I saw this link over at Drudge yesterday and I thought I'd include it in a post. It is Jim Cramer from The Street.com ranting on TV about how the Fed is clueless about the problems in the housing market. I mean he literally goes off as you can see from the video. The show was from Friday, but sorry, I get busy with work. As of today it had over 785K views so clearly people are paying attention to Cramer. In a nutshell Cramer believes that of the 14 million mortgages written between 2005 and 2007, that 7 million of them are in trouble because of teaser loan rates and the Fed doesn't seem to care about these people losing their homes. For a follow up as to why Jim made the call see this link from The Street.com TV when he offers a much calmer explanation as to why he made the call on Friday.
Now I'm not in the habit of offering advice, but it is hard to not pay attention to what Jim Cramer said. I don't know about you, but I've seen homes that used to sell in a week in my development sit unsold for months. Homes down in Avalon NJ where we were just on vacation are also not selling (that's not the over $3 million home range which sell any time) and how many of you don't know someone that didn't take one of this gimmick mortgages. In fact, a few years back I was ridiculed by friends for not refinancing my mortgage instead of doing what I did which was take a rate modification down to almost 5% fixed while leaving the years left on the mortgage the same.
I met Jim Cramer two times over the years when I was a Managing Director at Harrisdirect. I have two signed copies of his books and I read the religiously. I saw his radio show in-person twice and got to meet the man who is actually very soft spoken in person. At one point, I looked into getting a job with them, but it didn't work out. I think he is genuinely looking out for the average, small investor and his major upside is generating advertising dollars from increase site traffic. So, I believe him that there is a problem and people aren't paying attention, at least the Fed who left interest rates the same.
His blow up was an ominous warning. Will he be right? Who knows because there are so many outcomes that can occur. I for one believe the problem is as bad as he screamed, but hopefully people with some authority to make changes and perhaps a future President realize this is a bomb that is exploding. I believe Jim, I believe, now go back and relax in your Summit NJ home.