Philosophical Ramblings: Cramer and the effect of predictions on the populace
Jim Cramer got in some hot water the other day for the following comments:
In what Curry called a “dramatic statement,” Cramer emphatically urged any investor who has money they may need in the next five years tied to stocks to pull their dough out.
“I thought about this all weekend,” Cramer told Curry. “I do not want to say these things on TV. Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”
While the animated Cramer is known for telling investors the best prospects for earning money on the stock market, he’s now saying retreat is the best position in the face of some of the worst financial news in decades. The bank lending default crisis that put financial firms around the country on the brink of collapse could bring “as much as a 20 percent decrease in the stock market,” Cramer predicted.
That day, the stock market dropped, and MEDIA started blaming the “Cramer Effect” for making matters worse.
Now, in Cramer’s case, he was observing the behavior of all the investors as a group, and he gave advice based on this. Prior to his advice, the market was already struggling. He MAY have amplified it … he may not. Either way, he was reacting to investors … observing them … and possibly influencing them with his words.
And he was INFLUENCED by investors, which led to his decision to speak up!
It’s a circular argument.
It remind me of Ouroboros. Here’s a portion of the Wiki entry about this mythological creature:
The Ouroboros often represents self-reflexivity or cyclicality, especially in the sense of something constantly re-creating itself, the eternal return, and other things perceived as cycles….
I believe … that the Realtor (who, in the real world, is represented by the ever-changing person or persons that market realities to our country) has sold the country YET ANOTHER bill of goods, covering up one lie (Financial CRISIS) with another.
That’s where the circle starts.
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Yeah, I feel the same way about this. Markets are based upon confidence vs fear. It’s socially acceptable gambling. A never-ending circle.
This is the Realtor’s power, and why he is unstoppable in this reality.
***
Now, let’s do a What If…? What if we weren’t exposed and bombarded with the Financial CRISIS from the MEDIA?
Perhaps we’d see high gas prices and high food prices and think it’s normal inflation, or maybe the Arabs are raising prices on us again, but it will get back to normal one day. Perhaps you would still get frustrated over the delays of your home closing, but for different reasons.
But the whole “the sky is falling” mentality that all forms of MEDIA report? That adds to everything. It creates a complete lack of faith and trust in the government, banks, and stock market. It forces panic moves: a withdrawal of funds from checking, savings, money markets, and selling stocks on the market.
It’s negative and depressing. And angry.
Everything seems to come to a grinding halt…unemployment up, less jobs, less economic stimulation, etc.
It’s all about FEELINGS, not mathematics or logic.