Housing, not Oil

Darn, if it weren't for oil ... blah blah blah.

Look, it ain't oil. It is about housing and this administration's lack of recognition of the issue and the Federal Reserve coming late to the party.

Ever since I predicted the total and utter collapse of this junk in what was widely perceived at the time as an irrational, ill-spoken rant full of sound and fury, signifying nothing, I have watched the end come nearer and nearer for housing and for those that have borrowed money to finance it or insure it or build it in any way, shape or form.

It was avoidable. This is not oil. We could have stepped in and been bold; now we will have to do so by default, with a nationalization, or a partial nationalization, of Fannie Mae (FNM - commentary - Cramer's Take) and Freddie Mac (FRE - commentary - Cramer's Take).

They, of course, can't be owned. They call into question whether anything can be owned. The government will have to do a Chrysler bailout -- warrants to the government and a crushing of the common stock through massive dilution to get through this -- and the sooner the better, because no one in America will think there is mortgage money if this nonsense keeps up.

But now let's talk about the rest of the market. These futures are being pulled down massively by these two issues. We are getting bargains in health care, in foods, and in oils and gas because of it. I ask you, do you want to miss Rohm & Hass (ROH - commentary - Cramer's Take), Anheuser-Busch (BUD - commentary - Cramer's Take), Hercules (HPC - commentary - Cramer's Take)? Are those aberrations?

Do you want to miss nat gas? Oil? Drugs? Health care?

You get the point. It's wide open as long as you avoid anything that needs money from Wall Street/housing, and if it comes from the ground and China needs it, you still have a win.

Random musings: Doug Kass, who has owned this story, has a fantastic analysis of Fannie Mae's regulators elsewhere. He is spot on ... At the time of publication, Cramer had no positions in the stocks mentioned.

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