Cramer Has Another Monica Moment

CNBC's Cramer kept telling us in 2008 that Bear Stearns was not in trouble - oops! Last Friday he said if Brown won the Kennedy People's Seat, stocks would soar - oops! Buy on rumor, sell on news? Or maybe news does not move the market beyond Cramer-fed blip? I just wonder when the ever-entertaining and often-wrong Cramer will finally have his Monica Moment, the blunder that dogs him like a cheap cigar for the rest of his career. 

Obama is nearing his Monica Moment. The political tectonic plates are shifting this morning. Warren Buffett threw Obama under the bus by trashing his bank tax proposals. Congress may balk at Obama's morning proposal to nationalize the student loan program, after effectively assuming huge mortgage liability by backing Fannie/Freddie to the hilt last month. It is no longer clear if any of Obama's agenda can be passed, especially those which lead to further socialization of risk. 

While Obama continues to blame deregulation for the current credit mess, a simper explanation is that we privatized the upside and socialized the downside of the shadow banking system, the same mistake we made in the '80s with S&L's, just at much huger scale. Pushing high-risk loans and backing them with Fannie/Freddie implicit government guarantees led to a classic example of Moral Risk in mortgages. 

Finally we begin to see financial leadership pushing back on continuing this foolishness, starting with the former Obama supporter, Warren Buffett. This tectonic sea change will ratchet through investment thinking over the next few months. 

Comments

[cloudslicer]

Interesting that the banks are up today (so far). I can remember a time I saw the broad market down 1.5% and the BKX up 1.5%.

Very bullish if this is a trend and not a one off event.

[Hockthefarm]

I find it quite interesting that you would profile Jim C and Obama in the same note because it highlights the importance of timing.

Cramer had experience and access to money entering the greatest bull market in history. Right place, right time. If Cramer was 30 today, no one outside of his family would ever, ever have heard of him.

Obama is in the wrong place at the wrong time. The time for a full on Socialist(if there ever is one), was during the Clinton years. Obama is bright and politically astute, so he will be running to the middle as best he can. However, I believe he is flucked by circumstance. He cannot get re-elected with 1 to 2 trillion dollar deficits and 10+ percent unemployment. As he enters the last year of his first term he will be lucky if he is running 1 to 2 trillion dollar deficits and can wave a 10% unemployment flag.

First Bush, now Obama. Let's hope there is a door number 3 in the not too distant future.

And for the pure socialists among us: If the gubmint pays for education, the gubmint must own education. See Ireland. If you think our economy has the throw to pay 200 k$ for a kid to get a degree in Antlerology, good luck to you.

Hock
Hock

[yelnick]

Hock, I think Obama would have been better off winning in 2012. If McCain had won, the Repubs would be tainted with Hooverism for a generation, and Obama could have been the FDR he dreams he is. Time makes the Man. Sure, Obama was presented with a huge challenge and thus a chance to be great, but he chose to chase socializing healthcare, education and energy rather than fixing the crisis. He blew it even before he took office. Whomever is elected in 2012 - and it still could be Obama - has a huge chance to be the next great President.

My read on things is that Obama represents the end of the Progressive Era, not its culmination. By being elected and trying to set in lace the final pieces of the Progressive Puzzle, he has thrown the whole past 100 years of political thinking as bankrupt. That puzzle included Wilsonian intervention overseas, socializing major parts of the economy, placing over half the voting public on government dependency, and so forth. If you read the types of political arguments made back in 1907 or 1913 about evil bankers and all that, it sound eerily like Obama in 2008. Our Progressivism has not really helped the country. We are in 144 countries for no discernible end, we have debased our currency something like 25x, we abuse the rule of law & act as if the rules do not apply to us internationally, and we all know that govt stats are so manipulated as to be fraudulent. These are not the markers of a commercial republic that tries to be the great shining light to the world.

[Mamma Boom Boom]

"My-my-my-my music hits me so hard.......
It feels good when you know you're down
A superdope homeboy from the Oaktown
.....u can't touch this"

Watching the market today, I keep thinking of that little diddy.

"Fresh new kicks and pants
You got it like that now you know you wanna dance
So move out of your seat
And get a fly girl and catch this beat"

YES!

So, would the real top please ring a bell. Was it yesterday?

Also: "Insider buying fell to a new low of $7.8MM on the week. Selling dropped from $318MM to $293.22MM, but remains at very high levels."

U can't touch this!

[joe]

Love your post - hate Jim Cramer.

His "monica moment" - that is hysterical!! I know where I'd like to see the cigar placed.

Joe

[joe]

I would not be betting against Obama just yet. He isn't Bush - he is not stupid enough.

And I would not be paying too much attention to insider selling either boom-boom.

Joe

[Dave B.]

Once again, we bounced off that 1131-1129 area ( as we did last week ). Is Wave IV now complete as of today?

[Mamma Boom Boom]

Ok, Joe. I'll just have to figure out something else to worry about. Right?

[Rantly McTirade]

Nice mag cover, Yelnick.
Buffett talkin' his book 'o zombies(WFC, USB).
Actually, Buffetts' record has been mixed for some
time and what's more interesting, the guy feels the need to spout off on all kinds of topics; until the mid/late 90's, he was the 'secretive(!) Oracle of
Omaha', now he thinks he's gotta share-more like propagandize-on all topics financial, economic, political, whatever. And the MSM gives him a platform, apparently thinking a good record on stock selection(which, again, has faded in recent years)equals profound insight on anything. Shouldn't we expect Buffett to 'goeth before a fall' in the not-too-distant future? Bear markets, especially larger ones, typically discredit the icons of the prior bull-like Jack Morgan(son of J.P.) being specifically humiliated by a dwarf on his lap in the Pecora hearings in 1933 and vilified generally at the time. Even Livermore ended up blowing his brains out after originally making a mint in the '29 crash.
Finally, has anyone considered the pre-Civil War period as an analogy for the present? U.S. stocks peaked in the mid-1830's, then a big deflationary real estate bust began in 1837 and a depression ground on for several years until 1843-4. After some panics in the 1850's, stocks in 1859 were about half of their 1835/6 peak.The social and political parallels, given the current acrimony, may be even more interesting-which means we may have 21st century equivalents of the Kansas/Nebraska Act, Dred Scott and John Brown ahead.

[joe]

No - mamma - we all have so many things to worry about...

I wish you the best.

Joe

[joe]

"...big deflationary real estate bust began in 1837 and a depression ground on for several years until 1843-4. After some panics in the 1850's, stocks in 1859 were about half of their 1835/6 peak..."

Thats about right.

1837 was brought on by Jackson's closing of the bank of the United States and it lasted to the doorstep of the war of 1848. The Panic of 1857 - well - many historians will argue that by itself brought on the civil war -

It is strange now - isn't it? - that all the speculative things that brought on such things as 19th century panics, a 20th century depression - that when they happen again in this day - appear somehow new and unique.

But they are not new or unique - they happen over and over and over again - and will continue to cycle long after we are dead and gone.

I think it is all amazing, really - just how gullable we are as a civilization.

Joe

[Dave B.]

What did Hochberg say tonight on the STU?

I need to know which way to "lean" tomorrow and Hoch is the greatest FADE known to mankind!

[joe]

Does someone need to tell you which way to lean Dave??

Joe

[Dave B.]

Of course not, but I don't know of any other greater FADE than Steve Hochberg, do you???

[joe]

Well - that is true - he is a hack alright.

I would never accuse you of being intellectually dishonest - I would of him.

You make a good point Dave.

Joe

[robert]

I'll be buying everything and anything when Jim is jumping (out the thirtieth floor).

[yelnick]

Dave B - the STU tonight has two counts which lead to different conclusions: their ED, which would have ended as 4 is larger than 2; and an expanding diagonal, where would be in wave 4, or if 4 has ended, 5 should now push above Dow10730. What is tricky about expanding EDs is the fifth often truncates. If the start of the wave C is pushed back to the first week of Dec, then we would be in the fourth wave right now, and it closed above wave 1. Still, a messy overlapping count in al respects. This raises the risk that something else is going on.

[yelnick]

Rantly, love the history! I think however 1873-1896 might prove a closer analogy, or 1019-1942 (1919=2000). BTW Buffett's long-time partner Charlie Munger split with him some years ago, and Buffett has done much worse since.

[Anon]

Rhetorical question of the day: is the Yen about to implode?

[joe]

I think STU will always have two counts - and amazingly - they will both be wrong.

Joe

[Hockthefarm]

Very well said Yelnick.

I'd like to think you have the pulse of the people(but that is no gimmie here I'm afraid).

I just hope that someday we can put the imprint of the dirty 30's behind us. I believe the drop in spending during that period still shapes our policy decisions to this day. It is so bad that we still call it spending. Most 5th graders would call it debt accumulation. We need a constitutional amendment to protect future generations of this country.

Hock

[Hockthefarm]

"My read on things is that Obama represents the end of the Progressive Era, not its culmination."

Sadly, I agree. Cheney got it wrong. It's not that deficits don't matter, it is really that taxes don't matter.

Hock

[cloudslicer]

I look forward to the return of divided government and president nobody.

Nobody is the best President because in Washingtoon (not a typo) DC, nothing is usually better than something. I mean seriously people. Would you trust a government that can't even manage a border between Mexico and US to run a healthcare system?

Gridlock is good.

[Mamma Boom Boom]

Whaa dem bulls be?

[TC]

No one wants to be around for Obama's Banking Regulation speech. All bids pulled.

[Michael]

Time to BUY shares in Deutsche Bank (DB)!!!

Their proprietary trading unit is going to generate huge gains after this banking reform proposed by Obama and Volcker.

[Logic Police]

All bids? Wrong! My bid is still there. It's below market.

THINK before you post. I think many of you are intelligent but post impulsively or carelessly.

[Canadian Money]

Yelnick,

I see that Bob's 200 % short recommendation has been successful to date since your January 15th post. SP500 Bear Fund is up about 5% since then.

%.http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=CA%3Ahsd&sid=0&o_symb=CA%3Ahsd&freq=1&time=4

[TC]

"All bids? Wrong! My bid is still there. It's below market.

THINK before you post. I think many of you are intelligent but post impulsively or carelessly."

Congratulations!

You have now just showed yourself to be a TOTAL MORON. No one cares about your odd-lot 100 share bid.

[Who's the moron again?]

You have now just showed yourself to be a TOTAL MORON. No one cares about your odd-lot 100 share bid.

---------------------------------------------------------
Yeah, 100 shares actually is not an "odd-lot".

It would have been so easy to make a clever remark if you had just said "No one cares about your odd-lot 99 share bid", but you even screwed that up.

[Mamma Boom Boom]

NOW THINKING! By mid afternoon a rally starts. But will it be strong enough to fill yesterdays gap. (anticipate...anticipate) Probably not.

[David Gott]

1/21/10

Closing Comments:

ESH10:

No Irregular C/T Pattern

I’m surprised we made a new low on the close
I had figured we would reach 1111.75 no lower.
Due to the massive volume needed to push it down further.
This tells us Longs got squeezed on the close.

I had it figured this way
We reach 1111.75 (no lower on the close)
And then in the after hours session
We break below 1110.75
Economically its more feasible
From the first low at 1111.50
And until the close we traded 1,872,870 contracts
Therefore you spend less money for a higher yield
Shorting Heavy the after hours session
Just from the first low at 1111.50
Think how many stops are out there.
The first level of stops begins at 1108.75

The fact we clearly traded through 1114.25
The upper outer wall of the below pattern
Opens the correction door.
Clearly trading through 1106.50 confirms that the correction door is open
Trading below 1084.50 to 1088.50 clearly confirms that this is a correction
The correction will reach 975.00..

Intermediate term: (52 days or less)
Today is the 32nd day
RCT (from 12/4)
Neutral
Equalizer: 1088.50
Up Price target: 1166.25
Down Price Target: 1010.00
This pattern is a cycle completion pattern according to its physical dimensions

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