When we speak of tough business reporting, and how TheStreet.com believes you have to have it to make or save money, we very rarely define what happens when you don't have it. We rarely quantify the losses. We have had such good times for so many years that we forget what can go wrong, or what needs to be highlighted or pointed out if we are to avoid losing big money.

The story of

ContiFinancial Corp


, a company that came public in May of 1997 at 33 and now trades at around a buck is one of those stories.

I remember ContiFinancial.

Merrill Lynch

brought the deal. Its parent,

Continental Grain

, is one of those companies that people speak of with awe. It is one of those multibillion-dollar private companies we know nothing about except the owners are richer than everybody but a handful of





Blue-chip firm. Blue-chip parentage.

ContiFinancial was one of those hard-to-understand "consumer and commercial finance" companies that made loans to "borrowers whose needs may not be met by traditional financial institutions" and then packaged them to others who bought these higher-yielding pieces of paper.

Now I will give that to you in English, as it was never given to the thousands of thousands of people who lost their jobs and their investment dollars to this company. ContiFinancial makes loans to deadbeats at a very high yield and then puts them all together into a bigger bond that is then bought by hedge funds who are willing to take the collective risks that these people won't stop paying.

Everything about this industry makes me sick. It is a dangerous industry. The people can default. The loans can be poorly made. Rates can go down big and people can pay off the loans, making these packages hard to value. (By the way, that's what happened.)

This kind of company is as high risk as they come.

But not once in any of the dozens of articles that I read about ContiFinancial in its inexorable march toward a dollar indicates that any journalist saw it coming. In fact, in every story there was a sense that nothing could really go wrong here, that the company would be bailed out by the parent or bought by someone else or, as was the case when the company spoke in February of last year, be bailed out by an end to the vicious prepayments that played havoc with their end product, the packaged bonds.

Each time the company was interviewed, everything sounded just fine. As this stock worked its way all the way down to the low single digits, we had no doubt that everything would come out all right. We were told repeatedly by everybody at the company that there would never be a problem with debt when it came due, or with more securitization (meaning that it would continue to be able to rely on public bond markets for additional money).

In fact, these guys were done from the moment

Long Term Capital Management

and others of its ilk could no longer borrow a lot of money to take down Conti's paper. The writing was on the wall for months during the shameless period when we were reassured.

The de facto backstop of Continental Grain also allowed us to believe that a white knight would be found to get us out of a jam. And when one was found,

General Motors

(GM) - Get Report

, we had every reason to believe that the acquisition was a layup and we would be bailed out as shareholders. Nah, the deal fell through. And Continental Grain walked away from this like it had nothing to do with it.

When I look at the coverage of this disaster, I want to puke. If this company had gotten one-hundredth the critical coverage of a single typical football game, millions would have been saved instead of fleeced. If one reporter had ever raised even an eyebrow about the management of James E. Moore, who presided over the whole debacle and left "to pursue other interests" then maybe this travesty could have been averted.

Nope, this was nothing but free pass after free pass.

When I was in the green room with

Herb Greenberg

before the taping of our show, he told me about all of the death threats he has received for trying to expose managements that he thinks are playing games -- games that will eventually cost shareholders fortunes.

What a joke! Greenberg is virtually the only guy standing between us and those who would fleece us out of house and home. The


can't do it. The brokerages won't do it. Only brave guys like Greenberg will.

We are very lucky to have him doing this kind of stuff. No one else does.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at