Lehman and AIG Are in Real Trouble

Lehman (LEH - commentary - Cramer's Take) and AIG (AIG - commentary - Cramer's Take) should be down by now. Why not? We know they need financings, why is there even a letup for one moment on the shorting here? Consider that Goldman Sachs (GS - commentary - Cramer's Take) seems to go down every day, on the obvious prospect of a terrible quarter -- it is beginning to reflect a loss -- we know that AIG is on the hook for so many derivatives related to housing here and abroad that you can't possibly expect a respite in selling.

Sometimes the easiest thing to do is keep going after the same stocks, a la what Doug Kass did brilliantly -- and continues to do brilliantly -- with Fannie (FNM - commentary - Cramer's Take) and Freddie (FRE - commentary - Cramer's Take).

The more pressure put on AIG's stock, the less likely they can do a common stock deal, and the more likely they have to do a horribly dilutive preferred deal that will cause shareholders to jettison the common. What a nightmare. Maybe the best that happens is you have to cover on a secondary at $15.

Lehman? What's going to happen here that is good? A takeunder? A share issuance? That's about as good as it is going to get for these.

If Fannie Mae and Freddie Mac get confiscated, these should be crushed.

Ironically, the stock most hard-hit on the day, Morgan Stanley (MS - commentary - Cramer's Take), is a great hedge versus both stocks.

Short 'em, go long Morgan Stanley.

And go home.

Random musings: Are Bank of America (BAC - commentary - Cramer's Take) and Wells Fargo (WFC - commentary - Cramer's Take) getting jiggy because people are figuring out the dramatic share loss that FNM and FRE will get once the feds step in? I think so. It is possible that FNM and FRE will simply be a place where BAC and WFC can securitize to while servicing. Nice combination.

At the time of publication, Cramer was long Morgan Stanley and Goldman Sachs.

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