This is what he said on March 11, 2008 (Tuesday) before the collapse of Bear Sterns on March 14, 2008 (Friday) when the news broke out about the sub-prime crisis.
Should I be worried about Bear Sterns in terms of liquidity and get my money out of there?
And this is his exact answer
No no no. Bear Sterns is fine. Do not take your money (mumbling) … If there is one take away other than the plus 400 points, Bear Sterns is not in trouble. They are more likely to be taken over. Don’t move your money from there. That’s just being silly. Don’t be silly.
And today he came on CNBC and said what he meant was not to take your money out of Bear Sterns (as in if you own an account with them). He claimed he wasn’t referring to the common stock of Bear Sterns. Nice try Jack Ass. If there is one thing you can learn from this, always go the opposite of what Jim Cramer recommends. He is what some call a contrary indicator.
While checking for some videos on youtube about this Bear Sterns fiasco and Jim Cramer’s comment, I came across this video by Don Harrold. He talked about Bear Sterns, Jim Cramer, Federal Reserve, and JP Morgan.
Did you know that Federal Reserve is not exactly what you call a traditional Federal Agency. This is the wikipedia entry. The Federal Reserve System is the central banking system of the United States. Created in 1913 by the enactment of the Federal Reserve Act, it is a quasi-public (part private, part government) banking system composed of
1. the presidentially-appointed Board of Governors of the Federal Reserve System in Washington, DC;
2. the Federal Open Market Committee;
3. 12 regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury,
each with its own nine-member board of directors;
4. numerous private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks;
5. various advisory councils
Numerous private U.S. member banks? Isn’t that interesting? And one big news came out yesterday (on a Sunday when the market is not open) about JP Morgan Chase to buy out Bear Sterns for $236 millions or $2 a share (It’s a $57 stock before the news broke out on Friday). And Federal Reserve will provide the fund of up to $30 billions to JP Morgan Chase to seal the deal. JP Morgan Chase? One of the numerous private U.S. member banks? Well, you can draw your own conclusion.
The video is very informative. I learned a great deal from it and it has a lot of information of which this article is based on.
He referred to a letter from Thomas Jefferson to Secretary of Treasury Albert Gallatin in 1802 that goes like this
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
My deepest sympathy to those who lost their money in Bear Sterns. And words to others who are yet to suffer similar fate … IT IS your hard-earned money. Be careful where you invest your money. No one will take a better care of your money than yourself.
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Joey, very well put:
“Be careful where you invest your money. No one will take a better care of your money than yourself.”
Also, don’t blame cramer or feds for what happens to your money. They have their purpose and it is up to the individual to decide what to do with their money. To those who lost money: learn your lesson. To those who want cramer off the air: stop watching him; the only reason he is there is because of people like don harrold, giving him ratings.