You Can Hear the Fear on the Street

When you speak to people in bonds, you are hearing three words that you are never supposed to hear: "I am frightened." No one in this business is ever supposed to use those words. But I am hearing them all the time.

The complacency is gone. The fear is palpable. And it is not good. You don't want these people fearful. These people -- hate 'em or like 'em -- are the lubricants of the American engine. Finance is necessary. There's no one here worth punishing.

What's amazing here, at this very moment, is that it appears that no one has any capital to deploy. No one has any money.

That's because it's all tapped out. The hedge funds that like this stuff are up to their eyeballs in it. The funds of funds that overlook this stuff are running from these hedge funds.

That's why people are frightened.

I was never frightened on my trading desk. Or at least, if I was I never said it.

That I am hearing it says that those who come on the air and say not to worry are simply either liars or are doing no amount of homework. Or maybe, just maybe, they are looking at silly short squeezes like those in Beazer (BZH - commentary - Cramer's Take) and MGIC (MTG - commentary - Cramer's Take) and getting bluffed out of their shorts into thinking that everything is fine.

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

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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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