Hot Air has the video of Jim Cramer giving some great financial advice last week. He’s so sure that we should all hold onto Bear Stearns that he calls the notion of dropping the stock “silly.” Here’s a partial transcript that still has the goodies:

Dear Jim: Should I be worried about Bear Stearns in terms of liquidity and get my money out of there? –Peter

Cramer says:“No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.”

You already know what happened soon after he gave this little impassioned affirmation as to Bear Stearns worth.

March 17 (Bloomberg) — JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. for $240 million, about 90 percent less than its value last week, after a run on the company ended 85 years of independence for Wall Street’s fifth-largest securities firm.

Shareholders of Bear Stearns will get stock in JPMorgan equivalent to about $2 a share, compared with $30 at the close on March 14, the New York-based companies said in a statement late yesterday. The Federal Reserve is providing financial backing to JPMorgan, the second-biggest U.S. bank, and also cut the rate on direct loans to banks in its first emergency weekend action in almost three decades to stave off a broader market panic.

Cramer’s show has been something of a fad in the individual investment market. I’ve made money in the past by playing against/with his on-air recommendations. There was a period of time where his opinion held such gravitas that when he put the hit out on a sound stock, it would drop a dollar or so the next day. You could make bank by scooping up shares at the lower Cramer-induced price and then sell for a profit when the market shook his recommendation off a few days later.

Cramer himself isn’t against using dirty tricks, and he may or may not be a crook. Here’s a refresher from his Wikipedia entry:

In March 2007, a December 2006 interview from TheStreet.com’s “Wall Street Confidential” webcast stirred controversy after it appeared on YouTube.com. In the video, Cramer described activities used by hedge fund managers to manipulate stock prices; some illegal and some debatably legal.[19] He described how he could push stocks higher or lower with as little as $5 million in capital when he was running his hedge fund. Cramer said, “A lot of times when I was short, I would create a level of activity beforehand that would drive the futures.” He also encouraged hedge funds to engage in this type of activity because it is “a very quick way to make money.” Cramer claimed that everything he did was legal, but that illegal activity is common in the hedge fund industry. He also stated that some hedge fund managers spread false rumors to drive a stock down: ” …it’s important to create a new truth, to develop a fiction.”[20] Cramer said one strategy to keep a stock price down is to spread negative rumors to reporters he described as “the Pisanis of the world”. “You have to use these guys,” said Cramer. He also discussed getting “the bozo reporter from The Wall Street Journal” to publish a negative article.[21] Cramer said this practice, although illegal, is easy to do “because the SEC doesn’t understand it.”[22][23]

Yeah, this is the guy I want influencing my trading decisions.

Amerpundit says Ouch. No kidding.

This entry was posted on Monday, March 17th, 2008 at 1:13 pm and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.