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If CNBC's Jim Cramer wants investors to learn one thing from the stock market's recent volatility , it's that this is not a repeat of the months leading up to the 2008 financial crisis.
"[People are] missing the point. Nobody's talking about a recession," the "Mad Money" host said as stocks recovered from their Wednesday drop. "This is not the end of the world, which ... you would think it was when you looked at yesterday's action. There's no systemic risk. The economy might go from really good to really mediocre."
Cramer chalked up the prior day's dramatic slide to two things: the idea that Wall Street is too bullish on companies' 2019 earnings, which could be crimped by the Federal Reserve's rate hikes, and President Donald Trump trade tiff with China.
If the Fed follows through on raising interest rates once more in December and three more times in 2019, next year's earnings estimates for many companies are too high, Cramer explained.
And if the president keeps pushing China into a corner with tariffs, the effects on business could be worse than people think, he said, pointing to the possibility of U.S. companies facing earnings cuts, blocked deals or boycotts because of ties to China.
This, combined with Trump's attacks on the Fed — which Cramer has repeatedly said only embolden Fed Chair Jerome Powell to stay the course and prove that the central bank is an independent institution — raise the chances of an economic slowdown, the "Mad Money" host said.
"We're talking about a slowdown that reverses much of the economy's recent growth and causes rounds and rounds of layoffs," he said. "Maybe our [gross domestic product] decelerates. Maybe it goes from 4 percent to 1 or 2 [percent], thanks to the lack of demand for autos, housing, construction and so many other industries — plastics, paper. That could easily be in the cards."
What's not in the cards is another full-blown recession, even though many were worried that Wednesday's marketwide nosedive signaled more pain to come, he said.
"This is not some sort of rehash of 2007, where, by that point, a crash was inevitable," Cramer argued. "It's more like 2006, or at least a much healthier version of 2006 when it comes to balance sheets, where the crash still can be averted if our leaders know what they're doing. Let's hope the president and the Federal Reserve do a better job this time around."