Stay Focused on the Facts, Not the Fakes

Play action fake out of Philadelphia.

That's how I feel about the comments in The New York Times by the president of the Philadelphia Fed this morning, anchoring the case against a rate cut in December. This fake is so great the camera man followed the handoff. All of us who are real students of the game stuck with the quarterback for the screen play.

You see these Fed presidents and governors spend a heck of a lot of time looking at gross domestic product. It's comical. Do they really think this is the reason why they are easing?

I will say it again. You ease because of loan losses in the system that you can't go to the discount window for. You ease because second-lien mortgage bonds are worthless and unregulated structured product is being brought down left and right. You ease to save Washington Mutual (WM - commentary - Cramer's Take) and Citigroup (C - commentary - Cramer's Take).

Otherwise, you don't ease because you figure that we can quickly come back from a recession that is led by the $500 billion in soon to be defaulted 2005-to-2007 loan packages and the $1.2 trillion in homes currently in inventory that are not moving (five million homes times an average of $250,000).

Just wishing away these homes and these bad loans is quaint and catastrophic at the same time. You can't have an industry that is 15% of the economy go under and believe that the overseas sales of Deere (DE - commentary - Cramer's Take) and Honeywell (HON - commentary - Cramer's Take) and Emerson (EMR - commentary - Cramer's Take) are the cavalry. Let me stipulate that foreign sales by Cisco (CSCO - commentary - Cramer's Take), which ran too much ahead of the quarter but I still like, and Microsoft (MSFT - commentary - Cramer's Take), Exxon (XOM - commentary - Cramer's Take) and Intel (INTC - commentary - Cramer's Take) all make the GDP look rosy. But 15% of the GDP is going down and with it are most of the financial institutions that none of us will touch: WaMu, Wachovia (WB - commentary - Cramer's Take), Citigroup, Bank of America (BAC - commentary - Cramer's Take), Countrywide (CFC - commentary - Cramer's Take), Merrill Lynch (MER - commentary - Cramer's Take) and every Midwest regional bank that is hard hit.

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At the time of publication, Cramer was long C.

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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