Stop Trading!: Banks are Toxic

If there’s one thing that Cramer thinks is clear at this point in this market, it’s that you can’t own bank stocks. “Period, end of story.”

The affliction of the financial sector reminds Cramer of the savings and loan crisis of the early 1990s. Only this time, he said, it could be worse. He wouldn’t be surprised if more than 30% of the banks in the U.S. were “merged out of existence” when everything is said and done.

Cramer even backtracked on his earlier praise of JPMorgan’s takeover of Bear Stearns. It looks now, three months after Bear’s meltdown and JPMorgan’s subsequent takeover, that the deal hasn’t panned out the way Jamie Dimon had hoped. What did Bear give JPMorgan? Cramer asked. “Nothing.” There’s no synergy of culture between the two banks and Bear’s bond portfolio is looking like it could be even more worthless than people originally thought, he said.

With that said, there may be only one financial services company that’s worth buying here – and that’s Goldman Sachs . Goldman’s 18-straight-point move higher is a sign of health in an otherwise toxic industry, Cramer said.

Jim's charitable trust owns Goldman.

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