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It would be very easy for me to say something like this about the federal government's plan for Fannie Maeundefined and Freddie Macundefined: "The plan is a joke, it will mean nothing, the taxpayers are going to be stung and the market should be sold aggressively."

In fact, I feel like writing that. I feel like writing it because it is fun and simple and consistent with pretty much everything else every "intellectual" and "thoughtful" person was saying.

But then I reach back to my writings from last Thursday and Friday , which

asked the bears

if anything good could happen and what to buy and everyone was pretty scornful or ignored me. Even as the Bank Index (BKX) turned out to be a home run to buy.

So, I am urging, without any prejudice, that bears DO NOT READ ANY FURTHER. Just join the "Jim Cramer is a Moron Club" and go switch on some football, because here is what I have to say about the Treasury plan:

It is what I have been calling for. It is what I have wanted. So I can't turn around now, even as I have been the world's most vocal critic of the Treasury, and that it's bad.

I will first put, in plain English, what I believe this plan will help do (the operative word is


, as opposed to



    It will help stop the root of all financial evil right now, house price depreciation.

    It will make mortgage money cheaper and more readily available.

    It will slow the rate of foreclosures.

    It will, if done right, not cost the taxpayer anything and could actually return money to Treasury through the preferred and common stock that the government is buying.

    Now, let's try to pick each one of these apart, using the traditional "Cramer-is-a-moron Socratic Dialogue" between a hypothetical Cramer basher and me:

    Jim Basher (JB): Jim, nothing can stop house-price depreciation because there are too many homes for sale and the demand isn't there.

    Jim Cramer:

    Actually, we are building 60% fewer homes than we did two years ago and while the unsold inventory is up to 1991 levels -- highest in 17 years -- we have 40 MILLION More people than then, so it ain't so bad. The demand can catch up to supply if supply is shrinking and demand is pent-up.

    JB: Nothing will make more mortgage money available because the banks don't want to lend and only lower fed funds rates will lower mortgage rates.

    Jim Cramer:

    Fannie Mae and Freddie Mac had kept rates abnormally high, so getting them out of the way will help lower rates. I agree that the

    Federal Reserve

    should loosen and can loose because of the commodities collapse and the strong dollar. What you have to think of is what was happening and what can now happen. Before this action Fannie and Freddie were having trouble issuing paper to buy more mortgages and having trouble selling mortgage-backs because people were worried that the implicit guarantee wouldn't be explicit as no one really trusted the Treasury to do the right thing. (I had urged the Federal Reserve Bank to buy $200 billion in FNM/FRE paper but they wouldn't. This is late, and it's the Treasury, but it is better than nothing.)

    Now all of those fears go away and banks will be able to sell more loans to Fannie and Freddie, and they will package them and sell them and even, at the beginning , keep some on their own balance sheets, even though that's what got mortgage rates and get more money into the system.

    JB: This can't help stem foreclosures, those are from unemployment problems.

    Jim Cramer:

    Yes, indeed, unemployment rates rising are really bad for housing. But our foreclosure problem, which has much to do with house-price depreciation, can be stemmed by cutting the principal of the loan and taking an option arms/exotic loan and turning it into a 30-year fixed loan.

    Now that the government owns so many loans courtesy of the takeover, it can stop foreclosing (remember this company owns about half of the bad loans in the system), redo terms and then send the loans to the FHA, which


    cause a decline in the


    of foreclosures and prompt first-time homebuyers to come back to the market to buy, less worried that the homes on the block will be foreclosed.

    JB: This will cause the taxpayer to lose a fortune.

    Jim Cramer:

    You don't know that. The taxpayer now has a huge stake in two entities with the capability of being VERY PROFITABLE if you can get rid of or work out bad loans because these two companies have gigantic fee structures that make them fortunes that will now go to you. The companies don't need to be run for extreme profit, just some profit and we can get money back and the housing business will get better.

    Look, I know the Jim Bashers won't be quelled, I make new ones everyday! But if none of this means anything to you that could be remotely positive, then think like this:

    How does it hurt the market?

    Give me one way it hurt it other than some banks that own the preferred that now have to take a haircut but will be looked at with a less-than-critical focus because it wasn't their fault. In other words, there will be forbearance.

    To be sure, I don't like up-big openings, Just like I buy down-big openings. I would be selling something into an up-big opening.

    But given that this is the plan that I have been calling for, given that the big debt buyers like China and Bill Gross will come back to the market, given that nothing good was happening without this, I am very sorry to report: THIS IS GOOD NEWS!

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

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