Jim Cramer vs. Doug Kass
NEW YORK (Real Money) -- We've got a real battle going here: Doug Kass doesn't see this plethora of deals to be nearly as important to the market as I do. Rather than characterizing his words, I will link to it here.
But I have to tell you that I feel deeply committed to my views and want to go point-to-point and toe-to-toe.
First, the OfficeMax(OMX) /Office Depot(ODP) merger is an important tell. Some claim that these are nothing but two drunken sailors propping each other up. I say it is a recognition by these two companies that if you can't beat each other, join each other. Both stocks got ridiculously cheap. Together they will be a strong entity. There's no longer a level of confidence on the part of OfficeMax that Office Depot won't go away (as opposed to Circuit City or Linens & Things) so, why not create a powerhouse?
Either way, the animal spirits that come with this -- or with Staples(SPLS) pondering a private equity deal or with Best Buy(BBY) getting a bunch of equities -- are extremely bullish. Companies feel that things are going to get better or they wouldn't ponder private equity deals or the possible bankruptcy of competitors. And Best Buy did have a good quarter. It is entirely possible that the next one is even better or you wouldn't be getting multiple upgrades.
My inclusion of Dell's(DELL) potential buyout as positive and the analogy I draw to John Malone's purchase of Virgin Media is that you have beliefs by smart people that the worst is behind them. Virgin Media's business is challenged by Europe's woes. Malone must believe they are near the end. Michael Dell believes that his businesses -- and they are businesses, not just PCs -- aren't getting enough credit. Dell also knows that the customer base has been hurting but that it is not in secular decline. In fact, lots of these customers are government sponsored and Dell must know that the governments can only hold back spending for so long.