Are takeovers back? I sure get the sense that these lower prices have people thinking that deals have to occur. You have the Bestfoods (BFO) - Get Report fight, with Dick Shoemate working to do what is best for shareholders. You have this RJR (RJR) mess. When will that company not be in a takeover mode? You have the drug stocks unresolved and looking for takeovers. And you have the Cisco (CSCO) - Get Report- ArrowPoint (ARPT) deal validating these wacky 35-times-revenue prices for Net infrastructure.

What's the effect of takeovers during a bear phase (as we are in now)? They scare

short-sellers. They force covering. They make it too dangerous to lay all over stocks and frustrate the bulls. They make bears think twice about being so negative. Hey, add liquidity.

And, of course, they make

a very frustrating game exciting. Do you really expect to open Monday's

Journal

and not see two or three takeovers?

Random musings:

Did you short Cisco off that evergreen

"story" (read bear raid) on

CNBC.com

about its gross margins? If you did, what size noose are you sporting?

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Bestfoods and Cisco. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.