360 Degrees of Subprime Lending

When you have the housing industry building a fraction of the homes it was building and credit hard to come by, you are giving Benanke the crisis cover he needs.

Some of my friends who read RealMoney are freaking out about the negative columns that are being written about how dangerous this subprime crisis is. I'm taking those columns very seriously, which is why I am growing more bullish by the day. The fact that the Fed chairman bought into it today in front of the House of Representatives shows me that the Congressional drumbeat -- remember, prime is Republican, subprime is Democrat -- could be building and building fast.

Am I Mr. Brightside? No, I believe that subprime's awful, even worse than the bears think. When I look at the cancellations that a KB(KBH Quote) or a Toll(TOL Quote) has, I know that the same rate applies to those who took these loans down. That's maybe 30%-40%, not the 7%-10% default that their models presume when employment is this low.

If anything, they're saying there might be a fire. I say it's raging, which is why I believe the crisis is about to give us that May cut that I am counting on to take the Dow up 17% this year.

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

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Subprime Fungus Will Spread

By Doug Kass

This was originally published on Street Insight on Feb. 15 at 9:27 a.m. ET.

Wednesday saw another large mortgage bank, Silver State Mortgage, cease originating subprime loans. Silver State Mortgage was, according to National Mortgage News, one of the fastest-growing wholesale lenders in the country.

The relatively healthy subprime originators, like Washington Mutual's (WM Quote) Long Beach Mortgage, are downsizing around the country faster than you can say BBB-minus.