I said it on Friday, I wonder how Jim Cramer will revise what he says when there is a bounce in the markets from his; “Don’t buy until Dow 9000” call. Well, we certainly did not have to wait long for the mighty Cramer to revise his history, yet again, and spin “what he meant to say was” moment. As it turns out Cramer meant to say that if Trichet did not do anything he would not buy until Dow 9,000, but that is not what he really said.
Anyone who watches his show, I only do at night when I am going to bed because I like to laugh before I sleep, knows that this guy says one thing, will be wrong and will then “remind” you of what he said. Unfortunately, he reminds you of the complete opposite of what he says, almost every time. I think he forgets that video is forever or something because I am not sure how he thinks he can spin what he says when he is on tape saying pretty much the opposite of what he says he said. Cramer was a great money manager and a great self promoter, but as far as “looking out for you,” well, I think Congress looks out for you more than Mr. Cramer and that ain’t saying much.
This is not the first time he has done this and will not be the last time either. It kills me that he just slams bears and short sellers when he also sold short and was not an investor in his hedge fund. He also wants you to believe that the markets should go straight up and never down, unreal. What I find humorous is that he thinks the fundamentals are “great,” even in Europe. In May 7th he says Europe fundamentals are junk, but on May 10th the fundamentals are great, huh? He was extremely bearish on May 7th and bullish on May 10th, huh? Make up your mind. I am bearish on the markets, but like individual companies, what does that make me? I think a realist, but Cramer is just a damn phony.
The EU is in for some awesome austerity in the near future and the EU is 20% of the world GDP. If they are going to be thrown into a recession because of austerity, let’s just call it higher taxes, that will be a drag on the world economy, right? How can this Mad Money guru not know this? If you watch the full May 7th video he talks about the 290K employment report, how can he not see the 188K phony birth/death model addition? How can he not discount Census hiring, 66K temporary jobs? On top of another 26K actual temporary jobs in the private sector? Let’s face it, this guy is a headline reader and not a fact checker. I am not sure why he gets under my skin, perhaps it is because he acts like he is looking out for you when he is not and knows nothing about macro events. Most of all, he rejects what he actually said and replaces it with what he thinks he said. Some people have a word for that, it begins with an L.
Here is what he said May 10th:
Compare that with what he said on May 7th and you be the judge:
We all know the answer to that question, but he really has taken the cake today. As Goldman defends itself against this lawsuit Cramer had a piece on CNBC titled “Cramer: Goldman Invested Own Money in CDO.” In this article he cites an unnamed source, which is the first red flag, that stated Goldman did not short this CDO. Well, who cares as that is not the allegation. The allegation is that Goldman allowed Paulson to pick out lousy mortgages to short, in order to create the synthetic CDO, and did not disclose to investors that this CDO was created by a guy who wanted to short the market. The charges claim that the marketing of this CDO was said to have been picked by an “independent” third party which is patently false, unless Paulson & Co. wanted to lose money. As an aside, this is right about the time Goldman started to short the sub-prime market according to my sources, you know, publically available information.
The question is about whether Goldman did this, I think they did, and what other banks might have done the same thing, they all copy each other and the synthetic CDO market was a very esoteric vehicle to invest in. The CDO market was also controlled by a few main banks, Goldman, Morgan, BoA, Deutsche Bank, Citi and a few others. These banks kept the prices of the CDS swaps low, meaning the buyers, i.e. Paulson, was not making any money, as the market was collapsing which shows that the banks were deluding themselves about the reality of the market. Most CDO’s only needed a 5% default rate to blow up, banks did not move the prices of the CDS’s in the buyers favor until well after that 5% default rate, read The Big Short to verify. In other words, these guys controlled the market, created a product they knew was crap (the short sellers picked what they wanted to short!) and then sold these synthetic products to unwitting clients, they had to invest in some of them because by 2007 all the suckers were less likely to buy synthetic products.
My point is simple, no one claimed Goldman shorted this specific CDO, but misled investors to buy it by distorting the facts about it. Are they guilty? More than likely, but I am sure the case will be settled with admission of guilt. Does this mean AIG and other investors might have a claim? Yup, so go buy some GS Cramer, I am sure he will tell you that later tonight. Did other banks do the same thing? More than likely. It is hard to believe GS was the only bank that did this when they were a relatively small player in that business, compared to Citi, Merrill Lynch and others. Does Cramer grasp those facts or thoughts? I don’t think so.
After all, this is the guy who thinks the market going up every day for a month and a half is a good thing. Then again, Cramer, whose selective memory will omit this in a week or tonight, did this on his show last night:
I guess Cramer never made money shorting stocks… yeah right. I respect Cramer the hedge fund manager, but this other guy, what he turned into, is disingenuous.
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