Does the New Plan Do Enough?

Now the issue will be whether the equity stake/loan guarantee plan is enough to get lending started again. We have dozens of banks that need the money, and believe me, it is money that they need, new money, not loan guarantees. If the federal government guarantees old preferred issuances and says banks can have money in return for common stock, then you have the possibility of lending. If the banks lend, they can make money and offset the losses that they will have when they sell their loans to the TARP plan.

But to me it is a footrace. The shorts have to be thinking that if they can break some stocks while the Treasury Department frets over what to do or what not to do, that could be a big win.

In the meantime, remember the real issue: unemployment. Will banks lend to General Motors (GM Quote - Cramer on GM - Stock Picks) or Ford (F Quote - Cramer on F - Stock Picks) or Chrysler? Will banks allow the recently levered private companies to get loans? Will banks allow individuals to get money to buy new homes without demanding 30% or 40% in down payments?

I care about the nitty-gritty because I am convinced that if we were not dramatically oversold, no one would even care about this plan because we have no idea whether it will work or whether anyone will take advantage of it.

How great it would be to say, "We are out of the woods because the plan will be the best thing that ever happened to the banking system." Instead what I would like to say is that we are out of the woods for now because we are deeply oversold and we got a short-term catalyst to relieve that oversold position. That should allow hedge funds a chance to breathe -- hopefully a cessation of the endless margining out of funds -- and give individuals a chance to feel that they are not down immediately when they get a report.

Maybe that's enough to get some stabilization. Maybe that's what we need to do so we can make money buying stocks, not selling stocks, although this kind of whippy action inspires no confidence whatsoever.

One way to look at this market is to see how the stocks that rallied on Friday are doing today. Mixed picture: The stunning increase in Apple (AAPL Quote - Cramer on AAPL - Stock Picks), up 8, shows you there can be follow-through. But the lessons of GE (GE Quote - Cramer on GE - Stock Picks), JPMorgan (JPM Quote - Cramer on JPM - Stock Picks) and VF Corp. (VFC Quote - Cramer on VFC - Stock Picks) say the opposite. In either case, I reiterate that it is too early to fade this rally. Too oversold. Wait until tomorrow to peel anything off.

Random musings: Rebecca Darst has a great column on SunTrust (STI Quote - Cramer on STI - Stock Picks) today, the action in which is typical of what I believe we will continue to see -- a first-class raid on this institution. You have to recognize this pattern because it sure isn't going away; too much money to be made.

At the time of publication, Cramer was long GE and JPMorgan.