August 5, 2007
In the Fixed Income Markets We Have Armageddon
Finally got around to watching the Cramer video, and yes, it did make me chuckle. He’s a natural entertainer. I’ll transcribe a bit of it here:
“This is about Bernanke. This is about Bernanke. He has to be on that call. Forget the investors…. Bernanke needs to open the discount window. That’s how bad things are out there. Bernanke needs to focus on this. Alan Greenspan told everyone to take a teaser rate and then raised the rates seventeen times, and Bernanke is being an academic. It is no time to be an academic; it is time to get on the Bear Stearns call, listen, open the darn Fed window. He Has No Idea How Bad It Is Out There, HE HAS NO IDEA. HE HAS NO IDEA.
I HAVE TALKED TO THE HEADS OF ALMOST EVERY SINGLE ONE OF THESE FIRMS IN THE LAST 72 HOURS AND HE HAS NO IDEA WHAT IT’S LIKE OUT THERE. NONE! AND BILL POOLE HAS NO IDEA WHAT IT’S LIKE OUT THERE. MY PEOPLE HAVE BEEN IN THIS GAME FOR 25 YEARS AND THEY’RE LOSING THEIR JOBS AND THESE FIRMS ARE GOING TO GO OUT OF BUSINESS, AND HE’S NUTS, THEY’RE NUTS! THEY KNOW NOTHING!! … THE FED IS ASLEEP!!!
I’m not 52 like Cramer, but I’m old enough and know enough people to say: Just Go Buy Some Washington Mutual. ;-)
Barry posted a funny track, The Crystal Method - Right Here, Right Now (No Idea Mix), put together by someone named DJ FiniFinito. Hilarious.
August 5th, 2007 at 11:10 pm
Video
I think that Cramer might have some money in those Hedge Funds that are in trouble.
Funny how big money can take the small individual’s money for years with market manipulation and move the markets in their direction, but if they get hit hard from risky speculation, they cry for help. Sub-prime companies were more than happy to loan out money to people who are financially challenged and charge them ridiculous high rates for their business. Sub-prime can only blame them self for thinking that those people would be able to stay in those mortgages once those rates and monthly payments went up. Their business models were flawed in trying to drive company growth and has resulted in substantial loses.
August 6th, 2007 at 12:19 am
The danger here for all of us (in purely big picture, black and white terms) is the FED may actually gain brownie points for “legitimacy” in the eyes of us peons if they allow the masters of the universe to fry. In other words by appearing to actually be impartial they may extend their reign without question.
August 6th, 2007 at 12:56 am
Why WM?
August 6th, 2007 at 2:45 am
So, Donk, the Fed will do the right thing just to fool us into thinking they will do the right thing?
August 6th, 2007 at 4:26 am
Bernanke is the new friendlier, fuzzy face of the FED, as opposed to ole turtle face. It wouldn’t be surprising to see a change in direction in regards to “bailouts”. This would go far in regards to abating the increasing scrutiny of an entity that is neither FEDERAL nor Constitutional.
August 6th, 2007 at 6:28 am
Cramer calling for a Fed bailout reminds me of people who think it’s a good idea for taxpayers to provide heroin addicts with clean needles.
Supporting and legitimizing bad and destructive habits is a lose-lose proposition.
August 6th, 2007 at 8:43 am
@moom: It’s cheap (and getting cheaper all the time). “Maximum pessimism” creates incredible values, but you have to have confidence that your valuation is accurate and the balls to act.
@slick: Cramer comes across as a crybaby but I think he just worked himself into a frenzy and couldn’t hold back; I almost fell off my chair laughing — the guy is a great showman, no question about it. (How’d you like to be the referee who makes a bad call at one of his kid’s soccer games? ;-).)
August 6th, 2007 at 9:10 am
Certainly things aren’t as bad as Cramer says in this clip. Things are certainly bad, and the Fed must stay on top of it, but I think he is simplifying the matter too much.
August 6th, 2007 at 9:10 am
You think that Cramer might have been talking about Warren Spector losing his job during his outburst?
August 7th, 2007 at 11:07 am
On his TV show today Cramer said it was all for the little people who might lose their homes. Not the rich investors or business guys. I thought that was quite disengenuous.
August 7th, 2007 at 11:32 am
Bud: Well, Cramer isn’t known for his consistency. People never understood when he wrote his column Wrong! how he could flip flop on positions so easily. The fact is he’s a quick-trigger trader, willing to switch sides in a second, which is why long-term types loathe him.
August 7th, 2007 at 7:55 pm
unfortunately, chairman, cramer now espouses longer-term trading - both on his show and in his action alerts portfolio. results?
it’s well-known his picks on the show (not the lightning round, but the regular “well-researched” picks) don’t outperform after any cramer bump is removed. and his action alerts portfolio, with 6 years under its belt, is barely above the s&p - below it after you include the cost of subscribing to AA.
cramer is more of an entertainer / marketer than a good long term trader/picker. mao, your stuff is far better than his for that.
August 8th, 2007 at 1:17 pm
Cramer needs to go back to college and take some basic Finance courses. The is what a free market is about. Repricing is what the market needs and what the market wants. Quit crying Jim, remember, the market is NEVER wrong.
If people are losing their homes then they deserve it. Home ownership is only a right if one can AFFORD it. How delusional are you Jim, the housing market is inflated, free market says they need to come down 25%, so be it!! If the Fed cuts the rate, then America is subsidizing those loans through inflation Jim.
So you worked at the bond desk for Goldman back in the day. Obviously you haven’t learned a darn thing about basic economics. It’s either that or you must have some big interest in some troubled hedgefunds.
Cutting rates is the simple answer? Yeah what’s worse, idiots who can’t afford homes getting foreclosed, or the whole nation suffering from $4 gas? Greenspan, Dumb America, Cramer: time to pay up for your sins. It was inevitable.
August 10th, 2007 at 5:20 pm
[…] Kind of a negative neutral morning but then the selling got underway in earnest before lunch. Still a panicky, jittery market. I’ve been updating the CMBS BBB- post … the spread as of last Friday was 403 bps which is approaching Russian debt default / LTCM crisis levels. No wonder you have grown men going bananas on live TV. My two cents? In crisis, opportunity. If you have cash sitting around, look to put it to work. […]
August 29th, 2007 at 9:56 am
[…] Channeling Jim Cramer: THEY’RE NUTS! THEY KNOW NOTHING!! THE FED IS ASLEEP!!! […]