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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.<ref>{{cite web|url=http://www.nypost.com/seven/05112007/business/company_byrne_d_on_probe_report_business_roddy_boyd.htm |title=Company Byrne-d on Probe Report |author=New York Post|date=[[May 11]], [[2007]]}}</ref>
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.<ref>{{cite web|url=http://www.nypost.com/seven/05112007/business/company_byrne_d_on_probe_report_business_roddy_boyd.htm |title=Company Byrne-d on Probe Report |author=New York Post|date=[[May 11]], [[2007]]}}</ref>

===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.<ref> {{cite web|url=http://www.slate.com/id/2162460/|title=Cramer vs. Cramer: Will his crazy confession destroy his career?|author=Henry Blodget, Slate|date=[[March 22]], [[2007]]}}</ref> 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 contract|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: " ...it's important to create a new truth, to develop a fiction."<ref>{{cite news
|url=http://www.marketwatch.com/news/story/jim-cramers-big-mouth-reveals/story.aspx?guid=%7BEFABFEB9%2D4FC7%2D45A8%2DA14A%2D6318372C33E2%7D
|title=Jim Cramer's big mouth: His revelations only confirm what dupes average investors are
|author=Thomas Kostigen
|work=MarketWatch
|date=[[March 23]], [[2007]]}}</ref> Cramer said [[Short (finance)#"Short and distort"|one strategy to keep a stock price down]] is to spread negative rumors to reporters he described as "the [[Bob Pisani|Pisanis]] of the world". "You have to use these guys," said Cramer. He also discussed getting "the bozo reporter from The Wall Street Journal" to publish a negative article.<ref>Boyd, Roddy "[http://www.nypost.com/seven/03202007/business/cramer_reveals_a_bit_too_much_business_roddy_boyd.htm Cramer Reveals a Bit Too Much]", ''[[New York Post]]'', [[March 20]], [[2007]]</ref><ref>{{cite news
|url=http://www.nypost.com/seven/03212007/business/cramers_big_mouth_business_roddy_boyd.htm
|title=Cramer's Big Mouth: Clip Could Run Afoul of CNBC
|author=Boyd, Roddy
|work=New York Post
|date=[[March 21]], [[2007]]}}</ref> Cramer said this practice, although illegal, is easy to do "because the SEC doesn't understand it."<ref>{{cite web |url=http://www.usatoday.com/money/markets/2007-03-23-cramer-usat_N.htm
|title=CNBC's Cramer boasts of manipulating markets
|author=Matt Krantz, USA Today
|date=[[March 24]], [[2007]]}}</ref> During the interview Cramer referred to himself as a "banking class hero."<ref>{{cite web |url=http://today.reuters.com/news/articleinvesting.aspx?view=CN&WTmodLOC=C3-News-2&symbol=TSCM.O&storyID=2007-03-20T225520Z_01_N20362926_RTRIDST_0_CRAMER-INTERVIEW.XML|title=Jim Cramer draws fire over manipulation comments |accessdate=2007-03-20
|last=Hamilton
|first=Dane
|date=2007-03-20}}</ref>


===Setting the Record Straight on Bear Stearns===
===Setting the Record Straight on Bear Stearns===

Revision as of 08:26, 5 March 2009

This article is about the television personality and host of Mad Money. For the champion Scrabble player, see Jim Cramer.
James J. Cramer
Born (1955-02-10) February 10, 1955 (age 69)
Wyndmoor, Pennsylvania, U.S.
Occupation(s)Television personality
Author

James J. "Jim" Cramer (born February 10, 1955) 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,[1] 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.[2] 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?"[3] 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.[4] After Tallahassee, he worked at the Los Angeles Herald Examiner as a spot news reporter, covering "basically anyone who died violently in Cabalslifornia."[3] 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.[5]

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.[6] Cramer later earned a Juris Doctor degree from Harvard Law School.[3] 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.[3]

Cramer was admitted to the New York State Bar in 1985 and his current status with the NY Bar is "delinquent".[7]

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) [8], 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 double-digit 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 chairs, 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.

He was a guest on the Howard Stern Show on Sirius Satellite Radio on February 4, 2008, where he stripped naked in response to a lost bet with Howard Stern.

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

He had an appearance in the movie Mad Money. His show, with the same name, was displayed on one of the televisions.

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.[9]

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. Cramer disclosed the subpoena on his Mad Money television show, holding it up to the camera with the word "Bull" handwritten on it.[10] Both Cramer and TheStreet.com refused to comply with the SEC's demands for communications between journalists and their sources, and First Amendment advocates publicly criticized the SEC move. Soon after, the SEC stated it would not enforce the subpoena, and the investigation of the stock research firm was dropped a year later. In April 2006, the SEC announced a new policy on subpoenaing journalists, saying it would avoid issuing subpoenas "that might impair the news gathering and reporting functions". Any subpoena issued to a journalist must now be approved by the SEC's enforcement director.[11]

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.[12]

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."[13]

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.[14] 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. However, if that was not the case, since Bear Stearns was taken over by JP Morgan Chase for $10/share - then Cramer turned out to be right.

Others think the viewer was asking whether he should withdraw money he had in a brokerage account at Bear Stearns.[15] In other words, is it possible that the liquidity crisis at Bear is so bad, the viewer will not be able to get his money out of his Bear Stearns account?[16] On March 17, 2008, Cramer claimed he meant the latter explanation, rather than the previous one; moreover, this was also confirmed in a later episode of Mad Money when the original caller clarified his question in another phone call.[17] Cramer wasn’t recommending the common stock, he said. He was only allaying concerns about Bear’s liquidity.

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." The stock market decline continued into 2009 due to a deteriorating economy, and Cramer was proven correct to help investors save money.[18]

Criticism

  • 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[19] and "how things were incredibly dangerous."[20]
  • On September 15, 2008, Cramer invited the CEO of Wachovia on his show, Mad Money, in order to recommend the stock to potential investors.[21] 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. [22] 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. [23] 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. "[24] 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.[25] In 2008, Wachovia shares have declined 88 percent.[26]

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

  1. ^ James J. Cramer (2007-04-13). "Archives: James J. Cramer". nymag.com. Retrieved 2007-04-13.
  2. ^ Feinberg, Andrew (2005-10-24). "Cover Boy Cramer". The Money Monster Web Log. The Kiplinger Washington Editors, Inc. Retrieved 2007-06-14.
  3. ^ a b c d Tim Russert Show, July 14, 2007.
  4. ^ "The Mad Man of Wall Street." BusinessWeek. October 31, 2005.
  5. ^ Cramer, James J. (2002). Confessions of a Street Addict. New York, NY: Simon & Schuster. pp. 4–6. ISBN 0-7432-2487-6.
  6. ^ THE LAW; At the Bar - New York Times
  7. ^ http://iapps.courts.state.ny.us/attorney/AttorneyDetails?attorneyId=5430853
  8. ^ A Rather Sedate Jim Cramer Reacts to Spitzer Prostitution Revelation | NewsBusters.org
  9. ^ "Jim Cramer Quits Hedge Fund". Associated Press. USA Today. December 4, 2000. {{cite web}}: Check date values in: |date= (help)
  10. ^ Matthew Goldstein, TheStreet.com (February 27, 2006). "TheStreet.com, Cramer Get Subpoenas in Gradient Probe". {{cite web}}: Check date values in: |date= (help)
  11. ^ Marcy Gordon, Associated Press (February 14, 2007). "SEC Ends Probe of Gradient". {{cite web}}: Check date values in: |date= (help)
  12. ^ New York Post (May 11, 2007). "Company Byrne-d on Probe Report". {{cite web}}: Check date values in: |date= (help)
  13. ^ Mad Mail: Is Bear Stearns in Trouble?
  14. ^ "Jim Cramer on Bear Stearns". Media Bistro. 2008-03-17. Retrieved 2008-03-17.
  15. ^ "Setting the Record Straight on Bear Stearns". CNBC. 2009-03-04. Retrieved 2009-03-04.
  16. ^ "In Defense of Jim Cramer on Bear Stearns". Seeking Alpha. 2008-03-17. Retrieved 2008-03-18.
  17. ^ Tom Brennan (2008-03-17). "Cramer Was Right About Bear Stearns". CNBC. Retrieved 2008-03-17.
  18. ^ Michael Inbar (2008-10-06). "Jim Cramer: Time to get out of the stock market". TODAYShow.com. Retrieved 2008-10-06.
  19. ^ "Rant Heard Around the World".
  20. ^ "Rick Santelli takes down Jim Cramer".
  21. ^ "It Did Happen! - Cramer's Mad Money".
  22. ^ "Cramer Recommends WB".
  23. ^ "WB Historical Prices".
  24. ^ "Mad Money Lightning Round': Wait for Wachovia".
  25. ^ "Wells Fargo Buys Wachovia for $15.1 Billion".
  26. ^ "Wells Fargo's Push East Slowed by Wachovia Defections".
Wikiquote has quotations related to James Cramer.

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| #default = 1955 births

}}]] {{subst:#switch:{{subst:uc:LIVING}} 

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