Confounding market does nothing to solve shutdown

The impact of 2 million furloughed federal employees isn't quite like Superstorm Sandy. It's more like Hurricane Cruz, and there's no making up for lost business.

By Jim Cramer Oct 2, 2013 9:22AM

Businessman with face down on desk © Tetra Images, Tetra images, Getty ImagesThis has become a "you must be kidding me" market. Usually I am glued to the close as weTheStreet logo prepare "Mad Money" each night. I never like to feel away from what's going on, because it is possible that I'll have to rip up the top of the show if things get wild. You can't afford to have a show that doesn't address a big move.


But Tuesday I did the show from outside the NYSE instead of in Englewood Cliffs, N.J. I was without wireless and couldn't follow things, so I was stung by the last-minute close. I had been working my Washington, D.C., channels -- which, I admit, are meager compared with others' -- and could come up only with negatives. In other words, nothing was expected to happen in the next 48 hours. So I was thinking this market should stay down at the close, be subdued, without any new information.


Nope. It ran.


I wanted to scream at the market, "What do you know that the rest of us don?" But now we see the answer. Nothing. Nothing at all.


I continue to think there are risks to the numbers that come from the vast confusion that a shutdown engenders. Businesspeople plan. They like to make moves based on some stability.


But Congress is providing a fabulous excuse to do nothing.


I was gratified when Duncan Niederauer, the CEO of NYSE Euronext (NYX), said he didn't think the initial public offering process would be impeded, because the queue is huge. But then I figured, who knows? Maybe in order to prove a political point, someone from the executive branch will say the Securities and Exchange Commission should only work on enforcement, and not corporate finance. Who's to say no to that?

With the lack of any appropriations bills for years, we really have no idea who has money and who doesn't. It seems like the shutdown is designed only to aggravate the highest possible of people who can aggravated.


In real life, though, the ripple effect of 2 million federal employees being taken out of the spending loop isn't all that different from a hurricane taking out a part of the country -- except that we don't have insurance funds to rebuild and boost the economy. This isn't Superstorm Sandy, it's Hurricane Cruz, and there's no real making up for lost business.


That's really the issue here. Lawmakers won't react until there is so much pain that they fear for their jobs. When you have a market that rallies, like what happened Tuesday, they feel as if they aren't hurting anyone. If you have a market that goes down, then you have businesspeople who visit and talk about havoc, and you have constituents who are struggling to put dinner on the plates. Maybe then they would start dealing?


One thing is for certain: The buyers at the bell? They have left the building. They are being replaced by sellers who had their chance and didn't take it, and now they are thrilled to get the prices from the low of Tuesday's trading.

Jim Cramer's headshot

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, had no positions in the securities mentioned.




More from


Tags: NYX
Oct 2, 2013 9:42AM

Anyone who is "having problems" already because of the Shutdown; Have had problems all their lives.

Mostly of their own making...

Oct 2, 2013 10:21AM
Everyone can quit crying about the furloughed employees. They have ALWAYS paid them the back pay. Most of them treat it the same as kids feel about "bad weather" days.
Oct 2, 2013 11:47AM
This "shutdown" is serving a great purpose - it's exposing all the fat that can be trimmed.
Oct 2, 2013 10:22AM
My hope for one day is folks realize it is the political "institution" that has lost its' way.  These are merely employees who are confused by no clear message from the electorate.  If we stood on every street corner and demanded responsible job performance we would likely see it or at least more of it. The apathy of citizens is what has allowed these employees to wander from their intended course.  Politicians DO NOT solve our problems and we shouldn't expect them to.  We need to find the goals and directions to give them so they act responsibly.  They are operating in a vacuum and have wandered a bit.  Time to reel them in and give them clearer directions as they obviously haven't been able to do it on their own.  I see the opportunity for progress even with this pall of a shutdown.  Citizens are the boss and need to wake up and act it. You da boss!  JMHO
Oct 2, 2013 10:01AM
Nothing ventured nothing gained Cramer. The stock market is no different than a gambling casino some people took a chance that good news about a resolution was coming out in the evening and the market would soar today. Looks like they lost. I'm not sure why you are so surprised by the risk taking.
Oct 2, 2013 10:35AM
How do you liberals feel about the Unions poooo poooing ObamaCare now? If you can't stand together then don't be surprised when the other side of the table takes advantage of it.
Oct 2, 2013 10:27AM

It takes two to tango and liberals have to accept some of the blame here. Did we not hear some of them caving on ObamaCare? Did we not hear the Unions caving on support for ObamaCare.? Did the polls not show support for ObamaCare slipping. That emboldened the people against It. FESS UP.

Oct 2, 2013 9:54AM
Cheating traders are at the pig trough ripping off honest investors early ... of course, the markets should be down ,,, there is very good reason ... jobs are up, the market was up yesterday,  the shut down was having little impact.  
Oct 2, 2013 2:44PM

Barry I'm aware of "tax rates" in some of the Foreign Countries...But many get decent services besides just Healthcare...And other cost as petrol or driving, most don't go very far or take public transportation or bikes and motorbikes.


But those rates have also driven a lot of Commerce Underground or under the table...

Or others, particularly, the Rich and people with tax attorneys or good CPAs to find ways to deflect and defray from paying taxes...A big part of the problem with say, Greece..??


Now the same is starting to get worst here and has been for probably better then 20 years..?

TOO MANY people on the dole...

Too many doing work under the table or off the books...

And too many Rich, really not paying a FAIR Share...Hiding and write offs.


Our tax rates are not cheap here, if you take all things considered; Any taxes or fees that go to any Government controlling entity..

If you are anything but homeless in the U.S., you pay through the azz..

I've calculated it several times over the years, and it is between 55-60% of most people's income. 

Oct 2, 2013 4:27PM

Beav which one of you is the toughest? LimoPat .... NevadaLuke

Oct 2, 2013 4:25PM
Wonder if this was the same gambling crew that Cramer was so upset at yesterday at the end of the day........... LOL
Oct 2, 2013 9:57AM
Oh ain't this fun.  Seems all the hot heads who have continually complained that we have a do nothing corrupt DC became unglued when they seemingly did nothing in light of this shutdown.  All these folks screaming foul have no foundation to be surprised by an organization that has driven everything American into the ground. This AC act has been what five years in the making and perhaps a little late to blow off now.  Maybe a few years ago would have been better? Couldn't help but notice the stagnant jobs growth and the surprise "not" lowering of the previous tally. Look for the GDP numbers to be contracted for the third quarter in my opinion.  At least if they don't attempt to pass over them with the shutdown.  We in many ways are operating in the dark now.  May be somewhat of an improvement as most guberment staff numbers are suspect to me anyway.  Folks just need to go to work, do the best for their families and themselves and let this thing find a conclusion.  If you really cann't let it be write your congressperson and tell them what you feel is right. You can bet they are reading the tea leaves every twenty minutes at this point.
Oct 2, 2013 10:40AM
Life is full of unintended consequences of our actions. It certainly wouldn't take much for this to be one of those times. The Global FEDS aren't printing Trillions just because. For instance, it would take very little to Collapse the Banking System. If everyone demanded just 20% of their money back from Banks today, maybe far less, the System would literally unravel.

People will say nothing to worry about it, until it Actually affects them. Then those same folks will never shut the heck up about it. They quickly change from hey look at me, to the biggest whiners you will ever hear from. They change from get the Government out to why didn't the Government do something about it. What hasn't impacted you now doesn't mean you won't be severly impacted later in ways you never imagined.

Oct 2, 2013 3:20PM

ROME:Just ignore Barry.Everyday he just whines and cries how unfair life is and how

poor people get phones and he can`t afford one.He`s stuck in NY and always says

how his life sucks.Somehow he thought Romney would be his savior.He lost because

most Americans were smarter than to fall for MR.Garage lift man who only cared about the 1%.

Oct 2, 2013 12:36PM
""there's no making up for lost business""

BS. You have to eat you have to pay bills. And you know Obo will be buying more votes for his friends by giving all the workers retroactive pay. The unions are already pushing it.

Oct 2, 2013 1:40PM

Barry, I love this country.If you like Russia so much,I`ll tell you what I`ll do.Before you move

there I`ll send you a Bolshevik hat for those cold winters.I`ll toast you in January from my

patio when I`ll drinking my Harvey Wallbangers and enjoying my pension and the peace and

prosperity Obama has brought us.VIVA AMERICA !

Oct 2, 2013 1:24PM

There is no provision for the holding of referendums at the federal level in the United States, which the Constitution does not provide for. A constitutional amendment would be required to allow it.


So you see IDK short of politicans changing it or a revolution there is no provision to change it. We get to vote for them and the things they want us to vote on. You don't see them jumping up and down asking us to vote on how much money we want to pay them or if we require them to be on the new ACA with us.




Oct 2, 2013 12:08PM
Yesterday W/S said they expected the impasse to be short. Today, they don't know what to believe. Why doesn't W/S make up their bleeping mind!!!  Do you think it is going to be solved or not????? Today is nothing more then a profit taking day from the increase from yesterday.  Of course, last week they used the excuse of the budget problems to have losses. Losses are nothing more than investors taking the profit and run. I guess they had to make sure they had enough cash in their pockets just in case the budget impasse affected their cash flow!!!  What a pile of B/S!!!!!!!!!!!
Oct 2, 2013 11:45AM

This is a transcript of the 1971 conversation between President Richard Nixon and John D. Ehrlichman that led to the HMO act of 1973:

John D. Ehrlichman: “On the … on the health business …”

President Nixon: “Yeah.”

Ehrlichman: “… we have now narrowed down the vice president’s problems on this thing to one issue and that is whether we should include these health maintenance organizations like Edgar Kaiser’s Permanente thing. The vice president just cannot see it. We tried 15 ways from Friday to explain it to him and then help him to understand it. He finally says, ‘Well, I don’t think they’ll work, but if the President thinks it’s a good idea, I’ll support him a hundred percent.’”

President Nixon: “Well, what’s … what’s the judgment?”

Ehrlichman: “Well, everybody else’s judgment very strongly is that we go with it.”

President Nixon: “All right.”

Ehrlichman: “And, uh, uh, he’s the one holdout that we have in the whole office.”

President Nixon: “Say that I … I … I’d tell him I have doubts about it, but I think that it’s, uh, now let me ask you, now you give me your judgment. You know I’m not too keen on any of these damn medical programs.”

Ehrlichman: “This, uh, let me, let me tell you how I am …”

President Nixon: [Unclear.]

Ehrlichman: “This … this is a …”

President Nixon: “I don’t [unclear] …”

Ehrlichman: “… private enterprise one.”

President Nixon: “Well, that appeals to me.”

Ehrlichman: “Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because …”

President Nixon: [Unclear.]

Ehrlichman: “… the less care they give them, the more money they make.”

President Nixon: “Fine.” [Unclear.]

Ehrlichman: [Unclear] “… and the incentives run the right way.”

President Nixon: “Not bad.”

[Source: University of Virginia Check - February 17, 1971, 5:26 pm - 5:53 pm, Oval Office Conversation 450-23. Look for: tape rmn_e450c.]

Oct 2, 2013 10:54AM
Antropy has a good post.  We all should attempt to determine where each of us stand financially in this AC.  Might open many an eye from what I have heard about the costs a person will incur for "affordable" health care.  A good sound foundation might be a better way for making a decision.  I suspect the individual cost numbers were probably held back because of perceived sticker shock. There are pros and cons for doing this of course.  Now a total sales job would be required to quell the complaints.  Looks like this entire plan was not very well concieved to begin in such an economic downturn. I'm for a delay and better cost analysis and giving folks more info as to their responsible costs.  Let folks willingly search and sign up if they want and let others either go without or of course those with coverage can continue as was promised.  But to jam this down folks throats with all the other stuff they have to worry about?  Not fair!
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125 rated 1
264 rated 2
485 rated 3
679 rated 4
640 rated 5
617 rated 6
632 rated 7
493 rated 8
276 rated 9
153 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.