Without the SEC as Referee, the Financials' Books Are Worthless

No referees. You can do anything to shareholders. Nobody cares. It is the Wild West out there.

We have an SEC that aggressive on some things, but when it comes to just out-and-out nonsense, there's nothing you can do.

That's what makes this AIG (AIG - commentary - Cramer's Take) thing so ridiculous.

I mean, let's face it -- if AIG were to say it is issuing shares, millions of shares, and then were to simultaneously announce a buyback -- which is almost as stupid as boosting its dividend -- who would care? Would that headline shock you: "AIG to Issue Shares, Buy Shares"? Why shouldn't they? Who would stop them, the board?

Or how about the board of directors at Citigroup (C - commentary - Cramer's Take), led by Bob "Yoda" Rubin? It is amazing to me that the same people who supervised the big joke are now supervising, well, this big joke?

It doesn't matter -- there are no referees.

We, of course, actually don't know what anyone owns, because the SEC doesn't go after companies for bad disclosure. We never knew what MBIA (MBI - commentary - Cramer's Take) and Ambac (ABK - commentary - Cramer's Take) owned. We still don't. It doesn't matter, even though disclosure is supposed to be THE most important shibboleth of the SEC.

AIG? They told us they had disclosed everything. Of course, they told us nothing of any import, as we now know. They didn't put any of it in perspective, they were obviously ridiculously leveraged or it would never have affected them so badly. But we didn't know.

It continues. Read the Fortress Investment Group (FIG - commentary - Cramer's Take) conference call. They don't tell you what they own for competitive reasons. What is that about? Does anyone care at the SEC? If you called the SEC and asked them, would they be interested?

I don't think so.

Washington Mutual (WM - commentary - Cramer's Take). Wachovia (WB - commentary - Cramer's Take). Who the heck knows what they really own?

We don't know anything about many of these financials, because they don't have to tell us. And who can blame them? We would sell them if we knew.

That's the way things are. No wonder these stocks are shrinking as a percentage of the S&P.

The homework is worthless!

At the time of publication, Cramer had no positions in the stocks mentioned.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

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. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.