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Cramer: Stock Market Dead Without Regulation

By Dan Weil   |   Thursday, 14 May 2009 01:56 PM

CNBC television host James Cramer says the stock market needs more regulation or it will be dead on arrival as new investors stay away.

“It became a mug's game,” Cramer told Time magazine. “Unless we bring back the regulations that we had pre-Bush, unless we prosecute the bad actors, I think they [young people] should be scared” of the stock market.

It’s not clear what regulations Cramer has in mind.

The Bush administration did make it easier to short stocks by loosening the uptick rule. But it is difficult to argue that investors shouldn’t be able to sell stocks in the same manner that they buy them.

On other issues, Cramer defended the Federal Reserve from accusations that it’s printing too much money, risking rampant inflation.

“That's exactly what they were worried about in 1929 to 1931,” Cramer says.

“Hoover was very worried about tremendous inflation. So he did his best to avoid that, and we had the greatest depression in history. So perhaps we learn from history and worry about inflation after we worry about taking a Great Depression off the table.”

Cramer is bullish now on real estate.

“Mortgage rates are the lowest in my life. Affordability is the best in my life. Clearly, real estate is much better than stocks right now,” he says.

Not everyone shares Cramer’s view on inflation.

“You can’t have governments and central banks pumping billions and billions of dollars into economies and escape an inflationary impact,” Harold Evensky president of Evensky & Katz financial advisors, tells Moneynews.com.

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CNBC television host James Cramer says the stock market needs more regulation or it will be dead on arrival as new investors stay away.“It became a mug's game,” Cramer told Time magazine. “Unless we bring back the regulations that we had pre-Bush, unless we prosecute the...
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