CNBC's Cramer Rips 'Greedy' Government for Playing the Market
Here’s yet another excellent example of how, when the government gets too involved in the private sector, things don’t turn out so well.
On CNBC’s Dec. 7 “Street Signs,” host Erin Burnett asked “Mad Money” host Jim Cramer what he thought of Citigroup’s (NYSE:C) financial position in relation to its TARP bailout funding.
“Tying TARP with the sale of the government stock has made this story a dead story,” Cramer said. “And I just feel like you needed one, first the government sells its stake and then they pay back TARP. And they’ve really made it hard, because how can you issue equity if the government’s going to issue equity?”
As Cramer explained, Citi’s stock was at $5 a share and the government could have sold its stake, and turned a higher profit for the taxpayer.
“The government is not being smart about this and it just kind of takes – they had a shot,” Cramer said. “When the stock was at $5, I pleaded with the government to sell it. But you know, they didn’t.”
According to Cramer, the U.S. Treasury Department tried to play the market, a no-no when you’re up with a stock.
“You get these executives on, you get the Treasury on – they’re very loath to speak about it, but they played the market,” Cramer said. “They played the market and one of the first things you learn when you’re at a hedge fund or whether you’re at Goldman Sachs – never play the market. Never think that you can guess where the market’s going to go and you have a big profit. But that’s just what the government did – they played the market and we would like some explanation for that, frankly as taxpayers.”
The “Mad Money” host insisted it was greed that drove the government’s poor decision-making on Citigroup, which is now trading around $4 a share.
“Why did they play the market?” Cramer said. “What did they think? Did they think they were Buffett? You never turn a profit into a loss or it’s still not a loss. Never just look at a big gain and be greedy. The government was greedy and now everybody suffered.”
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