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The Cramer Crash?

by: Bespoke Investment Group October 06, 2008 | about stocks: DIA / IVV / SPY    

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What looked like just another bad day early this morning turned even worse when the opening bell rang today.  As of 10:30 this morning, the S&P 500 was down over 7%. 

So what caused the acceleration in selling?  Many have attributed the sell-off to hedge fund redemptions as well as comments Jim Cramer made on the Today Show before the open (that were later picked up on the Drudge Report) when he said, “Whatever money you may need for the next five years, please take it out of the stock market right now, this week." 

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Sp_futures

We'll see how the market closes, but these type of hysteria comments to Main Street, America from a renowned bull may cause just the type of panic that we noted this market was currently lacking.

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This article has 41 comments:

  •  
    Oct 06 02:51 PM
    I'm disappointed Cramer would say such a thing, knowing how many people heed his advice. What did he expect would happen? Making such comments only makes things worse. Very disappointing.
    Reply
  •  
    Oct 06 03:02 PM
    I agree, what did he think he was going to do by saying that in such a public arena. He also published an article in NY Magazine yesterday - as noted in another Seeking post.
    Reply
  •  
    Oct 06 03:08 PM
    The same Jim Cramer had said that market has bottomed out !!

    www.cnbc.com/id/259328...

    I am not sure if i should be following any of his advice. He has made such a irresponsible statement
    Reply
  •  
    Oct 06 03:09 PM
    Cramer just like Schumer D-NY on Indymac and Reid D-NV on "some large ins. co". are rumor mongering to drive the prices of everything down
    where they thru all of their multi-millionaire buddies will scoop up good stocks at an artificial low and spend the winter in warmer clims.
    Reply
  •  
    Oct 06 03:14 PM
    He probably take this chance to short.
    Reply
  •  
    Oct 06 03:18 PM
    You can thank Cramer for your Loss on WM too. They should take this guy off CNBC. I think it has gone to his head. Who would have believed some guy who honked horns, yelled and screamed about stocks would have such credibility. About the last person left with any credibility on CNBC is Art Cashen.
    Reply
  •  
    Oct 06 03:26 PM
    Cramer's next job:

    Being chased by a bull through the streets of New York City. Wait! That's an angry crowd of investors.
    Reply
  •  
    Oct 06 03:39 PM
    My God ..this man is a moron just like Schumer, they just say whatever they want to get attention. My God how irresponsible
    Reply
  •  
    Oct 06 03:40 PM
    Cramer is obviously SHORTING the market!!!
    Reply
  •  
    Oct 06 03:42 PM
    Cramer needs to hang it up!
    Reply
  •  
    Oct 06 03:51 PM
    I will bet against Cramer. In fact, I did, as I did some buying today. I can wait five years, but I hope I don't have to.
    Reply
  •  
    Oct 06 03:53 PM
    Good comments by Cramer. He's saying what the Street is thinking, unwilling to sell mainstreet a pig in a poke. Individual speculators have a right to hear what the pros are thinking, imo.
    Reply
  •  
    Oct 06 03:56 PM
    One other thing, I still see long-term value in energy stocks, even if oil goes to $50.00 per barrel. The world economy will have to turn negative for years for energy stocks to go down and stay down. I will buy them on the way down. T. Boone has called oil at $150 per barrel a year from now. I know he is down big (some say $1 billion), but he still believes in energy. I will keep some skin in the game just to see what happens.
    Reply
  •  
    Oct 06 04:02 PM
    Perception of every one is different. Very famous means liked by around 70% of the people. There will be 30% aginst or will disagree. Fundamental of problem idicates that population of unfortunate people (less income group) has increased and is increasing. Think about the value of default loans and bail out money to estimate the number of these unfortunate people. Those people are the heart and soul of the economy. Ofcourse we will survive but with low pace and probably Cramer suggest that.
    Reply
  •  
    Oct 06 04:13 PM
    Well, my goodness. This looks just like the Global Warming hockey stick "analysis." There's Cramer's statement; there's the crash. Of course, the time scale is a little compressed, and a half-dozen other comments this morning on financial web sites with no connection to Jim are NOT shown. But....logic being what it is and the stupidity of the general public as a given, I guess we've got to blame somebody. Of course, the fact that the market is behaving consistently with established technical analysis shouldn't be considered.
    Reply
  •  
    Oct 06 04:24 PM
    I remember the days when I was in Jr. High and read the Wall Street Journal. There were no Jim Cramers, no Maria Bartiromos and no Paulsons yapping in front of the television camera -- then they were black and white or color was just coming in. People could trade on facts, not yap.

    We need to do away with recommendations. We also need to do away with mutual funds because then company executives would be responsible to individual shareholders, not fellow executives running mutual funds, hedge funds, pension funds, et cetera. As Sarah Palin might say " I betcha high CEO salaries would go down too" as shareholders retook control.
    Reply
  •  
    Oct 06 04:37 PM
    A moron with a large following is a dangerous man...Bush was running 92% approval ratings at one point so the masses are asses...Cramer wants you to sell, everyone wants the bottom to be in...where's capitulation?
    Reply
  •  
    Oct 06 04:39 PM
    Cramer this morning yelled FIRE in a crowded theater.
    Reply
  •  
    Oct 06 04:41 PM
    Perhaps Cramer is getting to much credit here. After all, Europe and Asia were down big time overnight and S&P futures were down 270 points before the market open. Personally, without the help of Cramer, I set up stop loss orders over the weekend. It doesn't make much difference whether is is hedge fund selling, lack of confidence, bad news, scary headlines or just plain fear. The impact to ones holdings is all the same. Understanding it, doesn't make the reality of any better. Enough is enough. Personally, I think what happened was the music stopped and a lot of folks heard a wee small voice say.....going down!
    Reply
  •  
    Oct 06 04:51 PM
    Cramer is a first class ass clown. Listen to him and you deserve what you get.
    Reply
  •  
    Oct 06 04:58 PM
    i saw the same on friday night. First how irresponsible knowing how many 4 legged hoofed humans follow his advice.Second hes only looking like the ass he is by saying sell now. A few weeks ago he was yelling the lows have been hit!! 3rd. I dont make any apology being a conspiracy theorist when it comes to trading. This dude has lots of high ranking friends.. You gonna tell me he is gonna put viewers first before his powerful hedge fund buddies. All and all. Remember one thing with some of the most irresponsible journalism in this mess. Especially thos "Fast Money"gooks. (talk about a sleazy slimy i feel like im in a car lot show). Its entertainment. The media knows you as the consumer are most likely to watch death and doom. The saying "if it bleeds it leads" has been very abundant. There job is not to inform you first. Its to get eyeballs and pay the bills. If doom gets more viewers they love it!! Cramer, Fast Money all these sleazy shows. Remember at first its just entertainment! PS. doing the contrary to Cramer does work
    Reply
  •  
    Oct 06 05:08 PM
    The way it works with Cramer...his comment might put short term bottom :-)
    Reply
  •  
    Oct 06 05:27 PM
    haha...oh! so the great seer sees a correction...now...aft... Dow hits 10000. Genius! mmm...what's next?
    Just in...Cramer issues warning on Enron...
    Reply
  •  
    Oct 06 05:36 PM
    I guess you geniuses all figured out that Cramer's comments TODAY caused the global market free fall LAST WEEK.... what is wrong with you people, can't you do simple arithmetic. The financial sector is potentially $6 trillion dollars in the hole, a hole that can't be filled with hope, so let these investors protect themselves and if they think it is in their best interest, to exit the market. And if you know something that Cramer doesn't, by all means share that INFORMATION , but don't fault the man for his market-experience based advice just because it makes you feel bad. Too, I am really surprised by this Bespoke Investment Group Cramer voodoo story... you don't really believe in that do you? Or were you among the ones who thought Meredith Whitney caused the financial crisis by exposing Citigroup's weakness? Hey, y'all should use that energy to help investors figure a way out of this crisis without cutting off a limb. But looking at Cramer as a scapegoat, well that is just pathetic: don't you recall that Paulson, Bernanke, Immelt, Congress etc, have been saying we are in difficult times for weeks, if not months.
    Reply
  •  
    Oct 06 06:18 PM
    It's absurd to think the market is affected by Cramer.. a coincidence doesn't prove a link.
    Reply
  •  
    Oct 06 06:40 PM
    Anyone who is too lazy or stupid to do their own research should stay out of the markets. Listening to anyone else's recommendations is a recipe for disaster.Making money in the markets is hard work, not a get rich quick scheme.Unless you are connected to Goldman Sachs.
    Reply
  •  
    Oct 06 06:41 PM
    Who's Cramer? Can he help me find my testicles??...they are rolling around somewhere on the floor of the stock exchange... :-(
    Reply
  •  
    Oct 06 06:54 PM
    Mr Doji: "Anyone who is too lazy or stupid to do their own research should stay out of the markets. Listening to anyone else's recommendations is a recipe for disaster.Making money in the markets is hard work, not a get rich quick scheme.Unless you are connected to Goldman Sachs."

    The problem is that after one does excellent research, there are enough morons to listen to the Paulsons and the Cramers of the world and then these morons drive the market in an illogical fashion thus ruining the hard work of the diligent investor or trader.

    The same is true about elections. Democracy fails because there are enough fools that vote their emotions and not the issues. A candidate who drums up the fools will win virtually every time.
    Reply
  •  
    Oct 06 07:08 PM
    Cramer will never change as he lives off carcasses just like the vultures and the bloodier they are the bigger hype he can make out of them. The word responsibility seems unknown to him! How can he make statements he offered under such trying and difficult circumstances when the public needs sound advice without the fear factor thrown at them! He should be ashamed of his irresponsible statements which if followed only caused more damage mostly to inexperienced investors.
    Reply
  •  
    Oct 06 08:03 PM
    cramer is highly emotional person and changes his views about the market every day. he is highly dangerous.
    Reply
  •  
    Oct 06 09:07 PM
    Cramer's comments remind me of Greenspan telling people to get adjustable rate mortgages.
    Reply
  •  
    Oct 06 10:18 PM
    got this crazy idea.. why not use a page to help each other out? Forget about what Cramer does or doesn't do.. trade and share ideas, thoughts, fundamentals and metrics. I cannot get that info from Scottrade my platform.. oh wait.. if you do that and make a mistake along the way, then somebody will misconstrue that info and your the next Cramer wearing an asshat. I still believe if you use Cramers knowledge to get basic info, you should be able to more effectively do your own homework. I bought some going down today also.
    Reply
  •  
    Oct 07 12:31 AM
    Granted.. Cramer is in the know. However, the network does nothing to edit him, and that disclaimer serves no purpose because novice investors only want to run right to their portfolios and do exactly as he says.. in a way, it's rather irresponsible all around, because the guy has such a huge impact on fans that the market is absolutely impacted in whatever way his comments lead sheepey ignorant investors. This may not be his fault, but the powers that be are well aware of the Cramer effect.. in fact, even the government eventually follows his suggestion. It bothers me because those of us who can listn and still use our own sensibilities are made to suffer because of the irrefutable impact of his remarks. And whether unwittingly or not, he practically has the power to manipulate the markets, in many cases, by who he chooses as guests and his remarks to callers. I am gobsmacked at the ignorance of a television station, which very well knows this dynamic exists, and continues to position themselves as responsible objective reporters when this phenomenon is plain as the predictable rallies and sell offs which he is continually allowed to precipitates. It's sickening, really. And for what?? So he can claim to have known it would all play out just as he said? Well of COURSE!! Unfortunately, this is no joke.. peoples' savings and retirements are involved. I watched in horror as he made swipes at Wamu every night until they were finally raped by the FDIC, and now he uses his platform to tell what the FDIC should do? But the morning the killed Wamu, they were his hero.. but now they're messing with his Bob Stelle. This is outrageous, and it's as if we can do nothing but watch it all play out while our investments deflate before our eyes and he waits for his next pat on the back. Sick!
    Reply
  •  
    Oct 07 01:22 AM
    Kath H,

    Loved your comments, there should be more of you's around!
    John Bougearel
    Reply
  •  
    Oct 07 08:08 AM
    Cramer didn't cause the market to go down. He did cost many of his viewers who are new or not very savvy to investing untold $$$ by suggesting to sell into a panic. He should have spent more time explaining to his viewers and followers the suitability of investing in equities, their risk, and the proper time frame associated with investing in equities instead of acting like a circus clown.
    Reply
  •  
    Oct 07 10:39 AM
    Cramer is dangerous. I learned this a long time ago. He was screaming for everyone to SELL Oracle. Unfortunately, I heeded his advise, sold at $13.00 and sat by and saw Oracle go up past $20.00. His knowledge needs to get filtered - he is like a loose cannon.
    Reply
  •  
    Oct 07 11:00 AM
    Look, Cramer is an entertainer. On top pf that controversy sells. He's on the Today Show right? So what do you expect from someone who now makes his money, not from stocks, but his enterprises. So get over it and do your own RESEARCH and you can make it in this market. I am.
    Reply
  •  
    Oct 08 11:05 AM
    Bah, it's silly to think that Cramer caused this drop. If he had that much clout, then why didn't the stock market soar when he was calling a bottom a few weeks earlier?

    He's an entertainer. Listen to his advice at your own risk.
    Reply
  •  
    Oct 08 02:14 PM
    If we parse his comment carefully, we realize that he wasn't telling people to take ALL their money out of the market, just to be sure that if they need a chunk of cash for something planned that they get it out now; but people hear what they want to hear. Cramer is still the only game in town when it comes to having the inner workings of the market explained on popular television...
    Reply
  •  
    Oct 08 09:59 PM
    If anyone has money in the stock market that they may need in the next
    five years...they are living a dangerous life indeed...Cramer didn't have to
    sound such hysterical notes . I think we'd all be better off if we all spoke
    in much more deliberate terms...Sometimes he's an investors worst
    enemy, although I must say, that anyone scared out of a position because of the hysteria...shouldn't be in the market either.
    Reply
  •  
    Oct 08 10:30 PM
    Anyone think that maybe he said it to at least contribute a little to the bottoming.
    Reply
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