Cramer spent Tuesday’s Stop Trading! discussing the government’s latest attempt to save the housing industry. He called Federal Housing Finance Agency Director James Lockhart’s midday announcement “a huge positive.”
The FHFA will now speed up the renegotiation of delinquent loans held by Fannie Mae and Freddie Mac. It’s a huge step toward recovery given that Fannie and Freddie hold or guarantee almost half of all U.S. mortgages.
But the auto industry’s just as important, Cramer said. He reiterated his call for a bailout of General Motors. Cramer’s thinking: We bailed out AIG, why not GM? The failure of that company could result in the loss of millions of jobs, putting pressure on the U.S. economy equal to that of the housing bust.
“We’re going to have another meltdown,” Cramer said, if both problems aren’t solved.
Watch the video for more of Cramer’s take on housing and autos, plus the problems with Steve Schwartzman’s optimism.
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