Jim Cramer Makes A Case Against Double-Dip Recession
In his "Mad Money" show on CNBC, Jim Cramer said that there is a severe disconnect between economists, who are predicting double-dip recession, and companies at street level. This is the reason why, despite all the doom and gloom predictions, the Dow has soared 147 points and the S&P 500 has risen 1.5%.
Cramer mentioned that if these “eggheads” had seen the fundamentals of individual companies, instead of focusing on Washington and banks, there predictions would have been much different.
Cramer gave the example of CSX Corp (NYSE: CSX), the railroad company that is a good barometer of the economy’s health. While reporting its results yesterday, CSX had said, “Economic recovery expected to continue driving growth.” The results depicted that the company saw double-digit growth in every segment of its business, except in coal.
Cramer took Novellus (NASDAQ: NVLS) as another example and said that the company silenced its critics, who were predicting a fall in prices for the company’s dynamic random access memory (NASDAQ: DRAM) and flash memory. Thanking continued demand, NVLS management said, “I’m not sure we’ll see those decreases.”
In another example, Cramer noted that aluminum company Alcoa (NYSE: AA) had said, “It seems that some airlines, or the airlines sector in general, is turning the corner.” AA also indicated that orders are “up significantly.” Cramer stressed on AA’s statement, “Growth is pretty much in all regions driven very strongly by increased global activities,” and said that all these bullish statements refute what these pundits claim.
Cramer emphasized that “the companies are telling us the truth” and he agrees with these companies.
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