There's Plenty to Fear

Oh my. I am still getting hit with emails saying I'm overreacting and that there is not much to fear. I am incredulous.

There was a time when there wasn't so much to fear. Had the Fed cut rates rapid-fire by 200 to 300 basis points last summer, we could have had refinancing off the short rates for home equity lines of credit and hurting first mortgages. That would have at least given us time to work out of this jam. Just a gigantic short-term cut in the discount rate could have done a world of good. But we got nothing except "The fundamentals are sound."

Now it is too little and too late. I figure the Fed tomorrow will announce some other complicated scientific way to screw things up, just like it did with the bogus SIV plan and the ridiculously small TAF auctions. All of that stuff is just the kind of small-time, small-think Fed stuff that we have come to expect from this oblivious Fed chairman. Worse is the ludicrous nature of the government's planned tax rebates, which will do absolutely nothing to get things going at all. Nothing.

The real problem is on Wall Street, and no one is going to help Wall Street out of this one. Even as I would like to use the insurance plan to shut down the Gang of Four (Ambac (ABK - commentary - Cramer's Take), MBIA (MBI - commentary - Cramer's Take), MGIC (MTG - commentary - Cramer's Take) and PMI (PMI - commentary - Cramer's Take)) and guarantee 50 cents on the dollar to the insureds, I know that's not going to happen. That would require too much of a bailout of banks and bank equity even as that's where the real trouble lies. In the wake of the savings and loan debacle, we needed the Resolution Trust Corporation to protect the depositors. We don't need to protect these banks until they are insolvent, and then we will swing into action. I understand that they might not get the problem; that's how bad the disclosure has been. But it is pretty obvious now, and nothing is going to be done of any import.

I am not one of these Cassandras who is permanent. I have said we are in a bear market and advised people to be careful for weeks now. Tomorrow we will have a huge selloff. I will be a buyer, not a seller, as we will be ridiculously oversold. I will be a buyer because I have my highest cash position ever for Action Alerts PLUS.

But the issue is, of course, who does not have numbers to cut?

And that's going to be a real problem.

Building shopping list anyway.

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

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