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Jim Cramer would rather presume the market's foolishness than rationality about the effects of a potential Federal Reserve rate hike.
"I, personally, don't think it is a good idea to raise rates into an economy that seems a heck of a lot more tapped out than it was just a few months ago," the "Mad Money" host said.
Though Cramer does not want a rate hike, the market may still get one. While some Fed officials agree with Cramer, he fears that others may lean toward a hike because the U.S. is at "emergency low rates without an emergency."
Cramer drilled down his Fed worries to two issues: whether the Fed tightening matters at all to the economy and whether a quarter point rate hike is already baked into the market.
Cramer saw evidence that investors also worry about a rate hike based on the market's rebound on Monday. Investors who think a quarter-point rate hike will not have an effect confuse the real economy with the stock market, Cramer said.
"For stocks it doesn't matter what WILL happen to the real economy, it matters what people THINK will happen to the real economy," Cramer said.
For most of his professional life, Cramer has felt that many events looked obvious. They were right in front of everyone's face but still turned out to be shockers to many other market participants. He feels the same way about a rate hike, particularly after Monday's rebound.
Some investors may think they are ready to buy when the market sells off, but Cramer does not believe they are that brave. When stocks fall, people tend to think the sellers know something that others do not.
Thus, the Fed raising interest rates could seem like an obvious event, but could turn into a nightmare for the bulls.
"I always say you can rarely go wrong betting that someone is clueless or going to do something stupid or ignorant on Wall Street. It is a much better bet to presume foolishness than to presume rationality and calm-headedness. I wish it weren't like that, but it is," Cramer said.
Investors must wait for the fools to come to their senses or get blown out of the market, Cramer said, and then it will be safe to get back in after the rate hike.