Jim Cramer & tulipomania

I really like this video which unspy posted on my blog earlier.

To me its just not fair that hedge funds and corporations can manipulate the stockmarket. It’s the notion that there is no such thing as “market correction” or equilibrium. I believe George Soros said this as well in his book. It’s not a science because there’s humans involved. 

Financial market regulation was an area I could not ignore in my studies as a lawyer and accountant. In fact, I did a thesis on it =P Shenanigans and antics pulled by Jim Cramer’s days as hedge fund don’t give normal people a chance in the stock market. They’re shifting huge piles of money around in back rooms to create artificial lifts in stock prices or spreading rumours to make a stock go down. Essentially, they are screwing with people’s money and the overral stock market. It’s nothing new, its always been going on. 

The fact is that some CEO’s have lied and financial reporter’s don’t do enough digging around to reveal the truth. Financial reports don’t necessarily tell the truth either – sometimes the real info is hidden deep in the notes or in off balance sheet financing and never reported. If it is so opaque what trust do we have in financial markets? There always seem to be a hidden truth and unbelieveable faith that things will get better and an ideal of constant growth.

It’s tulipomania all over again. Check this from wikipedia:

“Tulip mania or tulipomania (Dutch names include tulpenmanie, tulpomanie, tulpenwoede, tulpengekte, and bollengekte) was a period in the Dutch Golden Age during which contract prices for bulbs of the newly introduced tulip reached extraordinarily high levels and then suddenly collapsed.[2] At the peak of tulip mania in February 1637, tulip contracts sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble.[3] The term “tulip mania” is often used metaphorically to refer to any large economic bubble”

I’m out like the bubble bursting,

Matthew Ho

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Jim Cramer v Jon Stewart: The Showdown

I’ve been watching these videos for the past hour or so. They’re very interesting, particularly given the current financial climate.  There’s been a feud brewing between Jim Cramer, the host of CNBC’s “Mad Money” and Jon Stewart, host of the Daily Show

I’ve actually got one of Jon Stewart’s books on my shelf (its brilliant!). FYI – Jon Stewart is a comedian. These two networks are supposedly sister networks as well. Watch these unedited & uncensored videos, they are very insightful – I was addicted! (note: the daily show posting these vids on their website)

Part 1

Part 2

Part 3

Based on what I have seen, Jim Cramer was pummeled by Jon Stewart. It was a three round knockout, that destroyed Cramer’s credibility. However, Cramer accepted too much blame. Could ANYONE have predicted some of these crisises and collapses?? If you put yourself out there and tell investors to buy Bear Stearns and then it crumbles, should you accept some of the blame? 

It reminds me of 5 – 7 years ago when people were recommending Enron, Worldcom, etc… and then they collapsed. I don’t think the CNBC network and Jim Cramer should be solely to blame, even though they made those recommendations. Yes, they could have done more due diligence, but it is a crazy stock market out there. Cramer should have stood up for himself more. Jon Stewart didn’t even give him much of a chance to respond either. He just kept knocking him down blow after blow.

The impact is once in a life time, however similar “shocks” have happened before. See Enron bust, Dot.com bust, Asian Crisis, and Black Monday 1987.

I’ve never doubted that there is manipulation in the stock market, some legal, and some illegal.  

Here’s the original video Jim Cramer did a few years ago, discussing how hedge funds manipulate the stock market:

I’m out like Jim Cramer’s career,

Matthew Ho.