The Cramer put?
When the smoke clears from Monday's Dow drop below 10,000, I'd really like to see the figures for mutual fund redemptions that day. And then I'd like to know how many impressionable 50-somethings who still watch Today on NBC took Jim Cramer's advice to more or less sell everything.
I'm not the only one who suspects Cramer's call might have some cause-and-effect relationship with the latest multi-hundred-point selloff. But it doesn't need to be the object of blind speculation. There are hard numbers that can marshal at least compelling circumstantial evidence — and those numbers are mutual fund redemptions.
Leave aside whether Cramer is right that any money you might need in the next five years should be kept out of the stock market. Leave aside how this doesn't square with Cramer's notorious history as a hypester. What I'm most interested in here is a cultural phenomenon.
We have a generation of clueless Boomers who bought all the way up before the 2000 Nascrash, fueled by CNBC. This generation then plowed its remaining "savings" into housing during this decade, egged on by Bush and Greenspan (and CNBC). Even if they don't watch CNBC every day, these are people who see Cramer as, if not a god, then at least someone whose advice is to be at least considered, if not followed.
Now, as their 401(k) balances are getting hammered, they turn on the Today show (the ultimate font of conventional wisdom for the crowd whose head is easily filled with conventional wisdom) and see Cramer. "Wow, if he's on Today, it must be important. Oh wow, he's saying sell everything if you need it in the next five years. God, I'm trying to fund both retirement and the kids' college fund, and I can barely keep afloat as it is. I'm going into all-cash." A few mouse clicks after they get into work, and it's done.
As I say, there are hard numbers that can bear out whether this is what happened. Be interesting to see if someone with ready access to them performs an analysis. If 6 in 10 Americans see a new depression as likely, it's at least plausible, no?
What do you think? Is this how things might have played out yesterday? Let 'er rip in the comments.
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