Economia portuguesa quase estagnada desde final do ano passado

[Ulisses Pereira]

"Our Biggest Banks Are Falling Apart"

By Jim Cramer
RealMoney Columnist
11/19/2008 12:30 PM EST

"They killed the banking industry, didn't they. Just like the 1930s. That's not so far-fetched. Citigroup (C - commentary - Cramer's Take) is well under $8 and is still taking crummy assets onto its balance sheet. Some $17.4 billion in heaven-knows-what is in those structured investment vehicles, stuff so toxic that even the morons at AIG (AIG - commentary - Cramer's Take) didn't own it or insure it, which is a benchmark.




Bank of America (BAC - commentary - Cramer's Take)? Ken Lewis now appears to be a total gunslinger making a bet on China. Would it not have been better to try to shop the bad mortgages to Washington under what TARP was supposed to be used for and take the hit against that capital?

JPMorgan Chase (JPM - commentary - Cramer's Take)? My hope? It's a rumor that Jamie Dimon is going to Treasury. Otherwise, holy cow.

It would seem that the banks have taken several legs down recently, and the reasons are fourfold:


1. Democrats might be inclined to demand that all common stock dividends be scrapped and all bonuses suspended at the banks that need aid, causing an exodus of both investors and talent.

2. The commercial real estate market has turned south with a vengeance. People ask me how I know that; I just look at REITS. And what is commercial real estate? Warehouses? Look at Prologis (PLD - commentary - Cramer's Take). Stores? Look at General Growth Properties (GGP - commentary - Cramer's Take). Office buildings? Look at Vornado (VNO - commentary - Cramer's Take), and that's the best one. The REITs are falling apart, and the banks and bank-like companies, including General Electric (GE - commentary - Cramer's Take), have a ton of it.

3. Total and utter collapse of private-equity paper, as demonstrated by that KKR Financial (KFN - commentary - Cramer's Take) piece of paper in Europe.

4. The new and frightening downturn in AAA-rated mortgage paper with FICO scores north of 700. A 2007 AAA piece of Alt-A paper with credit enhancement trading at 26, which translates to a 56% yield if you write off 80% of the pool based on a 60 default rate. That's exactly, by the way, what TARP was meant to buy before it got corrupted by the dissemblers at Treasury.
Against this will no doubt be a half-hearted rally at some point led by Exxon Mobil (XOM - commentary - Cramer's Take), followed by Chevron (CVX - commentary - Cramer's Take) and perhaps including McDonald's (MCD - commentary - Cramer's Take) and Apple (AAPL - commentary - Cramer's Take), with a dose of Research In Motion (RIMM - commentary - Cramer's Take).

The bulls and the technicians-turned-bulls refuse to recognize the destruction of our proudest financial institutions. They must think that The Rock is Dwayne Johnson, not Prudential (PRU - commentary - Cramer's Take), and that MetLife (MET - commentary - Cramer's Take) is Peanuts. This stuff is killing us, and nobody calling for a bottom is even acknowledging it.

We may very well need some new sheiks to save Citigroup when it goes to $5 again. I was there in 1990. Were you?

At the time of publication, Cramer was long Chevron and General Electric. "

(in www.realmoney.com)

Disclosure: Os meus clientes possuem posições longas sobre a CVX e uma posição curta sobre a XOM.