Tuesday, Sept 30, 2008
The Federal Deposit Insurance Corp. needs to increase its guarantee limit right now, Cramer said during Monday’s Stop Trading!, to stop a collapse in banking.
The Mad Money host has said before that the FDIC’s $100,000 deposit insurance might have been suitable for the Great Depression era, but not the 21st century. Cramer’s calling for that limit to be increased to $1 million. He also wants to see corporate accounts, which carry with them much more money, insured for a fee, even if it’s as small as 0.1%.
This, Cramer thinks, would “temporarily freeze” the massive withdrawals that are hurting so many U.S. banks. Goldman Sachs [GS 120.70 -17.29 (-12.53%) ], JPMorgan Chase [JPM 41.00 -7.24 (-15.01%) ], US Bancorp [USB 32.75 -3.45 (-9.53%) ] and Wells Fargo [WFC 33.25 -4.06 (-10.88%) ] were all down in Monday trading. The move could serve as a much-needed crutch until the market’s main problem – mortgages – is worked out. Apparently, that won’t be today, as Congress voted down the proposed bailout bill Monday afternoon.
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Otherwise, Cramer said, “we’re going to go down another 2,500 points, and we’ll go down that 2,500 points rather quickly.”
There’s a “jarring lack of confidence throughout the system,” and Cramer doesn’t want to see the market “destroyed” over the next 72 hours because of today’s vote in Congress. The FDIC, though, despite all the failures we’ve seen recently, does seem to still hold the trust of both the market and the average American.
“So maybe that’s the agency we bank with,” Cramer said, “while we get through this period.”
This article was posted: Tuesday, September 30, 2008 at 3:33 am