Cramer Predicts âMass Panicâ In Markets, âShockerâ GDP Figure
CNBC host predicts gross domestic product to shrink to an alarming 0.5 per cent
Paul Joseph Watson
Friday, August 27, 2010
CNBCâs Jim Cramer is predicting that a shockingly low GDP figure today will create âmass panicâ in the stock markets today, forecasting that gross domestic product will slip to 0.5 per cent, a figure that will all but guarantee the United States is heading for a double dip recession.
Most economic analysts expect a drastic downgrade of GDP figures for the second quarter from 2.4pc to around 1.4pc, but Cramerâs forecast of a mere 0.5pc would send chills through the market and stocks would undoubtedly plummet in a similar fashion to their May 6 âflash crashâ where the Dow experienced a sudden drop of almost 1,000 points.
âLook, Iâm going to give you my forecast right now â I think weâre going to get 0.5 percent GDP, OK?â Cramer said. âBut, letâs say we get 0.5 percent GDP. Everyoneâs going to say itâs horrible. Weâre going to go track down economists, Nobel winners who think itâs a double dip. And itâll be like shocker â 0.5 percent. And Iâm telling you itâs going to be 0.5 percent. Itâs like the housing number. On my show I said itâs going to be declined 50 percent. We get 30 percent. It was like shocker. Whoever is making these estimates is just so wrong because you know, you piece these pieces together on a daily basis like I do and come up with something between zero and 1 percent growth. So when it comes out as 0.5 percent â other people are â I donât know who those people are. I donât know who theyâre listening to or talking to. But itâs very clear that weâre going to have no growth. Why is that shocking?â
The Dow Jones Industrial Average closed below 10,000 yesterday as fears that lingering unemployment and the potential for a fresh round of quantitative easing by the Federal Reserve will signal that the so-called ârecoveryâ has been nothing but hot air.
The host of âMad Moneyâ did not mince words, predicting a âmass panicâ in the markets on the back of a terrible GDP revision.
âTomorrow Iâm predicting mass panic tomorrow morning,â Cramer said. â[M]ass panic, market looking down 15 ticks. It will be that way because it will be like, âOh, my.â And how can it be âOh, my?â Weâre on a national TV show right now, OK? Weâre watched by everybody. Iâm telling you itâs going to be 0.5. How when it comes out and 0.5 [percent] is that shocking to people? Are you not watching? What are you watching? ESPN? Are they talking about 0.8 percent on ESPN? Maybe thatâs it. Maybe on the YES Channel theyâre using 2 percent. I donât know what theyâre watching.â
Some will undoubtedly accuse Cramer of trying to manipulate the market by spooking traders into dumping stocks in violation of SEC rules. However, futures for today are up and it remains to be seen whether Cramerâs 0.5pc GDP forecast is wildly off base or chillingly accurate.
We wonât have to wait long to find out. GDP figures are likely to be announced just before 10am EST this morning. The outcome will go a long way to defining exactly how wrong the happy-clappy ârecoveryâ crowd were all along.