Cramer's Financial Dirty Dozen
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Date updated:07-02-2008

"The financials are flying -- there are finally bids for most of them underneath. Many, including Lehman (LEH), are running. What a great time to put the negative cards on the table and put the negatives in perspective. That's right, let's look at the financial Achilles' heels. What could go wrong?" - Jim Cramer


11. Cerberus: They are so confident it is scary. They can get away with it -- they are private. But it would be really frightening to read that they are running out of money.

symbol name last price % change open
  • +
  • C
    Citigroup Inc
  • $3.18
  • +0.95%
  • $3.20

1. Citigroup (C): Here's a company that is in so much trouble that I can't even begin to figure out how to fix it. There was a moment that it could have been unwound, but now your best hope is that it goes to $5 or $6 and we realize it could fail and we let the Saudis bail it out. Don't laugh -- that's the 1990 scenario. Pathetic that history repeats itself, but this is the worst-run major bank in the world. You get what you pay for. A dividend cut is next.

People owning C also tend to own: AIGALLBACCATCBSCOPCVX

TheStreet.com Rating: D What is this?

  • +
  • GM
    Gm
  • $0.00
  • N/A
  • $N/A

2. General Motors (GM): Merrill says what I thought was obvious when I said it the other day -- this one makes too much sense as a bankruptcy. Wrong cars, wrong balance sheet, one of the worst mortgage writers. Sold to you. Dividend cut needed. (Ford) doesn't have the miserable mortgage business so I am not including it in the dirty dozen).

People owning GM also tend to own: CMEICEISESAMCBATMMS

TheStreet.com Rating: No Rating What is this?

  • +
  • LEH
    Leh
  • $0.00
  • N/A
  • $N/A

3. Lehman Brothers: I, too, once blamed the speculators. But I now feel that the CFO firing put an end to that. This company has very little earnings power, and it has very great exposure to mortgages worldwide. It has minimal disclosure. We need a takeunder to remove it from the critical list.

People owning LEH also tend to own: BNICXEFAEWJEWYGOOGIVE

TheStreet.com Rating: No Rating What is this?

  • +
  • MER
    11.88
  • $11.78
  • 0.00
  • $11.78

4. Merrill Lynch (MER): Without a sale of BlackRock (BLK) or Bloomberg, more equity is needed. Nobody wants to put up equity for this one. We still have no disclosure on the last-in-no-out mortgages they wrote. Black box. I don't want to buy a black box. Dividend cut? Good question.

People owning MER also tend to own: AIGALLAXPBACBRK-BCCOF

TheStreet.com Rating: No Rating What is this?

  • +
  • WB
    32.35
  • $5.27
  • 0.00
  • $5.27

5. Wachovia (WB): Rudderless, knee-deep in unreserved California mortgages, still writing the lowest-quality mortgages as recently as Monday! Totally unacceptable. Rumored to be bought -- yeah. At under 10. Urgent dividend cut.

People owning WB also tend to own: AIGALLBACCCATCBSCOP

TheStreet.com Rating: No Rating What is this?

  • +
  • BAC
    Bk Of America Cp
  • $14.47
  • -0.07%
  • $14.67

6. Bank of America (BAC). They bought a company that could be shut down by indictments -- it has billions and billions of going-bad mortgages. Who the heck would want that? If BAC hadn't bought it, does anyone think it would still be alive? They swallowed the Love Canal when they drank from this well. Dividend cut needed, now.

People owning BAC also tend to own: AFLBABAXBENCMCSACSCODOW

TheStreet.com Rating: C- What is this?

  • +
  • WM
    Waste Mgmt Inc
  • $32.06
  • +2.10%
  • $31.66

7. Washington Mutual (WM): People are talking about a bottom; I am talking about a company that has the worst collection of mortgages out there, the least verified, the worst quality, with a private-equity firm that will take your equity and crush it. Five-dollar lottery ticket. Nothing more.

People owning WM also tend to own: BACBBTCCMAFITBJPMKEY

TheStreet.com Rating: B What is this?

  • +
  • FNM
    Fannie Mae
  • $0.98
  • -1.01%
  • $0.991

8. Fannie Mae (FNM): Someone has to take the hit for this market. Some government entity has to bail out homeowners. It will be this one, and see No. 9. Dividend cut needed pronto.

People owning FNM also tend to own: ABPIADPTDCREBAYEDCIFMDHTE

TheStreet.com Rating: D What is this?

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