Cramer Bets on Chrysler Collapse

Mad Moneyman Jim Cramer has published his 2008 predictions, and says that Cerberus’ buyout of Chrysler will go down as the “first real debacle of the private equity era.” Apparently Refco didn’t qualify…

Cramer puts odds at 5-1 that Congress will bail out Chrysler (and Cerberus, by extension), which presumably puts the need for such a bailout at 4-1 or better. The only silver lining for Cerberus would probably be the fact that it basically bought Chrysler for less than a copy of Cramer’s latest book would cost.

From Cramer:
“In the first real debacle of the private-equity era, Cerberus Capital Management, the quiet hedge-fund king, fails in its bid to resuscitate Chrysler—not a surprising turn, given that it picked Bob “I ruined Home Depot and all I got was $200 million” Nardelli to run the country’s worst car company. The combination of Chrysler and the 51 percent of GM’s lousy mortgage business that it paid top dollar for forces former Treasury secretary John Snow to seek a bailout for Cerberus. Amazingly, given the love of hedge-fund contributions by both parties, Congress agrees and writes checks for billions to save Cerberus’ wealthy investors. Call the Chrysler failure a lock. The bailout? I’d say 5 to 1.”