), all of which reported terrific quarters and could soon be in the dividend-protection zone.

 

I urged people to buy an additional tranche of trading gold going into these talks. That should be taken off the table now and booked as a capital gain. But no core position in gold should be sold here. Just have to own it. It's the only thing that's working. And it isn't quitting. I just don't want the trading portion to turn into a loss, even if, when it does, I would start buying gold again. That's a round trip for gold, and I don't want it to happen.

 

At the time of publication, Cramer was long T.

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites.

 

Follow Cramer's trades for his Charitable Trust.

 

14Comments
Aug 3, 2011 4:02PM
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We  need to take care of business in this country first , like drilling for our own oil  , producing our own goods and let the rest of the world take care of their problems without sticking our noses into everybody's business, we need to guit playing big brother and handing out money to the rest of the world. Doesn't charity start at home ? I bet China is over there laughing their a..  of at us ,like  the oil producing countries, saying dumb Americans have more oil under their country than we do and they just sit on it  , this is what some of the commentators on the radio use to refer to as the dumbing down of America , they got to the younger generations starting in the late 70's through the education system in our public schools with this Political Correctness bs.  
Aug 3, 2011 3:31PM
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Only JULY was AWFUL?? How about the past 3 years??? And for me personally, the past 16 months since being laid off???????

--------

If you've been unemployed for 16 months, why are you posting on MSN money rather that hitting the pavement looking for work?  Let me guess, you'd rather cash your unemployment check and bitch impotently about your lot in life?

Aug 3, 2011 2:32PM
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shut up, cramer.

just... shut up and switch jobs, will ya.

 

i hear u but im not listeningggg!

Aug 3, 2011 2:11PM
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July was aweful?  What about the first 2 days of August?
Aug 3, 2011 1:34PM
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well when the idea that the government should do nothing but collect taxes and do nothing with that money wins, you loose the biggest spender in the economy. Government spending = spending into the economy by putting money back into American hands thus propping it up the economy. Look at medicaid and medicare you just cut it now hospitals are suffering because of it. Doctors and nurses loose and with decreased healthcare we all loose when the uninsured masses start dropping dead for lack of care.
The spending bill just dealt the economy it's death blow but that's what the republicans wanted so they can get back in power and back to robbing the poor to feed the rich.
If we should be mad at anybody it's the rich. they got 12 years of Tax cut/subsidies to create jobs but they bought private jets and invested the money for them self instead.

Aug 3, 2011 1:32PM
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Leave the gloom and doom to Bernanke.
Aug 3, 2011 1:30PM
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While I'm glad Cramer isn't spewing gloom and doom every time the market turns or someone in DC does something stupid (read: everyday) he has become a nonsensical caricature on the stock report. I agree with Herbert when he says, "In the span of 24 hours Cramer goes from "With crisis averted, it's time to buy" to "Let's face it: July was awful".

 

Cramer is in it for HIS money, not yours or mine.

Aug 3, 2011 1:08PM
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Cramer is starting to sound like a bear. Cramer is scaring me now.
Aug 3, 2011 12:35PM
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In the span of 24 hours Cramer goes from "With crisis averted, it's time to buy" to "Let's face it: July was awful".
Aug 3, 2011 11:51AM
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Aw heck,  what we need is more anaylist publishing their one sided, personal opinions for public consumption.  What we really need is a law that requires analyist AND their parent company's to "back up" the articles they publish,  or be subject to severe fines and penalties.  It is sad that a large portion of the public listens to such crap and believes some of it.  If you read 10 analyist opinions, you have 10 different opinions and advice.

 

What is much more important, what is Tiger never wins another tourament.  If so he might loose his 25 million dollar mashion in Florida and his jet.   And them where would his 19 sweeties live?   Of course Sam Snead won about 140 touraments world wide, about twice as many as Tiger or Nicholas.  Of course the one sided sports commentators do not ever talk about that,  sad, very sad indeed. 

 

Lastly, why don't Tiger start going by his "real name" (Eldrick),  the name that his Daddy gave him?????   He does not look like a Tiger,  he looks more like a Pussy Cat.

Aug 3, 2011 10:42AM
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Jim:

 

The Tea Party has mandated fiscal austerity, though not enough yet to "liquidate labor, liquidate capital" as so many fans of Austrian, or root c****conomics desire, rather than to deal with the worst concentration of wealth since 1929. That means the Fed is on its own to deal with unemployment and/or keep us from falling into recession, or worse. At best, that suggests stagflation, the worst of all worlds for stock and bond investors but good for gold and other intangibles. At worst, it's 1929 again. Small wonder the Pimco All Authority fund is short the market and long junk bonds. All investors might wonder why.  

 

Gary Moore    

Aug 3, 2011 10:21AM
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Only JULY was AWFUL?? How about the past 3 years??? And for me personally, the past 16 months since being laid off??????? Get a grip. I guess you are finally waking from the sweet blissful oblivion called luck of the draw of having not been personally affected by this Economic Mess............YET, that is.
Aug 3, 2011 10:21AM
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The US economy is already well into another great depression with 30 percent unemployed Americans. 158,000,000 people working in 2006 now we only have 100,000,000 people working. 

Of course some 15,000,000 workers have taken retirement which means an additional $200 billion burden on S.S. and medicare and as S.S. payments of $1,000 a month are not enough to live on most that had 401k pension plans are raiding them for money to live on. Plus the other 43,000,000 workers most of them are getting food stamps and some other form of welfare which costs the government about $250 billion a year extra. And of course you have the bankrupt states either stealing money from their pension plans to pay bills or not adding money to their pension plans in order to pay bills. So a lot of people have quit putting money into the market and are taking money out at a rate faster than people are putting money into the market.

Now you have China announcing that they are going to get rid of most of their dollar dominated assets which includes $1.2 trillion US T-bills in the next few years and buy useful things like gold and oil with the money. Pretty much for the next ten years the stock market is going down down down.

Everyone should be selling now.

The word is the insider traders are dumping all their stocks. 
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