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Cramer: This Rally Is About Bush Leaving

By    |   Tuesday, 09 Dec 2008 10:41 AM

Why the rally? It isn’t really about the actual stocks, says CNBC stock guru Jim Cramer.

It’s about the end of the Bush administration.

“The whole source of this rally is President Bush, meaning that each day we come closer to getting rid of him is a day where the market is better,” Cramer writes on BloggingStocks.

Stocks are being supported by something, Cramer says, and there’s precious little real news that’s not either horrible on the face of it or not relevant to investors.

“Consider that in the last few days we had downgrades, shortfalls, job cuts, and negative news on several major Dow Jones Industrial Average stocks and that hasn't stopped the Dow,” Cramer says.

Over the past few weeks, President-elect Barack Obama has named key economic cabinet posts and promises to spend hundreds of billions if necessary on infrastructure projects to get Americans working again.

And while it will be more than a month before Obama takes office, Bush has already given several farewell addresses and post-mortem interviews, all signs that he has all but given up the White House to its incoming occupant.

Lacking more information, Cramer deduces that the market is now pricing in a Bush exit, bolstering stocks ahead of Obama’s arrival.

“I am just saying the uniformity with which everyone greeted ‘the end of the move’ after the FedEx news (shocker, really?) and Texas Instruments (have they ever delivered?) seems a little fatuous given that we have been going up for days for no reason other than Citigroup's not going under and Obama's not Bush,” Cramer says.

This is not to say stocks are winning the long-term fight just yet. For instance, investors seeking safety have driven rates on short-term bills to record lows, again.

The Treasury Department auctioned $27 billion worth of three-month Treasury bills Monday, fetching a discount rate of 0.005 percent, and another $27 billion in six-month bills was auctioned at a discount rate of 0.300 percent, both all-time lows.

Meanwhile, renowned stock market bear David Tice, strategist of Prudent Bear Fund, says stocks could plunge another 50 percent from current levels. That would put the Dow Jones Industrial Average at a measly 4,450 points.

"We got into this problem from too much credit, and we are creating even more credit now," Tice told Bloomberg. "We are trying to fight between inflation and deflation. Unfortunately, both of those will end badly."

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Why the rally? It isn’t really about the actual stocks, says CNBC stock guru Jim Cramer.It’s about the end of the Bush administration.“The whole source of this rally is President Bush, meaning that each day we come closer to getting rid of him is a day where the market is...
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Tuesday, 09 Dec 2008 10:41 AM
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