Jim Cramer's Best Blogs

But that doesn't eliminate the put and call. You get the put if the losses are horrible, but the put only applies to the loans that FNM/FRE packages, not to the common. You get the sold call because every chance these companies get they have to issue equity to meet additional losses. Remember, they are only well capitalized against today's losses, not future losses.

Once again, I preface that 4 million defaulted mortgages is probably ridiculously high. But everything has been ridiculous so far in terms of the losses.

I am going with my figures. The Bernanke mortgage exposure can be that big.

And that toxic.

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

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The Breadth of the Danger Is Staggering

Originally published on Tuesday, July 15, at 7:09 a.m.

You don't need me to tell you it's awful out there. You don't need me to tell you that there's no quick fix for any of these things. But what might help you understand why it feels so bad this time is that I have never, in my career, seen so many companies go off track at the same time. This is one unbelievable moment, and it is made more horrible by the day as companies' stocks just get pummeled, causing people to then question the very viability of the companies involved.

First, obviously, are Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote). We don't know what will happen, but we do know that their futures are much darker than their pasts. Their best hope: a Democrat becomes president and shows the usual love to both. But as investments, they are pretty much perma-losers going forward. The losses are that heavy. Yes, it is true that two years from now they will be better, but will the government let them limp through to that? View them as calls on a Democratic win.