On Monday, we referenced the bet between Jim Cramer and Eric Bolling.
Today’s NYPost runs with the story: "
‘MAD’ JIM CRAMER LOSES GOLDEN $50K BET"
"Should stock jockey Jim Cramer be locked up for aiding and abetting the subprime market meltdown? The host of CNBC’s "Mad Money" now owes $50,000 after losing one of the worst wagers of his entire career to rival trading wiz Eric Bolling.
Cramer, who favors the phrase "Boo Ya," made an on-air bet with Bolling about a year ago that financial services would be the hottest sector of 2007. Bolling, a former trader at the New York Mercantile Exchange, placed his money on oil and gold.
Investors who took Cramer’s advice would have taken a 30 percent hit to their portfolios as the stocks of financial titans such as Citigroup and Merrill Lynch got hammered by the mortgage crisis. On the other hand, investors savvy enough to follow Bolling’s bet on gold and oil would have hit the jackpot, as the hot commodities jumped over 60 percent in the same period.
Cramer, through a spokesman, blamed his loss on Federal Reserve Chairman Ben Bernanke’s failure to cut interest rates more aggressively. "The bet turned on Jim Cramer emphatically calling for the Fed to ease rates. The Fed didn’t follow Jim’s advice, and as a result he’ll be happy to write a check to the charity of Eric’s choice," a spokesman said.
I frequently disagree with Jim about many things, and call him out when he is wrong (and we was wildly, insanely wrong rec’ing Financials in 2007). However, to suggest Cramer is in anyway responsible for the sub-prime meltdown is patently absurd.
And, to give credit where its due, Cramer handled the loss like a gentleman, making good on the bet.
I guess this just means the NYPost is, well, the NYPost . . .
‘MAD’ JIM CRAMER LOSES GOLDEN $50K BET
January 18, 2008
Rational people take responsibility for their actions. Therefore, when a trade goes bad, accept it and more importantly, deal with it. Even now, Jim Cramer isn’t able to do this! Blaming the Fed for not taking his advice is comical, but sadly, to him, it is his reality- he is the most insecure person I have ever seen on TV. To the point of his wager with Bolling, I am glad to read he paid up. However, lets realize, as late as Spring ’07 he was touting financials, HD and Lowe’s, claiming all was fine; he even had Angelo Mozilo on as he was selling the stuffing out of his holdings of Countryfried! Two thumbs up, way up! Aside from this instance, it is sad to see that CNBC has promoted him like they have, he’s become the face of the network. It is as though the network is reaching out to the get rich quick crowd now, these “Millionaire Inside” shows reek like infomercials. Suze Orman? Puhleeze! Anyone catch the house flipping series they started to air? Hello, have any of CNBC’s producers listened to what has been going on lately? House flipping shows on CNBC? What’s next, the squirrely, annoying guy in the jacket with symbols on it selling gov’t grant info to host a show after Kudlow? It truly is Bubblevision. Yet we all tune in at some point of the day. Say it ain’t so!
Blaming the Fed for his loss?
Sounds like a whiner more than a “gentleman”.
What the hell does Jim think would have happened to gold and oil with more aggressive rate cuts?
Yeah, rate cuts would have prevented CDO writedowns. (sarcasm)
It’s absurd, agreed, but Jimmy do get nutty at times!!!
I am a new character on this board…Bizarro Barry. Bizarro was a famous Superman character with a “twisted sense of logic which typically manifests as a superficial “opposite” of anything Superman would do or say”. It is a compliment and honor to have a Bizarro version of yourself…Seinfeld had Bizarro Jerry on his show.
Bizarro Barry’s conclusion to this article is as follows:
To suggest Bernanke is in anyway responsible for the sub-prime meltdown is patently absurd and quite insulting to my intelligence.
If Cramer is a real gentleman, he will publicly write a check to Eric’s favorite charity on the air. This will get good publicity for a noble charity. He will explain to the viewers what his rationale for the bet were and where his assumptions went wrong.
anyone that listens to this modern day carnival charlatan deserves what they get. work with a reputable proven player in the market and do your own research and make your own decisions.
Definitely a BAD CALL….The problem for CRAMER is that when I make a bad call who cares, but, when CRAMER does its on TV…
BTW What does 50k matter to guys like that…
Cramer isn’t totally responsible for the collapse but he’s got a tiny part of the responsiblility because of his ridiculous boosterism. Believe it or not some idiots listen to this and take notice. It’s like being sold a lemon by a used car salesman. It doesn’t absolve the customer from practising caveat emptor but the car salesman remains a sleaze. And it in an area which is immeasurably more complex than car buying which is why we have the SEC. Like anyone with any financial literacy I’ve long understood the market was rigged in favor of insiders and have tried to participate to a limited degree in rising tides. What the event of the past year or so have demonstrated is a level of rigging that is even beyond my expectations. How ironic that some of the most expert insiders have ended up getting burned.
Echoing AJF and CaP:
This is like Duke or UNC beating Harvard by ninety points in basketball, and the Harvard coach blaming the loss on the officials.
You got beat by NINETY PERCENT! SHUT THE FUCK UP! Four or five would be one thing, but NINETY?
Honestly, even in getting his equipment handed to him he can’t dispense with the whining.
Been tuning in for the last 3 or 4 months. And will continue. But the positive refererences to crap like Fast Money and a snake oil salesman such as Kramer remind me of my need to filter further what I ingest.
BR: If you use the TBP Google search box (above right) and search “Cramer,” you will see the vast majority of my commentary is critical. However, when I see him doing something significant and praiseworthy, it would be hypocritical of me to ignore it.
We are all about being Fair & Balanced (or is that Rare & Balast? Fairly Unbalanced? whatever)
I don’t blame Cramer for causing the subprime crisis. But he is guilty of talking his own book with the “They have no idea” breakdown.
Cramer has given heartly booyahs when a company lays off employees or their jobs get offshored. A geat buying opportunity he says.
But when his own pals have TEHIR jobs threatened, it demands action by Congress and the Fed to assure their conitnued wealth.
Thats how I read Cramer.
Pretty soon Cramer will be blaming the Fed for Area 51, Three Mile Island and the death of vinyl.
Jimbo is undoubtedly a smart guy; anyone with such an encyclopedic knowledge of practically every stock in the market simply cannot be stupid. However, I completely disagree with him regarding his stance on the Fed. He seems to feel that it is not only the Fed’s responsibility to continually bail out the market but that the Fed is all-powerful to do so.
Jim may have been a brilliant hedge fund manager, but he doesn’t seem to know very much about markets work, how economies work or history. Jim’s trading style during his hedgie days was rabid and largely based upon short-term, news-based stock movements. Few can play this game, and it is one that is far, far different from that which he espouses on his tv show.
Cramer recently decided we were in a bear market. This after a 14% drop in the major indices, after 70% of the market sectors had been in bear markets for months, after the leading sectors – big cap tech, ags and oils – rolled over. Had he had the faintest idea of how to read a chart, he would have seen this coming a long time ago. It’s not that I feel everyone should understand technicals, but if you’re going to go on tv, you should at least be able to read the writing that’s been all over the wall for months.
As for his Fed rants, perhaps Jim would be well served by understand the nature of credit-induced bubbles and that they can’t go on forever. He seems to be completely ignorant of the fact that massive Fed easing as well as the total failure of Fed regulation has helped grease the wheels for the housing bubble and the larger credit bubble.
Certainly market participants have blown the bubble, but the Fed has held the door open. And now Cramer suggests that we administer the same medicine that got us sick in the first place? Jim, the world cannot consist of bull markets alone. There is something called the business cycle.
Yes, Cramer is a smart guy. Which makes me wonder how he can be so stupid.
There are four great contrarian indicators in a market like this.
1 – Sell side analysts. Despite all the litigation some 5% of stocks are rated sell. Why bite the hand that feeds you?
2 – Rating agency anaylsts. These are the people who couldn’t even get a job as a sell side analyst.
3 – Economists. They prefer the safety of the crowd.
4 – TV entertainers like Cramer. I watched his show once, for all of five minutes. Comical or contemptible, depending on the day you just had in the market. Presumably his daytime audience is comprised of subprimers and unemployed construction workers. Probably the same bunch who get their political analysis from the likes of Limbaugh. You want to take investment advice from an advertising salesman?
The other thing I noticed during my five minute sojourn with CNBC was that their main claim to fame was a once attractive, if well worn, woman who is trying to patent the moniker ‘Money Honey’. No I’m not making this up.
It’s not that hard to make money if you do the opposite of what these conflicted camps advise.
What do you all think of Cramer’s suggestion last night that the federal government buy AMBAC and MBIA outright, sell whatever has remaining value to Buffett, and then guarantee their customers 50 cents on the dollar? He says this would cost the gubbermint $250 billion, and would result in a 2000 pt jump in the Dow; if it’s not done and these two entities collapse, then the Dow will fall another 2000 pts.
Fantastic post! You just saved me 20 mins from writing the exact same thing. Of course you explained it much better than I. Cramer outright blew this call. He should of been reading this blog for the last year.
Here’s what I posted to Real Money immediately after the Cramer comments were picked up by Briefing.com:
Why Should Taxpayers Bail Out Speculators?
1/18/2008 3:21 PM EST
I am utterly, absolutely, completely aghast at the insanity now under discussion that the taxpayer is being asked to step in as insurer of last resort. It is utterly absurd.
Ambac, MBIA, and others had a nice little business going insuring Muni bonds. Then, they decided to disregard the risks of insuring derivatives, in particular, credit default swaps. They were after the fatter premiums and higher stock prices. I detail the specifics, in much less polite terms, here: Counter-Party Risk.
To ask the taxpayer to clean this ill conceived, risk taking stupidity is criminal.
The free markets are already working to resolve this. Into the destruction caused by incredible moronic recklessness and ill considered risk taking comes Warren Buffet’s Berkshire Hathaway. BRK will eventually own this space, after the monolines go buh-bye. (Good riddance)
Why on earth you or me should be expected to pay for this private sector clean up is quite beyond the pale.
This private profit, socialized risk taking. I find that beyond contemptible – it is offense to the Nth degree.
Some of the people who claim to support Free Markets actually have no idea what a Free Market is . . .
Position: Socialists of the World Unite!
She’s been the “Money Honey” since at least 1999(it could be farther back). She is just another one of CNBC’s stock market cheerleaders. The one thing I’ll never understand is how anyone will still give her interviews after making public an off the record conversation with “B-52” Ben.
Cramer blows just about every call. He’s nothing more than a bull market cheerleader, as is the rest of CNBC.
I’ve personally heard him call a bottom in financials at least 5 times over the past several months. I think his biggest problem is that he utterly confuses short-term market reaction to news events to the underlying social mood that ultimately drives bull and bear markets. These are 2 entirely different factors, but Jim seems to have a tremendous amount of trouble differentiating them.
Given that he is a bull market cheerleader, during market rallies, his calls can look very good. When everything’s going up, it’s very easy to jump on the back of the truck and look smart. But when the market does something for which is unprepared (namely, go down), I believe his true colors show.
As the old adage says, even a broken clock is right twice a day.
As for his suggestion of a government bailout of monoliner insurers, it’s actually not that bad of an idea. But I do have some problems with it:
1. This assumes that the bond insurers are the last shoe to drop. I believe that there are potentially many more. How many bullets does the government have? On the flip side, this could – and I emphasize could – restore some confidence to the market, but I don’t look at it as a savior.
2. It’s yet another example of people like Cramer trying to circumvent the business cycle by continually bailing out the market in order to preserve an eternal rally. It’s not that I want people to get hurt, but bubbles cannot be sustained forever. At some point, market forces MUST clean them out or the inevitable crash will be – needless to say – bad.
3. His insistence that this bailout, coupled with a 100 basis-point Fed funds cut, will send the Dow back to its all-time highs is naive. Maybe it will, maybe it won’t. But Cramer seems to fail that all the government needs to do is to flip a switch to make everything all better. There are serious problems and simply flooding the market with more liquidity will not solve what is looking to be a deflationary event.
4. And this is my biggest problem with Cramer. He doesn’t seem to have any nuance or variation in his market outlook. Everything he says or writes seems to confirm the view that the business cycle is strongly controlled by the Fed, who can fix any problem, provided it reacts to market downturns quickly and decisively. History has borne out that this is not only not the case, but that such actions only exacerbate the boom and bust cycle of the last 3 decades.
As I’ve said before – and will undoubtedly say again – Cramer is a smart guy, but he just doesn’t get it. I’m not suggesting I’m always right, or that I’m even right at this moment. But his views don’t seem to fit with reality and are consistently wrong.
Cramer’s interest is to keep his show on the air…and to remain a central celebrity piece of CNBC.
he refused to tell his viewers that stocks were risky even two months back, all his stocks have taken 20% hit, so canot imagine the plight of his followers.
so as a good politicians, he is trying to divert the attention to the FED……and it does appear that the whole administration is following the same path…
if i was ben, i would resign, saying that i am not given a free hand to fix things for the long.
Telivision and politics is to entice the sheeps….and hence we should not pay too much attention to it.
It wasn’t like back in Dec06 financials were the worst call in the world. At the time, betting against them was hardly the obvious call or they wouldn’t have been down 30% over the year.* Life goes on. While he is an entertaining person, the reason he is where he is at is that he has made people a boat load of money. Discount it because it was done in the 90s if you want. You can find Internet commentators to trivialize any accomplishment. There is just a certain detestable arrogance of folks who for the most part have never approached his level of success in his field basically calling him an idiot.
* Obvious calls don’t produce outsized returns.
How much would TSCM have had to spend to get this much space in paid advertising? A lot more. Bozo get’s away with misleading millions with yet another insincere mea culpa.
And on tax rebates. Which most people will use to buy consumer electronics made IN CHINAaaa. Yeah THAT’s the way to help our economy, create jobs for Americans….and well errrr… buy votes.
I refuse to read the comments on this thread. All I ever see on a thread relating to Cramer and other talking heads is (a) how they’re full of it and (b) how astonishing it is that anyone pays any attention to them. Well, you know what? Keep talking about them and they’ll stay on the air.
Talking heads cease to become relevant when you stop watching and talking about them.
With all the BRILLIANT information out there on various blogs, why would anyone waste their time watching and then complaining about these guys, CNBC, Fox, etc?
The more mindshare devoted to them, the less devoted elsewhere.
Then again, I don’t watch any of these guys, gals or channels. (I watch Bloomberg video on the web now and then.) So, perhaps, contrary to everything TBP readers say about them, these talking heads actually deliver valuable insight. But, since so many TBP readers seem pretty sharp, I consider that proposition unlikely.
i am not a professional investor/trader, hence i like to watch some programs on tv just to know whats going on out there…
and i just have basic cable, hence i dont get anything other than CNBC.
even then i mostly cannot bear watching Larry Kudlow, i wonder if CNBC has some tight relationship with GOP.
i watch only fast money and someties madd money…
how many people maybe like me, with no choice other than CNBC to get something from TV?
Cramer is ridiculous. This has to be one of the worst calls of all time!
Now, he blames the fed for not cutting, but they DID cut by 100 basis points and yet his precious financials continue to fall off a cliff.
Was his “bet” predicated on the fed cutting by 200 basis points in 2007? If so, why would you ever place a bet like that?
Cramer is ridiculous. This has to be one of the worst calls of all time!
No…here is the absolute worst call of all time, also by Cramer by the way. It called THE absolute top of the Internet bubble and just about every company named is in the dustbin of history. Sorry to those who have seen this one before.
I am stunned you believe a bailout of the monolines could be even a half-decent idea. While there can be societal benefit to muni bonds adopting a AAA rating, lowering the interest paid, for example, there was, however, no societal benefit to the monoliner’s expansion into credit default swap insurance – just a stretch for profits – and that stretch is what has caused their demise. (See Barry’s excellent post above.)
Exactly. Just stick your head out the window and yell, “I’m mad as hell and I’m not going to take it anymore.”
Anecdote: I proclaimed my own Network moment a year or so ago. I had cable t.v. and internet – the internet went down and the cable company told me it would take 4 days for repair. I informed them that they had the right to run their business as they saw fit, but the wait time was unacceptable to me so rather than repair simply cancel all cable services.
I have since been serviced with DSL and rabbit ears – and I don’t really miss t.v. much at all.
I suggest books, blogs, and rental DVDs. Life without t.v. can be liberating – if you get mad as hell and tell them you aren’t going to take it anymore.
The Winners of the New World
By James J. Cramer
2/29/00 9:42 AM ET
OK. Here goes. Write them down — no handouts here!: 724 Solutions (SVNX:Nasdaq – news), Ariba (ARBA:Nasdaq – news), Digital Island (ISLD:Nasdaq – news), Exodus (EXDS:Nasdaq – news), InfoSpace.com (INSP:Nasdaq – news), Inktomi (INKT:Nasdaq – news), Mercury Interactive (MERQ:Nasdaq – news), Sonera (SNRA:Nasdaq – news), VeriSign (VRSN:Nasdaq – news) and Veritas Software (VRTS:Nasdaq – news).
We are buying some of every one of these this morning as I give this speech. We buy them every day, particularly if they are down, which, no surprise given what they do, is very rare. And we will keep doing so until this period is over — and it is very far from ending. Heck, people are just learning these stories on Wall Street, and the more they come to learn, the more they love and own! Most of these companies don’t even have earnings per share, so we won’t have to be constrained by that methodology for quarters to come.
I mean how impressed are you by the rows of toy horns, and the greeting Booya Jimbo? Also you can buy his books ( suprise, suprise ) and go long into history of the biggest bear market in decades.
If it is not the Fed’s job to cut the rate when things get out of whack …. what was everyone saying when the same Fed raised the rate 17 times two years ago?
The Fed has cut the rate here and there but everytime they do outcome the Ayn Rand Puritans act like this is the first time that the Fed has acted.
Bond insurance has to be dealt with… federalizing mono-lines is fantasy.
And the State backing up dumb asses who purchased Million dollar Estates. or the dip-shits that believed Banker assholes that the CDO’s were worth anything.
Someone needs to provide Re-Insurance for SOME bonds and derivatives….(paid for by holders)
Given time, the free market could sort it all out, But the hand of Government, could be needed to Stem the Tide of Trillions of dollars of securities flooding the Free market at the same time.
There is a place for Government in the free market… or all of us would be jacking off the offspring of JPMorgan.
Free markets Left their course, I’m long the Guillotine.
and some Free market source… needs to provide REAL Ratings for securities.
I STILL HAVN’T FORGOTTEN S&P, MOODIES AND FITCH’S RESPONSIBILITY IN ALL THIS….. YOU FUCKING SHILLS….
Life without T.V., I agree is so much more fulfilling.
T.V. is the Opiate of the masses, Realizing that 30 percent of that time is spent being lied to by corporate america, and the rest spent having daydreams about a life you are to exhausted from inactivity to lead.
>M.Z. Forest wrote: “It wasn’t like back in Dec06 financials were the worst call in the world.”
The worst call was when Cramer was telling you to buy techs when the Naz fell to 3,500 which ended up being the first leg of the famous tech bubble crash.
They all want to blame Bernanke when their bets go south. You should have heard radio host Bob Brinker crying like a baby on his Saturday show today. Unbelievable these cowards. They’re wrong just like Alan Greenspin. Bernanke might be the first Fed chief in a long time that doesn’t try to fake it. America has become a nation of speculators and fools. All part of the easy money, Amway, circle spinner mentality — don’t make thing better, just BS your way through life.
Time to take your medicine children.
Eric also doubled that bet (“2008 double or nothing”) as seen here…
Fast Money has declined since Bolling left.
I fast forward thru the BS now. That show needs to fire one of the traders and replace them with a more technical person like Eric was.
Regarding bailouts. The states that benefitted the most from the real estate bubble should get stuck with the BILLS. Leave texas and the midwest ALONE!..I realize this is fantasy land but still.