Jim Cramer's Best Blogs

I have become convinced that we have been hurtling toward Great Depression Two without a resolution of the mortgage crisis.

This is the best way to stop that Great Depression. It would be shocking to me if we went into a Great Depression with foreclosures spiking, home prices plummeting, deflation rampant and unemployment doubling or even tripling, all because we worried about what institutions will make money. The ones who make money are the good ones, as I demonstrated with the math. The bad ones get swallowed up and management booted. What more can you ask for?

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

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The Plan Isn't So Hard

Originally published on Thursday, Sept. 25, at 11:07 a.m. EDT

We will make money on the plan. It is almost impossible not to, if the pricing is right. From the very beginning, we have lacked a ladder, a scale, that tells us what kind of mortgages are worth what. From the very beginning, the absolutely outrageous SEC demanded no disclosure of mortgage vintage, geography, FICO score and loan-to-value.

There simply aren't that many other variables. You can produce models. You can figure out what this stuff is worth.

The only real variable is which loans should not be bought no matter what. Some underwriters were so bogus and some buyers so speculative that you have to wonder how in the heck we should buy those mortgages. The negative amortization, pick-and-pay type of loans, I think should not be bought until the very end. Those could be worthless. The banks that lent them are going to have to take a severe hit.