Deals Can Get Done

Editor's note: Jim Cramer will present his 2009 stock outlook for the first time at TheStreet.com Investment Conference on Saturday, Oct. 25. Click for details.

How will we know when things have thawed? Everyone's looking at LIBOR and I can't blame them as that indicator of lending from one bank to another bank is crucial for the way the system is supposed to work. It's a good thermometer for certain, but I don't want it to overstay its welcome, because there are other "true" indicators out there besides just LIBOR.

I am looking at something else: takeovers. On Monday, we saw Waste Management (WMI) pull its bid for Republic Services (RSG), a smart idea as WMI had dropped so precipitously despite reporting better-than-expected earnings that one had to question if it was worth doing it. More important, though, getting the money was proving to be possible, but difficult. This situation also prevailed in Altria's (MO) buy of UST (UST), where Goldman Sachs said, "Don't bother, wait," even though the integration of the two is crucial for Altria's growth.

Now I expect deals to be done if the banks are for real about lending.

Further, the endless margin selling has created tremendous bargains for well-capitalized companies to buy other companies that have brimming order books but are being kept down because of hedge fund redemptions. How can some company not want to buy a Trinity (TRN), for example, which has been virtually cut in half even though both presidential candidates are pro-wind? Or how about a Foster Wheeler (FWLT) or a Joy Global (JOYG) or a Terex (TEX) betting that if there is credit there will eventually be a revival?

I don't care about near-term weakness. We all accept that you should buy a Lowe's (LOW) or a Masco (MAS) or a Black & Decker (BDK) when things are "bad" knowing they can get "good" one day. Surely, some large corporations must see it that way, and yet they just can't borrow to make it happen. If that changes then we know we have another reason to buy stocks than just their "P/E-cheapness," which hasn't worked at all of late.

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