Jim Cramer apologized Monday on "Mad Money" for recommending that his viewers buy Wachovia stock just two weeks ago, a recommendation he acknowledged was spurred by the appearance of his longtime friend and former boss, Wachovia CEO Bob Steel, on his program.
On September 15, Cramer had Steel on the show and later advised viewers to buy Wachovia stock. Watch:
Monday, Cramer said he "screwed up" because he "wasn't skeptical enough," admitting, "I let my judgment of Steel cloud my thinking about Wachovia." Watch (full comments below):
I let you down, cause I wasn't skeptical enough. I have to presume when it comes to banking right now there is no objective truth, just negative, just terrible things. I let my judgment of Steel cloud my thinking about Wachovia. Is he to blame? Did he take advantage of me? Perhaps yes. But ultimately I must be a firewall for you and this time I let the firewall down.
Here's the bottom line: if we had a plan, Wachovia might've been able to split into a good bank and a bad bank and be saved. Wachovia was overtaken by events. Still, I have no choice: I gotta put my friend Bob Steel on the Wall of Shame. You know what? I should put myself in the annex. I didn't protect you good, I didn't protect you better. I screwed up, I apologize.
Andrew Ross Sorkin referenceed Cramer's recommendation in a New York Times article Tuesday morning headlined, "What Goes Before A Fall? On Wall Street, Reassurance." Here's an excerpt:
It didn't help that Mr. Cramer later told his TV audience to buy Wachovia, calling it one of only a few potential "winners" in the $700 billion bailout being proposed, and said that Mr. Steel's background as the former Treasury under secretary meant he had "a better handle on how this process works than anyone else."
On Mr. Cramer's show Monday night, he spent an entire segment apologizing to his viewers about having Mr. Steel on the program and for his own bullish call on Wachovia's stock. "I screwed up," he said, referring at one point to Mr. Steel as a friend for 25 years. "I believed in the guy. Did he take advantage of me? Perhaps yes."
A spokeswoman for Mr. Steel defended his appearance, saying, "The environment we were operating in dramatically changed" between then and now. She added, "If you look at his comments, he tempered them by saying 'We always do what's right for shareholders.' "In fairness, she's right about that. Mr. Steel said on the same program that, "We're a public company. So we're going to do what's right for shareholders, I can promise you that." And at times, he seemed to show some self-restraint, resisting talking directly about Wachovia, instead spending much of the program talking in generalities about the troubles in the market.