TheStreet.com's Jim Cramer says the guys at the top don't know what they're doing, and it shows.

AIG's (NYSE: AIG) (Cramer's Take) making everyone's life difficult today. That's in part because AIG had been the biggest proponent of "super senior," meaning they repeatedly said that their collateralized debt obligation (CDO) exposure was of the kind that was intelligent, measured and thoughtful. They talked endlessly about how their due diligence made the difference and that unlike all of the other buyers, they kicked the tires three times and never bought the plain ol' CDOs. Then they brought in professors from Wharton to be sure that even if all heck broke loose and they were being too aggressive, they would be hedged.

They also were the first to give you the percentages of how much could go bad and that even in the worst-case scenario, they were overcapitalized. And, most important, they were insurers, no need to mark to market, they can play it all out.

Plus, they touted their own struggles. They made the point that because of the turmoil at the top, they hadn't bought any bad stuff and stopped buying residential real estate products after 2005. What they did buy -- they assured us in that big teach-in dog-and-pony show in December -- was the extra-special nature of their particular buys and that, unlike everyone else, risk officers scrutinized every single piece of paper that went into their super senior insurance, meaning only the top-top part of a CDO-squared, the part where everything had to default ahead of it; they made a point of how impossible that would be.

It was all nonsense. Every bit of it. It was all Enron, frankly, unless they genuinely drank their own Kool-Aid about risk management and extra-mile supervision. Obviously, the SEC needs to step in to find out, that's for certain.

This one's not from left field. I have been calling for Sullivan's firing for so long that I was mortified to speak at a St. Patty's Day event that was sponsored, in part, by AIG. This was the one that complained about me when I put it in the sellblock at $60 and said that Sullivan should be fired. The pushback from these guys was pretty heavy. As usual, they insisted that I did not know what I was doing. Heck, I hate that. For heaven's sake, if I didn't know what I was doing, why would I talk about it? There's enough that I don't know what I am doing that I am happy to shut up when I see it.

Anyway, this company's in trouble, and not just because of the capital raising. You don't raise capital and raise the dividend. That's so obvious as to be painful. Clearly, AIG has no idea what it owns, so any amount of capital it raises is pure conjecture. Everyone at the top is over his head. They don't know what they are doing.

So, because it is in the end of the reporting period, the whole shebang happens again. We don't believe anything good that Citigroup (NYSE: C) (Cramer's Take) might tell us today. We think that everyone's lying again, especially the really bad ones like Washington Mutual (NYSE: WM) (Cramer's Take), and I hate to say it, Wachovia (NYSE: WB) (Cramer's Take). We know that Bank of America (NYSE: BAC) (Cramer's Take) is back on the burner because Countrywide (NYSE: CFC) (Cramer's Take) is an unmitigated disaster. We know that no financial or homebuilder can be trusted after Hovnanian's (NYSE: HOV) (Cramer's Take) fund raise. Who in heck trusts Fannie Mae (NYSE: FNM) (Cramer's Take)?

So the threat for superdestruction comes back.

As I said last night, I believe, once again, that it will be contained. That's because there are so many value investors who have been give tens of billions to invest in these kinds of pieces of paper and because the egos of these value investors force them never to make a mistake, to just be early.

I would stay away from anything AIG. If I were them, I would have cut the dividend and raised $20 billion. Why not?

Oh, and keeping Marty Sullivan at the top?

Hysterically funny.

RELATED LINKS:

• AIG Battered by Derivative Writedowns
• 'Fast Money' Recap: Rotten AIG

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.