Mad Mail: Housing, Credit...What's Next?

Dear Mr. Cramer: You seem to have a more reasoned, practical approach to the economy/market than most of the so-called gurus. In many instances, your forecasts are downright eerie. It seems clear that there will be massive legislation to curb the now-obvious debt derivative excesses (whoopee!). Do you have any sense of what is the next area of potential trouble? Many thanks for the common sense, plain talk. Please keep up the good work, obviously no one else will. --Herb

Cramer says: “…The word is…that the big next shoe to drop is private equity. Deals done between 2006 and 2007 that are going to crater and cause gigantic problems.”

___

Jim: On Thursday you shared a theory that the upswings in the markets have been driven by large investments in the S&P futures as a commodity rather than investment in the individual stocks that make up the S&P. If there is an unusual undercurrent here of artificially raising the S&P stocks, which for the past five days seems to outweigh the performance of the stocks on their own merit, should we be looking only at those S&P stocks that meet explicit yield thresholds, have lots of cash on-hand, and are least effected by an economic downturn? Why look outside the S&P if we can realize some short-term gains from large amounts of unusual investing? --Glenn

Cramer says: “That strategy, which is a conservative strategy, did better than any other strategy this week. It is amazing how conservative tried and true strategies made you more money in this rally than anything else. I think you’re dead right, and I want to do exactly what you said.”

Questions for Cramer? [e-mail]

Questions, comments, suggestions for the Mad Money website? [e-mail]