August 30, 2008

Jim Cramer - if the government used home prices in the CPI reading, you'd see the biggest deflation since the '30s, calls the Fed "radical right wing"



Cramer predicts another 10% to 15% decline nationwide, and 40% to 50% peak to trough declines in bubble markets. He calls the Fed "reckless" and "radical".

Cramer: Fed's Destroying the Economy


Jim Cramer says the Fed is ignoring the U.S. deflationary crisis and is trying to reinvent the economy by destroying it.

26 comments:

born to lose said...

I don't know if i agree with Cramer, the lady did bring up a lot of good counter points.

He never really answered any of her challenges.

Andrew from Russia said...

This only confirms that the CPI, no matter how calculated, could not be a useful indicator of anything. Milk prices doubling and caviar prices quadrupling may be painful for their respective consumers but who really cares? And they claim that falling housing prices are an absolute disaster - as if rising housing prices did not portend that disaster.

Anonymous said...

What a dumbass.

Are we supposed to bring back neg-am liars loans to reinflate the bubble.?

Anonymous said...

Now THAT'S ENTERTAINMENT!

A clearly-on-the-edge of a nervous breakdown, heavily-medicated capitalist profiteer, across from an obliviously-perky ditzbucket...

Wow; okay!

Anonymous said...

if they had used home prices earlier, it might have prevented the bubble in the first place. the CPI would have more accurately reflected the prior inflation while they were keeping rates too low. only problem is, an accurate inflation measurement would have meant higher social security cost of living adjustments. the whole hedonics garbage in CPI is so subjective they can make CPI whatever they want.

take a bite out of crime said...

Has Bush and Cheney been arrested yet?

Anonymous said...

Cramer is trading for himself. You always have to be careful of Cramer to which side of the trade is he really on. Prices go up and then they go down. We were told for years by the realtors that housing prices only go up. The market still has not corrected until the vast majority of the market come to realize that prices can go down. That has not yet happened in all markets. Still more correction is needed.

million said...

someone like Cramer should not be allowed to invoke Hobbes' philosophy on command/centralized govt and social contracts.

and i guess being "conservative" means continued downward manipulation of interest rates.

and he thinks the Fed has lost all cred? look in the mirror Jimbo.

Nike said...

Letting the market do its thing is radical? Excuse me?

In one sentence he says that our ethanol mandate is driving grain prices, which I agree on. The democrats in congress will not lets us get our own oil, keeping oil prices high. The government is responsible, ultimately, for creating the conditions that allowed the housing bubble.

And then he says letting the market do its thing, a hands off approach, is radical? DOES HE WANT MORE GOVT INTERVENTION? Does he not understand that is what got us in trouble in the first place??

jerry roberts said...

I don't think you could say that this market was deflationary until homes purchased outside of the bubble period also experienced asset loses.

I'd simply call this a dutch auction since the high bidders got their choice and the low bidders will get the left overs.

Paul E. Math said...

More self-contradictory, self-interested dogma from Jim Cramer.

So what's his point? That the Fed, at a near-historic-low 2% target rate is, what, hawkish on inflation?? C'mon. Get serious.

You can't listen to a word this guys says because he just wants as low a rate as possible for himself and his banker buddies on Wall St. Period.

Falling home prices may be 'deflationary', depending on how you define 'deflation'. But you need to take care not only in how you define 'deflation' but also in the expected effects of this 'deflation'. What we really care about is what is going to happen - what word you use to describe it is irrelevant.

Even as money is wiped out in home equity losses and mbs defaults the Fed is determined to pump money into the system in other 'innovative' ways, creating dollars where nothing of value is created. This makes each dollar worth less and less even as falling home prices destroy money through home equity declines.

The Fed's talk about interest rate hikes is a head-fake for foreign investors to convince them not to abandon dollar-denominated assets like treasuries and prevent a run on the dollar.

Call it 'deflation' - the dollar is still toast and prices will soon resume their upward march.

biden said...

The government ibnflation numbers are totally bogus folks.They were crap when home prices were rising and they are crap now.According to the govt inflation is in check.Bunch of baffoons.They are printing so much money right now it is insane.Where are they getting money for iraq? You guys have no idea how corrupt the system is.I should have went to iraq and worked as a contractor.Kiss a little ass and get a huge contract to build outhouses.

Anonymous said...

but if they used the number in the cpi there would have been a gigantic inflation number for 20 years and they would have had to raise interest rates all trhose years and given a fair return to the savers dollars........they changed the calculation methods for a purpose but what was it?

Anonymous said...

Left is Right, Up is Down...

Nice television voice on the talking head though...

Paul said...

What an idiot he is! Zero credibility. I think Aaron Krowne should do a economic heads "Laugh-O-Meter" and Jim Cramer would be #1.

Anonymous said...

You cannot have deflation with supply siders at the helm. IE: rebate checks created from the press, and Iraqi rathole funded by the same. Borrow and spend, or borrow more and spend more are the only options here. Remember; these charlatans still think deficits don't matter.

The inflation they create merely rotates from realestate, to other commodities; such as food, energy, gold, and just about everything else not made in China. What will be key is figuring which area is next for their supply side dollar massive and continued printing orgy.

I saw this writing in 2001 when I bot a pile of gold and silver. I did not see step 2. Too bad for me.

Refuse to buy overpriced said...

If housing prices should be included in CPI, why didn't he speak out against the worst inflation since the Continental Congress?

If Cramer's goal is to make me "mad", he has succeeded.

The country's most shameless advocate of privitized profits, socialized losses.

jeremy burke said...

I'd say that 100% of americans are dumb do to fables like this:

"When the work was finally done, the artist, waving his wings, found himself buoyed upward and hung suspended, poising himself on the beaten air. He next equipped his son in the same manner, and taught him how to fly. When both were prepared for flight, Daedalus warned Icarus not to fly too high, because the heat of the sun would melt the wax, nor too low because the sea foam would make the wings wet and they would no longer fly. Thus the father and son flew away."

"They had passed Samos, Delos and Lebynthos when the boy began to soar upward as if to reach heaven. The blazing sun softened the wax which held the feathers together and they came off. Icarus fell into the sea. His father cried, bitterly lamenting his own arts.

I think that the economy is doing just fine since I support globalization and globalization will cause the old monied interests, and those on wall street, to rethink their strateiges as competitor quality increases.

cramer, in the video, whines about his lake getting bigger since he used to be the big fish in his small pond but now he's becoming a smaller fish in a bigger pond.

Anonymous said...

Man, I would love to see interest rates at 20% again. Let the people who have saved earn some bang on their buck for a while...

michael said...

shithead cramer,

if housing was included in CPI from 2000 to 2006 we would have shown huge inflation...the fed would have reacted by raising rates...and we may not even be in this mess.

damn keith your boy is such a douche bag.(cramer not obama)

shtove said...

I love Cramer's literary references. Sometimes he comes across as a sideways thinker. But then he gets it horribly wrong.

The blond looked like she needed to get to the bathroom from about halfway through.

Anonymous said...

If they factored in home prices only when they were going up then there would have been really high inflation in California!

goldsheet (Bob) said...

bloviate \BLOH-vee-ayt\, intransitive verb:
To speak or write at length in a pompous or boastful manner.

eric in vegas said...

We have to press the reset button on our economy. There's no way an economy based on 70% consumption is sustainable.

Anonymous said...

Cramer narrowly avoided a federal indictment some years back when he commented/shilled for some dotcom stocks that he had undisclosed interests in. I don't believe a word that comes out of the man's mouth unless I see a confirmation somewhere else.

fast actin tinactin said...

shill.