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It isn't just about sub-prime anymore; "All mortgages that were written between 2005 and 2007 I think are corrupted," said Cramer. He came to this conclusion after reading conference calls of CTX, LEN BZH and KBH. However, he zeroed in on two conference calls which are required reading: CFC's and NLY's. In CFC's "long and tedious" call is the implication there is no such thing as sub-prime because all mortgages are bad due to piggybacking equity loans and rising rates. CEO Angelo Mozilo said he doesn't predict a recovery until 2009. NLY's CEO, Michael Farrell, made "some incredible allusions to Moscow and Napoleon." While the situation is bad, Cramer says it is not as dire as it was in 1990 and 1991 when "almost every major money center bank was insolvent, and most of the big regionals either went under or were so impaired that they had to do shotgun marriages." After reading these calls, Cramer arrives at the grim conclusion that anyone involved with mortgages "could be wiped out in this environment."
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