 |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
  RSS FEEDS |
These financials are just deadly. Just amazingly deadly.
The ground zero? The housing index (HGX) and all its spawn, from Fannie (FNM - commentary - Cramer's Take) and Freddie (FRE - commentary - Cramer's Take) to CIT (CIT - commentary - Cramer's Take) and E*Trade (ETFC - commentary - Cramer's Take), Washington Mutual (WM - commentary - Cramer's Take) or Countrywide (CFC - commentary - Cramer's Take). (For a real depiction of the geographic ground zero, watch Wall Street Confidential with Farnoosh Torabi.) One of these players has to blink. It can't be Fannie and Freddie; they'll be kept afloat by Congress no matter what, even if they are insolvent. Somehow the federal government will get money to them. But there's only one real way to make it happen, and it is not a question of putting more liquidity into the system. There are only two ways to stop this slide:
Neither looks like it is going to happen. Earlier this year, in March, I talked about a dirty dozen of mortgage-related entities. I recapped them in August. It is telling. (The first number is where it was in March, second in August, last now):
Those declines in the last reading are the kinds of declines I am forecasting for the housing companies and their spawn now. In each case, when I talked about these stocks in March, people thought they couldn't go lower. When I talked about them in August, people thought they couldn't go lower. You see the November prices. Get used to it. This is what is going to happen without a Resolution Trust Corporation (RTC) or Fed cuts below the two-year. Random musings: I left out the mortgage insurers because for a couple of days you are going to hear rumors of partnerships and infusions, like the French did for a little one of these on Friday. Then when the rumors prove to be untrue, the rollovers will start all over again. Please note that due to factors including low market capitalization and/or insufficient public float, we consider Friedman Billings, Fremont General, RAIT and Accredited Home Lenders to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices. At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
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. TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.
|
|||||||||||||||||||||||||||||||||||||||||||||
| Subscribe to our RSS Feed |
© 1996- TheStreet.com, Inc. All rights reserved. |
PODCASTS
