Citi Shows a Way Out of the Darkness

After the newfound money for Citigroup (C - commentary - Cramer's Take), you can begin to see a scenario where the pain can be isolated.

You can wipe out the homebuilding industry tomorrow and, believe it or not, we would not feel it other than to see home prices stop plummeting. We can have a collapse of E*Trade (ETFC - commentary - Cramer's Take) and Indymac (IMB - commentary - Cramer's Take) and it won't matter much either. The prospects of CIT (CIT - commentary - Cramer's Take) -- bleak, very bleak because of a concentration of really bad mortgage loans -- could also dim and nothing would happen.

So what can't we handle? There are only ten companies we can't have go under:

Citigroup, Washington Mutual (WM - commentary - Cramer's Take), PMI (PMI - commentary - Cramer's Take), MGIC (MTG - commentary - Cramer's Take), MBIA (MBI - commentary - Cramer's Take), Ambac (ABK - commentary - Cramer's Take), Countrywide (CFC - commentary - Cramer's Take), Radian (RDN - commentary - Cramer's Take), Freddie Mac (FRE - commentary - Cramer's Take) and Fannie Mae (FNM - commentary - Cramer's Take). Each one of these needs a bailout or capital.

The last two are easy, Congress will do it whether the administration likes it or not. (You have to be puzzled by the reaction so far, particularly by the Fed, the indifference to the plight of these two, but they are not going to fail.)

The fact that Abu Dhabi is willing to rescue Citigroup shows there is money out there to shore up the other seven that won't be shored up by Congress.

The question is time. Is there enough time for each of those companies to find a sugar daddy? The race against time is weird, because if one goes under first, then the others get rescued by lower rates and complicated transactions that allow bondholders to win and stockholders to lose.

But now we have a template.

The irony, of course, is that an Arab infusion into Citigroup caused that institution to be saved in 1990 and the opportunities to invest then proved boundless; we hit bottom right around then. We have not had as powerful declines in banks as then -- we haven't seen the cut dividends yet or the collapses -- so this is premature vis a vis 1990.

Nonetheless, to ignore it, or to say that it is just a drop in the lake -- as I hear people saying already -- is just wrong. Never dismiss outside capital that is bigger than the U.S. government.

And remember, when it is really dark, there have been times when the sun comes out and it did not pay to be a bear. Particularly after a 10% decline.

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At the time of publication, Cramer was long C.

Jim Cramer is a director and co-founder 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. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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