Cramer: Fed Needs Reality Check

The plan the Federal Reserve announced Wednesdayto boost liquidity in the markets probably wouldn't alleviate even a couple of [weeks' worth of bad loans from Washington Mutual, Cramer said during Mad Money, let alone Countrywide or Citigroup.

Cramer called the plan "harebrained" and "ridiculously difficult to understand," saying it will do "nothing much at all."

The markets seemed to agree. The group the Fed's initiative was supposed to help the most -- the financials -- was down significantly Wednesday. Bank of America , Washington Mutual , Wachovia , and Citigroup all took losses. So did mortgage companies, homebuilders and Freddie Mac and Fannie Mae .

So which stocks did do well in this rollercoaster of a trading day? The ones traders buy before a recession. Pepsico , Coca-Cola , Procter & Gamble , Clorox , Colgate-Palmolive , and even Diageo , all were up.

If the Fed was wondering how its plan was received, there it is, Cramer said, adding that Bernanke and gang need to get out of their ivory tower and onto a trading desk. Until that happens, Cramer recommended staying defensive by investing in supermarket and drugstore stocks. But stay as far away from the financials as possible, he said.

Jim's charitable trust owns Citigroup.

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