Cramer Pleads for a Fed Rescue
In a truly astonishing clip, Erin Burnett interviewed Jim Cramer on Friday.
It is destined to become a classic Wall Street legend. I expect it will become required viewing for market historians and technicians alike.
There's no other way to say this: Jim goes postal. When Cramer essentially begs the Fed Chair to rescue the big Investment banks, you know things have gone awry.
Highlights include:
"Open the darn Fed window.
"He has no idea what its like out there - None!"
"They [the Fed] know nothing. The Fed is asleep."
"My people have been in this game for 25 years . . . They are losing their jobs -- these firms are going out business"
"[President of the Federal Reserve Bank of St. Louis] Bill Poole is shameful"
"Cut the rate. Relieve the pressure"
"In the fixed income markets we have Armageddon."
But don't take my word for it, watch the video:
CNBC.com (not a great video feed -- see the YouTube below)
I am not sure what he means about people talking to him every night "off the record" (was Jim inferring the Fed calls him? )
>
Ever since TV has been banned from our trading room (CNBC and Bloomberg alike), I only get to see these things when they show up online.
A truly astonishing performance. Kudos to Erin for maintaining her cool, as well as not adding to the madness.
I have two words for Jim: Moral Hazard. Contrary to everything we learned under Easy Alan Greenspan, it is not the Fed's role to backstop speculators and guarantee a one way market.
>
UPDATE August 4, 2007 9:30am
I have 2 requests:
1) Won't someone with more technical expertise than I pull the entire video off of CNBC and upload it to YouTube? (Man, does CNBC.com video suck wind, or what?
2) Could someone -- a very clever young dj, perhaps -- please remix/mashup that rant into a new hiphop song? (It would be hysterical)
~~~
Thanks! Someone uploaded this:
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UPDATE 2 August 4, 2007 8:20pm
Now for the punchline: "Completely meaningless, it has no relevance whatsoever"
Two weeks ago (July 16, 2007), Cramer mockingly said the Sub-Prime blow-up was utterly meaningless, and would have utterly no impact at all . . .
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UPDATE 3 August 5, 2007 6:21am
Ask and you shall receive indeed: DJ FiniFinito mashes up Jim's rant:
Crystal Method Right Here, Right Now Bill Poole No Idea_mix.mp3
>
Source:
Cramer: Bernanke, Wake Up
Mad Money host Jim Cramer makes a passionate plea to Federal Reserve
Chairman Ben Bernanke to consider cutting interest rates and, in turn,
help the market and the people who are losing their jobs on Wall Street.
CNBC.com, Friday, August 3, 2007
http://www.cnbc.com/id/15840232?video=452808336&
Saturday, August 04, 2007 | 08:29 AM | Permalink
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» Format Change from et alli.
Speaking Personally ~~~~~~~~~~~~~~~~ Note change in format for Out and About. Title/Headline with link in bolds first. Any personal commentary second and in italics. Out and About on the Net ~~~~~~~~~~~~~~~~~~~ Senate Backs Eavesdropping Plan Sought By... [Read More]
Tracked on Aug 4, 2007 11:44:56 AM
» Jim Cramer's Self-Contradictory Meltdown from Mr. Hoffman Blogs Here
This whole needs to be put in context. Handily, Cramer himself did this with this Active Trader Update early on Friday morning. [Read More]
Tracked on Aug 6, 2007 1:02:12 AM
» Whats On Tap For Markets This Week from The Capitalist Resistance
The Fed meeting on Tuesday is probably the most important and watched in years. Jim Cramer(Link: Here and Here) et. al are calling for Bernanke to cut rates and bail the market out. I don't think Bernanke will bail out [Read More]
Tracked on Aug 6, 2007 3:10:57 AM
Comments
Agreed. It is the action that Cramer is begging for (and the mentality that it reflects) that got us to the mess we're in. The Fed shouldn't do anything to bail anyone out.
Posted by: NUREG | Aug 4, 2007 9:01:26 AM
the turmoil in the bond market is not caused by high interest rates anyway, rates are still quite reasonable.
Posted by: rob | Aug 4, 2007 9:04:38 AM
That performance was amazing. Is this a taste of the strife that is to come?
Posted by: Anthony | Aug 4, 2007 9:05:54 AM
If the fed were to do what Cramer wants, then the additional money supply would drive up inflation, and hence long interest rates. It might become easier for people & corporations to get short-term and variable-rate loans, but 10-15-39 year loans at fixed rates would quickly become *very* expensive.
Posted by: david foster | Aug 4, 2007 9:11:03 AM
Wait -- isn't this the same guy who was telling everyone within earshot that the Bears were all wrong, ignore them, they are bitter with all their complaints about the credit market?
Someone should pull all of Cramer's quotes on that subject and shoot them to Barringo for a post.
Posted by: William Poole | Aug 4, 2007 9:14:27 AM
Barry,
I was in Paris Monday, and we got CNBC in the hotel. I turned the tv on when we came back around 4 to start getting gussied up for dinner, and I see Cramer's on pretty much non-stop.
I'm not a regular CNBC watcher, so I don't know if that's normal, but my knee-jerk reaction was "oh shit, this is gonna be a 'fun' week." The man appeared to be sweating through every layer of clothing he had on 30 minutes after the bell.
I know you write for The Street and probably have some relationship with the guy, and he seems like a good person, but this is the same man who capitulated in '98 and wanted to be longer and stronger in March of '00. You're as photogenic as him? No disrespect to him, but given that your as photogenic as he is, do you just need to start being spectacularly wrong to get off Kudlow duty and on to hanging out with Pisani and the gang?
Posted by: Bynocerus | Aug 4, 2007 9:17:24 AM
Cramer used to cheerlead massive layoffs in other industries as good for business -- they were great for profits.
But when Wall Street may have layoffs caused by reckless speculative excess, then the Fed HAS TO come in to rescue them? What crap.
What a f%$#ing hypocrite! I've watched Mad Money for the last time.
Posted by: Ben B | Aug 4, 2007 9:17:37 AM
You have to think that if Cramer is right, that all of the top investment bankers (the top insiders) are crapping their pants right now, we may only be scratching the surface of how serious this might become. Having said that, Cramer does have a flair for being overly dramatic!
Posted by: W.Edwards | Aug 4, 2007 9:22:28 AM
I don't mean to scare anyone. . but, I'm hearing anectdotal reports that some people who have put deposits down on new bentleys are walking away. . . they can't afford them anymore.
Worse- I'm hearing that younger bankers may only see bonuses in the 7 figure range this year. . and worse than that it may be "mid" 7 figures, not "high".
Something needs to be done.
Posted by: Criticalthought | Aug 4, 2007 9:25:26 AM
A couple/three pts to add - Cramer starts by castigating the Bear CFO for going wimp and then outdoes him by several orders of magnitude ? On nat'l TV ?! No cojones. Also - as mentioned - interest rates are low and IN FACT the discount window is open (always). Banks can borrow anything they want UNDER the Fed Rate right now, today. As the lack of diligence in the sub-primes is showing this wasn't/isn't about rates it's about good business practice.
Before we get too carried away with Schadenfreude though how BAD must it be for Cramer to completely loose it like that and violate every principle he's supposedly supported (markets are good, downsizing good, need discipline, etc.).
If he's doing that then there's a lot more problems under the covers the Institutions aren't telling us or themselves about.
Posted by: dblwyo | Aug 4, 2007 9:27:28 AM
I'm surprised you didn't show Cramer talking about real estate. I saw it originally at calculated risk. Here is the link to the google video: http://video.google.com/videoplay?docid=2885272539300360327&hl=en
Posted by: twistytop | Aug 4, 2007 9:28:34 AM
A couple/three pts to add - Cramer starts by castigating the Bear CFO for going wimp and then outdoes him by several orders of magnitude ? On nat'l TV ?! No cojones. Also - as mentioned - interest rates are low and IN FACT the discount window is open (always). Banks can borrow anything they want UNDER the Fed Rate right now, today. As the lack of diligence in the sub-primes is showing this wasn't/isn't about rates it's about good business practice.
Before we get too carried away with Schadenfreude though how BAD must it be for Cramer to completely loose it like that and violate every principle he's supposedly supported (markets are good, downsizing good, need discipline, etc.).
If he's doing that then there's a lot more problems under the covers the Institutions aren't telling us or themselves about.
Posted by: dblwyo | Aug 4, 2007 9:29:20 AM
Since the credit crunch is not due to high rates, this particular entertainer picked the wrong target - either deliberately or through ignorance.
I wonder which it was?
Posted by: wally | Aug 4, 2007 9:39:47 AM
Cramer is now more TV personality than money manager. Overblown bad acting, but great TV.
Posted by: tyoung | Aug 4, 2007 9:41:12 AM
Here it is, from iTulip.com:
http://www.youtube.com/watch?v=Pd5zAbDKZEg
Posted by: Dave L | Aug 4, 2007 9:46:17 AM
As a former hedge fund manager, Jim probably still has many friends and contacts that are losing it all right now. The fed isn't asleep. They just aren't interested in bailing out the speculators. I agree. Let them sleep in the bed they've made.
Posted by: Special Ed | Aug 4, 2007 9:50:19 AM
"My people have been in this game for 25 years . . . They are losing their jobs -- these firms are going out business"
Now I get it. He thinks he's Moses or he has a Jesus Complex if you like, but as Bugs would say, the man is a maroooon!
Posted by: SPECTRE of Deflation | Aug 4, 2007 10:08:21 AM
A bald faced idiot he is!
Posted by: Bucky Katt | Aug 4, 2007 10:12:51 AM
What I can't believe is that he actually believes this will help housing or the consumer. A year ago he said subprime was no big deal, and I guess it's not until your buddies take it in the shorts.
Bear's CFO said it's worse than 1987 and the Internet Bubble. I imagine it's worse because they are getting ass kicked for making wrong way bets that they must now eat. Welcome to the cess pool fellas, and the water is fine! The gall of Jimmy Boy and all his ilk is sickening.
Posted by: SPECTRE of Deflation | Aug 4, 2007 10:13:23 AM
wow i missed it on friday..thanks mr ritholtz......now i know why the market fell almost 300 points friday...cramer is the joe granville,robert prechter,abby joseph cohen of our time. actually there's no way out of this..we'll either have a depression or hyper inflation.buy campbell soup or home depot or lowes,they sell wheelbarrows.
Posted by: jake | Aug 4, 2007 10:17:05 AM
THAT'S ENTERTAINMENT.....
Ladies and Biatches:
We are watching the markets behave as they should. After all markets will fluctuate. "My friends aree loosing their jobs....?" BOO HOO! Gee, perhaps I can pick up a nice vacation home in Aspen, on the cheap....
DUH..... I think that we are going to see anotherr "repricing of risk" nestt week. Get ssome parashutes for your dollat denominated assets, and some life preservers while you're at it.
It ain't gona be pretty....
Good luck to all.... ;-)
Econolicious
Posted by: ECONOMISTA NON GRATA | Aug 4, 2007 10:18:34 AM
Barry,
would you please explain to KRAMER when you see him that a FED cut will do jack shit for homeowners who are now stuck with resets that they can't get out of?
We have much tighter lending standards, no liar loans, no 125% LTV,no piggybacking and on and on in combination with falling house prices on a national level. A year ago it might have mattered, but at this point the tide has gone out. The poor homedebtors can't qualify for the loans, and even if they could, the home is worth less today than a year ago. The FED and Street made a fine stew, and now they must eat it.
Oh ya, also tell KRAMERICA that the dollar sits at $80.14, and unless a run on the dollar would somehow help this situation, he and his brothers and sisters on the Street are screwed.
Posted by: SPECTRE of Deflation | Aug 4, 2007 10:21:36 AM
One other thing Cramer said during his rant was the Dow would go up 1000 points if the Fed cut. Is that really what this is about?
Posted by: GerryL | Aug 4, 2007 10:22:01 AM
Jimmy boy is much too smart to lose it like that. Seems to me that he was not trying to get the fed to come to the rescue - but simply to panic the market. And successfully so, at least for Friday. Notice that the meandering market went straight down after that interview. So if Jimmy boy had been short....
Posted by: Bluzer | Aug 4, 2007 10:22:51 AM
I was watching live. I have to admit that he was scary. Definite Kudos to Erin. It is very hard to keep ones cool while watching a grown man, just melt down.
One has to love his solution to the problem. Lets solve a bursting bubble by creating a bigger bubble!
Thanks again to Barry for providing a place for discussion of hot topics rather than sweeping them under the carpet like most media.
Posted by: Ralph | Aug 4, 2007 10:23:07 AM
