Jim Cramer: I Don’t Think We Will Get A “V” Shaped Recovery or a “Swoosh”

Jim Cramer explains why bank stocks can’t be bought amid virus crisis

Financial stocks look cheap and have big yields, but this group got shelled in Wednesday’s session for a reason, the “Mad Money” host said.

What are the ingredients which Suggest a Financial Crisis?

@RaoulGMI identified the following factors contributing to a crisis, before Coronavirus:

  1. Stocks: Largest Equity Bubble of All Time: (Pension Crisis & Buyback Bubble)
  2. Demographics:
    • Largest Retiree Wave, all wanting to sell stocks and bonds at the same time
    • Millennials are too poor and indebted (make 20% less than parents)
  3. Corporate Credit: Largest Credit Bubble of All Time
    • ($10 Trillion + Off balance Sheet = 75% of GDP)
  4. Student Loan Bubble:
    • $1.6 Trillion
  5. Auto Loan Bubble
    • ($1.2 Trillion)
  6. Indexation Bubble
  7. ETF/Market Structure Bubble
  8. Foreign Borrowings (Dollar Standard Bubble)
  9. Monetary Policy Bubble (The Central Bank Bubble)
  10. EU Banking Crisis
  11. A Trade War:
    • The Trade Wars “shattered” supply chains
  12. Coronavirus
    • Largest Supply & Demand Shocks of all Time

 

Big Picture:

Central Banks have been fighting for the last 20 years:

  • Full Scale Debt Deflation and a Solvency Crisis

Turns into:

  • A loss of confidence in the Dollar Standard and the Entire Financial Architecture

(page 29-30)

Jim Rogers: The Reset has begun: you have no idea what’s coming

trigger coming well we’re gonna we’re
24:50
having we have had a very substantial
24:53
rally governments everywhere have pulled
24:56
out all the stops printing spending
25:00
buying doing everything they can to get
25:03
markets up so yes we are having a rally
25:06
it will probably continue for a while
25:09
remember Michele there’s an election in
November you know that’s only six seven
months away from now so especially in
the u.s. they’re gonna do everything
they can to get reelected is that good
for my kids no is it good for you no
you’re good for me
no but that’s what’s going to happen but
I would suggest to you that the bear
market is not over yet we may even have
one more blow off rally if they do
something really dramatic if the suppose
I found a cure for the viru
s or
something like that we’ll have a blow
off rally blow off top and then the bear
market will resume because this bear
market is not over yet

okay it’s gonna be the worst in my
lifetime Michelle and Michelle oh I’m
older than you so it’s gonna be the
worst in your lifetime too
right now do you think it’s gonna be
comparable to 1929 do you think it’s
gonna be much worse well he could be you
know 1929 was caused because politicians
kept making mistakes one mistake after
another all over the world
so you know
the rest of that story at the moment I
wouldn’t say this will be absurdly worse
than 2008 I doubt if it’ll be worse than
29 but it could be I mean we have a lot
of completely totally incompetent people
around the world in government’s
we
always have but especially now the
Japanese it’s to me it’s in unfathomable
what the Japanese are doing and
Washington it’s unfathomable to me
what’s going on so they could really
bumble this very very badly mr. Trump
and his guys love trade wars they like
war so real war I mean so conceivably
this could get much worse and we could
bungle it
and have a 1929-30 of 30s be
more like it
there it is kind of thing at the moment
I don’t expect it but watch these guys
they’re good at making mistakes these
guys are crazy Korea I mean you look at
some of the things that are German you
now Michelle even their German cities
now that have huge financial products
John when I was a kid there was nothing
27:37
more righteous and virtuous than German
27:41
spending even German cities now have
27:44
problems so this is not just us this is
27:47
a lot of places go into that for us
27:51
please
27:52
what you see globally you know that
27:57
Illinois is bankrupt
27:59
you know the Connecticut’s bank run I’m
28:01
starting with the u.s. you know that
28:03
many cities and states and companies in
28:07
the US have got huge debts America’s the
28:10
largest debtor nation in the world the
28:13
Japanese might even be per capita more
28:17
indebted than we are because they just
28:20
the population is declining the
28:22
population has been declining for ten
28:24
years the debt has been skyrocketing for
28:26
thirty years and they’re just down there
28:29
printing and spending as fast as they
28:31
can
28:32
demands got very very serious problems
28:35
of facing it then you turn to the other
28:38
parts of Asia yes some of them are doing
28:41
better less bad I should say Korea the
28:45
38th parallel is going to open soon when
28:48
that happens
28:49
Korea the Korean Peninsula will be the
28:53
single most exciting place in the world
28:55
for a decade or two China’s doing its
28:59
making mistakes but you know Michelle in
29:01
China they still have interest rates
29:04
interest rates are 2 3 percent which is
29:07
somewhat low but it’s fairly normal the
29:10
Chinese are spending money but they’re
29:12
not spending everything in sight I mean
29:15
I have to say that the Chinese have done
29:17
a less bad job than just about anybody
29:20
in the world I’m startled I’m impressed
29:22
at how well they’re handling this so far
29:26
Russia’s a disaster
29:28
everybody hates Russia but I’ve as I
29:31
said I’m investing in Russia now and
29:34
have been for a while
29:34
it’s hated so much Europe I don’t know
29:40
if the euro will survive all of this I
29:43
own very very few euros going forward I
29:46
don’t want I don’t own much in Europe we
29:51
discussed the u.s. a bit maybe Venezuela
29:54
is a great place to invest we share you
29:58
and I are citizens of the land of the
30:00
free we’re not a we’re not free to
30:03
invest in Venezuela we’re not free to
30:06
invest in Korea we’re not North Korea
30:08
we’re not free to invest in Iran or some
30:11
places around the world that are great
30:13
investments but because we’re citizens
30:15
of the land of the free we cannot invest
30:18
they’re very depressed extremely
30:26
depressed has been for a while so
30:28
agriculture continues to be a great
30:30
place to look you know how to drive a
30:32
tractor Michelle not at the moment
30:37
not many tractors in San Diego are they
30:40
do grow up in San Diego no Indiana
30:45
yeah Indiana tractors in India I know my
30:50
grandpa
30:52
attractor I never learned yet in the
30:58
next 20 years that’s what I want to talk
31:01
to you about too we touched on this in
31:03
our last interview the fact that the
31:06
things that are going to be most
31:07
valuable in bear markets are the thing
31:11
the tangible items you know tractors
31:16
agriculture things like that food so you
31:21
know what I want to mention something to
31:23
you and I want to get your thoughts on
31:24
this there was a news article that came
31:27
out that Vermont had said that they were
31:30
stopping selling seeds I mean like fruit
31:34
seeds food seeds because it wasn’t
31:36
considered to be a necessary item at
31:39
this time don’t you find that odd I keep
31:45
telling you politicians keep making
31:48
mistakes no I think most rational people
31:50
would say what telling see he is
31:54
certainly essential vital to the world
31:58
economy in 2020 I told you these guys
32:01
really mess things up Michelle we could
32:05
have a horrible horrible head time ahead
32:07
of us and this is one of the perfect
32:09
examples of the kind of things that
32:11
these people do you know Michelle the
32:14
studies show that the people who are
32:16
good at being politicians in America
32:19
anyway are the people who were good at
32:22
playground in elementary school in
32:25
primary school they were great at
32:28
playground put as far as knowing
32:31
anything or learning anything but you
32:34
heard seeds are not essential Michelle
32:37
it was this the most absurd thing I’ve
32:40
ever heard of especially right now when
32:42
they’re talking about possibility of
32:43
food shortages here and there you know
32:45
it was a small article but I just it
32:48
caught my eye and I just wanted to get
32:50
your impression don’t give up with you
32:53
know they’re gonna be more of certain
32:54
things coming in the next year will be
32:57
many more although not just in America
32:59
you know all over the world
33:01
it’d be very strange that you should be
33:04
worried
33:06
expound on that just a little bit for us
33:09
please
33:10
well you know in the in the let’s go
33:13
back to 29 and since you brought it up
33:15
before in 29 American Congress was
33:18
considering raising tariffs and starting
33:22
a trade war 2000 of the best of the most
33:27
extraordinary economists in America took
33:30
about ads and said do not do this it
33:33
will be very bad for the American
33:35
economy and for the world economy
33:37
Congress did it anyway they had all the
33:40
experts saying to them starting a trade
33:43
war in 1929 is going to be bad for the
33:47
world they did it well you know the rest
33:49
of that story the market almost
33:51
immediately collapse the senators were
33:53
clear they were going to pass this law
33:55
and then economy started collapsing
33:58
banks and your banks in America started
34:01
going bankrupt in one of the largest
34:04
countries in Europe at the time the
34:06
government made two failing banks merge
34:10
so they failed I got a big failure when
34:13
they thought they were gonna save the
34:15
world about putting these guys together
34:17
turning in a real you know one then it
34:20
became one of the largest makes in
34:21
Europe failing needless to say that was
34:24
the 1930s mistake after mistake so don’t
34:29
think we are any smarter than other
34:30
politicians in history we’re gonna make
34:33
plenty of mistakes too I don’t who knows
34:35
Trump loves trade wars he thinks race
34:38
wars are good he thinks he can win a
34:39
trade war history shows he’s totally
34:41
wrong but who cares he’s the president
34:44
if he thinks it and once it it might
34:47
well happen and in 20 years 40 years we
34:51
look back and say oh that was a mistake
34:54
but in Miami what are your thoughts on
34:57
the president well mr. Trump did win the
35:02
election I suspect he will win the next
35:04
election as well who cares what I think
35:08
he’s probably going to win the election
35:10
he’s smart enough to do that he’s
35:12
adapted enough to you know that’s what
35:14
politicians are paid to do when
35:16
elections he won big
35:19
you’ll probably win the next big ones it
35:21
was very difficult in American history
35:23
to unseat a sitting president you know
35:28
if you’re the president you need votes
35:30
over here in this state you can spend
35:32
money over here in this thing
35:34
his opponent cannot do that and that’s
35:37
why it’s hard to defeat a sitting
35:40
president I if I were a betting man and
35:42
I’m not a betting man but if I were I
35:44
would bet mr. Trump will win you would
35:47
do you think that mr. Biden would make a
35:50
better president than mr. trunk I have
35:56
learned that I should not invest on what
35:59
I want of what I think I have to invest
36:02
on facts and what is happening in the
36:05
world I cannot in make an investment
36:07
because I think mr. Biden would be
36:10
better I have to make investments based
36:13
on what will happen and I’ve just got to
36:16
tell you that mr. Trump will win now mr.
36:20
Trump can bundle it and mr. Biden might
36:22
win then I would have to make
36:25
investments based on that fact doesn’t
36:29
matter whether I like him or dislike it
36:30
doesn’t matter whether I like Trump or
36:31
dislike it I have to based my
36:34
investments and my life what is
36:37
happening in the world I cannot let
36:39
emotions get too involved in it
36:42
with otherwise come I make enough
36:44
mistakes did not tell you about my first
36:46
wife I was foolish young hormones
36:56
emotions are not rational judgment so
37:01
what you’re saying is it’s very
37:02
interesting as an investor’s perspective
37:05
you see as as I’m not a professional
37:08
investor I don’t really look at things
37:11
that way but I can see that as a
37:12
lifelong global investor you look at
37:15
things from what you believe politically
37:18
will be happening and therefore you can
37:20
foresee certain ways that things may go
37:25
very interesting I
37:31
to try taking all the information spin
37:35
it around
37:36
come out with a decision on the other
37:39
side and then act if I had my emotions
37:43
get involved if I drink too many beers
37:45
and make decisions you know it’s not
37:48
gonna make enough mistakes is certainly
37:51
not going to work so into play to say
37:54
people say to me sometimes how can you
37:57
invest in that country it’s a horrible
37:58
country I say listen I don’t care if
38:02
it’s a horrible country investors are
38:04
supposed to make money and if you invest
38:06
it might make it a better country you
38:08
know you could be much better country if
38:11
you go there and invest in help change
38:13
things so please try to keep your
38:16
emotions out of it that’s so interesting
38:20
because people do say that they say how
38:23
could so and so invest in such-and-such
38:25
or there’s terrible things going on over
38:28
there or you know don’t they understand
38:31
the humanity of it but the perspective
38:33
is if years your perspective is that if
38:38
you invest in it you add money to the
38:40
situation in and you have a little bit
38:44
of influence that you may be able to
38:46
make things better rather than just
38:48
turning your back upon a situation
38:50
because it wasn’t right we shall right
38:53
now Venezuela is a catastrophe in every
38:56
way the United States says Americans
39:00
cannot invest there now I assure you the
39:03
people in Venezuela would love for
39:06
people to come there invest and he’ll
39:09
make things better and if Americans went
39:12
there and invested it he’ll make things
39:14
better the Venezuelans would say while
39:16
the Americans are great they helped us
39:18
you know but right now we cannot go
39:22
there and invest and help them and
39:25
change things you know if you ask me
39:28
we’ll be better off have we sent the New
39:31
York Yankees there for an exhibition
39:33
trip at baseball team if it’s a
39:35
Venezuelans love baseball that would
39:37
have much more influence in health than
39:39
boycotting and having sanctions and
39:42
saying nobody can go there and nobody
39:44
invest what you know I don’t live in
39:47
Washington that’s why I’m not a
39:49
politician it’s just so enlightening
39:53
it’s so enlightening because
39:54
automatically you do think well that
39:57
country’s doing terrible things
39:58
so-and-so look at this corporation
40:01
investing all current sorts of money
40:02
into it but in fact you’ve just
40:05
enlightened me into a completely
40:07
opposite point of view well and first of
40:10
all I know the US government has been is
40:13
way those are the people etcetera
40:16
etcetera have also learned Michelle in
40:19
my life don’t miss into propaganda
40:21
because it’s nearly all what governments
40:25
always have a view and they always spout
40:28
propaganda I have learned in my life
40:32
not to listen to propaganda to try to
40:35
ignore it because you go there yourself
40:37
and see what’s really happening and you
40:40
might come away with an entirely
40:42
different view I have learned the show
40:44
if you get your advice from governments
40:47
on investing well you’re gonna go broke
40:50
it’s mainly propaganda that comes out
40:53
and it’s artificial it’s is this on not
40:56
just American problem I mean everybody
40:58
everybody shine for everybody Japan
41:01
they’re all good at Russia oh my gosh
41:04
some of the stuff that comes out of
41:06
government mouth is astonishing so
41:09
please try to learn I teach my children
41:12
I you know I used to read newspapers
41:15
from five different countries every day
41:17
they all thought they were right they
41:19
all said they were right but then you
41:21
get many different views and you might
41:24
figure out what’s really happening my
41:26
kids you know they don’t read newspapers
41:27
they get on the internet they know about
41:32
international networks you know there’s
41:35
one from England there’s one from
41:37
Germany there’s one so the Middle East
41:39
is more from Japan is one from China
41:41
Russia us watch all these different
41:45
points of view they all say they’re
41:47
right how do you sure you CNN says it’s
41:51
right every day Fox says it’s right
41:54
every day but some of the Russians so
41:57
did everybody
41:58
you put them all together you might you
42:02
might get right you’re more likely to
42:03
get right if you listen to lots of
42:05
points of view rather than just one so
42:09
I’ve tried to learn about propaganda try
42:12
to learn that it is nearly always wrong
42:14
whoever the source it was a great saying
42:18
it’s famous in World War one in America
42:21
a famous American senator said it but it
42:24
turns out it comes from a Greek
42:26
philosopher and that is that the first
42:30
casualty of war is truth look in other
42:35
words when war starts I wouldn’t
42:37
propaganda starts truth completely
42:39
disappears so you must learn that you’re
42:42
still too young you learn that go back
42:44
and ask your parents in India it will
42:47
tell you your grandparents in Indiana
42:49
they know they know that people can
42:52
mislead young people and you know I mean
42:57
it just seems like it’s just all
43:00
propaganda anymore it was gonna use
43:03
another word now I want to turn real
43:21
briefly to China
43:22
real quick Jim it’s sort of a
43:25
complicated topic because there are many
43:27
people that are actually blaming China
43:30
for the entire worldwide scenario that’s
43:35
taking place right now we actually have
43:36
US politicians that are calling for
43:39
lawsuits against the country of China
43:42
over this situation now do you think
43:44
that china is in a stronger position
43:47
right now or weaker after the
43:50
coronavirus well everybody in China has
43:54
lost a lot of money this is cause China
43:57
a great deal they’ve had some deaths in
44:00
some lockdowns they are come seem to be
44:03
coming out of but if you could believe
44:06
what you see on the internet and on the
44:08
TV they seem to have done a much better
44:10
job of handling
44:11
that we have with us anyway so yes
44:15
relatively they’re coming out stronger
44:18
they were all weak everybody is hurt by
44:21
this but China’s neighbors have done a
44:23
much better job and by the way call it a
44:26
china virus viruses you know in 2009
44:30
nobody called the h1n1 virus we started
44:34
in America and nobody called the
44:36
American bombers closed airport’s closed
44:39
countries say encountering this you
44:42
cannot do that you know and I don’t know
44:45
you may not know but in 1918 the world
44:47
had this gigantic flu epidemic all over
44:51
the world kill millions of millions with
44:53
an L
44:54
it started at an army base US army base
44:58
in Kansas I wouldn’t call that the
45:02
American flu even though it started in
45:05
American military but you know what they
45:07
called it the Spanish flu was very very
45:11
good this is the Spanish flu stop it
45:17
American military base in Kansas but
45:20
American PR propaganda very very good
45:23
job the world still calls it the Spanish
45:26
flu so all this is absurd it’s the flu
45:30
forever it started you know and so far
45:33
John’s done a better job that we have of
45:35
handling it if you can believe what
45:37
seems to be on the internet and in the
45:39
press Jim it is always such an honor to
45:45
have you on this show I could continue
45:46
talking you know I want it before I let
45:52
you go I want to ask you something among
45:57
global investors it’s no secret that you
46:00
continue to carry the reputation of
46:02
being one of the top in the world and
46:04
it’s interesting to note that you have
46:07
said that some of the most profitable
46:09
times in your life took place in exactly
46:14
this kind of a bear market situation so
46:19
talk to us about your mindset your
46:22
philosophies and your perspectives about
46:25
when and how fortunes are most easily
46:29
made well we were just talking about
46:32
Asia and it’s remarkable you know agent
46:34
civilization has been around a lot
46:36
longer than we have those of us who
46:38
speak English there they all have a word
46:40
in China it’s way G in Japan it’s Kiki I
46:45
forget what it is in Korea but what the
46:48
word means what kiki japanese where kiki
46:52
means is disaster and opportunity are
46:55
the same thing and if you and if they
46:58
been around a lot longer than we have
47:00
but if you think about it it’s true
47:02
whenever there’s a disaster it’s
47:05
horrible for many people but there’s
47:07
also opportunity I mean if your house
47:10
burns down
47:11
Michele it’s terrible but it’s an
47:14
opportunity for somebody to rebuild your
47:17
how to sort of by the Prophet whatever
47:19
it is and the Asians know this at least
47:24
they have words for if we have a word in
47:27
English I don’t know it but that’s the
47:30
way I hope I have learned to try to look
47:33
it like when I see it this front pages
47:36
on a newspaper of some kind of disaster
47:38
I also try to you know sometimes give
47:42
money or try to help but I also try to
47:44
figure out okay someone is going to
47:47
benefit from this let’s figure out who’s
47:50
going to benefit where we can invest and
47:53
by the way when you invest in places
47:56
like that they’re very happy
47:57
Haiti money and they know it you might
48:00
be doing it so you’re an investor and
48:01
want to make money but the people who
48:04
receive your investments in a disaster
48:06
area they’re very very happy that
48:10
somebody has come in to invest because
48:12
it’s a help to them as well
48:14
but if you can remember Kiki Kiki which
48:18
is the Japanese word and I’m sure that
48:20
I’m pronouncing it harmless but it means
48:22
disaster and opportunity are the same
48:25
thing try to learn that go back into
48:28
peak your grandparents in Indiana they
48:30
did a good job remind him of Kiki Kiki
48:35
that’s a wonder that’s actually a
48:37
brilliant thing for everyone to remember
48:40
that a disaster and an opportunity are
48:43
the same thing I assure you you turn on
48:46
the TV next time there’s some kind of
48:48
horrible disaster somewhere whatever it
48:50
is trying to think you’re gonna feel
48:53
sorry for everybody yes and you might
48:55
want to help and you should but you also
48:57
then you should try to start saying well
49:00
wait a minute okay who’s going to
49:02
benefit from this where is the
49:06
opportunity I told you if your house
49:08
burns down it’s horrible but it’s good
49:12
for somebody somebody loves the fact
49:15
that your house burned down you don’t
49:17
but it’s good for somebody the guy who’s
49:19
gonna rebuild your house or whatever
49:21
okay
49:22
it was delight to see you again Michelle
49:25
very very pleased I everything is okay
49:29
and I guess everything is okay in San
49:31
Diego everything is fine here in
49:33
Singapore as far as I know so hope to
49:36
see you again sometime oh absolutely
49:39
sometime soon thank you so much for
49:41
coming on this show today I’m wealth
49:44
international okay what did you say
49:50
I said watch wealth international oh you
49:57
mean portfolio of global what did I say
50:00
yes a portfolio well in that all the
50:02
same international we hope that your
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portfolio has wealth yes it doesn’t if
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you watch portfolio well – you will get
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in your portfolio thank you so much for
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coming on the show today mr. Jim Rogers
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author financial commentator and
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legendary international investor the
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industry experts panel I’m Michele
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holiday at portfolio wealth global
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thanks Jeff
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[Music]
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you
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you