Play Video Cramer Remix: I have a better handle on this situation than the Fed right now
CNBC's Jim Cramer knew investors would be counting on him to explain the stock market's weakness after the Dow Jones Industrial Average dropped over 830 points on Wednesday in its sharpest decline since March.
"When everyone's terrified, justifiably or not, ... I like to step back for a second, get a battle plan going, pull out the 'Mad Money' sell-off playbook [to] help explain what's happening [and] what it will take for the pain to end," Cramer said. "Spoiler alert: I don't see it ending any time soon unless we get some major concrete changes."
The causes of the sell-off — which began shortly after the Federal Reserve raised interest rates and forecast several more rate hikes in an attempt to cool a strong economy — were sixfold, the "Mad Money" host said.
But above all else, he blamed the Fed for not looking more closely at the economic data before announcing its lockstep rate hike plans.
"The fact is, I do have a better handle on the situation than the Fed does, just like in 2007," he said. "Oh, I hate to show such hubris on this show – or anywhere or at home – but I am sick and tired of a Fed that reverts to a non-rigorous, non-homework-oriented approach every time things look good. It's like they unlearned all the lessons of the Great Recession."
Click here for Cramer's full sell-off playbook.
Cramer's sell-off strategy: Time to buy? 
Caution tape hangs near the steps of Federal Hall across from the New York Stock Exchange in New York.
On a brutal day for the major averages, Cramer decided to open the phone lines to investors worried about the state of the stock market.
His overarching message? "The time to start buying may be upon us," because what started as selling has now grown into what seems to be a full-blown panic, he said.
"A vicious correction is, indeed, a terrible thing to waste," he told viewers. "If you have some spare cash or if you're thinking about putting some long-term money away at the end of the year, maybe you pull some of it forward. That's what I did today for my kids' index fund."
The reason Cramer felt a bit better about buying was due to a trend he noticed in the market's trading volume. Investors were selling at a 10 to 1 rate, meaning the volume was heavily skewed to the downside, a sign that things could be getting oversold.
"On a day when volume was 10 to 1 on the downside, I am OK'ing small buys of some of the great stocks that we have followed and talk about," Cramer said.
Click here for the stocks he's talking about and why selling now might not be the best idea.
Reviewing the newest 'activist stocks' 
With shares of Starbucks, Campbell Soup and PPG Industries now the targets of high-profile activist investors — and the rest of the market in a tailspin — Cramer wanted to make sure investors weren't getting ahead of themselves.
On Tuesday, hedge fund Pershing Square, run by Bill Ackman, announced a $900 million stake in the stock of Starbucks; Nelson Peltz's Trian Partners disclosed a $690 million stake in shares of PPG; and Daniel Loeb's Third Point raised its existing stake in Campbell Soup's stock.
"You may be tempted to circle the wagons around companies that are being bolstered by activist investors," Cramer said. "After all, if very smart, very rich money managers believe in a stock, you probably think, why shouldn't you?"
But it's never quite that simple, and investors looking to buy one of the three may be left disappointed, the "Mad Money" host said.
"Piggybacking on these activists is a mistake unless you really believe in the fundamentals of the company," he said. "Hedge fund managers don't work for you and they have no obligation to tell you when they change their minds."
Starwood's Barry Sternlicht talks economic pressures 
Starwood Capital Group CEO Barry Sternlicht
Between tariffs, rising costs and the flattening yield curve, Starwood Capital Group Chairman and CEO Barry Sternlicht isn't feeling too sanguine about the state of the U.S. economy, he said Wednesday in an interview with Cramer.
"I think the Fed is going to have to be careful," he told the "Mad Money" host. "The economy's not quite as strong as the number indicated."
One of the real estate investor's chief concerns was the yield curve, which is so flat as to almost make borrowing money at a two-year rate the same as borrowing at a 30-year rate.
"It's not what we're used to, but usually, it's a signal of a downturn. I think it is a signal of a downturn," he told Cramer.
And with a $300 billion stimulus package, the tax cuts and the trade dispute with China on the government's plate, "it's going to be tough" to get a handle on the situation, Sternlicht suggested.
"What people don't understand about the tariffs is you're going to see their impact, I think, in the first quarter of next year," he said. "Because the inventory was here — it's on the shelves, it's in the warehouse, it was bought without the tariff. So you're going to have a latent inflation pressure in the market which the Chinese are trying to deflate by knocking their currency down."
Click here to watch Barry Sternlicht's full interview.
Carnival CEO: 'One day does not a trend line make' 
Arnold Donald, CEO, Carnival Corp.
If Carnival Corp. CEO Arnold Donald has learned anything in his years as a cruise industry leader, it's that a day like today can't single-handedly every facet of the economy or even the market.
"I am not a market expert, but I would say one day does not a trend line make, and the fundamentals and the U.S. economy and the world economy for the long term is what we have to look at," he told Cramer.
And investors looking for safer plays amid the downturn could even consider a stock like Carnival, a global cruise line operator with a steady, secular business, the company's president and CEO said.
"For our business, for the cruise industry, the reality is we're global and we are a great value, much better value than land-based vacations," Donald said. "And so we're attractive in almost any environment and we've said before we have no correlation to economic trends."
Click here to watch Arnold Donald's full interview.
Lightning round: Finding a taste for CAG?
In Cramer's lightning round, he rattled off his take on callers' favorite stocks:
Conagra Brands: "The company issued a lot of equity today at $35.25. [The stock] spiked to $36.25. This is to get the Pinnacle deal done. And then it came back to $35. I like the stock. Call me a buyer."
Caterpillar Inc.: "It's neither here nor there. Look, if things keep heating up with China trade, it's obviously going to go lower. I think it's a good company – no edge right here."
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