Cramer's 'Mad Money' Recap: Significant Downside Risk (Final)

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NEW YORK ( TheStreet) -- "How significant is the word significant," Jim Cramer asked of his "Mad Money" TV show viewers Wednesday.

If you're the Federal Reserve, and you're adding the word "significant" in front of the words "downside risk," Cramer said it's very significant.

It's only been six-and-a-half weeks since the markets last heard from the Fed, yet in just that short time the central bank felt it necessary to add the word "significant" to its downside risk assessment of the U.S. economy. Cramer said that means that the doom and gloom the markets have been predicting may indeed be more fact than fiction.

Cramer said nowhere was the market's skittishness more evident than in the coal stocks, where coal producers Walter Energy ( WLT) and Alpha Natural Resources ( ANR) both disappointed Wall Street.

The aftermath was quick and brutal for not only other coal stocks, like best of breed Peabody Energy ( BTU), but also mining equipment makers like Caterpillar ( CAT), a stock which Cramer owns for his charitable trust, Action Alerts PLUS .

But the carnage didn't stop there, even the rails which ship coal took a hit, with CSX ( CSX) and Norfolk Southern ( NSC) both down over 8% in a single day.

Cramer said this panic selling had nothing to do with the fundamentals, as both Peabody and Norfolk Southern have told us that September is shaping up to be terrific. Rather, he said that today's action was a sad reflection of weary investors getting yet another taste of bad news.

Cramer said that unfortunately this new negative reality will be with us a lot longer than the six and a half weeks it took the Fed to sour its outlook.

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