Jim Cramer freaking out and making some sense

[Doublebase]

YouTube - MARKETS ABOUT TO CRASH

 

[bigss75]

They gave alot of people mortgages that shouldn't be able to get them and now their gonna get burned.

 

[DOMS]

They gave alot of people mortgages that shouldn't be able to get them and now their gonna get burned.

Yep, those ARMs are going kill the market. Hell, the co-CEO of Bear was just "fired" over it. The sub-prime market's rot is starting to spread to other areas.

The Fed isn't going to change the Prime today (or so the consensus goes), but I bet they drop it next time.

I like Cramer. Unlike the other pundits, he actually advises taking actions. He's not always right (who is?), but his methodology is pretty good. And he provides some good leads.

 

[bigss75]

I like him his ideas and concepts he puts forth, but I don't like how people watch mad money blindly follow his recommendations. He makes it sound like its simple and everyone is going to millions, on his show. His books are different.

 

[DOMS]

I like him his ideas and concepts he puts forth, but I don't like how people watch mad money blindly follow his recommendations. He makes it sound like its simple and everyone is going to millions, on his show. His books are different.

I like the caveat that you placed at the end of your post.

What you said it true about his show, but not in regards to long-time viewers.

The only other pundits that I liked, were the three guys on the Squat Box. But they changed the show's members, so I stopped watching.

 

[KentDog]

Mad Money is hard to watch because the guy is just obnoxious. One ep he burned money.

 

[DOMS]

Mad Money is hard to watch because the guy is just obnoxious. One ep he burned money.

The "burning money" bit is an homage to one of his favorite (and mine) called The Shield. There's a reason for most everything that he does.

 

[Doublebase]

I got my loan late in 2006. 100% financing with no PMI on a 30 year fixed. My buddy is trying to buy a home for around the same price as mine and he can't get 100% financing. He has good credit and makes good money. They want at least 5% down and I believe he has to do a 80/20 loan to avoid the PMI.

 

[NordicNacho]

What goes up must come down.

 

[squanto]

YouTube Video

 

[DOMS]

What he says in that video makes sense.

I do believe that we're at the cusp of a very big correction. Possibly even the beginning of a bear market. Or even a recession.

Fourteen million home loans in the last five years. And a good chunk of it is going bad... There will be millions of people that will default (not the whole 14 million, though). Along with all of the other credit handed out since 2001.

Bad stuff is coming.

I'm okay with that. In fact, I want the market to break down in a big way. I want the economy to cool down. It's been way too overheated for too long. It's time for a downward cycle. It's time to return from excess.

Besides, there's a more money to be made in a market that is falling, than in one that is rising.

 

[maniclion]

Credit Welfare wasn't such a good idea after all was it.....

 

[NordicNacho]

Credit Welfare wasn't such a good idea after all was it.....

It just fed on itself with low intrest rates causing house prices to skyrocket. Things like intrest only loans, two year teasers, adjustable rates I live in a very nice town in LA called Glendora on our street 4 house are for sale another one is getting foreclosed on.


Just save up your cash their are going to be a lot of deals in the next few years. I've put all my roth money in a Gold Mutual Fund cause I think the dollar is going to go down, way down.

 

[DOMS]

It just fed on itself with low intrest rates causing house prices to skyrocket. Things like intrest only loans, two year teasers, adjustable rates I live in a very nice town in LA called Glendora on our street 4 house are for sale another one is getting foreclosed on.

The houses in your city seem to have double in price in the last 6 years.

 

[NordicNacho]

I drove through Salt Lake a Month ago on the way to Montana and stayed with my Cousin in Sandy. That place has grown alot with tons of new houses and huge Mormon mansions on the hills.

 

[DOMS]

I drove through Salt Lake a Month ago on the way to Montana and stayed with my Cousin in Sandy. That place has grown alot with tons of new houses and huge Mormon mansions on the hills.

I lived in Bountiful (north of Salt Lake) for 6 months back in '93. The SLC valley has changed unbelievably. Back in '93, I was bored, so I went downtown. It was like the Twilight Zone. There were no pedestrians and I saw a car once every 5 minutes or so. For a city boy from LA, that was some scary shit.

Now, on Sunday, the place is pretty busy.

And yes, they really have built a lot on the East Bench. There is a strong presence of fiscally-based companies (mutual funds, banks, etc.). There's money aplenty here.

But all of that means dick. I want to go home.

 

[Burner02]

Interest only and ARMS are good loan vehicles...IF the are understood and used correctly.
As in ALL business...there were a lot of shady lenders jumping on the refinance bandwagon...as well as home owners (that should not have been able to purchase a home) looking into some of the new, snazzy creative financing options...without things being explained to them, or didn't bother to read the contract...and go with a program that wasnt good for them.
a 5-1 ARM is a good program. Not for everybody...but it works as it is supposed to.
--if you know that you are going t obe moving inside of five years...why get a 30 year mortgage? The ARM will have a better rate.

Interest Only loans are good for their purposes. Think investing. True, the pricipal will be the same as the 1st day you signed the loan...but historically speaking...it will have appriciated as well.

Now...another loan which is interesting is the Power Option ARM. You can make payments like a fully amoritized loan, or you can pay it as an interst only loan or a reverse amorizitation loan. (there's a 4th option, but it escapes me at the moment)

Picking a loan is kinda like buying the right car for you.
A 2-seat sports car isnt right for a family of 4, where as a single guy or woman would have no need for a mini-van.

Its a basic matter of buyers being educated enough to shop for the best loan that fits their needs. If the lender is shady and things seem too good to be true, the buyer needs to question the loan.

 

[DOMS]

where as a single guy or woman would have no need for a mini-van.

They're good for giving away free candy.

Its a basic matter of buyers being educated enough to shop for the best loan that fits their needs. If the lender is shady and things seem too good to be true, the buyer needs to question the loan.

This describes a lot of lenders that have been active over the last several years.

 

[Burner02]

They're good for giving away free candy.



This describes a lot of lenders that have been active over the last several years.

a lot of them...jumped on the refinance band wagon....and worked the sub-prime market...made their money..folded thier doors and now history.
I know that here in Colorado, they are finally getting some guidlines. I do believe I have to get licensed to be a broker as I am a realtor.

one of the few positive things from this is that it is driving a lot of the riff raff out of the business...same with real estate.

 

[DOMS]

a lot of them...jumped on the refinance band wagon....and worked the sub-prime market...made their money..folded thier doors and now history.
I know that here in Colorado, they are finally getting some guidlines. I do believe I have to get licensed to be a broker as I am a realtor.

one of the few positive things from this is that it is driving a lot of the riff raff out of the business...same with real estate.

That's how it always is. Fix the problem after the shit hits the fan.

Personally, I'm really looking forward to the collapse of the housing market. Then, maybe, I can get a decent house, at a decent price, in LA.

 

[PreMier]

Im looking for a house with a decent price in SLC.. im pretty sure the market here wont sustain for too much longer

 

[DOMS]

Im looking for a house with a decent price in SLC.. im pretty sure the market here wont sustain for too much longer

Three year ago, I bought a house in a decent neighborhood for $128,000 at less than 4 percent. It's 2200 square-feet on a half acre.

I'm sure you'll be seeing prices like that, or better, in the near future. Hell, just wait and buy a foreclosed house.

 

[PreMier]

Yea, thats what im waiting for. Im making triple what I was 3 years ago, but I still cant afford a damn thing. We have had a strong market here, and there are a lot of investors here that are looking to turn properties over.. I just need it to cool down a bit.

If I remember you live close to where I did? I was off of 9800s and just east of bangater. There are a lot of nice homes there and my ex got hers for slightly over 200k. Now its well above 350.

 

[Burner02]

That's how it always is. Fix the problem after the shit hits the fan.

Personally, I'm really looking forward to the collapse of the housing market. Then, maybe, I can get a decent house, at a decent price, in LA.

yep...hind sight is always 20/20, eh?

 

[DOMS]

yep...hind sight is always 20/20, eh?

Yeah, but this happens in every major sector of the economy. You'd think that they'd be a little more proactive.

 

[JerseyDevil]

Besides, there's a more money to be made in a market that is falling, than in one that is rising.

I never really cared for Cramer. I do like Jim Jubak on MSN though. He writes a lot of good articles.

So DOMS, are you looking to short the market in general, or do you look specifically for overvalued companies ready to fall? All of my money is tied up in Roth IRA and rollover 401k's, so I can't short even if I wanted to.

 

[DOMS]

I never really cared for Cramer. I do like Jim Jubak on MSN though. He writes a lot of good articles.

So DOMS, are you looking to short the market in general, or do you look specifically for overvalued companies ready to fall? All of my money is tied up in Roth IRA and rollover 401k's, so I can't short even if I wanted to.

Why don't you like Cramer?

I'm into trading options. I was thinking of bear ratio spreads.

On of my clients works for Fidelity. Not only can't he do puts, he can't even do bull ration spreads. Fidelity has the tightest rules for brokers.

 

[bigss75]

a lot of them...jumped on the refinance band wagon....and worked the sub-prime market...made their money..folded thier doors and now history.
I know that here in Colorado, they are finally getting some guidlines. I do believe I have to get licensed to be a broker as I am a realtor.

one of the few positive things from this is that it is driving a lot of the riff raff out of the business...same with real estate.

Their doing it now that the Denver Housing market is going down the crapper

 

[JerseyDevil]

Why don't you like Cramer?

I don't like his screaming style. It is obnoxious to me. Plus, some outside criticisms of him:

• In January 2006, Joseph Nocera opined that the "people who are watching [Mad Money] and following [Cramer's] advice are fools." [2]

• In February 2007, Henry Blodget -- himself indicted for civil securities fraud in 2002 and banned for life from the securities industry -- criticized Cramer for overstating his abilities as a market forecaster, noting that in 2006 Cramer's suggested portfolio lost money "despite nearly every major equity market on earth being up between about 15 percent and 30 percent." [23]

• In March 2007, a review by CXO Advisory showed that Cramer's stock picks have done slightly better than the market averages.[24]

• In March 2007, Joseph Parnes, noted short seller featured in Barron's, refuted positions by Cramer on CNBC, and has shown to his audience in his publication Shortex that using positions contrary to Cramer's recommendations is actually more advantageous

 

[JerseyDevil]

I'm into trading options. I was thinking of bear ratio spreads.

On of my clients works for Fidelity. Not only can't he do puts, he can't even do bull ration spreads. Fidelity has the tightest rules for brokers.

That sounds cool.

I have the Roth at Fidelity, and I only invest with mutual funds. The rollover is at Scottrade, and is entirely in stocks. Evenually I will move the Roth to Scottrade, and invest in stocks only. Still can't short though. I thought that was a SEC rule, but I'm not sure.