"All of the rallies that we've gotten during this miserable period, beginning in the spring, have been related to the
or the possibility of a takeover by private equity," Jim Cramer said on TheStreet.com TV's Wall Street Confidential Web video Monday.
However, private equity was taken off the table in August and since then all the rallies have been because of the Federal Reserve, he said. If people think the Fed is going to cut, they buy. If they think the Fed might not cut, then they don't buy and if they think the Fed is going to stay tight, they sell.
Then "suddenly fresh money comes in -- not stale money like
Bank of America
, but fresh money from Abu Dhabi," he said. "What that does is make everything look different because what we've lacked in this market is liquidity, capital.
"The Fed has not provided enough capital," Cramer explained. "Now that doesn't mean that I'm not puzzled by the Fed's indifference to the strains of
, or to a senator like Chuck Schumer saying maybe the Federal Home Loan Bank Board shouldn't make these loans. That's precisely what they're there for.
"But I look at what's happening with Abu Dhabi, and I say, 'Wait a second, this time the rally has some grounding,' " he said. "This time you could argue that new capital is a better reason than the ephemeral Fed hopes.
"So those that are staying as negative as they were .... are blind to what has caused real rallies vs. bogus rallies," Cramer said. "This is not a rally about the Fed, therefore I think it may have more legs."
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