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We Need Some Homebuilders to Fail

By Jim Cramer

 About this article:
 It's a crucial time for the homebuilders. Rates have spiked huge here. That was not in the cards for them. They are not set up for that. We still have not had a major bankruptcy of a homebuilder. That's one of the reasons why we have not seen the stoppage of homebuilding. Look, let's be honest. We have no need for new homes in this country. None. We do not need Beazer , Centex , Horton , Hovnanian or Pulte to be building homes. We can't get a bottom in homes as long as Lennar , Standard Pacific and Ryland can still build. But build they must to be able to stay in business and meet cash flow covenants. The darned banks keep these companies alive with endless forbearance because they don't want to take a hit. The bank/housing company nexus is killing...

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