Cramer Admits He Was Wrong on Bear Stearns
Finally, we get some clarity from CNBC’s Jim Cramer about his remarks concerning the Bear Stearns fallout.
Last week, after it was announced JP Morgan Chase (NYSE:JPM) was going to take over Bear Stearns (NYSE:BSC) for $2 a share, Cramer’s remarks from his March 11 “Mad Money” program that Bear Stearns was not in trouble began to surface in various media outlets, including on Comedy Central’s “The Daily Show with Jon Stewart.”
“No! No! No! Bear Stearns is not in trouble,” Cramer said. “If anything, they’re more likely to be taken over. Don’t move your money from Bear.”
Cramer appeared on CNN’s March 23 “Reliable Sources” to maintain that he meant not to move your money from Bear Stearns the investment bank – not Bear Stearns’ common stock – on his stock-picking show. However, Cramer told host Howard Kurtz he was wrong about the general health of Bear Stearns.
“[O]kay, I was wrong,” Cramer said. “Bear Stearns was in trouble, but the idea was that you are going to be safe. Later that week, I said that Bear Stearns was worthless at 37 [dollars a share]. Why would I say that the stock is worthless if I was recommending it?”
One of the problems in news reporting about the economic slowdown has been the overwhelming negativity. Even Cramer’s colleague, CNBC’s “Closing Bell” host Maria Bartiromo, recently warned the Financial Times that negative reporting has consequences. Cramer told NBC “Today” host Matt Lauer the positives of the economy should be reported as well as the negatives.
However, Cramer told Kurtz he thought the economic reporting was “spot on,” and that it was even too rosy in some cases because some reporters wanted to keep Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke in their good graces.
“Actually the reporting has been spot on,” Cramer said. “I would go even a step further and say too complacent in part because everyone wants to get the get. They want to be able to get a call from Treasury Secretary Paulson or the Federal Reserve Chairman Bernanke and both of those until last weekend thought the fundamentals are ‘sound.’”
Cramer has long been critical of Bernanke, highlighted by his Aug. 3, 2007, meltdown on CNBC’s “Street Signs” where he yelled at the top of his lungs Bernanke had “no idea” how bad things were in the economy and that we were facing housing “Armageddon.”