TheStreet.com's Jim Cramer says before stimulus plans or anything else, we have to get some homes moving.Hurry. Hurry with the rate cuts. Hurry with the stimulus package. Hurry with the bond insurer bailout. Hurry with the write-offs. Hurry with the Fannie Mae (NYSE: FNM) (Cramer's Take) limits. Hurry with something, anything, because things are still going down and they are going down with increasing speed.
That's what the market said yesterday and the market is saying today already with this ridiculously low 10-year treasury that has not produced the break down to the 4.5 level of 30-year fixed that we need so badly to clear out the inventory of unsold homes.
It is all so obvious that everything has to be hurried. It doesn't take Toll (NYSE: TOL) (Cramer's Take) saying there is little light at the end of the tunnel this morning or Whirlpool (NYSE: WHR) (Cramer's Take) saying this is the worst market in two decades, but that's the feedback we are getting.
Intra-meeting rate cut? We need one yesterday.
I know that we will get them but each day that nothing is resolved is another day that something goes bad. The rate cuts have yet to impact the economy other than some refinancing by people who have bad resets from 2 and 28s from 2006.
Those will continue all year and every time they happen another one of these BBB tranches fails and we get more downgrades and the vicious cycle kicks in again.
Remember where we are: short, sharp rallies -- some would say bear rallies -- followed quickly by declines of some magnitude as the market realizes that the unsold homes haven't been sold and the new homes are hitting the market and the foreclosures are on the increase.
Everything is being dragged out in order to see if we get housing appreciation or stabilization and that's not possible yet, as Toll and Pulte (NYSE: PHM) (Cramer's Take) and Centex (NYSE: CTX) (Cramer's Take) have told us.
It is more than ever a housing issue not because of earnings but because the spigot of loans is getting shut off every day despite the price of interest.
That's because banks know they will take a beating on what they have and all of the BBB paper that is clogging the system still!
Unfortunately none of this is yet obvious to the Treasury or the President as a problem and we are still caught up in the needless stimulus plan instead of a plan masterminded by the FHA to stretch out payments at low levels on resets so that foreclosed homes stop hitting the market at the same time as new homes.
Without it, more pain and nobody is listening.
RELATED LINKS:
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 the stocks mentioned.
GM, Ford and Chrysler CEOs to present new plan tomorrow at U.S. Congress
Bush administration ignored regulators' warning of mortgage meltdown
Cramer on BloggingStocks: Any downside should now be muted 
Reader Comments (Page 1 of 1)
2-06-2008 @ 1:18PM
HCS said...
Are you insane? Housing in some areas, like mine, have doubled in 5 years. Price inflation needs to correct normally with price decreases, not bail outs. Let the market work. Like the elation going up, there will be pain coming down. This is normal. Easy money and credit was the cause and the blame lies there. Get real, no bail outs for bad behavior. HCS
2-15-2008 @ 8:07PM
carpenter said...
wake up pompas! if you sit back and think this is a bail out for people with bad credit that didnt deserve a loan in the first place, then your an ass, and i bet they got you to. what i mean is, no one is placeing blame in ALL the right places. you probably bought a new home in the last 10 years, i bet there was a realestate involved, which conveniently had your house appraised, by there appraiser, of course, at a 7% fee dont you think they wanted it appraised as high as they could? so if you are a pompas ass and you think your home is worth the $410,000 it was appraised at, think again! you lose to! try $310,000 maybe, and the first five years you pay intrest only just like everyone else? wake up people we are all losers in this except for big buisness because its going to be another ten years before your house is worth what you paid for it. people forclosed on are the lucky ones. they can get another house cheaper in a year or two. theres your wake up call! hug your realestate agent for me next time you see them. WANT AN INDEPENDENT APPRAISER? GIVE ME A CALL.
2-06-2008 @ 1:38PM
Americas Watchdog said...
Mr. Cramer;
With all due respect you are wrong. We have the National Mortgage Complaint Center & the US real estate market will not correct itself with interest rate cuts or federal "bail-outs". The issue with the US real estate is value---or the lack there of. Real estate markets will continue to lose value in 2008. This is in part because of record setting foreclosures that will occur in the 1st, 2nd & 3rd quarters of 2008. (More supply---foreclosures=lower prices).
We are of the opinion of why buy US real estate now, when it will have a lower price in December 2008? As far as the Feds, one thing they could do it require all mortgage lenders to disclose a kick back called a yield spread premium. Mortgage brokers must disclose this kick back (for inflating a borrowers interest rate). Banks & Mortgage Bankers get the exact same fee-----------they just don't have to disclose. Tens of millions of US homeowners were cheated with this scheme. Many now will lose their home.
Our Corporate Whistle Blower Center in now auditing conference calls between the Street & Banks & Homebuilders. To say CEO's lied or were really stupid would be the all time understatement. Why bail them out? We'd be more concerned about US pension funds lining up in front of Congress in a few months asking for their bail outs.
This mess is bad and its going to get worse. What did we fail to learn from the S&L crisis?
2-06-2008 @ 2:58PM
Charley said...
Back in college, when I got drunk and finished chugging a beer, I'd slam my stein down on the bar to get the barkeep's attention. "Give me another!" That's what folks like Jim Cramer are doing pleading for a Government bailout from the mess they themselves created. The Government should do precisely what the bartender did to me--ignore them!