Skip navigation
MOST POPULAR RELATED TAGS
  • TOPICS
  • SECTORS
  • COMPANIES

MAD MONEY FEATURES

Podcasts PODCASTS
Watch the Lightning Round whenever and wherever you want.




Full ShowFull ShowFULL SHOWS
Missed an episode of Mad Money?  Watch the lastest show here.




Widget OFFICIAL MAD MONEY WIDGET
Grab this all-in-one application and get recaps of the show sent right to your desktop or blog.




Soundboard CRAMER'S SOUNDBOARD
Admit it: You’ve always wanted to hit the “They know nothing!” button. Here’s your chance.




Mad Money PhotosCRAMER QUICK PICS
Check out the Mad Money host on set, back to school, behind the scenes and more.




Mad Money VideosVIDEOS
Get all your favorite Cramer clips right here.





ShopSHOP FOR MAD MERCHANDISE
Buy Cramer books, bobbleheads and other Mad Money merchandise.




Ringtones RING TONES
Pick up the phone! It’s Cramer! New Mad Money sounds for your cell phone.




Mobile AlertTEXT MESSAGE ALERT
Mad Money’s mobile. Get show highlights sent to your phone.




Text Size
Sep.26
6:47 PM ET

Cramer’s got a new issue he’s taking up with Washington: FDIC deposit insurance.

The Mad Money host wants the $100,000 limit upped to as much as $2.5 million, with additional protection available at a percentage cost.

Banks runs are taking place under the radar, he said, and this is the best way to stop it.

Even corporate and trust accounts need protection. Chief financial officers, lawyers, the wealthy – they’re all pulling their money from savings accounts and asking for T-bills. As a bank’s deposits evaporate, so too does its ability to lend, i.e., make money. This will continue until Congress agrees on a bailout deal.

“The lack of confidence inspired by Lehman’s [LEHMQ  Loading...      ()   ] demise, the general poor health of many banks, this is going to turn this into an intractable moment,” Cramer said, “if someone in the government doesn’t start pushing for more deposit insurance.”

The FDIC should be pushing Washington for a higher guarantee. Otherwise more and more banks will go out of business, leaving only what Cramer’s calling “superbanks” like JPMorgan Chase [JPM  Loading...      ()   ], Wells Fargo [WFC  Loading...      ()   ], US Bancorp [USB  Loading...      ()   ] and Bank of America [BAC  Loading...      ()   ].

The situation right now is so bad that a little Cramer calculus showed the Dow could drop to as low at 8,378 – a 2,768 decline – if Paulson’s plan doesn’t make it through Congress. That’s why this week’s Game Plan, just like last week’s, is a call to viewers to keep selling their stocks into any strength. Deal or not, we’re still most likely going to see a recession, so you want to preserve capital at all costs. The only thing a congressional agreement really brings us is avoidance of another Great Depression.

Just in case you think this bailout is only about saving Wall Street, think about this: 100 million Americans – about half the adult population – owns stocks directly or indirectly through mutual funds or retirement plans. No deal means your pension fund, 401(k), IRA, 529 college savings all plummet in value. Cramer can’t emphasize enough how important Paulson’s plan is to boost the credit markets – the economy’s fuel – force money back into stocks, bonds and the like, and get economy moving again.

Even outside the U.S., circumstances are dire. BRIC – Brazil, Russia, India, China – they’re all hurting. Chinese growth has collapsed, India’s inflation is out of control, foreign capital fled Russia when it invaded Georgia, and Brazil, while still a robust market, is a victim of the U.S. slowdown.

“BRIC, which was once the driving force of global economic growth,” Cramer said, “is now an actual brick around the neck of the world economy.”

The industrials, telcos, techs, oils, any company that relies on economic growth, will get hit hard if the Paulson plan falls through.

So “it’s not just the stocks of Wall Street,” Cramer said, “it’s the stocks of Main Street that are about to be crushed.”

Therefore, keep on selling into any strength. Deal or no deal, now’s the time to play defense.






Questions for Cramer?

Questions, comments, suggestions for the Mad Money website?

© 2009 CNBC, Inc. All Rights Reserved

Tools:
PrintEmailAdd This share icon
  • digg share
ADD COMMENTS
Remaining characters


Current DateTime: 05:21:40 25 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:03:47 25 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 02:05:46 25 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:02:04 25 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters