Recap of Jim Cramer’s comments on Stop Trading! Friday January 18. Click on a stock ticker for more analysis:
Ambac (ABK), MBIA (NYSE:MBI), MGIC (NYSE:MTG), PMI (PMI), Men's Warehouse (MW) and Apple (NASDAQ:AAPL): Cramer says Treasury Secretary Henry Paulson's stimulus plan only stands to benefit Apple and Men's Warehouse. Cramer says the source of the problems is a group of four bond insurers, ABK, MBI, PMI and MTG which are on the verge of bankruptcy and Cramer's plan "gives the municipal bonds over to Warren Buffett. ... It takes all these loans ... $500 billion ... and guarantees these loans for 50 cents on the dollar. ... It would cost us far less than the stimulus plan, and it would rally the stock market."
While he says he feels bad for the people who work at these companies, a government takeover and a Fed rate cut of 100 points could make the Dow rise 2,000 points.
The need to save the insurers is obvious, Cramer said, "Where would you go if you didn't have ... insurance? You would go into a cave."
"My plan is offering 2,000 on the downside if you don't take it, 2,000 to the upside if you do. It's a lot better than writing a check to Men's Warehouse."
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