Talking Feds Miss the Footrace

Don't pay attention to any of these Fed speakers. They are all acting irresponsibly in even talking about this stuff right now. They should just be quiet and watch what happens so they won't seem so clueless or panicked, the way that Bill Poole was when he said only a catastrophe would trigger a cut -- and then they cut the next day.

That kind of inconsistency is what erodes respect for the Fed. Same goes for Senator Chuck Schumer and New York State Attorney General Andrew Cuomo. None of these people has even the slightest insight into the fragility of the system right now.

They just don't know how awful things would be if a Countrywide (CFC - commentary - Cramer's Take) or Washington Mutual (WM - commentary - Cramer's Take) went under and their words allowed that to happen. The word "credit" is really the word "faith," and right now, judging by the 8.25% coupon I am hearing from Freddie Mac (FRE - commentary - Cramer's Take) preferred, the market doesn't even have faith in the federal government's implicit guarantee of Freddie.

I think these talkers and pursuers are reckless. I think that if things don't turn around, we will look back and blame these public officials -- particularly the unelected Fed ones -- for their cavalier statements that will have been based on nothing but hope or a lack of homework.

We all know this, we who have traded for ages. Where are the experienced people who understand how tentative things are? Where are the professionals who could say, "We will stand by the system, no matter what?"

The implicit statement these Fed folks are making is, "There's no worry so there's nothing to stand by."

How can they be so wrong?

There's a footrace going on between the Fed and outfits like MBIA (MBI - commentary - Cramer's Take) who need to tap capital right now. The footrace is to see if these companies will make it to the promised Fed cut land. I don't know which ones will. But I do know, at least, that there is a footrace. That's a lot more than the Senators, attorneys general and Fed heads know.

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

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