The collapse of the mortgage market has been a Main Street issue for the last six months, but after last week, it has now become a Wall Street issue, Jim Cramer said on TheStreet.com TV's Wall Street Confidential
Web video Monday.
"Obviously, these were all repossessed over the weekend," Cramer said, waiving his hand towards the BMW and Ducati cars parked behind him by the
New York Stock Exchange
. "These are largely Wall Street cars," he said. "They'd probably cost you $75,000, and they could get $50,000 on a repossession. We're speaking in terms of how everyone is so negative."
"The bonus pool is completely in doubt now," Cramer continued. "If you had done something really great in mortgages, I think now you're going to get laid off. The table of employment in mortgages and private equity is just way too high."
As someone who's in touch with the real estate markets and also a lot of analysts, Cramer said that he believes the takeaway from most Wall Streeters is "don't buy your summer home in the Hamptons until January or February."
"I genuinely believe the bonuses are going to be very much in question here," he said.
Cramer said that people have to recognize that the divisions that had been boosted, where the hiring was taking place -- even as late as the end of 2006 and early 2007 -- were private equity and mortgages.
"I predict that those divisions will be downsized dramatically," he said. "They've been the big driver of earnings, which is why I've been saying the earnings are going to come down for the major brokers, which is why they're not that cheap."
Also, he said, "there will be a lot of layoffs, which we have not seen since 1994."
The banks and the brokers are the ones that are "really being hurt" both by the mortgages and by the private equity, Cramer said. "The actual banks, the ones with very big deposit bases -- I think that they will be purchased after they go down lower."
Rather than bidding for
"would be much smarter" to buy
Bank of America
, he said. Even
could be bought.
"I think anything's possible as these stocks continue to go down," Cramer said. "We have a very weak dollar, so these companies are being put on double sale, and I really genuinely believe that they will not be independent at this pace."
At the time of publication, Cramer was had no positions in stocks mentioned.
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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