September 24, 2020, 1:03

“Kill your earnings”: Jim Cramer’s surprising take on the coronavirus crisis

“Kill your earnings”: Jim Cramer’s surprising take on the coronavirus crisis

Jim Cramer, famed trader and CNBC host, has a certain place in the American zeitgeist — he’s the embodiment of Wall Street free market thinking, Mr. Mad Money, the guy who slams buttons and honks horns as he recommends stock picks each night on television. During the financial crisis, he was among the highest-profile voices of the investment class, for better and for worse.

But now, the coronavirus crisis has Cramer feeling just like the rest of us: scared.

“I’m never going to tell you I don’t care about the stock market. I’ve cared about it since 1979, when I first got in. But for me, it’s a real sideshow. We’ve got to save these people’s lives,” Cramer said.

I spoke with Cramer for about an hour on an evening in late March about the coronavirus crisis and what it means for the economy, for business, and for everyday Americans. The talk of President Donald Trump reopening the economy early seems outlandish to Cramer, who in 2007 yelled on live television about the Federal Reserve not doing enough to help banks ahead of the financial crisis in a now-legendary “they know nothing” rant.

“You just have to beat the thing. You have to take the hit and beat the thing, because as great as it is to get the economy moving again, you can’t create demand if you’re afraid of getting sick,” Cramer told me. “It doesn’t matter when you say America’s open for business, I think we’re going to be scared to do things.”

This is a more somber version of Cramer than I expected. I worked at TheStreet, the financial publication he founded, for about two years, and my admittedly limited experience of him at the time was that he was very much the guy you see on TV — high-volume, high-velocity, all stocks all the time.

But when thinking about how business should respond to the economic coronavirus crisis, he starts to sound like Bernie Sanders or Elizabeth Warren. “When this thing’s over, I mean, I think everybody who is wealthy has to do something. And if you’re not, then shame on you,” he told me. “Sacrifice. We talk about sacrifice, and it’s like, ‘Hey, I do sacrifice, I pay my taxes.’ Oh, screw that,” he continued, eventually concluding, “Well, you’re a rich idiot.”

Of course, Cramer is still Cramer — throughout our conversation, he dropped in names of big companies and executives at random. Have you seen Cisco’s coronavirus donation? What about the response from Lowe’s? When I brought up Clorox, which he was talking about as a coronavirus stock pick back in January, he said they’re a “sensitive, good company” that won’t come on television and say, “Hey, use us and you won’t die.”

“I think that business has gotten smarter and is no longer like Scrooge McDuck. Even Walmart is paying people more,” Cramer told me. “But remember, I’m positively inclined toward business.”

He mused about the possibility of an antiviral drug discovery sending the market up 10,000 points: “If we beat this thing, it’s going to be unbelievable.”

Even if you’re not a Wall Street watcher, Cramer is a figure in all of this worth paying attention to. He is tapped into powerful networks, and business executives and political leaders regularly call in to his show. He was a big voice during the last economic crisis and could very well be this time around, too. Whether in his studio or his office at 6:30 am, Cramer is generally the loudest, most intense person in the room. And now he’s saying it’s time to listen to someone else.

“Fauci is God to me, so I do whatever he says,” he told me, referring to Dr. Anthony Fauci of the National Institutes of Health.

Cramer’s call to CEOs: “Take the pledge”

Cramer has begun pressuring business leaders and CEOs to promise not to lay off workers for 30 days amid the coronavirus crisis. In a CNBC interview on the morning of April 1, one of his first questions to Citigroup CEO Michael Corbat was whether he would “take the pledge” of no layoffs, noting that “the old Citi would lay off people right now.” The week before, he put the same pressure on the CEO of Starbucks, Kevin Johnson.

It’s unlikely 30 days will be enough — it could potentially be many months before the coronavirus is under control in the US. And whatever promises Cramer manages to extract, businesses are laying off workers in droves across the country. Roughly 10 million Americans have made new jobless claims over the past two weeks alone; during the Great Recession, 8.7 million jobs were lost total. It’s unclear when the economy will recover, or how hard that recovery might be.

But Cramer’s pledge is part of a broader view that it’s time for those who can to sacrifice, including the executives he’s been canoodling with for decades.

“You hear that there are lots of people who own businesses and they’re rich. And they’re not going to take this pledge, a simple pledge. I mean, you have to kill your earnings, okay? You have to kill your earnings. So what? You have to kill your earnings. Big goddamn deal. Kill your earnings,” he said. “I mean, come on, this is like the Great Depression, and you’re worried about hitting your numbers? It’s shameful. Miss your damn numbers. Give the money away.”

Cramer said he isn’t asking for anything he’s not willing to do himself; he owns a bar and restaurant in Brooklyn and he’s taken the 30-day pledge himself not to lay off his employees.

It’s not lost on me that Cramer is sounding a lot more pro-worker these days. When I was at TheStreet, I survived multiple rounds of layoffs that many of my colleagues and friends did not.

Cramer thinks the government could be doing a lot more

Cramer was upbeat about the Coronavirus Aid, Relief, and Economic Security, or CARES, Act, the stimulus package recently signed into law. Clocking in at $2.2 trillion, the bill includes $500 billion for corporations and $377 billion for small businesses.

But he doesn’t think it’s gone far enough.

“The stimulus package will help, but I wish they could spend even more money getting this thing beaten,” Cramer said, checking off a list of items: an antibody blood test, a vaccine, hospital beds, protective equipment, ventilators. “We’re just going to have far more people die than should, and what I really fear is that it just won’t end.”

Like it or not, some of the people in charge listen to Cramer.

When trading temporarily halted in mid-March after stocks plunged, Cramer, a Democrat, said on live TV that the White House contacted him to ask about his ideas on responding to the economic crisis. He’s a longtime friend and former colleague of White House economic adviser Larry Kudlow. (When I mentioned Kudlow’s advice in early March that investors should consider buying the dip, Cramer acknowledged that Kudlow tends to be an “optimist.”)

In the lead-up to and after the stimulus bill’s passage, House Speaker Nancy Pelosi called into Squawk on the Street, the morning show Cramer co-hosts with Carl Quintanilla, Sara Eisen, David Faber, and Rick Santelli. Treasury Secretary Steven Mnuchin has called into the show multiple times in the past few weeks alone. On April 1, Cramer asked him about the $500 billion corporate bailout fund, which Mnuchin will oversee and, despite efforts from Democrats to get some guardrails, has very few strings attached. One of his lines of questioning was about money for the cruise ship industry: Does America really need the cruise ship industry to be strong?

Stock picking in a global pandemic

Cramer said a pivotal moment for his view of the potential implications of coronavirus came on Super Bowl weekend in early February, when he interviewed billionaire hedge funder and Carolina Panthers owner David Tepper. The pair talked about an article in The Lancet forecasting where the virus might be headed and the potential for it to be a “game changer” in the weeks ahead. Cramer talked about it on CNBC the following Monday, February 3. “I’m betting that another shoe will drop on this coronavirus outbreak,” he said at the time.

“But then nothing happened. The market kept quiet. So then suddenly, I’m Jimmy Joker,” he told me. “But I read the stuff and I’m trying to prepare for my family and I didn’t want to be in a position where I’m trying to do one thing on TV, which is to say, ‘Hey, happy days are here again.’ And then in the meantime, I’m trying to plan how we’re going to handle this when it strikes. Not if it strikes, but when it strikes. So I’ve been bearish, trying to make people less exposed to the market.”

To be sure, Cramer is not always right or consistent. Stories come out every so often about his stock picks being off or how his charitable portfolio doesn’t beat the market. Should Americans buy and sell stocks based on what Jim Cramer says? I don’t know. The traditional advice for all Americans is that they shouldn’t be trading individual stocks at all, whether they’re getting tips from Cramer, their stockbroker, or some guy they know at the gym. They should be in low-cost index funds instead of trying to time the market, which is impossible to do.

And the last time this happened, back in 2008, Cramer experienced a public flogging over his predictions around the crisis. Namely, he had a high-profile run-in with Daily Show host Jon Stewart, who held him as an example of financial news malpractice ahead of the financial crash. (He eventually appeared on Stewart’s show to talk it out.) Rival Fox Business News put out ads criticizing his investment calls as well.

“It was my time on the cross, and I look at it very philosophically and say, I did my absolute best,” Cramer said when I asked him about it.

When I pushed as to whether it affected the way he talks about what’s happening now with his audience, he waffled. “Listen, accept me as a commercial enterprise. I do try to entertain, because it’s such a dry topic.”

Jim Cramer, like all of us, would like to feel better

The night I spoke with Cramer, he was in a car back to his home from CNBC’s studios in New Jersey. Despite the pandemic, he still shuttles back and forth and sees only the handful of people who make up his production team. His wife and kids are at the family’s beach house, so when he is home, he’s there alone.

“I want to be more confident than I am, but it’s very hard when I’m washing my hands every 30 seconds,” he told me.

Cramer seemed a little on edge, not because of the stock market’s moves of the day, but on account of one of his daughters, who is overseas teaching in Spain. During the morning’s show, he was trying to get in touch with her because she’d told him she wasn’t feeling well the day before. He tried to FaceTime her before going on air, texted her during a commercial break to call him back. Eventually, she responded, saying she was fine.

“She didn’t know that my whole world was collapsing because she hasn’t called back. She knows me as the guy who goes on and talks about stocks and the devil-may-care guy who’s trying to make money for people,” he said. “But that’s not who we are right now.”

This is a far cry from the ’90s version of Jim Cramer, who in his memoir writes about talking stocks when his mother died and his daughter was born. “I shouldn’t have traded that Alcoa the day my daughter was being born. Regrets. Real regrets,” he said.

The coronavirus crisis has upended all of our lives and plans. Later in our conversation, Cramer delved into the tumultuous times of TheStreet — tussles with the board, whipsaw strategies, pressure from investors. “I hated having a stock attached to my name that I couldn’t do anything about,” he said. The company was sold last year, and he felt like he could finally move on, until this. “The infighting, it just cuts your heart out.”

I interjected to empathize — I left just ahead of another round of layoffs, and I know things were rough.

Cramer cut me off: “Well, you know me. Look, was I the nicest guy? I’m deeply flawed.”

Sourse: vox.com

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