Cramer Rant, Version II
"Mad Money host Jim Cramer discusses doomed financials"
(CNBC 's words, not mine) and Monoline Insurers.
Give Cramer credit: This is a huge reversal from his prior (wildly incorrect) commentary on Housing, SubPrime and the Finacials
http://www.cnbc.com/id/15840232?video=624755222
Friday, January 18, 2008 | 04:00 AM | Permalink
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I commend him on his reversal, but don't agree with him that big rate cuts will help any time soon.
Posted by: Justin | Jan 18, 2008 4:38:14 AM
Thanks for posting that - normally I just skip Cramer but this is very well grounded and the ranting intermittent and not extreme (by his standards of course). Also think it's a deadon assessment of the quality of many of the financials earnings - cf. David Wessel's column last week on "Broken Banks". It looks to me (a point made in comments a couple of posts ago) that that a) the fundamental business model of many of these institutions is deeply flawed because b) it was based on false-to-fact presumptions about structured debt, leverage and credit quality. A massive...massive failure of due diligence. And this is not a rate problem - it's a credit market mechanism problem which will take a long time to work thru and be very...very...very fragile. As an investor it tells me to sort the banks (& others) into truth tellers and at-risk but to steer clear of financials until this works it's way out. Which'll take how long ?
Would anybody care to chime in on whether these guys truly need the bond insurers however ? It doesn't seem to me as if they do.
Posted by: dblwyo | Jan 18, 2008 5:39:59 AM
One of the commenters on the Calculated Risk blog said that the Cramer rant was a setup to allow the CNBC talking heads (and in particular those on Squawk Box) to engineer a retreat from their habitual chest-thumping bull presentations.
I agree. Squawk Box talkers have looked more and more foolish, as they literally lead interviewees to say positive things about the economy: "So, you would say that this situation gets out all the bad news at last, and smart investors would do well to buy? ..." and etc.
Now they have some cover, "As Cramer and many others on Squawk Box have pointed out ..."
It was just more acting. Financial television isn't even worth watching during treadmill time anymore. Bring on old movies!
Posted by: Sue | Jan 18, 2008 6:51:08 AM
Give Cramer credit because he's so cock-sure of his opinions regardless of perhaps having the exact opposite cock-sure opinion a day earlier? And on so many issues and stocks??? Without any melodrama whatsoever, it's completely disgusting. I'm going to boycott your blog for at least 5 minutes (I have to eat breakfast now, anyway) in protest of this post and the hat tip to Fast Money yesterday. Don't let yourself get sucked too deeply into the television toilet.
Posted by: dukeb | Jan 18, 2008 7:55:39 AM
PS: Did I mention "Rick Santelli" for President?
Posted by: dukeb | Jan 18, 2008 8:01:11 AM
Why give him credit if he was completely wrong before? What's to think he's not going to be completely wrong again now that he's changed his opinion? This should be filed under the contrary media post above.
Posted by: Jake Peavy | Jan 18, 2008 8:01:28 AM
A broken watch can be right several more times a day if you keep spinning the hands around like Cramer's "spot on" calls. LOL.
If you must make predictions, do it often, then just point to the ones you got right!
Posted by: lurker | Jan 18, 2008 8:54:47 AM
Probably the surest indicator of capitulation to date!
Posted by: Noah | Jan 18, 2008 10:34:47 AM
I think that he knows EXACTLY what he does and how it is perceived. He is a POS and folds faster than a wet taco.
This "rant" would have been better served had he done it BEFORE he piled his entire audience into tech. But I understand that by doing it this way he can appear to be blind-sided by the reality of all of it.....taking a page out of Greenspan's tact for now. Nevermind that all the warning signs were very apparent in the first place but how many times have you heard, from the "smart money", how they were all surprised by the whole problem(s).
It would be best if he just went away.....but people like it when you scream at them as it works at fast money too....
Ciao
MS
All he cares about is selling books and goldman sachs.
Posted by: michael schumacher | Jan 18, 2008 10:41:34 AM
I watched it and kept recalling his class-warrior rant about GM, Rick Wagoner, and the UAW not too long ago ("Wagoner has to break the union. He has to BREAK the union!") Then I see him talking about country clubs and the F. Scott Fitzgerald view of the world of the rich, and now I expect to see him on a barricade somewhare, waving a red flag and singing the "Internationale" .....
Clearly a man unafraid to change his mind.
Posted by: Uncle Jeffy | Jan 18, 2008 10:54:29 AM
Like others who have posted here, I am both disappointed and disamayed that you would mention to your readers to give Cramer credit for him most recent rant.
I give Cramer no credit whatsoever. Cramer has proven himself to be an inveterate flip-flopper.
He is delivering this rant now because the stock market has been going down. If the stock market shows a general up trend for a week or two then Cramer will flip-flop and start pumping stocks again.
Cramer has no concept of macroeconomics. His view of the health of the American economy is based solely on what the American stock markets are doing.
Actually, he has no concept of microeconomics or business either. His view on how well run and how solid a business is is based solely on how the stock the of that company is doing.
Posted by: Jasper | Jan 18, 2008 12:45:08 PM
NEWS FLASH from CNBC: Cramer has a plan! Coming up later! LOL
Posted by: Pat Gorup | Jan 18, 2008 2:04:15 PM
Cramer's Plan; government buys all insurers.
CNBC's Plan; Cramer moves to the Comedy Channel.
Posted by: Pat Gorup | Jan 18, 2008 2:51:02 PM
I've read about his education and personal success. His shtick to gain eyeballs is annoying for folks that don't like yelling and constant hysteria. It's draining to live a normal life with the stress cranked up to 110% all the time.
He appeared recently on Trump's Celebrity show and Conan O'Brien show. A guest on O'Brien described Cramer's projectile spit and snot, describing exactly when it landed on their check. In a tech magazine early 2000-something there was a quote from him, saying he acknowledged his contribution to the noise and chaos leading to the stock bubble. He was remorseful, and was retiring. Folks were skeptical. They were right. I'm just not sure what financial value Cramer adds to the debate for the rational long-term investor, other than for entertainment. And there are plenty of places to find joyful entertainment w/out yelling, spit, and snot. Ho hum...
Posted by: ef | Jan 18, 2008 4:56:48 PM
Credit? Oh, please. Now that Goldman & Pals have gotten themselves set up to profit from a declining market, Cramer and his ilk will be talking up the gloom - and whining for rate-cuts out the yin-yang.
Posted by: John | Jan 18, 2008 10:24:27 PM
All we need is to have those who give financial advice to submit full disclosure of their personal, or otherwise personally beneficial financial standing. On a regular basis.
Posted by: Max | Jan 18, 2008 11:54:12 PM
Last line of the interview: "Do we want the communists or the terrorists to own the banks? " Priceless.
Posted by: rudy_d | Jan 20, 2008 12:12:01 PM
