Jim Cramer
This column was originally published on RealMoney on Aug. 16 at 10:08 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
We can handle Countrywide(CFC Quote - Cramer on CFC - Stock Picks) going out of business. We certainly have to be ready, because it now seems like a possibility. I know it seems like we can't. But this was the 1990 experience, companies like Countrywide were falling apart left and right. Could we handle Washington Mutual(WM Quote - Cramer on WM - Stock Picks) and Wachovia(WB Quote - Cramer on WB - Stock Picks) going? Again, they made bad loans to homeowners, so they could be collateral damage to the Poole plan. Could we handle a total trashing of Bear(BSC Quote - Cramer on BSC - Stock Picks) to the point where it gets bought for a much smaller amount? Yes. Not a problem. They need to be punished under the Poole plan. Could we handle Bank of America(BAC Quote - Cramer on BAC - Stock Picks) going? Harder. Might be an issue. I don't think the Fed wants that to happen. And I like the way the stock acts because of that huge deposit base. It might consider Bank of America a crisis. The others are not crises. Can the stock market handle this stuff? As in 1990, a huge percentage of stocks will go down. (I agree with Bob Marcin on this, although he thinks that I believe that everything will go down. I am also closer in thinking to Doug Kass than I have been since we started this site.) I never, ever again in this period want to hear about the underlying fundamentals. They are not in control of this period. In fact, they are meaningless for the short term. Meaningless. And it is a sop to the public to talk about them. That's what I heard endlessly in the week before the October 1987 crash. It is a joke. Can you sidestep this? If you have cash or can short, yes, although this is a really tough level to short because the oscillator is so negative. I want to emphasize that it is possible that we can bounce simply because we are too over sold. That means bounce and make sales as we get less oversold.
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