Negative Focus Ignores the Good in Housing

The avalanche of paper. The inability to clear up the mortgage mess. The inevitability of failure when it comes to housing.

Where do these articles come from, central negative casting?

What has to occur to these reporters and editors that the piece of mortgage bonds that are not second lien are trading up and can be bought and sold. What does it take for these editors to figure out banking accounting and recognize that other real estate owned is peaking, and that with the exception of the issues involving home equity vs. first liens, things are improving.

What does it take for people to realize that we are a growth country and we are building houses at the same pace we were in the 1950s -- in a slow year! -- when we are double the size?

These articles are in a negative time warp that is shocking to me. Have these people spent 10 minutes with Tim Geithner? Do they so distrust the secretary and his work on banks? That's preposterous, because it is a heck of a lot more thoughtful and rigorous than their blathering.

Yes, there are some intractable mortgage issues. Yes, there are real issues involving fraud and mortgages. Yes, there are some bonds that will never come back. Yes, there are still companies that are under-reserved. But the size of the problem diminishes as a piece of the pie as time goes on and the population grows and the reserves are built up.

That's what happens. That's why Wells Fargo (WFC - commentary - Trade Now), which if you read these articles you might think is an out-and-out short, is actually a buy! That's why Bank of America (BAC - commentary - Trade Now), which if you read these articles you'd have to believe is bankrupt, is another buy!

No wonder things are so confused. These articles would make you sell-sell-sell everything.

Especially things you might want to buy.

At the time of publication, Cramer was long Wells Fargo and Bank of America.

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