Are these markets totally dysfunctional and not worth anything? Are they what companies realize? Are they what should matter? Or are they just institutions, not indexing at all but piling in when the commodities were going higher and now piling out faster than the actual users can react?

I think that's the case.

APC is a huge producer. It knows that for the moment, supply in the futures pits is overwhelming demand in the futures pits, but supply in the real world is actually somewhat tight.

It should be. The price of nat gas at $7 is analogous to oil at about $80.

At some point, the commodity should try to put in a bottom -- many of the nat gas stocks I follow have not taken out their lows of a week ago when nat gas was higher. They could be forecasting a bottom.

I believe nat gas will have to bottom before oil; it led the latter down.

But the most important takeaway I have is that the sellers now are just panicked institutions that were supposed to be just sitting in commodities as an asset class. I never bought that for a minute. They were sitting in commodities for a trade; the trade is over. And they are willing to sell right through the demand to get out.

We have seen this periodically in stocks, where supply comes so viciously that it drives right through demand because the buyers can't amass enough at one level to stop them and aren't ready to take delivery of all they can buy.

That's where we are now with these commodities. They are shooting right through the floor. Amazing and painful to watch.

At one point, Hackett told me his company is hedged and will be making good money at $5 -- he basically created a synthetic price for natural gas that is higher than it is right for the quarter and year.

When I heard that, as a holder of Devon (NYSE: DVN) (Cramer's Take) and National Oilwell Varco (NYSE: NOV) (Cramer's Take) and Cabot Oil & Gas (NYSE: COG) (Cramer's Take) for Action Alerts PLUS, my charitable trust, I blanched. Five?

Hmmm.

Could it go there?

Yes.

Would it be ridiculous?

Yes.

Will people have the capital to take advantage of it? Somebody might, but not the people who are fully on board here, expecting a bottom.

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RELATED LINKS:
Cramer's 'Mad Money' Recap: Getting to the Bottom of Natural Gas
All You Need to Know About Natural Gas
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Devon, National Oilwell Varco and Cabot Oil & Gas.