Driving potential investors to the stock line as the american stock market but not the American Economy suffers daily from hedge funds starting rel t relentle relentlessly in and out of our stock. The dow sank 42 points and s p gave up and dow declined its one more day we have to suffer from the volatility these funds leave in their wake. They obscure the good news happening in this country. Our horribly weak stock market this morning was like a different market for the rest of the day. It reflects their Collateral Damage an not our fundamentals which is why i came bouncing back later in the day. The market regained its equilibrium. Consider the positives for a moment. Positives hidden by bizarre moves like the hideous opening this morning. Before the opening i was incredibly heartened to learn Consumer Spending in this country rose. 5 , income increased. 3 . They show a confident consumer emerging. Its something that should have driven our stock market up and not down. Its clearer theres more shopping and dining out. We wouldnt get such a bullish hiring number from macys today as the Company Plans to bring on 86,000 part time workers from the holiday season. I was surprised to see such a big figure given that the ceo made comments about Consumer Spending. Made me ask could there be a turn to the positive . You also have to be concerned that an oil company most of us never heard of got a 7 billion take over bid from a canadian gas giant. They produce 30,000 barrels a day out of the now red hot basin in texas. Its going high. Why . American ingenuity and engineering. If the price is going to keep falling why wouldnt canada wait to do this deal . Perhaps because oil is another commodity temporarily caught in the grip of hedge funden bandits who equate a strong dollar with weak oil. Maybe oils not going down as much as we think. Thats okay. Its in a sweet spot for the consumer. Then the Business AnalyticsSoftware Company that got a leverage buyout this morning. I knew the company was for sale thanks to the excellent reality check but this is a nice sized bid from a nice sized firm and then near the close Computer Sciences said it too was exploring a leverage buyout. Remember those deals . Stay tuned for more reflections of this rarity of a deal later on. May not be such a rarity after all. In the meantime markets seem to forget that just last thursday nike reported a fantastic quarter with terrific worldwide growth. By the way, micron lost thursday. They are seeing increased demand. It was extraordinary. It was forgotten by sunday. The dreadful lack of positive pinks, for me either company i find totally absurd. How can you not extrapolate from those nike numbers more than a day. It would be on micron itself until the end of the day. Then we have the quite but immensely positive deal that nisource the huge utility announced last night. Theyre taking advantage of a newfound natural gas well by splitting into a regular utility and tax Advantage Pipeline company that will spend billions upon billions of dollars building pipelines that can tap into it. Its the second in the world and it is just now there. We keep hearing that apples new iphone launch is doing poorly. They do a story like that every single hour but any other Consumer Products company on earth would kill for this. How about that go pro launch that sent go pro up another 10 , i could go on endlessly. Were getting within the context of the United States being the best global safe haven for people to put their money to work but its precisely this best safe haven characteristic that is causing the latest round of whirling volatility. The set up right now is so weak that many of the hedge funds that made big bets in emerging markets like latin america and china are panicking. There are no bids worth hitting in the on going disaster that is brazil. Major riots in hong kong come at a time when theyre acting like they really believe in communism for the first time in a generation. Cracking down on the kind of showy merchandise and spending habits that have given so much of chinas growth. The riots are frightening but you have to ask yourself are they more important to our stock market than the good news from nike or micro or macys. Do they outweigh Computer Sciences . Absolutely not. They spent most of the day repounding after this mornings hideous opening. We might have finished in the black if ford hadnt disappointed its meeting. Why . European renewed losses. I cant think of a good reason to invest anywhere overseas. Ukraine russia tensions, hong kong riot, isil gaining team. You want to get out of those markets alive. If youre rich you almost have to wire your money out of your country and into american dollars and american bond. Strong dollar is bad for oil, bad for exports and bad for the nation as a whole. Wrong. A strong currency is a sign of americas might. Its not a negative. Now what to do if youre one of these leveraged hedge funds that made these foolish bets in emerging markets . Raise capital right . Many of these guys are making the time honored stupid trade of selling the good, the United States, and keeping the bad. All those countries that are falling off a cliff. They sell the good. Thats often not the case with overseas junk. Theyre just in your nature. These idiotic hedge funds. But once the hedge funds liquidations are finished and the smoke clears, its todays session. Before selling is over and nobody else wants to bail. Buyers reach for uniquely american situations, restaurants, retailers, Health Care Stock and move them right back up. Theyre so high up that you again get the volatility on the outside. I dont like it either way. I think they make enormous sense here. They have everything to do with the increased Consumer Spending i just mentioned and the leftover dollars that lower gasoline prices give you. We have to stop talking about the fed already. Its classic misdirection play. Look, you have to let these hedge funds lash out with their selling causing all of this volatility its so unnerving and then buy what makes sense that has nothing to do with their silly gyrations. The problem common sense is obscure. Heres the bottom line, the next time the volatility drives your stocks up or lets say it drives them up. Take some profits and buy them right back when our hedge funds volatility inevitably drives stocks down and then they unwind again the moronic risky bets that should have never been made in the first place but are causing them to sell our good stocks here just to keep their bad businesses afloat. Mark in wisconsin, mark. Jim, ive had a position now for quite awhile. Its been as high as north of 20 but now its banking around 10 plus. Should i hold my position or should i sell it and move on . Look, i think he has more up his sleeve than the one drug people feel is already played out because they have given away the royalties. I think that selling down immunogen here is not just a mistake but a big mistake. Lets go to bill in washington. Bill. Hey, jim. Im calling to see what your outlook is on Goodyear Tire with its recent last month or so its fell a little bit. Ive never been a big fan of the tire companies. You did catch a good move on Goodyear Tires still not too late to go. Gordon in oregon please, gordon. Hello jim, gordon from oregon. A second time caller. Okay. I am calling about matel. It has a juicy durable dividend yield of 5 with a 63 pay out. Stable margins however today it was downgraded. My question is should i swap out mattel for competitor hasboro. Mattel had a bad quarter. It was like it cant be that please, stop here, i mean it read like the game plan from a really bad nfl coach. All right. The hedge funds are darting in and out, darting in and out and hurting the market. Theyre Collateral Damage but underneath it all i see good news. Thats why you should use their volatility to your advantage. Mad money tonight, a deal to take tibco private sparks a surge in the stock. Can you cash in . And its doubled over the year and a half and it may be the best supermarket stock in the game plus the cloud stocks lost after a spell of sky high gains but have they come down enough to be buys again . Im giving you my forecast. Stick with cramer. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question, tweet cramer, madtweets. Send an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. How much money do you have in your pocket right now . I have 40, 21. Could something that small make an impact on something as big as your retirement . I dont think so. Well if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge might not seem so big after all. For over 60,000 extra curricular activities help provide a sense of identity and a path to success. Joining the soccer team. Getting help with math. Going to prom. I want to learn to swim. Its hard to feel normal, when you cant do the normal things. To help, sleep train is collecting donations for the extra activities that, for most kids, are a normal part of growing up. Not everyone can be a foster parent. But anyone can help a foster child. When i opened up the papers this morning and saw Tibco Software was selling itself to a private equity shop for 4. 3 billion i almost did a double take. After all when was the last time we saw a large scale leverage buyout. Last year there were four public to private deals. This year hasnt been a single one. Oh and then we hear about how Computer Sciences they might be doing it. Holy cow 2in1 day after a yearlong drought. We have to ask ourselves where have they all gone. We know this has been an incredible year for mergers and acquisitions with them already exceeding each of the last six years. In fact when it comes to activity 2014 is on track to be 20 higher than the previous peak in 2006. This is a secular trend. But the pace of private equity transactions it hasnt kept up at all. Its increased year over year representing nearly 20 of total volume and down over its average of 30 . On the surface doesnt make a lot of sense. Why . Private equity firms worldwide are sitting on 465 billion in cash. They can borourow money at low rates and take companies they bought years ago public again. You might think if private equity shops are selling aggressively right now it would make sense they wouldnt be buying but historically its not how it works. They have been pretty quick about putting that money right back to work in the market. So after multiyear period where it looked like the private equity guys are going to buy everything in sight, what the heck is going on here. Typically they have much longer horizons than hedge funds. Their investors count on them to make big money every five or seven years like a cycle. But still you cant make your investors squad if all you do is sit on the sidelines parking that money where you know youre not get anything return. So what exactly is keeping these well funded private equity firms from taking companies private in this environment . Okay with the averages near their all time highs you might think the private equity guys are worried about their valuation. Why are we seeing so many acquisitions where one publicly traded company buys another. Perhaps its more a question of currency when a private equity shop tries to do a buyout they can only use one currency and thats cash. But when a publicly held Company Makes an acquisition they can use another currency, they can pay with their own stock. When companies are at or near their all time highs, paying with stock is brilliant. Thats one reason were seeing so few leverage buyouts in this country this year. Private equity firms cant compete with publicly Held Companies that make stock fuelled acquisitions. Thats just part of the puzzle. Another factor is most of these private equity shops have a very clear cut business model. What they stick to. They use boroughed money to buy Public Companies and take them private, in other words, remove their stock while at the same time loading up their Balance Sheet with debt and then they cut cost to the bone and generally try to improve the way the business is run. Fast forward a few years and the p. E. Guys sell a leaner, meaner, new and improved version of that exact company back to the public for a nice profit like they did at hca. Like they did at dollar general. Heres the problem. Right now there arent very Many American companies that would make good leverage buyout targets. Not only are stocks more expensive but most Public Companies have been cutting costs so long that theyre now at peak levels. Arent a lot of opportunities for operational improvements from a private equity firm buys one of them. Lately they even had to pony up more cash to do their deals and the leverage buyout business the Key Performance me trick is whats known as the internal rate of return youre going to hear it as irr. All these firms are looking for companies that can give them a descent irr but in a recent really Excellent Research report they found that only 60 companies in their entire coverage universe excludeing the financials could generate an internal rate of return greater than 15 . 15 given the risk isnt all that great. Just listen to what some of the top private equity player hearsay to say about the value lag la valuations. The investment environment across the board is challenging. Its hard to find compelling things to do and its a good time to be careful. Oak tree capital Great Company says quote there is no question that bargains are harder to come by. That doesnt mean its come to an end. The private equity guys are still sitting on fortune and that needs to be put to work. Theyll be putting more of that money to workout side the United States. Or through partnership deals with nonprivate equity investors. Like i said before globally private equity firms of 465 billion in cash just sitting there. Thats nearly the highest level on record and 300 billion of that is raised since the beginning of last year based on the way the private equity business works that means this money will need to be put to work 2016 by 2018 probably. On the most recent Conference Call they had a stock we liked very much and said that international now represents 66 of its announced deals that have yet to close. Much of this money could be headed overseas and many will be nontraditional. Take last years heinz deal. It did have a buyout partnering up with Berkshire Hathaway to cover the cost of the deal. That could be the new model for private equity deals Going Forward. That was the warren buffet model. Everybody loved that deal. At the end of the day its almost impossible for the private equity guys to compete at least here in the United States at this particular moment. When public Companies MakeStrategic Acquisitions they can save a fortune by cutting overhead and eliminating spending. Thats what activists are aiming to do in their bidding war. For cramer fave drug company allergen. A lot of these potential take over targets are simply worth more to publicly traded companies in the same business than they are to private equity shops. They have a very good eye care franchise and so does allergen. Heres the bottom line. With them taken private today its worth thinking about just how rare these leverage buyout deals have become lately. Private equity firms may be flush with cash but they dont have many opportunities to put that cash to work. Right now m and a wins the day but they have years to make the purchases and well see a gigantic influx the next time we get a major swoon in the stock market that creates real bargains for these buyers and judging by this newfound and yes off putting volatility we may not have that long to wait. Theres much more mad money ahead including a ride around the aisle of one Supermarket Chain right to buy t. Weather has been dark and gloomy but is the sun about the come out . Dont miss my forecast. Find out the key to this markets next move and stay with cramer. Ts changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. 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Because at scottrade, our passion is to power yours. In this confusing market allow me to point out one major bright spot. A Grocery Store that defied all odds through a string of raises. Causing stock prices to soar as its competitors look by in disbelief. Im talk