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Stop Trading! The Trouble with Annaly


Cramer admitted on Thursday’s Stop Trading! that he made a mistake sticking his neck out and recommending Annaly Capital Management . The stock fell precipitously after European firm Carlyle Capital Group, which invests in mortgage-backed securities, defaulted and sent mortgage REITs plunging stateside.

Unfortunately, Annaly is a great company with no credit risk but it’s being taken down as though it has it in spades, Cramer said. Simply put, Annaly is “guilty by association.”

The shorts could pull Annaly down enough that its lenders get cold feet and the company has to do another equity offering, and that could spell even more trouble, according to Cramer. Even still, he reiterated his support for CEO (and neighbor) Mike Farrell even though he would no longer touch the stock.


Jim's charitable trust owns Annaly.

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