CNBC host predicts gross domestic product to shrink to an alarming 0.5 per cent
Paul Joseph Watson
Friday, August 27, 2010
UPDATE: Cramer’s 0.5pc GDP forecast was way off the mark. GDP has been revised down to 1.6pc, but this still outperformed most economists’ expectations. How did Cramer get it so wrong?
CNBC’s Jim Cramer is predicting that a shockingly low GDP figure today will create “mass panic” 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 Cramer’s 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 “flash crash” where the Dow experienced a sudden drop of almost 1,000 points.
“Look, I’m going to give you my forecast right now – I think we’re going to get 0.5 percent GDP, OK?” Cramer said. “But, let’s say we get 0.5 percent GDP. Everyone’s going to say it’s horrible. We’re going to go track down economists, Nobel winners who think it’s a double dip. And it’ll be like shocker – 0.5 percent. And I’m telling you it’s going to be 0.5 percent. It’s like the housing number. On my show I said it’s 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 – other people are – I don’t know who those people are. I don’t know who they’re listening to or talking to. But it’s very clear that we’re going to have no growth. Why is that shocking?”
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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 “recovery” has been nothing but hot air.
The host of “Mad Money” did not mince words, predicting a “mass panic” in the markets on the back of a terrible GDP revision.
“Tomorrow I’m predicting mass panic tomorrow morning,” Cramer said. “[M]ass panic, market looking down 15 ticks. It will be that way because it will be like, ‘Oh, my.’ And how can it be ‘Oh, my?’ We’re on a national TV show right now, OK? We’re watched by everybody. I’m telling you it’s 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 that’s it. Maybe on the YES Channel they’re using 2 percent. I don’t know what they’re watching.”
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 Cramer’s 0.5pc GDP forecast is wildly off base or chillingly accurate.
We won’t 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 “recovery” crowd were all along.
Watch the clip below.
Paul Joseph Watson is the editor and writer for Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also an occasional host for The Alex Jones Show. Watson has been interviewed by many publications and radio shows, including Vanity Fair and Coast to Coast AM, America’s most listened to late night talk show.
This article was posted: Friday, August 27, 2010 at 4:39 am