You have to give credit where credit is due.
On Aug. 3, 2007, CNBC’s “Mad Money” host Jim Cramer lost his cool about Federal Reserve Chairman Ben Bernanke’s reluctance to cut key interest rates. A year later, his comments about Bear Stearns have been largely correct.
“[I]t is no time to be an academic, it is time to get on the Bear Stearns call,” Cramer said during the “Stop Trading” segment on CNBC’s “Street Signs.” “Listen – open the darn Fed window. He [Bernanke] has no idea how bad it is out there. He has no idea! He has no idea! I have talked to the heads of almost everyone single one of these firms in the last 72 hours and he has no idea what its like out there. None!”
Cramer slammed his hands on the set table during the outburst, and became enraged enough to warrant pleas from host Erin Burnett for him to calm down.
“[M]y people have been in this game for 25 years, and they are losing their jobs, and these firms are going to go out business ... and he’s [Bernanke] nuts,” Cramer continued. “They’re nuts . They know nothing! … The Fed is asleep. [Federal Reserve Bank of
As it turns out, Cramer was right about Bear Stearns. Bear Stearns fell and was taken over by JP Morgan Chase (NYSE:JPM) in March – although he did mistakenly say Bear wasn’t in trouble just days before the collapse.
In the months after Cramer’s rant, the Fed cut prime rates seven times – from 5.25 percent to 2 percent. Cramer is not calling for any more rate cuts now.
“I think look – if they weren’t being complacent, and, you know I’m glad we’ve discussed it,” Cramer said on the Aug. 1, 2008, “Street Signs.” “A trillion dollars later – a trillion dollars in losses later – well, remember I think the bottom is in. I don’t think we violate the July 15 lows.”
Cramer did express his gratitude to Burnett for “allowing him to rant.”
“Can I just say thank you for letting me rant,” Cramer said to Burnett on the August 1 “Street Signs.” “I know there are whole other networks that would have pulled the plug or somehow would have gone like this [gesturing to ‘cut’].”
