Cramer Defends Doom-and-Gloom 'Today' Remarks
As one of CNBC’s star personalities, “Mad Money” host Jim Cramer has often appeared on the financial cable network’s parent channel, NBC – and has had an even more prominent role during the global financial crisis.
Cramer made an appearance on NBC’s Oct. 6 “Today” and made one of his most dire statements yet – he told viewers the stock market could fall “as much as a 20 percent” and warned investors to take out any money they would need in the next five years.
Following his statement, the Dow Jones Industrial Average (DJIA) fell 700 points and some even suggested his remarks may have had an impact on the market that day. However, Cramer told his audience despite the criticism he felt it was his duty to warn investors.
“What I said on the ‘Today’ show earlier this week and what I said on this show has gotten a lot of attention – a lot of media attention,” Cramer said on CNBC’s Oct. 8 “Mad Money.” “Some of it’s nice, some of it’s nasty. Let me explain what I was doing. It was what I promised I would do each and every day since I started this show. I’m talking about telling the truth.”
“I’m not going to tell you to buy when I know it is time to sell something,” Cramer said. “Earlier this week, I made a decision and my decision was that I wanted to make room. I wanted to be sure that if I needed money for something in the next five years, for a big purchase – college, college tuition, a car because, you know, credit is hard to come by, a home – I was going to take some of the money that I had in the stock market for that occasion and move it over into savings account.”
Cramer is known for his wild outbursts, including an Aug. 3, 2007 outburst about Federal Reserve Chairman Ben Bernanke’s reluctance to cut key interest rates. A year later, his comments turned out to be largely correct – as storied financial institutions Bear Stearns, Merrill Lynch, AIG, Washington Mutual and Lehman Brothers have all gone out of business or have been absorbed by larger institutions.
But just a week before J.P. Morgan bought out the troubled Bear Stearns, Cramer told viewers, “Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.” Within a week of Cramer’s remark, Bear Stearns stock fell from almost $63 a share to less than $4 per share. He later apologized.
Cramer demonstrated a passionate disapproval of his critics’ claims for his Oct. 6 “Today” show remarks.
“That’s what I said,” Cramer said. “That’s a firestorm? How could that be a firestorm? That’s called prudence!”