NEW YORK ( TheStreet) -- Debra Borchardt interviews Jim Cramer regarding bond fund inflows. A full transcript appears below:
Jim, in the stock funds we saw $22 billion in outflows in August. That was the fifth worst in five years and what I found interesting was they were leaving stock equity funds and going into bond funds and it just didn't make sense to me right now.
Oh, it makes sense to me.
Okay. Tell my why it makes sense to you.
Because the stocks are viewed as a fraudulent asset whipped around by high-speed frequency trading. Without an SEC that protects people, stocks are viewed as being playthings. Stocks are viewed as being not a serious form of asset class. They let you down in 2000, they let you down in 2007-2008, they let you down with a flash crash, they let you down with that crash that Knight Trading had and they let you down with Facebook and all these things are always taken when you hear people talk about the market. They always say that these didn't cut back and that they didn't cause people to be more circumspect about stocks and they're wrong. Because look, I have a pretty amazing perch given to me by CNBC and I talk to more people than I think anybody. I know you could say that's anecdotal, but people don't trust the asset class. They don't think it's worthy of their capital, so I think the outflow's making an immense amount of sense. It's not considered to be a trustworthy asset. Now I'd come back and say companies themselves are providing you with a remarkable return, particularly from dividends. So I say, stop thinking of it as an asset class. Start thinking of it as companies that pay you to be in their companies and you will not be as disgruntled but people just look at us like, "Oh, the S&P" the index fund proselytizers have helped wreck things. The forces against the individual are just too great. The Street:
Do you think people got frightened away by this whole, "September...it's going to be bad. Bad things happen in September" talk. Jim Cramer:
Well because it has been. The Street:
And here we are on September 16 and it hasn't been that bad. Jim Cramer:
But it has been. Those stocks have been hideous. I mean look... The Street: But we haven't gone down. We haven't seen some ten percent decline or anything and September's going to be okay. Jim Cramer:
But look, I come back and say that the gloom is palpable in the equity market. You watch TV, you read the stories, they're all negative...preponderance of negativity...don't say all. Don't want to give in to hyperbole but stocks have become lawless in my view. They're lawless. There's been financial engineering that people accept as being great that I think is awful. There's chicanery everywhere. We can't pick up the paper but there is some Ponzi scheme and people just say, "Oh, I've had enough." There's no Ponzi scheme in Treasuries. I embrace their view as a legitimate view even as I disagree with it, I accept its legitimacy. The Street:
Okay, that explains your position then. Jim Cramer:
I accept its legitimacy but I disagree with it. The Street: