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Two Fight Back - Cramer's Mad Money (9/11/08)

You can go to the Morningstar sites and watch an interview with Miller and you'll see what his position was on Fannie and Freddie. They made billions in the 80's out of them, so he thought the history would repeat itself... and it didn't.

Fannie/Freddie Bailout 'Disastrous Fiasco'

This bailout was necessary. Painful but necessary. Paulson is not some Marxist for god's sake! All this rants about some 200 billion injection into Fannie and Freddie are just ridiculous.
The war will cost some 2 trillion $ by the time you get out of Iraq and here you are... talking about some 200 billion which will help to stabilize the worlds financial markets.
The shareholders lost 90% of the money in one day. Who was bailed out here? The management was ousted. Oh yeah it is the tax payer who'll pay for that. Come on!
When the housing market will recover Fannie and Freddie will do just fine and the Treasury will get plenty of money out of it... it is just a matter of time if it succeeds.

The idea that some obscure market force would sort this thing out by itself is radical. It cannot be done. Well it can be done if you are prepared for a 7+ year depression with a housing prices collapse of 50+% a MBS default ratio of 60 or 80% and some 50% of banks going under... oh yeah, add some skyrocketing unemployment rate of 15+ percent and a fabulous probability of terror-like deflation for the next 10 years - you know like in Japan, where no one bought anything because he asked himself the question: "Why buying now, when tomorrow everything will be cheaper?"

Study Japan and their housing collapse and you'll see what can be the consequences instead of ranting about communists. A 200 billion bill will look like a cheap penny stock for all the things that went wrong here.

Fannie and Freddie should never be the public-private cyborg in the first place, and Greenspan shouldn't have cut rates to 1%... but hey! You don't have a time machine to change that. So get over it.

When a fox gets trapped into an iron trap ... she bites her leg off, so she can survive. Paulson bit the leg off. That's it.

The US is not out of the woods yet so you should pray that the bill will be only 200 billion, because it could get into trillions. And in that case the great depression will look like a picnic compared to this mess.

In this article there's plenty of intelligence... but some serious lack of common sense.