Maybe a Bank Closure Would Wake Up Washington

Understand that in the last few months, the major institutions that relied on Ambac (ABK - commentary - Cramer's Take) and MBIA (MBI - commentary - Cramer's Take) have weaned themselves from most of their exposure.

They had to, given that both of these companies are technically insolvent based on any present value accounting. Go read Wachovia's (WB - commentary - Cramer's Take) earnings conference call if you want to see what I am talking about.

Of course, not everyone has the luxury of doing this. Citigroup (C - commentary - Cramer's Take) can't. If it didn't have the insurance, it would need to raise a lot more capital. Chuck Prince wasted so much capital that the only reason why this bank can even exist right now is from the fiction of these two knuckleheaded companies.

Merrill Lynch (MER - commentary - Cramer's Take) is in the same boat, too. I would be shorting both of them off this news.

I also don't know about AIG's (AIG - commentary - Cramer's Take) exposure; I think it is real bad, and the company needs to raise capital, even though it has a lot of equity.

I would not own that stock. Washington Mutual (WM - commentary - Cramer's Take) and IndyMac (IMB - commentary - Cramer's Take) become more of the past. Bank of America (BAC - commentary - Cramer's Take) must walk away from Countrywide (CFC - commentary - Cramer's Take).

As long as the Russian style nature of the agencies and the monolines continues: We pretend to work and you pretend to rate, we buy some more time for everyone else in the system.

Nothing more than that.

That's why you are seeing municipal bond issuers not even bothering with the insurance anymore -- see front of Financial Times today. That's why the whole damn thing is such a joke. Look, there is no doubt a tremendous benefit to the feds taking over the book of business of these crummy companies and taking warrants in them, but that's way too creative and sophisticated for what has become a bunch of clowns in Washington.

At this point, suffice to say that we just want to buy some time for something else positive to happen.

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