Jim Cramer Gets It Right, Links Long Rise Of Commodity Prices To Creation Of ETFs

Think GLD, SLV, etc., as we've been saying.

Here:

"In the past two decades we have seen an unprecedented financialization, if you will, of all commodities. Pretty much everything is traded either through glibly created ETFs or through futures backed up by warehouses somewhere or through physical hoarding via tanker ships. The pools of money that have chosen to make commodities as an asset class is much larger than we can ever know because those funds aren't registered anywhere and pretty much report to no one.

"I am sure at one time, before the ETFs and the large pools of capital, you might have traded these commodities on actual supply and demand. ...

"What mattered was the financial buyer not the natural buyer."

So we all have been paying too much for this stuff for a long time already.

Same thing happened in housing, and commodities will end up just like housing, down big time.

Jim Cramer Still Thinks You Are A Fool. He May Be Right.

M1 since the 2008 panic

M2 since the 2008 panic

M2 is up $2.71 trillion since the crisis, M1 $1.05 trillion. That means since September 1, 2008, nearly 39% of the rise in M2 is directly the result of the increase in M1 (checkable deposits, i.e. the spending money in circulating cash and checking accounts).

Overall, M1 is up nearly 75% over the period, but M2 just 35%. But back out the M1 and M2 is up only 21% net, or $1.66 trillion. Still, that's a lot of moolah being saved and not flowing into stock markets.

Enter Jim Cramer, who here says that as CD instruments (M2) mature now, they will not be rolled over but get invested in the only thing going for return, namely stocks:

"Every-day CDs from the halcyon days of the middle of the last decade, when rates were going higher, will come due -- and the dramatic decline in the rollover CDs should force that money into the stock market. Invariably I hear that this flow won't amount to a lot of money. Just dismiss these people out of hand; they are either short or ignorant."

"Force"? "I hope" is more like it. I smell a book-talker.

Most of this CD and money market fund money is money of "households", small time stuff under $100,000. With plunging returns on savings over the period as the US Federal Reserve Bank pursues its policy of financial repression through zero interest rate policy, Cramer is hoping households will suddenly become the greater fools with markets at all time highs and plunge into stocks even though households have been net negative all along since the crisis, pulling out $250 billion from the stock markets according to widely reported figures from Standard and Poors.

In contrast to households it's the funny money which has been driving the markets higher, banks and other corporations doing stock buy-backs to the tune of $1.2 trillion net over the period. Most troubling of all, a year ago already banks were reported to be responsible for fully 32% of the ownership of the total market all on their own, rivaling the household sector's 37% share. If you want to understand how markets are up so much, you have to look there.

Suckers who took Cramer's sell advice in early October 2008, people who "need their money in the next five years", have entirely missed this bank-driven rally which has been aided and abetted by the Fed. And potentially they lost as much as 25% right up front in just the first three weeks after his sell announcement on the nationally televised NBC Today Program, before the markets opened on Monday morning, October 6, 2008, the Monday after TARP was signed.

And here he is, 4.5 years later, hoping people will take his advice again and plunge in because there's plenty of liquidity to keep markets buoyant. Well, plenty as long as you provide it.

You know. Sell low, buy high.

They should hang a warning label around that guy's neck.

Jim Cramer Blames President's Fear-Mongering Over Sequester For March Jobs Number

Here:

"I think the report can be totally explained by our Fear Monger in Chief (i.e., President Obama), who scared the heck out of everyone as he talked about the massive job losses coming from sequester. I am sure that'll be the case, but the real impact here was similar to the U.S.'s pre-cliff non-dive, when the country's business was frozen."

Jim Cramer's Stock Picking Secret

Thanks for nothing, Jim Cramer

Flashback to Jim Cramer, Monday, 10/06/2008 ("Take Your Money Out Right Now"):

“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”

-- Jim Cramer, Monday morning, October 6, 2008 (before the market open)

The Friday before that outrageous, irresponsible advice was nationally televised on NBC's Today Show, the Vanguard Total Stock Market Index Fund (VTSMX) had slumped to 26.62 from 30.90 two weeks before, not quite 14%. After his Monday call, however, the fund, a proxy for the whole market, dropped nearly 18% in that one week alone, to 21.85, on its way to its 16.60 low in March 2009. TARP, by the way, was signed into law also on that Friday before Jim opened his BIG mouth the next Monday morning.

Four years and four months since that fateful day in October 2008, VTSMX has bounced back to reach a new all time high of 38.13 as of Friday, February 8, 2013.

Your $36,700 in early October 2008 would be worth $57,300 today, a gain of 56%, if you had ignored Jim's advice.

THANKS FOR NOTHING, JIM. Not only did I need the $36,700, I needed the $20,600 gain.

Of course, Jim technically has until October of this year to be vindicated, but that presupposes a market crash from here of at least 36% to start cutting into that original pile of money I needed. But hey, I needed it, so it's not there, so no worries, right?

And what's Jim saying last week?

“We have a genuine, honest to goodness, bona fide bull market here,” Cramer said Tuesday.   

Look out below.

Jim Cramer, Who Said Sell It All In Oct. 2008, Predicts Romney Gets 98 EC Votes

Here.

hahahahaha! hahahahaha! hahahahaha! hahahahaha! hahahahaha! hahahahaha! hahahahaha!

Jim Cramer Is So Full Of It: Panic! No, Don't Panic!

Four years ago on a fateful Monday morning in early October Jim Cramer was telling us if we needed our money in five years we'd better get out NOW. The market tanked that day, even though TARP had been signed the Friday before. The market kept tanking for 3 more weeks, in part because of Cramer's own televised statement on October 6, 2008. The market stabilized after that for a while, and then the market tanked some more in March 2009, and then came roaring back because of Federal Reserve interventions to the present day. Long term investors who stayed all-in through all that until now aren't quite fully redeemed from five years ago, but from four years ago they are, and then some. I'd rather still own the same stocks at this level in excess of 1400 today than have listened to Jim Cramer after S&P 500 at 1100 on Friday October 3, 2008 when George W. Bush signed TARP into law and sold into a sea of frickin' fallin' knives! The market has rebounded 27 percent nominal since that time, and if you missed that Jim Cramer owns some of the blame. 

And now Jim's telling us to be patient in October, the month of "the willies", and start buying in earnest in January? Fear motivated Jim Cramer four years ago. Today? Not so much.

OK Jim. Whatever.

On Third Anniversary of TARP, S&P 500 Closes at 1099.23, Same as it Did 3 Yrs. Ago

What are the chances of that?!

Spooky!

Pay attention to the hand in the following chart, and the dot under it, and the closing it signifies in small print in the upper right hand corner, which was a Friday three years ago, October 3, 2008, the end of a tumultuous week in American history on which President Bush signed the TARP legislation:

I remember this vividly, because Jim Cramer came on television the following Monday, October 6th, 2008 (after what seemed like a weeks' long freefall in the markets and sheer panic among the politicians trying to get TARP passed to save their donors' bacon on Wall Street) telling people to sell if they needed their money within five years.

Well, here we are, three years later . . . in the same place.

Do you still have your money? 25 million unemployed/underemployed don't.

You'll notice TARP, signed on this date three years ago, did nothing to stop the freefall in the markets. Obama and McCain both were for it. So were Sen. McConnell, Speaker Boehner and Majority Leader Cantor. And most Democrats. The real fight against TARP was in the Republican Party, and we lost, as did they.

TARP's final cost to the taxpayer may end up as much as $37 billion, an amount similar to the paltry one House Speaker John Boehner was proud to report to great fanfare that he and the Republicans saved in the spring of this year on the budget the Democrats never passed as required by law last year.

Nor are the banks really healthy after nearly $80 billion in FDIC payouts for 396 bank failures. And let's not even talk about the housing sector, the vast repository of the wealth of the American people squandered in the "let the good times roll" of HELOCs, refinancing, and flipping.

OK, let's talk about it: household net worth, which for many is all about their homes' value, is about $7.7 trillion off peak, or back at levels last seen in . . . 1997.

As for Jim Cramer, well, telling people to sell in a panic is just stupid, as is telling people to buy in a panic. Those who kept their heads and were patient and held on and invested new sums along the way made some big money in the markets right up to August of this year.

Don't fight the Fed, as the saying goes, until the Fed stops fighting, which it just did . . . sort of.

The significance of today's market is that the S and P 500 is back where it was after all the TARP intervention, all the Federal Reserve emergency lending (massive! trillions! to foreigners too!), stimulus spending and quantitative easing has run its course.

We've declined, we're moving sideways.

I expect more of the same . . . until we decide it is important to do otherwise.

S and P 500 Downsy Daisy Upsy Daisy: Now 14 Percent Off April Highs

Another Jim Cramer machine-caused flash rally?

Jim Cramer's 'Machines' Cause Flash Rally, Reversing Some of Yesterday's Losses

Now 14 percent off the April highs.

Jim Cramer Blames The Machines

Here:

"You have to believe that it's related to the machines . . .."

Obama Caused the Panic, Not the Media

So says Jim Cramer. And he voted for the guy.

Video here:

"He came out and panicked the heck out of us.

"He talked about the higher interest rates for mortgages, he talked to spiking credit cards, he talked about how hard it's going to be to get a student loan. It took us all aback because we felt that he'd be a compromise leader.

"Instead, he created tremendous fear. Tremendous fear means uncertainty. Uncertainty means no spending. Uncertainty means no spending by businesses. It means no hiring. It was a setback.

"He caused the panic, not the media."


Obama went outside the experience of his enemy, Jim Cramer.

Jim Cramer Defends His October 2008 Sell Advice

Here was his advice on Monday, October 6, 2008 on The Today Show:

“Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”

The market free-fall had already begun after September 19 when this index was still above 1200. Selling two weeks into this crash was like trying to catch a falling knife. The time to bank one's profits had been after a pull-back from the highs over 1500, at the 1400 or even the 1300 level, not after a "mere" 100 point pull-back from 1200 to 1100. By then the time for action had already passed, over 400 points off the highs on the S and P 500.

"I know I have been castigated for having told people to sell stocks to raise money for anything they might need for five years, a solid attempt by me to really warn people who were counting on stocks for retirement and college tuition when we were at Dow 11,000 and Dow 10,300.

The assumption at the time was that things were bad -- like now -- but that it was worth buying and holding and 'riding it out.'

I didn't think so. I thought it was better to sidestep it and then come back when the coast was clear . . .." (source)

He's now laying out what a worst case scenario going forward would look like this time around, apparently in order to be able to say "I told you so" if we have another crash.