Stop Trading!: Europe, Please Stand Up

Wednesday, 29 Oct 2008 | 3:26 PM ET

Now that the Federal Reserve has cut interest rates to 1%, the U.S. has done virtually everything it can to claw its way out of the markets’ troubles. Now, Cramer said during his regular Stop Trading! segment, Europe has to step up.

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Caterpillar, which recently reported a less-than-stellar quarter, is struggling mainly because of business in Europe. So a decline in rates, and a return in minerals and oil, is good for the company. Cramer’s hoping that a decreased concern with inflation will allow the European Central Bank to make much-needed cuts.

While China recently lowered its rates to 6.66% from 6.93%, something “we need,” Cramer said, the Bank of England has held rates at 4% despite the recession that country’s in.

Despite suffering through a recession of its own, the Bank of England still holds interest rates there at about 4%. And while China recently lowered its rates to 6.66% from 6.93%, inflation has seemed to be a concern for central banks the world over, preventing the kind of cuts the world markets need. For Tuesday’s 889-point Dow rally to continue, Cramer said, Europe needs to follow America’s lead.

“Europe cuts and China cuts, the rally’s sustainable,” Cramer said. “Without it, it’s just going to go right back down.”

“We’ve now down everything we can on our end,” he said. “Let’s hope that Europe listens.”

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