“They cop to cowardice to cover up complicity.”

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Jim Cramer of theStreet.com spoke last week about the spreading subprime-triggered disaster in the financial markets. Actually, he didn’t speak. He ranted and yelled saying he, a former hedge fund manager, is currently getting dozens of calls a day from hedge funds and trading desks saying, Jim, you have to tell people how bad things are now, to counter the smiley faces who are say the crisis is contained and all is well. He did just that, screaming that Bernanke of the Fed is clueless and that things are getting desperate. Financial Armageddon isn’t coming, he said, it’s already here.

During the height of the dot com boom, when many thought the bubble would go on forever and we’d all retire zillionaires, I remember Cramer screaming, people, take some money off the table. Take some of your profits and put them in t-bills or something safe. Don’t keep trading with them. Doubtless, there are many who wished they’d acted on that advice.

If Cramer is right, and I think he’s certainly more right than wrong, then what’s coming will rattle all of us and have repercussions for quite some time. EZ credit is dead. Home mortgages will become unavailable to many. Business will slow down. Municipalities will see greatly decreased revenues because of defaults on property tax and and less sales tax revenue (because people are spending less.) A recession, maybe worse, seems a virtual given.

Watch the Cramer video

Here’s an example: Loan insurer ACA Capital may be toast - Barron’s

ACA Capital is leveraged 180-1 on loans they are supposed to insure. (How can it possibly be said they are insuring anything with insane leverage like that?) Apparently, big investment banks “used the company to move billions of dollars in risky, volatile loans off their books.” It just blew up in their faces. Because ACA was leveraged to such an extreme level, just a 7-10% drop in what they insure could wipe them out - and actual drop could easily be more than that.

This means the investment banks may have to eat their toxic loans, with no insurance to save them. “Barron’s says, losses could be $3 to $5 billion.” And because the investment banks are leveraged on their portfolios too, this could trigger further catastrophic losses.

This is precisely what Cramer is talking about. Sympathetic detonation. One explosion triggers more explosions.

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Ruling class unity on continued occupation of Iraq

The goal of controlling the resources of Iraq is not just on Bush’s agenda, it is on the agenda of all the representatives of the ruling class that occupy Congress, although some advocate different tactics.

What other explanation can there be? The public opposes the war, the ruling class ignores them. Let’s get in the streets on September 15 for the March on Washington.

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