Another day, another bogus Armageddon

We're better off than we were 3 years ago, though it may not feel like it.

By Jim Cramer Jul 12, 2011 9:12AM

the streetjim cramerDidn't know we now face another Armageddon. In fact, a couple of Armageddons. The debt-ceiling Armageddon. The Italian Armageddon. The Chinese inflation Armageddon.

 

Jeez, these Armageddons seem like a dime a dozen. And that's the real problem: Armageddons aren't sold a dozen by the dime. They are sold very rarely. We should know it -- we lived through one just a couple short years ago.

 

Here's the problem, though. We have learned the wrong lesson. We have learned that every single crisis is the paramount crisis. That every single woe is the death rattle. That the sky not only falls but falls hard and takes all of us chickens with it.

 

Here's what we should have learned. You can almost blow up the western financial world. You can almost nationalize every single bank. You can almost destroy capitalism. We almost did. We can scorn Bernanke and Geithner and criticize them for 9% unemployment. But I think we should have and could have had 25% unemployment. I think we could have had a depression.

What's happening now is not equal to what happened then. Sure, stocks are higher. But don't tell me that a potential Italian bond restructuring -- which I don't think will happen -- is as bad as the collapse of the U.S. financial system. Don't tell me that 5% or even 6% bond yields in Italy could be our funeral. As a broker, I sold 14% Treasurys 30 years ago, and that was supposed to be the end of the world.

 

I am suspicious of the end-of-the-worlders here. Their rap is too convenient. I see this one as "OK, we beat Greece. Now let's go after Italy with short positions, with credit default swaps, with everything we can, because we have to make our quarters." That's hedge fund speak for "Look, we can't take down companies, but that doesn't mean we can't take down indebted countries."

 

I say sure, go ahead. But if you think you can send this market down even 10% from here on Italy and a possible budget talk breakdown, I say give it your best shot.

We're better than we were three years ago.

 

It's just that after a day like Monday, you don't feel it.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Learn how to follow Cramer’s trades for his Charitable Trust.

 

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23Comments
Jul 12, 2011 10:41AM
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Smile You still have a house. Ninety percent (90%) of Americans still have jobs.  We haven't defaulted on our debt, yet.  Five hundred thousand boomers a month should be retiring leaving their jobs to xy whiners.  We haven't suffered a national disaster like Japan. We lead the world in technology (Apple, IBM, Intel, Microsoft. etc.). We haven't suffered another terrorist attack.   Things may not be as good as they were in 2007, and probably never will, but they're a lot better than they were in  1963, 1973 or 1983 so quit whining and figure out how you are going to improve you life instead of asking the government, everyone else, to do it for you.
Jul 12, 2011 1:33PM
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Cramer's hidden motives, keep buying so I can sell. ;-)

QE2 ended and now the FED is rolling over mass holdings, which is just a shell game of hiding a broken system of money from debt.

 When 70% of daily market volume is computers trading between themselves, be careful when looking at overall market trends.   Be ready for the next correction with cash on hand.  And remember the 1930's stock market crash, while everybody was selling screaming the end of the world, the Rockfellers, Morgans were buying, knowing damn well the US industries would be there for the next boom fueled by the banks fiat money.






Jul 12, 2011 2:03PM
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Thanks for all the tax payers money that went to wall street and keep the million dollar pay days going. The poor people became more poor by doing this bail out and the wars go on with no one paying for them. Keep this giveaway going and the U.S.A. will be gone!!!!
Jul 12, 2011 12:50PM
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Where ever there is money there are crooks nearby.
Jul 12, 2011 9:42AM
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LOL...  Repeat a lie often enough and the minions may start to believe it...

 

Jul 12, 2011 11:45AM
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It is in Jim Cramer's best interest to be the "cheerleader" for investing in the stock market.  He makes millions off his newsletter and other advisory positions.  It's interesting to see when he touts a stock on his show that the next day the price of the stock goes up as all his "followers" believe everything he says whether it's truthful or not.
Jul 12, 2011 1:43PM
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There is alot of money on wallstreet I think it is time the government implements a tax on all these rich people who have money to invest.
Jul 12, 2011 1:40PM
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You are just like all the Wall Street crooks. How long can this go on and on  and on without some serious financial crisis. All you guys on Wall Street are go on with business as usual. Well some day the sky will fall. I think Wall Street should  bail out the government with a 10% tax on all daily trading volume to fund health care and social security.
Jul 12, 2011 11:22AM
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Market down 10% would be a blessing.  Try 15-20%.
Jul 12, 2011 2:55PM
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the  people whining about all the doom and gloom out there are the same people calling for the government to fix things while at the same time calling for the government to shrink and stay out of their lives. Shut the f up and do something to fix your own situation, don't wait for the government to bail you out like they did the banks. YOU are NOT to big to fail!
Jul 12, 2011 5:48PM
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What i don't much like about Jim Cramer'a attitude is that you can't just shrug off a multiple rocket attack and that's what the market has. Just a few of the concerns are

 

1. The flat US job market from last week's figures.

 

2. High Chinese inflation means they won't power the world economy upwards anymore on stimulus steriods, indeed the reverse.

 

3. The gathering contagion of Euro sovereign debt rolling from country to country as the original three search for more money and now bigger economies look shaky while Europe for the first time actually considers the first, a Greek default which will really hurt

German and French banks. The Eurozone just can't handle all this debt, much of it generated by bailing the banks out in the first place. Just look at Ireland for instance, today's latest downgrade. Their banks have recieved massive amounts from the government of this small country.    

 

4. The budget impasse in the US.  At a time of neccesity the Republicans say you can't tax wealth creation further. Well somone has to pay taxes and it can't be the unemployed so it should be corporate America with their 2 Trillion on the sidelines. They or the economy they take their money from were bailed out. Well now it's time to pay the bill! This is not radical or socialist, but instead good house keeping and common sense

 

 The world is interconnected as never before and so wherever you see these problems in aggregate they matter a lot.

 

When banks were bailed out the debt went to government and now we're seeing the consequences all over the world. We just kicked the can down the road, we the people who bailed out the banks through our governments have recieved a modest benefit of avoiding an even worse recession but many of the surviving banks have done very nicely thank you. Well not now as all the above chickens come home to roost in the form of developed world dangerously high levels of government debt. 

 

This is a real not a fake problem and has been rolling around the markets for a year now and there are no easy solutions out there.

Jul 12, 2011 1:23PM
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Thanks again, Jim.  I truly appreciate your perspective on what is going on in the market and helping ordinary investors better understand the market with all of its complexities.  Including, the forces that try to bring the market down (as well as up) and help us see what drives some of these movements.  Yes, some folks like WakeUpNow love to dish out vulgar criticism wherever they can.  And yes, at times it may seem like your opinions contradict themselves.  But some of us do understand where you are coming from.  You have never professed to be a market prophet and unlike so many advisors, you are quick to admit when you were wrong.  Although Mad Money is a little over the top for some folks, it frankly makes an investing show a little more fun to watch.  Unfortunately, many never listened to you back from the beginning of your radio days and seem to judge based on the wacky antics they see.  But for those of us who are long time listeners, you've helped make us much more market savvy by teaching us some very sound, basic investing principles.
Jul 12, 2011 10:31AM
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So what is better exactly? The DOW is still down 2000. My house is still worth half what it was. 2 million Americans have lost their jobs. The country has 2 trillion more debt and nothing to show for it. And Cramer says things are better than 3 years ago? Why not tell me what is better. He can't seem to come up with anything that is better. Just says things are better. That's reassuring coming from that guy.
Jul 12, 2011 1:26PM
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You can't compare the great depression's unemployment with today's unemployment because the US used different formulas in the unemployment figures. At the peak at 12+% unemployment we where around 25% unemployed or under employed.
Jul 12, 2011 5:59PM
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Yes, I agree we could had a depression, 25% unemployment but we would be rebooted back and then be better off then a "false profit"........Obama needs to go! If not we won't reboot. Face it, are we getting better with Obama, I think, NOT......

 

Cramer's hidden motives, keep buying so I can sell.
Jul 12, 2011 6:05PM
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in the capitalist mind it is dog eat dog competition that is great.....until you are the dog being eaten ...............then you want government regulation.........

don't believe me? just listen to the people whine about the price of gas and cry to have the capitalist gougers put in jail

Jul 12, 2011 11:50AM
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Your right Jim.  Love the way you step on the doomers and gloomers.  I agree with you---those guys are losers.
Jul 12, 2011 6:45PM
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PTPTP

 

So do many others, however, P&G's market in NA and the EU is saturated  = no growth!!!!!!  Only hope is for the 3rd world to pony up.  2/3rd's  of this planet  make less than $500 USD per YEAR... where is the growth......good luck!  BTW most of your P&G products can be replaced with simple household cleaners that have been around for years and cost $1-2 USD. Unless ur digging ditches or cutting grass for a living that expensive Tide u use is overkill.  All about marketing, perfumes and enzymes added for that "better clean".  Dawn pollutes the environment with Triclosan, Cascade only cleaned dishes better with phosphates, the list goes on.  If u feel better while paying a premium for products that are over priced more power to ya!!!!!!!1

Jul 12, 2011 6:00PM
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PTPTPT

 

I am a P&Ger and if u think 5 years of flat growth (55-65) is going to let u retire wealthy, ur sick.  Sure the divs are great ...we at P&G don't pay for much of what is dumped into our retirement funds for years service,however, ask the guys in the early 1990's at 50 yo with 30 years in bailed with the stock at $85 how their retirement years were spent........Getting another JOB in most cases to cover the losses.

Jul 12, 2011 2:45PM
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is cramer a minister and his followers the drinkers of poison kool ade?
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