Jim Cramer's Best Blogs

How about the option ARMs exposure of a Downey (DSL Quote) or a Washington Mutual (WM Quote)? Not much. Those are failed institutions with big deposit bases. Someone will buy them, but they are part of the problem that won't go away, because those home loans are 100% loan to value, so there is no equity in homes. Many of those people will lose their homes, but if Treasury/FNM/FRE gets those loans, they can give them a 20% mortgage haircut which might be enough to cover the decline in some parts of the country.

The most important change: We had seven dying institutions -- AIG (AIG Quote), Ford (F Quote), GM (GM Quote), Washington Mutual, Citigroup (C Quote), FNM/FRE and Lehman (LEH Quote). The prospects of LEH or AIG to do a Merrill (MER Quote) deal is better than before. That would leave just a handful that need bailing or closing, and you know that GM and Ford will not be closed -- they are too big to fail. Again, that's better than what it was.

That's the win.

Random musings: Bulls, bears and pigs -- the pigs who stayed short Ambac (ABK Quote) and MBIA (MBI Quote), amazing. ... Possible big winner here: HSBC (HBC Quote) -- they can take over WaMu when that company can't raise the cash.

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