Ambac Needs a Foolish Fund to Stay Alive

Ambac (ABK - commentary - Cramer's Take)? How do they stay alive? I just don't see it. Who the heck is going to put more money into this thing?

The answer of course, is that there is a hedge fund/mutual fund sucker born every minute.

These financials that recapped before are often recapping again. The outrageous capital raise of Merrill Lynch (MER - commentary - Cramer's Take) yesterday after they pretty much assured that there wouldn't be one -- although they hedged by saying it was equity that wouldn't be raised, and they didn't -- is typical. So is National City (NCC - commentary - Cramer's Take).

And now it will be Ambac again. That's how bad that quarter was.

One day the capital will run out for these darn financials which are now only 11% of the S&P -- down from 20%!

This one could be the test. And I sure wouldn't give them my money.

Random musings: Keep an eye on Fannie Mae (FNM - commentary - Cramer's Take) equity. I think it is a huge short. I don't even like the preferred. The company is too big to fail -- but who the heck needs the equity, it's the bonds that will be insured, not the common.

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

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