Welcome Aboard Jim Cramer (& Rick Santelli)

In our article on August 2, 2008 – “Jim Cramer on Ben Bernanke – Fair in August 2007 and Unfair in August 2008”, we asked for a smackdown between CNBC’s Rick Santelli and Jim Cramer. (http://www.cinemarasik.com/2008/08/01/jim-cramer-on-ben-bernanke—fair-in-august-2007-and-unfair-in-august-2008.aspx).

We withdraw this request.  Both Jim Cramer and Rick Santelli came together on Friday, September 5, 2008 and suggested that the next action of the Bernanke Federal Reserve would be to cut interest rates. How can you have a smackdown when both contestants agree?

Both Jim Cramer and Rick Santelli have now joined our views about the necessity of further rate cuts. These views were articulated in our article on August 2. In that article, we showed that large momentum-oriented investors (Quant Funds, Global Macro Hedge Funds), whom we termed Mo-Force (for the momentum driven force they can unleash in the markets) had bought commodities, gold and sold the US dollar every time the Fed cut interest rates.

In that article, we expressed our belief that Mo-Force had started getting out of such trades in July 2008 and that these investors might begin climbing on the DEFLATION bandwagon. We suggested watching the action in US Treasuries for confirmation of such a signal.

Then we wrote “If and when Mo-Force starts chanting the deflation mantra, then Bernanke will have the force behind him to cut interest rates again”.

Take a look at the chart of TLT, the ETF for long term US Treasuries, and judge for yourself whether Mo-Force is getting behind US Treasuries.

                                                      (chart courtesy of www.bigcharts.com)

We also said that “if Bernanke does not cut interest rates further, we would make an impassioned and strident plea to Jim Cramer to do his “rant” again, this time more explicitly and more loudly”.

Well! You don’t have to ask Jim Cramer to do the sensible thing. He tends to do the right thing himself.

On Friday, September 5, Jim Cramer made his first request to Ben Bernanke to cut interest rates. This was a sensible request delivered in a soft (well, soft for Jim) manner. We all know what could come next if the Fed drags it’s feet for too long.

Watch Jim Cramer make his case for a rate cut in his opening segment on his “Mad Money” show on Friday, September 5.

Jim complains (just like we did on August 23) that no one on CNBC is talking about cutting interest rates (see our article on August 23 – “Are CNBC Anchors on a Mission Against US Treasuries – A Viewer’s Perspectives”www.cinemarasik.com/2008/08/19/are-cnbc-anchors-on-a-mission-against-us-treasuries–a-viewers-perpsectives.aspx).

That is no body on CNBC except Rick Santelli, who began gently broaching this possibility on the morning of September 5.

That is why we say “Welcome Aboard Jim Cramer (& Rick Santelli)”.

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