Things look awful for the mortgage companies, Jim Cramer said on TV's Wall Street Confidential Friday.

"There is a lot of panic" because of the idea that all of the mortgages behind the CDOs are insured by PMI Group ( PMI), MBIA ( MBI) and MGIC Investment ( MTG).

"I decided this morning from now on I am going to presume that PMI, MBIA, MGIC and Washington Mutual ( WM) are not going to make it," he said. "I say that because I cannot be a conservative investor and believe that those companies can make it."

People shouldn't believe anything Merrill Lynch or any of these insurers or Countrywide Financial ( CFC) has to say, Cramer said. "You just can't trust them."

Cramer: What I'm Doing About Merrill's Panic Attack
At the time of publication, Cramer had no positions in stocks mentioned.

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