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There’s some controversy surrounding Jim Cramer’s “Bear Stearns is fine” comment from last Tuesday. Cramer has said that he was referring to Bear Stearns as a depository institution, not as an investment. He claims that he was telling the questioner that his money was safe at Bear Stearns’ money management arm. Cramer also says that he called Bear’s stock “worthless “on Friday.

Mick Weinstein at Seeking Alpha, whom I respect greatly, agrees with Cramer. I’m sorry but it doesn’t wash with me. Let me say that I think it’s very possible that that what’s Cramer intended. But, to a reasonable person, there’s no reason to see it that way.

Mad Money is a show dedicated to Cramer's discussion of stocks. That's the appeal. Only a few times have I heard him discuss larger money management issues. Plus, there was a stock chart of BSC up on the screen. That strongly implies to an average person that he meant the shares.

If he was referring to Bear’s deposits, Cramer didn’t mention basic facts, like you should immediately speak with your broker, or check up on the firm’s deposit insurance. Anyone who has spent five minutes studying for a Series 7 knows about SIPC. At no point did Cramer make an effort to clear up would could be confusing. Plus, he goes the extra step of saying that “Bear Stearns is not in trouble.”

In today’s WSJ, James Stewart writes that “Bear Stearns didn't have a retail brokerage operation and didn't cater to individual investors.” The firm did (and I suppose, does) have a small retail operation but that’s only for high net worth individuals. I looked at Bear’s website and they don’t even have an office here in Washington, DC. Once any trouble hit, I would think that those brokers informed their clients as soon as possible. In high-net worth money management, clients aren’t typically kept in the dark.

Posted by edelfenbein at March 19, 2008 8:20 AM