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Warren Buffett Vs. Italian Bonds

Warren Buffett versus Italian bonds — it was a titanic match-up that would move the markets on Monday, but in the end, the rising bond yields in Italy caused U.S. stocks to end lower.

Stocks have lately focused on headlines from Europe as traders react to the escalating sovereign debt crisis in the euro zone. Italian benchmark bond yields rose above 7 percent last week, a level that forced countries with a lower debt burden to seek bailouts. With debt of more than 2 trillion euros, Italy is considered too big to bail out. Yields on 10-year Italian debt rose to 6.76 percent on Monday.

Investors then turned their attention to billionaire investor Warren Buffett, who told CNBC that his firm, Berkshire Hathaway , has purchased $10.7 billion worth of IBM stock this year.

"That was a total stunner," Cramer said. "Buffett, who has historically eschewed tech, has put $10 billion to work in a company that has transformed itself from a somewhat unpredictable hardware business to a software and consulting business that sells hardware and has consistent cash flows, which is what attracted Buffett to Big Blue."

More importantly, Buffett laid out an optimistic course of action that suggests investors buy stocks of U.S.-based companies. Although Europe's debt woes are troubling, Buffett said the U.S. companies he's buying shares of would do just fine. His comments were enough to push the markets back up for a time, but Cramer said the problem is that Europe's problems aren't going to go away over night. Buffett appears on TV every once and a while, but investors see more news about how horrible Europe is every single day.

The bottom line? Even as smart and powerful as Warren Buffett may be, he's only one person. Moreover, he's only on TV on occasion. Europe, on the other hand, just doesn't seem to go away.

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—Reuters contributed to this report.

When this story was published, Cramer's charitable trust owned IBM.

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