Plus more ceos head to trump tower. And another automaker, another emissions probe. We will fill you in on that. But it is all about the banks this morning. Wells misses, j. P. Morgan beats, b of a posts some mixed results. Jim, you just tweeted enough with the binary trade. What do you mean by that . Were in a difficult situation here because there are people whove been saying the banks have run up so you got to sell them. Thats trader talk. When i was at a hedge fund i would say ill put out bank of america at 23 buy back at 22. 88. These are unbelievable quarters, theyre unbelievable because theyve become growth stocks, cocacola, they do not have the ability to run this organic growth. These are remarkable quarters and we just started. Bank of america haechbt seen the gains yesterday. Numbers im looking at ive calculated 100 basis points in fed increase, you get 3 billion more. Just added on. Do you think that Proctor Gamble can put up that kind of number . 600 million baked in the next quarter. Wells fargo, all right, now, the American People, we love them, right . We love the American People. They had 6 deposit growth. They had deposit growth at wells, not outflows. What happens when people forget . This is like e. Coli and chipotle. Wells fargo gave you e. Coli and people have already forgotten. I got to push back a little bit because deposit growth is up, but new Retail Banking business is down double digit year on year since the scandal. So was chipotle. So youre saying you dont need new customers, just existing customers to keep going . Yes, i think because of the way were set up with the fed wells fargo is not going to have a big decline today like it would the stock like you would have expected. The sooner people put this back and sloan is a good enough executive, people realize, wells makes loans, theyre a good lender, the cross selling issue will be behind them. Theyve changed a lot im not forgiving them. What they did was terrible. I use wells. But i would tell you that the American People will forget because the American People are forgiving. And wells will unless theres look, if the republicans had lost, we would have witch hunts i mean, the witch hunts would last itd be like sa salem, as a matter of fact salems in massachusetts, isnt it . Yes, it is. But j. P. Morgan was best in show. It was a remarkable quarter. Record annual profit, almost 25 billion for the year. Geez. Did include a tax benefit of about 475, but they steal from wells, jim, the crown of r. O. E. 11 versus 9 a year ago, that passes wells. Yes, they did. They deserve that. I know some people at j. P. Morgan had felt i was partial to wells because thats the way they play it. Theyre very convivial these guys, the different banks. I mean, they hate each other. So when you Say Something good about wells, they immediately come back with a fact. But the point is that j. P. Morgan it was the best quarter ever. And all i can say is theyre going to be very many quarters ever and the key thing will jamie dimon have the luxury to be able to pay back a higher dividend, will trumps view filter through all the different agencies . I think it will. J. P. Morgan did a great job. By the way, i would feel the same. Bank of america they have way too much capital. But j. P. Morgans quarter was pristine. Line by line its amazing. By the way, also bank of america lowest credit losses in the history of bank of america. So youre looking at these things and saying, im, im going to sell them. What are you going to buy . Im going to sell these and buy estee lauder . Sell these and go buy southern corp. . Yes, the nvidia guy is not going to because he never own bank of america to begin with. But im saying bank of america if you want to sell it what do you think is going to happen . Theres going to be a bunch of rate hikes. Their numbers are going up, bigger dividend, they boosted the buyback. And youre going to say oh, yeah, i remember i sold it at 22 because cramer said that wasnt as good im not playing that game. I got ya. You mentioned dimon. He did make some statements on the economy. Said the u. S. Economy may be building momentum. Looking ahead there is opportunity, he said, for good, rational and thoughtful policy decisions to be implemented which would spur growth, create jobs for americans across the income spectrum and help communities. And were well positioned to play our part. Yeah. Thats true. Echoes the comments from the bacs that impact the trump policy trade, its more about waiting for rates to kick in, the impact to kick in in q1. I think thats right. Look, lets look at it this way. I think weve seen peak compliance costs. More people being added. There was a rush to build compliance. And they paid top dollar for people who didnt generate any revenue. If you could demonstrate that you were a compliance officer, you were going to make more than a loan officer at j. P. Morgan, thats changed. Okay, were going to slow that down. The other thing that i think is going to matter is technology. Bank of america with just remarkable adoption of technology. So the costs keep coming down. So costs come down, rates go up, the estimates go up. Estimates go up and they become growth stocks. Theyre no longer valued on book value. Theyre being valued on the possibility that they may be growth stocks. And i think they are. All right. So for those who say j. P. Morgans up 23 since the election, butte estimates are u 4. You say the estimates will now start catching up . Yeah, the estimates dont include all these rate hikes we always talk about. I think when i look at these i try to figure out, okay, what would i rather be in . And i come back and i say, okay, listen, the guy whos in j. P. Morgan, is he choosing between facebook and j. P. Morgan . I mean, no. J. P. Morgan is a totally defensible buy because it doesnt sell at a high multipletoearnings. Now, heres whats remarkable, carl, i havent used a multipletoearnings for a bank in eight years. Ive never cared. Ive never cared. But whats say this sucker can make seven bucks, okay . Lets say it makes seven bucks and i give it a 15 multiple because suddenly we can actually put a multiple on it . Right. Then its not going to stop here. Again, i think there will be people who say, god, dont listen to cramer, hes on some sort of sugar high. Theres this big sugar theme. Yes. I say, hey, send me some sugar, lend it to my neighbor here. The issue that i have is that the bank stocks if you give them pricetoearnings multiple, theyre the cheapest of any group in the stock market. And i would sell Proctor Gamble and buy j. P. Morgan right now. Well, a big part i think 40 of the growth expected in s p earnings this year is going to be energy and banks. Well, the Energy Stocks, i mean, theres no aint no stoppin those now. Those companies at a 53 basis, i mean, i saw wpx, i know people dont know wpx, a fabulous guy, used to be continental resources, he did a 700 billion deal buying permian, doing 600 million to pay for it in stock, theres more demand for it than ever. Bank of america, i gave them such heat last year for their oil exposure, four of their loans went bad. I now feel like, im sorry, i apologize on air. But this is the kind of thing thats happening is those criticized loans went away. The bank loan i almost think they should make more loans because they have so few. If we want to have this country grow, mr. Trump, listen to me. Thats like mr. Gosh tear down that wall. If you have a home with j. P. Morgan and you want a second home and you have the amount of money to do it, j. P. Morgan has to stop turning you down. They have to stop sending you to a story. Yes. You mentioned trump. We have a week to go until the inauguration and now this influential Chinese State run tabloid says the u. S. Would be required to wage war to block off islands in the South China Sea, thats in response to what secretary of state designate Rex Tillerson at the confirmation hearing yesterday. Without elaborating, tillerson commented he wanted to send a signal to china that access to the islands is not going to be allowed. This was an oped in a newspaper run by the communist party, jim. But they said that any approaches like this in their words would be foolish. How much attention do we pay to that . Well, i think okay, so maybe some American Companies get hurt. Maybe they do something to retaliate against American Companies, but this is a different regime. I want to hear general mattis, i thought it was interesting by the way, russia is the biggest enemy, not china. But i think the chinese better get used to this. Its kind of like a brand new ball game where we dont think, you know what, they keep talking like that were going to sell less prel. Those days are over. Fascinating testimony yesterday by mattis. Whoa. Backing up nato. Right . Yeah. I mean, remember he was supposed to be played by Harrison Ford in a movie. Im not kidding. You can google it. Harrison ford supposed to play battle for fallujah. Lets take a listen in case you missed some of what the general said yesterday on the hill. Do you believe that that world order is now under more strain than its ever been . I think its under the biggest attack since world war ii, sir, and thats from russia, from terrorist groups and with what china is doing in the South China Sea. I think deterrence is critical right now, sir, absolutely. And that requires the strongest military. Do you think we have the Strong Enough military today in order to achieve that goal . No, sir. All right. I guess well see if geopolitics rattles the market in any way. Hasnt so far, didnt in 16. No. Mattis is in the military known as someone who felt that the government itself didnt backup the military. So thats a very important point because he often felt that our people were our soldiers were put in harms way without any thought. And that if you do that again, mattis will be gone. He will not stand for it. Really quickly changing gears, getting something on the record, the latest automaker swept into an emissions scandal. French prosecutors have opened a probe into wlo the automaker cheated on tests similar to volkswagen and fiat. What is going on with the emissions scandals around the world, jim . Beyond me. I mean, these are things that younger people look at and dont want to buy the company. Although volkswagen did have good numbers. Yes. Again is shocking. Yes. And china buys half of their cars now. Thats a good point. Gm sells a lot of cars there too. When i read these things i just think are eyes going to glaze over . I dont know. Because theres now so many of them. But there is kind of a its stunning. I mean, you know, these are big purchases that people made. And this is fraud. And i dont get it. Yeah. I think were all kind of stunned. I saw fiat actually go down yesterday. In a day when the rest of the motor stocks went up. So maybe someones relating them. But right now were in some sort of mode where you can say a lot of things about Different Companies and the stocks seem to reflect the animal spirits. Yes. When we come back this morning, well take a closer look at the ceo parade at trump tower. Only a week to go before the inauguration. Take another look at the premarket. Seeing some Dollar Strength after retail sales and ppi came in okay. China exports well get to, some comments on oil production. And it is friday the 13th, s p up 57 of the time, better than average on the 13th on a friday. More squawk on the street in a minute. All week long power players in business have been meeting with the president elect at trump tower. Most recently henry kravis, alphabets schmidt, randall stephenson. We had a good chat with david yesterday here, jim, about what you do when the president elect is targeting a unit of a company you want to buy. Well, were kind of not used to it. Look, i remember studying when the president said we got to take over the rails, truman, i remember when kennedy criticized the top four executives of bethlehem steel for making too much money. So its not completely out of bounds. But, you know, were in a new world of granularity when it comes to the president elect and companies. And i think we got to get used to that. He knows who makes the jets. He knows who makes hes very hands on. I mean, when you look at that cabinet, i think that cabinet is intimately familiar with the actual way that we do Large Business in this country. Better get used to it. Hes got the names. Im not just talking about paul. This morning tweeting about three hours ago totally made up facts by sleaze bag political operatives, fake news in regards to the memos that we saw heard of this week. Hillary clinton guilty as hell, should never have been allowed to run. A loss because she campaigned in the wrong states. Does that need to go away in order for the market to stop worrying . Is the market even worrying . I think the market is just separated it entirely. I think the market looks at people whove been picked, look at tillerson and say, geez, tillerson turns out to be more substantive than we thought. I think the market looks at gary cohn and says hes in there saying thats okay, you can say that, no problem. Lets remember lower Corporate Tax, repatriation. The personal nature of the president elect reminds me very much of when truman criticized the Washington Post columnist who didnt like the way his daughter sang saying he was going to punch the guy. So we do have that. That was in a letter, that was not in a tweet. So, i mean, there is a truman like nature of this president elect if you go back and read truman. He was very personal about these things. But hes taken it to a little further. Gallup numbers out today below what bush had 61 going in, bill clinton 68 going in. Do you think that matters when it comes to getting that policy done . We did have larry fink on this morning who said if the rollout of policy is slower, then in fact the markets are ahead of themselves. Well, i think tillerson is going to be tillerson doesnt get approved, then we know that thats a proxy for i think tillersons the proxy. Not mattis. Mattis if he isnt approved, there isnt an administration in the world that wouldnt be proud to have that man serve. But i think tillerson is the kind of test case. Many of us i think many people who listened to tillerson felt, geez, he equipped himself very well. If tillerson is rejected, i think a lot of what happens is going to be more dependent upon earnings. Today was a good day for earnings, but there would be a lot of days where the dollars so strong you have a bad day. Funny you mention that. Nomura today argues the donald trump honeymoon is over and were heading into a period of dollar weakness. That was what some tried to allege yesterday. Really . That somehow this was the beginning of the end for this big surge. I just dont see it that way. I just see that theres some sort of sense that washington may not be im old enough to remember reagan where he talked about lets get the government off the backs of its people and there were a lot of people who didnt vote for reagan but came around to the idea that when the dow started going up that maybe theres something new happening here. And i think that theres something new happening here when it comes to business versus some of the personal ways that the president elects handling himself is transcending for stocks. May not be transcending for all the other stocks, but for stocks i think people are saying, okay, lets see, wells fargo, you know, the president elect is not going to call them and say, you know what, its time for you to be punished for cross selling. I mean, its just not going to happen. And i think that when bank of america decides it thinks it should buy back more stock and it calls the government and says that, i dont think the president elect trump is going to say, you know what, i dont like bryan moynihans game here. I think he thinks, okay, well, brians smarter than i am about bank of america. He should. So thats the tone. Thats different. And i think people have to understand that the tone of weaving in Business People is different. I always felt i remember during remember the great oil spill there were Oil Executives who came to me i have acquaintances in the oil business, and a lot of them said, listen, i call the president , i wanted to speak to the president about how i have solutions from acondo but they didnt want to listen to me because were Oil Executives. The demonization of business that occurred is over. And i think that changes things. Yeah, certainly being echoed and comments early in this earnings season and im sure were going to hear more. Not only demonization, i dont see or hear a lot of people saying that moynihan hes making too much money. I think theyre saying, oh, bank of americas making a lot of money. Yes. When we come back well get cramers mad dash, count down to the opening bell and talk more about the trading day ahead as earnings season does kick off. Back in a minute. Siotice. Yo notr 35es rs fhearede we we. Re otmiag notr go we we. Re it just about six minutes to the opening bell. Lets get to cramers mad dash. A lot of upgrades today. Tiffany, comcast, netflix and and facebook. Im glad you put it in that context because this is the first day where i feel like the analysts have said, all right, im not going to fight it. I see comcast over 70, i see tiffany acting better, netflix is on a roll. Sell to hold Deutsche Bank. But the call i want to focus on is Raymond James going buy to strong buy facebook, better channel checks. This is the second one weve had this week which is really about how the money advertisers continues to go to facebook. And this idea that dont forget theres instagram, so the younger people i mean, theres this thesis going around which is that older people dont like facebook. They do love instagram. And the moneys going that way and theyre finding more ways to monetize. So i think this is great. The reason why this is such an interesting call is lets put this number out there. 30 times 2018 earnings would take this stock to 160. Now, 30 is not that expensive for a company thats generating a lot of cash and has really grown quickly. Yeah. So the multiple has shrunk. The stock does deserve to be higher. Did have a lot of to and fr