Renowned financial analyst Jim Cramer has issued a stark warning, drawing parallels between the current market situation and the infamous 1987 ‘Black Monday’ crash. He attributes this potential downturn to the recent tariffs imposed by President Donald Trump. Jim Cramer is the Host of Mad Money on CNBC and runs the CNBC Investing Club
Echoes of 1987: A Looming Financial Crisis?
Cramer emphasized that if the President doesn’t engage with international partners and reward compliant countries and companies, the scenario could mirror the 1987 crash, where markets plummeted over three days, culminating in a 22% drop on Monday.
He stated, “Surprised we can’t get a short cover rally in case President Trump realizes that a Black Monday may not burnish a legacy.”
Cramer also said, “If President Trump does nothing and if Europe retaliates then we the odds jump for an October 87 replay”
Market Turbulence Following Tariff Announcements
On April 2, Trump announced a 10% across-the-board tariff on all imports, with steeper duties targeting specific countries to begin on April 9 — including a 34% tariff on China and 26% on India.
The financial markets have already shown signs of distress following the tariff announcements. The Dow Jones Industrial Average experienced a significant decline of over 2,200 points after China introduced retaliatory measures against President Trump’s tariffs.
Taking to social media platform X, Cramer expressed his concerns, stating, “It’s tough to build a new, weaker, world order on the fly. Frantically trying to do it but don’t see anything yet that takes the October 87 scenario off the table yet. Those who bottom-fished are sleeping with the fishes …so far.”
Historical Context: The 1987 ‘Black Monday’ Crash
The 1987 ‘Black Monday’ crash remains one of the most severe single-day market declines in history. On October 19, 1987, stock markets around the world collapsed, with the Dow Jones Industrial Average dropping 22.6% in a single day. This event highlighted the vulnerabilities in the financial system and led to significant regulatory changes.
Potential Impact on Global Trade Relations
The imposition of tariffs and the ensuing trade tensions could strain relationships with key trading partners. Such strains may lead to reduced international cooperation and potential retaliatory measures, further destabilizing the global economy.
Investor Sentiment and Market Volatility
Investor confidence is a critical factor in market stability. The current climate of uncertainty, fueled by policy changes and international tensions, may lead to increased market volatility and cautious investment behaviors.
Markets reacted sharply to the tariff news. The Dow tumbled 2,231 points on Friday, following a 1,679-point decline on Thursday — the steepest two-day drop since the onset of the COVID-19 pandemic. The Nasdaq sank 962.82 points (5.8%), while the S&P 500 lost 322.44 points (5.97%).
Path for American Companies?
Cramer in a series of tweets urged President Trump to do something for American companies and workers. He posted on X, saying “There is a path to avoid a 20% decline. Give great America companies a path. The president must help American companies and their workers who did the right thing and help them. If the president wants to avoid an April 2000, a March 2020 or an October 1987 he can offer a path to help workers. It can make a difference…”
He did praise the move by Vietnam to negotiate tariffs.
Job Numbers a Huge Win for Trump
U.S. job growth surged in March, delivering a major boost for Trump and far exceeding analysts’ projections, though the unemployment rate rose slightly.
The Bureau of Labor Statistics (BLS) reported on Friday that the economy added 228,000 jobs in March, a sharp increase from February’s revised figure of 117,000, down from the originally reported 151,000.
This result topped expectations from analysts surveyed by Trading Economics, who had forecast just 135,000 new jobs for March.
At the same time, the unemployment rate inched up to 4.2% from 4.1%.
Comparative Analysis: Then and Now
While the 1987 crash was influenced by different factors, the underlying theme of rapid policy shifts and market reactions remains relevant. Understanding the similarities and differences can provide insights into potential outcomes and preventive measures.
Still, Cramer noted the strong employment report as a possible buffer: “It makes it less likely a crash will necessarily lead to a recession.”
“I will contain my anger, but only because I lived through ‘87 and in the end, I came out okay. I was in cash for the crash. I know what this feels like,” he said.
In a post on X, Jim Cramer said, “Look i don’t want a repeat of ’87 of course. But i traded during that period and remember each day well.. We knew to sell.. and we are proud we did. But we felt like idiots because the week BEFORE the crash was so bad and we were late to sell.”
His latest post indicates a more tempered view stating, “I think the difference between now and 1987 is that the circuit breakers could slow things down.”
As the situation unfolds, it is imperative for policymakers, investors, and the public to remain vigilant. Proactive engagement, transparent communication, and strategic planning will be essential in mitigating potential economic downturns and fostering global stability.
Individuals should always assess their risk tolerance and work with a licensed advisor.
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US Faces Looming Default This Summer Unless Congress Acts, CBO Sounds Alarm
The United States is once again facing a financial crisis as the government could run out of money to pay its bills by August or September 2025 if the debt limit is not addressed as per the Congressional Budget Office. Without congressional action, the government may default on its obligations, triggering severe economic repercussions.
US Faces Looming Default This Summer Unless Congress Acts, CBO Sounds Alarm
The Social Security Administration (SSA) has reinstated a controversial policy that could significantly impact seniors’ finances. Starting March 27, 2025, the SSA will begin withholding 100% of overpayments from Social Security recipients’ benefits, reversing the previous policy that allowed for just 10% withholding. This change is expected to recover approximately $7 billion over the next decade but has raised serious concerns about the financial well-being of vulnerable Americans.
The Social Security Administration (SSA) has announced sweeping budget cuts totaling more than $800 million for fiscal 2025, targeting hiring, overtime, contracts, and operational expenses. While the agency says these reductions will improve efficiency, former officials warn they could have dire consequences, including delayed benefits and potential system failures.
Social Security Slashes $800M in Costs—But Could It Lead to “Breaking Social Security”?
More than 1.1 million Americans have received long-awaited retroactive Social Security payments, with an average payout of $6,710. While this unexpected windfall is welcome news for many, it could come with an unexpected downside—higher taxable income. The Social Security Administration (SSA) confirmed in a March 4 announcement that $7.5 billion has already been distributed following the passage of the Social Security Fairness Act. Updated monthly benefits for eligible recipients will begin in April, but financial experts warn that these lump-sum payments could push some retirees into a higher tax bracket, potentially increasing their tax burden for the year. More than 3.2 million people are set to receive higher Social Security benefits under the newly enacted Social Security Fairness Act. Last month the SSA announced they will begin issuing one-time retroactive payments by the end of March, compensating beneficiaries for missed increases dating back to January 2024. These payments will be deposited directly into bank accounts SSA has on file, though some recipients may see funds before receiving an official notice in the mail.
Social Security Sends Over $7.5 Billion in Retroactive Benefits —But Some May Face a Tax Surprise
Millions of retirees counting on Social Security to keep up with rising costs may face yet another financial squeeze in 2026. The Senior Citizens League (TSCL) has forecasted a mere 2.3% cost-of-living adjustment (COLA) for next year—falling short of inflation and marking a continued trend of inadequate benefit increases. This prediction lags behind the 3.0% yearly rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If accurate, this would mean yet another year where Social Security adjustments fail to keep pace with real-world expenses, leaving many retirees struggling to cover essentials like housing, healthcare, and groceries.
Seniors Brace for Another Social Security Letdown as 2026 COLA Prediction Signals Trouble Ahead
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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Source: Jim Cramer Warns Of Impending
