Cramer Too Negative?

The following is an unofficial and edited transcript from Monday's "Mad Money."

There's this notion, one you hear all the time, that because we're down so much, and because we’ve held at the October 10 lows and rallied from them every time, that we should all stop worrying and join the "land of a thousand bull dances" otherwise we'll be left behind.

But the bad news keeps getting worse, and perversely, the bulls are everywhere. That's exactly the opposite of what we need to see before we can bottom.

Let's just look at the facts: we've done tons of bailouts -- this latest one with the insurers buying little banks so they can get in on the TARP is about as absurd as it gets -- but all those bailouts seem to do is keep things from falling apart completely. The Treasury immediately backed away from the one thing that could actually help us, going after the mortgage problem root and branch by buying the mortgages and then refinancing them. That's something we have yet to do. If you look at private equity, asset backed bonds, credit cards, commercial real estate and big mortgage bonds, we've accomplished nothing.

We've made zero effort to unwind the mortgages in the CDOs, which represent about 80% of the bad ones, because nobody in government is willing to tackle that problem. And Cramer doesn't even know if it can be tackled. You can only refinance mortgages from the ground up, not the top down, and Paulson & Co. don't want to do it, although the FDIC does, but it lacks the teeth to pull it off.

Cramer hears all the time about the so-called big tax cut that comes from cheaper gas prices, but when he see dismal retail sales numbers, Cramer knows that the consumer isn't spending. Then he starts to worry that who the heck will lend the retailers money to hold down inventory for Christmas? We need evidence the economy, which started falling off a cliff in August and then really plummeted in October, has bottomed out, even if it just slams into the floor and stops.

Everyone knows GM will very likely run out of cash by the end of the year, and if we let it go that could break the market, another Lehman -- although if we get a real bailout for the autos, that is something that would make me more positive.

The litany, the parade of horribles goes on -- Fannie and Freddie have now been revealed as the loss-making machines they truly are. None of the homebuilders have gone out of business, instead they keep pumping out homes, making things even worse. AIG , which has become a conduit for taking tax-payer money and sending it hedge funds by making bogus CDO mortgage trusts whole.

We're still haunted by the specter of Lehman, but other than Lehman, we’ve still had no major bankruptcies. We've yet to find a real resolution to the credit crisis, and to top everything off, we’ve now got shantytowns -- genuine Bernankevilles.

"So am I too negative?" Cramer asks. "I don’t think so. Admittedly, stocks have fallen to levels that are amazingly low, but there's no money out there for takeovers to clean up this mess so the fact that so many stocks have fallen so hard doesn't matter."

Cramer sees a bottom and wishes he could join in the bullish cacophony heard everywhere, and that he could participate in the "land of the thousand bull dances," but he needs more reason than the idea that we've tested the lows and they've held. The negatives are too many and too awful.

What could change Cramer's mind? Big rate cuts from China or the European Central Bank or an auto bailout. Those things could help. But without them, he doesn't see how you could look at the facts and be a bull.

Cramer's Bottom Line: "Stick with the recession resistant stocks, the accidental high-yielders, and stocks that are trading at or near cash. Right now it's more important to worry about not losing money than about being too negative. Oh, and by all means, keep me honest, tell me the positives. But let's be realistic so we don't just do a thousand bull dances without a note of fundamental music to accompany us."

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