hbunny_IHB
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Cramer is also arguing that the "market tells" for mortgage-land, i.e., Countrywide's stock, bespeak a mortgage market that is going to be just fine:
By Jim Cramer
RealMoney.com Columnist
1/30/2007 7:35 AM EST
If everything is so horrible in mortgage land and credit card land, does someone want to tell me why anyone would want Countrywide (CFC - Cramer's Take - Stockpickr - Rating) or MasterCard (MA - Cramer's Take - Stockpickr)? But Countrywide is the subject of buyout chatter by Bank of America (BAC - Cramer's Take - Stockpickr- Rating), which doesn't need to double-down on mortgages. Yet that's just what B of A would be doing if it does the deal. We're supposed to be so fearful of credit cards, yet there's been one of the most furious big rises that I have ever seen in MasterCard. Countrywide's got models that tell me if you know how to lend to the subprime market, you are not in trouble In fact, you are in clover. MasterCard's price action says that the consumer is spending and not stretched. When I see these moves I keep thinking, "Don't freak out on these two issues because the ultimate tells of the groups are ramping." That's just a great defense when the bears go nuts with these issues.
There's just too much pent-up demand evident in the most desirable places in the country. The temporary glut of houses is getting worked off, the prices are correcting, and the demand and competition for a place in these desirable areas will continue. Interest rates are looking to stay low, indeed fed lowering is looking pretty likely.
By Jim Cramer
RealMoney.com Columnist
1/30/2007 7:35 AM EST
If everything is so horrible in mortgage land and credit card land, does someone want to tell me why anyone would want Countrywide (CFC - Cramer's Take - Stockpickr - Rating) or MasterCard (MA - Cramer's Take - Stockpickr)? But Countrywide is the subject of buyout chatter by Bank of America (BAC - Cramer's Take - Stockpickr- Rating), which doesn't need to double-down on mortgages. Yet that's just what B of A would be doing if it does the deal. We're supposed to be so fearful of credit cards, yet there's been one of the most furious big rises that I have ever seen in MasterCard. Countrywide's got models that tell me if you know how to lend to the subprime market, you are not in trouble In fact, you are in clover. MasterCard's price action says that the consumer is spending and not stretched. When I see these moves I keep thinking, "Don't freak out on these two issues because the ultimate tells of the groups are ramping." That's just a great defense when the bears go nuts with these issues.
There's just too much pent-up demand evident in the most desirable places in the country. The temporary glut of houses is getting worked off, the prices are correcting, and the demand and competition for a place in these desirable areas will continue. Interest rates are looking to stay low, indeed fed lowering is looking pretty likely.
