BAC and C Hold One Key to This Mess

In 1990, you began to hear things you couldn't believe. Manufacturers Hanover might merge with Chase? Are you kidding? Security Pacific to tie up with Bank of America (BAC - commentary - Cramer's Take)? Bank of Boston taking over large banks throughout the country? Say it ain't so.

But that's just what happened when things began to bottom. You had a Middle Eastern interest taking a big stake in Citigroup (C - commentary - Cramer's Take) and unthinkable mergers occurring to build what turned out to be some of the best-performing stocks I have ever seen.

It is happening again. The unthinkable: Bank of America and Citi. You think Bank of America is done? You think they aren't calling JPMorgan (JPM - commentary - Cramer's Take) today? Or Wachovia (WB - commentary - Cramer's Take)? You think this ridiculously pro-"whatever companies want" government wouldn't bless them?

Of course, we had the Resolution Trust Corporation then. If we get this SIV (structured investment vehicles) bailout, we can have some clarity on that front, too.

I still believe that the mortgage insurers, Countrywide (CFC - commentary - Cramer's Take) and Washington Mutual (WM - commentary - Cramer's Take) are in big trouble. But the WaMu branch network will be coveted by someone and when that bank hits rock bottom it will be shotgunned to someone else .Not a reason to buy WaMu but a reason not to be too negative, for certain.

Let me give you an example of too much negativity. Deutsche Bank's Mike Mayo, who is doing some fabulous work, this morning pulls up the HELOC exposure for the major banks.

HELOC itself is not bad. It is HELOC that is purchased from bad issuers like NovaStar (NFI - commentary - Cramer's Take) that has no documentation that is above the value of the house. It is HELOC that is from 2005 to 2007. It is HELOC from California, Arizona, Nevada and Florida.

Now, don't get me wrong, that's a ton of HELOC. But if you bought your house before the bubble went nuts you are paying your HELOC.

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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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