Business & Media Institute
June 30, 2010
Today’s plunge in the U.S. financial markets is a cause of concern for a lot of people – but according to Rep. Paul Kanjorski, D-Pa., we haven’t seen anything yet if congressional Democrats don’t get their way.
Kanjorski was asked if by CNBC’s “Power Lunch” co-host Tyler Mathisen if financial regulation relied too much on regulators themselves and not the power of law, which Congress has the authority to enact. Kanjorski said he would have preferred a tougher bill. However, call it political expediency, especially as financial regulation legislation has an uncertain fate, but Kanjorski warned if Congress didn’t pass financial regulation – the Dow would drop 1,000-2,000 points.
“I would have had preferred to have more rules, like the Volcker rule or like my amendment – the ‘too big to fail’ rule embedded in the law so it was very clear and it was mandatory,” Kanjorski said on the June 29 broadcast of “Power Lunch.” “That was not accomplishable politically. We didn’t get any help to pass this bill from the Republican side, either in the House or in the Senate, and it’s interesting that they should complain about it. You know, I wish every one of them would ask the question and also the industry and media, what happens in this country if this bill fails? Do you think 236 points down on the Dow is surprising? Check 1,000 or 2,000 points if we fail to change the ways that caused this problem.”
That drew the ire of CNBC “Mad Money” host Jim Cramer. In his “Stop Trading” segment during the June 29 broadcast of “Street Signs,” Cramer blasted Kanjorski and said Congress was the problem.
“You know, they are the problem,” Cramer said. “And we all know it, right? It’s like let’s not even outthink it. I love our bureaucrat congressmen in Washington, but they’re the problem. And I don’t want to be just Mr. Rick Santelli here, but give me a break.”
Cramer noted the timing – on the eve of a financial regulation bill vote and asked why he was waiting until now to tell us.
“I mean, really – so he’s telling us about the 2,000 points? Now he’s telling us?” Cramer continued. “I mean, like other than a couple of congressmen and senators.”
But according to Cramer, things are much more dire than the Washington, D.C. political playbook. He explained there was a real problem with the mentality in the federal government – to demonize profits.
“What is the 10-year telling us?” Cramer continued. “We’re done. It’s 1934. I’ve been saying over and over on the show – the market’s overvalued, the market’s overvalued. Just try to buy a yield. It’s because, you know – we’ve had it. Washington has decided to eviscerate profits. No one wants to say this because what happens when you say it, is you got a bullseye on your back and I don’t even feel like saying it because I already have a ton of them. But you know it really is – I mean to like listen to Congress tell us about what causes a 2,000-point decline and then just accept it and say, ‘Yeah, that’s interesting.’ I’m not playing that game. I’m too old.”
Cramer said the problem was very complicated with what he said was a deflationary phenomenon. He explained there were very few positives with the S&P 500 index to point at what he deemed “gloom-busters.”
“We have radical deflation in this country,” Cramer said. “I mean, that’s what it is. People are maybe working, earning money off the books. I’m doing a series on the show. I’m trying to find companies that are gloom-busters. I gave combed most of the S&P 500, some of the S&P 600, you know the next level. I’ve got about four or five companies that say things are good. I mean, this is a remarkable time in the American economy. This market deserves to go down. Now I know a lot of people will say, ‘Wait a second, it just rallied from 270.’ We’ve all played that game. We know what happens – the ultra-funds come in in the last half hour, they rebalance – you go down 500 in the last minute. Maybe it’s our fault. It’s our fault because of TARP or … whatever.”
This article was posted: Wednesday, June 30, 2010 at 3:34 am