Game Plan: More Bad News? Thank God.

After Wells Fargo CEO John Stumpf said U.S. housing hadn’t been this bad since the Great Depression, it was hard to imagine things getting any worse. After all, that was coming from the number-one mortgage lender in the country and a bank without half the exposure to the subprime loans that hurt so many of its rivals.

But this was actually a good thing, Cramer said.

The Federal Reserve won’t act until things are dire, so that was just the doom and gloom the market needed. It’s never a question of if the Fed will intervene, it’s just a matter of when. So the bleak picture Stumpf painted might have been just enough to prod Chairman Ben Bernanke into action.

But in the meantime, clear out of Countrywide , Washington Mutual , Downey Financial , E*Trade , Standard Pacific , Pulte Homes , Centex , Beazer or any of the mortgage lenders. If Stumpf was spot on, these stocks won’t work for a very long time, Cramer said.

Instead, buy defensive stocks like Coca-Cola , Altria , Colgate-Palmolive and Clorox. Even Avon is great these days. And don't forget healthcare plays like Medco Health Solutions .

Hang tight, Homegamers. The worse the market gets, Cramer said, the brighter the future looks.

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