Of Course Policy Matters

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Every time I hear that policy doesn't matter, that rules don't matter, that nothing can be done, I think two words -- "Lehman Brothers." For those of you who think that it doesn't matter what government does, ask yourself whether you would feel the same way about the world today if Lehman Brothers had been bought by another bank, and we would not have had

1. tens of billions in bonds and preferreds destroyed,
2. the buck broken,
3. tens of billions in margin accounts that vaporized,
4. a fire sale of bad assets driving all prices down,
5. a sense of chaos as you knew the government had no plan, even after Bear, Fannie (FNM - commentary - Cramer's Take) and Freddie (FRE - commentary - Cramer's Take) and everything else that happened.

We have simply been unable to stem the consequences of Lehman ever since.

I point this out because after Lehman, we tend to believe in nothing positive. Nothing. We think that every regional bank is worthless and that every investment bank is posturing and that the assets at all of the major banks are worthless and that every insurance company is unhedged and they are all going to zero. All of them.

That's why there's such a backlash to Vikram Pandit. I think the vast majority of traders out there think Pandit is lying. My friend Peter Eavis wrote an excellent piece in the Journal that talks about how Citigroup's (C - commentary - Cramer's Take) memo was convenient given Sen. Shelby's discussion that amounted to euthanizing Citigroup. That's why, with the exception of Doug Kass' comments, I have gotten literally -- and I have never seen this before -- 100% feedback that yesterday's rally is a joke and a fraud and that everything is indeed worthless. All my email on mark-to-market is that it doesn't matter, all assets are bad. All my email on uptick rule is that I am unsophisticated rube who doesn't understand the way the market works. All my email basically says, "Why bother, game over."

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Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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