Jim Cramer's Stop Trading! Buy Bear Stearns

Don't overreact to the meltdown of two toxic hedge funds, Cramer counsels.
Author:
Publish date:

Buy

Bear Stearns

(BSC)

despite all the toxic hedge fund handwringing, Jim Cramer said Friday on

CNBC's

"Stop Trading!" segment.

Cramer said 1998's collapse of the Long Term Capital Management hedge fund "was 100 times worse" than the apparent demise of two highly leveraged Bear Stearns funds that were betting on subprime mortgages. Cramer said the near implosion of the funds "is a liquidity issue, not a credit issue," and that big Wall Street buyers of the fund's paper, such as

Barclays

(BCS) - Get Report

, "need to grow up."

Cramer said there will be another toxic fund out there somewhere that will blow up, but that's just "another group of idiots" and investors should keep "a cooler head" before they go out and sell all their brokerage stocks on the news.

"Sell them for another reason" if you must, Cramer said. But he urged investors to bear in mind the overall strength of recent quarters at

Goldman

(GS) - Get Report

,

Lehman

(LEH)

and

Morgan Stanley

(MS) - Get Report

.

At the time of publication, Cramer was long Goldman.

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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