The bond market has entered a financial twilight zone, and at this point, there doesn't seem to be a smooth way out.Market Insiderread more
"I think (rate cuts) will help, but whether they're going to be sufficient to counter the negative trade pressures and global growth slowdown and impact is debatable," one...Central Banksread more
China has used both monetary and fiscal measures to lift economic activity as its trade war with the U.S. looks set to intensify in the coming months.China Economyread more
Alibaba held a board meeting before its latest quarterly earnings release last week, during which the board decided to postpone the Hong Kong listing, Reuters reported.Technologyread more
President Donald Trump said on Twitter he was postponing a scheduled meeting with Denmark's prime minister because of her lack of interest in discussing a possible sale of...World Politicsread more
The two countries want to smash the civil aerospace duopoly enjoyed by Airbus and Boeing.Aerospace & Defenseread more
Federal Reserve Chairman Jerome Powell is set to deliver his annual speech on Friday at the Jackson Hole, Wyoming symposium, where he's expected to provide more clarity on the...Asia Marketsread more
After Elon Musk touts Tesla solar on Twitter, Walmart sues the electric vehicle and clean energy company over store rooftop panels that ignited.Technologyread more
U.S. and Asian investors poured $3.7 billion into U.K. tech start-ups in the first seven months of 2019, research shows.Technologyread more
Trump said he has "been thinking about payroll taxes for a long time" — and he cautioned that "whether or not we do something now, it's not being done because of recession."Politicsread more
Secretary of State Mike Pompeo privately told business executives and free traders that the trade war could end by the 2020 election and that hurdles to an immediate agreement...2020 Electionsread more
If you are one of those investors who thinks that if interest rates go higher, that it means to sell everything—then Jim Cramer thinks you are brainwashed. Sorry.
"That's why I want to spend some time on the notion that when positive things happen to economies around the world, you tend to get markets that go higher, not lower," the "Mad Money" host said.
Higher interest rates are good! Cramer explained his reasoning when he shared that he likes to start his day by monitoring the German bond market. Right now German bonds are going down in price, which means their interest rates are going up. This has caused major worldwide market turmoil.
Yet about a month ago the German bond yield was so low, that you had to be crazy to buy these bonds and hang on to them for ten years. Now that it has gone up tremendously, those investors holding the bonds are panicked, thus causing S&P futures in the U.S. to get hit hard.
Cramer suspects that hedge funds are making accurate short term judgment, but inaccurate long-term judgment. They assume that as rates go up in Europe, they will also go up in the U.S. Thus, stocks must come down.
But the "Mad Money" host finds this logic hogwash. Europe rates are rising because the European economy is getting better, thus there is higher demand for loans and more demand for money. That's a good thing!
Cramer sees three positive implications for higher interest rates:
No.1 This is good for U.S. companies that do business in Europe, that have taken a beating recently.
No. 2 A strong economy abroad means there is a stronger currency. So when Europe gets stronger, it becomes a magnet for money.
No. 3 This means that China can be resurrected, too. Europe's weakness has been a big drag on China, as a quarter of its exports generally go to Europe. So if Europe can be awoken from the dead, so can China.
Ultimately the wave of selling on Tuesday subsided during the day and the averages managed to regain some of the losses, which show that some of the panic subsided.
"We could freak out that our interest rates hit six month highs, but I have the benefit of age and I can tell you that rates have plenty of room to rise before this economy gets derailed," Cramer added.
Read more from Mad Money with Jim Cramer
Cramer Remix: A bold call on China
Cramer: Genius mergers, ready to pop
Cramer: China's comeback—time to buy?
With that said, what should you be doing?
"We're nowhere where interest rates can hurt the real economy, either here or in Europe, which is why you need to take advantage of those sellers who went to college to get stupid, because they're selling precisely what you should be buying," he added.