To Solve Our Problems, We Need to Solve Housing

Hurry. Hurry with the rate cuts. Hurry with the stimulus package. Hurry with the bond insurer bailout. Hurry with the write-offs. Hurry with the Fannie Mae limits. Hurry with something, anything, because things are still going down and they are going down with increasing speed.

That's what the market said yesterday and the market is saying today already with this ridiculously low 10-year treasury that has not produced the break down to the 4.5 level of 30-year fixed that we need so badly to clear out the inventory of unsold homes.

It is all so obvious that everything has to be hurried. It doesn't take Toll saying there is little light at the end of the tunnel this morning or Whirlpool saying this is the worst market in two decades, but that's the feedback we are getting.

Intra-meeting rate cut? We need one yesterday.

I know that we will get them but each day that nothing is resolved is another day that something goes bad. The rate cuts have yet to impact the economy other than some refinancing by people who have bad resets from 2 and 28s from 2006.

Those will continue all year and every time they happen another one of these BBB tranches fails and we get more downgrades and the vicious cycle kicks in again.

Remember where we are: short, sharp rallies -- some would say bear rallies -- followed quickly by declines of some magnitude as the market realizes that the unsold homes haven't been sold and the new homes are hitting the market and the foreclosures are on the increase.

Everything is being dragged out in order to see if we get housing appreciation or stabilization and that's not possible yet, as Toll and Pulte and Centex have told us.

It is more than ever a housing issue not because of earnings but because the spigot of loans is getting shut off every day despite the price of interest.

That's because banks know they will take a beating on what they have and all of the BBB paper that is clogging the system still!

Unfortunately none of this is yet obvious to the Treasury or the President as a problem and we are still caught up in the needless stimulus plan instead of a plan masterminded by the FHA to stretch out payments at low levels on resets so that foreclosed homes stop hitting the market at the same time as new homes.

Without it, more pain and nobody is listening.

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

---

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

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.