On the Brink: The Leaders Can't Hack It
08/28/08 - 03:27 PM EDT
Jim Cramer
Editor's note: Our new "On the Brink" series will provide daily insight into the financial firms facing capital shortfalls and the growing pressure from short-sellers in the market.
Without a bear story to cling to and with oil going down, you see how benign and positive this market really can be. You can see how people are going back to the "happier days are here again" scenario. Now, will the ne'er-do-well financial institutions use the benign moments to raise more equity? I think we have to start imagining a world where somehow Washington Mutual (WM Quote - Cramer on WM - Stock Picks) and Citigroup (C Quote - Cramer on C - Stock Picks) raise money. We have to be thinking that AIG (AIG Quote - Cramer on AIG - Stock Picks) is working on an offering. That's what happens when we get a couple of good days with a decent bond market and no crises. I think the problem with the remaining eyesores is the leadership. AIG's boss, Robert Willumstad, still has not gotten his arms around the European exposure, and the downturn there in real estate is where we were in about December 2007. Not a good place to be. Citigroup has become a debating society with endless trimmings. But let's face it, if any of these headcount reductions had been real, they would have about two-thirds the employees they had last year at this time. I wonder whether Pandit is an inept fund-raiser and whether it's time to admit that they need him in some sort of office of the chairman. Citigroup is in the same shape as a college that needs to put in a president who is a fund-raiser, not a practitioner, and Pandit's clearly not cut out for that. Not inept; just the wrong man for the job. Lehman's (LEH Quote - Cramer on LEH - Stock Picks) Dick Fuld is now squarely part of the problem. He has lost the truth and faith of the investment community. If Kerry Killinger were to be fired, WaMu would go to $5-7 and it could raise money.
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