When a Bank Isn't a Bank

There are two kinds of banks in this market, Cramer said Tuesday, those who don't need money and those who do. Investors should buy the former sell the latter.

This might not be as clear cut as it sounds, though, because Mad Money's using a much looser definition of "bank" than most Wall Streeters do. As far as Cramer's concerned, a bank is any company sitting on piles of cash. It doesn't matter if it sells mortgages or mobile phones. If an institution, regardless of its sector, can live without a government handout nor does it doesn't need to raise capital, that's what we call a "good bank."

Any number of the strong earnings reports or high dividend yields would clue you into who we're talking about: Schering-Plough , Merck and Exxon Mobil announced great numbers recently. Verizon's paying out a 5.8% yield right now. Salesforce.com, which jumped 10% Tuesday, is offering growth even in this environment. And Microsoft , too, is cash rich. The same goes for General Mills, Kellogg, McDonald's and Bristol-Myers Squibb. All of these companies are capable of raising their dividends and buying back stock. And they certainly don't need help from the feds.

So who are the bad banks? The companies reaching toward Washington with their hands out. And oddly enough, these are the firms we normally think of as, well, banks: Citigroup, PNC Financial Services Group, SunTrust , even Goldman Sachs. These stocks lost an average of 5% just today despite the Dow being up 141 points.

So going forward, at least for the near term, drugs, oil, food, phone and software companies are good. Companies traditionally known as banks? Not so good. That's the dichotomy that defines this market. Expect the non-traditionals to go higher, Cramer said, and those bad banks to go lower.

Cramer's charitable trust owns Bristol-Myers Squibb, General Mills and Goldman Sachs.

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