“We could be on the verge of depression”

Apr 4, 2020 2:25 AM ET

CNBC’s Jim Cramer delivered a terrible message about the financial future on Friday.

“I have to be honest with you: we could be on the verge of depression. No recession, no depression if things are not going well,” said Mad Money’s host.

Cramer gave the bleak outlook after seeing the first drop in employment in the United States in almost a decade. The Department of Labor’s non-agricultural wages and salaries report lost 701,000 jobs in March after numerous non-essential closings, particularly bars and shopping centers, had to be closed to slow the spread of the corona virus.

The main averages fell by more than 1.50% on the day of trading. The Dow Jones fell 361 points, the S & P 500 by 38 points and the Nasdaq Composite by 114 points.

“The bad numbers are just beginning, which is why the averages were reached today,” said Cramer. “This will be a brutal time, but if we do things properly, it will be a brief depression,” he added. “Still, I think we’re making real progress economically.”

Parts of the federal government’s massive $ 2.2 trillion stimulus package are currently underway to mitigate economic damage through corona virus response measures. Some banks began offering multi-billion dollar loans to support small business payrolls on Friday, although access to the $ 350 billion program has not yet been fully completed.

Bank of America, which started lending on Friday morning, said 58,000 organizations had applied for $ 6 billion in loans by midday to weather the storm. J.P. Morgan Chase opened his aid loan portal later that afternoon.

Cramer, who applied for support for restaurants he owned in Brooklyn, New York, pointed out that the small business loan program could not be effective without slowing the spread of the virus. Companies cannot remain open without a consumer base.

“As much as I love the fact that the government fundamentally supports companies in this difficult time, there are no customers at the end of the day,” said Cramer. “Many of these smaller companies may have to close because, despite government support, it’s not worth staying open.”

In the meantime, around 10 million people have applied for unemployment benefits in the past two weeks. Cramer continued to campaign for a national ban, including additional government funding, to help people stay afloat to stop the virus from spreading.

“I have to emphasize that this is mainly a public health crisis that has turned into an economic crisis,” said Cramer. “The only way to get back to normal is to overcome this plague, so the government has to do everything it can.”

Cramer went on to voice his thoughts about the coming week:

Monday: Update of COVID-19 infections

“As long as the numbers are terrible, money will continue to flow from the stock market. We are doing a major downward revaluation of stocks as the business will undoubtedly be weaker than anyone expected.”

Tuesday: Levi Strauss profit

Levi Strauss reports the results for the first quarter after the closing bell.

Estimated sales: $ 1.46 billion

Estimated earnings per share: 35 cents

Wednesday: mortgage applications

“Home buying was a real driver of the old economy. I bet these numbers are collapsing,” said Cramer. “The whole living cohort is a house of pain until we get this virus.”

Thursday: WD-40 win

WD-40 reports second quarter results for the 2020 fiscal year after the market closes.

Estimated sales: $ 103 million

“A company called Spruce Point released a short report this week forecasting a disappointing quarter. These short sellers believe the stock is ripe for a much lower valuation,” said the host. “If you want to buy WD-40, we’ll wait and see what management has to say first. You don’t have to bring any danger to court.”

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