It's Bad Behind the Scenes

Over and over I hear that the subprime issue can be contained. I hear that it will blow over and that the woes are overdone.

Holy cow, are these people making any phone calls to find out what's going on behind the scenes? Are they totally clueless? I sit here and make call after call to people and when I am not collecting their resumes, what I am hearing is so dreadful that I don't even want to repeat it.

Understand, I have no skin in the game. In fact, I am looking for a house so the housing prices are going my way!

But you need to know that in the last two weeks, all fixed income has simply shut down. You can't even sell commercial paper, and that stuff's like tap water, the way it flows. The rest of the market can rally, we can have short squeezes, but the money is pouring out of everything everywhere and flowing into cash and Treasuries. The mortgage market has disappeared overnight. Overnight!

I see these ads for home-equity loans and mortgages and I laugh. The companies can't possibly get you one because there is no way that anyone will give them the money to do so. These homebuilders are dead right now. Moribund.

Gee, I wish I knew some Fed governors and presidents. I wish I knew the chairman. I wish I had a better relationship with the Treasury. Because someone has to do something. Some one has to let Fannie Mae (FNM - commentary - Cramer's Take) help -- the regulators won't even let them do that.

I don't know if any of these complacent hopefuls has a clue what's really happening.

This weekend, the fund of funds members are going to take out every dime they have with hedge funds that lever any kind of bonds. In the next 10 days, I believe a dozen hedge funds of some reknown will fold!

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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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