August 05, 2007

Jim Cramer melts down (with the markets) live on CNBC - you must watch this video. "We have Armageddon" (Bump)



(UPDATE - I'm gonna bump this video for a bit longer. It's just that good, and that honest. You gotta believe CNBC and others will make Cramer back away from these comments Monday, and he probably will. But card laid, card played, and this cat is out of the bag...)


Mark this day - August 3, 2007. The day it all unraveled. The day the center could no longer hold.

Even Jim Cramer completely lost it today.

And I think we all know why.

I didn't know what housing panic would look like when it really started to hit.

Now I do.

Everyone watch this video.

This is housing panic.

And get ready.

Sorry, Jimbo. The Fed ain't gonna cut.

Here's some highlights:

SHOUTING:

"HE HAS NO IDEA HOW BAD IT IS OUT THERE. HE HAS NO IDEA. HE HAS NO IDEA. I'VE TALKED TO THE HEADS OF ALMOST EVERY SINGLE ONE OF THESE FIRMS IN THE LAST 72 HOURS AND HE HAS NO IDEA!!!"

"AND BILL POOLE HAS NO IDEA WHAT IT'S LIKE OUT THERE!!"

"THESE FIRMS ARE GOING TO GO OUT OF BUSINESS!!!!!"

"THIS IS A DIFFERENT KIND OF MARKET AND THE FED IS ASLEEP AND BILL POOLE IS A SHAME HE'S SHAMEFUL!!!!"

"WE HAVE ARMAGEDDON"


At this point the video ends and I've gotta believe Cramer went out to his car and did some blow with Kudlow.

211 comments:

1 – 200 of 211   Newer›   Newest»
Mark in San Diego said...

IF the Fed cuts, the dollar will be .50 cents to the Euro, and oil will cost $110 a barrel in USD. . .and actually, at this time it would be "pushing on a string" as the Japanese found out . . .think a 15 year downturn just like Japan real estate crash. . .I agree - today is the day.

Anonymous said...

OH

MY

DEAR

GOD

This man needs help.

shtove said...

Woooooooooooooooooot?

Is it staged? I don't think so, at least not by CNBC producers. Does Erin still "want" him? Possibly more than ever.

This is a play to put the "Fed must lower" headline in to the MSM.

keith said...

This is what set Cramer off. I sure hope the Fed doesn't cave. After the biggest bubble in human history, the way back down is either long and painful, or short and painful. We'll see which path the Fed takes.

http://tinyurl.com/2krgy4

Fed won't ride to rescue of markets: Poole

Financial markets understand that the Federal Reserve won't respond quickly to a typical market upset such as last week's sharp stock sell-off, St. Louis Fed President William Poole said Tuesday.
The Fed should only act "in due time" if evidence accumulates that the market drops could undo price stability or low unemployment, or when financial market developments threaten market processes themselves, Poole said.

FORECLOSUREBOY said...

Foreclosure boy he say walk away house!

No more make check to big bad bank!

Find little home rent save very much money!

Anonymous said...

Damn, that is panic, so when do people start jumping out of the windows, and how do you get blood off the sidewalk?

rcochran said...

Cramer's point of view is very Wall Street centric.

I'm sure he has lots of broker buddies and fund managers who are losing it all right now, and they expect the Fed to bail them out.

Screw them. They are used to eating everyone else's lunch, and now that things have turned against them, they want to be bailed out. What a bunch of spoiled babies.

Rip Saw said...

Now that was television worth watching!

maria bartiromo (aka the Fiat Biatch) said...

Why don't any of the CNBC fiat biatches ask Cramer why should an industry built on fraud be saved? The house of cards that CDOs built. Why keep that Frankenstein alive??

Anonymous said...

Dooooopey!!!!!!! Doooopeeey!!!

Don't do it, don't pull the trigger... I know your CFC and TOL longs suck rotten eggs; and your Cramer crush is wilting; and your basement bedroom at mom's house is suffocating... But that's no reason to end it all.

We need you! We need trolling idiots like you to provide chuckles and lighten the mood while our CFC and TOL shorts keep rocketing. Likke your hero "W" says, it's hard work to be rich!!!

LOL, what a dolt!

Dow down 280+ points... the dead cat bounce is done. And sheeple, like dear ol' Dopey here, got pounded ky-free once again!

Enjoy the weekend, Dopey... Love ya!

westparker said...

The fed can't cave, besides the dollar dropping by 50%, the long term rates will skyrocket. This is the perfect setup for stagflation. The market is starting to realize it, gold was up $10 today.
The only way to hopefully control it is to push tons of money on the system (even more than they have been) and keep rigging the inflation and growth number hoping to keep the sheeple fooled.

Anonymous said...

CNBC seems to have "shortened" the Cramer video. It cuts off when he mentions Bernanke...

Mikhail said...

Isn't this kind of passionate screaming just part of Cramer's standard schtick? If so, maybe this rant is all just to make some drama.

I don't watch enough of his shows to know what's "normal", but I seem to recall seeing him go on loud rants in the past.

Anonymous said...

The guy is a drama queen. His only interest is that all his rich friends don't take a hit. Inflation is already way ahead of wages and a rate cut would send inflation through the roof. But then again, he could care less what happens to "wage earners".

Anonymous said...

Is Cramer DOPES?

Trevor Cordes said...

Wow. I've kept an eye on Cramer for 3 years now and I too have never seen him like this. I feel sorry for poor Erin, taking that venting.

With Cramer you know it's often an act but this sure looks like he's giving you the real deal. If he's just relaying what broker/dealers are telling him then things might be way worse than the MSM is letting on so far, and could explain the horrid indice performance late today.

Keith, want to start a new thread about how things play out if the fed *does* lower rates? I'm still holding puts on the HB's (missed the irrational BZH-inspired 20min dip). Most stocks, esp HB's, will pop on a cut, but how long for the decimated dollar and inflation to slam them all back down? Could take months. I think all REIC shorts *must* instantly cover on an unexpected cut. Wait out the pop and buy back in.

Don't rule out a stupid, complacent move (cut) by the fed. When they stopped raising at 5.25% I was fully convinced they were going to keep raising (at least to 6%). I think they stopped raising way too early and they may very well lower too soon. Since they lie about inflation anyhow, what do they care? Y/Y core, what a joke. Completely opaque core PCE, don't make me laugh.

k.w. - southern ca. said...

Bravo for Cramer!

He's coming clean - better late than never.

The rest of the "management blow-hards" will soon be singing the same tune.

Trevor Cordes said...

BTW, Orangzilo to be on CNBC next Thu at 4pm ET. I'm going to turn my TV's aaturation setting up to max and see if I can blind my dog with the orange glare.

k.w. - southern ca. said...

The Fed will take the course which favours big business.

Anonymous said...

What is happenning is that he and all his insider friends have gone short, and now he is trying to get the DOPES to panic and sell.

It's all a mugs game.

Anonymous said...

Bernake has two choices:

1. kill the dollar

2. put millions of people out on the street via foreclosure, cause mortgage companies, banks, homebuilders to go under causing millions more to lose their jobs

Odds are he picks #1 to save #2 which is why I am still not convinced housing will drop all that much.

And don't discount the influence of Cramers out there. The Fed is a political animal after all. If enough people start demanding a cut, well they'll get a cut, especially 14 months from an election.

Hitlery doesn't want to come into power with 15% unemployment and 10 million homeless people. She'll get that 30 year fixed down to 3% if she has to.

Mark said...

Armageddon? Until it looks like 4th quarter 1930 or even 1977, I think calling it Armageddon is a little dramatic. Besides, I'm indifferent to a bunch spoiled Wall Street brats losing their jobs. Now realtors losing their jobs makes me ridiculously happy. Personally, I hope Bernanke doesn't lower rates.

Anonymous said...

"Now that was television worth watching!"

"Makin' their way, the only way they know how...
That's just a little bit more than the law will allow.
Just two good ol' boys, wouldn't change if they could,
Fightin' the system like two modern-day Robin Hoods..."

go ben and go bill!!

Anonymous said...

Best.

Meltdown.

Ever.

I think I saw a puddle at Erin Burnett's feet at the end of the video.

Roccman said...

This is gonna get much much worse people.

I shit you not.

Get food, ammo, water, a bug out bag...etc.

Anonymous said...

Most stocks, esp HB's, will pop on a cut, but how long for the decimated dollar and inflation to slam them all back down? Could take months. I think all REIC shorts *must* instantly cover on an unexpected cut. Wait out the pop and buy back in.

=========

My thinking exactly. I loaded up on HB calls today as KBH was sinking below $31 late in the day. Won't even take a rate cut, only rumors of one and I'm expecting a 10% pop for the sector. I hope Jimmie boy's Oscar worthy performance will help churn out the rumor mill.

Long term who knows what happens. Who cares. This country is fucked no matter what happens, as long as I make enough $$ short term I say let them all burn.

AuAgPb said...

"Bernanke needs to open the discount window"

WTF???? The GIVEAWAY window was open for YEARS. Maybe some Wall St. types need to be unemployed. Those Christmas bonuses should last a while.

Anonymous said...

and to think its only the beginning hows it gonna be by december

Snowden said...

Wow, what a gloom-and-doomer he has become in the last week. He should lighten up, everything is fine. The Dow is just shaking itself off after a huge run up. A little profit taking does not a crash make! Inflation is low, lots of new jobs (92,000 announced today!) plenty of houses changing hands, more inventory just means more choices! It is a great time to buy! If the Feds just relax rates to under 6 the party will pick up right where we left off. No worries! Did you get your new iPhone? I got mine! Everything is beautiful!

snark

- Snow

Charles said...

Hilarious...

And the lady's right a FED cut would trigger Armageddon. Oil skyrockets overnight increased food costs within a month and your precious Walmart/China goodies jump up just enough so that even MORE mortgages default.

Any increase in liquidity will not hit the consumer anywhere near fast enough to keep the economy afloat.

It would only hasten/exacerbate the demise...

Trevor Cordes said...

Anon, be careful going long on HB this soon. The HGX and DJ HB index have both definitively broken out of H&S reversal to the downside. We're off the cliff of the right shoulder at the neckline on huge volumes. HGX neck is around 188, we're at 177. DJHB broke the neck weeks ago. Yesterday looked like the only chance for a bounce to the support, but it failed miserably and unless HGX can close above 188 soon, it's another 30% off for the HB's. That will be a sight to see and I'm in there with puts. Above 188 I sell puts, wait for the pop and then re-examine. Seriously, it's all about that support (now resistance).

And I don't think fed jawboning will be enough. They've jawboned for a year with their dovish-but-hawkish crap. It amounts to nothing. Only an actual cut will cause a pop.

bobbyg said...

Folks, Helicopter Ben will sacrifice the dollar to save housing and wall street. How can we ignore what Cramer is saying and believe the nonsense coming from Poole? It is all lies and jawboning. Look at the dollar and gold -- the market does not believe this rhetoric. You really think that with an election coming that the Fed will not cave to Republican pressure?

I agree that the dollar with tank and long term rates will rise (and gold and hard currencies will skyrocket!), but the people most vulnerable have ARMS and a rate cut will rescue their &sses.

We all know that the system is rigged in favor of the Street. I would not bet against the Fed. Even though we all pray for comeuppance for these idiot bagholders and the Wall Street scum that brought this country to this nadir, we need to be realistic. Sadly, Cramer is the scary voice of truth.

serindippity said...

"Gentle Ben" is turning to be grizzly.

The Greenspan Put expired.

Benny boy ain't gonna rescue the Republicant's with another hit of the blow they've gotten themselves addicted to.

Free markets this free markets that, "oh we had an owie----uncle Fed ppplease!!! we need some free gubbermint money or we're gonna die! die die die! And even worse, we might not be able to go to the best part of Hamptons like I promised the wife, we'll have to slum in Cape Cod or even-----please god no----Joisey."

What I don't understand is my oil and utility stocks cratering today---almost 5% in a utility ETF? I am invested in what I thought were unavoidable necessities: liquid energy and electric energy.

C'mon Mr Market, these are regulated utilites. Even if the bond investors aren't touching a mortgage then surely the utilities can even more easily float their debt. People might stop paying the mortgage and rent, but they won't last long if the juice is turned off.
AA and AAA from a monopoly utility is worth the rating, not the pseudo AAA on subprime CDO's.

k.w. - southern ca. said...

As long as the problem doesn't hit us directly in the pocket book - we tend to be complacent.

This problem is *much* bigger, and *much* more important than any self-directed goals we may have.

Regarless of what you may believe or say, housing is a bust across this country - this is objective, a fact that cannot be argued intelligently against.

Snowden said...
Wow, what a gloom-and-doomer he has become in the last week. He should lighten up, everything is fine. The Dow is just shaking itself off after a huge run up. A little profit taking does not a crash make! Inflation is low, lots of new jobs (92,000 announced today!) plenty of houses changing hands, more inventory just means more choices! It is a great time to buy! If the Feds just relax rates to under 6 the party will pick up right where we left off. No worries! Did you get your new iPhone? I got mine! Everything is beautiful!

snark

- Snow

FORECLOSUREBOY said...

Foreclosure boy he buy ammunition and alcohol very much.

Soon this be only money unless you love very long time - that always worth very much.

Agent #777 said...

I think that this clip is randomly cutting off. I got a couple minutes past Armageddon and BB mentions. The last word I heard was "complacent".

JP said...

That had to be one of the funniest moments I've *EVER* seen out of him. If it was acting; good job...If it was real he is probably a coke-head and realizing that he is going to start having to buy the "cheap" stuff now..!

Anonymous said...

"What I don't understand is my oil and utility stocks cratering today---almost 5% in a utility ETF? I am invested in what I thought were unavoidable necessities: liquid energy and electric energy."

They are in bubble too, though they will probably decline less. I'm not liking the decline so far on my FSNGX, which was up as much as 45% YTD.

Vandal said...

Blown Mortgage has a scoop...NovaStar just announced that there will be no new funding or approval for any loans that have not yet been locked.

This pretty much means they are dead...another one bites the dust.

Tom said...

Bernake has two choices:

1. kill the dollar

2. put millions of people out on the street via foreclosure, cause mortgage companies, banks, homebuilders to go under causing millions more to lose their jobs

Odds are he picks #1 to save #2 which is why I am still not convinced housing will drop all that much


Um, how exactly can he "kill" the dollar and have that be the lesser of those two evils? The dollar is the foundation of our country's economy. You kill its value, you kill everything.

The only thing worse than millions of people losing their homes is hundreds of millions of homeless people rioting after they see their fiat currency turned into toilet paper.

Sorry folks, but post WWI Germany tried that trick. Didn't work out so well for them.

i am anonymous said...

It's only armageddon when Wall Street cronies start losing their jobs and firms go out of business. Right Jimbo?

rcochran said...

Folks, Helicopter Ben will sacrifice the dollar to save housing and wall street.

_______

Maybe. It will be very interesting to watch things unfold and see if you're right or not.

To me, it looks like housing and Wall Street CAN'T be saved, but maybe the dollar CAN get a little of it's dignity back, after some pain.

I do have popcorn and I will enjoy watching.

Anonymous said...

Investment banks made hundreds of billions these past few years screw them!

rcochran said...

Um, how exactly can he "kill" the dollar and have that be the lesser of those two evils? The dollar is the foundation of our country's economy. You kill its value, you kill everything.

______

Yeah I think I agree with that.

We could plunge the entire nation into a Weimar Republic hyperinflationary nightmare (remember, that nightmare preceded an even worse nightmare: the Third Reich), or we could let the spoiled Wall Street buffoons and the REIC flap in the breeze.

Which would YOU pick?

rcochran said...

It's only armageddon when Wall Street cronies start losing their jobs and firms go out of business. Right Jimbo?

_____

Yeah, really. I feel soooooo sorry for those poor rich brokers and fund managers. Lord knows we should let the dollar become completely worthless so that they can maintain the lifestyles to which they've become accustomed.

Anonymous said...

Not to spoil the HP/Cramer circle jerk but has anyone noticed inventory is down in the following

Reno, Tucson, Tampa, Houston, Cape Coral, Boston (down 6%), Seattle (down 43%!!), New Orleans, Kansas City, Cincinatti, Wash-DC

This is from housingtracker

I always thought that as soon as the MSM starts talking housing crash, that would be a clear sign the crash is over.


DISCLAIMER: I sold my house in 2006 and am renting currently. I am looking at this objectively and when Tampa's inventory is down over the past 3 months after 2 straight years of increasing, you start taking notice. When Seattle's inventory falls by over 40% you take notice.

Anonymous said...

The only thing worse than millions of people losing their homes is hundreds of millions of homeless people rioting after they see their fiat currency turned into toilet paper.

Sorry folks, but post WWI Germany tried that trick. Didn't work out so well for them.

August 03, 2007 10:46 PM

===============================

Dumbfuck,

Nobody will riot because the dollar loses 5% against the Euro or Yen.

Get a grip.

rcochran said...

The only thing worse than millions of people losing their homes is hundreds of millions of homeless people rioting after they see their fiat currency turned into toilet paper.

______

Excellent point, well said.

We have some quality thinkers on this blog nowadays.

I hafta say, Keith, I watch many economy-oriented forums, blogs, etc., and you have stayed more entertaining and thought-provoking than the lot.

Great work.

mrmx said...

"You really think that with an election coming that the Fed will not cave to Republican pressure?"

well, what happened in 2000?

rip saw said...

Screw those bastidges. I say the Fed should jack up rates another 25 bps. If we're going to ever believe in the free market again two things must happen: Honest accounting, and NO BAILOUTS!!

keith said...

What's Cramer do if the Fed RAISES rates?

Ron said...

Oh he is kidding guys, he is going to bring out the barking seal next...it is all a joke he is a big joker. yeah right....anyone want to come back and say they were...dead wrong?

Anonymous said...

here dopes..........heeeerrrreee dopes......come out , come out wherever you are...uncle anon has something for you dopes......come on out dopesy....how do you like me now?

Joel said...

Anon 10:55,

Inventory isn't down in Seattle, it's still skyrocketing faster than the rest of the nation. Housing tracker just lost one of it's data sources. See: http://seattlebubble.com/forum/viewtopic.php?t=490

Anonymous said...

where are you dopes? come on dopes? whatcha gona do now dopes?

Anonymous said...

Oh where are where are the trolls? Send in the trolls, where are the trolls?

As usual the likes of the gutless "DOPES" are nowhere to be found when the market is down BECAUSE of Sub-prime & Housing, but they will be back when the slightest scintilla of information that hints at something positive, no matter how unrelated and irrelevant, unless of course there isn't any or they are busy fending for their lives on the mean streets like Will Smith in "Pursuit of Happiness" after being ejected by the bank that foreclosed on their cr@pbox after the NegAmOptARM hits its recast ceiling and the rate adjusts and suddenly a windshield is on their mind;)!!!

Anonymous said...

Could this be the inflection point for metals ie gold silver? Was wondering if I should stock up on silver?

rip buzz said...

Drive a stake through the heart of the beast. Raise rates 50 bps! Bwahaha!! Margin call gentlemen...

Anonymous said...

Not even lower rates will save the day. And to think that a huge chunk of the reset will happen in November 07. It's already ugly now, so imagine by the end of the year when that mountain of crappy loans will reset.

Hey Keith, pull that resetting graph again to show reality to the sheeple.

jorghis said...

Jim Cramer goes nuts over everything. Its what he does, it gets ratings, thats why hes on TV. He isnt really a financial genius he just screams and yells about whatever has happened most recently. The market drops on subprime worries and he freaks out more than most people. That is a total nonevent and means nothing.

sinis said...

Anonymous said...
Not to spoil the HP/Cramer circle jerk but has anyone noticed inventory is down in the following

Reno, Tucson, Tampa, Houston, Cape Coral, Boston (down 6%), Seattle (down 43%!!), New Orleans, Kansas City, Cincinatti, Wash-DC

This is from housingtracker

I always thought that as soon as the MSM starts talking housing crash, that would be a clear sign the crash is over.


DISCLAIMER: I sold my house in 2006 and am renting currently. I am looking at this objectively and when Tampa's inventory is down over the past 3 months after 2 straight years of increasing, you start taking notice. When Seattle's inventory falls by over 40% you take notice.


Its because they are being pulled off the market. I have a realestate friend who has told me time and time again that people are asking way to much money for their homes. In most instances houses in the neighborhoods have been sold for 50K + less during the past 6 months but they still insist on asking 50-100K more. No one is buying them. So they pull them off the market, take it in the ass, try to rent for as long as possible with rent only covering 1/3 - 1/2 base mortgage, and hope for the best. Many believe it will rebound by the Jan 2008, they are in for one hell of a wake up call...

Anonymous said...

Man, some of us, HPer's, have been around on this blog for a long time, but I have not seen a bigger loser like this DOPES guy. We had plenty of realtwhore trolls that came and went, but this DOPES must be the dumbest of all. We are in a financial meltdown and the idiotic DOPES has been cheering meaningless news.

There's no doubt whatsoever that DOPES is hurting financially.

Anonymous said...

Look guys when inventory went up you said rightly that it will lead to lower prices. Econ 101. Now inventory is falling in some areas and yet you say it will lead to lower prices. Can't have it both ways. Either supply and demand laws work or they don't. But you can't say higher supply and lower supply will both end up with the same result.

Anonymous said...

Bwahahahaha...Jimbo is telling the sheeple to buy beer stocks because on "times like this" people can always drink.

Man, buy ammunition and supplies because this boat is going down fast.

Anonymous said...

Buy beer? Who da thunk it!

Anonymous said...

YOU REAP WHAT YOU SOW... PHUCK THESE GUYS ON WALL STREET.

Anonymous said...

I'm still up 7.1% YTD and you dopes are sitting in cash! Just wait till Monday's rebound when you all will be wetting yourselves.

DOPES

Anonymous said...

Cramer is at home right now kicking it old school with a beer in hand on his 100 acre spread laughing at you tools who take him seriously. Damn if you aren't the most gullible bunch of imbeciles out there.

He's a TV personality for crying out loud. His show is called ****MAD*** money as in he's mad, crazy, insane. Get it? It's a TV SHOW. His character on that show is the "crazy financial advice guy". Today he played the part of the "crazy financial advice guy". And what do "crazy financial advice" guys do? They go crazy when the market tanks. A 5 year old could see what's happening here.

My advice to you all is put the tinfoil hat down, shut off the computer and take a day off. Reality and fantasy are merging into each other.

The dude is right, you are kinda dopey.

Anonymous said...

"Now inventory is falling in some areas and yet you say it will lead to lower prices."

Who said that inventories are falling? REIC, NAR, Mozilo, Kudlow, MSM, shills?

Sure buddy, foreclosure is skyrocketing, unemployment is growing, no liquidity, no credit because of tighter underwriting, higher rates...but inventory is falling! Yeah, right. It's falling in MI, PA, Las Vegas, Florida, AZ, CA...everybody got rich out of the blue and are buying lots of homes. Must be the soooo rich European and South Americans who are buying everything.

I tell you what, go ahead and buy a couple of MacMansions over the weekend.

Logic and common sense are not part of American life anymore

rcochran said...

Nobody will riot because the dollar loses 5% against the Euro or Yen.

Get a grip.


_____

You're the dumbf*ck.

You probably haven't been paying attention, but the dollar is tapping ALL TIME LOWS against the Euro.

Will five more percent cause riots? Probably not, but another 40% or so just might. What do you think will happen if China can't afford to hold our dollars and t bills, and they dump them? What if more countries start paying for oil in Euros or Swiss Francs because the US $ has devalued too much?

Have you spent one second using your flabby brain to ponder what would happen?

Anonymous said...

Well, just a few comments...

This is only the beginning of the hysteria that is to come. The idea that the Fed won't tank the dollar is probably false. We have a much greater threat than just the drying up of liquidity--underlying public debt and SS/Medicare/Medicaid entitlement obligations can never be paid. In that respect it is very similar to the Weimar Republic printing their way out of Versaille sanctions. Even if they raised interest rates now to protect the dollar, it would only postpone the inevitable--one day that debt must be paid.

I think we will print the way out of this..it is the only solution to both the long and short term problems we face.

Ben

dopes guy said...

I love you all too.

DOPES

CashedOut said...

"history has not dealt kindly with the aftermath of protracted periods of low risk premiums"

it isn't like they haven't been warned.

Anonymous said...

"Now inventory is falling in some areas and yet you say it will lead to lower prices. Can't have it both ways."

If inventory drops 10% and demand drops (another) 50%, I wonder what'll happen to prices, smart guy.

FORECLOSUREBOY said...

Foreclosure boy understand decline with inventory.

Bank take back home and NOT put on mls yet. Bank try to hide loss until find buyer for bank.

75% countrywide reo not in MLS

Understand decrease inventory now, white man?

smitty said...

one thing that entirely pissed me off in Cramer's video was his comments about "spending billions on Iraqi housing." US made bombs destroyed them, so it's reasonable to fix them.

US residents, on-the-other-hand, were digging their own graves for unknown reasons. Let freedom ring!

Markus Arelius said...

Now I'm scared. What do I do?

- Ammo?
- Guns?
- Canned food ?
- Dig a bunker ?
- Move to Canada??

Anonymous said...

Erin got under Cramer's skin, finally. Cramer was likely reacting to her snide delivery.

Anonymous said...

The Lie That Will Kill Hedge Funds
By Jim Cramer
RealMoney.com Columnist
8/3/2007 9:37 AM EDT


It's all in the marks. Unless you have run a hedge fund, you have no idea what that means.

So I will explain it to the uninitiated.

When you run a hedge fund, you are always seeking capital. You can seek money directly from institutions or individuals, or you can do the easiest thing and seek money from those who are offering it: "fund of funds" managers who, specifically, look for managers to place other people's monies.

This cohort of investors had just gotten started in about my seventh year as a hedge fund manager, and they were always plying me with capital. I tried it for a while, but the ones I had, and they were substantial, demanded too much of my time and, I thought, forced me to make shorter-term decisions than I liked. I valued my independence too much. So I sent their money back.

Lots of people thought that was foolish. Lots wanted to grow their funds gigantically because they figured that was the way to get rich, quick. I was an idealist, and I wanted it to be a like a club where someone had to nominate you to get in. I wanted it that way because I didn't want any heat from them, and as long as I didn't seek them out, I didn't have to worry about pleasing them beyond the numbers.

Anyway, few people run money as I did. Maybe none. Most take the fund of funds' money.

Fund of funds managers interview and bracket managers into different groups: high-growth stocks, even-oriented managers, arbitrage, market-neutral, short, long, etc. They put them in buckets and measure them against others and then they go back to their real clients and say "here is the menu," or "here is what we recommend."

When I was in the game, by far the most popular were the "market-neutral" and "arbitrage" funds because they could absorb any amount of money and play all around the world without being hostage to "the market." They make money no matter what, which is the definition of what you are supposed to want if you are a client.

These managers can take advantage of the vast discrepancies that exist in the markets worldwide and borrow a lot of money to exploit them. That's hard if you are a pure stock guy. It is true that Pepsi (PEP - Cramer's Take - Stockpickr - Rating) is cheaper than Coke (KO - Cramer's Take - Stockpickr - Rating) on a price-to-growth metric. (Coke grows slower than Pepsi but has a higher multiple.) But does that mean you can go long Pepsi and short Coke and the twain meets? I wouldn't bet that way.

But how about this? American Home Mortgage (AHM - Cramer's Take - Stockpickr - Rating) issues $1 billion in mortgages that Citigroup (C - Cramer's Take - Stockpickr - Rating) packages. American Home isn't a "deposit" institution with a broad range of businesses to fall back on. It just issues mortgages, 2 and 28, teaser, little documentation, etc., etc.

Citigroup pools all of those mortgages and offers them into a bond that yields 7%, say, as a blend of the payments. A market-neutral and an arbitrage fund manager might say, "OK, I have $1 billion under management. I will go to Citigroup and borrow 10 billion and invest in these kinds of bonds."


They yield 7%, I am borrowing at 5%, I get 2% on all I lever up, which can produce, risk-free, a lot of return. It sure seems risk-free; the bonds are "highly rated" by S&P and Moody's, which gives me ample protection. I am not doing anything reckless. I am doing what every other manager in my class, the biggest and most profitable class, is doing.

http://www.thestreet.com/s/dice-rolling-hedge-funds-death-will-be-quick/markets/activetraderupdate/10372191.html?puc=googlefi

Anonymous said...

Look guys when inventory went up you said rightly that it will lead to lower prices. Econ 101. Now inventory is falling in some areas and yet you say it will lead to lower prices. Can't have it both ways. Either supply and demand laws work or they don't. But you can't say higher supply and lower supply will both end up with the same result.

"Real" Inventory has not fallen, only "listed" Inventory AND demand has fallen EVEN further, just look at the rate of home sales.

mrmx said...

"What I don't understand is my oil and utility stocks cratering today---almost 5% in a utility ETF?"

could be people selling off stuff to cover other positions.

Miami Investor said...

Erm..

Since my home is sinking in price I figured I would join the shorting stock bandwagon..

Someone point me in the short stocks for dummies 101 please?
Oh I have a stocktrade account but whatever works...

You guys seem to understand this all much better then I :)

Please note: I am not being sarcastic AND I work in construction so im double screwed

Help?

Anonymous said...

I think wingnut cramer just yelled fire in the movie theater.Run my ass is burning!!!!! I hope he doesn't stroke out on black Monday.

Pon Raul said...

http://tinyurl.com/ystnwl

(in case the original video doesn't work for you...)

Good luck friends. None of us... and I mean *none* of us... will escape this unscathed.

I noticed that in the last few days, the number of "toys" (motorcycles, etc) being sold on craigslist has gone through the roof. Cash is king.

Hold fast...

JJ said...

Cramer didnt finish the thought, it's open the window and shout "I'm mad as hell and I'm not going to take it anymore" see Netowrk 1976-

http://video.google.co.uk/videoplay?docid=613471067173435418&q=NETWORK+1976&total=105&start=0&num=100&so=0&type=search&plindex=0

As for killing the dollar or Wall Street, I think they'd rather kill Wall Street, as countries like Saudi have 100s billions USD in T-bills and killing the dollar would make them worthless, imagine if Saudi switches to the euro for oil followed by everyone else, welcomes Osama as it's Prodical Son to defend them against the great Satan USA etc etc, the US would end up imploding like the former USSR with zero monetary, economic or military power, now set that against the desturction of a few Wall Street firms and a few million angry former home-debtors, now which would you pick?

pjp said...

Anon -- Re: supply & demand.

Yes, what about the supply of credit plumetting? People need credit to buy houses.

It's not a simple relationship.

Anonymous said...

" Now inventory is falling in some areas and yet you say it will lead to lower prices. Can't have it both ways. "

Where did the loans go? I guess you can goto American Home Mortgage. Oops, Friday is over.

whitetower said...

"Turn the machines back on -- turn them back on!"

whitetower said...

"Turn those machines back on -- turn them back on!"

http://www.youtube.com/watch?v=n6cZUCa6Kyk

RJB said...

OUTSTANDING!!! I CAN'T STOP LAUGHING… Screw all the overpaid wall street paper pushers.

FlyingMonkeyWarrior said...

Jimbo is telling the sheeple to buy beer stocks because on "times like this" people can always drink.

***************************************
Beer is going to cost more, because the hops are being plowed under for gov subsidized ethanol grain crops.
nice call.
Grain and Alternative Energy is what will inflate next, which by the way are all oil based;
itulip Ka Poom thoery.

b52 said...

AP = Robert Bach, senior vice president of research at real estate services firm Grubb & Ellis, said some of the lenders he works with will not even quote a loan right now.

And a measure of volatility known as the VIX has skyrocketed by nearly two-thirds in the past two weeks to reach its highest level in more than four years.

"We were in a situation a couple of weeks ago where there wasn't much that investors were worried about. It's more a psychological impact of the lending environment in general."

Two mortgage insurers said this week a $1 billion partnership created to invest in mortgage debt may now be worthless for that very reason.

And now American Home Mortgage Investment Corp. is bankrupt despite almost no exposure to subprime. The lender's minimal exposure to subprime is little consolation to the home buyers to whom it promised $800 million in loans this week and failed to deliver.

"It's just a broader fear," said Grubb & Ellis's Bach. "That credit disruption has spread to the point where people are reluctant to make loans. What started in subprime mortgage has sort of transferred into other kinds of debt right now."

Hoof Hearted said...

Wow!

I used to hate Cramer, but he showed some sack today. Cramer knows the drill, guess who snaps up the big boys when they bottom without FED help? That's right the Chinese.
The Fed printed too much, and lent it too easily. The Chinese know it! They hold $20-50 trillion in USD, and won't be left holding the bag. They will prop the $ only long enough to liquidate. The Chinese are about to go on the biggest shopping spree in this countries history. They already own 13% of Blackstone, are currently bidding $31B(only 1 week's worth of US interest payments to China!) for a huge American bank, and watch the Chinese snap up millions of foreclosed properties.

Look at the market charts. For the last week the market has sold off 1-2% only to spike up 3-4% in the last 30 min of trading! WTF? China is buying the dips. The PPT doesn't have that much money. Looks like China took today off.

Anonymous said...

Inventory isn't "falling" any more than inflation "is in check."

The inventory numbers are reported by the same people who want to paint a lovely real estate market. Thus, a lot of the "inventory is down" spin is spin.

Think about it for a minute -- do you honestly believe that there is a huge, sudden rush by people to snap up overpriced houses in Boston and those other communities. . . even as credit dries up and rates increase?

Think again. The inventory isn't "decreasing" because of improving sales -- leading to supply constraints. It's "decreasing" because people are taking their houses off of the market due to the fact that they cannot fetch anywhere near what they need to pay off the mortgage.

It's a bit like arguing that the market for cars is improving because "inventory has declined" -- ignoring the fact that inventory declined after the automaker sent 10% of its unsold stock to the crusher!

mejustme said...

They're going to go out of business because they deserve to go out of business.

Anonymous said...

Cramer's an ass. His buddies are losing their jobs and he's very VERY upset.

Any outrage and panic from him while every other type of US job's been going byebye the past several years?

Any outrage about the screwed up lending his buddies did to GET US TO THIS PLACE?

Didn't think so...

SPECTRE of Deflation said...

ROFLMAO!!!!!!!!!!!!

The man is a nut case, and he's also a crybaby. This isn't about the consumer, but rather his chums on Wall Street who are beginning to feel some pain just like the common sheeple. Hey Cramer, screw you and your chums. I hope each of yus guys in New York take it right in the shorts Pal.

P.S. You are also a moron. Do you really think your 1.00% rate cut will matter when the underwriting STANDARDS are being tightened and INCOME must be verified? Stop and think blowhard!

SPECTRE of Deflation said...

keith said...
This is what set Cramer off. I sure hope the Fed doesn't cave. After the biggest bubble in human history, the way back down is either long and painful, or short and painful. We'll see which path the Fed takes.

http://tinyurl.com/2krgy4

Fed won't ride to rescue of markets: Poole

Financial markets understand that the Federal Reserve won't respond quickly to a typical market upset such as last week's sharp stock sell-off, St. Louis Fed President William Poole said Tuesday.
The Fed should only act "in due time" if evidence accumulates that the market drops could undo price stability or low unemployment, or when financial market developments threaten market processes themselves, Poole said.

If they cut, the dollar is doomed. Everyone else is raising for God's sake, and Boo-Yah is screaming rate cut.

Anonymous said...

I live in Seattle. The housingtracker info is clearly a booboo.

Inventory still rising here.

HeliBen2TheRescue? said...

Everyone's talking about a rate cut (virtually no chance of a hike, it seems, not even to rescue the sinking $). What if Benny just leaves rates as they are, as he's done all along? What would be the effect at this point? Would people continue to sell into the weakness in the market, or what does anyone else think will happen? I think the odds of them standing pat is as good as anything else they might do at the Fed.

Like everyone else here (incl. Keith) I'd love to see a rate hike, but not bloody likely at this point. The most we can hope for is no change in the discount rate. I'm heading overseas to stay for half a year or more starting about the first of Nov. and I'm hoping for any sign of strength from the dollar since I have to convert my $$ to local currency.

Everytime I go over there, the dollar has lost more value, and any prestige it may have had, even in places like Ukraine. The local currency, the Hryvny, has gained against the dollar by 2 - 3% just in the past month. Shoulda converted more sooner :(

Monopoly money will soon be worth more than the USD if this keeps up. A rate decrease will just decimate the value of the buck.

It's "sh*t or get off the pot" time for Benny and his buddies...

Pain said...

If you had to move because of housing prices, you have been ethnically cleansed.

If you had to move because the neighborhood went bad, you've been ethnically cleansed.

If you had to move because you couldn't get a job, but a Mexican could, you've been ethnically cleansed.

There is an alien invasion of ALL white countries and ONLY white countries.

You, your children, your relatives, your friends are being genocided.

As Ben Franklin said, "We can all hang together or we can all hang separately."

http://whitakeronline.org/blog/

messier11 said...

How Funny is this? This is the quote from careerbuilder.com. Can you imagine? "Career" builder. They locked the door in Melville, NY yesterday. They still have a website too. When do they shut down that thing. This plus Cramer made my day today.


"If you need a home loan, you have come to the right place! American Home Mortgage is one of the nation’s leading mortgage lenders. We believe it is the right and destiny of every American to own a home, and we are proud of the role that we play in promoting homeownership in communities across America.

American Home Mortgage offers valuable benefits to consumers searching for a new home or those refinancing their current home loan. We are a mortgage lender that lends directly to consumers without any middlemen. We are also organized as a real estate investment trust (REIT). This allows us to offer more competitive pricing and a far greater selection of home loans than traditional mortgage companies.

Founded in 1987 in New York City, American Home Mortgage is one of the top 12 national lenders, with coast-to-coast operations and the ability to originate loans in all 50 states and the District of Columbia. We look forward to the opportunity to meet your specific real estate lending need with a great home loan and outstanding personal service!"

Anonymous said...

Cramer said...

"14 million people took teaser mortgages in the past 3 years...

and 7 million of them are going to lose thier homes!" [as rates reset]

-- Inventory skyrocketing

What is this going to do to consumer spending?

The malls are already hurting bad now.

bobbyg said...

"Could this be the inflection point for metals ie gold silver? Was wondering if I should stock up on silver"

-----------------------------

If you don't have a portion of your wealth in PMs, or non-dollar currencies as hedge, you are taking some serious risk.

I mean, does Benny really seem like he has the cahones to say to President Cheney: "Well gee Dick, I know a string of bank failures and a housing collapse induced recession wont do much to help your team get re-elected next year, but it really is in the long term best interests of the country. So I gotta keep rates on hold until my fake core CPI data falls comfortably below 1.5%" ????

Anonymous said...

Don't fall for this guy. He is shorting and making tons of money.
This guy is an actor.

Anonymous said...

OMFG!!! that was AWESOME!

if you've got a mac you can see the video here:

http://tinyurl.com/2evwrs

pwnd

Kenduffelsniffenspotzen said...

"HE HAS NO IDEA HOW BAD IT IS OUT THERE. HE HAS NO IDEA. HE HAS NO IDEA. I'VE TALKED TO THE HEADS OF ALMOST EVERY SINGLE ONE OF THESE FIRMS IN THE LAST 72 HOURS AND HE HAS NO IDEA!!!"

"AND BILL POOLE HAS NO IDEA WHAT IT'S LIKE OUT THERE!!"

"THESE FIRMS ARE GOING TO GO OUT OF BUSINESS!!!!!"
================================
Welcome to capitalism. Stupid bankers should go out of business.

FYI, I don't believe the Fed controls interest rates. Robert Prechter at Elliot Wave has run charts that show the Fed follows the rates at other banks.

So if the Fed has a 5.25 rate, and my bank is offering CD's at 5.45, I think you should factor a "fed rate increase" sometime in the not so distant future.

SPECTRE of Deflation said...

At this point the video ends and I've gotta believe Cramer went out to his car and did some blow with Kudlow.

LMAO! BOO-YAH!

Kenduffelsniffenspotzen said...

keith said...
'What's Cramer do if the Fed RAISES rates?'
August 03, 2007 11:14 PM
===================================
Keith, I must disagree here. I don't believe the Fed controls interest rates. They just follow them up or down. If the market demands 10% interest rates, the Fed will follow along.

SPECTRE of Deflation said...

Did someone tell him he was playing Kramer on Seinfeld?

where is dopey said...

Mr DOPES is actually Larry Kudlow, the cocaine snorting bufoon.

Anonymous said...

I am waiting for atleast (at a minimum) Half the Wall Street boys (corrupt,criminals that collected 250000 average bonus in one year)jump from windows. I have zero sympathy. All the glee in the world.

Anonymous said...

Our only hope is to erect an altar to President Ron Paul and sacrifice our first borns to him.

Only then will we get back to the Gold Standard, and to the blessed era of five-cent candy bars.

Gotta go, "I love Lucy" is about to start. It's a brand new episode tonight.

robert said...

Anonymous said...
“Look guys when inventory went up you said rightly that it will lead to lower prices. Econ 101. Now inventory is falling in some areas and yet you say it will lead to lower prices. Can't have it both ways. Either supply and demand laws work or they don't. But you can't say higher supply and lower supply will both end up with the same result.”

This selling season is quickly coming to a close and if you’ll notice, quite a few listings have simply expired. You see the same thing month after month. Towards the end of the month, quite a few listings get pulled and the DOPES rally around “inventory is going down”. In a few weeks housingtracker will show increased numbers and the DOPES stay quite about inventory until the end of the month.

We’ve seen it all before and if you take a look at your excel spreadsheet you’d know. Now, I agree that as the cooler months arrive, they’ll probably be a significant drop (just as in the past). A quick comparison of sales and pulled listings will clear things up pretty quick. I do believe however, that the drop this season will not be as significant as those in the last few years. With another round of ARM re-sets, these FB’s can’t afford to wait around until next summer and not have the house listed.

Anonymous said...

It is time for the corrupt mortgage brokers and hedge funds managers to learn their new dance.

Check out the video

http://video.yahoo.com/video/
play?vid=879021&fr=&cache=1

Anonymous said...

So we're supposed to worry about Jim Cramer's rich buddies on Wall Street?!?!?

Keep the rates where they are or raise them Ben.

duh said...

look anonymous idiot, real estate inventory is always seasonal. Inventory always goes up in the spring and falls in the autumn. The most accurate way to track inventory is to look at year over year comparisons and to compare the current inventory with the current sales rate to find out how many months worth of inventory is on the market. In some areas of South Florida, there are currently 4-7 years worth of inventory on the market. For comparison's sake, real estate agents have historically said that 6 months of inventory is a market at equillibrium. Do you know what that means? Prices are going to fall. This is all elementary stuff, dingleberry. It's exhausting having to keep explaining this stuff to you morons.

Anonymous said...

Lower prices because those coming off the market are foreclosures. When the bank sells it, guess what happens? You got it, lower prices and mark to market selling.

Anonymous said...

anon said
Look guys when inventory went up you said rightly that it will lead to lower prices. Econ 101. Now inventory is falling in some areas and yet you say it will lead to lower prices. Can't have it both ways. Either supply and demand laws work or they don't. But you can't say higher supply and lower supply will both end up with the same result.

___________________________________

One thing you have to consider is that inventory does fluctuate during the year. Inventory typically peaks in the summer and then starts to decline. Last year inventory peaked in July/August and then went down (as it always does).

It will continue to decline until early next year when it naturally starts to move higher again. The difference is that the inventory in most of these markets is still higher than last year at this time and sales are lower when compared to last year.

That is what you need to focus on.

Jymkata

greybeard said...

The dick belongs in jail for his 20 years of stock manipulation and sleazy "journalism". Cramer & his pals will laugh at this next week when the market is up 500 and they count the money they made scaring small investors out. With a performance like that, hell maybe they'll even nominate him for an Emmy.

This market is way oversold, so be prepared for a bounce. If Bernanke takes Cramer's advice and drops rates, it's moon-shot time folks, 17K by September.

Anonymous said...

i tried to tell you guys 2 yrs ago this was going to happen but would you listen me ...... hell no.... your crazy never happen....

you wanna know what's gonna happen next .... are you ready for dow 1000, NYSE and nasdaq going out of business and a catastrophic deflationary recession in the USA... like the world has never seen.... yes deflation... that is why inflation is mild .... it has to go to zero before you get deflation DUH!!!! banks, insurance companies and even governments will go broke... yes that means no pension, no unemployment etc... won't do much good to have your $$$in the bank if it closes it doors .... think it can't happen ...in the 30's thousands of banks closed for a long time .... ultra secure banks in switzerland are the only safe haven... yes it is financial armageddon boys ....so fasten your seatbelts boys it's gonna get rough.... we should see a fool's rally sometime in late 2010 and then the BIG drop into 2012...

Anonymous said...

That's why some of us like him. He doesn't hold back. He lets you see the raw. If you can't handle that, don't watch it.

However, these screwed buyers should have thought about this before they got in way over their head.

Also, I have no sympathy for the likes of Goldman Sachs complaining when they handed out an average bonus of 600,000!!!! dollars to EVERY employee last Christmas.

They want to get bailed out, tell them to give back their bonuses.

Anonymous said...

------------------------------------------------
Look guys when inventory went up you said rightly that it will lead to lower prices. Econ 101. Now inventory is falling in some areas and yet you say it will lead to lower prices. Can't have it both ways. Either supply and demand laws work or they don't. But you can't say higher supply and lower supply will both end up with the same result.
------------------------------------------------

I belive it´s actually about the supply of money. Less (easy) money=lower prices and vice versa, regardless the amount of available houses..

Finn in Sweden.

bozonian said...

Gee, how come a high school grad with no training in economics saw this coming three years ago and the geniuses on Wall Street are surprised?

Answer? They aren't. They knew this was coming all along, but like the flppers, they keep putting their chips on the table for one more spin of the wheel until finally, their number didn't come up. Too friggin bad.

The Riddle of Steel: "For no one - no one in this world can you trust. Not men, not women, not beasts. [Points to sword] This you can trust."

Buy commodities, metals, minerals oil and land when the price comes down, the real things that everyone needs, not the discretionary junk like IPHONES and paper money which will soon turn to dust in the wind.

Smash Monster said...

We are supposed to cry over guys whose average BONUS was 137K last year? And their managers with their 1.7million bonuses? I don't think so.

Just another example of hypocrisy - unfettered "free markets" are a good thing if they are free to do what they want when they are making a killing, but when they screw the pooch - government please fix it!

The criminal fraud that has gone on here in So Cal has been so obvious for years - let the chips fall where they may. You don't need to be a rocket surgeon (wink) to know you shouldn't buy a 600K house when you make only 50K a year.

Duh.

Anonymous said...

As much as I love Jim Cramer (without his lessons I'd long ago have lost everything in the market) he doesn't do well with other reporters. He interrupts them, yells over them, makes wild and silly gestures when the other person is talking and in general isn't a team player.

I can imagine that working for him must be pure hell but will really look good on your resume.

"Team Player! Team Player!"

However, alone he's great. He's a virtual one man show and his wackiness works solo.

I feel sorry for Erin because these situations occur quite a lot and are awkward. He just pushes her aside and doesn't let her talk. They need to rope him in when he's with another reporter or just let him do his schtick by himself.

Anonymous said...

Listen to that video, she is laughing at him and mocking him like a child.

You can hear it in her voice that she is a none believer of what Jim Crammer has to say.

Like many home owners, she is absolutely in denial about the state of the housing market.

So why do you believe that any reasonable people would ever trust that message.

If that is the case, then why would Ben Bernanke lower interest rate just to run the risk of dropping the Dollar index below the 80 mark.

The 80 mark is a line that Ben Bernanke must hold.

Anonymous said...

If it took this long for the CNBC to start lifting the veil on the housing debacle, then can you imagine what kind of crap are we gonna get from a FOX business channel. Rupert Murdoch is not going to have his chess pieces in place to spin fast enough to minimize this for his Republican/Big Business cronies.

Anonymous said...

Jim, Jim, Jim,......you waited too long to come out and say your piece on this subject. (Although when you did it was spectacular!) You waited till your investor friends were hurting and had no regard for the little guy. Too little way too late. I hope you and your big investor friends go down harder than the little guy. How you can you have any fans left is beyond me. BOOYAA!

Anonymous said...

To Keith and fellow HPer's: It feels good to finally know that the media lid is coming off on this subject after years of watching all this unravel. I tried to mildly discuss this with family and friends starting three years ago and no one believed me. I would say it isn't a conspiracy theory, it's just when you put certain pieces of the mortgage and credit puzzle together then this is how it has to end up.

Anonymous said...

July 20 (Bloomberg) -- Federal Reserve Bank of St. Louis President William Poole said investors who lost money buying subprime mortgage-linked securities got what they deserved.

http://bullrunner.blogspot.com/2007/08/ltcm-is-really-getting-back-at-bear.html

Anonymous said...

Wells Fargo, other lenders curb mortgage loans
Friday August 3, 3:45 pm ET
By Jonathan Stempel


NEW YORK (Reuters) - Wells Fargo & Co (NYSE:WFC - News), Wachovia Corp (NYSE:WB - News) and other lenders are limiting mortgages to some of their more creditworthy borrowers as worries about U.S. homeowner defaults widen.

Wells Fargo, the second-largest U.S. mortgage lender, said it is curtailing issuance of "Alt-A" home loans through brokers, while Wachovia has stopped entirely. Wachovia also said one lending unit has temporarily halted its Alt-A production.

Lenders are making fewer home loans once thought to be safe because investors now perceive those loans to be risky. The changes could worsen the U.S. housing slump by putting home ownership beyond the reach of a larger number of Americans.

Alt-A loans, short for Alternative-A, fall between prime and subprime in quality. One Alt-A specialist, American Home Mortgage Investment Corp (NYSE:AHM - News), is closing on Friday.

Anonymous said...

By Jim Cramer
RealMoney.com Columnist
8/3/2007 9:37 AM EDT

The Lie That Will Kill Hedge Funds


It's all in the marks. Unless you have run a hedge fund, you have no idea what that means.

So I will explain it to the uninitiated.

When you run a hedge fund, you are always seeking capital. You can seek money directly from institutions or individuals, or you can do the easiest thing and seek money from those who are offering it: "fund of funds" managers who, specifically, look for managers to place other people's monies.

This cohort of investors had just gotten started in about my seventh year as a hedge fund manager, and they were always plying me with capital. I tried it for a while, but the ones I had, and they were substantial, demanded too much of my time and, I thought, forced me to make shorter-term decisions than I liked. I valued my independence too much. So I sent their money back.

Lots of people thought that was foolish. Lots wanted to grow their funds gigantically because they figured that was the way to get rich, quick. I was an idealist, and I wanted it to be a like a club where someone had to nominate you to get in. I wanted it that way because I didn't want any heat from them, and as long as I didn't seek them out, I didn't have to worry about pleasing them beyond the numbers.

Anyway, few people run money as I did. Maybe none. Most take the fund of funds' money.

http://tinyurl.com/2fysqu

Anonymous said...

Financial Engineering at it's worst.

Anonymous said...

The point that everybody seems to forget is that there's a shady government operating within the government. Fed is a big example of that, the phony war in Iraq is another, and the corrupt MSM is yet another (watch Bill Moyer's latest program on media).

These secretive groups will do whatever to protect their cronies or partners in crime. Sure, we want the free market to take care of itself ("the invisible hand"); however, that concept doesn't really exist anymore. It's all manipulated, including economic stats.

Good luck to all of us, because the only thing we'll get is collapsing bridges, millions of poor immigrants, and tainted food from China. For instance, the war in Iraq was created to transfer money from us, honest taxpayers, into the pockets of these groups. So far, the bill is running about 1 trillion dollars. The entire system is infiltrated by these legalized mafia and they are not done with our tax money yet. So keep working hard to make lots of money for Blackwater, Lockheed, Halliburton, Wall Street, Big Pharma, etc.

SPECTRE of Deflation said...

rcochran said...
Um, how exactly can he "kill" the dollar and have that be the lesser of those two evils? The dollar is the foundation of our country's economy. You kill its value, you kill everything.

______

Yeah I think I agree with that.

We could plunge the entire nation into a Weimar Republic hyperinflationary nightmare (remember, that nightmare preceded an even worse nightmare: the Third Reich), or we could let the spoiled Wall Street buffoons and the REIC flap in the breeze.

Which would YOU pick?

DITTO BUMP!! Anyone who thinks a rate cut will help in this debacle is a loon.

SPECTRE of Deflation said...

Anonymous said...
I'm still up 7.1% YTD and you dopes are sitting in cash! Just wait till Monday's rebound when you all will be wetting yourselves.

DOPES

You will be wiping your ass with your paper profits Dope. You are one of the sheeple who kneels at the feet of the shills. You are screwed!

SPECTRE of Deflation said...

keith said...
What's Cramer do if the Fed RAISES rates?

The CNBC staff better have a case of duct tape handy in case they raise.

SPECTRE of Deflation said...

Anonymous said...
Well, just a few comments...

This is only the beginning of the hysteria that is to come. The idea that the Fed won't tank the dollar is probably false. We have a much greater threat than just the drying up of liquidity--underlying public debt and SS/Medicare/Medicaid entitlement obligations can never be paid. In that respect it is very similar to the Weimar Republic printing their way out of Versaille sanctions. Even if they raised interest rates now to protect the dollar, it would only postpone the inevitable--one day that debt must be paid.

I think we will print the way out of this..it is the only solution to both the long and short term problems we face.

Ben

Can we afford a dollar run? This is what you are talking about when you mention a rate cut. The rest of the world is raising, and we can't afford to lower rates along with the fact that Helo Ben knows all this and will jawbone but sit pat. Better that Wall Street takes it's lumps than go Germany 1929.

SPECTRE of Deflation said...

Anonymous said...
The Lie That Will Kill Hedge Funds
By Jim Cramer
RealMoney.com Columnist
8/3/2007 9:37 AM EDT


It's all in the marks. Unless you have run a hedge fund, you have no idea what that means.

I have a different perception of MARKS. MARKS are usually the sheeple you are about to screw. Welcome Jim, to the cess pool where the common sheeple wallow.

Anonymous said...

Anonymous said...

"Now inventory is falling in some areas and yet you say it will lead to lower prices."

Who said that inventories are falling? REIC, NAR, Mozilo, Kudlow, MSM, shills?

===========

No doofus, housingtracker and housing-watch.

Anonymous said...

Anonymous said...

I'm still up 7.1% YTD and you dopes are sitting in cash! Just wait till Monday's rebound when you all will be wetting yourselves.

DOPES

August 03, 2007 11:55 PM
--------------
I'm up 6%+ and all in cash and no matter what happens up or down I'll continue to be up 6%+ and when the market is approaching 12k later this year and your getting margin calls you'll be $h!tting your pants and not have a pot to pi$$ in and I'll still be up 6%+

DUMBA$$

Anonymous said...

If inventory drops 10% and demand drops (another) 50%, I wonder what'll happen to prices, smart guy.

August 04, 2007 12:13 AM

=================

You obviously have no formal training in economics. If you do and still made a comment like that, I would demand my tuition money back if I were you.

Anonymous said...

I think his female co-host was a bit taken back and even for Jim this is a bit extreme. So while still scripted there may be some genuineness to his drama queen excesses in this clip. Glad I'm in cash.

Anonymous said...

The inventory numbers are reported by the same people who want to paint a lovely real estate market. Thus, a lot of the "inventory is down" spin is spin.

Think about it for a minute -- do you honestly believe that there is a huge, sudden rush by people to snap up overpriced houses in Boston and those other communities. . . even as credit dries up and rates increase?

=========

A few a months ago references to the housingtrack numbers were a daily occurance here. Nobody questioned the sources of the daa then. Everyone was cheering on the increasing inventory. Now that the same sources are showing declining inventories you question the validity of the sources.

You cannot have it both ways. Well I suppose you can since no matter what you will dismiss bad news (bad for you). Government shows a bad jobs report you take that as gospel. Good job report comes out you dismiss it as lies. Housingtracker shows inventory growing, aha look inventory is growing. Housing tracker shows inventory is falling it's nothing but lies.

You guys are too much.

George W. Groovy said...

This guy had no credibility talking up the market. Why should he have any talking it down? Geeks like him used to be paid in chicken heads, whisky and a place to sleep it off.

Anonymous said...

duh said...

look anonymous idiot, real estate inventory is always seasonal. Inventory always goes up in the spring and falls in the autumn. The most accurate way to track inventory is to look at year over year

=====================
Boston is down 9% YOY imbecile.

You were saying....

Anonymous said...

I'm up 6%+ and all in cash


you're up 6% YTD in cash? 6% a year in a CD does not mean you are up 6% through August moron

Anonymous said...

Wall st, IBs, all big bad evil money making machines. Like all good communists Keith and Co. hate them with a passion.

Yet you all boast and brag about making money off shorting CGC, Indymac, etc.

Only 2 words come to mind:

DOPES and Hypcorites.

crash dummy said...

The fed reserve had shot their wad (they can't afford to lower or raise rates). The US govt had shot their wad(high deficit spending for years--no room for more spending). And the american consumer had shot their wad(overborrowed and spent all their money). We are in an airplane which have just lost power to all three of its engines. Assume the crash position.

Anonymous said...

armaGREEDon
No mercy for the rich!

gwk said...

I am a retired New York City Police Officer residing in Manhattan who interviewed with Mr. Warren Spector of Bear Sterns back in May to be his personal driver for him and his actress wife. NYPD retirees drive many corporate executives in NYC. The interview went well as we sat in his beautiful office located on Madison Avenue. He talked about his passion for bridge and the remodeling of his new Townhouse. I subsequently passed on this position because the driving was more for his wife than him, and reading now about him being dismissed it was probably the right decision because I would now be looking for work instead of driving a Park Avenue Lawyer and his family. I think I will send Mr. Spector an e mail with my sympathy. Oh well

Jack said...

Cramer, BAAABE....
Yeah, guess what?? It IS arma-freakin'-geddon. And all your
CEO pals at all these Hedge Funds just got greedier and greedier over the last 3 years, and it's finally exploding in their faces. Why should the FED come in to bail their loser A$$'s out now??? You wanna Play?? You gotta PAYYYY--
Those of us who have sterling credit and haven't followed the sheeple off the cliff will be waiting in the wings with CASH to to pick up the pieces for pennies on the freakin' dollar.
Take a little Xanax, get a few hookers for the road, and head to your house in the Hamptons--It'll all be alriiiight........

Anonymous said...

LOL!! Thanks for the Cheap entertainment Cramer, but bailing out your buddies-(yeah, the same guys that have been bilking the public for the last 3 years) is the LAST thing Bernanke needs to do!! It's time to "Cut Bait" and kill this evil beast now.

Like someone has said, you can't fix a severed limb with a band-aid, and there will be NO such quick fixes in this disaster.

Hey--I know, why don't you take a little Prozac, grab your CEO buddies, a few hookers, some Colt 45-(No more Crystal boyz-you gotta pinch those pennies now) and head to your house in the Hamptons for a little R&R--You all could use a little break, yes?

Anonymous said...

"You obviously have no formal training in economics. If you do and still made a comment like that, I would demand my tuition money back if I were you."

That's your reply? Wow, you are a smart guy.

sam said...

Trust me that the Fed will not cut until this gets far far nastier. I think multiple major banks would have to be insolvent.

The correction underway is absolutely necessary to regain sanity not just in the REIC, but throughout the capital markets. The debt terms for private equity deals that have helped propel this market are about as absurd as what was going on in the mortgage markets.

The fed understands this- that there has been mass stupidity in this boom. Just think of trying to buy a house in Manhattan/NJ on a low six figure fed salary. It has tied its hands because as a matter of policy it does not considered "asset inflation" in its rate setting policies. These people aren't stupid- they can see that the asset inflation has lead to unhealthy market distortions.

Also, they don't have a handle on the CDO's and derivatives that Wall street has created. Despite public statements about dispersion of risk (which are accurate) they are suspicous.

The short Eurodollar trade (or fed funds) will become very attractive when the market says that multiple rate cuts this year. Remember back in March/ Feb when the Eurodollar was forecasting a cut to 4.5% by year end? could have made a lot betting against that.

With global growth strong (the banks are making most of their money abroad), now is the perfect time to work this sh*t out of the system. The fed knows this and knows that the implications of a bail-out are far worse.

wake up sheeple! said...

Bush said today, "All this US financial home loan corruption and free-falling home prices is because a new CIA report shows that ring-leader "Abdula Ackmad Kazoobedoo" of Al-Qaida has been operating on wall street undercover, and that he will make sure that the investgators will receive the $8.4 billion dollars they have requested for further investigations." The democrats agreed.

Up next, Bush visits the collapsed bridge site in Minnisota, that will cost US taxpayers a total of $1,798,280 - just for the presidential VISIT! Includes travel expences, jet fuel, food, secret service, 12 MPG motor coaches and extra-security crew costs.

foreclose_me said...

You can watch the original CNBC if you have a Mac.. although CNBC video sucks in general.

You need the Flip4Mac Quicktime plugin, which is the new official way to watch Microsoft WMV.

http://www.flip4mac.com/wmv_download.htm

Realist said...

The government stayed out of the way while mortgage brokers convinced the masses to take on irresponible debt.

The government stayed out of the way while these loans were packaged to the "brilliant" investors on Wall Street and beyond.

After all, these groups are adults who are capable of managing their own finances. Remember, each and every one of them went out of their way to to enter into the financial fates that any realist saw coming years ago.

The government should continue to stay out of the way and let it all play out.

If millions of people lose their houses, it's not the end of the world. The ownership of the houses will change, but the houses won't be destroyed. Demand for a place to live will find a way to occupy the supply of vacant houses that will exist. Prices will have to reset to sustainable levels. Levels that will allow people to actually pay their mortgages long term... or levels that will allow positive or at least break even cash flows as rentals. There will be a lot of current homeowners that will be inconvienenced for a while, but that is not an unreasonable price to pay for entering into ridiculous loans that they should have known were going to become impossible. Many current owners will become renters, renters that have their finances together may become owners, mortgage servicing companies may have to become rental property managers, some current homeowners may be able to creatively get back in as homeowners at prices and mortgage payments that are realistic.

There will be a lot of mortgage investors that will lose money on investments based on the impossible investments that they chose to invest in. I look at a person or entity that is capable of making these huge investments as financially sophisticated. If they lose money, how is that any one elses problem. Even if they are not as financially sophisticated as one might think, how is that any one elses problem.

***Devaluing the dollar in order to bail these clowns out will make every American with a dollar in his or her pocket the subsidizer of this lunacy.***

In my opinion, Cramer lost it because he likely got inundated with calls from his friends at Bear Sterns and the rest of the irresponsible financial community over Cramer's comments about people abondoning their mortgages and turning in their keys. Didn't Cramer say something about talking to a bunch of these types over the last 72 hours? So what if Cramer's people have been in this business for 25 years. All those years did was position his friends to make idiotic decisions. If they lose their shirts, they should have known better.

To me, it's shameful... and embarassing to see Cramer whining like this on national T.V. Does he care so much about his friend's idiotic investments or might he have some idiotic investments of his own that he wants the Fed to bail him out of?

Anyway, the government needs to stay out of the way, and let this thing play out!

Anonymous said...

just a data point from portland or. A homa a few miles from me has been on the market for over 6 months, it started at $735k and currently sits at $629k unsold in a very nice neighborhood, zillo lists it at $840k.
a doctor friend of mine is trapped with 2 homes, one he wants to tear down and rebuild and cannot get financing. A year ago the bank said they would do 95/5 financing and now want 80/20 and he was just told they may go 75/25 so he is in a bad spot now looking at having to get 25%.

King of the Bitter Renters said...

THERE will be no jumping. Windows don't open in new architecture for a reason. Buildings are different since 1929. If these guys want to go, they can use their private bathrooms, and they need to know how to slice up there arms, not across their wrists. Couple of lines of toot will keep the pain down.

As for us peons without 4mil in leverage to 1mil in assets, what? Since we can't declare bankruptcy anymore, we can either go the guns and ammo, Mad Max route, or we could pull together like the Cubans did after the Russians cut them off in 1991. They got kind of skinny until their victory gardens grew. (that is where the REAL Green Revolution happened) All organic. Or we can wait for the die - off. Instead of shooting everyone, we could lose a few pounds and get to know our neighbors.

Old Eastern European proverb : grow a little plot of potatoes and you won't starve.

k.w. - southern ca. said...

People are selling off to cover
their extravegant life-style spending habits.

~~~

mrmx said...
"What I don't understand is my oil and utility stocks cratering today---almost 5% in a utility ETF?"

could be people selling off stuff to cover other positions.

the toothfairy said...

hmm. he must be out of coke.

Does anyone here really believe these multi millionaire Wall Street bankers are going to lose any of their personal money?

Anonymous said...

Inventories traditionally peak and start to fall this time of year. The same thing happened last year. you can look at San Diego as an example.

http://bubbletracking.blogspot.com/2007/01/tracking-san-diego.html

The inventory peaked in early August and then fell. According to Case Shiller index San Diego home prices have fallen 8% from the peak and are still falling. The banks are sitting on a growing number of REO's right now that are not showing up as inventory. The falling inventory numbers do not show signs of an improving market. Many people have pulled their homes off the market because they did not sell. Those homes will come back on next Spring when we will have our supposed rebound....LOL.

Anonymous said...

does the street blow lower blood pressure and hypertension any better than these proscribed designer diseases called legal drugs even at their cheap prices, or does the govt poison them also.. not to be confused with "The Street.com

gates slim buffett said...

The market will crash and the people with money will be there to pick up the bargain in the end. The rich will get richer while the poor saps who leveraged themselves into bankruptcy will continue to be debt slaves. What a game.

k.w. - southern ca. said...

Once again - they panic *only* when it affects *their* pocket books.

I'm curious to see Cramer's reaction as we head into 2008.

Anonymous said...

Aparently, some people think that Cramer "lost it" and went off on national tv. Not me. This is a cynical, duplicitious, and manipulative man with a considerable talent in acting.

I think that he planned the whole "rant" after he became aware of the comments of Jochen Sanio about the IKB bailout. Probably, he thought something along these lines:

"The sheeple want a panic, heh? I'll show them a panic."

Then he proceeded to buy as many 2X shorts as he could and scripted his rant. He's running the sheep like a wild dog. You can expect them to be cornered in the fence being torn to pieces. I expect Blood on Wall Street Monday.

I don't think that he can panic Bernanke into cutting rates, but, short of that, Bernanke had better say something calming if he values his job.

Maybe, "Fannie and Freddy will accept all the mortgages that meet their standards".

http://boards.prudentbear.com/
bbs_read.asp?mid=538284&tid=
538284&fid=1&start=1&sr=1&sb=
1&snsa=A#M538284

Tom said...

This is only the beginning of the hysteria that is to come. The idea that the Fed won't tank the dollar is probably false. We have a much greater threat than just the drying up of liquidity--underlying public debt and SS/Medicare/Medicaid entitlement obligations can never be paid. In that respect it is very similar to the Weimar Republic printing their way out of Versaille sanctions. Even if they raised interest rates now to protect the dollar, it would only postpone the inevitable--one day that debt must be paid.

I think we will print the way out of this..it is the only solution to both the long and short term problems we face.


You make a good point, but personally, I don't see that as a likely outcome. We've heard copious individuals allude to the fact that there is a huge amount of corruption within our financial system. That in itself precludes the notion that these rich and wealthy will be willing to see their net worth evaporate while the dollars they hold devalue into oblivion.

Oh sure, many can diversify into other currencies or gold. But the wealthy of this country still hold their vast sums of wealth denominated in US dollars. It is in their own self interest (and this includes the members of the fed) to ensure the dollar retains purchasing power. To do otherwise is to commit suicide on a massive scale.

If you read some of Bernake's statements to date, he is clearly fixated on inflation. The mortgage meltdown and the housing bubble are issues to contend with. But those are still localized sections of the broader economy. He essentially has to choose the lesser of two evils.
Option 1: He lowers interest rates and prints money like a madman. But assuming he is not a complete idiot, Bernake knows this would only delay the inevitable, not solve the problem. Not to mention it would decimate the wealth of this nation. Are you telling me all the baby boomers (who vote) are going to set idly by while their retirement plans vanish as their currency becomes worthless? Not a chance.

Option 2: Bernake continues to print money but at the same time keeps interest rates as they are, or slightly higher. (Remember, we are still at historic lows) The end result; many REITs and Hedge funds take a bath. Those people with idiotic loans get royally screwed and housing experiences a correction. And yes, this is going to suck for those involved. But the effect on the broader economy is substantially smaller than the effects of option 1.

No matter which way we go, this will not end well. But like any doctor, triage is the word. You either sacrifice a few to save the many, or you sacrifice everyone.

stuckinthecity said...

Mark in San Diego said...
IF the Fed cuts, the dollar will be .50 cents to the Euro, and oil will cost $110 a barrel in USD. . .and actually, at this time it would be "pushing on a string" as the Japanese found out . . .think a 15 year downturn just like Japan real estate crash. . .I agree - today is the day.

August 03, 2007 9:43 PM
---


ya, and greedy sellers will raise their prices!!

stuckinthecity said...

Is this the W.W.E.? Was he acting?

I did like the "go buy some WaMu stock" crack! hahahahaha

Tom said...

I'm still up 7.1% YTD and you dopes are sitting in cash! Just wait till Monday's rebound when you all will be wetting yourselves.

I can't speak for everyone, but I am certainly not sitting on all "cash". I am still diversified like anyone else. The majority of my assets are in cash, but I have been adding to short positions on many of the lenders now taking it in the ass. I have PUTs on IMB, CFC, LEND and DSL. I don't know how much I am up year to date across all my assets, but my PUTs alone are up in the hundreds of percent. Most of my cash assets are in CDs that yield 5.1%. So if I was to tally everything, on a quantitative basis, I am likely up close to 15% year to date.

Enjoy your 7.1%, DOPE. Oh and incidentally, the market is seldom kind to those that exhibit excess hubris. Food for thought.

Anonymous said...

I have been shorting most of the builders and lenders and I'm up at least 40% this year.

the only long position I have is Quest Oilsands (AMEX:BQI). They have 10 billion barrels of oil and are trading at a $1.1 billion market cap which is equal to what they should be worth if they had only 500 million barrels.

Anonymous said...

Dang that giraffe lady was hot. Yeah, and what about the ten-year trading independently of the rate?

lee said...

OMG keith,

you are funny. i know this is serious stuff, but the crack about doing blow in the lot is still making me chuckle.

wiserenter said...

Hahaha. I like the disclaimer at the very end.

Pete said...

I watch Cramer's show from time to time. I don't hate the guy. But C'mon, Jim. Just a month ago you and many other financial commentators were saying how great things were. How the bears were full of it yada yada yada.

Now all of a sudden it's armageddon? Just like that? What exactly did you "experts" miss? These internet guys have been sounding the alarm for two+ yrs and you have been saying they were full of it. NOw that it's time to admit they were right you instead advocate turning the USD into toilet paper so you can save jobs in the Financial sector. And what happens when gas goes to $5 and food and everything else we transport gets jacked up in price?

The USA does not revolve around the Financials. What i sgood for Wall Street isn't always good for Main Street. Ihope the Fed understands this.

burn baby burn said...

Rates are going up! Not down

keith said...

Bear Stearns dumping their President on Monday should cause more trouble

http://www.cnbc.com/id/20123124

Bear Stearns is Preparing to Oust President: WSJ

Bear Stearns is preparing to oust Warren Spector, one of its two presidents and its co-chief operating officer, the Wall Street Journal reported on Saturday.

A Bear Stearns Bear Stearns Co IncBSC
108.35 -7.28 -6.3%


Quote | Chart | News | Profile | Add to Watchlist
[BSC 108.35 -7.28 (-6.3%) ] spokesman did not immediately return a phone call seeking comment.

Bear Stearns' board is due to meet on Monday to consider the departure of Spector, who heads up its stock and bond trading operations, the paper said, citing a person familiar with the situation.

Spector, 49, had widely been seen as a candidate to become the firm's next chief executive, the Journal said.

Anonymous said...

Cramer is not disingenuous. He's got more heart in this than anyone else on CNBC.

He's made too many admissions on the air that could have landed him in criminal court. He's out of control and I like that. While he's not always right, at least we get a pure opinion about something from the heart.

I've don't think I've ever seen anyone make the goofs he does on the air. Only in the funny gaffs like Casey Kasem swearing or William Shatner telling the director "Don't tell me what to do. That disgusts me".

I sure as hell would not want to work for him though. He must be a brutal, unforgiving and tyrannical task master.

Anonymous said...

where was this putz when GM employees where being fired, of Ford....

he crying over a few multi=millionaires who screwed the public.F HIM!!

Let them all sink.

Raise the rates FED!!

Anonymous said...

"It's all in the marks."

Yeah, there's still money in the retail marks pockets. The grifters on the Street will find a way to get the rest out while the market is on the way down.

SPECTRE of Deflation said...

Keith, it gets even better. From the Big Picture, and it's on youtube at Barry's site. Too friggin' funny to say the least. Think he's on the wrong side of a bet? LOL! :

Two weeks ago (July 16, 2007), Cramer mockingly said the Sub-Prime blow-up was utterly meaningless, and would have utterly no impact at all . . .

Anonymous said...

So the Fed took the punch bowl away and the result is an angry Cramer demanding it back.

Keyser Soze said...

Whom the Gods would destroy, they first make vain.

HBB said...

He is upset that Bear Stearns said it was the worst bond market in 22 years.

Then he himself freaks out on TV and calls it Armageddon.

Go Figure!!

Brian said...

go to cnbc.com and there's a new video up showing an interview with cramer later in the day... where cramer backpedals. too late jimmy

Illegals Everywhere said...

For anyone not relating to the gravity of and quickening of this situation I strongly suggest going to Realty Trac. The increase in numbers for Las Vegas and the big counties of So.Cal are nothing short of staggering.

Clark County, NV has over 20K homes in some form of foreclosure. Riverside County, CA has over 21K in some form of foreclosure.

The numbers have simply went off the chart over the past month. I have been a bubble believer and positioned myself accordingly since early 05. That being said; I am astounded by the short-term rise in numbers…

Keep in mind that we are just getting started here! For all of the Seattle Bulls out there you need only look at the surrounding areas. Everett and Marysville commuting areas have fallen already. I just don’t see this situation ending up anything short of a depression.

Tom said...

The USA does not revolve around the Financials. What i sgood for Wall Street isn't always good for Main Street. Ihope the Fed understands this.

Very well said. Which is why I think the notion of sacrificing the dollar is not an option. Bernake has a little more breathing room with pumping more liquidity into the system. But the clock is ticking.

What I could see is a lowering of .25 basis points strictly for the sake of appearances. To quell the markets. But .25 will have little to no effect on the credit calamity. It will be a bandaid fix and short term.

In the end, rates will likely return to the levels there were in the late 90s. Mortgages will be in the 7-9% range. At some point, he has to shore up the dollar.

My suspicion is that he will be pressured by President Shit-for-brain's administration to keep the gravy train running just long enough til the next election. The Repubs have enough negative press to deal with. A recession and a dropping stock market (coupled with people losing their homes) will pretty much fry the party's chances for re-election. Although personally, I think housing is now in free fall and nothing the Fed does can change that. They lowered rates like crazy after the dot com bubble burst. But that still didn't stop the NASDAQ from dropping from 5000 to 1400.

Tom said...

Oh, I just wanted to add my two cents to the inventory numbers.

In my neighborhood (in northern California), inventory has indeed gone down. But that is merely because homes previously being listed have gone off the market. I have seen next to no sales in my area. Prices are still dropping as well.

NobodySpecial said...

Oh, I just wanted to add my two cents to the inventory numbers.

In my neighborhood (in northern California), inventory has indeed gone down. But that is merely because homes previously being listed have gone off the market

==================================

Invenory being reduced has the same effect whether by people pulling homes off orselling. End result is the same, less supply.

Anonymous said...

Vanity of Vanities...all is Vanity

wawawa said...

Cramer tries to explain his outbust.

http://release.theplatform.com/content.select?pid=TwrQmH3Zmyis4FIIy16EMUQLxbA9DNtK&UserName=cmsguest@cnbc.com&key=CiRLgpl9omZGBA8ZiKyxumLRNGA%3D

Anonymous said...

Im right there with you Bozonian

Anonymous said...

housing prices continue to drop in Phoenix-Mesa as well...

Anonymous said...

Keefer do you have a crush on Cramer? Seems like every day there is a video of him here.

keith said...

It's a love/hate with Cramer - he was pumping the homebuilders and Countrywide just a few months ago.

But then he found HousingPANIC.

This is the first MSM HousingPANIC moment, so it's gonna get covered.

But just wait, there's more.

It all starts tomorrow

Anonymous said...

I'm betting dow up 100 tomorrow at 9:45am. I bought in Friday late and will be selling Monday early.

By 10:30 who the fuck knows...down 300, up 300 it's a crapshoot.

FU Cramer and the train yrio said...

Where was cramer screaming his head off on tv when all his hedgefund and buddies at goldman sacks where putting up the money to fund billions and billions in subprime originations, setting up their own subprime lenders with 0 lending standards, and then packaging up those loans into investment vehicles like CDO and MBS and selling them to pension and retirement funds.

Where was his outrage and table pounding when all this was creating the mess we now have.

So now this blowhard drama queen goes on CNBC and starts yelling at the fed that they need to bail wall street out of the mess they created themselves.

FU Cramer!!!! You reap what you sow.

Anonymous said...

wawawa said...
Cramer tries to explain his outbust.

http://release.theplatform.com/content.select?pid=TwrQmH3Zmyis4FIIy16EMUQLxbA9DNtK&UserName=cmsguest@cnbc.com&key=CiRLgpl9omZGBA8ZiKyxumLRNGA%3D

August 05, 2007 7:32 PM


=========

He's 100% right. Fed cuts, Dow is over 14K again the next day. Fed will cut, too much money on Wall St in jeopardy.

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