August 01, 2007

And then Jim Cramer (correctly) panicked, and (finally) said sell all the lenders - "Tremendous panic" and "First man out lives"

Jim, a bit of bad news for you (but I'm glad you finally found HousingPANIC - BOO-YAH) - The lenders have already gotten destroyed, their stocks are down 50%+, over a hundred have gone belly up - and NOW you say get out? NOW you say sell and be first man out?

Jim, Jim, Jim - glad to see you wake up, but you're not first man out. You're late.

But still, even though you're late, really late, good call. Get out at any cost - housing, lender stocks, homebuilder stocks, anything to do with real estate worldwide. Get out.

Thanks Morgan for the link

Jim Cramer:

"Why don't more people talk about this? Because it inspires tremendous panic. It's first man out lives."


Theodore said...

Are any of the trolls still going to try and claim that he's only joking?

ImOut said...

Cramer is probably out long ago.

As he says, he sold his last beach front property last week and now he doom and glooms the market. niiiiice move.

Its clear the global economy is a highly leveraged ponzi scheme.

I cant imagine how Cramer could be even more bearish, lets see, he could say 'get ALL your money into EURO's and foreign currencies TODAY TODAY NOW NOW NOW!' That is what Schiff says, but calmly.

Lets start a WE LOVE CRAMER fan club until he turns on us, the we start and bash him.

Anonymous said...


Hoo-weeeee...liquidity is right out of the window.

keith said...

So I can't see Mad Money over here - is he being this negative on CNBC, or is the Tale of Two Cramers?


Anonymous said...

It's fun to watch Larry Chews His Goldilocks Kudlow starting to squirm. Kudlow would pee on you and tell you it was raining. I looked up "Denial" in the dictionary and found Kudlow's picture.

Anonymous said...

He is being really negative on CNBC as if he sees that it's a lot worse than he even wants to say.

Monday he gave the most negative synthesis of the "gloom and doom" (reality) we HPers have been talking about for a long time. He said he was just putting out there to acknowledge the meltdown view and then said he didn't believe it would happen. Then after tuesday's drop he basically ceded that the worst case was happening and said we should all buy defense (as in bullets and military hardware) stocks....and he wore camos for the show.

Anonymous said...

I think Cramer is going to hang by his fans who will soon realize he knew alot more before saying something about the housing and credit debacle. I can never look at him without thinking what a "player" with sheeple's money he is. Jim....I hope you go to the Econ Hall of Shame.

Waiting_4_the_show said...

I'm out and stocked with popcorn.

just walk away said...

Man, this is just like the Mad Max Road Warrior movie. Remember the night scene where all hungry nomads had the camp circled (bloggers and the media) and the big freak in the mask climbed up on his vehicle with the hostage (David Lereah/Lawrence Yun - take your pick) and said "JUST WALK AWAY!"

We all know what happened to Lawrence in that scene...

russdog777 said...

Sold all his real estate.
Sold the last real estate holding two weeks ago.

and NOW he calls the real estate / credit meltdown. Jim was trying to be the first man out himself. Anyone else think there might have been a conflict of interest or pump and dump?

Nice one Jim.

SPECTRE of Deflation said...


Torabi: "I have to bring up a video we did yesterday that was entitled ‘Walk away from your house’".

Torabi: "Jim Cramer says, y’know, ‘there is a time to walk away from your house’. To re-visit the video yesterday, you said, ‘when your house is down 20%, essentially, when you have no more equity left…’"

Cramer: "Right"

Torabi: "…that’s a good time to sell…"

Cramer: "Yeah"

Torabi: "… but what [unintelligible] because that"

Cramer: "Well not just sell, to walk away. You can’t sell it."

Torabi: "How do you walk away?"

Cramer: "Well you just default on the mortgage. It makes huge economic sense. You go rent. Uh, you don’t want to lose your job, so you keep your car. Uh, you keep your credit cards so you can buy, and all that really happens is is that you made a bet and you lost, so don’t compound it by continuing to pay."

Torabi: "Now the hierarchy of debt, you were saying also that y’know, your credit card debt should be less of a priority than if your house is losing value"

Cramer: "Oh, yeah, credit cards are much more important than your house. Remember, your house is only a good bet if you can build equity. But if you are going to lose money each month, you might as well rent. You shouldn’t own."

Torabi: "And, but, yesterday you’re also saying there are no places in this country where there is value in homes. A lot of homes are depreciating…"

Cramer: "No, No, there is no place where [mumble] you wouldn’t be down on your home if you bought it in 2006, that’s what the issue is. So, I’m saying that buying homes in 2006 was like buying the Nasdaq in February of 2000. They’re very very similar - it was better to be margined out than to continue to put capital against those Nasdaq stocks."

Cramer: "There was a report this morning by David, I believe it was David, uh, Blitzer, on, when I was on with the wonderful and fabulous Erin Burnett and it was that the, some housing prices have, uh, been, have actually stopped going down and some are going up and I just think that’s not true. I think, like, bad CDOs, and, like, bad leveraged loans, the actual mark to market is down everywhere. I get that from the 5 homebuilders whose conference calls I listen to. There are no up markets, and there are markets that are falling 20-30%, and those are the ones where it’s much smarter to walk away from your house."

Torabi: "Is the 20-30%… what’s that based on, or is that just…"

Cramer: "It’s where the, uh, purchase prices are, uh, when you back in the discounts. The discounts are very hard to see, cause all the homebuilders do two things: One is is that they offer incentives that don’t surface, so the list price is $250,000, but you’ll get rebates just like a car, so the list price of a car is $25,000, y’know, but you’re really only paying $18,000, so take in that, and the second thing is is that there’ll be Realtors, and what’ll happen is is that you’ll say ‘look - the list price is $225,000′, but you can negotiate down and go $190,000. I’m using the negotiable prices.

Cramer: "This is happening in the inland empire, in Sacramento, uh, it’s happening in Phoenix, it’s happening in Denver, and it’s happening in Las Vegas, and in southern California, uh, anywhere near the bread, the so-called bread basket, Modesto, these are all places where there’s tremendous overbuilding, and where it may pay to leave your house."

DAMN!!!!!!!!!! You still aren't getting your 1.00% cut Jimbo no matter how much you howl.

borkafatty said...

Bush gladly printed up more money for his war, because the real-estate run-up acted as a "cash sink", sweeping up the surplus money in the economy. People thought they were getting richer because now they lived in a two million dollar house that had cost their parents just fifty thousand. On paper it looked good and while it worked Bush could print and spend with abandon knowing that at some point that extra cash flowing through the economy would get sucked up to pay the huge mortgage payments of America. But now that the real estate boom has gone bust, there is nothing to soak up that extra cash, and with too much money chasing around too few goods and services, hyper-inflation is not far off.

The thing to keep in mind is that the disaster was intentionally created by the US Government, who thought they could win control of Mideast oil and repair the economy before things went to hell.

The government screwed the pooch, and YOU, my dear readers, are set up to take the fall for it.

SPECTRE of Deflation said...

Folks, in the stock market, your first loss is always your best loss. Don't listen to the shills and sheeple who are clueless. IMHO.

We can also extrapolate that to housing. Sellers that saw what was coming and agressively priced their houses to move even if it meant a short sale. Now it will be too damn late for many,as they are wiped out by a falling illiquid asset.

Anonymous said...

Cramer's populist streak is showing!

He knows things are gonna git "blowed up".

I have no idea what tense that is.

DOPES said...


rip saw said...

Those Harvard types really crack me up.

westwest888 said...

Cramer's as smart as us, and then some because he has his own TV show. If you guess the same as Cramer before he says it AND take a position in the market, you're smart. If watching Cramer is a huge eye opener for you, then it's too late to trade and you simply haven't done your homework.

Hat tip to HP for being so dynamic as to cover every angle of the housing crash with counterpoints.

polizeros said...

Even better, buy puts or sell them short.

John Singer said...

Now Cramer wants us all to sell our houses and put the remaining money in Google stock. Given his record here, maybe not such a bad idea

Anonymous said...

Bernanke Now Sees $100 Billion Losses in Greenspan's Mortgage Bubble
Increase DecreaseJuly 20, 2007 (LPAC)--Standard and Poors downgraded once-top-rated mortgage backed securities (MBS) to junk, and Federal Reserve chairman Ben Bernanke--who was warned a month ago in EIR that the mortgage meltdown was "much worse than he thinks"--estimated there will be $100 billion in hedge fund and bank losses in the mortgage bubble his predecessor Alan Greenspan largely created. Bernanke was testifying to the Senate Banking Committee on July 19.

Bernanke's public estimate is well down on the low end of bank and real estate analysts' estimates of these losses, and even S & P forecast in a July 14 report that the losses will be in $400-500 billion range. Hedging his bets that the sub-prime mortgage losses might go higher, Bernanke added, "A lot of the sub-prime mortgage paper is not as good as was thought originally," as he notified the Senators that he's now working with some banks to assess the value of their mortgage assets, such as collateralized debt obligations -- pools of bonds backed by sub-prime home loans.

Anonymous said...

gold and silver stocks could be the next bubble

Anonymous said...

Very curious, foes anyone understand why he is doing this now? Is he going to profit financially somehow if people walk away from their houses in droves that he would not have 2 weeks ago?

Sure,he sold his houses first, but why start a panic and not just let it all devolve- why do people think he needs it to crash immediately?

Ben Dover said...

Forget the KY... Grab the Vaseline. It's going to be rough (and deep)this time.

Batman said...

I still think it's not too late for some people to get in the life boats. Chart the DJIA trend and you'll see we still haven't broken below the support. We've only climbed down to May of this year.

The denial will keep going while the parasites get their cash out, leaving the sheeple/proles holding the bag.

I agree we've hit the iceberg now, but most people still think the ship's unsinkable.

Right now when I talk with non-HPers it's really only people with a fair bit of investing knowledge that know what is going on. Linsay Lohan is still higher on the radar that this gigantic global financial meltdown.

Anonymous said...

Got Gold?

Anonymous said...

Cramer is Wall street's mouthpiece for holding the FED hostage. Essentially the message is, cut interest rates or else we will ask millions to walk away from their mortgage.

This is non-violent terrorism if you ask me.

stuckinthecity said...

guess we are done with pump time now it's dump time!

rcochran said...

It's fun to watch Larry Chews His Goldilocks Kudlow starting to squirm. Kudlow would pee on you and tell you it was raining. I looked up "Denial" in the dictionary and found Kudlow's picture.


I'm an irrationally exhuberant Kudlow-basher. I try to post derisively on his blog each day.

Anonymous said...

Yeah but iPhones are selling like hotcakes........oops, Apple just cut back production to about half what they originally thought.

Jerj said...

Oh my god:

``It is too early to say if home sales have already passed bottom,'' said Lawrence Yun, senior economist for the Realtors group in Washington. ``Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand.''


This might be the worse Larry quote yet.

buyerwillepb said...

Did JC just say "Panic?"


Anonymous said...

Funny. Cramer was doing his usual mid-day appearance with that girl on CNBC, and after his negative forecast (i.e., gloom & doom), CNBC rolled a long disclaimer saying that none of Cramer's opinions were responsibility of CNBC.

Now, Maria "lend me you corporate jet" Bartoramo is serving the usual Kool-Aid.

Anonymous said...

This market is more volatile than my uncle, during holiday parties, after drinking half bottle of Jack Daniel's.

Anonymous said...

"...cut interest rates or else we will ask millions to walk away from their mortgage."

I too walked away with the same feeling.

Anonymous said...

cramer and his pals are buying gold

Brucey (AKA Rice-a-Roni) Johnson said...

Ben Dover,

Will you invite me to that party?