CNBC: The MSNBC Business Channel

06 October 2008

Jim Cramer Spreads Panic On National Television


Also: CNBC Brings Out The Gloom-And-Doom Guests

Always known for his manic approach to financial talk hosting, CNBC Mad Money host Jim Cramer poured gasoline on the fire this morning with a panic-inducing plea to sell everything as soon as possible.

Were this to take place on CNBC, it might hurt the markets a bit, but Cramer compounded his error by spooking NBC's more mainstream and less market- savvy Today show viewers. Worse, it was then picked up by the Drudge Report, which has trumpeted this in the upper left corner above the main headline.


Jim Cramer: Time to get out of the stock market

Financial guru warns that investments could lose 20 percent of their value

By Michael Inbar contributor
updated 9:16 a.m. ET, Mon., Oct. 6, 2008

Bullish investors should turn into shrinking violets as the stock market continues its shocking downward spiral, CNBC’s “Mad Money” host Jim Cramer told Ann Curry on TODAY Monday.

In what Curry called a “dramatic statement,” Cramer emphatically urged any investor who has money they may need in the next five years tied to stocks to pull their dough out.

“I thought about this all weekend,” Cramer told Curry. “I do not want to say these things on TV.

“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”

While the animated Cramer is known for telling investors the best prospects for earning money on the stock market, he’s now saying retreat is the best position in the face of some of the worst financial news in decades. The bank lending default crisis that put financial firms around the country on the brink of collapse could bring “as much as a 20 percent decrease in the stock market,” Cramer predicted.

Aside from his irresponsible and frankly reckless, fire-in-a-crowded theatre rhetoric, could Cramer's end-of-the-world assessment prove contrarian for investors?

When the last bull has thrown in the towel, it's usually a good sign that the markets are close to bottoming. And when Jim Cramer is predicting years of declines, including a further 20% haircut, it could be the start of of a snapback rally.

Add to that a volitility index (VIX) now registering historic levels of fear, including heavy put buying and we now have several contrarian indicators converging all at once.

Can't make any promises, but this could prove to be the best news we've seen in some time.

ALSO: CNBC'S steady parade of late-afternoon guests and regular commentators tried their best to pour water on the "comeback rally" that the Dow close down "only" 369, rather than over 800 as seemed in the cards just an hour or two earlier.

My favorite was the conversation on the floor with Art Cashin, where disappointment was expressed over the supposed lack of capitulation, throw-in-the-towel selling, as though the rally had begun too soon.

Since when is a drop of 1400 Dow points in a week NOT ENOUGH SELLING? Sorry, but that was a washout.

Who says it can't go higher from here?

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