This column was originally published on RealMoney on Aug. 16 at 10:08 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
We can handle
going out of business. We certainly have to be ready, because
it now seems like a possibility.
I know it seems like we can't. But this was
the 1990 experience, companies like Countrywide were falling apart left and right.
Could we handle
going? Again, they made bad loans to homeowners, so they could be collateral damage to
the Poole plan.
Could we handle a total trashing of
to the point where it gets bought for a much smaller amount? Yes. Not a problem. They need to be punished under the Poole plan.
Could we handle
Bank of America
Harder. Might be an issue.
I don't think the Fed wants that to happen. And I like the way the stock acts because of that huge deposit base. It might consider Bank of America a crisis. The others
are not crises
Can the stock market handle this stuff? As in 1990, a huge percentage of stocks will go down. (I agree with
Bob Marcin on this, although he thinks that I believe that everything will go down. I am also closer in thinking to
Doug Kass than I have been since we started this site.)
I never, ever again in this period want to hear about the underlying fundamentals. They are not in control of this period. In fact, they are meaningless for the short term. Meaningless. And it is a sop to the public to talk about them. That's what I heard endlessly in the week before the October 1987 crash. It is a joke.
Can you sidestep this? If you have cash or can short, yes, although this is a really tough level to short because
the oscillator is so negative. I want to emphasize that it is possible that we can bounce simply because we are too over sold. That means bounce and make sales as we get less oversold.
Am I being too negative?
That's just a stupid question. We have
the Fed's game plan. They mean it when they say that they would rather tighten than ease. They see the good business that the
are doing, and they want that cooled.
making this up.
You just need to know it.
General Electric owns CNBC, for which Cramer is a featured commentator. At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
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