Picking Among Financial Rubble Depends on Fed

Why doesn't this Beazer (BZH - commentary - Cramer's Take) just go bankrupt already? Why doesn't someone in that darned industry go belly-up?

When I look at this Beazer every day I just think, OK, merge or die. Do something. Don't just stand around death-rattling.

Behind the scenes for most of these homebuilders -- Toll Brothers (TOL - commentary - Cramer's Take) excluded -- I sense that all the terms of the credit agreements, the so-called long-dated money that is supposed to be on tap, could soon become a huge issue.

That's one of the reasons the HGX, the housing index, keeps crashing to new lows. This industry is disappearing before our eyes.

Just when we are told that the worst is over! Look at this KB Homes (KBH - commentary - Cramer's Take) and this Centex (CTX - commentary - Cramer's Take). They were supposed to be OK with long-term money. Or how about Horton (DHI - commentary - Cramer's Take)?

Are KB and Centex headed to the teens, Horton to the single digits? Does it matter? Are these companies all considered bad actors by the Fed, not to be bailed out?

And how much can they take with them? Can they take down all of finance?

I don't think so, but it is obvious that these stocks, even more than the brokerage business, are weighing on this market. When I look at the large holders of them, I worry that some of these positions could cause some real pain, not just embarrassment, but pain for all but the most seasoned of players.

For example, Carlyle and Cerberus are in this mortgage business, and that's something that makes us all say, "Don't worry, those companies are fine." Remember last week when the market declared KKR Financial Holdings (KFN - commentary - Cramer's Take) and Thornburg (TMA - commentary - Cramer's Take) healthy? They look like they are back on life support.

And I have to tell you that if I were a federal prosecutor, it would not take much goading to get me to read Gretchen Morgensen's excellent piece in The New York Times and ready the investigation, if not the indictments. Just too juicy.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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