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Cramer on Europe: Prepare for ‘Outright Defaults’

From here on in, when it comes to the PIIGS – Portugal, Ireland, Italy, Greece and Spain – you must presume the worst:

“Outright defaults,” Cramer said Wednesday.

These countries’ finances are on death’s door, and it won’t be long before we get the equivalent of bond funerals for Greece, Spain, Portugal and Ireland and a “shotgun Italian wedding,” Cramer said.

He urged viewers dig through their portfolios to see which of their stocks would be affected. Use today’s positive close – up 53 points in the Dow and 0.6% in the S&P 500 – to take profits. Take the chance to cash out if you think Europe’s debt woes will directly impact US equities, the US economy and at least the near-term futures of our companies. And there’s little doubt that more news is on it’s way, given the Spain downgrade we saw this morning.

But is that what Cramer’s going to do?

Nope. He refuses to panic over Europe. Sure, the market will drop every time we get more bad news from across the Atlantic, but keep this in mind: The market won’t stay down for long when we get good news at home. Just consider how stocks rebounded after the Federal Reserve’s benign statements this afternoon.

What you have to do, Cramer said, is ask yourself, Ronald Reagan style, if the companies you own are better off than three years ago. Among the Dow 30, 23 sure are. Only four are doing worse. Of the remaining three, two are pushes, Cramer said, and then there’s General Electric , which he won’t comment on because it’s the parent company of CNBC.

Look, we’ve gotten largely positive pronouncements from everybody from AT&T and Boeing to JPMorgan Chase to Intel . AT&T’s seeing growth thanks to Apple’s iPhone, Boeing’s 787 Dreamliner finally took flight, JPMorgan’s now the country’s premier bank, and Intel’s riding a wave of renewed corporate and consumer spending. And none of this has anything to do with Portugal, Ireland, Italy, Greece or Spain.

“I think they’re all buys on PIIGS weakness,” Cramer said of the aforementioned stocks, adding that a host of others, including techs like Juniper Networks as well as Ford, are doing great, too.

So rather than using Europe’s troubles as an excuse to cash out, Cramer thinks you should buy in. As long as you rid your portfolio of any exposure to that continent, then you’re ready for any worst-case scenario. And imagine how well positioned you are if things work out for the better, meaning they don’t default and we go much higher.

“Wonders never cease in this market,” Cramer said.

Cramer’s charitable trust owns Apple, Intel and JPMorgan Chase.

General Electric is the parent company of CNBC.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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