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It's time to talk turkey about the prices on your screen and recall another time when things felt like this -- the crash of 1987. In 1987, we believed that all the major firms in the brokerage industry were going to go belly-up. Many of them were not in compliance with paperwork, others were simply not even picking up the phone. It felt like the end of the world. It wasn't. But it was eerie.

We are in that mode again. I don't think anyone looking at

Morgan Stanley

(MS) - Get Report

or

Goldman Sachs

(GS) - Get Report

today would dispute that. These companies are clearly reflecting that they are in severe straits, much worse than I think they are. In many ways, this time it is

worse

than 1987 because

AIG

(AIG) - Get Report

and

Fannie

(FNM)

and

Freddie

(FRE)

and

Lehman

(LEH)

still haven't been sorted through. We have too many aftershocks that we must worry about, and there is too much damage in the system. Plus, there is now a sense that the U.S. government has become a cartoon government with a cartoon currency and a cartoon

Fed

. No rate cut? Oh my! How wrong!!

I think the Fed is in shock that we are not doing better today, but what they failed to recognize is that the erosion in confidence from their worrying about inflation is staggering. I think also, right now, they should be on the phone to the big repositories of capital in the Middle East and Asia and urge them to take advantage of these prices.

I want to make it clear: In many ways this period right now is worse than 1987. AIG, Lehman, FNM, FRE,

Bear

, and who the heck knows what else? Right now we are experiencing a true meltdown in financials. There is very little hope at this moment that we can turn it around ourselves.

I think that unless we get some outside help from the Middle East or China, it won't end. Our government has made so many mistakes, our Fed has made so many mistakes, that I can understand why people would panic.

I simply have to believe, though, that there is outside capital that wants in. I believe that money does exist that can come in and stabilize things. But I also want to point out that without it, we are most likely not done going down.

Again, without it, we were down 508 points from the 2300 level in 1987, and we had a much more capable Fed and government. So I can't rule out a big percentage decline from here. It could happen again unless we get some grownups from outside our own universe to come and put money here right here.

Without it, we cannot take 1987 off the table, even though I think the situation is not as perilous given the incredible liquidity of so many companies and the moves that have been made to preserve the system already.

What happened in 1987 that turned things around? The major Wall Street firms with capital came in and bought the market at about 1400 on Terrible Tuesday. They had the capital to do so. We don't anymore. The foreigners do, I do hope that we are making calls to the major sovereign funds from companies more flush than ours.

Without it, you can figure that history can always repeat itself even though the pain is in one sector only -- finance -- and the rest can be handled given the cash in the corporate coffers and the sidelines. To save finance, we need more than just our own help -- we need major intervention from the incredibly tight EU. We also need major infusions of cash into financials from the likes of the big Middle East sovereign funds.

Logically, we should bottom at some point, just like we bottomed in 1987. That bottom did not occur until we declined more than 50% from our highs. But then we caught bargains of a lifetime. I think some capital should be kept for that moment.

I also think that we need to be on the lookout for major buys caused by panic, too. Not a sop to the bulls, just a statement that fear is so prevalent that there have to be some opportunities in rock-solid companies with no debt that are down way too much at this very moment. Some stuff isn't down enough, some stuff has much further to fall, but some stuff can be bought right around here

if

the companies do not need cash and can withstand this assault.

At the time of publication, Cramer was long Morgan Stanley and Goldman Sachs.

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

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