NEW YORK ( TheStreet) -- "The good news appear to have run out," Jim Cramer warned his "Mad Money" TV show viewers Thursday after disappointing news out of Europe caused an abrupt about-face in U.S. markets.
Cramer said the European Central Bank dropped the ball today, and unless something surprising happens Friday, he's going to have no choice but to raise his threat assessment of the markets to DEFCON 2.Cramer explained that there are a lot of things the ECB could have said today, such as backstopping all sovereign debt bonds, dropping interest rates to just 0.25%, or reassuring the markets that another Lehman-style collapse is not in the cards. But Cramer said that instead the ECB once again showed us their lack of a credible plan. "This war cannot be won on a single front," said Cramer. Cramer said with so much capital needing to be raised in the first quarter of 2012, his threat assessment will indeed be raised tomorrow unless something substantial is announced. He once again encouraged investors to sell all bank stocks and stick with only high-yielding companies, as even the end-of-year hedge fund buying will be enough to counter major bank collapses in Europe. There were some bright spots in the market however. Cramer noted that Costco (COST) disappointed as expected, making that stock worth buying if it gets hit again tomorrow. He said that Enterprise Product Partners (EPD), one if his favorite master limited partnerships, issued nine million shares today, which knocked that stock down to attractive levels. Cramer also said he still likes McDonald's (MCD), which posted great same-store sales numbers in of all places, Europe. "We await more news from Europe," Cramer concluded, "and while the Europeans should be worried about recession and collapse, they still seem to be fighting inflation."