Jim Cramer: The pandemic led to 'one of the greatest wealth transfers in history'

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my job is just entertain but to educate

teach you put in context so call me one

eight hundred seven four three CBC or

tweet me at ship raver are we really

returning to normalcy here despite the

twenty one point five million people

collecting unemployment benefits is this

the fabled v-shaped recovery that so

many people were hoping for well that's

what the markets saying

Eva's the average didn't do much say

tallying up 12 points declining that's

me climb points before said now is that

losing 0.69% see that's the problem I

think we're looking at a v-shaped

recovery but it's a v-shaped recovery in

the stock market and that has almost

nothing to do with the v-shape recovery

in the economy prosper live when you

look at the nasdaq-100 the tech-heavy

index to briefly hit an all-time high

today it sure doesn't seem indicative of

the porter jobs picture and most of the

moves that responsible for whatever

gains we have more from airlines and

hotels and casinos all which i put in

the so called less bad category less bed

than we thought a trend that can last a

few more days before it does peter out

and people do a lot of fast gaming of it

but it does peter out it's kind of

musical chairs how can the market

rebound without the economy because the

market doesn't represent the economy it

represents the future of big business

the bigger the business the work moves

the major averages and that matters

because this is the first recession

we're big business along of course we

bigger wealth but that's not really by

show is coming through virtually

unscathed if not going for the gold

small business the ones that aren't

publicly traded they're dropping like

flies after a government mandated shut

down because they're non-essential the

people who work there are not essential

it's hard enough to run a small business

how about when the government says you

your clothes and Lalor says i don't care

that's the thing about this pandemic

it's been one of the greatest wealth

transfers in history and it's a wealth

transfer that was mandated by the state

I think they will have it'll have a

horrible effect on our country but we

barely begun to see the impact still we

just got some figures from the American

bankruptcy in student that will chill

both Republican and Democrat that's


the today's numbers so a 48 percent jump

in chapter 11 bankruptcy filings that's

that pesky real world asserting itself

but the only big bankruptcy that we've

seen in the stock market is Hertz now

I'm not trying to blame the government

for this the Treasury Department

actively shoveling money

small and mid-sized businesses they

can't find another it's still 186

billion left the Paycheck protection

program the companies that took the

money just got a big break they only

need to spend 60% on their employees to

get the loans forgiven down from the

original 75 that's important as most

more businesses fail because they can't

afford to pay the rent they can cut back

on labor they can skimp on the product

they can figure out ways to work more

efficiently but they can't lower the

darn rent and from what we can tell

there hasn't been much forbearance from

the major landlords but in the end the

stimulus package probably won't be

enough for one simple reason and it's an

odd one that's not talked about enough

it's not gonna work because of social

distancing social distancing has become

the real bane of small business and a

boon to the larger ones again well

that's not really anybody's fault

it's a producing some terrible outcomes

lately we've seen we've been seeing some

real improvements in the coronavirus

numbers however that's only happening

due to the widespread adoption of mass

and social distance guidelines the

problem though is that it's very hard to

make money at a restaurant or a retailer

if you're not allowed to if you've got

to wear a mask at a bar and such a

buzzkill and you can't have crowds

anywhere in the restaurant industry

which employs about 15 million people

social distancing means losing a ton of

tables and a lot of bar space the

ladders brutal cuz alcohols where the

real money is but for big business let

me give you a concrete example I walk

through this and I decided this is how I

am going to explain it because it keeps

eluding people it's driving me crazy

Costco last night Costco reported some

magnificent 5.4 percent safe lower sales

quota versus last year while she was

only looking for 1.6 percent

they also saw an incredible

and six percent pickup in e-commerce you

heard me 106 the stock moved up four

points in depreciation while everything

else got clobbered in Sector Costco has

except for the lowest in retailers

Costco has a simple ethos they try to

focus on a small number of producers

where they can move huge volumes that's

security some terrific bargains for the

customers they don't try to make money

on markup you get better prices when you

buy in bulk that's the power of what we

call scale now consider what they sell

all sorts of food steaks crab legs fish

all it much cheaper prices than your

local butcher or fishmonger they sell

auto parts for Stannis - Stannis and

less than what you pay at the local

mechanic the apparel prices are as low

as it gets no department store can beat

them fruits and vegetables they're

better-looking and more organic than

anything your corner green grocer can

supply often at half the price

I am a bit of a wine aficionado not

great but good enough and they were

selling camus below the price that my

liquor store pays to the vineyard before

even marking it up health and beauty

aids don't you dare compare them to

harmon owned by the hapless Bed Bath and

Beyond a place that had to be closed

didn't get don't build me xxx Costco

sporting goods so inexpensively you have

to wonder how any mom-and-pop competitor

can stay in business maybe Best Buy can

compete on electronics maybe not I know

that local jewelry tried to bring in

special inventory but not a Costco

special prices paper towels toilet paper

they had the limit how many you can take

because the prices was so great thank

heavens that's gone the only category

that casco didn't compete in this month

is hearing aids the vision was closed

there's still the cheapest place to get

this Ultimo the ultimate baby boom

product but they won't bring them back

until they can sell them safely don't

worry though

they're coming as our class goes

terrific free samples in a newer safer

form now I bring up Costco because a

month ago they instituted a policy

saying that all customers need to wear

masks covering their mouth and nose at

all times unless you're - no masks and

no shoes no service we initially heard a

bunch of stories about a potential

backlash from shoppers who boycott the

chain rather than mask them you probably

saw those a lot of people say oh that's

the end of Costco mass mass mass wrong

turns out most customers understand if

anything the mass policy has helped them

immensely because people feel safe to

shop in there that Plus Costco 16 feet

wide aisles give Costco the one-two

punch against covetous

the supermarkets or any other store for

that matter for all the chatter about

frustrated Americans who don't want to

wear masters shop reality is that most

consumers desks we want a safe place to

buy their essentials with masked men and

women manning all parts of the store

let's say okay highest quality lowest

prices incredibly wide 16 feet aisles

safest shopping experience all masked

other than Amazon which yet to put the

box out there for 24 hours but who the

heck can compete with that combination

that's right and there is the problem I

want you to go to your Costco Go aisle

by aisle and what you see is the

destruction of nearly every small to

medium sized retailer right there in

front of you now the local guys are

starting to reopen but they're in debt

they're struggling to pay the rent

they've already lost customers the big

box change we've now tasted them and

loved them and they just can't compete

with Costco on pricing or more

importantly safety they can't rival

Target order ahead and pick up

contactless of course they can't beat

Walmart with this ability to deliver

anywhere anytime to low prices at best

these mom-and-pop outfits can set up an

omni-channel face book shop power buy

Shopify which is better than nothing but

probably not enough and that's just

retail smaller restaurants even worse

you can rip out half the seats from most

of the big chain locations and they're

just gonna make up the difference with

the takeout and delivery but ordinary

restaurants they get crushed by delivery

but there's the real money's at the bar

and delivery takes a chunk of their

profits remember I co-own two places and

we could lose 2/3 of our tables if we

are lucky we aren't even allowed to the

open right now in order to meet the

rules that we don't even have yet

costing a fortune just to find what

those are our Italian food the

longshoremen maybe better than the Olive

Garden but how the heck do we make money

with only four tables instead of twelve

and by the way you can't we don't have a

bottomless salad bar and if you try to

steal our rolls good luck now what's

happened to small business all over the

country and the stock market will never

capture that kind of pain that I just

described instead they'll capture all

the game as the larger alpha states

share from tiny companies and those are

the ones of the stocks that we're

training the bottom line you might say

that's just capitalism but the logical

conclusion here is a world where we have

a handful of big retailers and a handful

of big restaurants but all publicly

traded and that's it without a second

stimulus package that's what the future

will look like I guarantee it and you

won't enjoy it even if you profit off

the rising stocks of the big box stores

that are taking over the world and worn

the corner store and whatever the heck

it once purveyed Zach in Pennsylvania

Zach hey Jim big Booya from Eagles

nation how are you

Eagles nations getting ready for a

season even from not a lot to go see it

I'm good how about you good man so I

have a two-part question I'm in my early

30s I want to know is Sherwin Williams a

long-term buy and can it stock it to a

self you know what it's so funny I

happen to like the stock the Sherman

Williams very much ever since they

bought Valspar but I like even more

let's just leave it dad I think sure

Williams this great comebacks go sell

like Lowe's and Home Depot but you know

what I'm just giving it to you I'm

giving it to Zach Sherwin Williams is a

winner just by the way not a lot of

competition in the paint business you

notice that they shouldn't a little

those companies combined hey why don't

we go to mark in Iowa mark hi Jim I'm a

new investor that bought Delphi

technologies when it was low right

they're being they're being brought out

by BorgWarner late quarter three or

quarter three or quarter 2 or quarter

three sometimes if now I need to better

better understand how that affects the

company's value when it buys out another

company like that or is there more value

in board Warner's down 20% from the next

one's to run and I know that's what I

say rotten there are people actually

running stocks these days they ran the

hotel now the rent they're running the

airlines the next thing they're gonna do

is they're gonna run the autos that's

just my prediction and board Warner's

one of the runs that they're gonna run

Magne is the best in that segment and

when I say run you know exactly what I


go read my Passat and Twitter file that

I can't barely get through disgusts me


disgusted by it I don't need Twitter any

more than the president or no president

means enough forgotten alright I think

we're looking at a v-shaped recovery in

the stock market but not the economy

this is what the one for the stock

market this is the one for the economy

because that's live long and prosper and

quite frankly you may not enjoy what's

about there happen in the real economy

oh man money tonight I'm sitting down

with House Speaker Nancy Pelosi to talk

employment reopening plans and the role

that business can play amid recent civil

unrest so be good because tomorrow we'll

be speaking the vice president Pence

then my sit-down was CEO of JM Smucker

find out the latest quarter call for

some food for thought and Shopify is up

over 100 percent over the past few

months alone

is there still time to buy this red hot

stock I've got the exclusive so stay

with Kramer


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