Cramer: It's the Fed versus China and Putin and stocks hang perilously in the balance

Published Sun, Oct 2 202210:29 PM EDTUpdated Mon, Oct 3 20224:15 PM EDT

It turns out that the irrational just stayed irrational longer than we thought it would. When we talk about investing strategies, we often talk about probabilities and that they almost always do work out. The idea that the market can go down endlessly without a respite seems unlikely. We get oversold. Good things do happen. We catch a break with an earnings report or a piece of news from commerce or labor or housing that makes things better. It's why you want to stay long stocks — even as you want to put new money in the 2-year Treasury and get a 4.2% yield — because it just seems a little preposterous with healthy banks and a healthy consumer that things can stay this bleak for so long. But things aren't working out like that right now. There are so many rational things that could happen, but the irrational just stays, well, irrational. And nothing seem to be able to change it. Take Russia. We know that 13% of the world's calories came out of production when the Russian and Ukrainian borders shut down. That drives up the price of food incrementally. But even more important is has driven up the price of fertilizer, as Russia and its closest ally Belarus are major players in the market. Or who would have thought that Europe's most important environmental issue — energy — was somehow almost entirely dependent on one country — Russia — that has been run by a madman ever since he won the second war in Chechnya with a level of brutality that seems very familiar. There was nothing in Vladimir Putin's character that seemed worth trusting, but Europe decided that Russia was a good actor that could produce all the energy it needed. There was no need to have back-up plan. Electric generator plants were mothballed. Solar became the de facto energy strategy even as it isn't particularly sunny in many parts of Europe. You think we made mistakes here in the United States? At least we have abundant natural resources. The idea that Europe isn't over here negotiating the credit to produce the liquefied natural gas needed and speeding up the building of new gas export terminals is truly ridiculous. It's pretty clear that unless Putin is killed, we aren't going to see a reversal of the situation any time soon. This week we will have more Russian meddling when OPEC+ meets on Oct. 5 in Vienna. Russia is actively trying to get a million barrel cut, which will just cause more pain and inflation for the West. Yes, Russia's actions and the West's feeble response, save that of the U.S., was irrational. And because of the brave Ukrainians, it stays irrational. It's a nightmare for Europe because the better the Ukrainians fight, the more likely that Europe suffers a winter of freezing or nuclear variety. We