Buying Time

Wells Fargo (WFC - commentary - Cramer's Take) buying Wachovia (WB - commentary - Cramer's Take) gives us a moment's respite. We need more lenders with bigger deposit bases and we needed WFC to step up. Now we have Citigroup (C - commentary - Cramer's Take) ready for the next bank failure, although it's so stupid that they didn't do an equity offering when they had the chance.

We are in a world of pain right now post-Lehman, as it isn't worth lending to anyone -- the rewards aren't great enough. The rescue package will help -- or at least the bears will have to admit it can't do any damage -- if it allows a Wells or a JPMorgan to dump bad loans fast for any price other than the ridiculous price received by the most desperate seller.

If things would just slow down, you could see a world developing where we have some strong lenders who can make a nice spread on their cash if the Fed cuts the rates and people take loans to buy houses, something that could happen if we stop the foreclosures.

But the "doesn't matter" feeling comes from the jobs number just reported, which shows we are going into a rather severe recession. It comes from equity offerings like General Electric (GE - commentary - Cramer's Take), where the AAA rating didn't help borrowings and made a mockery of all the money spent on the darned buyback. It comes from the insurers, which smell like they are going to have problems guaranteeing their guaranteed annuities. It smells like a worldwide earnings collapse where any company that mines or drills or tills the earth is going down the drain.

We are in the woods. It is burning. Anything that gives us time and cover, anything that makes things slow down, anything that allows us to flesh out Lehman or guarantee more savings or realize which insurers are stronger than others will make it so the new world, when we come out of this, will have stronger financial institutions.

But we simply aren't coming out of this anytime soon.

And every minute that we dawdle on offloading mortgages is another minute where we get fiascos like the California budget, and fiascos like the New Jersey municipals, and fiascos like the Sovereigns (SOV - commentary - Cramer's Take) and the National Citys (NCC - commentary - Cramer's Take) and Downeys (DSL - commentary - Cramer's Take) and BankUniteds (BKUNA - commentary - Cramer's Take).

Random musings: Sounds like Monday is going to be a round of worldwide rate cuts. That will give us some time for certain. Remember, we are only buying time to avoid Great Depression Two, not buying time to have better-than-expected earnings.

At the time of publication, Cramer was long JPMorgan and GE.

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