RiskAverseAlert

Cramer Is Wrong: Why NII Holdings Is a Buy

Equity is DEAD money. I don't care what "fundamentals" suggest. How is it people find it so hard to understand that with a mountain of debt existing higher up on the accounting food chain, and with capacity for servicing it continuing to collapse (just keep your eye on that moribund real estate market), that equity in all forms is at incredible risk of being indiscriminately sold simply for the sake of raising capital that's needed higher up in the food chain?

What do you think was behind last year's equity sell-off? This risk remains intact.

Truth is -- and all the evidence supports this -- yesterday's status quo will not soon return. Wall Street's infinite credit machine called "structured finance" -- the principle lever behind rising equity prices since 1995 -- will not be restarted. Do you really think that with the very Federal Reserve's credibility coming under attack the capacity of private financial firms to infinitely create credit will soon be restored? Please. Send me whatever you're smoking if you do.

Nevertheless, debt liabilities underlying the dead game of structured finance remain. Equity is at great risk.