House of Cards

Jim Cramer muses on whether the market tanking last week was a sign of things to come. The short answer is yes.

His reasoning is pretty sound, though I wonder about what exactly he wishes or hopes the Administration can or should do in the face of a problem due entirely to market irresponsibility. Bailing out financial experts who should have known better than to extend paper to those unable to pay is not a good idea.

Helping homeowners who are in a financial bind sounds like a good idea, but the specifics of any kind of help are the devil in the details that can make a bad problem even worse. I don't want folks to lose homes because of defaulting on loans, but whose fault is it that they were extended credit when they were not in any position to pay.

The most immediate fix would be for the Fed to adjust interest rates down, which is something they've been reluctant to do for fear of inflation, particularly due to energy costs. However, if the problems spread away from the financial sector, the fed may have to take action sooner than it would like.