Save AIG - Save the World! - Cramer's Stop Trading! (9/16/08)

Recap of Jim Cramer's comments on Stop Trading! Tuesday September 16.

Save AIG! – American International Group (AIG)

If given the choice, Cramer would choose saving American International Group over an interest rate cut from the Federal Reserve. "AIG (AIG) cannot fail. “I could take a rate increase if they bailout AIG,” Cramer joked to make his point. “That’s how important this is. The Fed announced its decision to keep the Fed Funds rate unchanged at 2% Tuesday afternoon. After an initial reactionary drop in the Dow, the index recovered and was up about 75 points with less than a half hour to go in trading. As much as Cramer had wanted a rate cut, he thinks a failing AIG would wreck the markets right now in ways interest rates couldn’t. "It's the No. 1 institution in the world right now that must be saved. Everything else could go except for AIG. The markets would freeze and they would not open tomorrow.” Cramer said AIG needs to be saved in a "pass-the-hat-around fashion," referring to what he sees as a worldwide investment in its success. The middle bank index is doing well, he said, but that doesn't matter. "Frankly, I don't really care if my community bank is doing well," he said. "I care about AIG and the fate of Western banks, all of which have relied on AIG at some point for a risk transfer." “Every bank would have to raise capital, in the world. Every bank,” he continued. “And there isn’t a dime to be had.”

Everybody Hates Goldman - Goldman Sachs (GS)

As for Goldman Sachs, Cramer said: "Everybody hates them! They're the most hated group of guys I know." He said that it's as if no one who's talking about Goldman right now listened to its conference call. They reported earnings today better than Wall Street expected. Still that hasn’t stopped the negative talk about the investment bank’s overall business. Cramer disagreed, saying Goldman has billions in capital, trades at only 10 times earnings and in the end should have been down a lot more than it was. "They won! This was a beautiful quarter!" he said.

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Comments

[herbert hoover:]

I love Republicans. Free market economics - unless we lose money then No More Free Markets!

2008 Sep 16 07:10 PM

[TinyMIghty:]

Fed saved AIG. Why doesn't the Fed get great discounts from AIG insurances for the people in the U.S.?

2008 Sep 16 08:18 PM

[tinman:]

I love Republicans and Democrats, but only if they learn from their mistakes.

Meantime, I bought some 2big2fail AIG "calls" at $2/sh this morning.

2008 Sep 16 08:23 PM

[MarvinMBA:]

AIG must not fail...it is the kingpin to the securities industry and if allowed to fail the end of our economy and Depression would be just a few months away. As the country now stands, we are going forward with continued RE devaluation, loss of employment, high energy prices and just almost into a Depression already...failure of AIG will tip the scale and all is gone gone gone with no possibility of rebuilding our world status for the next 50 years. As it is were barely floating now.

2008 Sep 16 08:45 PM

[The Retired...:]

I used to believe that Jim was a stable guy but what type of hold does aig have on Jim that he backs a company like aig that has a fiduciary duty to protect the assets of the company when just a very short time ago they were looked at like Goldman Sachs.
When has it become so upside down that it's now cool to back up the truck and buy stock or suggest that a company the size of Aig and it's managers should be bailed out like they are going to save the western world or is this hecktic market just so nerve racking that jim believes this company has some Devine given right to be bailed out like the fiasco with Bear Sterns but by banks i thought that no matter what western banks were helped by A.i.G. the banks paid for this type of coverage from them since when in a western corporate society does a bank just give funds to another private corporation it's bank depositors money that are being used to substidize a.i.g is this right???
Jim i know you want to help people make and keep their money safe but aren't there limits to what is proper for these bailouts and for who and for what reason does aig deserve this bank handout?
I like4 to see common logic that can be counted on what's the story???

2008 Sep 17 04:08 AM