Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- the Fannie/Freddie bailout,
- the shorts' handbook, and
- lack of foresight.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Throw Out the Rulebook
Originally published on Monday, Sept. 15, at 9:06 a.m. EDT
Nobody wants a panic. But we've got one.
Nobody from the
has gotten ahead of this problem. Nobody's in there with the list -- and the list is every firm with a big short position -- saying, "Guys, raise money or die, which is what happened to
Having Lehman die is obviously bad for its customers and lenders, but it will be sorted out.
But how can the Fed and Treasury not have been in there telling
what to do? How can there not be a plan? How could we let free-market capitalism still run wild? It obviously failed.
How can the Fed not cut rates
in this deflationary environment to make the deposits of banks worth more?
How can this guy Tim Geithner still be in charge, when everything he has done has been reactive and wrong? Do we just say, "Hey, them's the breaks"?
I put this one on the Federal Reserve. They had every chance to do more, and all they did as fret about Chinese-led inflation. Now the Chinese are so desperate they are doing a stimulus package, and all we have is a Fed that is worried about trying to be sure not that liquidity is available but that its various fancy facilities are in place, facilities that did nothing to help Lehman and did nothing to help
and are doing nothing to help AIG.
Without a rate cut and a Resolution Mortgage Trust, we will simply be facing the imminent demise of
. We aren't any more ready for that than we were for Lehman.
Why blame the government?
Because this stuff as so known and so obviously in the cards that you have to wonder whether perhaps the government has some marching orders from the president to do nothing until after every collapse -- nothing that is preventive.
This weekend, William Gruver -- a board member of
and a professor at Bucknell and a limited partner at
-- wrote a piece for the
New York Times
op-ed page about the need to relook at the endless deregulation that got us here, post-Glass Steagall. It talked about getting ahead of problems and making the system less complex. Good advice! After the next few weeks, there will only be a few survivors left.
Time to put in new rules: Don't wait for a new administration.
All of this was just too obvious. Neither the people who run the government nor the rules they have are right for a time of far more sophisticated interlinking instruments.
So, as almost everyone goes under, let's think of the new world and how to make it better.
Because at this pace, we will be in the new world in two or three weeks.
statement of disclosure is more than we are getting out of others. I find it helpful, and it should be examined for what survivor companies should be doing. ... Lots of high-multiple stocks are going down; they'll probably bounce later in the day.
At the time of publication, Cramer was long Goldman Sachs and GE.
AIG Rescue Had to Happen
Originally published on Tuesday, Sept. 16, at 9:33 a.m. EDT
was too big to fail. There was just no way this outfit was going to be left to go belly-up. It would have frozen the whole Western and Eastern banking worlds and now, through what looks to be a pretty good plan, the company will be able to liquidate assets orderly and set aside the billions it will no doubt need to pay out all of the sour paper it insured.
I am sure we will have to hear a lot of grousing about moral hazards and how this is an outrageous use of capital and how the
shouldn't be involved.
It's all hogwash. This is a company brought to its knees by short-sellers courtesy of the
lax standards that would not be able to pay off financial bets worldwide, which would have set off a chain reaction that could have led to a worldwide depression. I mean it. That's how intertwined this companies' guarantees are into the international financial system.
Will the taxpayers be on the hook for all of the money? Actually, I think the assets of AIG are actually going to be able to cover most of the bets made, as they are darned good and can be sold over time, not fire-sold.
It's a horrible thing, but it is less horrible than every other option I have heard.
Now, how about some good news. A month ago, I talked about seven black holes: AIG,
AIG, FNM/FRE and Leh are now off the table. Washington Mutual can muddle through or be seized by the FDIC in what I now think could be an orderly fashion. The automakers will get their guarantees because it is an election year.
Citigroup? It has a lot of assets it could sell and a big deposit base, so it simply has to make those sales and it will be fine.
But it must make them
In other words, we are almost there. I think that because of the big deposit bases of
Bank of America
, we don't need to worry about them. And a black hole I didn't even think was a black hole after the 300 million shares issued and the Lone Star deal,
, is filled in to boot!
There will be others
, no doubt. But you have to admit that, one, pretty good list, and two, pretty far along in being fixed, if not almost there!Let's see now what the bears have to complain about other than we have now nationalized about 60% of the financial system. We are not all Keynesians now, we are all communists now!
At the time of publication, Cramer had no positions in stocks mentioned in this post
I-Banks Would Be Great Pickups Here
Originally published on Thursday, Sept. 18, at 3:09 p.m. EDT
We love the commercial banks too much, and we hate the investment banks -- or at least the last two -- too much.
I have been a huge supporter of the commercial banks -- the fortress four:
Bank of America
-- and I added
recently, but I do not want to sugar-coat things.
We need investment banks, and if I were a JPM or a WFC or a WB, I would now be
one of these two --
. If I were Bob Steel, I would be buying either one of these here.
If you can use deposit money, which you now can, to do some of the institutional trading support that can be very lucrative, you would do it. I think Goldman's book, which is right here, is for real.
I do not know who is behind the selling, but I have to point out that Goldman has no home equity or car loans or any of the other subprime nonsense that a Wachovia has, but nobody seems to care.
Also, last week the talk was that Goldman might buy Wachovia ... now it could be the other way around!
At the time of publication, Cramer was long JPMorgan and Goldman Sachs.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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