Cramer: Dow Could Drop Another 14%, Oil's Going to $50 78 comments
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From Jim Cramer in New York magazine (emphasis added):
What will New York look like a year from now? The answer: bad and probably worse, and perhaps downright catastrophic. Three degrees of awful. The first step was passing the bank-bailout legislation. Now that it’s done—and if it didn’t get done we would have been looking at a guaranteed economic collapse—the critical issue will be presidential leadership. And while any president will be an improvement over the current one, there is a growing belief on Wall Street that Barack Obama has the capacity to lead us out of this wilderness while John McCain does not. I’ll go a step further: Obama is a recession. McCain is a depression...
At this time next year, I could see the Dow as low as 8,300. That’s more than 40 percent off its October 2007 high of 14,164. On Main Street, that means a further slowdown in consumer spending, as buyers feel poorer, and another hit for 401(k) and college savings accounts. For Wall Street, it means more bank closures and mergers and still more layoffs. The two remaining independent commercial banks–née–investment banks, Goldman Sachs (GS) and Morgan Stanley (MS), will have to fight mightily to remain independent. The bet here is that Goldman makes it but Morgan Stanley succumbs to one of the four emerging megabanks — Citigroup (C), JPMorgan (JPM), Bank of America (BAC), and Wells Fargo (WFC)...
In terms of investing between now and next fall, I’d buy the stocks of only companies you can’t not use—Kellogg’s (K), General Mills (GIS), Kraft (KFT), P&G (PG). You can’t trust anything to do with financial paper — there’s still too much uncertainty (if a bailout bill does pass, at what price will the toxic bonds be marked?). And commodities have been bid up too high — demand soared as investors sought shelter from stocks — to buy for some time. Oil’s going to $50 on weaker demand; when it gets there, we can revisit the oil stocks.
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This article has 78 comments:
"At this time next year, I could see the Dow as low as 8,300."
Cramer... Such an optimistic fool.
I could see the Dow as low as 8,300 next week!
You must be a very young man. Read a few books on economic history...
Welcome to the ride....
I just cant agree Jim, he and his new spending and taxes frighten me
Thanks for the run but I'm looking elsewhere for help
Republicans, No to Yes (25)
Arizona _ John Shadegg.
Florida _ Vern Buchanan, Ileana Ros-Lehtinen.
Illinois _ Judy Biggert
Louisiana _ Rodney Alexander, Charles Boustany.
Michigan _ Joe Knollenberg, Peter Hoekstra.
Minnesota _ Jim Ramstad.
North Carolina _ Howard Coble, Sue Myrick.
Nebraska _ Lee Terry.
New Jersey _ Rodney Frelinghuysen.
New York _ Randy Kuhl.
Ohio _ Jean Schmidt, Pat Tiberi.
Oklahoma _ Mary Fallin, John Sullivan.
Pennsylvania _ Charles Dent, Jim Gerlach, Bill Shuster.
South Carolina _ Gresham Barrett.
Tennessee _ Zach Wamp.
Texas _ Mike Conaway, Mac Thornberry.
___
Republican Jerry Weller of Illinois was absent Monday. He voted yes on Friday.
___
Democrats No to Yes (33)
Hawaii _ Neil Abercrombie, Mazie Hirono.
California _ Joe Baca, Barbara Lee, Adam Schiff, Hilda Solis, Mike Thompson, Diane Watson, Lynn Woolsey.
Nevada _ Shelley Berkely.
Iowa _ Bruce Braley.
Indiana _ Andre Carson.
Missouri _ Emanuel Cleaver.
Texas _ Henry Cueller, Al Green, Sheila Jackson Lee, Solomon Ortiz.
Maryland _ Elijah Cummings, Donna Edwards.
Arizona _ Gabrielle Giffords, Harry Mitchell, Ed Pastor.
Illinois _ Jesse Jackson Jr., Bobby Rush.
Michigan _ Carolyn Kilpatrick.
Georgia _ John Lewis, David Scott.
New Jersey _ Bill Pascrell.
Ohio _ Betty Sutton.
Massachusetts _ John Tierney.
Vermont _ Peter Welch.
Oregon _ David Wu.
Kentucky _ John Yarmuth.
___
Democrats Yes to No (1)
Washington _ Jim McDermott.
Stop!
You're frightening the children!
Maybe he found Paulson's crack pipe. It was lost for a while over on Capitol Hill.
Deregulation had its run and now its over. Welcome back to the stodgy net interest spread commercial banking business with simple, efficient highly standardized and commoditized financial products ; at least we can hope that we are not yet beyond the point of no return
Get off the air! Depression? Please!!!! IT IS A DIFFICULT ENVIRONMENT BUT WE WILL NAVIGATE THROUGH THIS! I believe in having cash as an investment but I believe I will use you as a contrarian indicator and slowly put money back to work in the markets (bond and stock) as both have some very attractive opportunities.
Cramer's new big call: Obama is better for the economy than McCain.
Now I'm filled with confidence at the thought of an Obama presidency.
Rabies affect his mind too.
his desperation calls marked the bottom of this year long correction... just 35% on NASDAQ, not much....
Cramer, you are an IDIOT!! The bailout cost us a Trillion that is better used elsewhere. Remember how it was so urgent to get the bill passed within days? And then the next day Paulson comes out with "it'll be about a month before we actually start buying debt." Real urgent, huh? Not just that...it is also a flawed, philosophically and morally wrong idea! The *only* real solution to this economic calamity is DRASTIC TAX CUTS and cutting government to the CORE!! Too much credit-based living is what got us here...playing shell games and resetting banks to begin more lending IS OBVIOUSLY JUST MORE OF THE SAME!! The real answer is to give people their money back so they can begin cutting down their debt and spending out of their wallets, rather than off of loans!
"the critical issue will be presidential leadership. And while any president will be an improvement over the current one"
BS. You may not agree with the war...but then just say so. Don't blame this economic mess on Bush -- look back to the Clinton "housing for all" push, which Dems like Barney Frank and Chris Dodd jumped on wholeheartedly! Greenspan and McCain (among others) both tried to warn about issues at Fannie 3 years ago...got shot down.
"there is a growing belief on Wall Street that Barack Obama has the capacity to lead us out of this wilderness while John McCain does not. I’ll go a step further: Obama is a recession. McCain is a depression"
Cramer: you are an IDIOT!! Obama wants to double the Cap Gains tax and also raise the div tax. Yeah, raise taxes on those who invest in America - that makes sense. And you do realize that small biz creates 80% of the jobs in the U.S.?! Obama will be destroying those jobs because many of those small biz owners report business income on personal tax returns, and will exceed his threshold for the rich who ought to be skinned alive.
Oh...just heard in the news this a.m. -- Obama is now planning to push the tax increases out till 2010...never mind that businesses plan further out than a year or two. Taxes foreseen in 2010 will still impact hiring and expansion plans in *2008*.
How else is an Obama presidency bad for America? Universal healthcare. You wanna see a black-hole budget?? Remember just how much trouble it is funding medicare already -- and that's just retirees and the disabled. Expand those numbers to everyone...and this country is done. We simply cannot afford that much waste.
Look, people, socialism DOES NOT WORK!! I can hardly believe Cramer would advocate a guy for prez who is so anti-freedom and anti-capitalist. Obama is not *fit* to preside over this nation!!
McCain -- you should not assume he is "another Bush". There are a few common threads -- both are Republicans, both are somewhat conservative. But the differences are vast: McCain actually fought in a war -- we all know the story; he *does* go against his own party when necessary -- to me, that says you can trust him to do the right thing, not what the party says (look at how Obama falls in line with the radical Dems on everything...no new change there, really); and I think McCain-Palin will actually work at smaller government...which IS THE THING WE REALLY NEED right now...not Obama's "grow the government, spend more, tax more" plan!!! And don't be fooled -- Obama WILL raise your taxes -- there's no flippin' way he abandons his PET PROGRAMS in order to keep his middle-class tax cut promise!
McCain = slow recovery, then growth; Obama = ever-bigger government, and U.S. as the whipping boy of the world for 2 decades!!
GET IT RIGHT, CRAMER!!!
buy, buy, buy. There will be no incentive to drill, drill, drill.
We will be no closer to energy independence at the end of the McSame administration than we are now, but $3 trillion deeper in debt.
You might as well start pricing everything in rolls of toilet paper, because it's more useful than the dollar.
Did you ever think Bush-Cheney would create one of the biggest government ever? Biggest deficit, largest debt.
People never learn. Fiscal responsible republicans are dead.
And you can quit debating McCain vs. Obama, because Obama has it in the bag at this point, given the economic situation. Iraq + Palin + Economic Calamity is the perfect storm for the Republicans.
And yeah, I'm a Republican, but I'm also tired of having my rights revoked by lies, my President lieing to his country, and my money disappearing.
In that environment Russia and Opec will rule oil prices - not wishful thinking in Washington.
Yes, get yourself a president who can fix the mess caused by Bush and the neocons. Obama is the only one who has a chance of fixing the damage done to the US reputation and the world economy.
On Oct 07 08:09 PM jcrash wrote:
> I love people bitching about raising the cap gains tax. You really
> think you are gonna have any cap gains to report in the next 4 years?
Um...yeah, actually! :) Sorry you aren't doing as well.
>
> And you can quit debating McCain vs. Obama, because Obama has it
> in the bag at this point, given the economic situation. Iraq + Palin
> + Economic Calamity is the perfect storm for the Republicans.
Not. Cuz more taxation and more socialism are exactly the *wrong* answer to an over-indebted economy!
> And yeah, I'm a Republican, but I'm also tired of having my rights
> revoked by lies, my President lieing to his country, and my money
> disappearing.
You better check your facts again, then. Both regarding which presidents have lied to the people (vs. just making unpopular decisions, that regardless of popularity, have prevented further attacks on Americans). And you want to watch money disappear? Get ready for the Great Obama Tax & Spend show!! Because he's all about redistribution of wealth...the politics of envy...increased reliance on government...and he's *NOT* gonna be able to do it by taxing only the top 5%. Not with the government taking over payment for healthcare...that single initiative alone will bankrupt this country. Noone is even mentioning that Medicare is failing...if we already can't afford it for just the elderly, how in hell are we gonna pay for *everyone*?? Government as a provider is NEVER CHEAPER than the private sector!! Competition drives the cost down.
Please...quit falling for the style and rhetoric, and examine the policy proposals, and the facts surrounding them!!
I'll answer my own question. Cosmo Kramer ?
OIL - One thing that everyone misses, is that the law of supply & demand does NOT apply to the oil industry. Unlike other commodities (corn, soy, oj, rice, etc) whose supply is nature dependent - the oil industry controls and varies the supply to control the demand (and price).
What other industry is allowed to raise their prices based on what MIGHT happen ????? Can you imagine what would happen if your insurance premiums were allowed to fluctuate daily because of the weather???? But we allow OPEC, BP, MOBIL, EXXON to raise prices for ANY reason they dream up.
If we can regulate utilities like long distance phone calls, and cable tv, why can't we REGULATE something more important , OIL !
It is anyones guess what will happen. The Chinese have a saying... "May you live in interesting times." Well, although you are young, you are living in interesting times, that's for sure.
But to answer your question, nobody really knows how this will end, when it will end, or how things will look when it ends. If anybody tells you differently, including here, they are selling you stocks in pure BS.
The global marketplace and financial system has become too interconnected and complex for traditional/historical approaches to the problem. They are really not sure what the problem really is/what it has become... They can't even valuate paper... Efforts by several nations acting in concert have failed to work,,, They use old tricks and new tricks but they now have a shelf-life of minutes to hours...
This crisis is a totally different animal. Most models that indicated o bottoming of the market days (and in some cases weeks) ago, have all been shattered. Depending on the source of your information, outcomes range from dismal economic prospects to an economically-caused "Jericho."
In all of this, no matter what the future holds, America and the world will get through this; we have to. Perhaps that old saying, "prepare for the worst and hope for the best" may come into play here. That may be the best advice anyone has in a situation like this.
Quote:
"As a young guy, am I completely wrong to be looking at this market as a sort of gift? I mean, I was a little later to start saving for retirement than my friends but now is my time to catch up, right? I am maxing my 401k this year and planning to do the same next year. No debt, no house, no car, etc. I feel badly for the older guys, but us young guys, this is an opportunity of a lifetime. Or at least until the fed re-inflates this bubble only to have it burst again in 8-12 years. As far as bottoms...I think there will be plenty of time to catch it during the big U."
Link?????
surgery. Anyone who listens to a guy who gets in at the top and
then gets hysterical at the bottom...well it serves them right to get
burned...maybe they'll learn a thing about the market.
He lies. Period. He signs every law with a little disclaimer saying he can disobey the law anytime he wants because he is President (Paraphrased, but he does actually do this). He has locked up AMERICAN CITIZENS with no trial for 6 years in SOLITARY CONFINEMENT - and they went crazy. Great. No chance there to see if they were actually guilty of anything. I think you would think different if somehow YOU were the one he locked up.
He doesn't believe in torture. However, he won't define torture for you, so torture is defined only in the air between his ears. Makes it awfully convenient, huh? The guy has an IQ of MAYBE 105. He has been led around like a puppy on a leash by the real powers that be. He was perfect for that...make him think it was his idea and he will stick to it until the end of the world comes.
As far as taxing goes...Guess what? I'm middle class and I will pay less in taxes under Obama. McCain promotes a $5000 tax credit for healthcare. Guess what type of Healthcare you are going to get for $5000? Not much. I like my employer plan just fine. McCains $5000 is sure to be like the $5000 deduction for childcare...it was a nice number 8 years ago, but childcare has literally doubled in 8 years, and that number as remained the same. So, the $5000 tax credit for healthcare will effectively be worth half that in just a few years.
I'm also tired of inaction by all of the government on Social Security. We are like the proverbial frog in the pot letting the water get hotter and hotter. Someone - and a democrat with a democratic congress is the only one that could possible do this - is going to have to step up and CHANGE the system. Yes, some will pay more, work longer and get less, but as it is now the system is simply a non-starter.
So, you can proselytize for the Republicans or Libertarians all you want (Personally, I think of myself as both of those), but the truth is that those groups can get nothing real done and we need a mandate going into 2009. Obama is the only hope of a President with a mandate, so deal with it, as it is a done deal.
Folks (and that's what you liked to be called?!), we've had a 9/11 and the biggest financial crises since the depression under Bush's watch. Not under my watch. Not under Bill Clinton's. His watch. Bush. He borrowed money from China to get us stuck in two wars with no end in sight and no victory in sight, while Osama is sending video greeting cards annually. And that's if you believe in the official version of 9/11.
We won't talk about Gitmo or Abu Ghraib cause I know you folks don't care much about that, torture and human rights and stuff.
What's the Dow been like under Bush? Where was it when he entered the office, and where is it now? What was the Dow performance under the last Democratic president?
Socialism. SOCIALISM. You Republicans out there still dare talk about SOCIALISM in America after what just happened? Under REPUBLICAN President.
Cut spending? You've had a Republican president and Republican Congress for 6 years. And did you cut spending?
The only thing Bush ever did while in office was cut taxes. That is the ONE and the ONLY promise he made that he delivered on. And NOTHING else.
I could have done that, folks. It's the easiest thing in the world.
So, no, I don't know much about Obama, really, and have no clue how he'll do. I just know that right now.... we'll be better off if I was the President, so long as it's not Bush or McBush.
p.s. oh, wait, I got it. Right. All of the above is nothing. AT LEAST BUSH GOT US CHEAP OIL AT THE PUMP, LIKE THIS DAD.
Best to all
Daniel Ivandjiiski
Mccain's programs + tax decreases represent a much larger spending agenda than Obama--financed largely by borrowing more from China/Japan, recklessly devaluing all dollar assets, and continuing to run the country into the ground.
This time I believe him a little more though, we HAVE to be getting close. How long can the VIX stay above 50? I actually see the Dow above 9,000 this time next year. I mean the stockmarket is down 40% on a fears of a recession. Isn't the cost of a recession already priced in? 40% is A LOT. Are companies earnings going to be beat worse than that? I doubt it. That's global depression-like numbers. I am going long this tomorrow at close if we see another big dive..
If MS makes it to the 14th, there is going to be one hell of a short squeeze (that's when the deal closes for their Japanese financing)...
You are kidding me, right? There are NO, and I repeat NO models for what is going down right now. The United States in particular and the world, in general, has never leveraged itself 20-30 years in the future using a bubble economy for capital. To make it worse, the leverage was negotiated through the economic system as an "investment" instrument, thereby multiplying...
Capitulation... We've only seen a couple of the many shoes that may drop...
BS, BS, BS... That stock is +1000 points today and +9000 this month.
PS: Looks like Cramer's previous prediction and my response were both wrong. Cramer thought the Dow would go 8700 next year. Earlier this week I responded by saying that the Dow would hit 8700 next week. I guess we were both wrong.
We have seen this leverage game before. They called it the roaring twenties. The only difference was in the aftermath the Fed contracted the money supply by 1/3, whereas Ben is doing his best to flood the market with moolah. Real estate and commodity bubbles are sprinkled throughout history. Every generation gets one or two, which is why the old folks put it in bonds.
Can you keep your rants under 6 paragraphs? You're using up all the oxygen in these threads.
Also, "free market" market is not the same as "free association". Back up your statements.