Jim Cramer: American consumers are still afraid

“Has America gotten frugal? Jim Cramer asked on Mad Money Wednesday,” Scott Rutt reports for TheStreet. “Cramer said it appears Americans now have changed since the Great Recession of 2008, just as our grandparents did after the Great Depression.”

“Higher inflation numbers have always been met with rising interest rates, Cramer said. Yet, after today’s red-hot inflation number was released, interest rates actually fell to their lowest levels since the fall of 2013,” Rutt reports. “How can that be?”

“Cramer said it appears the historical linkages have been broken post-2008 because our behavior has changed. The American consumer is still afraid. Borrowing remains low, home buying is down, couples are having fewer children, children are living with their parents longer — all signs the nation has simply gotten more frugal,” Rutt reports. “Cramer said investors need to use this artificial weakness to take advantage of these discounts in the markets. Eventually, these discounts will begin to dissipate.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

21 Comments

  1. “Has America gotten frugal?”

    No, just broke. Wall street is terrified of saying people are broke because of the recession, lost wages, lost industries and jobs with low wages that replaced their old jobs. To do so will only show illustrate their lies.

    1. It ain’t broke. It has changed. Have fewer kids means markets shrink. Markets shrink means lost industries. Lost industries means lost wages.

      The other thing that has changed (not broke) is automation. Raise the minimum wage makes it easier to justify spending the capital to replace the now more expensive worker. What is left is jobs for clerks. That is, until we go paperless. Then, no more clerks.

      It’s not broke, just changing.

      Oh yea, one more thing… the influx of women in the workplace. More people available for jobs means less jobs for everyone. It ain’t broke, just unintended consequences. Change is always in the wind. Get use to it.

      1. Dude, people are clearly broke. They need money and aren’t finding job. You can’t really make 20 million broke people disappear just by covering your eyes.

        1. The fact that a majority of Americans live paycheck-to-paycheck and a good percentage of those left don’t have enough savings to pay their bills for 6 months is revealing. I don’t feel the list bit sorry for anyone who through their own incompetence are suffering because they put the purchase of an iPhone or iPad before the welfare of their family.

        1. Female labor force participation has actually dropped 4 percentage points since the recession began in 2008.

          People are broke, even the ones who have jobs. Wages have not kept up with inflation, which means that the people with jobs are taking home less disposable income. This while output per worker keeps increasing.

          Also, wages as a % of GDP has been dropping since the 1970s, while corporate profits have increased. Companies have been paying workers less for more work, and keeping the difference.

          This is unsustainable, and the system will implode at some point when there are not enough consumers to buy the products these companies make.

          Henry Ford was as frugal as they come, but he understood that if he paid his workers a good wage they would become customers. He paid DOUBLE the prevailing wage for his factory workers. Today a CEO is a hero if he figures out how to pay workers half what they should be paid.

        2. I did not say anything about sudden. Just one of the changes that make things look “broke”.

          However, looks like I misunderstood the meaning of “broke” by bjr001 (LOL). Sorry. maybe “poorer” would have been a better word to help a dumb-dumb like me.

          With regards to Dafaq, yep, jobs are hard to find. Tell me about it. I just explained it above. It’s the new normal. Eyes Wide Opened here. And I is saving my money. Member of the frugal class.

          So, here’s a thought. All those babies would have added to the economy if they weren’t aborted. ‘nother unintended consequence.

          1. Way off topic there. Additional population does not benefit “the economy”. All of the major problems of the planet stem from overpopulation. Adding more people to the planet only oversupplies the already oversupplied labor force. And that is assuming those new babies are taught the ethics and morality that includes the honor of working. Many of America’s youth are not brought up with the instruction to work hard, they just think that their video gaming is “experience”. Then they wonder why it’s so hard to get a job. Wages are lower than ever because of oversupply of labor, but it also doesn’t help you retain a job when times are bad if you spend all your time on your cell phone and Facebook and video games. You need to be a good worker to retain your job. Many Americans forgot this a long time ago — then they turn around and complain about immigrants wanting to work hard while their fat lazy kids are too proud to work a physically demanding entry-level job. Don’t have kids if you are just going to raise them to be parasites on society.

  2. Cramer also said AAPL should buy HAR….. Harmon Industries is a much better fit for apple. Top of the line sound systems and the leader in auto infotainment.

  3. Just closed on the father-in-laws house last Friday. It was on the market for 48 hours before it sold (for $5000 more than asking price) with multiple offers. Not all areas of the USA are in the same circumstance.

  4. How does the Cramer stock manipulation trick work again? You let his blabbering artificially raise or lower stock prices, then you short or buy a week lower expecting that change to reverse, right?

  5. From my point of view:

    I see people wisely avoiding over-spending. I see people avoiding going into debt. I see avoidance of credit card debt.

    Debt these days is part of the creeping Neo-Feudalism where companies turn us into their indentured servants. We watched the parasitic drawing in of people who couldn’t possibly pay for the mortgages they signed, all part of ruining people’s lives for the sake of a quick buck by way or selling debt.

    Thus, people literally have less money, depending upon their real assets instead of debt. That’s entirely logical and I hope it stays that way. The lenders brought it on themselves by parasitizing, but abusing their customers.

  6. As they should be, yes be afraid Americans be very fucking afraid. Karma’s coming your way you terroristic warmongering torturers and it’s going to consume you BIG TIME!

  7. Cramer is an apologist for the 1%. Household savings rate is low historically. If they aren’t buying and they aren’t saving, it means they don’t have any money.

  8. Talk about out of touch with reality! I receive a 1.5% raise annually (based partly on merit). Meanwhile inflation climbs at a rate equal to or greater than my raise. This means I actually earn less year over year because the cost of living is outpacing my income.

    With housing way over inflated by nearly 50% or more depending on your locality who can afford to move out on their own before being financially set? One of my children moved back home and frankly I don’t see many new buyers will be able to buy real estate for at least another 10 years.

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