Shares of U.S. traded Deutsche Bank soared 14 percent on Friday on a report that it was close to a $5.4 billion settlement with the Justice Department for its role in the mortgage bond crisis, rather than the proposed $14 billion deal. CNBC could not independently verify that report.
This wasn't earth shattering news for Cramer.
The reality is that Deutsche Bank has 1.8 trillion euro in assets and $220 billion in cash on hand. It's the largest bank in Germany, with tremendous worldwide reach. He expected a settlement to be reached.
"It's the only European bank that my snob Harvard friends would have considered working at," Cramer said.
Cramer suspects that Wall Street saw news of a possible settlement as a surprise because the media only focused on the negative aspects of the story. Saying anything positive would have risked getting called a moron.
Many investors were concerned that Deutsche Bank's legal reserves of $5 billion to $6 billion were too low versus the $14 billion penalty sought by the Justice Department.
"If this deal falls apart and it turns out that Justice wants more money, I still think Deutsche Bank will be able to find capital, either from another institution, or in the worst case scenario, the German government," Cramer said.
In fact, given that German interest rates are negative currently, the German government buying Deutsche Bank would be an incredible investment if given the opportunity.
Ultimately, panic makes a great headline, but it's a terrible investing strategy.