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Cramer Plays With Fire and Gets Burned (CIT, C)

September 30, 2009 10:11 AM EDT
Yesterday, market pundit Jim Cramer made a ridiculously awful call on embattled lender CIT (NYSE: CIT). Cramer made a call to buy CIT stock yesterday. Well today it is down 40% on reports a deal with bondholders will wipe out the current common shareholders.

Here is what Cramer said on CIT yesterday.

"Because no one forced CIT into bankruptcy, it can live to play again, and when I read in the New York Post that Paulson owns CIT debt, I realized that he's powerful enough to save this company, particularly because he is one of the investors in IndyMac and knows his way around the bottom of the debt barrel.

These two stocks represent lottery tickets that are no longer rip-ups because they have made it out of the "critical care" stage and are recovering.

I would buy them both."


The other stock Cramer was talking about was Citigroup (NYSE: C). Citi is another volatile situation that most investors should not be involved with.

It appears Mr. Cramer has not learned from past mistakes and is back to his old antics of going out on a limb on situations that he clearly doesn't understand. Due to Cramer's lack of caution and diligence, mom and pop investors are getting hurt.

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Jim Cramer, Citi, Bankruptcy