TheStreet.com's Jim Cramer explains what could force the Fed to cut rates again.The housing index just can't rally for a minute. The thing's amazing. The stress of the system is so clearly manifested by this that I have to wonder if the Fed wants this index lower.
The fact that the Fed's speakers never mention things like this index and the homebuilders makes me wonder if this group is actually what the Fed wants to put out of business. I wonder if the Fed thinks that Pulte (NYSE: PHM) (Cramer's Take) and Horton (NYSE: DHI) (Cramer's Take) and Lennar (NYSE: LEN) (Cramer's Take) and Standard Pacific (NYSE: SPF) (Cramer's Take) and Centex (NYSE: CTX) (Cramer's Take) need to go bankrupt before the Fed can ease any more.
Many of these firms lent money recklessly. Are the Fed heads thinking these companies need to pay like the New Centurys and the NovaStars (NYSE: NFI) (Cramer's Take) did? (Are the feds, by the way, thinking that this GMAC company has to go because that was a huge provider of crummy mortgages?)
Either way, they, like Fannie Mae (NYSE: FNM) (Cramer's Take), may be overlooked by Bill Poole, but the market itself looks at the housing index (^HGX), layers on Fannie Mae and puts in the J.C. Penney (NYSE: JCP) (Cramer's Take), Starbucks (NASDAQ: SBUX) (Cramer's Take) and Kohl's (NYSE: KSS) (Cramer's Take) numbers and thinks the Fed is just totally wrong about holding off. Toss in the incredible action from the mortgage insurers, which are giving back much of those squeeze gains coming from bogus buyout rumors, and you really have to worry.
You know me. I think the last place you will find out what the Fed is going to do is from the Fed. How quickly we forget that Bill Poole was telling you the day before the half-point cut that there wasn't going to be a cut without a cataclysm.
These guys just don't know what's about to happen and they want to be reactive. So I would not rule out immediate ease on a major financial belly-up, but not before a homebuilder bankruptcy that tips the scales.
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. At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider NovaStar to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.RELATED LINKS:
Mark Zuckerberg and Priscilla Chan: A Romantic Facebook Timeline
Facebook's IPO Debacle, Day 3: Un-Friended and Dis-Liked on Wall…


Reader Comments (Page 2 of 2)
11-20-2007 @ 7:28AM
Sam said...
Cramer please........ WAKE UP already.
Our nation got into this home mortage loan mess BECAUSE OF LOW INTEREST RATES.
Expecting lower rates to get us back out is akin to giving an alcholic more booze to sober him up.
It takes "real" wages to pay for "real" homes...not smoke and mirror financing or government bail outs.
The average American's wages have remained stagnant for decades and low wages cannot support high home prices...The cutting of wages at airlines, in the auto industry and at meat packing and tire plants over the years just to name but a few do not support home ownership at escalated home prices.
Wages and home prices must balance and be in sync. 40 million baby boomers are retiring and they no longer have use for hign maintenance private homes, as they can no longer keep up with maintenance. The seniors require assistance in their older years so they are moving back in with their children. The market is going to be flooded with vacant homes as 40 million seniors grow to old to maintain them.
Sorry Cramer...but you are out of touch with reality on this issue.
11-24-2007 @ 1:15PM
joel said...
dadahh ! everyone blame the suprime market , 10 years ago it was just the contrary , hey you made a bad decision it is your problem , you have been defrauded then it is another story .
Fact is peoples bought house tagged wih new car ,new plasma tv and the like and let's not forget about that cruise too all on borrow equity in something artificially inflated and on a salary they could not afford , sorry buy what you can when you can and forget theseextended or deffered payement , someone will have to make them . You .
11-26-2007 @ 6:25AM
julie pierce said...
'Twas 4:45 am that day.
Thanksgiving was over.
The turkey away.
The shoppers were out there.
Where could they be?
Not at our Walmart,
And not home asleep.
To Kmart and Best Buy,
The shoppers did go.
To Target and Penny’s,
Our Walmart was slow.
The head lights and highways,
Were busy you see.
The highway was crowded,
The mall was busy.
Even dear Santa,
He knew where to be.
He waited at Target,
Most did agree.
No reason to venture,
No reason to go.
The Walmart will draw you,
It’s part of the show.
The HD TVs are numbered you see.
At each Super Center a few more than three.
With twenty or thirty at 800 a pop.
You wait on the list Black Friday a flop.
Customer service is all in your head.
Sam’s way is over, Sam’s way is dead.
No price change, No comping,
No Blitz as it was.
Black Friday for Walmart is not what it was.
The holiday season is now something new.
You like it you buy it,
No price change for you.
2 year service plan?
A real good idea.
It is made in China, and you need that thing.
The register prompts it,
The register rings.
Debit or Credit?
Upscale it sings.
No lay a way, price match,
Or bargain is seen.
Black Friday will end,
As if in a dream.
On Target, on Kmart, on Best Buy a sale,
On Bruno’s and Walgreen’s on Macy’s
the malls.
The Bentonville Monster
Has taken a fall.
All of the others,
Out did the best.
They lost it, they dropped it,
Turned it to a mess.
Somehow they ruined a
Wonderful day.
The wrapping, excitement all gone away.
Black Friday at Walmart was once,
Uncompared.
The workers, the pallets, the piles were
All there.
The sales were enormous, everybody was there.
An increase was yearly.
Each year how it grew.
What once was is over,
Now there are few.
Along with the others,
I buried among,
The Christmases over,
The Christmases done.
Walmart is dying.
Could this be the last?
Will they if ever.
Relive the past.
I seriously doubt it.
They just cannot see.
The millions they are losing.
The shoppers agree.
They don’t even wonder,
They don’t even try,
To make it to Walmart
They’ll just let it die.
Customers trickle
Inside and out.
Then shop on ebay or Macy’s,
Without a doubt.
The deals they are better,
The customers say.
The workers are happy,
It’s not about pay.
A smile here, a smile there,
A laugh and a shout.
Walmart is something,
They can all do without.
Forgotten are customers,
Sam knew where there.
The ones who were trying,
To show others they care.
A mother, a father,
A man and his wife.
The people that needed,
A break in their life.
The wishes that children,
Held closely all year.
The special toy doll that
Would ward off the tears.
The train set, the soldier the cars and
The plane.
The phone and the TV that shoppers would claim.
The items were made in the US of A,
The bicycle tires they now throw away.
From China and Hong Kong,
The lead painted Toys,
The shelves will be barren,
For girls and for boys.
The children see Santa, to tell him their wish.
You buy it all elsewhere,
The elves know the pitch.
Buy it at Walmart,
It’s not for the rich.
It’s poisoned with toxins,
It’s soon in a ditch.
Save more, live better,
Is now what they say.
Always is over,
They gave it away.
Trash heap tomorrow
Buy it today.
Please don’t return it,
Don’t give it away.
And if it is broken,
It came in that way.
But if it’s from Kmart,
Or if it’s from Sears,
We’ll give you a refund
That card will buy beer.
The WIC check is good,
And the food that you buy,
Can come back tommarrow,
Even that pie.
The candy, the syrup, the meat and the soy.
Will all be a trade off,
Will all be a joy.
If you need money, the trade will be fair.
Your WIC card or food stamps,
Can help you out there.
What should be won’t matter,
We’ll give it with ease.
A card for your pocket,
Cause we aim to please.
It’s easy to give,
When you’re going to make,
A few million dollars,
Or whatever they make.
Wall Street is blinded,
Chuck is the Fool.
E-trade is all about,
Going to school.
Retail is fickle,
The stock price is fake.
Execs at Walmart,
Are in for the take.
Failure at this point.
It means not a thing.
Rob is in billions,
And Lee Scott does sing.
Their families are shopping,
The malls and the stores.
Not meant for the average,
Not meant for us all.
The Rolex and Gucci,
Cannot be bought here.
Walmart is having a wonderful year.
Free ads and PR is part of the game.
Lawsuit and Walmart are now viewed the same.
A free pass to refund,
The WIC check and more.
The government cannot,
Or won’t do much more.
How many children will not see a thing.
No Christmas dinner but Mama bought a ring.
Sam and now Helen,
I’m sure must be sad.
To see something wonderful,
Turn out so bad.
Sam called it evil.
Sam was a man who did love his country,
And did the best anyone can.
He treasured his workers,
He shared with them too.
Black Friday meant paychecks and
Bounuses too!