The bad news is that the pain in the Net isn't over. The good news is that like everything else on the Net, it tends to happen swiftly, without the slow water torture that other bear markets have.

How will we tell there is a bottom? The same way we found bottoms before in this sector: The underwritings will tell us. You have to see deals fail. You have to see issuers say they think these prices are too low. You have to see supply dry up.

Why is this underwriting bugaboo so important? For one simple reason: Nobody willingly becomes a cannibal. We are forced into cannibalism, which means selling Nets for other Nets, because there is not enough capital to sustain these prices.

(It may seem a little far afield to talk about the

Donner Party

on such an occasion but those adventurers socked in by late snowstorms in the Sierras never intended to become cannibals and did so only at the behest of their parents. For that they have been judged mighty harshly.)

The combination of a supercharged underwriting market allowing new companies to wield huge clubs in the form of market cap, a lousy bond market and a horrific amount of margin selling have coalesced to make the Net one plum ugly place.

If the underwritings get stopped by this selloff, that is the first step toward a bottom. A consolidation of the players out there would be the second. And an acknowledgement by insiders that the stocks have fallen too low would be the third.

Then it will be safe to buy for more than a trading bounce. When you hear of deal cancellations, that will be the signal to cover shorts. The takeovers and insider buying will be the signal to buy.

Random musings:

Shame on you who would like me to lie. I can't tell you how many emailers blasted me for saying that we were selling most of our Net stocks. This is a diary. I can't lie to myself or to you about what we are doing. In answer to your inquiries, I am not selling my

TheStreet.com Inc.

(TSCM)

stock.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long TheStreet.com Inc. 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.