Worldwide Action Puts Our Posturing to Shame

We are seeing nothing less than an entire repudiation of everything this administration has done. We are seeing it as Europe has taken the initiative in reining in our Gangster Capitalism that leaves no one punished and taxpayers holding the bag.

The plan that we are seeing in Europe, which is to give the taxpayer a huge percentage of the gains on the return of banking -- which we're seeing with HBOS, Royal Bank of Scotland (RBS - commentary - Cramer's Take) and Lloyd's (LYG - commentary - Cramer's Take) -- is the quickest way out of this mess. It doesn't avoid a severe recession, but it ends the endless "let's nationalize, no let's let 'em fail, no let's merge" nonsense that Paulson and Geithner have brought upon us. Plus, a re-regulation of a crazy bank system and derivative system is a total repudiation of Christopher Cox's deregulation that allowed brokers to take 40-to-1 lending positions.

This is all good and it shows that aggressive policies by clearheaded individuals who are in charge of their countries -- this is all being done at the highest level, higher than finance minister -- works. We have a president with no bearing whatsoever, who is so hopelessly over his head, who has presided over this ridiculousness and is so clearly not a grown-up that we can only pause and wonder what would have happened if we did not have a radical ideologue in charge bent on dismantling any order in favor of the gangsters on Wall Street.

What has to happen now? Citigroup (C - commentary - Cramer's Take) is our HBOS/RBS. It needs to be given a 55% taxpayer infusion in return for the firing of all management. The major banks like Wells (WFC - commentary - Cramer's Take), Goldman (GS - commentary - Cramer's Take), JPMorgan (JPM - commentary - Cramer's Take), Morgan Stanley (MS - commentary - Cramer's Take) and Bank of America (BAC - commentary - Cramer's Take) need huge amounts of capital that can then be lent. We should put money with them in return for equity.

Then we must demand that the undercapitalized banks sell themselves or we will do it ourselves, as throwing any more money at these money pits is a huge mistake. Better to finish this with four or five trustworthy banks and start over.

My only fear is that our own indecision and sense that our banking system can raise the money it needs from private capital will derail us and hobble us during the coming difficult recession.

I would not put that past our leaders. (To call them "leaders" after all that we have seen seems a little preposterous, frankly.)

Let's see. The more we know about our plan, the less likely I am to let go of stock bought Friday.

The less we know, the more likely that Congress gets involved, the bankers lobby to keep their bonuses no matter what, and we get more runs on the bank.

At the time of publication, Cramer was long JPMorgan, Morgan Stanley and Goldman Sachs.

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