Cramer: Better After the AIG Save

This post appeared earlier today on RealMoney. Click here for a free trial, and enjoy incisive commentary all day, every day.

How about this? We are better off than we were yesterday.

You have to understand that we simply wouldn't be able to open most financials if

AIG

(AIG) - Get American International Group, Inc. Report

had failed. Our new sovereign wealth fund, the

Federal Reserve

, came up with an elegant plan to take over AIG and make good on what would have been broken guarantees that would have caused worldwide capital calls and bank closings that honestly would have made the Great Depression seem like the Little Depression, World War I to our new World War II. That's worth avoiding.

It's hard to rally on this. People are still reeling from the enormity of it and the fragility that we didn't know about. I am actually pleasantly surprised that the Fed recognized that we had a problem this size on our hands.

You have to look at this only one way: Without this nationalization, we might not have had banks paying off other banks. We would have a seize-up and a destruction of capital that we simply couldn't handle.

Now we are going to rebuild on a firmer basis.

I believe, again, that AIG was actually somewhat solvent but it had guarantees meant to be paid off, like

Fannie

undefined

and

Freddie

undefined

, simply on house depreciation. It was a miserable underwriter and arrogant beyond all get-out, and it wasn't just Martin Sullivan that caused the problem. The now allegedly senior statesman Hank Greenberg set up this model, AIG simply took it to an extreme.

Last night before the news that Lloyds might buy

HBOS

, another mortgage issuer of no judgment, it looked like we could be down big on the recognition of the trouble we must have been in.

Now it looks like we simply aren't in as much trouble as yesterday. That makes things more constructive and not as worth selling after this save.

At the time of publication, Cramer had no positions in the stocks mentioned.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer),"

click here. Click

here to order "Mad Money: Watch TV, Get Rich," click

here to order "Real Money: Sane Investing in an Insane World," click

here to get "You Got Screwed!" and click

here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by

clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.