Mortgages Last Hope: Private Sector Saviors

Of all the proposals I have heard out there to try to fix the mortgage mess, the most vile one, the one that really hits the good guys, the hardworking people who are doing everything they can to pay and be current, is the reduction of principal solution. This heinous solution discourages all of those who have been good citizens. It doesn't fix anything because no bank will do it and it is confiscatory to the investors to boot.

Yet, it's the Fed's position. That's right, it is Bernanke's position. Here you have a guy who quite eloquently put in a paper written in 1992 how he would buy anything with Fed money to stop a deflationary spiral, including mortgages,. SMART! That's not my issue -- two years buy AAA paper solution -- it's really his. Here's a guy that should know better, a Republican nonetheless, than to rip off the earnings. But he wants to make it so no bank would ever make a mortgage loan again, the obvious consequences of his lunacy. Here's a guy that then gets a free pass from all of the media even though he should promptly be fired and hopefully will, if the Democrats win.

He is the problem right now. He has been ever since he didn't cut rates through the two-year to reliquefy the balance sheets of the banks last August. He didn't open the discount window and slice the rates to rebuild the capital.

He is simply a disaster.

There are so many simple solutions that I have proposed in these cyberpages, first when there was a legitimate chance to cut rates and not have to so the stupid $600 per person giveaway/travesty, he didn't listen. Then when there was a chance to get the FHA involved to guarantee 30 year mortgages to keep people in their homes (I would take it to 50 years if I had the authority) while refinancing them at lower rates so no resets, he failed to act.

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

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