We'll Know It's Safe When M&A Revives

Lots of times I get asked, "When will we know it is real, when will we know that it isn't just short-squeezes and declines and advances that get wiped out as fast as they came?" The question is rarely more pertinent than on a day like today, when the market's up huge and people are trying to figure out whether to trust it. The answer is that we will know it when acquirers come in and take advantage of the lows.

What kinds of acquirers? OK, consider that there has not been an oil takeover of any consequence since the peak, even though the stocks have repealed huge moves. Consider that the infrastructure stocks have been cut in half, but the businesses are holding up well.

If business is ever going to come back, would you let Joy Global(JOYG Quote - Cramer on JOYG - Stock Picks) buy in two-fifths and not take a shot at it? How can Bucyrus(BUCY Quote - Cramer on BUCY - Stock Picks) not call them to merge? How can Foster Wheeler(FWLT Quote - Cramer on FWLT - Stock Picks) not be bought by a General Electric(GE Quote - Cramer on GE - Stock Picks), or how can McDermott(MDR Quote - Cramer on MDR - Stock Picks) stay independent?

Or how about the incredible decline in the mining stocks? If we even get some standards on coal, some, any, these stocks will seem ludicrously cheap. Of course, if Obama wins, it won't matter, but it is enough of a crapshoot that there could be a lot of upside.

A few months ago there was a flurry of cable buying, but I have now seen discovery cut in half, mostly because John Malone strikes again with complexity instead of simplicity and crushed us. But there are more channels and eyeballs there than the stock says there are.

Biotech stocks have come down huge since the time of the takeovers just a few months ago. Where is Pfizer(PFE Quote - Cramer on PFE - Stock Picks), Merck(MRK Quote - Cramer on MRK - Stock Picks)?

When these prices attract buyers, real corporate buyers, whether they be buyers of Ciena(CIEN Quote - Cramer on CIEN - Stock Picks) and Motorola(MOT Quote - Cramer on MOT - Stock Picks) or Sprint Nextel(S Quote - Cramer on S - Stock Picks) and Winstream(WIN Quote - Cramer on WIN - Stock Picks), we will have a handle on the downside.

Until then, it is all trading. Of course, I would be remiss if I didn't mention that I do want Citigroup(C Quote - Cramer on C - Stock Picks) to buy Washington Mutual(WM Quote - Cramer on WM - Stock Picks) and want Morgan Stanley(MS Quote - Cramer on MS - Stock Picks) and Wachovia(WB Quote - Cramer on WB - Stock Picks) to merge . But we can't have everything ... yet.