Cramer Defends His Citi Call, Says He "Has No Idea Really How Citi Is Doing"

Tyler Durden's picture

Did You Make Money? Then It Was a Good Deal

By Jim Cramer
RealMoney Columnist
12/18/2009 9:30 AM EST

The Citigroup (C) deal was a good deal. It just wasn't good for the bank.

I was adamant the other day -- some would say rabid -- that you be in on the deal. I specifically did not want you to buy it ahead of the deal, although I am now being ridiculed -- thanks Huffington Post! -- for suggesting that I wanted you in at $3.70.

Look, I have no idea really how Citigroup is doing. That's because they don't know how it is doing. That's the biggest flaw of the joint, of course. But what does matter is that I think that worldwide GDP growth is going to be stronger than people think, and that will cure a lot of the errors of all banks, including Citigroup.

Sometimes, as I say in Getting Back to Even, bad merchandise turns into good merchandise at a price. The idea that so much supply could knock down Citigroup to where the stock traded is of ZERO interest to me. The dilution? It is manageable.

The main thing is the stupidity of the critics who keep calling it a bad deal. A bad deal is one that breaks print, not one that goes up after.

Make judgments only about whether you make or lose money. That's what you can try to control.
The rest is dross ginned up by people who need something to write or talk about.

At the time of publication, Cramer had no positions in the stocks mentioned.

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bugs_'s picture

You home gamers need to do your homework!

take my show away!


Anonymous's picture

From 2000. For the full text, go here:

Editor's Note: James J. Cramer is the keynote speaker at the 6th Annual Internet and Electronic Commerce Conference and Exposition, held today at the Jacob Javits Center in New York City. We're running the full text of that speech here.

You want winners? You want me to put my Cramer Berkowitz hedge fund hat on and just discuss what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now.

OK. Here goes. Write them down -- no handouts here!: 724 Solutions (SVNX Quote), Ariba (ARBA Quote), Digital Island (ISLD Quote), Exodus (EXDS Quote), (INSP Quote), Inktomi (INKT Quote), Mercury Interactive (MERQ Quote), Sonera (SNRA Quote), VeriSign (VRSN Quote) and Veritas Software (VRTS Quote).

We are buying some of every one of these this morning as I give this speech. We buy them every day, particularly if they are down, which, no surprise given what they do, is very rare. And we will keep doing so until this period is over -- and it is very far from ending. Heck, people are just learning these stories on Wall Street, and the more they come to learn, the more they love and own! Most of these companies don't even have earnings per share, so we won't have to be constrained by that methodology for quarters to come.

Bearish News's picture

His rationale was classic. "It's 3 and a half bucks, and I know you like that

Gotta love advanced fundamental analysis.

Divided States of America's picture

At least he admitted one thing, he HAS NO IDEA...which is the basis of most of his calls.

Cognitive Dissonance's picture

"At the time of publication, Cramer had no positions in the stocks mentioned."

It also looks like he's not sampling what he's cooking. Very interesting. I suspect some of his bad calls come from the fact that he has a daily show and he needs to introduce variety into his calls.

People who "love" him love his ferocity and emotion. They assume since he "feels" so strongly about what he's saying, he's someone they should follow. Most people don't know that manic-depressives act this way.

He also feels strongly about his favorite ice cream. Does that mean I should buy that as well? What flavor do you recommend Cramer?

SilverIsKing's picture

If I can speak for Cramer, "Tutti Fruity."

economessed's picture

Rocky road....

Blue moon...



Anonymous's picture

Does his disclaimer on TheStreet include his charitable holdings?

If So, Why the heck WOULDN'T he buy some if he likes it that much, Eh?

DaveyJones's picture

No matter what Cramer said, I'm just glad that my taxpayer preferred shares were converted to common then diluted by a new public offering 

ShankyS's picture

"In on the deal, but not ahead of the deal, but I have no idea really how CITI is doing, and no open positions."

That about sums it up.

P Rankmug's picture

How does Cramer get rewarded for touting this crap?  Are his med prescriptions comped?  Besides the humiliation, what's in it for Cramer?

Comrade de Chaos's picture

a juicy rumor:

Overheard that PIMCO underwrote some CDS contracts and got a bit burned. (some people were let go) And while they are still playing in well calculated poker, the rest of the pack (majority) are outright gambling.

Just imagine getting caught on the other side of interest swaps when the rates suddenly spike. (and once our economy does pick up , eventually  -- -- duck & cover.)

spekulatn's picture

At the time of publication, Cramer had no positions in the stocks mentioned.


Nuff said.

lizzy36's picture

interesting analysis.

so if it is a bad deal for the bank, who is it a good deal for?

the only reason it didn't break print is because the underwriters stood in their @ $3.25 and swallowed more than paris hilton has in her lifetime (so a metric ass ton).

interesting he doesn't mention the giant overhang, being the governments stock. 

stock will probably trade up today on S&P re-balance. 

seriously, if one expects stronger than than consesus GDP prints, isn't there about a million other ways in which one could play that scenario (that are less risky and provide greater upside)?


Anonymous's picture

Say what you will, so far the guy is right. If you bought at $3.15, you are in the money as the stock is currently trading at $3.26. I wouldn't want to hold it over the weekend though.

SteveNYC's picture

"swallowed more than paris hilton has in her lifetime"

You sold me on this line, absolutely brilliant! Coming from a chick too.....

gmak's picture

Good point. Except that Paris doesn't swallow.

Rusty_Shackleford's picture


Yeah, if I remember correctly she's a bit of a puritan.

She rolls with the schoolmarmish "Let me know when, and then you can douse my neck and breasts with your ejaculate."

ZeroPower's picture

so eloquently put that i lold pretty hard

Miles Kendig's picture

seriously, if one expects stronger than than consesus GDP prints, isn't there about a million other ways in which one could play that scenario (that are less risky and provide greater upside)?

Lizzy - You have me in stitches.  The reason Cramer made this selection is the same reason Paris makes hers.  They were both a long way from the door and are the subject of broad publicity.  Perhaps there is far more in common between Paris & Cramer if we just look a little closer. In this I agree fully with your closing observation and suspect that most of those who rely upon Cramer's investing advice ultimately realize that it is Paris who has been choosing their dates.

Anonymous's picture

Rep. Peter DeFazio’s phone rang. On the other end was Rahm Emanuel.

The White House chief of staff last month expressed frustration with DeFazio’s resignation calls for President Barack Obama’s top two economic aides — Treasury Secretary Tim Geithner and White House chief economist Larry Summers — and appealed for cooperation, according to DeFazio.

malusDiaz's picture

Glad to have him as a represenative =)


And Merkly, they both give the Bankers the shaft.

midnitepoet's picture

Cramer's show on CNBC is definitive of CNBC's problem. Hype and Noise replacing Thought and Analysis. What a CrapShow indeed!

Anonymous's picture

This obsession you have with Cramer is getting old. How about we switch to some other irrelevant topic for a day? Please?

StopInvesting's picture

That link goes to his sign up page for subscription. He should be paying us!

etrader's picture

Yet more bread n' butter stuff for the daily show to run with......


cocoablini's picture

These douchebags like Cramer, it's not their money, so who cares?

On the otherhand, Paulson and Associates(not Henry) are long Citi for a reason. What's the reason? TBTF banks are just a profit machine now. They have a revenue filter which allows profits to flow through and losses to divert into the US taxpayer Hoover Dam. Why WOULDN'T you not recommend garbage like Citi when you know full well that even if a 5 year old was running the place it would make profits and no losses?

In the meantime, I'm still waiting for my Goldman Sachs ATM card...

Shameful's picture

So if I act like a wildman and shill for stocks I openly have no idea about I too can have a show on CNBC?  Well hell, where do I sign up? I even have a full head of hair that should put me ahead of Cramer.

Anonymous's picture

Yes ... but you have to constantly repeat the follow-
ing mantras as loudly as possible:

"Bears are Pessimists" ....

"I am an Optimist" ....

"I Believe in the American People"...

"Bernanke and Geithner saved us from Armageddon"...

"Robert Rubin is a genius"...

"Larry Summers is a genius"...

"Hank Paulson is a nice, honest guy, whose priority
is the well-being of the American People"...

"Dick Cheney is not a war mongering financial
terrorist (and neither is his sock-puppet Dubya)"...

"Barack Obama is not bought"...

"Most of those in Congress are not corrupt"...

"Wall Street and D.C. are not in bed together"...

"Mistakes were made, and nobody could have seen it

"The Recession is Over"...

"The worst is behind us"...

"The U.S. has the best and most productive workers
the world has ever known"...

"We care and are mindful of preserving the strength
of the dollar"...

In other words ...
display your willingness
to cut deals with the Devil,
and sell him your soul, and then you get Gov't
backing to take the biggest possible risks with OPM ...
and then (inevitably, even after you've stolen
millions and billions of dollars) you are permitted
to come back whining to Fed and Treasury that you Must
Have a BBBBBailout (if they'll also help you pretend
to be solvent).

If you can follow those simple steps, your Wealth
is Guaranteeeeeeeeeeeeeeeeeeeed!!!!

Anonymous's picture

A lotta time spent writing those quotes.. damn

JR's picture

and well worth it too.  fitting reminders...for these financial times.

Anonymous's picture


in the office of new BAC CEO Brian Moynihan

Moynihan : yes , this is Brian

caller : hello Brian , its Vikram Pandit ....... i just wanted to call to say con------

Moynihan : who the hell are you , Pandit ..... i didn't order Indian food today .

Pandit : huh ? Brian ... this is Vikram Pandit ..... CEO of Citibank

Moynihan : yeah right ..... and i'm the mayor of Dublin Ireland too .......

Pandit : hey asshole , i was calling to congratulate you on your new job but .... < Moynihan puts hand over phone >

( Moynihan calling to his assistant " hey , who is CEO of Citi ? ..... what ?? it really is an indian dude? .... oh crap )

Moynihan : Pandit .... Pandit ... my apologies ......... i had you mixed up with somebody else ...........

Pandit : lemme get this straight ...... BAC just appointed a guy to run biggest bank in USA who has no clue who his competing CEO are ?

Moynihan : easy Vikram ....... i ran consumer banking here ... and with CEO's at banks like revolving doors of late , rather hard to keep track , ya know ......... besides , you sound a bit like Ramesh down at the Tandoori Kitchen and ..... hey , would you like to grab some lunch there one day ?

Pandit : Thanx but i'll take a rain check until you catch up on what major bank CEO should know before offered the job .....

Moynihan : easy Pandit ........ with your lump of turd secondary yesterday swirling in the toilet just over $3 , i wouldn't start lectureing me .

Pandit : uh ... Brian .... speaking of lump of turd secondaries ? at least mine is still above secondary price .... or did you even know you guys sold a trillion shares recently at $15 ....

Moynihan : hey my turbaned one ........ at least i'm gonna get a monster bonus next year and won't have to take Geithner's call like he's my wife .............. and when your stock is down to 25 cents and you need a loan ? go call Dimon pal ......... he'll pick the coins off your eyes in the grave

Pandit : F*** off , buddy ....... with the government behind us , we're bullet proof ......... when CMBS start imploding and your zillion dollar jumbo home loans start doing implosions and Geithner calls to ask what i think , i'll tell him to pull the handle and let the bowl empty with you in it !

...... and so another day in the never ending saga " As The Banks Burn " comes to an end

AnonymousMonetarist's picture

There are 4 shares of Citi for each person on the planet.

Miles Kendig's picture

Citi stock is indeed a case study in how to apply the concept of scarcity for success and profit.

RSDallas's picture

Jim Cramer has been setting himself up for a huge fall for the last 6 months (some would argue forever).  His comment "I have no idea really how Citigroup is doing", I think says a lot about Jims approach to investing.  He probably doesn't know anything about any of the companies he touts, other than what Govt. Sachs may be saying.

Jim is a promoter and that's it (and a good one).  He will have a lot of explaining to do when the house of cards begin to fall again. 

Jim better start reading up on topics such as deflation, inflation, money supply, dollar valuation, trade balances, credit and especially debt and what impact these forces can (and will) have on the stock market, as his viewers will inevitably start asking why he didn't ever mention these.  But he probably "has no idea how the real economy is doing in the United States".

Anonymous's picture

nah, read the disclosure they run before the show

Brett in Manhattan's picture

Did You Make Money? Then It Was a Good Deal

By Jim Cramer
RealMoney Columnist
12/18/2009 9:30 AM EST

The Citigroup (C) deal was a good deal. It just wasn't good for the bank.

I was adamant the other day -- some would say rabid -- that you be in on the deal. I specifically did not want you to buy it ahead of the deal, although I am now being ridiculed -- thanks Huffington Post! -- for suggesting that I wanted you in at $3.70. "


Actually, Jim, you wanted us in at 4. I guess you forgot about this:

From Seeking Alpha:

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday August 6, 2009.

Citigroup (C)

Why would investors want to buy stock of a bank that represents national economic woes, and of which 34% is owned by taxpayers? Cramer thinks Citigroup is not just a buy for the individual investor, but is a buy for America. However, the reasons go beyond patriotism and may involve huge profits. Cramer gave 5 reasons to buy this underdog bank:

1. It is cheap. Very cheap. While some argue that it is not possible to figure out how much Citigroup is actually worth, Cramer thinks the book value is about $4 per share and thinks the stock should sell at 1.5 book value for a $6 price target*.

* Now, he claims he doesn't know how Citiigroup is doing.

 2. On September 10, the government can sell its 34% stake in Citigroup. The government has already made $5 billion on its position, and could have a $20 billion windfall from the sale.

3. Citigroup is the dominant bank in 108 countries. In spite of its domestic woes, Citigroup is still the leader in emerging markets.

4.Citigroup is spinning off bad loans by dividing itself into Citigroup proper and Citigroup Holdings. This leaves the main bank with three profitable businesses; retail banking, global services and investment banking.

5. Solid management. Cramer says the government would be crazy to replace CEOs Vikram Pandit and Ned Kelly.

Cramer called Citigroup "the ultimate call on economic growth worldwide."




ATG's picture

Will JC commit Hari Kiri live on the air for ratings?

GE dumped NBC.

BAC broke.


Can C, GE, HBC and WFC be far behind?

There are no financial earnings anywhere folks if balance

sheets are reconciled and bad loans foreclosed

or marked to market...



AR's picture

What an absolute idiot this guy is. If it wasn't for his wife's money, Cramer would still be living out of the back of his car. No wonder Berkowitz distanced himself from this "moronic mouthpiece." Clearly his Citi call was caused from his lapse in taking his bi-polar medicine.

Cramer states:  Look, I have no idea really how Citigroup is doing. 

Then keep your mouth shut...

Tripps's picture

everyone who bought the secondary is up right now. the government is at break even


once again, you got 10 comments here whereas 7 months ago you had 100


there's a spin everything negative when in fact one of the largest equity offers ever is still in the money


cramer 1- ZH -0

AnonymousMonetarist's picture

The double secret insolvency premium is priced in!

Broker on the phone he got some monkeys for sale.

Can't return your call they haulin him to jail.

Jeff Lebowski's picture

Are you sure about that?

In the tape, he says to buy after hours, tomorrow, any day but the day of the offering.  Closing price on C at the time was $3.69.

Green Sharts's picture

You're stoned again Lebowski.  On the tape he says NOT to buy after hours or the next day, that if you buy anytime other than on the secondary "you're an idiot."