It’s been almost a full year since Jim Cramer‘s epic flip out on CNBC, but it feels like it was just yesterday. After the jump, join us for a look back at what the past year has brought us:
In the past year a lot of big things have happened – 1.) shortly after JC’s tirade, Barry Bonds broke Hank Aaron’s home run record and then later Marc Ecko turned that piece of baseball history into a unique collector’s item. 2.) Microsoft released Halo 3, and video game nerds all over the world rejoiced. 3.) Wildfires all over Southern California scared the crap out of the country. 4.) The New York Football Giants won the Superbowl 5.) Fidel Castro resigned. 6.) And just yesterday a 44lb. cat was found in New Jersey. So all in all it has been a pretty momentous year.
Fortunately, many things have changed economically since Cramer went on his big rant. Whether it was related to the near panic of emotion that Cramer stirred up or not, the Federal Reserve and ‘Big’ Ben Bernanke did wake up.
Since those summer lovin’ disaster day of 2007, the Federal Reserve has cut the discount rate 9 times. Additionally, the have also cut the federal funds rate (which relates to the rate the banks lend each other money and directly correlates to many of your personal and student loans) a total of 7 times.
At the point in time when Cramer screamed at Erin Burnett in her strange giraffe dress on CNBC’s Street Signs, the Fed had not cut the fed funds rate since June of 2003. As a matter of fact, since 2003 the Fed had been on a massive rate increasing spree. Rates were at a huge 5.25% and had been stagnant at that point for over a year. Obviously, it makes sense that Cramer was on edge as he saw the real estate market fall into the toilet, the first Bear Stearns hedge funds blow up, the CDO and subprime loan market get destroyed, and millions of people began losing there homes.
As funny as it was to get Cramer’s explosion on air and turn it into a viral video sensation, it was scary to be watching the economy at that point in time. No one was quite sure what would go wrong next.
So as we look back on a year of massive interest rate cuts from the fed and hours upon hours of Capitol Hill testimony about what went wrong, we can all look back on Jim Cramer’s tirade with fond memories. Hopefully the worst is behind us, but even that might not be true.
"They know nothing!" – Jim Cramer, August 3, 2007
NY Fed: Historical Changes of the Target Federal Funds and Discount Rates, 1971 – Present