Cramer's 'Mad Money' Recap: Don't Panic
NEW YORK ( TheStreet) -- The crisis in Cyprus is just another in a long line of European panics that likely won't amount to anything, Jim Cramer reassured his "Mad Money" TV show viewers Monday. He said the bears may once again be predicting the end of the world as we know it, but nothing could be further from the truth.
Cramer said the banking system in Cyprus is simply comical -- the regulators, or lack thereof, allowed their banks to get into such a mess in the first place. This comedy of errors is only outdone by the regulators' clueless actions in trying to remedy the situation.
But as bad as things are in the troubled island nation, there were no big runs on the banks, as many bears were calling for over the weekend. Nor were there major market selloffs. Cramer said those who insist "it could happen here" clearly have no idea how well regulated the U.S. banking system is post-2008.
"There was no panic on the floor of the
Rates Charting Higher
The charts are speaking to Cramer, and he said they're screaming that higher interest rates are coming in 2013 thanks to a stronger economy.
Cramer explained that as he studied the charts of hundreds of stocks over the weekend, he kept seeing the same pattern over and over again -- parabolic moves to the upside. That's why he hasn't been recommending buying many stocks over the past few days. Parabolic moves leave little room for error, and investors who buy into these moves are often hurt and hurt badly.
But upon further review, Cramer said he noticed the highest concentration of parabolic charts were in the banking and insurance sectors, meaning that investors are betting big that these companies will be making a lot more money in 2013 as interest rates rise and the spread between what banks charge for loans and give to depositors widens.
The opposite move can be seen in the consumer staple stocks like Clorox (CLX) , Procter & Gamble (PG) and Pepsico (PEP) , said Cramer, as investors are pulling their money out of these defensive names and placing bets on more economically sensitive names.
The economy is clearly doing better and investors know it, Cramer concluded. That means it will only be a matter a time before the Federal Reserve knows it, too, and does something about it.