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  • dexter_new_york dexter_new_york Jul 24, 2008 12:53 PM Flag

    Cramer: Housing Bill to Move Builders, Banks

     

    Cramer: Housing Bill to Move Builders, Banks07/23/08 - 04:08 PM EDT
    BAC JPM KBH RYL TOL USB WB WFC WM
    Jim Cramer
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    The housing bill is a huge deal. I don't think people realize how big. Besides saving Fannie(FNM - Cramer's Take - Stockpickr) and Freddie(FRE - Cramer's Take - Stockpickr) through the big losses -- perhaps to the Promised Land where there will be stronger fees overwhelming charge-offs sometime in 2010? -- it will help eliminate the overhang of foreclosed homes.
    That's bullish for my two faves in a hated industry: KB Home(KBH - Cramer's Take - Stockpickr) and Toll Brothers(TOL - Cramer's Take - Stockpickr), the two best houses in a real crummy neighborhood. (I like Ryland(RYL - Cramer's Take - Stockpickr) too on this bill.)

    But more important, the question, the bigger question, is, how much is in the bank stocks for this bill? We all know there has to be a price, a time, where these stocks are overinflated. We obviously aren't there yet, in part because even the worst of the banks, Washington Mutual(WM - Cramer's Take - Stockpickr), is passing muster today.

    The move in the four fortresses, Bank of America(BAC - Cramer's Take - Stockpickr), JPMorgan Chase(JPM - Cramer's Take - Stockpickr), U.S. Bancorp(USB - Cramer's Take - Stockpickr) and Wells Fargo(WFC - Cramer's Take - Stockpickr), seems so overdone that I have to expect profit-taking -- maybe we will get it on any strength in oil -- but the money keeps flowing in to it.

    Some of this move is the short-sell rules, some of it is the better-than-expected net interest margins coupled with the overwhelming charge-offs that in some

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