Jim Cramer Tells Media to ‘Dial Back the Hysteria’ on Economy

Appearing on NBC’s Today show Thursday morning, CNBC Mad Money host Jim Cramer was the voice of calm, telling his colleagues to “dial back the hysteria” over the economy and reassuring viewers that “the markets are up huge.” He called out those in the press, including NBC, that were “sowing panic” about the possibility of a future recession.

“This morning, nerves are frayed on Wall Street in the wake of the Dow’s worst day of the year, a loss of 800 points. The markets shaken by fears of worldwide economic trouble,” co-host Craig Melvin warned as he introduced a report hyping a possible downturn. Correspondent Peter Alexander sneered: “This morning, President Trump is arguing that the economy remains strong despite new concerns that it is actual weakening and a loud signal that a recession could be on the horizon.”

 

 

The reporter eagerly pushed more alarmist rhetoric:   

Fresh off that market meltdown, with stocks plunging in one of their worst days all year, fears of a recession are rising. The major stock sell-off following a sounding of the alarms on Wall Street. The flashing red warning sign, a key economic indicator that’s proceeded every recession since 1956.

Both NBC Nightly News and ABC’s World News Tonight engaged in the same fearmongering Wednesday night.

On Thursday’s Today show, Alexander fretted over Trump supposedly passing the buck: “The President again blaming his hand-picked Federal Reserve Chairman Jerome Powell for not cutting interest rates more aggressively...”

Following the doom and gloom, co-host Savannah Guthrie turned to Cramer and worried: “So how significant is this? I mean, it’s the worst single-day drop this year, all the key markets are down. I mean, what does it mean?” Cramer immediately dispelled attempts to stoke panic:

Well, I think we need to dial back the hysteria first. The markets are up huge....so let’s kind of be a little more cool. There a many people who I think are sowing panic. That’s not necessary. This does not have to end poorly, we can avoid a recession.

After Guthrie pointed to the brief inverted yield curve that occurred on Wednesday morning, indicating that short-term bonds were temporarily considered more valuable than long-term bonds, and asked: “Does that mean a recession is certainly going to happen?” Cramer replied: “I’m so glad you asked that way because the answer is no. I think that it raises the possibility. I think that there are people who can sow fear....I really don’t want to be someone who is taking the ill-advised position that it must end in recession.”

While Cramer acknowledged that the Trump administration’s trade war with China was contributing to some of the economic uncertainty, the CNBC host actually agreed completely with the President’s criticism of the Federal Reserve:

Oh, the Fed has to cut again. And the Fed has been wrong. The Federal Reserve got what we call too tight. The Federal Reserve raised rights – raised rates, but much faster than every else in the world. And they’re out of step, and they have to come to grips with the fact they made mistakes. And they have to say that and cut rates. But I’ve got to tell you, Jay Powell’s been a little intransigent...He has to make some moves, but more importantly, he has to say he will cut if things slow down. And he hasn’t. He’s been circumspect, he has not recognized the gravity of his words, and he hasn’t done what’s necessary.

At the end of the discussion, Cramer again ripped the hysterical news coverage of the economic news: “I think most people should recognize, things are not as horrible as, let’s say, the media is making it out to be.”

Here is a full transcript of the back-to-back August 15 segments:

7:11 AM ET

CRAIG MELVIN: Now to some troubling new signs for your money. This morning, nerves are frayed on Wall Street in the wake of the Dow’s worst day of the year, a loss of 800 points. The markets shaken by fears of worldwide economic trouble. We’re going to talk about the situation with Jim Cramer in just a moment, but first, NBC’s Peter Alexander joins us with more. Peter, good morning.

PETER ALEXANDER: Hey, Craig, good morning to you. This morning, President Trump is arguing that the economy remains strong despite new concerns that it is actual weakening and a loud signal that a recession could be on the horizon.

[ON-SCREEN HEADLINE: Stocks Tank Amid Recession Fears; Dow Plummets 800 Points as Trade War Grows]

Fresh off that market meltdown, with stocks plunging in one of their worst days all year, fears of a recession are rising. The major stock sell-off following a sounding of the alarms on Wall Street. The flashing red warning sign, a key economic indicator that’s proceeded every recession since 1956.

It’s called a yield curve inversion. Here’s what that means. When the economy is strong, you can expect to be paid more for long-term Treasury bond investments than for short-term investments. But on Wednesday, that flipped, with short-term Treasury bonds paying more than longer term ones. A warning that investors are losing confidence in the economy.

It comes amid signs of a global slowdown and growing fears about President Trump’s trade war with China. Even after the president delayed imposing a new round of tariffs until mid-December, acknowledging they could hurt American consumers.

DONALD TRUMP: We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers, which so far they’ve had virtually none.”

ALEXANDER: The President again blaming his hand-picked Federal Reserve Chairman Jerome Powell for not cutting interest rates more aggressively, tweeting, “We should easily be reaping big rewards and gains but the Fed is holding us back. We will win!”

And tonight, President Trump will hold another campaign rally. This one in Manchester, New Hampshire, a state that’s boasting one of the lowest unemployment rates in the country. This latest indicator warns that a recession could be more than a year out, but if it happens, it would be the first to hit the U.S. since 2007. Savannah?

SAVANNAH GUTHRIE: Alright, Peter, thank you. We want to focus more on what this all means for you. And for that, we’re joined by Jim Cramer, host of CNBC’s Mad Money. Hi, Jim, good morning.

JIM CRAMER: Good to see you.

GUTHRIE: So how significant is this? I mean, it’s the worst single-day drop this year, all the key markets are down. I mean, what does it mean?

CRAMER: Well, I think we need to dial back the hysteria first. The markets are up huge. Dow up nine, S&P up 14, NASDAQ up 17.  

GUTHRIE: You mean year over year?

CRAMER: Right, so let’s kind of be a little more cool. There a many people who I think are sowing panic. That’s not necessary. This does not have to end poorly, we can avoid a recession.

GUTHRIE: I was gonna say, let’s – this inverted yield curve –

CRAMER: Yeah, it’s hard to understand.

GUTHRIE: Which now I can be a CNBC anchor, but this is – it’s basically a key indicator that has predicted recessions in the past. That little light blinked red yesterday.

CRAMER: Right.

GUTHRIE: Does that mean a recession is certainly going to happen?

CRAMER: I’m so glad you asked that way because the answer is no. I think that it raises the possibility. I think that there are people who can sow fear. And there is fear, there is uncertainty and that often does lead to recession, but the economy is actually strong. Unemployment, the best in 40 years. Credit is available. So I really don’t want to be someone who is taking the ill-advised position that it must end in recession.

GUTHRIE: Let’s talk about this trade war with China. There does not seem to be any end in sight. What’s the exit strategy here and how much is that affecting what we’re seeing in the markets?

CRAMER: I think that’s sowing very big uncertainty and I think that the President has said over and over again, “Look, we may have to have a bit of a downturn in order to be able win the trade war.” I’m beginning to think that there has to be some sort of compromise in the trade war. The Chinese just this morning ratcheted things up again.

GUTHRIE: They don’t seem to be concerned in the least.

CRAMER: They should be. They should be because their economy is slowing more than ours.  

GUTHRIE: The Federal Reserve, as we know, can kind of goose the economy by lowering interest rates. It recently did, but not enough to make the markets happy. What do you think the Fed should do?

CRAMER: Oh, the Fed has to cut again. And the Fed has been wrong. The Federal Reserve got what we call too tight. The Federal Reserve raised rights – raised rates, but much faster than every else in the world. And they’re out of step, and they have to come to grips with the fact they made mistakes. And they have to say that and cut rates. But I’ve got to tell you, Jay Powell’s been a little intransigent, he has got to –

GUTHRIE: The head of the Federal Reserve.

CRAMWER: Yes, I’m sorry. He has to make some moves, but more importantly, he has to say he will cut if things slow down. And he hasn’t. He’s been circumspect, he has not recognized the gravity of his words, and he hasn’t done what’s necessary.

GUTHRIE: And real quick, if you have a 401(k), you’re looking and you’re seeing a lot of red on that balance sheet. What do you recommend?

CRAMER: Look, I think you gotta stay the course. Could we go down 5-8%? Look, we’re up so much, that’s certainly the case. If you can’t handle that pain, if you want to take something off the table, so to speak, sell some, that’s fine. But I think most people should recognize, things are not as horrible as, let’s say, the media is making it out to be.

GUTHRIE: Alright, Jim Cramer, always good to get your perspective. Thank you so much. He’ll have the latest on the markets tonight on Mad Money, 6:00 p.m. Eastern on CNBC.

NB Daily Economy Recession Stock Market NBC Today Video Jim Cramer Savannah Guthrie Peter Alexander

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