Not many investors guessed the subprime crisis right, but Cramer says Annaly Capital Management Chairman and CEO Michael Farrell did. How'd he do it?
"Thirty years of being a mortgage trader tells you a lot about cashflows from consumers," Farrell says. The CEO doesn't pretend to have a crystal ball, but he just didn't think the subprime market was sustainable the way it was going. He'd seen this kind of overextension before in the junk bond trading of the '80s and the tech boom of 2000.
The troubles aren't over, Farrell says: "I think it's too early to collect all the pieces that are broken." Four years of poor underwriting standards don't come to a screeching halt without at least a few people flying through the windshield. And housing is a much broader bubble than tech was, he says.
Farrell will be in AAA assets while he rides out the storm.
"NLY, that's the stock that's a winner," Cramer says.