Mad Money w/ Jim Cramer 9/10/26

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Jim Cramer (0:58)

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now.

Hey, I'm Cramer.

Jim Cramer (1:15)

Welcome to Mad Money. Welcome to Cramerica.

How's it going, friends? I'm trying to make you some money. My job is not just to entertain you, but to educate you. So call me at 1-800-743-CBC, or tweet me at Jim Cramer. Many years ago, at a meeting in the training program at Goldman Sachs, we were being quizzed about our knowledge of the markets. The instructor Dave, tough as nails Dave, pointed me and said, Jim, what's the principle determinant of the price of the stock of Delta Airlines? Wheelhouse, right in my wheelhouse, like a big fat pitch, a curve that hangs, and I could visualize the ball rising to the upper deck as I talk. Dave, I told him, Delta, which traded at $34, the PE of 7, is hostage to the price of oil and unhinged variable cost, and Prasm, or passenger revenue per seat mile, as well as Chasm, cost per available seat mile. With Delta, well, both are above industry standards, but it's low PE so I could see it rising over time. Boy, I smiled the whole time, rattled off all that information. I mean, who knows more than me? Oozing with youthful self-confidence. No, Dave said, it's hostage to the long bod, the 30-year treasury. Now leave this room, go outside for the rest of the meeting, might help you learn something, including some humility.

So beat red face, tail between my legs, I walked out of the meeting of 24 young people, my peers, and stood around waiting in the hall for this conclusion. I never forgot the seared embarrassment I really hated Dave for a really long time, but I learned a valuable lesson, the long bod, the 30-year treasury is in charge of everything.

So today where we had more downward pressure because of interest rates, especially the long bod, you saw the damage the bond market can do with the Dow sinking 317 points, as it'd be losing 0.58% and the NASDAQ falling 0.65%. The long bod, responding to higher oil prices, of course. Why was Dave so sure that the long-buying control dealt a share price and not the fundamentals of the actual business?

Jim Cramer (3:23)

Because that's how the stock market works.

Jim Cramer (3:25)

Look at what happened today. The long bod went right through 5.3% relentless run unlike any I can remember, just tracking oil all the way up. The 30-year is inextricable and it's taking things with like a landslide. First and most obvious are mortgage rates. Today, they breached 7%.

Oh man, new existing home sales were awful. Rates were kept so long in this country that, frankly, you're almost going to have to double your mortgage rate if you buy a new place. So why ever sell your old place? That's putting a lot of houses out of reach. New home buyers might not be able to afford that 7% rate. It defeats the American dream.

Housing is 10% of the economy, but it punches well above its weight.

Think about how many things go into a house. Think about the materials, the wages, the brokers, the lawyers, the plumbers, the electricians, the landscaping, just as shootin works. Other retailers from RH to Best Buy to Home Depot and Lowe's. Stanley, Stanley Buck and Decker.

Then there's the investor. Stocks are terrific, they can make you fortunate, especially younger people who can afford to take chances. But you know what beats stocks for anyone who's 50 or older? The 30-year treasury, the king, that's what! Short inflation could go higher and you might get squeezed, but historically it's not so bad to get a 5.3% risk-free return. Believe me, when you get older, you can still own some NVIDIA and some Apple. You might like a little Chevron or a Proctor too. But that 30-year is the ultimate sleep at night piece of paper. Not that I know from personal experience, but lots of people tell me it's good to sleep at night. The yield on the 30-year can destroy housing, but it's an even more powerful competitor when it comes to stocks, lower yielding stocks in a sloppy environment like this one. Then there's the problem of too much supply. Government needs to pay for all this debt. We're lucky Uncle Sam can issue bonds to pay for it, and people still buy them because they're back by the full faith and credit of the US government, but the level of issuance is insane. They're currently about $4.5 trillion in long bonds. Right now, our Treasury structure wants to try to keep that interest rate down to reverse all the fallout. He says he's got the inside scoop or something. He's buying them in order to push the price up and the yield down. The problem is Treasury's doing a $6 billion buyback when there are roughly $4.5 trillion B versus T worth of long bonds out there. Now that's too much, and he has too little firepower. The whole thing is a little silly, isn't it? Although less silly than giving every adult $5,000 that the Republicans can keep control of Congress after the midterms, that would be another trillion dollars. Mr. Treasury Secretary, save the powder.