Cramer's clairvoyant "Rant" 11 years ago

[mickeyd]

I enjoyed that Cramer-rant!
"He has no idea what it's like out there!"
"We have Armageddon !"
"7 million people will lose their homes!"

 

[audreyh1]

I enjoyed that Cramer-rant!
"He has no idea what it's like out there!"
"We have Armageddon !"
"7 million people will lose their homes!"

Wasn’t too far off on that last prediction:

RealtyTrac data indicates 7.3 million consumers lost their homes between 2007 and 2014. The vast majority experienced foreclosure — 5.4 million.

from https://bobsullivan.net/restless/7-...ng-the-recession-are-they-ready-to-buy-again/

 

[haha]

Of course, Cramer’s rant makes us all want to know the answer to “Where in the cycle are we NOW?”

Almost by definition one cannot know where he is in "the cycle". What can be known is where a given valuation metric is relative to various past cycles, or relative to some averaged idealization of past cycles.

Even assuming that one is in a cycle contains a judgment. Elroy Dimson has many examples of when what might have been assumed to be a half cycle was never completed, usually due to war or revolution or other unanticipated change. Another way to have a cycle left uncompleted is for the portfolio owner to die. Markets may be (mostly incorrectly) assumed to be perpetual, but no one assumes that his own life is.

Recently what has worked very well is trend following. Other ideas, not so much

Ha

 

[morriss003]

Just ran across this from CNBC yesterday. Cramer - love him or hate him. I remember catching Cramer's rant back on August 3 in 2007, and boy was he right on the money. This would have been right before the resignation of the Bear Stearns CEO. The Federal Reserve was not paying attention to the unfolding financial crisis - they did not get it at the time. When they finally realized how bad it really was - well, there was a whole lot of pain.

Since then, a few other have tried to emulate Cramer's "rant" by getting all worked up over various things, but this was really a one and only time for Cramer - going beyond his usual emotionality. And I'm glad he did it. He shocked and offended a lot of people at the time, and many tried to blow it off as an overreaction during the coming months, but I believe he was completely vindicated as the financial system seriously unraveled in 2008.

The transcript is missing a lot of context however. Without knowing the big headlines at the time it's hard to get a feel for the context.

From CNBC:
11 years later: Cramer's 'They know nothing!' rant — Here's the complete transcript

Jim Cramer sounded off on the Federal Reserve for not anticipating the coming financial crisis 10 years ago today.

Read more: https://www.cnbc.com/2018/08/03/11-years-later-jim-cramers-they-know-nothing-rant.html

I bailed out of the market in early 2006. It was clear that almost everyone was drinking the Kool-Aid, so I don't blame any particular entity. [MOD EDIT]

 

[SpartacusSchmartacus]

Noticed it by finding that all the investors in the PMI mortgage insurance companies were bailing large. Tried to say something at the time (trading blogs were just starting) mentioned that I was "short" all of them but most investors are "long" only and didn't want to hear it. Virtually all the PMI insurance companies went to zero.
Can't remember if Cramer was before or after that but a wealthy friend bot a bunch of those CDO's and they too went to zero ... sold in blocks of 100K ouch! Tried to warn him to no avail... he doesn't speak to me now, like it was my fault?