SPY295.44+0.56 0.19%
DIA244.88-0.14 -0.06%
IXIC9,324.59+39.71 0.43%

Cramer Revisits His Infamous 'They Know Nothing!' Moment

Investors and analysts are increasingly drawing comparisons between the trading action of the past month and the climate during the financial crisis back in 2008.

Benzinga · 03/12/2020 15:09

Investors and analysts are increasingly drawing comparisons between the trading action of the past month and the climate during the financial crisis back in 2008.

On Thursday morning, CNBC’s Jim Cramer blasted the U.S. government for their seeming lack of understanding about the financial impact of the coronavirus outbreak, and the language he chose was extremely reminiscent of an impassioned interview he gave prior to the economic collapse in 2008.

“They know nothing. They know nothing. We know more than they do, and that’s not acceptable either,” Cramer said Thursday.

Cramer said S&P 500 companies may start going bankrupt due to the outbreak if the government doesn’t step in with “radical action.”

“Are we going to sit here and let so many companies go bankrupt because of an illness? I think that is stupid,” Cramer said.

See Also: Deja Vu? The S&P 500 Is 'Eerily Tracking' October 2008

2007 Comments

The interview on Thursday reminded many viewers of Cramer’s famous Aug. 3, 2007 interview in which he blasted the Federal Reserve for their complacency.

“My people have been in this game for 25 years and they’re losing their jobs and these firms are gonna go out of business and it’s nuts. They’re nuts! They know nothing! This is a different kinda market. And the Fed is asleep,” Cramer said back in 2007.

In the year following Cramer’s 2007 comments, the SPDR S&P 500 ETF Trust (NYSE: SPY) dropped 12.2%.

On Thursday, Cramer called on President Donald Trump and the U.S. government to postpone all manner of tax collection for now to help businesses and individuals weather the coronavirus storm.

In a prime time address on Wednesday, Trump said he will be calling on Congress to issue payroll tax cuts and provide economic stimulus for U.S. small businesses.

See Also: How To Play The 2020 Stock Market Crash: Like 1987, 2000 Or 2008?

Benzinga’s Take

Cramer is correct in his concerns that financially weak companies within the S&P 500 may be in jeopardy in the event the coronavirus triggers the first U.S. recession since the financial crisis. However, the financial crisis was defined by very real fears that the global financial system would collapse. Thus far, the coronavirus threat doesn’t seem nearly as systemically risky in nature.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

Photo courtesy of Tulane University.