"OK, I'm being a little facetious, but when you think about it, maybe I'm not. Hedge fund managers have lost billions of dollars shorting stocks ever since the trade war began in earnest," the "Mad Money" host said.
As hedge fund managers tried to preemptively calculate the effects of the trade dispute, the negative coverage made them bet against various stocks that they thought would be seriously debilitated as a result of tariffs, Cramer explained.
"Yet these bets aren't paying off: the trade war just isn't producing the kinds of shortfalls that, in theory, should've kicked in this quarter," he said, citing the better-than-expected performance of stocks like Cummins and Emerson Electric.
"Turns out it's less of a problem than the doomsayers thought, which is why shorting's been such a bust, with the short-sellers acting as a natural accelerant for the upside when they cover their stocks ever since the trade war with China first flared up six months ago," Cramer said.