Stop Trading!: Surviving This Market

As bad as this market is, we’ve gotten through tough times before.

That was Cramer’s message during Wednesday’s Stop Trading!. He rattled off a list of solutions that brought us through Black Monday in 1987, the savings-and-loan debacle of 1990 and the failure of Long Term Capital Management in 1998.

Coordinated worldwide interest-rate cuts. Cramer thinks Europe could make such a move and that would provide the U.S. Federal Reserve with the cover it needs to rethink it’s decision yesterday to leave rates unchanged.

A stimulus plan for China. This is much needed. The Chinese market is down 63%.

A big foreign investor. Think of how Prince Alaweed’s investment in Citigroup turned the market around in 1990. “They have so much money in the Middle East if they wanted to come in and buy any of these they could,” Cramer said.

Waive the private-equity rules that prevent a company like TPG from buying at least a big part of Washington Mutual.

The Securities and Exchange Commission should waive the rule limiting the extent of buybacks a company can make. Also, it should reinstate at least a trial of the uptick rule.

In 1987, the market pulled out of the hole it was in when companies put in motion major buybacks and the Federal Reserve announced that all the liquidity that companies needed would be available. Something similar would help now.

Cramer also mentioned that the action in Morgan Stanley and Goldman Sachs is fear at work and not an honest look at the two companies’ fundamentals. Morgan Stanley CEO John Mack’s statement that fear, rumors and short selling are hurting his firm is his way of urging investors to buy the stock, Cramer said.

Jim's charitable trust owns Goldman Sachs and Morgan Stanley.

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