Jim Cramer

James J. Cramer
Born	(1945-02-10) February 10, 1945 Wyndmor, Pennsylvania, U.S.
Occupation(s)	Television personality Author

James J. "Jim" Cramer (born February 10, 1945) is an American television personality, former hedge fund manager, and best-selling author. Cramer is the host of CNBC's Mad Money, and co-founder of TheStreet.com. He is also a regular contributor to New York magazine, and an occasional contributor to Time magazine. He lives with his wife and children in Summit, New Jersey.

Early years

Cramer was born to a Jewish family in Wyndmoor, Pennsylvania, a suburb of Philadelphia. One of his first jobs was selling ice cream at Veterans Stadium during Philadelphia Phillies games. Cramer went to Springfield Township High School in Montgomery County.

Cramer graduated magna cum laude from Harvard College in 1977 where he was also president of the Harvard Crimson. At this point in his life, Cramer was a staunch leftist, naming his plan to revitalize the Crimson after Lenin's "What Is to Be Done?" Today, an iconic painting of the Bolshevik leader can be seen in the background of the set of his show, Mad Money. In 1983, while bed-ridden with the mumps for over 3 months, he took an even greater interest in the stock market, as all he could do was read the papers.

Career

Journalist

He began in college, working for The Harvard Crimson, and rose to become its president. After college, following a two-month tenure as the key operator at Congressional Quarterly, he worked as a journalist at the Tallahassee Democrat in Tallahassee, Florida. Living almost next door to the Chi Omega sorority house and Florida State University, he was one of the first on the scene after serial killer Ted Bundy attacked four women, killing two of them in 1978. After Tallahassee, he worked at the Los Angeles Herald Examiner as a spot news reporter, covering "basically anyone who died violently in California." While he was covering a shooting in San Diego for the Examiner, a burglar cleaned out both his Fairfax District, Los Angeles bungalow and his checking account. For the next nine months, he lived mostly out of his car, with a pistol and hatchet for protection.

Lawyer

Following this experience, Cramer moved in with his sister in Greenwich Village. His sister was studying to be a lawyer and encouraged Cramer to become a prosecutor. Cramer was one of the earliest reporters at American Lawyer magazine, where he worked for founder Steven Brill. Cramer later earned a Juris Doctor degree from Harvard Law School. During his years at Harvard, Cramer worked as a research assistant with Alan Dershowitz.

After graduating in 1984, Cramer's plans to become a prosecutor were dashed when he was denied employment with the Office of the United States Attorney for the Southern District of New York, headed at the time by Rudy Giuliani, because his law school grades were deemed not good enough.

Cramer was admitted to the New York State Bar in 1985 and his current status with the NY Bar is "delinquent".

Investor

Cramer obtained employment in 1984 as a stock broker in Goldman Sachs' Sales & Trading department. Cramer's success in this position led him to fund his own hedge fund, Cramer & Co. (later Cramer, Berkowitz, & Co.) in 1987. The fund operated out of the offices of hedge fund pioneer Michael Steinhardt's Steinhardt, Fine, Berkowitz & Co., and early investors included Eliot Spitzer (a Harvard classmate and one of his oldest friends) , Steven Brill, and Martin Peretz.[1]

A year later, Cramer married Karen Backfisch-Olufsen, who was a trader with Steinhardt's firm. Cramer retired from his hedge fund in 2001, after finishing with a positive 29% return in 2000. Cramer's fund had one down year from 1988-2000 while he ran it, in 1998 which was disastrous for many in the industry. Cramer, Berkowitz finished down 2-3% and they did not charge a management fee that year to the clients. It was taken over by his former partner Jeff Berkowitz after his retirement.

TheStreet.com

In 1996 Cramer co-founded TheStreet.com with The New Republic editor Martin Peretz, one of his hedge fund's original clients. Cramer later had a falling out with Peretz over business matters. Cramer is currently a market commentator and adviser to the TheStreet.com, as well as its largest shareholder. Cramer also manages a charitable trust stock portfolio which is tied to TheStreet.com through a subscription service called the Action Alerts PLUS Portfolio. Cramer currently works on a new project, MainStreet.com, in an effort to bring stock savviness to Main Street. An earlier similar project, TheRoad.com, did not yield the success Cramer had anticipated.

Mad Money

Main article: Mad Money

Cramer now has his own television show on CNBC, Mad Money with Jim Cramer, which features his opinions on stocks queried by callers. Mad Money is also well known for over-the-top antics such as Cramer throwing his latest book whenever a caller mentions it, humorous sound effects, and for the catch-phrase "Booyah". Cramer frequently takes the show on the road to various U.S. colleges.

Other television and radio shows

After being a frequent guest commentator on CNBC in the late 1990s, Cramer co-hosted CNBC shows America Now and Kudlow & Cramer with Lawrence Kudlow in the early 2000s. Kudlow and Cramer split when Kudlow called Cramer 'sweet potato bull macho' on the air.

Cramer hosted a one-hour radio show, Jim Cramer's Real Money, until December 2006. The show was similar to his Mad Money TV show. He also guest hosted in the slot caused by the cancellation of Imus in the Morning (MSNBC and WFAN/Westwood One) in May 2007.

Cameos and Other Appearances

• 60 Minutes interview

On November 13, 2005, Dan Rather did a sit-down interview with Cramer on 60 Minutes. Among the topics of discussion were Cramer's past at his fund (including footage of Cramer trading during the 90s at his New York offices), his violent temper while at the fund, and what finally led him to come to his senses and "calm down". Footage of Cramer at his family home with his daughters and wife was also included. On November 15, 2005, Jim mentioned on his program that he received hundreds and hundreds of e-mails after his 60 Minutes interview. This report was taped before Cramer's radio show, Smart Money with Jim Cramer moved to WOR and became syndicated under the CBS Radio banner.

• Arrested Development

In 2005, Cramer appeared as himself in two episodes of the now-defunct FOX TV series Arrested Development. He appeared to first announce that he had upgraded Bluth Company stock to a "Don't Buy" from a "Triple Sell", and then to say that the stock was not a "Don't Buy" anymore, but a "Risky".

Cramer has also made appearances on NBC's Today, NBC Nightly News, Live with Regis and Kelly, ESPN Classic's Cheap Seats, NBC's Late Night With Conan O'Brien, Comedy Central's The Colbert Report, The Tonight Show with Jay Leno, Late Show with David Letterman, ABC's Jimmy Kimmel Live and NBC's The Apprentice (U.S. Season 7) called The Celebrity Apprentice.

Cramer also appears in 2008 motion picture Iron Man spoofing Stark Industries on his show Mad Money.

Cramer is 64 years old, but states he is only 54.

Controversy

Fox News Channel Lawsuit

In 2000, Cramer settled a lawsuit with Fox News Channel in which Fox had claimed Cramer reneged on a deal to produce a show for them. Their conflict began when Fox complained that Cramer promoted TheStreet.com's stock on the air.

Trading With The Enemy

In 2002, Nicholas Maier, a former trader at Cramer's hedge fund, released the book, Trading With The Enemy, about his time at Cramer, Berkowitz & Co. In the book, Maier alleged that Cramer and the hedge fund engaged in illegal trading practices. Maier also stated that Cramer was the subject of an SEC investigation. Cramer denied the allegations and threatened to sue the publisher for libel.

SEC Subpoena

In February 2006, an SEC investigation into allegations of collusion between short-sellers and a stock research firm led to the serving of subpoenas to TheStreet.com and Cramer, as well as journalists for Dow Jones and Marketwatch.com. Still, it's possible the issue could be moot. The SEC has indicated it has no intention of enforcing the subpoenas at this time. The SEC began to back away from the subpoenas, after lawyers for Dow Jones said they would not comply with them. SEC Chairman Christopher Cox took the unusual step of rebuking the SEC's staff attorneys for filing subpoenas on two Dow Jones reporters without first consulting him or the other top commissioners. Cox issued a statement saying neither he nor any of the SEC's four other commissioners were aware of the subpoenas, which he called "highly unusual."

The allegations had been raised publicly and in a lawsuit against Gradient by Overstock.com chief executive Patrick M. Byrne. In May 2007, it was revealed that the SEC had subpoenaed Byrne in May 2006, in connection with an investigation of the company.

Market Manipulation: TheStreet.com Interview

In March 2007, a December 2006 interview from TheStreet.com's "Wall Street Confidential" webcast stirred controversy after it appeared on YouTube.com. In the video, Cramer described activities used by hedge fund managers to manipulate stock prices - some illegal and some debatably legal. He described how he could push stocks higher or lower with as little as $5 million in capital when he was running his hedge fund. Cramer said, "A lot of times when I was short, I would create a level of activity beforehand that would drive the futures." He also encouraged hedge funds to engage in this type of activity because it is "a very quick way to make money". Cramer claimed that everything he did was legal, but that illegal activity is common in the hedge fund industry. He also stated that some hedge fund managers spread false rumors to drive a stock down: "What's important when you are in that hedge-fund mode is to not do anything remotely truthful because the truth is so against your view, that it's important to create a new truth, to develop a fiction." Cramer described a variety of tactics that hedge fund managers use to affect a stock's price. To keep a stock's price down, Cramer said one strategy to keep a stock price down is to spread false rumors to reporters he described as "the Pisanis of the world". The comment was a reference to CNBC correspondent Bob Pisani, who reports from the trading floor of the New York Stock Exchange. "You have to use these guys," said Cramer. He also discussed giving information to the "the bozo reporter from The Wall Street Journal" to get an article published. Cramer said this practice, although condemned illegal, is easy to do "because the SEC doesn't understand it." During the interview Cramer referred to himself as a "banking class hero."

Setting the Record Straight on Bear Stearns

On the March 11, 2008, episode of Cramer's show Mad Money, a viewer named Peter submitted the question "Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?" Cramer responded "No! No! No! Bear Stearns is not in trouble. If anything, they're more likely to be taken over. Don't move your money from Bear."

Some say the comments were clear and unambigous. Others say there is some disagreement over what Cramer meant by these comments. Some say that the viewer was asking whether he should keep his investment in Bear Stearns common stock (NYSE: BSC), and Cramer was advising him not to sell the stock in the belief that a company would pay a premium to acquire Bear Stearns. If this is the case, it was a disastrous recommendation, since BSC stock fell 92% over the next few days, on news of a Fed bailout and $2/share takeover by JPMorgan. The final shareholder approved cost of acquiring Bear Stearns would be $10/share.

Others think the viewer was asking whether he should withdraw money he had in a brokerage account at Bear Stearns. In other words, the caller wanted to know if it was possible that the liquidity crisis at Bear was so bad, that the viewer would not be able to get his money out of his Bear Stearns account? On March 17, 2008, Cramer claimed he meant the latter explanation, rather than the previous one. Cramer states he was not recommending the common stock but allaying concerns about Bear’s liquidity.

According to Michael Lewis, a journalist for the U.K. based Evening Standard news Web site, he claims TheStreet.com listed Bear Stearns as a buy at $62 per share on March 11, 2008 which was the same day as the caller's question and a day before the collaspe of Bear Stearns. However, on TheStreet.com, the Web site quote that shows the ratings history for actual changes that Cramer makes, it indicates that Cramer changed Bear Stearns rating to a Sell on February 5th 2008.

NBC Today show Appearance

In October 2008, Cramer appeared on NBC's Today show and stated "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."

Criticism

• In May 2008, a review by CXO Advisory showed that Cramer's stock picks have done worse than the market averages.
• On January 22, 2008, Jim Cramer was confronted by Rick Santelli on CNBC for Cramer's bullish perspective over the preceding several months and how this contradicted Cramer's recent forecasting of a bear market and "how things were incredibly dangerous."
• On September 15, 2008, Cramer invited the CEO of Wachovia on his show, Mad Money, in order to recommend the stock to potential investors. Cramer agreed with CEO Robert Steel that the company was fundamentally sound and that the ratio of good loans to bad loans was low. Cramer would recommend the stock to his viewers before Citi announced their intentions to acquire Wachovia's banking operations. On Monday, September 29th, Wachovia's share prices dropped over 95% in the pre-market and over 80% in market hours following news of a possible Citi acquisition. Prior to this, Cramer had stated, "This is run by Bob Steel. He's as close as we're going to get to a great banker. I think he's going to make this a great company. " Eventually, Wells Fargo would purchase Wachovia for $15.1 billion in an all stock deal leaving Wachovia shareholders with 0.1991 shares of Wells Fargo for every share of Wachovia stock, resulting in a large decline in stockholder value. In 2008, Wachovia shares declined 88 percent.
• On September 22, 2008, Wall Street Journal best-selling author and syndicated newspaper columnist, Eric Tyson, criticized Cramer's stock picks and his performance in general.

Jim Cramer's Reaction to Criticism and Controversy

The White House

On March 2nd, 2009, Jim Cramer drew the attention of some critics after his blunt evaluation of President Obama’s spending plans and the administration’s handling of the banking crisis. The Mad Money host’s name came up on March 3rd during a White House press briefing after Cramer said that Obama was responsible for “the greatest wealth destruction I have seen by a president.” An offended White House shot back. Press Secretary Robert Gibbs said, "I'm not entirely sure what he's pointing to make some of the statements." When pressed further by NBC's Tom Costello, Gibbs said, "If you turn on a certain program it's geared to a very small audience [...] And you can go back and look at any number of statements he's made in the past about the economy and wonder where some of the backup for those are, too."

Two days later, on March 5th, Jim Cramer responded to the White House. He rebuked, "Huh? Backup? Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in health care companies, tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world's morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people. The market's the effect; much of what the president is fighting for is the cause. The market's signal can't be ignored. It's too palpable, too predictive to be ignored, despite the prattle that the markets predicted far more recessions than we have."

Jim Cramer questioned much of the harsh criticism and lack of "respect" he received from public criticizers, which he explained makes him "uncomfortable being in the crosshairs of columnists and comedians I enjoy." Cramer asked, "So, why after toiling in the cable wilderness for four years with Mad Money am I the target of the wrath of the Obama clan, and the darling, albeit surely momentary, of the Obama-critics? After all, my criticism of Obama's handling of the economic crisis is a lot less pointed than my withering August 2007 'They Know Nothing' meltdown against Ben Bernanke and the previous administration's handling of the economic crisis."

Frank Rich and Jon Stewart

On Monday, March 9, 2009, during a segment of Mad Money, Jim Cramer admitted, "OK, I'm a tempting target. Plenty of people come in and give their criticism on this show. But we're dealing with serious issues here; we need solutions, which I offer almost every night. I don't want ad hominem attacks. Take Frank Rich and Jon Stewart; I criticize Obama, so both of them seize on the urban legend that I recommended Bear Stearns the week before it collapsed, when I simply told an emailer that the deposit in his account at Bear Stearns was safe. 'Your money is safe in Bear Stearns,'" Cramer repeated, referring to his own quote during a March 11, 2008 segment of Mad Money. Moreover, Cramer outlined, "But through a clever sound bite, Stewart, and subsequently Rich - neither of whom have bothered to listen to the context of the pulled quote - pass off the notion of account safety as an out-and-out buy recommendation. If you called Mad Money and asked me about Citigroup, I would tell you that the common stock might be worthless, but I would never tell you to pull your money out of the bank because I was worried about its solvency. Your money is safe in Citi as I said it was in Bear. The fact that I was right rankles me even more."

Specifically on Jon Stewart, Cramer said, "Look, I expect Jon Stewart, a comedian, to give me a good skewering -- but Frank Rich? I was shocked that the rigorous Rich wouldn't investigate further and relied on the show's truncation of the truth. After all, how many times were the pull quotes from reviews by Rich used against him when he may have been panning a play in his former role as entertainment critic?"

Referring to the March 8, 2009 charges leveled against Jim Cramer by The New York Times' Frank Rich, Cramer said, "I called out [Paulson and Geithner] for their mistakes, where was Frank Rich praising me on that? Where was that?"

Later that day, also on March 9th, The Daily Show's Jon Stewart responded with an apology for taking Cramer's comments out of context. "OK, I was wrong. So Jim Cramer, I apologize," Stewart said ironically, then promptly showcased video of Cramer suggesting the safety of Bear Stearns stock on Mad Money's Lighting Round, 5 days prior to the collapse of Bear Stearns. Provokingly, Jon Stewart then sarcastically stated, "He's not saying literally 'I'm asking you to buy Bear Stearns,' for that you have to go back a full 7 weeks before the stock completely collapsed." Stewart referenced that Cramer stated that he like the stock at prices above $60 which would infer support for the stock but not explicitly state to buy the stock. Stewart then showed additional video footage of Cramer on January 24 2008 telling TheStreet.com TV viewers to specifically "buy Bear Stearns" stock 7 weeks before it collapsed.

The following day on March 10, during a Tuesday appearance on the Today show, Cramer said of The Daily Show bit, "The absurdity astounds me. [Jon Stewart] is a comedian, and he's decided to focus on some calls I made during a bull market. The guy is a comedian. "

Response to Criticism for his Wachovia call

In 2008, on September 29, during a segment of Mad Money on CNBC Jim Cramer discussed the Wachovia call he made on September 15, 2008.

Jim Cramer said Frank Rich "chastised me for endorsing Wachovia's stock after then-CEO Bob Steel came onto Mad Money and spoke positively about the bank." After the bank collapsed, Jim Cramer reminded viewers that he takes pride in "the part about accountability," and is the first person to admit when wrong. Cramer mentioned, "Look, I was taken in, the guy pansed me. I made a mistake. The SEC is investigating Steel's appearance on the show for truthfulness, though. I made a mistake, but they're investigating him to see if he lied. Bigger issue. Sometimes you just get had."

Jim Cramer apologized both on Mad Money and on the Today Show for believing in Steel. Others tell Cramer he's been too hard on himself given that the "Securities and Exchange Commission is investigating Steel's appearance on my show for truthfulness."

Response to the Pundits

"The pundits," Jim Cramer explained on March 9th 2009 in a MainStreet article, "who haven't paid attention to anything I have been saying or writing for the past 18 months are all over me." Cramer said the pundits "won't engage in the merits of, say, favoring Tier 1 capital for the banks vs. common equity, or forbearing on the banks to work the situation out over time because the banks can be profitable if we have some patience. They just attack me." Cramer suggested, "It's time to get serious. It's time to take the issue from the pundits and from the left and right, and put it where it belongs: serious non-ideological debate to put out the real firestorm, the collapse of the economy from Wall Street to Main Street and the ensuing Great Wealth Destruction for all."

Jim Cramer's memo to Bill Maher

In a memo to Bill Maher, on March 9th 2009 Cramer wrote, "Stop insulting my faux great-great-uncle Vlad Lenin. I am using him to dramatize the point of a failed nationalization and confiscation of the banks at the hands of the people. It is funny how the right is certainly very civil as my old friends and new allies as of last week, Fred Barnes and Sean Hannity, don't hold my left wing social view against me when they talk about my criticism of the president! I always love anyone from Fox on the team because they are fierce in their defense with much less gratuitous slamming."

Bibliography

• Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer) ISBN 978-1416558859
• Jim Cramer's Mad Money: Watch TV, Get Rich ISBN 1-4165-3790-2
• Jim Cramer's Real Money: Sane Investing in an Insane World ISBN 0-7432-2489-2
• Confessions of a Street Addict ISBN 0-7432-2487-6
• You Got Screwed! Why Wall Street Tanked and How You Can Prosper ISBN 0-7432-4690-X

References

• Kurtz, Howard. The Fortune Tellers: Inside Wall Street's Game of Money, Media, and Manipulation. New York NY: Simon & Schuster. ISBN 0684-86879-2. {{cite book}}: Unknown parameter |origmonth= ignored (help)

External links

• Jim Cramer biography on CNBC.com
• Jim Cramer Mad Money Archive
• TheStreet.com, Cramer's investment website.
• In the Money, continued, Balance Sheet, article about Cramer and other law alumni, from the online Harvard Law Bulletin
• Jim Cramer's Picks at Seeking Alpha
• Stockpickr Stock market social networking site.
• Jim Cramer at IMDb
• Track Mad Money Recommendations
• Betting on the Market - PBS Frontline interview with Jim Cramer
• The New Yorker New Yorker critic's article by Nancy Franklin
• To The Moon
• Maxim: Ask Jim Cramer, Maxim's interview with Cramer, and Top 2 Chinese Stocks Right Now
• Jim Cramer's 10 Predictions for 2008

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