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Forums - General - The Worst Is Over For Economy

akuma587 on 17 July 2009

I'll note that the stock market gained around 700 points this week after Q2 2009 earnings reports started coming out much better than analysts predicted.

Cramer: The Worst Is Over

http://www.cnbc.com/id/31951620

It’s 1991 all over again, Cramer said during Thursday’s Mad Money. Investors who follow the game plan that worked then stand to gain the most.

Eighteen years ago, Wells Fargo [WFC  25.00    -0.05  (-0.2%)   ] announced that fears of a continuing decline in real estate, especially commercial, were unfounded. The bank boldly stated that the worst had passed and we should expect the market to turn up. Of course, no one believed Wells, and the shorts continued to pile in. But they were proved wrong. Investors who bought WFC, Warren Buffett among them, made big money.

How is this playing out today? JPMorgan Chase [JPM  36.89    0.76  (+2.1%)   ] made similar statements when it reported second-quarter numbers on Thursday. Despite all the negative press about a coming onslaught in foreclosures and a crash in commercial real estate, CEO Jamie Dimon described an environment that seemed to contradict all that. He said that loan loss reserves and delinquencies showed signs of stabilization and losses related to the Washington Mutual acquisition wouldn’t be any worse than expected. That, Cramer said, is bullish news.

But yet again no one believes JPMorgan’s announcement. They’re convinced that the worst is still in front of us, not behind us. Cramer brought this to viewers’ attention because he didn’t want them making the same mistake he did in 1991, which was to side with the naysayers. While he doesn’t think all banks are on the rebound, it’s pretty obvious from JPM’s quarter that some things are improving – yes, even real estate – and they need to be recognized.




We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

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akuma587 on 17 July 2009

I'll repost my predictions from last week, before the stock market rallied this week:

There is a decent chance you will see positive GDP growth in Q3 2009. I will be simply amazed if you don't see positive GDP growth in Q4 2009. Q2 2009 GDP growth will be negative, likely in the -2-4% range.

Unemployment will likely remain high, once again a relative term since by many standards you could argue it is actually much lower than it could have been, until the end of 2009. Unemployment may start decreasing by the end of the year, but unemployment is particularly difficult to predict. Unemployment will start dropping by Q1 2010.

The stock market will likely start rising after the Q2 earnings reports come out, maybe during if Q2 earnings meet or beat analyst expectations. The stock market can be particularly volatile though. I would estimate the DOW will be over 9000 by the end of the year, the highest I would predict it could go is 10000. It is highly unlikely the DOW will dip back below 7000 or even 7500.



We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls.  The only thing that really worried me was the ether.  There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke

It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...."  Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson

TheRealMafoo on 17 July 2009

You have got to be kidding me. I would like to know how we can keep losing jobs, and grow GDP.



tedsteriscool on 17 July 2009

I highly doubt it, but I'm a pessimist anyway so...



HappySqurriel on 17 July 2009

I think Cramer is somewhat entertaining in the way a circus clown is, but I would rather take financial advice from a circus clown then Jim Cramer ... He is one of the most reliably wrong people I have ever seen primarily because of his tendancy to take the most extreme position possible, and to switch to the opposite extreme the second his current prediction becomes unlikely.



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im_sneaky on 18 July 2009

Don't like Cramer as much as Kramer. I bet Kramer could make better predictions, as well.



 

 

That Guy on 18 July 2009

Sorry Akuma, I gotta side with Mafoo on this one. In my mind, job = economy. The bottom line is: Job loss = economy is still hurting.

Now the stock market is a tricky thing. It may be going up a little bit now because investors that still have money are either buying to cover from their short sales, or investing a little extra money, hoping to find a good deal.



highwaystar101 on 18 July 2009
TheRealMafoo said:
You have got to be kidding me. I would like to know how we can keep losing jobs, and grow GDP.

Well recession is a catalyst for efficiency for some companies, which subsequently ends in growth whilst those around are failing. But that said I really can't see it increasing GDP, it would be very unlikely.



sguy78 on 18 July 2009

It's amazing how Obama preached about how doomed the economy was when he was running for the presidency, and then about a month and a half in he's talking about how it's not as bad as it seems. I just hate how stocks jump up and down on rampant speculation.



famousringo on 18 July 2009
HappySqurriel said:

I think Cramer is somewhat entertaining in the way a circus clown is, but I would rather take financial advice from a circus clown then Jim Cramer ... He is one of the most reliably wrong people I have ever seen primarily because of his tendancy to take the most extreme position possible, and to switch to the opposite extreme the second his current prediction becomes unlikely.

Hehe, I remember The Daily Show lampooned Cramer rather severely, leading some other 'analysts' to come to his rescue and a great furor ensued. Cramer himself tried to stay cool and downplay everything, but it all made for some very fun TV (watched via internet).



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