NEW YORK (TheStreet) -- "The cavalry isn't coming to save Europe," Jim Cramer announced to his "Mad Money" TV show viewers Monday. "If you're hoping for the cavalry, stop," he continued, "as hope should never be part of the investing equation."
Cramer said there are many things wrong with the cavalry thesis in Europe. First, he said, there needs to be a cavalry before it can ride to the rescue. But just who would that cavalry be?With so many banks and countries in need of help, Cramer said the incredible size of a bailout is unfathomable. He said there will be money available to bail out depositors at these banks, but shareholders and bond holders will most certainly be left out to dry. These banks and countries can, of course, continue to offer new bond auctions, he said, but for how long? Cramer said these auctions are a recipe for instant losses and the world's investors won't be fooled for long. Cramer explained that the European Central Bank won't act as the cavalry because they can't agree on anything. The Germans won't be the cavalry either, as they're too worried about inflation. Some think the Chinese will ride to the rescue, but the Chinese are already losing money in Europe and aren't likely to throw good money after bad. Even the Middle East isn't likely to invest, as they too are already heavily involved in the crisis. So with no one left to ride to the rescue, Cramer said he scoffs at the idea that a cavalry will ever come to save the banks and countries of Europe. He said that investors need to stop expecting a rescue and warm up to stocks with dividends, like Bristol Myers-Squibb (BMY) and Pfizer (PFE) and utilities like ConEd (ED) and Duke Energy (DUK). Cramer was recently asked about Plains All American Pipeline (PAA), an oil and gas master limited partnership, and how it compares to his all-time fav Kinder Morgan Energy Partners (KMP), one of the stocks he owns for his charitable trust, Action Alerts PLUS. Cramer said that in the long-term, Kinder Morgan remains his favorite, but after doing the homework, he discovered that in the shorter-term, Plains All American is also worth looking into.
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