Posted on 08/04/2007 10:36:23 AM PDT by ex-Texan
Jim Cramer today angrily called on Federal Reserve Chairman Ben Bernanke to lower interest rates, saying he "has no idea how bad it is out there" in the nation's credit markets.
In his "Stop Trading" segment on Street Signs today, Cramer said the nation's central bank is "asleep" and should immediately "relieve the pressure" on financial firms and the nation's home owners who are facing big increases in their mortgage payments as 'teaser' rates expire. Many thousands will "lose their homes," he warned. "This is not the time to be complacent."
About an hour later, he made a return appearance on CNBC's Closing Bell to soften his initial comments, making it clear that he is not recommending investors sell stocks. He predicted a big rebound for the major stock market averages if the Fed does indeed lower rates, and said he was upset by Bear Stearn's Bear Stearns Co Inc [BSC] "complaining" during a conference call earlier in the afternoon. "I don't want to scare anybody," he added. "The Fed can make this whole problem go away" by lowering interest rates.
Standard & Poor's changed its rating outlook on the firm to negative from stable this morning.
NOTE: There is a MUST SEE Video at the primary link. Why? Jim Cramer losses it on the air.
....And where is the culpret (Greenspan) when people really want to confront him?.......
As usual, he’s soaking in his tub — making big bubbles!
If it wasn’t for the VA home loan program I would never have been able to afford my first house.
An incorrect argument, m'friend. Current holders of US paper are compensated at a fixed rate of interest; if FOMC subsequently reduce short rates in the US, the value of the paper held at the time of the rate cut will increase, because future purchases of US paper will be dearer in that the spread between the coupon rate (nominally 6% on 30-years) and the current rate will have widened.
Indeed, the price of 30-years and 10-years have been moving right up for a month as the mkt increasingly, so it seems, is anticipating (or 'pricing in') an FOMC rate cut. Fed Funds futures are up 30+ basis points in just 3 weeks' time -- the mkt is QUITE certain that a cut is on its way.
Now, it may seem odd that a cut in the Fed Funds rate would have any effect at all on 10-year rates and 30-year rates, but the fact that it does so is inarguable historically.
| Here are the Results for Saturday, August, 4 2007! For the 30 day period ending 2007-04-23... |
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| Cramer Wins! Click here for full details of this battle. |
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Since November 1, 2005, Jim and Leonard's overall records are: Jim Cramer - 138 wins, 138 losses, 48 ties Ongoing Stats: Leonard the Wonder Monkey is right 49.95% of the time. |
In March 2007, a December 2006 interview from TheStreet.com's "Wall Street Confidential" webcast stirred controversy after it appeared on YouTube.com. In the video, Cramer described activities used by hedge fund managers to manipulate stock prices; some illegal and some debatably legal.[17] He described how he could push stocks higher or lower with as little as $5 million in capital when he was running his hedge fund. Cramer said, "A lot of times when I was short, I would create a level of activity beforehand that would drive the futures." He also encouraged hedge funds to engage in this type of activity because it is "a very quick way to make money."
Cramer claimed that everything he did was legal, but that illegal activity is common in the hedge fund industry. He also stated that some hedge fund managers spread false rumors to drive a stock down: " ...it's important to create a new truth, to develop a fiction."[18] Cramer said one strategy to keep a stock price down is to spread negative rumors to reporters he described as "the Pisanis of the world". "You have to use these guys," said Cramer. He also discussed getting "the bozo reporter from The Wall Street Journal" to publish a negative article.[19] Cramer said this practice, although illegal, is easy to do "because the SEC doesn't understand it."[20] [21]
Pain teaches wisdom.
How true! I've paid more than my fair share in "tuition". Here's another lesson that I learned:
Anybody that says children are an "investment" doesn't know jack about accounting! Kids are an EXPENSE!
I love mine anyway! ;>)
No man’s credit is as good as his cash......
Not to long ago you had to go hat in hand to ‘The Banker’ and near neigh grovel for a house loan. Today it is much simpler. You can do it online. Home loans are written for any credit group. Naturally you pay more for lower scores, but basically if you have had the income for a few years, you can get a loan. This is good, by and large, and no credit goes to the government.
I’ve never been a Cramer fan. I think he’s a flake and a PT Barnum wannabe. Sooner or later he’ll slip up and get caught and wind up spending time in Club Fed.
Waaaaa! Consumers make decisions about what they can and can not handle financially. Just another demand for government to bale out stupidity, both professional and personal. Those of us that use common sense and live in reality don’t have these sort of fiscal issues. Although we do benefit financially from the desperation of those that do (until of course the guberment comes in and tries to soothe the consequesnces of these poor decisions and risks.)
Even if the SEC does not get him, I always change the channel when he comes on.
bttt
Thank you. You echo my position completely.
As I said on another thread: Fannie/Freddie are to the DNC what Enron was to the GOP.
The report on the accounting within Fannie/Freddie should be read by all taxpayers. If taxpayers did read the report on Fannie/Freddie accounting, then they’d fall in line with your/my position in a heartbeat: if you want to call it private property, then don’t ask for the government to help you buy it. Use private financing.
LOL! Cramer must have gotten a visit from some of Bernanke's goons.
Yes, but there is a difference here:
Your loan was part of the VA benefit programs for those who have served, along with education, health care and other bennies.
It isn’t proper to compare your benefits to Fannie/Freddie, because:
a) You’ve earned your benefits and compensation. Thanks for serving.
b) If every vet bought a house through the VA home loan benefit programs, the government involvement in housing still would be only a small fraction of what the loan activity is today through Fannie/Freddie. I don’t think you understand the magnitude of the problem(s) we’re taking a shot at when we’re talking about getting Fannie/Freddie out of the housing finance game. Fannie/Freddie together are holding home mortgage loans that total over $1 trillion, and they bundle and re-sell much, much more.
The VA benefits for your home loan I see the same way I see all other VA/vet benefits: compensation for your service, and the least we can do, not a handout to some middle-class person who didn’t need a hand-out in the first place (which is what Fannie/Freddie are).
All of the VA-guaranteed credit programs add up to mere 24+ billion per year.
You sound just like Herbert Hoover's advisers at the beginning of the Great Depression. If what you say is true, lowering rates to their natural market level shouldn't hurt any. But it would help prevent a market correction from turning into a financial crisis.
I bought more house than I could afford with a one year ARM twenty years ago and it's worked out great.
You’re correct in the small version of the market (ie, the over-inflated housing valuations).
Here’s another reason why you’re correct that it is too late:
The problems in the sub-prime market aren’t just liquidity. They’re structural, there have been problems with the bond rating agencies playing “dumb and dumberer” and outright collusion to commit fraud on the part of those marketing CDO’s and CDO-squared with their “mark-to-model” valuations.
The Fed can only a) establish rules, guidelines and conditions on the American banking system, and b) supply liquidity.
The Fed cannot solve structural problems in the debt market, in particular, the mark-to-model valuations of CDO/CDO-squared. That, the market must sort out for itself.
The whiz kids these hedge funds and investment banks hired got too clever by half. Now it is time for the grey-haired ones to take control, slap some kids around and clean up the mess.
My observation is that the Fed causes crashes, usually using the pretense of trying to prevent them.
You must mean the ones for $500k for $300 a month. OK, those are crazy, but most ARMs aren't like that, and they are a great deal for the borrower and the lender.
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