Cramer Calls A Housing Bottom (Yet Again)
“The end to House price depreciation in the vast majority of areas in this country has at last arrived.” -James Cramer
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Do we even need to mention the absurdity of this?
James Cramer, who has called an inordinate number of Housing Bottoms since the market topped in 2005, now declares that “Housing Has Officially Bottomed.”
What does a bottom look like to Cramer? “Ramping sales, and sales in certain areas are up ten times those of last year, and an end to falling prices. That’s exactly what we’ve seen for the past three months.”
We have seen the housing collapse decelerate, but not stop falling. Price reductions have not ended.
No, we have not seen an explosion in new Housing Starts — rather, this is a noisy volatile series that frequently shows a monthly gain, but continue to show annual falls.
Oh, and that big jump in May housing starts? It is due to a 62% surge in multi-family homes — apartments, high rises, etc. — and not houses. If you want to read anything into it, the Home Builders are showing LESS CONFIDENCE in the Housing market, not more, as Jim asserts in the video. Rather than building to sell, they are building to rent. Hardly a broad endorsement.
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And relying on a single month pop in this series is sheer foolishness: Each circled monthly number below shows a gain over the prior month — none of which resulted in a housing bottom:>
Chart via Barron’s Econoday
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Previously:
Worst Predictions for 2008 (December 31st, 2008)
http://www.ritholtz.com/blog/2008/12/worst-predictions-for-2008/
Yet Another Greenspan Housing Bottom Call (May 13th, 2009)
http://www.ritholtz.com/blog/2009/05/yet-another-greenspan-housing-bottom-call/
Sources:
Cramer: Housing Has Officially Bottomed
Tom Brennan
CNBC, June 16, 2009
http://www.cnbc.com/id/31388528
http://www.cnbc.com/id/15840232?play=1&video=1155057267
June 16th, 2009 at 11:37 pm
Cramer knows he can say anything at this point and never be held accountable down the road. Such is life in the MSM today. In fact, he’ll probably claim he never called the bottom here down the road when proven wrong yet again, and may even try to claim that he called this one all along too. There are never any ramifications for outright incompetence and dishonesty on CNBC, so why not just say anything?
June 16th, 2009 at 11:39 pm
It’s the type of call which will land James J. another Daily Show invite. Although in all fairness the network (CNBC) ought to send Larry Kudlow instead this time. Cramer took the fire for the whole network last time. Kudlow was pushing “goldilocks” forever and a day despite the likes of Roubini trying his best to wake him up. Gary Shilling too was mocked with a “Wizard of Oz” clip for his negative view of housing (which turned out to have been quite correct.) Time for Jon Stewart to rake Larry over the coals.
June 16th, 2009 at 11:46 pm
US Housing stock shrank in Q1 2009.
Does anyone know whether that ever happened before?
Actually, I think it’s fair enough to call a bottom here. Here is a dramatic reenactment of Jim Cramer calling a bottom. Jürgen Prochnow plays the role of Jim Cramer.
http://www.youtube.com/watch?v=ulByRIz-f3Y
June 16th, 2009 at 11:47 pm
Soros says the markets are always wrong.
Watching this NO big surprise as to why there George!
Barry, right on on the fix for financial TV. Oh, if this wasn’t entertaining enough CNBC also ran a piece on Obama swatting a fly. http://www.cnbc.com/id/15840232/?video=1154919821&play=1
June 16th, 2009 at 11:52 pm
@Transor: LOL. Too funny. You’re killing me, man.
June 17th, 2009 at 12:16 am
The problem is, as BR noted in the recent ways to fix Business News, is that there is no accountability, either for the clowns like Cramer and Kudlow (Could we put them back together again so as to reduce the time wasted on air?) or the many Hacks they roll out, mostly talking a book or trying to reduce inventory of s**t positions.
The only good news in this story is, again, it’s getting less bad, usually described as “Green shoots”. Unless we overshoot the long-term trend line, which is quite possible, there’s probably only another 15-20% to fall from here?
June 17th, 2009 at 12:39 am
Here’s my question. Since I could be at least as credible as Cramer, can I get my own show on CNBC? I’ll make it a variety show and have comedians and slap stick and bloopers and clowns. It should fit right in.
June 17th, 2009 at 12:46 am
Mannwich has it exactly right. Cramer’s been calling this June bottom for months and it’s been evident for anybody that follows CR, Dr. Housing Bubble, Housing Doom, etc. that his call was absurd and would be grossly wrong.
But he’ll make some kind of excuse once it’s quite clear that he was wrong, or he’ll blame it on the Obama admin or the naysayers (ala the short selling scapegoating), or more likely he’ll just stop talking about it as if it never happened. That’s the most likely scenario just like all his other terrible and damaging calls.
June 17th, 2009 at 2:33 am
Housing prices are a function of affordability. That is, a household can afford a house that is approximately 3 times their annual income. (That’s a maximum price, 30% is much more likely.)
If incomes don’t go up, then how can housing affordability go up? They can’t.
It seems to me that the question of the day is how do we get incomes to go up?
June 17th, 2009 at 2:40 am
transor,
Some really good dialogue could be written for this. Outstanding.
June 17th, 2009 at 3:25 am
Is this news?
Cramer’s not a market soothsayer, he’s entertainment. I know he was once a hedge fund manager but that was years and years ago. There hasn’t been much relevant or insightful in his antics for ages.
The best Cramer can hope for is a follow-on bit on The Daily Show to boost his sagging career as financial court jester.
June 17th, 2009 at 3:57 am
aitrader,
you raise the Signal Q: “Is this news?”
A: No, it’s Prole Feed. Of such a Grade, though, while checkered, one wouldn’t ever find a Checkerboard on it..
Good Going!~ BR.
“Do we even need to mention the absurdity of this?”–above.
serves as a distinct reminder of how hard it is to listen to our ‘inner voice’, while submerged in the cacophonous cackling of our cohort.
http://www.thefreedictionary.com/cacophony
June 17th, 2009 at 6:01 am
He is still around? People still watches his clown show? I would have expected him to resign after the Daily show debacle.
June 17th, 2009 at 6:06 am
lol told you months ago following cramers advice would have you LIVING IN THE STREET!
People have to have jobs to buy houses or anything else unless of course they were born rich and the jobs thing not looking too good.
Then there is all the spending and well obama 08 – depression 09
http://www.realclearmarkets.com/articles/2009/06/world_war_ii_did_not_end_the_g.html
June 17th, 2009 at 6:52 am
I was wondering how Cramer was going to deal with this as his June 30 “bottom” date was rapidly approaching. Notice how in recent shows his housing bottom countdown calendar has been conveniently hidden behind a board or chart. Last night it was highly visible — front and center. He simply took advantage of yesterday’s data to get himself out of a no win situation.
June 17th, 2009 at 7:14 am
[...] Kudlow called housing bottom in 2005 Jump to Comments His partner agreed back then and revises the bottom to 2009: Cramer Calls A Housing Bottom (Yet Again) [...]
June 17th, 2009 at 8:47 am
[...] The Big Picture details precisely why Cramer is just babbling nonsensically. [...]
June 17th, 2009 at 9:18 am
[...] | Posted by Chill on 17 Jun 2009 at 09:18 am | Don’t trust anyone calling a housing bottom. [...]
June 17th, 2009 at 9:31 am
How can stocks be at “generational lows” when Cramer is still on the air? There are obviously people left to be sucked in. When his show is cancelled I might consider picking up some stocks.
June 17th, 2009 at 9:34 am
Kudlow would never leave the confines of his cocoon an CNBC.
Stewart would skewer him like a schiskaboob.
At least Cramer has guts, little rational judgment, but guts.
Kudlow is simply a bombastic shill living off his past association with Conservative elitists.
June 17th, 2009 at 9:35 am
Cramer wouldn’t know a bottom if it sat on his face.
June 17th, 2009 at 9:44 am
Will be bringing to market ‘The Cramer Shirt’…. On sale now!
June 17th, 2009 at 9:55 am
Could be a bottom.
…That doesn’t mean it goes UP from here though. IMO at best, it stays flat as a pancake.
@OnlineBrokerReview: Your comment = WIN.
Just like ‘The bottom is in when people quit calling bottoms’, the bottom will be in when Cramer is off the air and CNBC (assuming it stays on the air) replaces it with a show on bonds, or small business management, or whatever…
June 17th, 2009 at 10:33 am
Only monkeys pick [their] bottoms
http://economicedge.blogspot.com/2009/05/hugh-hendry-on-latest-rally.html
June 17th, 2009 at 11:16 am
[...] Cramer calls a housing bottom (yet again) – Jim Cramer says the bottom of the housing market is here, Barry Ritholtz disagrees. The problem [...]
June 17th, 2009 at 11:23 am
Seriously. Those who take umbrage at CNBC’s Jim Cramer’s blusterous blundering prognostications miss the point of Cramer and his role on Mad Money. Credibility and Jim Cramer go in the same sentence only insofar as Jim needs to be true to his persona; he doesn’t need to be right to retain a rabid TV following. http://www.housingcrisis.com/uncategorized/bottom-liners/
June 17th, 2009 at 12:36 pm
Confucious Say: Picking bottom give you stinky finger.
June 17th, 2009 at 1:23 pm
I guess he is basing his bottom call on former bubble areas where houses are selling for less than they were before the bubble started. Take parts of SoCal for instance (http://www.latimes.com/business/la-fi-cheaphomes10-2009jun10,0,4802553.story) where homes are selling at 1989 prices (yes, nineteen eighty-nine!!). Other areas, most notably the northeast, still have a ways to go.
June 17th, 2009 at 2:05 pm
But …. But
Mortgage Application Volume Falls 16% . . . . . .
Why aren’t people listening to Cramer? He SAID we were at the bottom, Mortgage Applciations are supposed to be going UP!!!
June 17th, 2009 at 2:33 pm
BR, Why do you even report on anything this loon has to say. IMO anyone that listens to this guy has got to be nuts!!
June 17th, 2009 at 3:46 pm
[...] housing collapse decelerate, but not stop falling. Price reductions have not ended,” Ritholtz writes on his [...]
June 17th, 2009 at 3:54 pm
A TV views is born every minute and it takes CNBC and Jim Cramer to seperate him from his money.
June 18th, 2009 at 4:15 pm
[...] Cramer says it has, you know it hasn’t. The trouble with Jim Cramer and most of the media reporting on housing and the economy is that [...]
June 20th, 2009 at 11:35 am
Cramer and Kudlow have NO Clue what is going on in the real world. We are a small business with 8.5M of homes that haven’t moved in two years… NOBODY is buying. The only offers have been less than 50 cents on the dollar. I can’t get the banks to foreclose. I can’t even get Regions to take a short sale of .75 on the dollar…. I told them to foreclose because then they can get .50 cents… (at this point I’m toast…) The only home building going on in our market is armageddeon/inflation fear plays… All of our subcontractors, suppliers, and vendors are going out of business. Almost everyone I know is underwater on their home and couldn’ t move if they wanted to… Banks are sitting on so much real estate it’s scary…. I saw Kudlows show yesterday and was LOL… He’s a joke (and interrupts incessantly…)