Cramer Says a Default Could Cause a 10% Crash in the Market

[iamwhatiseem]

Thus far, Cramer has been correct. The past few days have seen a sell off in stocks due to this nonsense going on in Washington.

Did you consider the possibility that Cramer and others who have been putting out this fear have influenced the decline themselves?

The fact is, no one really knows what will actually happen if the debt ceiling isn't raised. It's only anyone's guess.

Initially we would see a knee-jerk reaction by Wall-Street...which would be followed by a very quick recovery. The smart guys are selling off right now HOPING that the debt ceiling isn't raised...and then start buying when the fall happens - and make out like bandits a week or so later.
I never made so much money in investments than I did in 2008 - 10. I sold off within days of the crash (I admit some luck here) - and I reinvested back in just after the crash - and withdrew again in early 2010. If you sell now, and the government fails to get a deal this weekend and the market falls 1200 points...that could be a very good thing if you sold out prior to that. WIth the bubble-building attitude of Wall Street - I have faith they will drive up stocks rather quickly after the fall.

 

[Toro]

Thus far, Cramer has been correct. The past few days have seen a sell off in stocks due to this nonsense going on in Washington.

Did you consider the possibility that Cramer and others who have been putting out this fear have influenced the decline themselves?

The fact is, no one really knows what will actually happen if the debt ceiling isn't raised. It's only anyone's guess.

The decline isn't because of guys stating negative perceptions. It's because there ARE negative perceptions. And minor ones at that.

I do agree that nobody has much idea what will happen. But that's a negative because the market doesn't like uncertainty. Most in the market do not believe the US will default.

 

[iamwhatiseem]

Thus far, Cramer has been correct. The past few days have seen a sell off in stocks due to this nonsense going on in Washington.

Did you consider the possibility that Cramer and others who have been putting out this fear have influenced the decline themselves?

The fact is, no one really knows what will actually happen if the debt ceiling isn't raised. It's only anyone's guess.

The decline isn't because of guys stating negative perceptions. It's because there ARE negative perceptions. And minor ones at that.

I do agree that nobody has much idea what will happen. But that's a negative because the market doesn't like uncertainty. Most in the market do not believe the US will default.

That is because most in the market have an I.Q. above 85.
If their is no agreement, and the gov't actually defaults on SS for example - then this President would have committed the single most insidious act in the history of this nation. Anyone who can add knows that a default would be by choice, not necessity.

Having said this...if the gov't once again kicks the can down the road - then a default is not merely likely - it is certain. In fact, the first defaults will be in the next few years. Only way to avoid that is reduce the spending deficit one way or another by $7.5 trillion. There is not one official in Washington who has the guts to do this. Therefore - in the not so distant future - America will default...just not now.

 

[Zander]

Thus far, Cramer has been correct. The past few days have seen a sell off in stocks due to this nonsense going on in Washington.

Did you consider the possibility that Cramer and others who have been putting out this fear have influenced the decline themselves?

The fact is, no one really knows what will actually happen if the debt ceiling isn't raised. It's only anyone's guess.

Think about the issue logically. If we do not raise the debt ceiling - VIOLA!! We create an Instant balanced budget.

Then we return to the same funding levels that we had in 2002- that year the feds spend $2.2 trillion - the same amount we are collecting now. Everybody takes a haircut in their budget, and some departments and programs are eliminated entirely. Our GDP takes a hit for one year, then it starts to rise again. The mood in the country changes, people start "hoping for change" from the failure of Obama's fecklessness.....

Worried about what the people will say or riots in the streets? No big deal! Remember Obama talking about "shared sacrifice" last year? He can just reload that speech into the teleprompter.

 

[Paulie]

Thus far, Cramer has been correct. The past few days have seen a sell off in stocks due to this nonsense going on in Washington.

Did you consider the possibility that Cramer and others who have been putting out this fear have influenced the decline themselves?

The fact is, no one really knows what will actually happen if the debt ceiling isn't raised. It's only anyone's guess.

The decline isn't because of guys stating negative perceptions. It's because there ARE negative perceptions. And minor ones at that.

I do agree that nobody has much idea what will happen. But that's a negative because the market doesn't like uncertainty. Most in the market do not believe the US will default.

I believe very strongly that the media has a lot to do with the way the market moves. Remember back in late 2008 and early 2009 leading up to the March bottom? The market was moving almost solely on daily news. Bank stocks were up and down each day as the media kept changing their mind on what the government was going to do about mark to market, citi and boa nationalization, etc. It was a media clusterfuck.

 

[Toro]

Did you consider the possibility that Cramer and others who have been putting out this fear have influenced the decline themselves?

The fact is, no one really knows what will actually happen if the debt ceiling isn't raised. It's only anyone's guess.

The decline isn't because of guys stating negative perceptions. It's because there ARE negative perceptions. And minor ones at that.

I do agree that nobody has much idea what will happen. But that's a negative because the market doesn't like uncertainty. Most in the market do not believe the US will default.

I believe very strongly that the media has a lot to do with the way the market moves. Remember back in late 2008 and early 2009 leading up to the March bottom? The market was moving almost solely on daily news. Bank stocks were up and down each day as the media kept changing their mind on what the government was going to do about mark to market, citi and boa nationalization, etc. It was a media clusterfuck.

I look at it a bit differently. The media does not operate in a vacuum. They report what is reflective of the market. They may exacerbate the mood but I don't think they create it. The best examples are that the media tends to be excessive when the market is excessive, often reflecting turning points. Thus, media sentiment - like the market in general - is often a good contrarian indicator at highs and lows.

 

[Meister]

Isn't the market reacting to the possibility with it correcting over the last week?
I'm not so sure it's waiting for the news to pull the trigger.

 

[Gallagher]

There was never any real risk od default as the interest and principal payments were always going to be honored. The gov takes in trillions and the least they could or should do is pay the bondholders. It was never an issue and the politicians, especially Obama, played on that irrational fear.