Jim Cramer Mad Money Review

[SeriousMoney]

Why U.S.A.'s Not A-OK by Investors Abroad
By James J. Cramer
RealMoney.com Columnist
12/28/2005 8:27 AM EST

At what point do worldwide bargain hunters embrace our markets? It sure hasn't happened yet. When you contrast our averages with their French, German, South Korean, Japanese, Brazilian and Mexican counterparts, you begin to believe that we have become international pariahs. Is Germany really that much better to invest in than we are? Are those other countries pinnacles of stability? I know they have burgeoning middle classes and credit is breaking out everywhere, but what the heck, why are we such a horrid place to invest?

When I see these comparisons, I like to think inside and outside the box. Inside the box, it's the Federal Reserve's 13 rate hikes and the prospect for more. The playbook says that at this point a recession must occur, and the international folks all play by the same playbook. They know only that four out of the four times we've inverted, we went into a recession. I believe these international investors are taking a page out of Dirty Harry's playbook: Ask yourself, do you feel lucky? No one does.

Also, I have been loathe to say this because I love my non-political perch, but I believe that this administration and its Treasury Department are viewed as being somewhere between Peru's and Poland's in terms of political and financial stability, and I mean no disrespect to the strides that either of those two great capitalist nations have taken in their breaks from socialism.

We are perceived as being completely inept in handling everything from health care to pensions. We have a president who spent all of his political financial capital on Social Security, which failed. And we have a Treasury Secretary who is a very nice man in a Franklin Pierce -- pre-death of son -- way.

I write all of this because it pains me to see our chemical and our drug and our industrial companies trading at such low multiples vs. those of other free-world economies; plus, I have to admit there is an incredible sense that if it is a U.S. drug company it can't go up, but if it is a European drug company, it will go higher. The multiples on these Swiss banks are better than our investment banks, and worst of all, these places have no oil at all, where we are just viewed as profligate wasters of oil with no discipline.

I believe these intangibles matter. They matter as we sit here, down for the year, in a world where countries with far fewer resources and far more left-wing governments see their stocks going much higher.

I don't have the answers; at least I am willing to ask the questions, something that, with this administration, isn't done easily and is done with an eye toward kyboshing any possibility of ever interviewing an administrative official again -- which, by the way, is A-OK by me, 'cause they don't know much anyway!

Where's Bob Rubin when you need him? At least he thought about this stuff. So did Larry Summers.

Does John Snow think? At least Alcoa (AA:NYSE) went down after that other guy, the guy who played for the Yankees, left Treasury. Have you seen a chart of CSX (CSX:NYSE) since Snow left? There's a picture that tells a story.

Hmm, looks like a chart of one of those dang European bourses.

http://www.thestreet.com/p/_htmlrmm/rmoney/marketcommentary/10259217.html