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The best way to sustain Friday's late rally is for the government to cut a back-room deal with the largest banks and brokerages to get them to start making loans again, Jim Cramer told viewers on his "Mad Money" TV show on Friday.

On a day when Dow closed down 128 points after another extremely volatile session, Cramer said this "secret" meeting is necessary to get the economy, credit markets and stock markets rolling again and avoid a repeat of this past week's brutal market.

Cramer said he would have the Federal Reserve take the initiative by inviting to the meeting the CEOs of large financial institutions such as Citigroup ( C), Bank of America ( BAC), Wells Fargo ( WF), JP Morgan ( JPM), Morgan Stanley ( JPM), and Goldman Sachs ( GS), the latter three of which he owns for his Action Alerts PLUS portfolio.

Cramer said the Fed would tell the CEOs that it would not repeat the mistake it made when it allowed Lehman Bros to fail. Instead, he said, the Fed would do all that it can to get the financial institutions "open for business" again.

He said the Fed would guarantee all their debts as well as their brokerage, savings and corporate accounts. Furthermore it would allow them to pay off their bonds with federal money, permit them to sell their credit default swaps lower and provide them $100 billion each to lend.

In return, these financial institutions would have to live up to their end of the bargain by "opening the spigots" and make loans again. He said the loans will be targeted to corporations, small businesses and individuals -- but not hedge funds.

He also said the Fed would have the financial institutions divvy up the "bad banks" among themselves, with the aim of having them assume the good deposits while selling the bad assets to the federal government's newly created Troubled Asset Recovery Program.

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