 |
 |
 |
 |
 |
 |
 |
|
|
|
|
|
|
|
|
● |
|
|
 |
| |
| |
 |
| |
|
| |
Thursday, 03/20/08
Posted 03/23/08, 11:47
pm ET |
(Scroll down to see Jim's
comments below) |
|
| |
| |
|
Today's date:
Thursday, 03/20/08 |
|
| |
Dow Jones: |
12,361 |
+
261 |
| |
NASDAQ: |
|
2,258 |
+ 48 |
| |
S&P 500: |
|
1,329 |
+ 31 |
| |
|
| |
|
| |
|
Final Segment 1
Title: |
'Bear Raid Siren' |
|
. . . .
. |
|
Featured Stock(s): |
General comments opposing
bear raids.
No specific stock picks.
See Closing Segment 2,
below...
|
|
|
After this segment, you
can see Jim's
Sudden:Death picks
here... |
JJC: All
right, we've got to have a
talk... some serious stuff
here... it's going to
include some
recommendations here of
something I want you to do
in Washington... I want
you to do some
letter-writing...
It's another travesty...
. . . .
.
The
bear raid on
Bear Stearns (BSC)...
the raid that's the talk
of the Street... could
never have happened before
July 6th of last year...
Since then, we've had
countless bear raids on
your stocks...
They've been driven by
hedge funds, who short
these stocks
aggressively... bear raids
that have probably lost
you millions and millions
of dollars... and will
keep losing you a lot of
money.
None of that would have
been possible before July
6th... Why?...
The reason is a little
arcane, but it's
incredibly important, if
you want to understand why
this market has been so
brutal, so vicious...
and what can be done to
put a stop to the endless
bear raids... people
driving stocks down that
you own...
They are now putting even
high-quality stocks in
danger of being pounded
into dust, with nothing
more than a rumor here...
a rumor there...
making fortunes for people
betting against you...
and robbing you blind...
Now, you have understand
that this stuff used to be
impossible... you couldn't
do it. See, there
was a rule put in place in
the 1930s...
It was called
"the uptick rule"...
That slowed things down,
made the system more
stable... It
said you couldn't bang
down a stock - you
couldn't short a stock -
unless there were buyers
out there, willing to pay
more than the last
price... It was
known as an "uptick"...
If the last price was an
uptick from the previous
one, you could then sell
it short. They
pretty much had to take
you, okay?...
You see, the stocks had to
move a little higher,
before you were allowed to
bang them down. For
80 years, that's the way
it was, okay?...
Ever since the rule was
implemented to prevent the
great crash of 1929 - and
the aftermath... endless
knock-downs of stocks -
from happening all over
again...
It kept people who were
short stocks from creating
their own declines...
by waiting until there
were buyers first, before
they could start the
process...
. . . .
.
Then, on July 6th of 2007,
the
SEC decided, in its
some sort of bizarre and
infinite wisdom, to pass a
little-noticed Rule 201.
That got rid of this whole
protection for you.
That got rid of the uptick
rule, which was meant to
make it so that you would
have a level playing
field... and it gave
the short sellers the
upper hand to rip your
lungs out...
The academics who
supported the rule change
- who said you had to get
rid of the uptick (rule) -
they knew exactly what
they were talking about
too right?... even
though they've never
traded for a day in their
life... and my worst
instincts tell me that
these people were utterly
clueless to the damage
this would cause to you
and your investments.
They went along with it
anyway...
They tested it out during
a totally positive period,
where it made no sense to
raid down stocks at all...
They didn't test it in a
1930s-like period... when
the market was a heck of a
lot like this one...
You don't change a rule...
you don't test a rule...
in a bull market, that
enables people to short.
You test it in a bear
market, like this one.
And now we've had the big
test, and it's failed
miserably.
Believe me, if they hadn't
suspended the uptick
rule... had they done the
study this year... the SEC
would never had made this
choice.
Now, in its commentary,
the SEC told us, "sharp
declines, such as those
induced by bear raids, are
highly unlikely to occur
in today's markets, which
are characterized by much
smaller spreads, higher
liquidity, and greater
transparency, than when
the rule was adopted,
almost 70 years ago."
I'm sorry... I've
got to suspend any
statesman-like demeanor at
this point...
These guys are total
morons about the stock
market... they just don't
know. This is
exactly what happened when
they suspended the uptick
rule. And, if they
couldn't see it coming,
then we do need some new
people at the SEC...
The smaller spreads didn't
matter at all... The
higher liquidity?
Well that was because the
brokers used to have a lot
of money to lend to make
orderly markets...
Not anymore... that's
vanished. The SEC
thought it would last
forever... that's gone.
The SEC went on to say,
"High levels of regulatory
surveillance will reduce
the risk of undetected
manipulation."
Again, that was
outrageously wrong.
The regulators are working
in total retrospect.
The rates do the damage...
they destroy the
confidence... the
stock gets destroyed...
the self-fulfilling nature
of the declines gets
reinforced as investors
say, it must be going out
of business... really
terrible... and they cause
a run on the bank... they
take their deposits
away...
That's what happened in
the
Bear Stearns (BSC)
raid, as people took their
deposits away.
That's what happened in
the
Lehman
(LEH)
raid, on Friday...
people took their deposits
away... That's what
happened in the
Merrill (MER)
raid...
All these were allowed to
happen, because of this
change in the law by the
SEC. They never
would have happened...
By the time the regulators
get involved, it's too
late for you. And,
because people are more
fearful than greedy on a
decline, nobody wants to
get in front of the
train...
A $10 billion hedge fund
selling short 500,000
shares simultaneously can
take down any of your
stocks... and you,
and the companies
themselves, are helpless
in the face of this
ridiculous rule change...
I bet you have lost tens
of billions of dollars
because of what the SEC
did...
The SEC - the guys who are
supposed to regulate and
stabilize this market -
had no idea what they were
spawning when they got rid
of this rule... a rule
that turns short sellers
into bad guys of the most
nefarious sort...
They're not just betting
against stocks anymore...
Now they're raiding those
stocks, driving them lower
and lower, and hurting
you, and sometimes great
companies, in order to
make themselves a quick
buck...
The uptick rule was a
brilliant creation... it
eliminated savagery...
Its elimination makes no
sense... and we will
not have peace in the
markets until it's
restored.
. . . .
.
The Bottom Line!:
Here's the bottom line,
okay... listen to me... I
need you to write
congress... I need you to
write the SEC...
Tell them you're tired of
losing money to bear
raids... Tell them
that you are sick of
losing money to short
sellers who destroy your
stocks and your nest
egg... just like they did
in the Great Depression...
and I will do everything I
can on my end to help...
This is the beginning of
my campaign to get this
law reinstated, so that
you will once again be
protected from bear
raids...
. . . .
.
| |
|
| |
|
■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
|
| |
|
|
Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
|

|
na |
na |
na |
General comments opposing bear
raids.
No specific stock picks.
|
|
|
|
|
|
|
|
|
 |
 |
|
|
|
|
|
|
|
|
|
 |
|
See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
|
|
 |
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
|
|
|
We need your help!
If you find our service valuable, your
donation is critically helpful to support
our operating costs and is
MUCH appreciated!
(click below to donate) |
We are serving thousands
of
new visitors every day and our costs are
growing as well. Thank you for your
support & generosity!
|
|
|
|
|
| |
| |
|
Final Segment
2 Title: |
'Mad Mail' |
|
. . . .
. |
|
Featured
Stock(s): |
See specific stocks
below... |
|
. . . .
.
| |
|
| |
|
■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
|
| |
|
|
Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
|
 |
CGMFX |
45.72 |
na |
'Mad Mail'
General question
about mutual
funds, and
recommending CGM Focus
(CGMFX)
Q:
I am spooked...
I'm two-thirds
in mutual funds
and one-third in
cash. The
market looks
good today.
Will this keep
going? Is
it time to come
back?
Should I
dollar-cost
average into all
my mutual funds,
so I get my
confidence
back?...
Jim:
I want you to be
in
Ken Heebner's fund... Go get
Jim Cramer's
Stay Mad For Life
(which profiles
and recommends
several mutual
funds and rates
fund mangers)...
and I want you
to put some
money in it
(i.e., Ken
Heebner's CGM
Focus Fund)
Monday morning.
It's all about
Heebner.
He's your guy.
It's all in the
book...
|
|

|
FWLT* |
54.29 |
na |
'Mad Mail'
Foster Wheeler (FWLT*)
Q:
My question is
about FWLT*... I
did
my homework, the balance sheet looks
good... they are
sitting on a
nice pile of
cash, and they
just acquired
Biokinetics, yet
it has been in a
serious house of
pain. My
instinct says
keep buying on
the downside and
reap the rewards
within 6-9
months, but I
would love to
hear your
outlook on
this...
Jim:
I did the same
thing as you...
I bought some
for
my charitable trust yesterday...
You've got to go
buy it right
here. It
is now at only
at $7 billion...
The backlog's
much bigger.
I totally agree
with you.
This stock's
almost down
50%...
FWLT* is my
favorite, and I
think you buy
it. And,
if it goes to
$40, I think you
put 20% of your
capital into
this darn
th | | | | | |