August 4th, 2007

Jeremiah Jim Cramer Shouts Fire & Blasts the Fed

Posted in Money, These United States by ed

Jim Cramer is the founder of TheStreet.com and the chair-throwing impressario of the stock chat show Mad Money.

Mr Cramer (aka Jimbo and Q-Ball) worked at Goldman Sachs before founding the Cramer Berkowitz hedge fund, which he then left to form TheStreet.com. So his early morning overview pieces at RealMoney.com (a subscription service offered through TheStreet) are filled with insight based on deep experience.

But during the heat of the trading day, he often goes bananas. And trading on his overheated ideas is likely to get you toasted.

Indeed, if Jimbo blogs “Buy It!” at high noon, chances are you should sell before sundown.

Yesterday, as the Doom & Gloom scenario rolled into town, Mr Cramer got steamed after listening to a desultory yet alarming Bear Stearns conference call. Then told his blog what he knows:

It’s Bad Behind the Scenes
8/3/2007 3:11 PM

Over and over I hear that the subprime issue can be contained. I hear that it will blow over and that the woes are overdone.

Holy cow, are these people making any phone calls to find out what’s going on behind the scenes? Are they totally clueless?

I sit here and make call after call to people and when I am not collecting their resumes, what I am hearing is so dreadful that I don’t even want to repeat it.

Understand, I have no skin in the game. In fact, I am looking for a house so the housing prices are going my way!

But you need to know that in the last two weeks, all fixed income has simply shut down. You can’t even sell commercial paper, and that stuff’s like tap water, the way it flows.

The rest of the market can rally, we can have short squeezes, but the money is pouring out of everything everywhere and flowing into cash and Treasuries.

The mortgage market has disappeared overnight. Overnight!

I see these ads for home-equity loans and mortgages and I laugh. The companies can’t possibly get you one because there is no way that anyone will give them the money to do so. These homebuilders are dead right now. Moribund.

Gee, I wish I knew some Fed governors and presidents. I wish I knew the chairman. I wish I had a better relationship with the Treasury. Because someone has to do something.

Minutes after this post, Mr Cramer appeared on CNBC (the old Financial News Channel) and starting yelling at the Fed for sitting on its hands and mouthing academic nostrums.

He then blogged:

I’ll Keep Telling It Like It Is: Bad.
8/3/2007 3:34 PM

Look, I don’t lose it on national television for no reason. In the last 48 hours, I have spoken with most of the big desks and mortgage lenders in this country.

… I had to say it. I had to say what’s happening. I had to say what people I trust are telling me.

I have talked to more board members of major financial institutions in the last two days than I have in the last 20 years. People are coming to me because they trust me and want me to say something.

They don’t want me to say, “Don’t worry about it.” They don’t want me to say “Don’t panic, anyone.”

What they say to me is, “Please, please say something.”

So I did. And I don’t regret it. Not one bit.

And will do it again. And again. And again.

Until someone hears me.

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One comment

  1. ed says:

    Here’s an update. Rather amusing.

    August 20th, 2007 at 11:31 pm

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