The Failure We Need Could Be SCA

We need a darned failure to raise the stakes with the Fed. They lack urgency because they are still looking at inflation figures and retail stats and employment that hold up.

I have felt that the lynchpin here, the Achilles heel, may be a company that insures the kind of structured finance nonsense that has caused so much trouble.

I don't like to root against any particular company, but it is time for the shareholders of Security Capital Assurance Limited (SCA - commentary - Cramer's Take) -- one of these guarantors that doesn't have enough capital to guaranty -- to admit they are about to take one for the team.

Here's a company that hasn't been able to raise capital and that might be forced to go under if the ratings agencies downgraded its ratings.

The tenuous nature of this whole era resides with these ratings agencies. The agencies, recognizing the havoc they could cause with downgrades, even if the downgrades would be right, seem timid to me and willing to look the other way. But it's tough to avert your eyes when it comes to Security Capital, which could easily be overwhelmed. The same, of course, could be said about MBIA (MBI - commentary - Cramer's Take) and MGIC (MTG - commentary - Cramer's Take) and PMI (PMI - commentary - Cramer's Take) and Ambac (ABK - commentary - Cramer's Take), they aren't nearly as endangered. Sure, MBIA cancelled a conference call for Friday, but that doesn't necessarily mean anything.

SCA, though, needs capital now. Without it, I can't see how it can stay afloat.

How important is this to the moment? I think it is so important that someone else with a stake here will somehow keep it afloat. That's been the way things have gone right now, which is why the Fed is complacent.

That could change if SCA takes one for the team.

That could be the urgency break we need.

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

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

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. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.