LIKE MCCAIN, CNBC'S CRAMER PREDICTED THE POTENTIAL FOR A TOTAL FINANCIAL MELTDOWN OVER A YEAR AGO

MCCAIN - IN 2005 - SAW THE RISKS PILING UP AT FANNIE MAE AND WANTED THE GOVERNMENT TO TAKE ACTION:

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

CRAMER IN AUGUST 2007:



CRAMER WAS FOCUSING ON AND BLAMING HIGH RATES FROM THE FED AND TIGHT MONEY.

HE SAID THAT MILLIONS OF PEOPLE TOOK OUT LOANS AT "TEASER" RATES AND THEN GOT HURT AS GREENSPAN - YES ALAN GREENSPAN - RAISED RATES 17 TIMES!

• THE FIRST LEG ON THE STOOL WAS FANNIE MAE - AND ITS DEMOCRAT CRONIES IN CONGRESS.

• THE FED IS THE SECOND LEG - BY RAISING RATES 17 TIMES FROM LATE 2004 TO 2006.

• THE THIRD LEG IS EXORBITANT CRUDE OIL PRICES.

• THESE THREE FACTORS HAVE WRECKED THE WORLD FINANCIAL SYSTEM.

WE POSTED ON THIS LAST WEEK WITH THESE THREE CHARTS:

THE ROOT CAUSES [OF THE COLLAPSE OF THE REAL ESTATE MARKET] WERE HIGH CENTRAL BANKS RATES AND OIL.

GREENSPAN KEPT RAISING RATES THE LAST TWO YEARS HE WAS FED CHAIRMAN, AND THE ECB KEPT THEIR RATES HIGH.

HERE'S A CHART OF THE FED FUNDS RATE - LOOK AT IT FROM 2004 TO 2006 -- THIS IS ONE REASON WHY THE ECONOMY SLOWED:


HERE'S THE CRUDE OIL PRICE CHART; NOTE WHAT HAS HAPPENED SINCE 2004:


FURTHER PROOF - AND WHY IT'S A GLOBAL CRISIS: LOOK AT WHAT THE ECB DID: THEY KEPT RAISING RATES. THEY RAISED IT WHEN THEY SHOULD HAVE LOWERED IT!

AT THE TIME SARKOZY SAID THIS WAS THE WRONG THING, AND THAT THE ECB SHOULD HAVE LOWERED RATES. SARKO WAS CORRECT!

THESE TWO FACTORS - (THE HIGH COST OF MONEY AND HIGH COST OF ENERGY) SLOWED US DOWN AND BURST THE LENDING/REAL ESTATE BUBBLE. PEOPLE HAD THEIR MORTGAGES GO UP AND THE CREDIT CARD EXPENSES GO UP AND THEIR ENERGY EXPENSES GO UP.

SO THEY CUT BACK WHERE THEY COULD, AND THIS IS HOW WE GOT HERE.

THESE FACTORS CAUSED THE CURRENT CRISIS AND THEY ALSO POINT THE WAY OUT, THE WAY BACK:

1. LOWER THE COST OF MONEY - BY BRINGING DOWN RATES TO 1.5%.
2. REDUCE THE PRICE OF OIL BELOW $75/BARREL (BY DRILLING HERE NOW, AND BUILDING NUKE PLANTS AND COAL PLANTS).
3. AND REFINANCE THE BAD MORTGAGES AND GOING FORWARD END SUBPRIME AND ALT-A MORTGAGES.

• THE SOONER WE DO THE FIRST ITEM THE BETTER.
  
• AND WE SHOULD ANNOUNCE WE ARE PROCEEDING TO ITEMS 2 & 3 ASAP.

• THIS WILL SIGNAL THAT WE HAVE ARRIVED AT THE BOTTOM AND ARE NOW CLIMBING BACK.

WE CAN DO IT.

AND SOONER THAN YOU THINK.

CRITICAL IN THIS EFFORT WILL BE ELECTING MCCAIN.

OBAMA AND THE DEMOCRAT CONGRESS WILL MAKE THINGS WORSE.

VOTE ACCORDINGLY.