Cramer Calls (Yet Another) Bottom in Housing
This week, one of my fellow LIRR commuters handed me a New York
Magazine, and asked me my opinion about an article by Jim Cramer on a bottoming in Housing sector. The articles title? On June 30, 2009, Buy an Apartment.
Gee, that seemed rather specific, I wonder what's in the article? I thought.
I practically spit up my coffee when I read the first paragraph:
"For more than a year, I’ve been a huge bear on housing. From the moment the credit-crisis storm began to form, I’ve been shouting in my usual unhinged way about just how bad the devastation would be, and carrying on about how anyone who bought a home in this environment would lose money immediately. At various points along the way, my house-hating judgment has been questioned, but I’d say I’ve been vindicated by the relentless decline in home values we’ve seen, the worst since the Great Depression. Even here, in our so-called real-estate-superstar city, prices may not have fallen, but the rate of acceleration has started to soften."
That paragraph struck me as particularly
disingenuous. Perhaps Cramer's long housing bias had spanked him enough times that he finally flipped bearish, but, damn, that was only after
getting the credit bubble and housing collapse, and especially, repeated bottom calls on the Home Builders, very, very wrong for a long, long time.
Now, I don't know when Cramer flipped bearish on Housing -- I do not watch the show regularly, nor do I read him at TSCM -- but he certainly was bullish in 2005, 2006 and early 2007. Maybe he flipped bearish some time in the past year. I don't know.
But here's the funny thing: I get tons of emails about James Cramer, asking me "Why don't you focus on Jim ever?" Why doesn't TBP cover him more?
Fair question. For a couple of reasons, making Jim a focus of the blog doesn't interest me. I've criticized him on many an occasion, but being his stalker -- ala Luskin on Dr. Paul Krugman -- simply isn't my bag.
Why? First, I respect Cramer's accomplishments with TheStreet.com. Forget the TV pundit you see today, not many people had the foresight in 1995 to recognize that web based business content was going to be big. But Cramer did, and that sort of foresight and business acumen earns my respect.
Second, being Cramer's Jiminy Cricket is not how I want to define myself. I have my own opinions, beliefs, and perspectives. I've carved out a nice little corner of the internet for the Big Picture. And if I make Cramer the focus of this blog, I give up my own identity. Besides, he retired from finance years ago, and now works in entertainment industry.
But third, and perhaps most of all, I don't need to. Why? Because Don Harrold already does:
Jim Cramer Calls a Bottom in Housing - HERE'S THE TRUTH (August 27, 2008)
>
Jim Cramer Called "The Bottom"? 1 Out of 10 Ain't Bad! (July 30, 2008)
>
Sources:
On June 30, 2009, Buy an Apartment
Our resident financial expert calls the end of the housing-market free fall—to the day.
James J. Cramer
NYMag, Sep 7, 2008
http://nymag.com/news/businessfinance/bottomline/49938/
Don Harrold
http://www.donharrold.net/
Don Harrold on YouTube
http://www.youtube.com/user/donharrold
Saturday, September 13, 2008 | 03:00 PM | Permalink
| Comments (78)
| TrackBack (1)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef010534a6fe58970c
Listed below are links to weblogs that reference Cramer Calls (Yet Another) Bottom in Housing :
» Jim Cramer...Busted! from Twelve's Blog
I often catch Mad Money on XM Radio while driving around town. Cramer's editorials are generally entertaining, thanks to his special effects and whiny voice. I remember hearing him talk about the housing market reaching its bottom. He sounded both [Read More]
Tracked on Sep 15, 2008 12:13:49 AM
Comments
THANK YOU, Barry. This needs to be said and said and said. Cramer has become a cartoon character, a total farce.
He'd be a perfect politician in this day and age of fabrications, revisionist history and outright lies. If we the people believe this crap, we deserve everything that's coming. Do your homework!
Posted by: Jeff M. | Sep 13, 2008 3:11:17 PM
"The difference between stupidity and genius is that genius has its limits."
--A. Einstein
Posted by: Roger Bigod | Sep 13, 2008 3:28:15 PM
You are right BR this comedian is not worth the effort. He's a cartoon character but the fact that he is continually brought forth as a commentator on one of our three main broadcast channels, not the cable lunacy, speaks volumes about where the public discourse is in America today.
Posted by: John(2) | Sep 13, 2008 4:02:06 PM
Kramer is a Clown. Sounding more and more like NARstrodamus every day. Throw enough darts and sooner or later one then has to stick.
Westside of LA isn't close to a bottom and is just getting started.
Total Sales Volume Drops (YOY) last August of 31-69% in:
1) Beverly Hills (-69%)
2) Marina del Rey
3) Venice
4) West Hollywood
5) West LA
6) Culver City
7) Pacific Palisades
8) Santa Monica (-31%)
http://www.westsideremeltdown.blogspot.com
Posted by: latesummer2009 | Sep 13, 2008 4:04:10 PM
To watch "Mad Money" is to experience the id of the day trader. There is hardly any continuity and an extremely selective and self-serving sense of his own history (as you note, Barry). It is all righteous enthusiasm or maudlin self pity, depending on what happened that day.
For me, the most notable and illuminating Cramer moment didn't happen on Mad Money, but when he literally slobbered with rage at poor Erin Burnett in his infamous "They Know Nothing" rant. Books have and will be written about how the Fed (and others) screwed up and facilitated what promises to be a wrenching, multi-year recession (at best), but it's ludicrous to believe holding back a few weeks on a rate cut set off the dominoes, that we'd be sitting at Dow 15,000 with quicker easing.
That Cramer should say so, and seems to continue to think so (it's still one of his favorite drops, though it's now more of a general-purpose middle finger for public officials), bespeaks a continuing ignorance that can only hurt those who take his advice, and there seem to be a ton of them. Whatever the disclaimers, it's not just entertainment for a lot of people who really can't afford to trade on his assumptions but nevertheless do so.
Posted by: Rosabarba | Sep 13, 2008 4:15:00 PM
The question is, how long does the bear market have to last before his show gets cancelled?
Posted by: DL | Sep 13, 2008 4:23:18 PM
Energy costs are too high for a turn around. $5.35 in parts of North Carolina.
Posted by: bc | Sep 13, 2008 4:38:23 PM
I'm so happy to find out about donHarrold.net. I had a similar idea, and made a website "financialrecap.com" that was going to comment on the TV shows (like Cramer) and catch them in their mistakes. Also I wanted to highlight cool lines from people like Jeff Macke on Fast Money (e.g. the reason Moody's doesn't downgrade MBIA is because "they don't want to be Shiva, creator and destroyer of worlds!".
Well my website sucks. Yet another project started and not followed through on. But anyway I'm happy to find donHarold.net!
P.s. bigpicture is currently my favorite financial blog. Awesome! I think this is a 50-hour a week job to keep up...
Posted by: Craig Hilles | Sep 13, 2008 4:40:56 PM
Great Site for the housing collpase...
10 reasons why CA is years away from a bottom:
http://www.doctorhousingbubble.com/10-reasons-why-california-is-years-away-from-a-housing-bottom-rebuttal-to-those-calling-for-a-bottom-for-california-housing/
Posted by: bc | Sep 13, 2008 4:44:33 PM
Posted by: techy | Sep 13, 2008 4:39:31 PM
the FDIC, their ownselves, have, at last report 117 Banks as 'Troubled'
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=FDIC+troubled+banks
Roubini is one the most lucid dudes allowed near a Broadcast Camera.
Think about the old adage: "Prepare for the Worst, Hope for the Best"
or
"The evils of this deluge of paper money are not to be removed until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions. Till then, we must be content to return quoad hoc to the savage state, to recur to barter in the exchange of our property for want of a stable common measure of value, that now in use being less fixed than the beads and wampum of the Indian, and to deliver up our citizens, their property and their labor, passive victims to the swindling tricks of bankers and mountebankers." --Thomas Jefferson to John Adams, 1819. ME 15:185
http://etext.virginia.edu/jefferson/quotations/jeff1325.htm
Posted by: Mark E Hoffer | Sep 13, 2008 5:18:03 PM
Posted by: John(2) | Sep 13, 2008 4:02:06 PM
J(2)
it's another one for the Ripley's file: something we, actually, agree on.
This: "First, I respect Cramer's accomplishments with TheStreet.com. Forget the TV pundit you see today, not many people had the foresight in 1995 to recognize that web based business content was going to be big. But Cramer did, and that sort of foresight and business acumen earns my respect." though, is a great point.
Posted by: Mark E Hoffer | Sep 13, 2008 5:23:21 PM
how can someone so smart be so clueless. It's weird. Really weird.
Posted by: jenny | Sep 13, 2008 5:27:57 PM
Cramer couldn't find his own 'bottom' with both hands.
Posted by: Pool Shark | Sep 13, 2008 5:35:17 PM
jenny,
see: Besides, he retired from finance years ago, and now works in entertainment industry.--BR
and: that can only hurt those who take his advice, and there seem to be a ton of them. Whatever the disclaimers, it's not just entertainment for a lot of people who really can't afford to trade on his assumptions but nevertheless do so.
Posted by: Rosabarba | Sep 13, 2008 4:15:00 PM
he's a shill that feeds the bid..
or, differently:
he's a techni-color shadow-caster (thanks: Plato)
he's neither Ignorant, nor Stupid.
Posted by: Mark E Hoffer | Sep 13, 2008 5:38:09 PM
"For more than a year, I’ve been a huge bear on housing." -- Cramer
Oh, wow, Jim -- how courageous. Back in 2005 -- three years ago -- my wife was contemplating leaving her salaried job to join her two cousins, who were prospering as a real estate agents.
"No, honey, no!" I pleaded. "This is the WORST possible time to enter the real estate biz. Prices are completely Bubbled, and soon it's all going to collapse."
The third time we had the conversation, she memorably remarked, "You're the only one who talks this way. Everyone else thinks the market's fine."
Today, of course, she will admit (if asked) that she's glad I dissuaded her from going into real estate just before it tumbled over the cliff. Unlike Cramer, though, I don't broach the topic with our friends and pound my chest like a frickin' ape while grabbing at my crotch.
Forecasting a specific date for a low is typical stupid media showboating. Cramer and New York magazine were made for each other: shallow, brash and obnoxious.
Posted by: Jim Haygood | Sep 13, 2008 5:41:01 PM
Great post Barry! Yes, Cramer is a smart man in many ways, however he flip flops by the hour and he rarely owns his mistakes as he spins everything. Many lemmings still follow the guy and buy into his bs...... This is pathetic, sad, and dangerous to one's financial health. Keep up the good fight Barry!!!!!!
Posted by: Cramer is a MAD man! | Sep 13, 2008 6:00:00 PM
Every generation needs their Henry Blodget and we have our ours. Except Cramer doesn't limit his act to just one sector. Please keep exposing this guy. Jim is proof that just about anyone can successfully manage money during a bull market.
Posted by: The Stock Speculator | Sep 13, 2008 6:05:07 PM
"Those who have knowledge, don't predict. Those who predict, don't have knowledge." ~ Lau tzu
Posted by: senthil | Sep 13, 2008 6:13:30 PM
Cramer is a great entertainer . However, he should use his talent in way that doesn't hurt the innocent ( "lemmings" ). He should know better .
Posted by: Pete | Sep 13, 2008 7:06:27 PM
Yes give Cramer his due for creating The Street.com in 1995? - he saw an opportunity and moved early. True that he is now an "Entertainer" who offers trading opinions. Again he saw an opportunity for a fast-paced, exciting take on stock trading instead of the usual staid and droll commentary. Is he a stock trading genius? Probably not. Is he a genius at identifying and capitalizing on web/broadcast stock trading
infotainment opportunities? Maybe so. Should you take his advice or is he a cartoon? It depends upon what you think of Dr Phil.
Posted by: sreynolds | Sep 13, 2008 7:07:48 PM
" Besides, he retired from finance years ago, and now works in entertainment industry."
Barry, you really know how to indult subtly. Love it.
Posted by: Mike in NOLa | Sep 13, 2008 7:11:33 PM
Cramer is funny as hell and that's about it. He's just doing his job, pump, pump, pump.
Posted by: easy$ | Sep 13, 2008 7:29:45 PM
Jim can be good entertainment, except too many people have lost too much money watching Jim's show. He's almost purely a momo trader, jumping on fast moving trains. Jim's momo style worked great in the 90's. Much tougher now. He needs to warn everyone that, if you're gonna trade that way, you need your finger on the eject button constantly (which most of his viewers don't). His sell recommendations come after many of his stocks crash back to earth.
Posted by: SteveC | Sep 13, 2008 7:40:33 PM
What? I'm truly surprised that none of you guys seem to recall the Barron's cover from not too long ago. Whether it is Cramer, Andrew Bary or Brian Williams doing the reporting I can only bring myself to endorse a double layer of tinfoil, frequent genuine repentance, requests for guidance from above and a shortwave set tuned to 6925 USB. It is going to be very interesting to see how Don's silver bullion age. BTW, whatever happened to Herb Greenberg?
Posted by: the | Sep 13, 2008 7:42:30 PM
I used to have the link to the wayback machine but I remember Cramer in the late 90s when he was on top of this game. Before L. He touted sometime a couple years back how he warned of the dot.com crash and told people to sell and saved his followers a lot of money.
But I remember him and his column back then. And I remember when he touted his tech darlings that were going to survive the crash in the markets. He posted it around Oct-Nov of 2000, before the Internet scrubbed it clean. Of the 12 that he said to stick in your portfolio, 9 went bankrupt, and 3 are trading between 70-90% of their former price.
Posted by: andrzej | Sep 13, 2008 7:49:36 PM
