The French have got it right. Overnight they have consolidated their banking industry with this shocking takeover announcement.

All I can say is it would not shock me if we woke up some day in the next few weeks and saw the same kind of action in our bank market. Why?

    Technology makes banking cheaper and causes banks to raise numbers. The Fed has given the green light to the bond market to do nothing, meaning you won't be roiled by bonds. The underwriting market is quite strong, and many of these banks have exposure to the equity market. All of the previous takeovers have now been put behind us, allowing banks to begin to bid up their own stocks by buying back shares aggressively. So it might be the right time for rival banks to strike before prices get too high. Most of the large banks are already Y2K-compliant, so nothing has to be done if you merge. Now that the Japanese are retrenching, the margins will get better for the basic loan business. The leveraged buyout business, with its lucrative high-margin loans, is making a comeback, as highlighted by this Allied Waste (AW) - Browning Ferris (BFI) deal.

I even priced out the BKX calls, the bank-stock index that trades most actively, to see if I could embrace the whole industry, but the premium is too high.

What do I mean by that? I wanted to buy the March 850 calls with the index at 869, but they were priced at 29, 10 bucks over, which is way too much for me. (Over means, over what would be parity with the index.)

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At the time of publication the fund had no positions in stocks or options mentioned in this column, though positions can 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 by sending an email to

letters@thestreet.com.