14,000,000 that took out mortgages with super generous terms not going to be able to pay them back? Do these borrowers not have mortgage insurance as part of their payments? Come to think of it that just sloughs off the defaulters to insurance companies...that colossal number of defaults would not be sustainable!

Not even his listeners can have any real sympathy for the Wall Street investment banks who booked billions of profits and bonuses from securitizing these mortgages, which were credit-impaired from the start. And Wall Street wants the Fed to bail them out, even before the law suits have begun and their customers start demanding they take these foreclosed mortgages on to their own books?

Here is an article that shows how easy it is for people to lose their homes in foreclosure because the securitization process allows all the participants along the way to shrug their shoulders and say "not my problem". http://www.nytimes.com/2007/08/06/business/06home.html?_r=1&ref=business&oref=slogin

This is what Wall Street wrought, and these real people in the article are among the millions who are getting badly hurt in this mortgage crisis. At least the Wall Street bankers won't lose their homes and their fortunes even if they do lose their jobs.

Here.

I did inhale.

Kunstler

...Cramer's histrionics were only a few clicks above his normal antics on the "Mad Money" show, but even so, they made a remarkable impression of someone in real, not mock, despair. He mentioned more than once during the tirade that he'd been on the phone all week with other interested parties who were begging him to do something about the rising bloodbath on Wall Street. And by "do something," they clearly meant that Cramer should go on his TV show and make an appeal to Federal Reserve chief Ben Bernanke to drop the prime interest rate at the Fed's meeting this coming Tuesday -- the purpose of which would be to make cheaper loan money available to the Wall Street players whose investment houses suddenly found themselves underwater in the churning straits off Hedge Fund Island, weighed down by bagfuls of worthless securitized non-performing mortgages.
Personally, I don't quite get how a financial industry based on bad loans would be helped by borrowing more money to bail out a hopelessly unwinding Ponzi loan racket of the type the industry had engineered for itself -- but maybe I'm lacking the gene for financial creativity that the Bear Stearns bonus babies were all born with.
In any case, apropos of Cramer's telephone marathon, one can only imagine the number of cell phone minutes racked up this weekend out in the Hamptons by players trying desperately to finagle their way out of the brutal fact that their firms and funds suddenly lay exposed to the cruel ravages of reality. A lot of catered crab tidbits and mini-quiches must have gone uneaten out along the dunes as weeping men in blazers realized that "marked to market" had come to mean the same thing as "holding a bundle of shit."
...

In his CNBC tirade, Cramer barfed up some choice phrases such as, "[the Fed board] has no idea how bad it is out there!" and "this is armageddon for fixed income [markets]!" No doubt a lot of observers, especially in the cheerleader financial media, will discount these utterances as we enter the shark-infested waters of the open markets this week. I really have to wonder if the many little life-rafts out there, rigged desperately over the weekend, bearing the castaway crews of hedge fund boys, are not drifting into the damp winds of a perfect financial storm.

I did inhale.

LINK To Video ~ Cramer: Why I Took the Fed to Task ...

http://mauberly.blogspot.com/

but this article makes sense:

No Correction Yet
By Al

CNBC’s Jim Cramer the market clown calls: ‘Armageddon in the Credit Markets’ — he goes on Ben Bernanke has no idea of the big problem in the bond markets. Cramer believes that Ben Bernanke should lower interest rates or people will lose their homes and the market will go down. The real truth might be he isn’t really concerned about people losing their homes but more concerned about his friends in the markets who stand to lose money. After all it is his hedge fund friends in the markets that put the poor home owners in their current situation with cheap loans they couldn’t afford. We have had a lot of liquidity in this market and Cramer is calling for more so the party will continue, he seems to forget about inflation and the fact that the Feds reason for existence is to curb inflation. My guess is, the Fed will do nothing Tuesday. Lately, there seems to be a lot of personalities appearing on television trying to make people feel good about investing in this market and trying to put a floor under it. Cramer is just another example. The question you need to ask is why are all these personalities doing this?

Let’s look at things. The Dow is up 5%+ for the year, the S&P is up 1%, the NASDAQ is up 4%+ and the poor Russell is down 4.5%. If we talk about the last 52 weeks these percents are much higher. This is not what I would call a correction. A correction is a 5% to 20% drop in the markets. So what is all the concern about? The market got way oversold and dropped down to where it should be based on normal growth expectations. We have not seen a correction yet and we may not in the near future. The market just got ahead of it’s self and we have made a minor adjustment. Give this market a week or so to shake out and it may be time to buy.

Source

Cramer's just showing his compassionate side this time. His buddies are now facing "Madame Guillotine" in their jobs, not some little peons being axed because Wall Street demanded job cuts to justify a rising stock price. Cut Cramer a little slack. At least it shows he's partially human.

I'd like to see his comments about Nardelli's appointment as the head of the new Chrysler, though. The comparison will be interesting. Nardelli's being brought in carry out another "neutron bomb" attack, just to get this moribund dinosaur's stock moving in the right direction. How firing tons of people when they have no product line to offer will resurrect the company escapes me however. Chrysler has gone to the well so many time asking its employees to bear the brunt of the pain as it restructures that I think the new owners will find that the well has done run dry. And Nardelli was such a winsome jolly fellow too.

or, at least, an ex-coke head, but watching his show makes me suspect he's fallen off the wagon.

mrs. skippy loves the guy. i can't tell why, or talk her out of it. i point out the study that proves that cramer's picks are all about 3 months behind the curve.

maybe it's the wacky graphics she loves.

...that Bear Stearns is another Enron, or at least Drexel Burnham. Raising the liquidity is only going to delay the inevitable.

The housing market, by the way, has already melted down. I'm so glad I don't own right now. All inevitable; by my calculations, the housing bubble ran for thirteen years but really took off in '01. That's a remarkable run, though inflated by a class of financial gimmicks not since since the Roaring Twenties.

Can someone comment on the "Cocaine Hypothesis" of stock market activity? This is the theory that volume corresponds directly with the supply of cocaine to the wall street distribution district. When there's plenty around, the traders are twitchy and think they're brilliant, buying and selling like squirrels on, well, cocaine.

When the supply is thin, they all lay about like lizards on a cold rock, listlessly yelling "Buy!" "Sell!" but just not feeling it.

It amazes me how shortsighted people can be on both sides of this issue, as if all of this must happen on a given day. It took a while to make this mess and it will take a long time for the full effect to be realized.

Fate of Subprime

...

Economist Gary Shilling thinks as many as half of all subprime ARMs will go bad - meaning, about 1.7 million homeowners will be forced to give up the roofs over their heads. So far, house prices are down about 3% coast-to-coast, according to the Case-Shiller index. JP Morgan (NYSE:JPM) predicts that the index will go down 15% to 20% in the next two or three years.

“The worst is still ahead,” says the NYT piece. ARMs really caught on in the spring of ‘05. The peak in adjustments will hit in October of this year - with about US$50 billion in mortgages up for reset.

...

I did inhale.

By Reuters | 07 Aug 2007 | 02:18 PM ET

The Federal Reserve on Tuesday held benchmark U.S. interest rates steady at 5.25

percent for a ninth straight meeting and said that while downside risks to growth had risen "somewhat," inflation remained its main concern.

The decision by the central bank's Federal Open Market Committee keeps the overnight federal funds rate at the level it hit in June 2006 after 17 straight quarter-percentage point
increases.

...wasn't swayed by the histrionics.

http://www.usatoday.com/money/economy/2007-08-07-fed-unchanged_N.htm

WASHINGTON — The Federal Reserve left its target for a key short-term interest rate unchanged at 5.25% Tuesday, acknowledging growing volatility in financial markets and tighter credit conditions for consumers, but reiterating that inflation remains the dominant threat to economic growth.
A statement released after the meeting of the Federal Open Market Committee, made up of Fed governors and regional bank presidents, suggests the central bank is unlikely to alter its rate policy soon.