Saturday, August 04, 2007

The Jim Cramer Implosion

I watched the Jim Cramer of Mad Money melt down on CNBC Friday. Here is a Link to it. He wants Bernenke to lower the interest rates. It was kind of a toss up as to whether it was an act or not. You wouldn’t normally pull stuff like that with people you work with on a daily basis. I don’t think that Erin Burnett who was interviewing him was enjoying the loss of control. I am sure that she thought he deserved a kick in the nuts.

Today on Bloomberg Jim Rogers was interviewed and he referred to the auto industry, the housing industry and the finance industry as being in a recession. He had to correct himself when he tried to pronounce “recession” with a “d,” on two occasions. Just maybe it’s time to pass out the life jackets.

Jim Cramer seems to think that lowering the discount rate is going to save the market. In his way of thinking it will save the market. It will save the quid pro quo. I think we are tired of the salesmanship of, “If this erection lasts more than 4 hours. . . .” In reality we have a stock market that is out of control, we need a meltdown to restore reality. Google alone is pumped up on steroids.

On a good note, we have Wells Fargo raising the Jumbo rate to 8%. This for once seems like a realistic rate for long term home loans. It’s not that I wouldn’t like them lower; it’s the spread between short term and long term that has now gotten healthy. There is now a premium for investing long term that wasn’t present in the past. Things are starting to make sense now.

Bear Sterns is still in control of seating arrangements on the Titanic—I think they are going to move the band to the back of the boat, everyone loves music. It will surprise the people coming back from the life boat tour of the iceberg.


Paco Bell said...

Here is the Youtube version.

Cranky said...

(I see I’m not the only one that was thinking this)

Right in the middle of watching Cramer lose his marbles, I start thinking about that 1983 movie “Trading Places” when Mortimer Duke played by Don Ameche, starts screaming “Now, you listen to me! I want trading reopened right now. Get those brokers back in here! Turn those machines back on!” Then I get to wondering… how far off are we from complete meltdown??? Why is he going crazy like this right now? Is he just sick of people crawling up his ass, riding him for answers?

Let’s see… we’ve been cheering on this great ship… faster, faster, faster… got her all the way up to 24 knots… now we’re screaming full reverse. For what… so we only hit at 23 knots???

I just hope someone is chronicling all this and has it published. I want to save copies of it for my grandchildren… this will all happen again in their lifetime.

Anonymous said...

I sent my father (an insurance broker and financial advisor to the extremely wealthy aka. he has no time or patience for small fry like me) some statistics on the housing market here in los angeles illustrating why I have not bought a home nor plan to in the near future. I do feel there are multiple signs there is a depression brewing on the immediate horizon. Now keep in mind, this is a man born in 1937 whose parents literally lost their farm during the depression. His response?

"Girl, you're full of doom and gloom. Buying a home is a good investment now and has been for the past five years. The economy and stock market never goes down and neither does real estate. Your sister makes much less than you and she has bought a house." (With an ARM no less.)

I feel so torn. I don't want my sister to have financial hardship, yet worry that if she keeps listening to my father she and her three kids will end up on the street.

I hope you do save this stuff Cranky and warn your grandkids. I just don't understand how my Pop could witness the devastation of the depression and not see it coming around again. Are we too skeptical? Could he be right?

Jim in San Marcos said...

Hi Cranky

Not too many people know the top speed for the Titanic--Looks like you watch PBS too.

As for this happening again in your grandchildren's life time, I really doubt it. It will be three generations in the future before all memory of this crash is gone from the worlds "group memory."

My second post as a blogger will give you more info on it. here is a Link to it.

Jim in San Marcos said...

Hi Anon

If your dad was born in 1937 he never really got to experience the Depression. At the age of 11 he was watching the new post war prosperity.

Several people have accused me of being full of doom and gloom. I have to agree, they are right. The doom and gloom is not my idea, its just the way I interpret the events around me.

Remember one thing we can "all be right" about a future event, we just can't "all be right" at the same time.

Your dad is right today, and you could be right tomorrow. The irritating thing is that he could be right for 1000 days before you are right for one day. That one day is the one that really counts. So stick to your guns.

Cranky said...

Hi Jim
A few years ago I stumble across the Elliott wave. I was so fascinated by it I’d spend hours looking at it, reading about it. I was blown away with the Kondratieff Wave. That’s a great post Jim! One of my favorites here.

As to the “in my grandchildren’s lifetime”, you’re right about the three generations. The information would be for them to teach their kids… my great grandkids. To hopefully prepare them… to condition them for what may come. To teach them how not to be financially foolish. If my grandfather had passed down a book like that to me, I would have devoured that thing. My grandfather was born in 1909. He was 20 years old when the great depression started to unwind. His great grandson (my sisters kid), now 22, will learn like he did, the hard way.