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Why We Won’t Revisit Dow 6,500

The stock market is worse off than it was a month and a half ago, Cramer said during Tuesday's Mad Money, but that doesn't mean we're in for a repeat of 2008 and early 2009.

The 2008-2009 iteration was the last bear market we went through and the third-worst bear market in US history. The other two coincided with the Great Depression. In early 2009, the Dow dropped to the "generational bottom" of 6,500, Cramer said, and investors feared for the financial survival of the western world. Yet today people act as though the "stock market is doomed.” He thinks the negativity and pessimism about the markets is overblown.

"We do need to worry," Cramer said. "But not like we were worried in the last bear market."

It is the stock market, not the economy, that is the problem today, Cramer explained. He said China is "not as bad as people think." Its middle class, along with India's, is growing rapidly. Even Federal Reserve Chairman Ben Bernake blessed the US economy this week when he said a double-dip recession is not in the cards.

Cramer thinks the current problems will be fixed, though in a worst-case scenario the market could drop to 8,260. But he does not expect that to happen.

"Even under my own disaster scenario I do not think we will come anywhere near where we were in the dark old days," Cramer said. "There's just too much good, too many opportunities and too many things going right to see those levels again."

The Mad Money host said financial regulators are now seasoned veterans in dealing with crises and "recognize how to head off financial catastrophe." For that reason, Cramer said he's not telling people to leave the table like he did in October 2008. There is risk of losing money short term, though, he warned, so the strategy is to be prudent, stay diversified and look for accidental high-yielders.

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