Jim Cramer on his Bear Stearns prediction: Whatevs
posted at 10:07 pm on March 18, 2008 by Allahpundit
A follow-up to yesterday’s post. If the Messiah’s taught us anything, it’s this: Never apologize. Never apologize.
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Ha! What a loon.
Richard Romano on March 18, 2008 at 10:12 PM
hey..ya know…sorry
great montage
windansea on March 18, 2008 at 10:13 PM
Was he really saying that money managed by Bear is ok, but the stock is worthless? I would think that’s a pretty clear distinction. Is he getting a raw deal here?
mikeyboss on March 18, 2008 at 10:15 PM
Don’t take advise from someone that has anything to do with “Mad Money” >:D
Chakra Hammer on March 18, 2008 at 10:16 PM
It’s pretty lame for Jim on a stock show to present this as if he only meant money in the bank. Erin sure tried to set him up with all the right answers though.
Spirit of 1776 on March 18, 2008 at 10:16 PM
It will become Monopoly money.(Worthless)
Chakra Hammer on March 18, 2008 at 10:16 PM
I love how it comes back on the interviewer toward the end. I’m just glad my job isn’t to give everlasting predictions about other peoples’ wealth, which just happen to be in junky stocks soon to be junkier.
Vizzini on March 18, 2008 at 10:19 PM
Hey, I know how to make a ton of money on stocks. What? Why am I not working on Wall Street? Cuz I’m dying to share my knowledge with you. And just for $19.99 (but only if you call RIGHT NOW) you can have my knowledge AND a monthly newsletter (a $50 value).
freevillage on March 18, 2008 at 10:21 PM
AP… how are we suppossed to have a discussion when you button up both ends with video…. geeesh.
(kidding, don’t rip of my head and crap down my neck)
Hog Wild on March 18, 2008 at 10:21 PM
He sure is tripping over his defense. Liquidity indeed.
blankminde on March 18, 2008 at 10:24 PM
I want to hire whomever did this video for some ads in the general
windansea on March 18, 2008 at 10:27 PM
OK, I looked back at the first video and I think he is getting a raw deal. I think he meant if you have investments with Bear, no need to move them. I don’t think he was saying, “hold on to the stock.”
mikeyboss on March 18, 2008 at 10:27 PM
The investors in Bear got outsized returns for years by slicing high risk loans up into unrecognizable securities. You win some, and you lose some – my portfolio did not earn what theirs did for 5 years or so, but I still have my money….
Think_b4_speaking on March 18, 2008 at 10:27 PM
Buy, Jim, Buy! (Some stupidity offsets.)
CyberCipher on March 18, 2008 at 10:30 PM
Ok, I apologize if this seems a bit off topic, but I just read this in the Washington Times,
Has anyone ever heard of SCF? This is the first I’ve heard of it.
4shoes on March 18, 2008 at 10:31 PM
Early Monday he was on live over the telephone talking about this to Joe Kernan. He started to sound like he was crying(again) and they showed a close up of Joe who was rolling his eyes. This guy has been all over the park in his predictions of the direction of the market. I guess a broken clock is right twice a day.
Hummer53 on March 18, 2008 at 10:36 PM
HA! I knew that dude was an idiot. this confirms. thank you.
WayWard Fundamentalist Christian on March 18, 2008 at 10:52 PM
Here is a funny stick figure slideshow explaining the subprime mess. Warning: strong language at times:
Think_b4_speaking on March 18, 2008 at 10:56 PM
Every time I see him I always assume he’s a two minute man.
SouthernGent on March 18, 2008 at 11:00 PM
If you could not understand what Jim is talking about you do not need to be in the market. there is a difference in liquidity and equatiy. the two are NOT the same. There are also different types of stocks. the Bear Streans preferred stock is doing just fine. The Bear Streans common stock is not. The problem with bear was that it got caught in a fast moving liquidity crunch. I.e a run on the company has its customers (hedge funds) pulled their money out. This happened quickly and icaught almost everyone by surprise. As of the close friday no one including the Fed chairman, treasury sec and CEO of Bear thought BS was worth $2.00. It was not until the weekend that the FED, Treasury sec CEO of bear and CEO of JPM decided that Bear was worth .05 shares of JPM.
Again if you do not understand what happened, what the words mean, and why it happened you should not be investing money in the company in the first place. The same thing could happen to any bank or borkerage in the coming weeks. Citibank could become insolvent overnight. I have been warning about this for months now. People on this board have called me chicken little, people still refuse to see the danger and complain about “bailouts” from the FED like it is a bad thing. We are still not out of the woods. The market reacted well the last two days thanks to the FED and the Bush admin. It could be alot worse and still may be.
unseen on March 18, 2008 at 11:05 PM
Has anyone ever heard of SCF? This is the first I’ve heard of it.
4shoes on March 18, 2008 at 10:31 PM
the biggest difference is that no interest is charged. It is against islam to charge another muslim interest. since our entire economic system is based on interest, money lending etc it is a polar oppsite of our system. Instead of interest they include other types of repayment. sometimes including the interest in the loan just not calling it that, sometimes they will take other types of things to insure repayment.
unseen on March 18, 2008 at 11:12 PM
You mean, US dollars?
Tzetzes on March 18, 2008 at 11:16 PM
Right now I’m watching Jimmy C. push a glass company based on the move away from plastic baby bottles due to toxin issues. Good thing I was at the biggest health expo in the country last weekend and saw a friend of mine pick out a new toxin free plastic baby bottle for his healthy baby products website. I guess I’ll be lookin’ to short his pick.
TheCulturalist on March 18, 2008 at 11:23 PM
HILARIOUS! And illuminating.
fred5678 on March 18, 2008 at 11:25 PM
Can you sayfull of “Hot AIR”. This jerk is as emotional as a mullah or Dem, therefore, not to be trusted.
YankeeinCA on March 18, 2008 at 11:27 PM
Ditto all that; more to the point, neither the snarky fellow who put this video together, nor Allahpundit, nor most of the commentors here seem to grasp the difference between the value of Bear Stearns stock and the value of assets managed by Bear Stearns.
Ah, but the big question here is that of schadenfreude. Are you saying we’re supposed to feel it now, Allahpundit, or not? Is it OK, or isn’t it? I just can’t figure it out! I need you to tell us! Because, you know, we’re all just so morally stupid…
Lee on March 18, 2008 at 11:29 PM
Crazy White Man speak with forked tongue…….
This IS Obama-esque. Neither of them has the experience or the knowledge to advise anyone on public policy or economics
Janos Hunyadi on March 18, 2008 at 11:33 PM
Lee on March 18, 2008 at 11:29 PM
It amazes me that the avg american has no idea that their entire livlihood is tied to what happens on wall street and in the bond market. I guess the DEms and the MSM did their job well when it comes to class warfare. If anyone thinks the rich will suffer while the middle class escapes untouched, they are dreaming. If the rich wall street bankers go broke the rest of the country will be in soup kitchens with no jobs. don’t believe me read some history. Pay close attention to the years 1929-1944.
unseen on March 18, 2008 at 11:37 PM
Crazy White Man speak with forked tongue…….
This IS Obama-esque. Neither of them has the experience or the knowledge to advise anyone on public policy or economics
Janos Hunyadi on March 18, 2008 at 11:33 PM
Again he is saying two totally different things. If you think he is talking about the same thing both times you do not understand what is being talked about.
unseen on March 18, 2008 at 11:38 PM
unseen and Lee, you are both correct. The real issue here is the massive level of financial ignorance that exists in a country where people are being pushed into the deep end of the pool via IRA’s and 401k’s without the education needed to make sound financial decisions. Cramer understood what he was saying, but forgot who he was saying it to.
TheCulturalist on March 18, 2008 at 11:49 PM
I’m watching the late night broadcast of Mad Money right now and Cramer just went through the history of his Bear calls. It’s really quite clear.
TheCulturalist on March 18, 2008 at 11:52 PM
4shoes, unseen above has the basics covered, generally what I have seen is that the loan is discounted like a bond. Say you need $100K over 2 years, they fill out paperwork for loan of $110K and discount the note to your original $100K.
Think_b4_speaking on March 18, 2008 at 11:56 PM
TheCulturalist on March 18, 2008 at 11:49 PM
agreed. However Jim was saying to CNBC watchers. Those people are alot different than youtube watches IMO. So maybe he was saying it to the right people just that the message moved too a different audience due to technology. That being said people should have a basic understanding of economics before trusting their live savings to CNBC personalities or stock borkers or mutal fund managers or just about anyone. A stock broker is not a doctor. Anyone can with a little effort learn the basics of economics. when you think that you work all your life for that savings isn’t it worth an addtional hour or so a week to protect it?
unseen on March 18, 2008 at 11:57 PM
unseen, I agree completely. Which makes it all the more sad that so many people don’t take the time or make the effort.
TheCulturalist on March 19, 2008 at 12:03 AM
Rule #1 of blogging…if you’re about to look dumber than the person you’re trying to make fun of, don’t click “post!” Resist the impulse and use the time to look up terms like “liquidity” in the dictionary. That’s the book people used to read before they got their knowledge from YouTube.
RedLasso the clip from his latest show if you want a clue instead of learning about the world from YouTube professors.
This is exactly why America is in the situation it is. People can’t find Alaska on a map and they don’t understand the difference between having an account with money at risk and owning stock in a company. God help us.
econavenger on March 19, 2008 at 12:05 AM
econavenger, allah has a fresh post on the very topic of posting rules open right now. I’d link over to it, but I’m just learning how to post here. pardon my newbieism.
TheCulturalist on March 19, 2008 at 12:16 AM
rule number 2 of blogging
when unseen and econavenger come calling, ask them what their net worth is before proceeding
windansea on March 19, 2008 at 12:16 AM
I wish knowledge would always translate into net worth. I really really do. But from what I’ve experienced, it’s usually focus and drive that pump up net worth. I’ve met too many people who I wouldn’t want to spend 2 minutes with because they are very poor human beings, but that didn’t preclude them from loading up their bank accts.
TheCulturalist on March 19, 2008 at 12:22 AM
He should team up with Olberman and complete the
circle.
Texyank on March 19, 2008 at 12:22 AM
yep, thats what I thought
at least you are an honest loser
windansea on March 19, 2008 at 12:23 AM
windansea, I’m a little new here, so I’m not sure who all the aholes are, but I’m learning fast. Thanks for helping.
TheCulturalist on March 19, 2008 at 12:27 AM
maybe your sockbuddies will help out
windansea on March 19, 2008 at 12:29 AM
Agreed. Pretty clean.
I do wonder, what is the point of Cramer taking a question like that, if he was’t going to tell you the truth regardless if his heart said to sell?
Roebuck on March 19, 2008 at 12:30 AM
windansea on March 19, 2008 at 12:16 AM
I have a 37.3% return on my IRA so far this year. Due to rules within my 401k about frequent trades I am down a big 2% in my 401k for the year which the company match more than makes up for. I trade stocks and options daily. I dabble in the forex market at times too. today was very good to me. I bought LEH brothers stock yesterday for 30.78 when everyone else was selling in fear it is now trading at $46.49. I have trades that lose me money as well as makes me money but I ALWAYS know what I am trading and the risks involved before I place any of my money at risk.
unseen on March 19, 2008 at 12:31 AM
windansea (that wouldn’t be a polite way of saying flatulenceanincontinence would it?) I’d love to hang around tonight and spar with you, but I’m going to move up to a higher level of intelligence and work on a shark puzzle with my 4 year old. sweet dreams.
TheCulturalist on March 19, 2008 at 12:35 AM
TheCulturalist on March 19, 2008 at 12:27 AM
I’ve found when people do not understand what they are talking about they attack people to appear less stupid. This is what usally happens (see windsea). Next they will be calling us chicken littles because you know the economy is great because Bush says so…
unseen on March 19, 2008 at 12:36 AM
Cramer was wrong. He says that Bear Stearns has no problem with liquidity but they did and that is why the Fed helped arrange JPM’s takeover. BSC was insolvent and I would call that a liquidity problem.
Bill C on March 19, 2008 at 12:38 AM
Bill C, you are correct. However, Cramers call was that peoples assets on deposit with Bear would be safe for the very reason that this weekend’s action showed. Massive capital being used to prevent the dominoes from falling if Bear went belly up.
TheCulturalist on March 19, 2008 at 12:43 AM
I have all my money in zeppelin futures.
Chuck Schick on March 19, 2008 at 12:50 AM
unseen on March 19, 2008 at 12:31 AM
TheCulturalist on March 19, 2008 at 12:43 AM
Cramer googled himself :)
windansea on March 19, 2008 at 12:50 AM
True enough, but Cramer was also bullish on BSC common stock. See this video. Also, while Cramer was saying no, no, no to removing money from BSC, CNBC was showing a stock chart of BSC. On top of that, Cramer would have been massively wrong if the Fed had not brokered the JPM takeover. Although it is probably a reasonable assumption that the Fed would not have allowed BSC to go bankrupt.
Bill C on March 19, 2008 at 12:50 AM
This was a run on an investment bank. This is new territory folks. What’s even more interesting is that the cartel owned by banks to protect eachother thought it was so important to save a firm that isn’t even a bank like them.
Bear Stearns has no client deposits. The Fed isn’t supposed to protect them, but it is anyway.
gabriel sutherland on March 19, 2008 at 12:51 AM
More importantly, are any serious investors really getting their stock picks from CNBC? I hope at least they diversify their crap stock picks with Fox Business or Bloomberg.
gabriel sutherland on March 19, 2008 at 12:52 AM
Allahpundit, Cramer was absoluterly right and you are completely misunderstanding what he was saying.
He did not say Bear Sterns was not having problems with liquidity. He said you should not take your money out of Bear Sterns brokerage accounts due to worries about liquidity. He turned out to be correct. Those customers who kept their money in a Bearn Sterns account lost nothing.
What he was saying had nothing to do with value of Bear Sterns common stock.
coldwater on March 19, 2008 at 12:54 AM
BSC was insolvent and I would call that a liquidity problem.
Bill C on March 19, 2008 at 12:38 AM
on tues 03/11/08 Bear was not insolvent. on wed the CEO of Bear came on CNBC and stated that their liquidity postion was strong. Thurs and fri they had a run on their bank. Now bear was in trouble for along time its stock went from 170 to 60 in the last 6 months. That should have been a major wakeup call to anyone paying attention. If you still missed it the drop from $60 to $30 from Tues to Fri would have been a great second chance to get out. On fri everyone stopped doing business with bear and the FED along with JPM stepped in to insure the free flow of the markets. By monday it was over. An 85 yearold American company was wiped out in 4 days due to a run on its banks as investors pulled their money from bear. All of bears customers money is safe no one but the common shareholders lost money due to the FED’s actions.
unseen on March 19, 2008 at 12:54 AM
I lost all respect for this ahole when he was crying about Spitzer on TV. I hope his show gets pulled.
echosyst on March 19, 2008 at 12:58 AM
Bill C on March 19, 2008 at 12:50 AM
From my understanding Cramer was bullish on bear due to the possibility of it being taken over by a european bank. that was the rumor being talked about. That being said the 170 to 60 move should have kept most away from bear regardless of what someone says on TV. Still you are correct with Creamers thoughts on the common stock. He makes alot of bad calls, he also makes alot of good calls. In trading you can be wrong more than 50% of the time and still make tons of money if you control you risk/losses/gains correctly.
unseen on March 19, 2008 at 1:00 AM
What’s even more interesting is that the cartel owned by banks to protect eachother thought it was so important to save a firm that isn’t even a bank like them.
gabriel sutherland on March 19, 2008 at 12:51 AM
Bear makes a market for 1/7th of the US stocks. If bear didn’t open on Mon 1/7th of the US stocks would not have been able to trade. Bear also handles and clears trades for major hedge funds, they have a large fixed income business. So basically a failure of bear would have caused a failure of the entire US banking system. I would say that is reason enough to save the company wouldn’t you.
unseen on March 19, 2008 at 1:05 AM
Bill C, no question that he was wrong on the common and that there has been some revision going on at thestreet. I noticed this morning that an email I received yesterday had the link changed to show a video about MCD rather than Bear as the link title had shown. No one and I mean no one can call the markets or individual stocks 100%. Anyone managing a portfolio would know to not have too much money in any one position. A 100% loss in any one stock in a 20 stock portfolio is still only 5%. Painful, but not deadly.
TheCulturalist on March 19, 2008 at 1:05 AM
I think he knows more about Financials than all of you, posting disparaging comments about Jim Cramer.
iamse7en on March 19, 2008 at 1:05 AM
Final tally: Cramer was, for the most part right if one assumes Bear Stearns is/was too big for the fed to allow it to go under
Also, most of the posters in this thread aren’t as smart as they think they are since owning stock in Bear /= worrying the money invested via Bear would not be available.
ParisParamus on March 19, 2008 at 1:10 AM
Cramer is a weasel, the screen caps in the above prove it
windansea on March 19, 2008 at 1:17 AM
The real sad part is that there were many Bear employees who, like many at Enron, had way too much of their retirement money tied up in company stock. Great while it was over $100, not so great when it was valued at $2. If people who actually worked at a large finacial firm didn’t know to limit their exposure or at least cash out some of their stock at those higher levels, then who would know? That is, of course, assuming that Bear allowed them to do that within their retirement plan. If not, here come the lawyers. John Edwards on speed dial.
TheCulturalist on March 19, 2008 at 1:21 AM
Cramer had previously mentioned the danger of runs on some investment banks last week and knowing that that impulse was in the air, he was trying to discourage it while giving correct advice. He actually could have been forgiven for lying for the public good just to stop a run.
Either way was dead right and now getting mocked by comedians and YouTube fools. It’s almost a scapegoat mob mentality with people looking for someone to crucify in a crisis they simply don’t comprehend. It’s nervous herd laughter because their instincts should be telling them something is very wrong by now. I personally despise the idea of a lie taking hold and becoming the new truthier truth…just for fun, so I thought I’d call the foul.
Why are we such an unserious nation, and getting worse at the exact wrong time? I’d like to think we have the residual intellectual capacity to elevate our game when facing an economic crisis that could destroy our currency and/or bankrupt us almost overnight (yeah I know we’re already technically bankrupt). I can guarantee you that some billionaire enemies of the US know how to start effective rumors. We don’t need Cramer telling everyone to get their money out of the banks when there’s a rumor. It’s bad enough that we and the whole world all know we better move our investments and savings out of dollars as fast as possible.
econavenger on March 19, 2008 at 1:46 AM
long silver baby, buy the dips
TheCulturalist on March 19, 2008 at 1:49 AM
unseen and econavenger, I’m new here, but it’s nice to see that there are some level heads here. financially speaking. I bow in your general direction.
TheCulturalist on March 19, 2008 at 1:52 AM
Investors who can’t tell the difference get mad at Jim cramer.
adamsweb on March 19, 2008 at 1:56 AM
After 9/11, everyone learned about Islam either to embrace or oppose it. But few remember it was a post-dotcom bubble economic attack and not an Islamic cultural push.
We delayed the impact of the attack until now by creating a new double bubble while we studied and/or embraced Islam. Bad idea. Guess who is ready to make another big move in 2008 now that the housing and finance bubbles are collapsing? The same guy who has this naive Instapundit post on his cave wall.
So here’s Economics in One Lesson as a preemptive book suggestion for all.
Here’s the cliff notes audio interview for another book that predicted the specific unfolding current events.
And here’s a YouTube video with redeeming value. Warning: it’s a documentary with subtitles and it is not at all funny.
econavenger on March 19, 2008 at 2:34 AM
Cramer’s being a friend of Spitzer does not do Spitzer’s reputation any good.
Shy Guy on March 19, 2008 at 3:28 AM
unseen and econavenger, thanks for taking the time to post a comment.
Just remember: for every smart-alecky troll there’s at least 100 readers looking for a serious discussion.
(I should know, I am a smart-alecky troll)
billy on March 19, 2008 at 5:50 AM
I just wish this guy would blow a major arterial gasket live on the air and just get it over with. The clown is a walking heart attack waiting to erupt.
pilamaye on March 19, 2008 at 7:10 AM
But they are both sooo smart.
RobCon on March 19, 2008 at 7:49 AM
Cramer as a whole is correct. He makes hundreds of predictions and not all are going to be correct…very few people make as many public predictions as he does day in and day out. And if you check what he says, against other reliable sources, you will see that at the end of most any 12 month period, he is spot on.
Regardless of the way he delivers the message, few deliver so publicly, and accurately.
right2bright on March 19, 2008 at 8:39 AM
Capitalist Infidel on March 19, 2008 at 9:17 AM
lol. I think I posted this exact same comment on Hot Air on Monday. I had to go back to check because I thought you were quoting me in this part as well as the first part.
My argument wasn’t that Bear should be saved, but rather pointing out what potential consequences the market would absorb as a result of one of the seven NYSE specialist firms closing shop. Yes, it would be very bad. The Fed used what powers are in its possession, but the move is highly unusual and may establish a bad precedent for other investment banks that aren’t banks with deposit windows.
Cramer roots for the Eagles so there’s really no way I can trust his calls as a Bears fan.
gabriel sutherland on March 19, 2008 at 10:22 AM
gabriel sutherland on March 19, 2008 at 10:22 AM
The only thing that gives comfort is that it was used before for short term help during the depression and was swiftly stopped once the crisis was over. So all things being equal it should only be a short term fix. the FED seems to finally “get it” Now if only the other 80% of the AMerican people did the same. I would hate to think that our own stupidity/quest for revenge/spite would push us into a depression but over the weekend we came real close. that is the second bullet we dodged in the last 2 months. both crashes were avoided by quick action from the FED and from the federal governmnet which to me is why we elect them in the first place to deal with these big issues that the little guy is powerless to stop. Next to a strong army to defend us I think it is the most important job of the fed gov to insure a free fair marketplace.
As far as the Eagles, I’m a steelers fan so I know what you mean.
unseen on March 19, 2008 at 11:39 AM
Whose Jim Cramer? Is he like a poor man’s Bob Brinker or something?
srhoades on March 19, 2008 at 11:41 AM
You are absolutely right about this being the Feds job. I just wish they would get out of the business of controlling the money supply. Greenspan’s big mistake was to stop targeting growth in money supply and start targeting CPI and PPI. This ignores asset prices and that is why we had the double bubbles.
I don’t want revenge against BSC or any other broker/dealer but I think the Fed is fighting a losing battle. Of course, that doesn’t mean it shouldn’t fight.
Bill C on March 19, 2008 at 2:06 PM
Bill C on March 19, 2008 at 2:06 PM
we had bubbles before the Fed, we also had depressions. bubbles are more to do with the human emotion of fear and greed than anything else IMO. While I agree that America can not print its way out of our problems. It is nice in a way to know that countries like china and the middle east are giving us a dollar in goods and getting back .70.
Old saying on wall street don’t fight the FED. a losing battle I think. It just takes time to turn around a ship the size of the USA. give it 6 months and we should be out of the woods IF the fear can be contained. I know its a big IF but…
unseen on March 19, 2008 at 4:18 PM
Maybe. The Fed stopped the last bursting bubble by flooding the markets with liquidity. I am not saying it can’t happen again, it really depends on the public maintaining confidence and there is no guarantee of that.
Bill C on March 19, 2008 at 11:41 PM