TheStreet.com's Jim Cramer says the acquired Bear Stearns portfolio is worth even less than he thought.

How bad was that Bear Stearns portfolio? I am beginning to believe that JPMorgan's (NYSE: JPM) (Cramer's Take) buy of Bear is looking like a big mistake. It can only be justified by what might have been an even bigger problem for JPM -- the collapse of the trades that Bear made, which were being processed by JPM's clearing.

We are now beginning to get a real sense of the worthlessness of the mortgage portfolios. Not that we got any help from the SEC, which has taken a "we don't care what's in the mortgages as long as you tell us you have mortgages" attitude. That's been worthless for investors, and maybe even for JPMorgan.

The losses now exceed $400 billion, according to my modeling (if you simply assumed that 50% of the exotic mortgages that were issued from 2005 to 2007 eventually went into default). That's amazing, but it looks like I dramatically underestimated the losses. UNDERESTIMATED!

The most egregious issuers of these exotic mortgages were Bear, Merrill Lynch (NYSE: MER) (Cramer's Take) and Lehman Brothers (NYSE: LEH) (Cramer's Take). I believe that JPM has taken in a huge number of uninsurable, non-hedgeable mortgage instruments that are a pure write-off. And that means they are probably underwater on everything they took in.

Worse still, judging by the Goldman Sachs call (NYSE: GS) (Cramer's Take), JPMorgan didn't pick up much from the point of view of clearing and prime brokerage. I am really worried JPM got nothing from this deal.

JPM is adamant that it got a lot out of the deal, which would imply that I am totally wrong. I can't buy that. Sorry. Not after what we have seen from the other companies that have similar vintages.

Second, it's a really bad sign for the next shotgun acquirers. Without insurance from the government for all of these bad portfolios, it simply isn't worth it to call the government and say "I want Nat City (NYSE: NCC) (Cramer's Take)," or "I want Washington Mutual (NYSE: WM) (Cramer's Take)."

It also makes me think that Countrywide Financial's (NYSE: CFC) (Cramer's Take) balance sheet will really impair Bank of America (NYSE: BAC) (Cramer's Take). And I simply don't have any idea how Wachovia (NYSE: WB) (Cramer's Take) can make it in its current form.

Everyone is way too bullish on these companies. They should all be sold. Period.

Random musings: It is time to reassess the negative view of gold. The Fed isn't tightening, which is what caused gold to go down. That was a canard. The reversal in these banks is no doubt freaking the Fed out. The idea of raising rates takes away the one reason why you would want to invest in banks: the yield curve allowing the banks to refinance. That logic is sheer lunacy.

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Bolling: After Lehman Call, Bet on GS, JPM
Cramer: Bear Arrest Could Scare Hedge Funds Straight
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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 was long Goldman Sachs.