Where are all of the leveraged buyout funds when you need them? By this stage in the economic expansion, we should have some faith that the smaller-capitalization stocks, the ones that have been scorned and hated by this market, could survive a couple of lean years.

We should also, if the accounting is right, believe that many of the smaller-cap companies have tons of cash hanging around, almost stockpiling, on the balance sheet. And we should have managers who are sick of looking at their stocks hanging at the exact same place while Internet stocks hug the new high list.

So why haven't these managers tried to take over their own companies? Why haven't they reached out to LBO funds or to banks and bought in their equity to capture these luscious streams of income for themselves? If these stocks are as darn cheap as their proponents say they are, why isn't someone doing anything about it?

Small-caps, for many of the liquidity reasons I have cited over and over, are going nowhere. The only real hope for them is to LBO or to be bought by conglomerates trying to bring out values.

The latter would be a natural here if there were such a thing. In the '80s, we had companies like



Gulf and Western

that used to simply look for values and snap up companies, can management, streamline and then suck out the excess profits and return them to shareholders.

But conglomerates are hated by this market, so no one has any kind of currency in that world to do these rollups. And the LBO funds? Who the heck knows? Where did they go? Why aren't they scanning for companies that hit my screen for high cash ratios and high book value? Why aren't they conspiring with managements to take over companies and then, when the pasture is greener five years from now, bring them public again with a much greater insider ownership? Why haven't the investment bankers put together new funds to take advantage of this small-cap vs. large-cap arbitrage and take these companies private?

Only after we see the takeovers and the LBOs are the small-caps going to move. No money manager can bring out the value, and money managers are loath to take stakes in companies and push managements to do something to bring out value. They would rather just sell.

As long as they would rather just sell, you will find me in the

S&P 500

and its larger-cap kin.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. 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 a letter to TheStreet.com.