Back to the future?
The often wrong but also entertaining Jim Cramer thinks we’ve gone back to November of last year, when things were especially gloomy in the aftermath of Lehman:
Is anything out there better than it was four months ago, when the market let too-big-to-fail Lehman fail?
Some would say retail is better, because the aggregate numbers indicated things were better. I disagree. Anything with any sort of higher price point was a disaster in January, and there’s a food war going on among Kroger, Safeway and Wal-Mart that’s disastrous for margins. The Goldman Sachs piece yesterday talked about how Kohl’s and all of the other major retailers have stretched valuations, and that’s a huge negative. The better ones are the ones that fired people. JC Penney came out and said there are 100,000 people too many, hardly encouraging.
Autos are a disaster. Next week we could see a bankruptcy for GM if the bondholders want to do it. Ford is similarly a disaster. Chrysler is, too, although no one seems to care anymore.
Housing is so horrible that even though there are fewer homes being built, the devastating lack of a housing credit of any proportions will keep that industry on the skids. The Toll call was truly sobering, with no bottom in most of their markets.
Aerospace seems to have dropped off a cliff. Even though the airlines have more money courtesy of cheaper fuel, they aren’t ordering. That’s truly bad news for Boeing and everything that goes in it. Defense is tailing off and will get worse courtesy of Obama.
I suspect from the way the stocks and the bonds of the casino companies are acting that Las Vegas Sands and MGM could be finished in their current form. Who the heck knows what’s going on with the LBOs in that industry. That sector is nasty, as is the hotel space, as we see from Marriott
Maybe Cramer’s initial view of Geithner was correct after all.