Jim:     On Friday, after the biggest two-day rally since the crash of 1987, I told you to sell, sell, sell... I said you should unload at least 20% of your portfolio, if you hadn't already. Even though we were down 373 points today... even though the Dow was truly polaxxed... my sell call still stands for those of you who haven't lightened up. Now, if you listened, you got the best prices at the open which is terrific...

You should still be selling...

See, when the market doesn't function like a market, but if functions like some sort of erratic machine on crack... the obvious fuel of hedge funds gone wild... you get what you had today...

Let's wait until it calms down and comes down, before we talk about... buy, buy, buy...

Now, when I do the Lightning Round, it doesn't mean I'm not going to say I don't like certain stocks, but I'm not saying buy them, okay...

Just because (Treasury Secretary) Paulson's rescue plan takes another Great Depression off the table, that doesn't mean it's time to buy stocks hand over fist... especially since we don't even know if Congress would pass the darn thing... even though not passing it would be like cutting off our collective nose to spite our face.

Let me reiterate... I am totally in favor of a plan like this... I say "of a plan" because I saw so many different iterations, it's hard for me to tell...

By the way, we joke about socialism and communism and expropriation on this show all the time, but the $700 billion bailout plan is actually the furthest thing from it, despite what you may hear all day in the papers.

Markets do not exist in a vacuum... never have, never will. The government's stepping in to save the system is not a communist move, okay... It's a capitalist move because, without it, our entire system of capitalism was about to grind to a halt... and it still might.

Maybe the people condemning this plan consider multiple large banks failing to be a capitalist move? Not me. Maybe these people feel that the price of no intervention, which I believe could lead to 30% unemployment in this country, which is what we got the last time the financial system was burning and we did next to nothing, isn't too high a price to pay.

I'm not in that camp either. I don't want you thrown out of your house, I don't want you to lose your job... That's the camp I'm in...

Now, our long-term goal on Mad Money is to preserve free, but regulated, capitalism... not the unmitigated, unregulated crony capitalism that the hedge funds and the brokerage houses have practiced for the past seven years...

But back to the main point...

Why should we still be negative after today's big decline? First of all, I caught the play 21 years ago...

After the big rally in 1987, after the Crash... the market then did very little... It actually sold off again, because the systemic risk was still there, as was the crippling fear...

Well, fear still reigns today, and the systemic risk has yet to be taken off the table. And, even if the plan does pass, there is still earnings risk...

Think about it... How can anyone be bullish in a market where Goldman Sachs (GS*), a stock that I own for my charitable trust, a firm universally acknowledged to be the best on Wall Street, if not the world, for finance... the one firm that didn't screw up with mortgages and, in fact, made money shorting a lot of this garbage... the one firm that did not take losses in a quarter... in other words, didn't have their quarter overwhelmed by losses... was on the precipice...

Paulson's plan, the short selling rules, and the conversion of Goldman into a deposit bank may have taken the potential collapse of Goldman off the table. You wouldn't know it from the action in the stock today, but it was all the way down to $88 on Wednesday... Thursday...

But it would be insane to feel good about anything financial. And, by the way, all stocks at the end of the day are financial...

In a world where Goldman came that close to the brink, I just don't feel as comfortable as I did about owning stocks...

Goldman made this commercial bank move, I think, out of... I'm going to say it... I'm an alumnus... I think they did it out of desperation. I think they did it because no other bank would lend them money to finance withdrawals overnight... which has typically been the pattern... that they do lend...

This way, they could get someone to loan them the money when these big hedge fund accounts, in part of what's known as their prime brokerage, pulled their money out post-Lehman... Because, in Lehman, they were frozen. A lot of the big firms could not get their... still can't get their money out of Lehman...

So now Goldman can go to the Federal Reserve and pay off their clients who are leaving. There's no reason to leave now, frankly. There's no place that's safer. Goldman goes from being a risky stock to being a cheap one, relative to Wells Fargo (WFC) and US Bancorp (USB), which I said on Friday had gotten too expensive and were slaughtered today. Goldman has much higher capital levels and a better balance sheet, no home equity loan, no auto loan, and no bad mortgages.

It's worse. How the heck can I be bullish when they're taking my happier-days-are-here-again thesis off the table, with that big spike in oil, however short lasting?... And I do believe it will be short-lasting...

It means that I do like the defensives... the toothpastes, the hair cares, the smoking... you get that. But let them come down. Again, let everything come down... everything.

Why else should you be negative now?...

Well, because of the panic short selling rules last week... That made us that we're simply too high... still are. Who knows how low we would have been without Chris Cox's Don Quixote like move to protect us from the shorts... Like everybody else, I complete abhorred what Cox did to eliminate short selling. I mean, boom, he just closed it for all those banks... that didn't seem right to me. But, at the same time, I would have been more upset, and not as worried about the precious rights of the short sellers, if the Western World financial system had seized up and died... I don't know, that seems to be something we want to protect more than the rich people who have money in short hedge funds...

Okay, anyway... it was very much a possibility before Cox stepped in and stepped on the shorts...

Of course, the idea that Cox could protect these stocks simply by saying no short selling, and create a short squeeze, was always absurd. And we saw the proof of that today, with the bank stocks all acting horribly and down big...

People have already figured out how to get around this rule... They're using put strategies and future selling. So, if they can knock the banks down as hard as they did today with the short selling rule in place, who knows how much damage they could do, if they could actually short the stocks and knock them down plain and simple, without the use of puts. That doesn't make me very bullish.

The real question you've got to ask yourself right here is, what's the point? Taking the Great Depression off the table doesn't mean we have a buying opportunity. And, ever since the collapse of Lehman with no bailout and a freeze, absolutely the Great Depression 2 is on the table...

So why not have more cash for Great Depression 2?... Why not buy some gold for Great Depression 2?...

It doesn't make any sense to throw money into stocks after the biggest rally in years. Even if, or when, the rescue plan gets approved, I don't think you should be a buyer necessarily, because there's still a tremendous amount of earnings risk, except for those foods and drugs that I talk about. Who wants to buy ahead of the possibility of big earnings shortfalls and terrible unemployment?...

Now here's the ultimate irony...

Even as I distrust stocks right now, the one asset that can be trusted more than ever is the one that caused all these problems...

It's your home.

Both parties are trying to get houses to appreciate. As I see it, money will be available, tax credits created, fewer houses will be built, there will be fewer foreclosures. I mean, think about it, the Feds are throwing a lot of money at the problem to get rid of bad mortgages... and, when the government buys these mortgages, I bet it's not going to throw people out of their homes...

The asset that caused all the problems is looking better and better everyday... and I am a buyer into the weakness...

I still predict some declines in the housing but, when you add in the mortgage deduction and the tax credit, I bet you're break-even at worst, if you start buying in the next six months.

Here's the bottom line...

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The Bottom Line!:     The selloff we had today was going to happen, even without the reasons I just enumerated. If you're already on the sidelines, stay there. If you're not, keep on selling until you get that cash up to a respectable level, and then go buy some gold.