Recap of Jim Cramer’s comments on Wall Street Confidential, Friday December 22. Click on a stock ticker for more analysis:
Cramer said that when he was a hedge fund manager, he would create activity to drive futures lower when he was short on a stock, and when he was long on a stock, he would put $5 million in a few companies to ensure that they would go higher, he told Aaron Task, host of Wall Street Confidential, adding that today one would need $10 million to drive a stock up. Often, hedge fund investors boost futures to raise hopes that will quickly turn sour when sellers come in, Cramer said, adding that it the scheme is not only legal, it is a "very quick way to make money." Cramer recommended that managers whose funds are not performing well make sure that stocks like Research in Motion do poorly for the next six days; "it's really important to knock it down because it's the fulcrum of the market today." Although defeating RIMM would require around $15 million to $20 million, and would be a challenge since it reported a great quarter, it would be a "fabulous" thing to do since struggling hedge fund cannot tolerate RIMM up so high. Another idea is that those who are short Apple, which Cramer calls the "ideal short," should spread rumors that Verizon and AT &T don't like Apple's new phone. He added that those involved in hedge funds should "not do anything remotely truthful, because the truth is so against your view," adding that even Fannie Mae lied about its earnings. Cramer wants investors to understand that the market is influenced by brokerage houses which have a series of orders that can push a stock down, and once rumors are leaked to the press, the "vicious cycle down" begins. On a final note, Cramer comments that the Fed is desperately looking for a reason to cut interest rates.
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