Cramer's TheStreet.com TV Recap: Games Hedge Funds Play

"It's a very effective way to keep a stock down," he said. "What's important when you're in the hedge fund mode is to not do anything remotely truthful, because the truth is so against your view."

Maybe two weeks from now the buyers will come to their senses and realize everything they heard was a lie, but then again Fannie Mae (FNM Quote) lied about its earnings, Cramer went on to say.

"It's just fiction and fiction and fiction," he said.

It's important for people to recognize that the way the market really works is that it has that nexus of hitting the brokerage houses with a series of orders that can push a stock down, after which rumors get leaked to the press and get on TV, Cramer explained. Then there is a "vicious cycle down."

On another note, Cramer said the Fed will have to cut rates and is "desperate" to figure out how quickly it has to cut them.