Cramer: ‘Bernanke has no idea!’

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Good morning. We’ll be back in L.A. Tuesday and back up to speed soon. CNBC’s Jim Cramer is screaming from the rooftops that the mortgage and debt crisis is out of control and the Fed is asleep at the switch and needs to wake up and start cutting rates.

Backstory: Last week we posted on a meltdown by Cramer, in which he argued that the housing crisis is so severe that many homeowners would be smart to walk away from their homes and mortgages. This second Cramer meltdown is more significant -- it happened live on CNBC (the first was recorded for TheStreet.com) -- -- and fed into market fears about the widening mortgage and credit crisis. You can see the second Cramer tirade here on YouTube -- it gets good about two minutes into the clip. Here’s a partial transcript:

‘Bernanke needs to open the discount window. That’s how bad things are out there ... Alan Greenspan told everybody to take a teaser rate and then raised the rates 17 times! And Bernanke is being an academic! It is no time to be an academic... He has no idea how bad it is out there. He has no idea! He has no idea! ... And Bill Poole (president of the Federal Reserve Bank of St. Louis)? Has no idea what it’s like out there! My people have been in this game for 25 years. And they are losing their jobs and these firms are going to go out of business, and he’s nuts! They’re nuts! They know nothing! ... The Fed is asleep! Bill Poole is a shame! He’s shameful!! ... We have Armageddon. In the fixed-income markets, we have Armageddon. ... We’ll spend billions in Iraq to build homes. We are gonna have thousands of people -- we have thousands of people losing their homes right now. Fourteen million people took a mortgage in the last three years. Seven million of them took teaser rates or took piggy back rates. They will lose their homes. This is crazy!’

Why we think this is important: Cramer is influential and he speaks on behalf of Wall Streeters who can’t speak publicly. Traders and investment bankers can’t stand up and say, ‘This is awful, this is a crisis, we need help.’ Cramer is saying it for them. Whether he’s right is another issue; he’s jawboning the Fed as loudly as anyone we can remember.

Your thoughts? Insights?

Cra