Mortgage Insurance giants PMI, MGIC, and Radian, are on the verge of collapse as claims surge. Mortgage insurance companies stock losses are the possible trigger to another stock market crash.

Mortgage Insurance Company Demise Discussed

New York Governor and former consumer champion, Eliot Spitzer discuss the demise of the big mortgage and bond insurance companies on Jim Cramer’s Mad Money last Friday,

The Fed rate cut this week came from and emergency meeting when the Dow futures were down almost 500 points. The rate cut came just in the nick of time stemming a stock market crash…or so we’re told.

“Rob, did you say “stock market crash”?

Yes…at least that was how it was reported in the media… a crash as bad as Black Monday two decades ago…and we were 60 minutes away. Tick- Tock…

Yesterday Merrill Lynch announced it’s first quarterly loss in 6 years with the excuse their subprime mortgage exposure cost them $7.9 Billion, $3 Billion more than expected - marking Merrill’s gut-punch as the “Worst Hit” taken by a financial company from the subprime mortgage meltdown.

With the Fed jumping in on Friday to calm the markets it would be easy to be fooled into thinking the worst of this financial irresponsibility is over…it’s only just begun!

Merrill Lynch yesterday downgraded the stock of Countrywide Home Loans (CFC ticker symbol) and speculated on the analyst call just how they could go bankrupt. First this was irresponsible and reckless on the part of Merrill…or was it?

Since the call yesterday a lot has happened:

1. The stock has fallen about 10 points.

Remember this date: August 3rd, 2007. This is the day Jim Cramer melted down right along with the subprime home mortgage market and Bear Stearns. I wrote an article about a month ago on the Bear Stearns implosion due to subprime home mortgage exposure, forecasting their demise, and here it is.

So on Mad Money last week Jim Cramer, the self-appointed genius stock picker, lost out to Yours Truly when it comes to shorting the home builders. Earnings are coming out this week on a number of home builders and I’ll be proven right again.