TheStreet.com's Jim Cramer says our problems are so widespread, he sees lots more IndyMacs before we're out.

You don't need me to tell you it's awful out there. You don't need me to tell you that there's no quick fix for any of these things. But what might help you understand why it feels so bad this time is that I have never, in my career, seen so many companies go off track at the same time. This is one unbelievable moment, and it is made more horrible by the day as companies' stocks just get pummeled, causing people to then question the very viability of the companies involved.

First, obviously, are Fannie Mae (NYSE: FNM) (Cramer's Take) and Freddie Mac (NYSE: FRE) (Cramer's Take). We don't know what will happen, but we do know that their futures are much darker than their pasts. Their best hope: a Democrat becomes president and shows the usual love to both. But as investments, they are pretty much perma-losers going forward. The losses are that heavy. Yes, it is true that two years from now they will be better, but will the government let them limp through to that? View them as calls on a Democratic win.

We all know that Citigroup (NYSE: C) (Cramer's Take), Wachovia (NYSE: WB) (Cramer's Take), Washington Mutual (NYSE: WM) (Cramer's Take) and National City (NYSE: NCC) (Cramer's Take) are in trouble. Bank of America (NYSE: BAC) (Cramer's Take) says it isn't in trouble, but obviously the market doesn't believe management because the stock failed to rally when it said its dividend was safe. Any short-selling hedge fund could hire 30 actors and have them line up at a Washington Mutual or two and get a bank run going. Then we would have to hear about a "hasty" Treasury department plan to bail out WM. Hasty? How can these guys not see it coming?

TheStreet.com's Jim Cramer says Fannie and Freddie aren't the true culprits here.

The blowhards and bluff artists and the Gang of Four -- Ambac (NYSE: ABK) (Cramer's Take), MBIA (NYSE: MBI) (Cramer's Take), MGIC (NYSE: MTG) (Cramer's Take) and PMI (NYSE: PMI) (Cramer's Take) -- truly have blood on their hands for this moment. So do the ratings agencies, the mortgage insurers and the salespeople who packaged undocumented loans and pushed buying homes with no money down.

The whole apparatus stinks and we are now seeing the unwinding, but I think that the false assurances created by the Gang of Four and their insistence to not worry made everyone way too complacent. Their glib promises as well as the incredibly lax work of the ratings agencies, S&P and Moody's, enabled the whole edifice to be propped up.

And once it was clear to them that they needed more capital, they chose to forgo the window and attack the shorts. Had they raised the capital they needed and had the ratings agencies said they can't bless any more of this junk, we might have never been in this spot.

TheStreet.com's Jim Cramer says he has no confidence in these hated names, and neither should you.

The financials are flying -- there are finally bids for most of them underneath. Many, including Lehman (NYSE: LEH) (Cramer's Take), are running. What a great time to put the negative cards on the table and put the negatives in perspective. That's right, let's look at the financial Achilles' heels. What could go wrong? In other words, here's the companion piece to Doug Kass' positive conversion. Here's what I am worried about even as Doug thinks everyone's too worried and the bottom is being put in.

To get started, let's look at what's not causing the endless declines in the stocks -- don't worry, we will get to the financial dirty dozen when I finish this preamble.

First, it ain't earnings. Earnings aren't going to be that great. But that's why the S&P is at 14 times. It can go to 12 or 11, or most likely stays at 13-14, but the E goes down (earnings).

Second, it ain't oil. The stocks sensitive to the increase in oil have room to go down, but the price of oil is being factored in slowly but surely.

Third, it isn't inflation or recession. Those two are being baked in each day.

MAJOR PAPERS:

• After being downgraded by Moody's, The Wall Street Journal reported that MBIA Inc (NYSE: MBI) will have to make $2.9 billion in termination payments and put up an additional $4.5 billion in collateral on agreements called Guaranteed Investment Contracts. As a result the firm is selling municipal bonds to raise cash.
• Anheuser-Busch Companies Inc (NYSE: BUD) introduced a new business plan to help thwart a takeover by rival InBev. As part of its plan, The Wall Street Journal reported its intention to reduce headcount, raise prices and buy back more of its shares.
• In an attempt to withstand the economic slowdown, the Financial Times reported that Siemens AG (NYSE: SI) announced plans to cut 17,200 jobs worldwide. Approximately 6,400 job cuts will be in Germany with a third more, elsewhere in Europe.
• The Financial Times also reported that Citigroup Incorporated (NYSE: C) is planning to change its bonus system for hundreds of its top managers, in an attempt to increase cooperation and reduce competition within the company.

OTHER PAPERS:

• John Varley, the CEO of Barclays Plc (NYSE: BCS), said the GBP4.5B rights issue answered naysayers, and said in an interview with The Sunday Telegraph that extra financing will not be necessary.

Moody's Investor Services' recent downgrade of MBIA Inc. (NYSE: MBI) from Aaa to A2, a five notch drop, will cost MBIA more than $7 billion. MBIA is the country's leading insurer for municipal bonds and stable corporate bonds such as utility bonds. Due to increasing uncertainty regarding MBIA's mortgage related investments, Moody's judged MBIA to have only limited financial flexibility to address continued deterioration of its mortgage related portfolio, which has already taken a cumulative loss in excess of $2 billion.

MBIA must come up with $2.9 billion to cover potential termination payments in Guaranteed Investment Contracts (GICs). The company must also pony up $4.5 billion more to meet collateral posting requirements for these GICs. MBIA senior management insists it has more than $25 billion in assets, of which $15 billion is available to satisfy these collateral requirements.

So who do you believe? Both Moody's and S&P downgraded MBIA. The company's senior management says things are more or less fine. Clearly investors are backing Moody's and S&P. The stock closed on 6/25 at $4.91, and may be headed to its 52-week low of $4.25. MBIA's 52-week high was $68.98, but we shall not see numbers like that for many a day.

MOST NOTEWORTHY: Assured Guaranty, Limelight Networks and Monotype Imaging were today's noteworthy initiations:

• UBS expects Assured Guaranty (NYSE: AGO) to increase shares in the public finance guaranty market and take advantage of reinsurance opportunities. Shares were initiated with a Buy rating and $31 target.
  
• Merriman assumed Limelight Networks (NASDAQ: LLNW) with a Neutral rating. The firm believes investors should remain cautious until a ruling in the company's patent infringement trial is handed down.
  
• Monotype Imaging (NASDAQ: TYPE) was initiated at Banc of America with a Buy rating and $16 target. The firm highlighted the company's strong revenue visibility and attractive valuation. Shares were also initiated at JP Morgan with an Overweight rating, citing TYPE's discounted valuation and solid IP licensing franchise.

OTHER INITIATIONS:

• B. Riley assumed National Penn Bancshares (NASDAQ: NPBC) with a Neutral rating and $16 target.
  
• Vestas Wind Systems (OTC: VWSYF) was initiated at Jefferies with a Hold rating.
  
• UBS started MBIA Inc (NYSE: MBI) with a Neutral rating and $6 target.
  
• Morgan Joseph initiated DXP Enterprises (NASDAQ: DXPE) with a Buy rating and $53 target.

Before the bell: Oil, financials woes send futures lower

Ambac (NYSE:ABK) is down 4% after being downgraded.

MBIA (NYSE:MBI) is off over 5% after a downgrade.

Royal Caribbean (NYSE:RCL) is off 5% after a brokerage downgrade.

Continental (NYSE:CAL) is off 4% on news that it is unlikely to merger with another airline.

Stocks may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

When word started circulating that hedge fund manager and renowned short-seller William Ackman was set to make public a new short position, a friend and I discussed it with some anticipation. We both hoped that it would be something new and exciting -- ideally a non-financial stock and, at the very least, something other than a bond insurer. Ackman has made headlines with his prescient calls -- and publicity-generating antics -- warning of trouble at Ambac (NYSE: ABK) and MBIA (NYSE: MBI).

Well the name of the company is out and it is indeed another bond insurer. And making it even less interesting, it isn't even a short. He's betting against Financial Security Assurance which, since it's owned by French bank Dexia, can't be shorted. Instead he is buying credit default swaps on the company's bonds.

A Fortune piece discussing Ackman's claims somewhat snidely points out that his long picks aren't doing well lately. Sears Holdings (NYSE: SHLD) and Target (NYSE: TGT) have been weak performers this year. But I think analyzing a stock's performance over a few months completely misses the point -- Ackman does higher quality research than just about anyone else on Wall Street, and it can take the market years to catch up with him. In the case of Amback and MBIA, an analysis of stock charts would made Ackman look like a buffoon for years after he started raising red flags. If Ackman's research is sound -- historically, it generally has been -- patient investors should do quite well following him into Target and Sears. Impatient investors probably won't do well no matter what.

MAJOR PAPERS:

• According to Yahoo! Inc (NASDAQ: YHOO), the Wall Street Journal reported that a severance plan investor Carl Icahn said is "excessively expensive" would come into play if Icahn is successful in his plan to take control of the company's board; Yahoo! maintained that the plan is structured to prevent Yahoo! from altering or dismantling it while under a proxy challenge.
• The Financial Times reported that Lehman Brothers Holdings Inc (NYSE: LEH) almost reached a strategic deal with a group of Korean financial institutions as part of its recent capital raising initiative, and the investment bank may still sign an agreement with the Korean companies this year, inside sources said.
• According to the Financial Times, Merrill Lynch & Co Inc (NYSE: MER), UBS AG (NYSE: UBS) and Citigroup Incorporated (NYSE: C), which are most exposed to MBIA Inc (NYSE: MBI) and Ambac Financial Group Inc (NYSE: ABK), are facing further write downs of up to $10B after the bond insurers lost the battle to keep their triple A credit ratings in tact.
• A source familiar with the matter told dealReporter that Barnes & Noble Inc (NYSE: BKS) is conducting due diligence, but has not established whether it will competitively bid for Borders Group Inc (NYSE: BGP). Should Barnes & Noble indicate real interest, the biding process could be delayed, the source said.

OTHER PAPERS:

• The Detroit News reported that Ford Motor Company (NYSE: F), in an effort to keep up with changing consumer demand in the U.S., is assembling a plan that will shift entire truck plants to car production.

TheStreet.com's Jim Cramer says hedge funds that short stocks are speaking up -- get used to it.

I wrestled with this thought all night: What happens tonight if I could own or short individual stocks, and then came out and said that I had thoroughly researched the last quarter of Wachovia (NYSE: WB) (Cramer's Take) after the firing of Ken Thompson. Mercy, mercy, why did that take so long? Let's say I said the dividend was too high and that the company needed to do an equity offering of at least $5 billion that would no doubt have to be priced in the teens because of all the misstatements about the pick-and-pay loans the bank inherited from the smartest institution in the world, Golden West, which was sold to them by those two saints, the Sandlers. Now let's say that I have researched those loans and recognize that as many as half of them could be conceivably overstated in worth.

Do you have any doubt that I could take that stock down to $16 to $17? Any? Do you think I could even cause that bank to have to raise equity despite its deposit base?

I don't think you would. Let's say I was short 5 million shares in stock and derivatives. I think I would easily clear $25 million in a day. I am so confident that I could that I probably would put out more than 5 million shares short.

Now, heaven forbid, I were to do it to a non-deposit-base institution, an institution like Lehman Brothers (NYSE: LEH) (Cramer's Take)? No deposits? Down even more. I could make it be a foregone conclusion!

Today was a very mixed trading day on the economic and news front. Ben Bernanke said that inflation was far higher than he was comfortable with, but he also said he doesn't expect this scenario to become like the one in the 1970s. Oil also slid again to under $123.00 per barrel. Today may have looked better had it not been for some additional downgrade warnings from Moody's on bond insurers. These are the unofficial closing bell levels:

• DJIA 12390.89 (-11.96)
  
• S&P500 1377.24 (-0.41)
  
• NASDAQ 2503.14 (+22.66)
  
• 52-WEEK LOWS
• TOP 10 ANALYST CALLS

AMBAC Financial Group Inc. (NYSE: ABK) and MBIA Inc. (NYSE: MBI) each saw shares punished to 52-Week Lows after Moody's noted that it may cut the bond insurers' "Aaa" rating.

Lear Corp. (NYSE: LEA) was actually rather impressive today. Shares were up 1.2% in the final minutes at $25.05, despite the company issuing an earnings warning this morning.

Level 3 Communications Inc. (NASDAQ: LVLT) saw another active trading day with shares up almost 5% at $3.92 in the final minutes of the day. There are several reasons.

Verizon Communications Inc. (NYSE: VZ) was trading down about 1.1% at $36.9 in the final minutes on reports that it was going to pay some $27 billion to acquire Alltel and its 13+ million wireless subscribers from TPG and GSCP.

MBIA (NYSE: MBI) is recently down 87 cents to $5.82.

Moody's Investors Service said it will likely cut the insurance ratings of MBI because of its credit profile and constrained new business prospects.

MBI call option volume of 7,099 contracts compares to put volume of 19,095 contracts. MBI June option implied volatility of 140 is above its five-month average of 118 according to Track Data, suggesting larger price risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

TheStreet.com's Jim Cramer says the mortgage problem is in the process of cresting, which is why the stocks have largely bottomed.

We are in the heart of default country, and we knew we would be. This is the toughest moment. You need to go back and look at the calendar to realize the astonishing acceleration in defaults. It's simple: This moment two years ago is when the underwriting standards were the lowest, and this is the moment when the defaults will be the highest because the loans are resetting at high levels and most of the lenders, lenders like Countrywide (NYSE: CFC) (Cramer's Take), are more interested in getting as much out of a borrower as possible before kicking him out than working out the loan.

Think about it.

In the second quarter of 2006, the housing industry was going strong. We were in the 7-million-homes-changing-hands mode, and the vast majority of those homes required little money down, with home equity loans being taken out immediately to pay whatever little interest was being charged. These were the moments of the ultimate no-doc-high-fee loans by New Century Financial, Ameriquest, Resmed (Ditech), American Home Mortgage, Novastar, and of course, Countrywide. This was when the homebuilders' mortgage arms lent the most terribly.

TheStreet.com's Jim Cramer says some segments are doing well, but the losses in Britain show how bad it is.

If you think the disclosure is bad for these financial insurers here, it is every bit as poor over there in the U.K., where we just learned that housing prices dropped the most ever on record.

Most of the major monoline insurers, and of course AIG (NYSE: AIG) (Cramer's Take), have exposure to Britain in ways that we are all too familiar with over here. The only difference is that I believe the trajectory was considered far more certain over there than here. AIG in particular bragged about this business in December, to show their diversification away from the U.S. Kind of like how Bear (NYSE: BSC) (Cramer's Take) bragged that by putting a lot of different mortgages together from Florida and California and the rest of the country and varying their ratings you have created a wondrous, diversified instrument called a CDO.