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Friday May 19th 2006
'FED- Up'
Cramer
told viewers that the market was in a "classic dive with
everything in free-fall...wasn't just a soft patch or some weakness".
Why,
why why do you ask? Because The street realized that The Fed
(Federal
Reserve) could raise (short-term) interest rates to 6.5%.
This
happened back in 2000, when the NASDAQ was blowing up. Then
too, the
Fed began raising short term interest rates. Cramer
called this "The
biggest and most stupid mistake imaginable", likening this
move to
launching nukes on stocks. People lost fortunes.
(Jim Cramer
had
enough foresight to get out just before the 'carnage', the millions he
managed still intact - editor)
The Fed is worried about speculation, and
noted that although the Central Bank may be more interested in
commodities, the effect is the same because they use"the same blunt
instrument..crush speculators wherever they may be".
The bottom
line, is that the Fed will probably raise the rates, and the only way
to
avoid getting hurt is to KEEP A DIVERSIFIED PORTFOLIO! Don't
keep all
your eggs in one basket.
