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Jim Cramer bid a farewell to financial stock bear raids when he told viewers of his "Mad Money" TV show Tuesday that the Treasury Department's new protection plan finally puts an end to this devastating, but legal, practice.

Cramer said the market was able to hold onto most of its gains on Monday because the possibility of another Great Depression was taken off the table.

He said that the government's plan to take taxpayer money and invest it directly in banks has finally broken the cycle that has plagued the sector, panicked investors and brought many of the industry's finest companies to their knees.

Cramer described the process in which short-sellers and hedge funds targeted banks and destroyed them. By using unregulated credit default swaps, short-sellers were able to create unsubstantiated fear in a stock.

Once the fear took hold, the short-sellers would exacerbate the situation using naked shorts and puts to lower the stock price even further at very little cost to them. With stocks under heavy pressure, rating agencies were forced to lower ratings, causing media speculation and eventually banking customer panic.

Cramer said the Securities and Exchange Commission's prior moves to ban short-selling on financials didn't go far enough to prevent the credit default swaps from being used to spread fear.

However, that has changed with the government's new rescue plan for financial companies and its huge influx of capital. Cramer said short-sellers now have to once and for all cover their positions and leave the financials.

"The financial stocks no longer have a bulls-eye on the them," he said. "SEC-endorsed bear raids are a thing of the past."

Cramer: Breaking Capital Destruction

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