Jim Cramer's Mad Money Review

The administration has to present this as: If you vote against this, you want to kick people out of their homes, Jim Cramer said on Wednesday's Stop Trading segment on CNBC, referring to the government's proposed bailout plan.
Cramer offered his opinion on four financial stocks. AIG (AIG), he said, is a total loser. I think AIG would be down substantially if not for the reason you can't short.
He called Freddie Mac(FRE ) and Fannie Mae(FNM) interesting. Since you can't short them and since both companies - and particularly Fannie Mae - have portfolios that would benefit greatly from the government's plan, Cramer said, he can understand why some might see a rational for owning them and flipping them. But, he said, I don't want to buy any dollar stock.
People see potential for Washington Mutual(WM), too, he said. There's a lot of people who feel like the moment the plan gets in, there's going to be a premium bid for Washington Mutual. I think that's just ridiculous.
Moving away from financials, Cramer said that if the rules against offshore drilling are done away with and we actually open up our shores, Schlumberger's(SLB) a big win, not just Transocean(RIG). Transocean is the leader, he said, and Schlumberger will follow.
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Labels: AIG, American International Group, CNBC's Stop Trading, Fannie Mae, FNM, FRE, Freddie Mac, Jim Cramer, Stop Trading, Washington Mutual, WM

Wells Fargo's(WFC) a winner here, said Jim Cramer on the Stop Trading segment on CNBC Thursday.
He urged people to look back at the early 1990s, when what was to become Bank of America(BAC) bought Security Pacific. It was completely unbelievable, impractical, he said. No one believed it, and yet that's when Bank of America became a great bank.
Now Wells Fargo is in a position to acquire Lehman Brothers (LEH)or Washington Mutual(WM) should either be seized by the government - something that needs to happen to avoid a great depression, he said. The bank system's falling apart. Let's save it before it goes to zero.
He distinguished the dysfunctional banking system from the economy at large and said he expects a huge holiday season. I'm paying $2.50 at the pump, he said. Mortgage rates are the lowest they've been. He recommended buying Sears (SHLD) He also saw bullish signs in falling oil prices. Oil going down through $100 is really, really bullish, obviously, for a lot of the market, not for the oil stocks, he said, though some of those are going up, too, due to the hurricane.
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Labels: CNBC's Stop Trading, Jim Cramer, LEH, Lehman Brothers, Sears Holding, SHLD, Stop Trading, Washington Mutual, Wells Fargo, WFC, WM

"The banks are going to owe billions and billions of dollars," Cramer said. "There is no explanation for why these banks who made this deal ... are backing away." Cramer said there has not been a material change at Clear Channel. "These banks are going to be on the hook if this deal doesn't go through." He said that Clear Channel has outperformed other radio companies such as Cumulus (CMLS) and CBS Radio.
"Private equity is going to make a fortune," Cramer said. "I think there'll be emails that come out from the bankers [saying] 'Look, we gotta get out of this deal.'" The banks are feeling buyer's remorse, he said, but "there was no way to get out of this contract." He says the banks won't be able to walk away from the deal.
Cramer said he believes that lawyers will be able to show in court that Clear Channel is worth billions of dollars, and the banks will be forced to pay that sum. "Banks are not the most popular and sympathetic defendants," he said.
Moving on to the broader stock market, Cramer decried "raids" by short-sellers. He noted poor stock performance by Washington Mutual (WM) and Wachovia (WB) as examples of short pressure.
Cramer said that if he were a short and were allowed to trade he would use all the firepower he could to take the banks' stock down to levels that would frighten investors, causing further selling. He suggested that the government may reinstate the "uptick rule" that regulates short-selling.
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Labels: CMLS, CNBC's Stop Trading, Jim Cramer, Stop Trading, WB, WM

The Vs and the Dopeys; IndyMac, Washington Mutual (WM), Citigroup (C)
Cramer says the current optimism in the market is due to two groups, the Vs who believe in a quick and complete recovery and the Dopeys who feel that nothing is wrong in the first place. The convergence of these two groups is bringing the stocks up, said Cramer. However, Cramer does not identify with these camps; 'I need to see that all numbers are weak' since the fed is really dense and unsophisticated and will not make more cuts unless it is obvious there is a recession. The Fed is very reactive said Cramer and will use the bullish January retail sales as ammunition to do nothing. The purpose of cuts is not to bail out the economy, but to help IndyMac, Washington Mutual and Citigroup stay afloat, he added. The issue is not fundamentals, said Cramer, but credit risk and a bunch of institutions that are overextended.

Labels: C, Jim Cramer, Wall Street Confidential, WM

Stick with agriculture and recession stocks, Jim Cramer said on CNBC's "Stop Trading!" segment Friday.
"Mosaic (MOS) is terrific. ... I think Agrium (AGU) is a catch-up ... to Mosaic," Cramer said. "You're going to do better with that than ... betting against Procter (PG)."
More broadly, Cramer believes the market is frantic as shorts try to cover their bets on the bond insurers. "Today's a big short-squeeze day. 'Let's short squeeze Ambac (ABK) and MBIA (MBI).'"
In the financial sector, Cramer expects more take-unders like Bank of America's (BAC) purchase of Countrywide (CFC). He foresees Washington Mutual (WMon the auction block, adding that CEO "Kerry Killinger is doing his best to do a bad job. ... Washington Mutual at $15 is like Countrywide at $8."
Cramer encouraged investors to play conservatively. "I would be partial to Coke (KO)," he said, adding that he was encouraged that commodity prices are down for the soft-drink company. Pepsi (PEP) is another good pick, he added.
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Labels: ABK, AGU, BAC, CFC, Jim Cramer, KO, MBI, MOS, PEP, PG, Stop Trading, WM

The Fed's creation of a temporary term auction facility to help ease the pain felt in the credit markets was "just another stupid thing that they did," Jim Cramer said on CNBC's "Stop Trading!" segment Wednesday.
"The proof is in the pudding," Cramer said. "What's the group that acts the worst today? The group that this is was meant for!" He noted that although Apple (AAPL), Chevron (CVX), Exxon Mobil (XOM) and Google (GOOG) responded well to the market, the financial sector was performing poorly on the news.
"They should have changed the statements to 50 basis points - merry Christmas, do your best," Cramer said. Instead, "Their amount of action ... a day's worth of Washington Mutual's (WM) problems."
Cramer suggested that the Federal Reserve members resign. "You are running some kind of offense that no one understands. ... These guys are really jokers." He cited the Fed's lack of experience in the markets as the source of their ineptitude. "They never sat on the desk," he said. "Go sit on a desk at Merrill Lynch (MER)."
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Labels: AAPL, CVX, GOOG, Jim Cramer, MER, Stop Trading, WM, XOM

Fannie Mae (FNM), Freddie Mac (FRE), Washington Mutual (WM)
Cramer explained why aid for borrowers is not a moral hazard or a bailout:
“The companies that do mortgage servicing don't have the ability to renegotiate every one of these contracts," Cramer said. "It's better to do it en masse with the government's help so that the people who might fight this realize that they're fighting the government, but it's certainly no bailout." Cramer added, "We need to slow down the process because we don't want the bank examiners to shut down all the banks.”
He said it is a good strategy to tide Washington Mutual (WM) over with a few billion dollars until another Fed cut when it can start to be profitable again. He suggested spending $500 billion bailing out Fannie and Freddie, although Cramer added this kind of talk scares people. However, the only other alternative is if there is a sudden rush to buy houses.
Cramer reiterated his disillusionment of the Fed, which cut rates a half a point in the summer, and then felt it was “done.”
“Right now I think the Fed is torn between doing what would certainly be the right thing and doing the right thing incrementally over time," Cramer said. "What I'm saying is the more time you waste, the worse it gets. That's very clear from what's going on.”
Cramer said he wished it were the case that “if you were to put money in Washington Mutual in the big convertible that you don't expect to just lose money,"
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Labels: FNM, FRE, Jim Cramer, Wall Street Confidential, WM

On Tuesday's "Stop Trading!" segment on CNBC, Jim Cramer was too deflated by the Fed's quarter-point rate cut to offer up another "They know nothing!" tirade like the one he delivered Aug. 3.
"I'm no longer fiery. They had their chance. I wanted to do a wake-up call then, in August. ... That was when it still mattered," said Cramer, who had been hoping for a 50-basis-point cut. He believes the Fed's unwillingness to act "just made Paulson's job much harder."
"Everyone is in much more trouble," Cramer added. He chided the Fed for complacency. "These guys are academics. They're very far removed. ... They obviously don't get it. They want to take whatever pain we have. ... I admire them for their lack of panic, but the time to have done something was back in August."
Cramer did not share the Fed's outlook for the economy. "They're hopeful. ... very optimistic," he deadpanned. He had hoped the Fed would understand the severity of the situation, but he was wrong. "They flabbergast me. I'm like everybody else. ... 'You gotta be kidding me.'"
"You now just delayed the recovery," Cramer said. Cramer believes that there will now be large bailouts of companies hit hard by liquidity demands. "It's more likely that the companies that are trying to raise money won't get money," he said. He pointed to recent stumbling by Washington Mutual (WM ), Fannie Mae (FNM), Freddie Mac (FRE) and UBS (UBS), all of which were hurt enormously by the subprime lending crisis and the credit crunch. "I thought [the Fed] saw," Cramer said.
Cramer believes that if monetary policy were managed more effectively, the Fed could have made the right decision: "They are a cellar-dwelling group of Federal Reserves. ... If they were in the NFL, they'd be fired."
Investors' hope, for now, Cramer said, is to "buy companies that aren't levered to the United States."
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Labels: Fannie Mae, FNM, FRE, Freddie Mac, Jim Cramer, Stop Trading, UBS, Washington Mutual, WM

Cramer was pleased that now investors have more clarity about bad collateralized debt obligations, and now know that any loans issued and purchased by Fremont General (FMT), Novastar, New Century Financial, American Home Mortgage, and Washington Mutual (WM) are bad. The bad home equity issued between 2005 and 2007 might have been purchased as E*Trade, Wells Fargo and Citigroup.
"You have to take charge and get them off your books very quickly," Cramer warned. "We got this at Wells Fargo and that's great."
"We're finally getting clarity," he said. "We know that loans that were purchased from these clowns can't be owned. But it also means that we can purchase pieces of paper that may have been from 2001 to 2004 and 2007 paper beginning in July is safe, too."

Labels: FMT, Jim Cramer, Wall Street Confidential, WM

NCR (NCR) and Eastman Kodak (EK) are two stocks with a great deal of potential upside and a cushion to the downside. NCR, is a leading manufacturer and designer of ATMs and scanners. Because of its recent anonymity, NCR is a great play on the rise of the middle class in the former U.S.S.R. and the Third World. Cramer says NCR has a huge buyback coming. NCR is sporting 17% growth in ATM sales, with Europe having only 500 ATMs per million people and even fewer in China. A sleeper stock that deserves more attention. Eastman Kodak might not seem like a good buy being a couple points above a 52-week low. Cramer has been betting against Kodak since he started his hedge fund, but he believes the company is about to turn around. After years of losses, its balance sheet is healthy now, sporting $6 of net cash per share. With $82 million in digital income, Kodak is ready to come back alive.
CEO Wall of Shame
Cramer finally removed Citigroup (C) CEO Chuck Prince from his Wall of Shame. He replaced Prince with Kerry Killinger, CEO of Washington Mutual (WM). WaMu’s Kerry Killinger rocketed past Motorola (MOT) CEO Ed Zander and Alcatel Lucent's (ALU) Pat Russo to the top position. Cramer said Killinger has done such a poor job running Washington Mutual that the Fed will cut rates to bail the bank out. Compared to total loans, Washington Mutual’s allowance for losses is far too low.

Mad Mail
The first writer asked Cramer how he intends to play the environment during NBC Universal’s Green Week? Cramer said all week he will work on individual ideas about how to play green, focusing on companies that make power cheaper but are still profitable. The second mailer questioned Cramer’s Apache call in the mid-$70s. Cramer said that his earlier statement; that the company would not go through $80, turned out to be wrong. He said he wished he’d given the stock more leeway, but he made the wrong call. He apologized for his mistake. The third viewer mentioned that Diana Shipping (DSX) CEO Simeon Palios, whom Cramer had interviewed on the show last week, may have had trouble articulating his company’s story in proper English. The viewer wondered if Cramer had made any follow-up on the call. Cramer felt Palios indicated that the bull story wasn’t there and that he was negative.

Labels: ALU, C, EK, Jim Cramer, Mad MOney Recap, MOT, NCR, WM

Countrywide (CFC), Ambac (ABK), PMI (PMI), MBIA (MBI), Washington Mutual (WM), Bank of America (BAC), Wachovia (WB)
To those who dread a Fed rate cut due to inflation worries, Cramer says oil and grain prices will not be alleviated by a rise in interest rates. "The thing that would knock the market down huge is obviously they don't cut," said Cramer; " … all year people have been focused much more on inflation. It's deflation that I'm worried about."
While raising interest rates may strengthen the dollar's value, Cramer insists this is not so simple; "the dollar is highly correlated to economic growth, not to the price of money."
"I've seen whole economies raise interest rates to be able to defend their currency and fail repeatedly," he said. "Where people want to be is in a country that is controlling its own fate, tends not to have as big a trade deficit as we have and is growing, and our country is not growing, therefore you don't want the currency."
While he does not think CFC, ABK, PMI, MBI and WM can be rescued by the Fed, and those too took mortgages between 2005 and 2007 may be "wiped out" a rate cut may still save those who took mortgages in 2007.
If rates are not cut, "Armageddon is back on the agenda," added Cramer. While Countrywide is currently engaged in a battle for its survival, BAC and WB will report "quarter of quarter of losses," which will cause people to view the crisis "very differently."
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Labels: ABK, BAC, CFC, Jim Cramer, MBI, PMI, Wall Street Confidential, WB, WM

This year's decline in existing home sales will be steeper than previously anticipated, a trade group for real estate agents predicted Wednesday.
The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade.
The trade group's outlook for 2007 homes sales has grown more pessimistic through the year as foreclosures soared, credit market troubles developed and sales fell. Back in February, the group forecast an annual decline in existing home sales of only 0.6 percent.
In its October report, the association predicts 5.78 million existing homes will be sold in 2007, down from 6.48 million last year. Last month, the association predicted an 8.6 percent drop from a year ago.
This year's sales would be the lowest since 2002, when sales hit 5.63 million.
Sale prices for existing homes are forecast to drop 1.3 percent to a median of $219,000 this year -- a slight improvement from last month's prediction of a 1.7 percent decline. The median price refers to the point where half sold for more and half for less.
Next year, the trade group expects existing home sales to climb to 6.12 million. That is 2.4 percent lower than last month's prediction.
Source: Alan Zibel, AP Business Writer

Labels: BAC, BZH, CFC, DHI, Home Sales, KBH, LEN, MDC, PHM, SPF, TOL, WB, WFC, WM

An index that forecasts near-term home sales fell in August to a record low as would-be homebuyers had difficulty getting mortgages. Economists said the housing market's woes show no sign of improving soon.
The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.
The pending home sales index has done a farily good job of predicting sales levels over the following two months said Joshua Shapiro, chief U.S. economist with MFR Inc. in New York.
Shapiro and other analysts expect prices to fall further before home sales rebound. Developers are already making big price cuts to move unsold new homes, but existing homeowners are more reluctant to do so. "We haven't reached bottom yet," Shapiro said.
August's reading of 85.5 was below analysts' expectations and the lowest ever for the index, which started in January 2001. An index reading of 100 is equal to the average level of sales activity in 2001.
With defaults rising among borrowers with weak credit, lenders in August backed off from all but the safest mortgages.
Source: Alan Zibel, AP Business Writer

Labels: BAC, C, CFC, FMT, FNM, FRE, Home Sales, Housing Stocks, IMB, LEND, UBS, WFC, WM

Wells Fargo (NYSE: WFC - News), Countrywide Financial's (NYSE: CFC - News), Washington Mutual (NYSE: WM - News), Bank of America (NYSE: BAC - News), Wachovia (NYSE: WB - News)
Thursday's dash for financials may indicate the sector will be one of the "long-term beneficiaries" of Bernanke's position, but Cramer does not think they are safe. He tacked a double sell on WM but thought BAC and WB could survive. However, he reserved the lion's share of his praise for WFC, and said, "It is the great speculative play that should prosper." He believes WFC will "own the mortgage market" and will win with investors because it offers a great dividend. Cramer would wait for WFC to drop to the $32 - $34 range.
Sell Block: VMware (NYSE: VMW - News), H&R Block (NYSE: HRB - News), Capital One Financial (NYSE: COF - News), Friedman Billings Ramsey Group (NYSE: FBR - News) Lamson & Sessions (NYSE: LMS - News), Six Flags (NYSE: SIX - News)
Cramer urged investors to "stay the course" and added "no one ever made a dime panicking." However, he added it isn't too late to sell minerals and he feels tigher consumer spending will put pressure on retail. Cramer would sell VMW after its highly successful IPO, and would stay away from HRB, COF and FBR. He would also sell LMS as well as SIX because of low attendance due to the weather. He concluded it is better to invest in long-term stocks rather than quick trades in the current environment.
KKR Financial (NYSE: KFN - News), Thornburg Mortgage (NYSE: TMA - News) and Reynolds American (NYSE: RAI - News)
Not all high dividends are good dividends, Cramer declared and used KFN and TMA as examples. He added high-dividend names KFN and TMA aren't worth the investment because as their stocks fall so will the yields. Cramer likes RAI which has a dividend of 5.5% and is a "smart play" in this environment because "nothing is more defensive than cigarettes."
Mad Mail: Bear Stearns (NYSE: BSC - News), Jones Soda (NasdaqCM: JSDA) and Google (NasdaqGS: GOOG - News)
Cramer would avoid BSC and JSDA whose climb was "how to make a million" in the market. He adds GOOG is safe and likes the tech sector for its pristine balance sheets and great products.
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Labels: BAC, BSC, CFC, COF, FBR, GOOG, HRB, Jim Cramer, KFN, LMS, Mad Money, RAI, SIX, TMA, WB, WFC, WM, WMV

Thornburg Mortgage (NYSE: TMA - News), Washington Mutual (NYSE: WM - News), Lehman Brothers (NYSE: LEH - News), KB Home (NYSE: KBH - News), Beazer Homes USA (NYSE: BZH - News), Procter & Gamble (NYSE: PG - News), Coca-Cola (NYSE: KO - News), and Colgate (NYSE: CL - News)
Cramer predicts around 7 million "teaser" mortgages are likely to be defaulted and recommends "staying defensive," by avoiding real estate and bank stocks such as TMA, WM, LEH, KBH and BZH and investing in soft goods such as PG, KO and CL. While the Fed thinks mortgage woes will pass, Cramer still believes the Fed should cut rates.
Schering-Plough (NYSE: SGP - News)
Cramer thinks SGP is an excellent stock for the current environment and notes sales are up 13% since last year. He adds the company is not leveged to mortgaes and he believes in Fred Hassan, who was one of Cramer's transformational CEOs. He would wait until buying SGP, and while the current economic climate is not good, "we have no control on what the Fed will do," Cramer said.
Vodafone (NYSE: VOD - News),Verizon Wireless (NYSE: VZ - News)
VOD is a good international play and the world's best wireless carrier. Cramer thinks VOD will raise more revenues than the competition, owns a "serious chunk" of VZ, is successful in emerging economies and has a strong dividend.
CEO Interview: Jack Cumming, Hologic (NasdaqGS: HOLX - News) with Cytyc (NasdaqGS: CYTC - News)
Jack Cumming talked about the upcoming merger with CYTC, which will mean $400 million to $50o million in EBITDA and nine top women's health products. Cumming added the company can afford the acquisition and there is no financial risk.

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Labels: BZH, CL, CYTC, HOLX, Jim Cramer, KBH, KO, LEH, Mad Money, PG, SGP, TMA, VOD, VZ, WM

Safer than Houses: Intel (NasdaqGS: INTC - News), Texas Instruments (NYSE: TXN - News), Cisco Systems (NasdaqGS: CSCO - News), and Microsoft (NasdaqGS: MSFT - News), Advanced MicroDevices (NYSE: AMD - News)
Often people run from tech during a selloff, but Cramer notes tech is now the safe sector with significant upside potential, since these companies have enough cash to make huge buybacks. Cramer proclaims he is once again an "Intel-aholic" as he was in the 90s, because the stock is cheap, has loads of cash and an accelerating growth rate. Compared with AMD, Cramer says Intel is "the much stonger part of the duopoly" and has a lower price tag.
The Rant Heard Round the World
While some think Cramer's rant against the Fed last Friday was overdone, Cramer believes he was "the most responsible guy out there. He added, " The AAA-rated mortgage bonds are trading horribly or not at all. These are good pieces of paper, yet they've been marked down," Cramer said. He says has no idea why Ben Bernanke is still worried about inflation, and observed that the Europeans are concerned about the ripple effect of the US mortgage crisis. "My rant was the rant heard around the world," Cramer said, "The only one who hasn't heard it is Chairman Bernanke himself."
Mad Money Madness Index: MGIC (NYSE: MTG - News), MBIA (NYSE: MBI - News), KB Home (NYSE: KBH - News), Blackstone (NYSE: BX - News), Centex (NYSE: CTX - News), Beazer Homes (NYSE: BZH - News), Washington Mutual (NYSE: WM - News)
Cramer says those who have not sold the stock in his Mad Money Madness Index are being hoggish; "Greed is not good ... The market makes you pay for it."
CEO Interview: Dr. Eli Harari, Sandisk (NasdaqGS: SNDK - News)
Cramer thinks SNDK will rise next week if there is a day that is not "horrible," and he likes the company because flash memory is "hot," will replace disk drives and is the favorite of companies like Apple. He said Dr. Eli Harari's bullish remarks at a recent Flash Memory Summit reminds him of Cisco CEO John Chamber's fully justified optimism. Dr. Harari commented flash is everywhere, is contributing to market acceleration and is much cheaper than it used to be. "There's no question that flash memory today is the fastest-growing market within the semiconductor market," Dr. Harari said. "And I do not see it ending anytime soon."
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Labels: AMD, BX, BZH, CSCO, CTX, INTC, Jim Cramer, KBH, Mad Money, MBI, MSFT, MTG, SNDK, TXN, WM

Cramer's Index: MGIC Investment (NYSE: MTG - News), Countrywide Financial (NYSE: CFC - News), Bear Stearns (NYSE: BSC - News), KB Home (NYSE: KBH - News), Centex (NYSE: CTX - News), MBIA (NYSE: MBI - News), Blackstone (NYSE: BX - News), Thornburg Mortgage (NYSE: TMA - News), Beazer Homes (NYSE: BZH - News), Washington Mutual (NYSE: WM - News), Goldman Sachs (NYSE: GS - News), Citigroup (NYSE: C - News)
While Cramer says he doesn't want to be a "buzz kill," he admits it is not possible to be really bullish as long as the housing crisis persists. Cramer formed his own "index" of the above-mentioned stocks, and said when the 12 companies stablilize and the Fed cuts interest rates, it will be time to let the bulls run once again. He made a personal appeal to Fed chairman Ben Bernanke; "Cut the rates. Take the pressure off. Many, many people could be about to lose their homes, because you're not listening..."
New Age Under Armour: Lululemon Athletica (LULU)
Cramer has discovered a new Under Armour, which like its predecessor, has experienced a massive initial bounce and is expected to keep growing. Yoga apparel company, LULU came public at $18 and jumped to $31 "in one of the worst tapes I've ever seen," said Cramer. However, he doesn't think this stock is a "one trick pony" but will keep going up as UA did, because LULU has been doubling stores year over year. Since the stock is speculative and has risen, Cramer recommends waiting at least 3 days or until the price drops before buying.
Beer is Near: Boston Beer (NYSE: SAM - News)
While in the current climate, investors are dubious of even some soft goods stocks, "People drink beer no matter what." Cramer likes SAM's 13% long-term growth rate and its smart move of acquiring a brewery from Diageo for $55 million rather than building a new one, which would have cost $200 million. Although he's a self-proclaimed "Bud man" Cramer gives SAM a triple buy, even near its 52-week high.
CFO Interview: Stephen Chazen, Occidental Petroleum (NYSE: OXY - News)
Chazen discussed production increases in Argentina and Peru; "California continues to be good for us." he added. Chazen dismissed worries about political risks, noting there are always political risks, and he remarked on the stability of OXY's chemical business. "All oil stocks are trading down in unison," Cramer said, and added now is the time to buy oil.
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Labels: BSC, BX, BZH, C, CFC, CTX, GS, Jim Cramer, KBH, LULU, Mad Money, MBI, MTG, OXY, SAM, TMA, WM

Predator and Prey: BASF (NYSE: BF - News) and Nova Chemicals (NYSE: NCX - News)
Cramer continued his series on European stocks with BASF, the biggest chemical company in the world, and a stock he likes because "...it has nothing to do with the United States. " While chemical companies have been attractive takeovers, Cramer thinks of BASF as a predator rather than the prey and doesn't expect it to get a bid. However, as long as chemical companies are in bull mode, Cramer says BASF will thrive with its secure earnings. It is also linked to two other bull markets: agriculture and natural gas and oil. He predicts BASF will rise from $136 to $150. Cramer likes NCX as a good "prey" play since Access founder Len Blavatnik is trying to build a global chemcial company and is looking for acquisitions like NCX with strong fundamentals. Cramer thinks NCX could be bought at $56.
Sell Block: Blackstone Group (NYSE: BX - News), Google (NasdaqGS: GOOG - News), Johnson Controls (NYSE: JCI - News), Washington Mutual (NYSE: WM - News), Goldman Sachs (NYSE: GS - News)
Cramer hopes people listened when he said they should get out of BX, but he suggests he may have been a hog with Google, which missed its quarter. He added a caveat; "Please don't buy the first trading day the week after I recommend a stock," he said. "You have to wait for weakness" and if the stock is high "take a pass." He identifies JCI as one of his picks for which investors should have taken a pass. However, Cramer still thinks JCI is an anointed stock with some upside. Cramer would leave the financials in Rumorville, since they have been vulnerable to Street Gossip, even WM. Concerning his golden pick, GS, Cramer says it hasn't bottomed yet and he would only recommend investors who can take the pain stay in GS.
CEO Interview: James Young Union Pacific (NYSE: UNP - News) with CSX (NYSE: CSX - News)
James Young commented on how overcapacity in the industry is getting lighter, and is responsible, along with congested traffic, for the stock's rise. Cramer said UNP is not going to stop rising at $125 and also gives CSX two thumbs up.
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Labels: BF, BX, CSX, GOOG, GS, JCI, Jim Cramer, Mad Money, NCX, UNP, WM

Lundin (AMEX: LMC - News) and Rio (NYSE: RIO - News): Cramer would buy nickle miners LMC and RIO because, according to the Baltic Dry Index, there is no economic slowdown. He expects international growth, especially in China, to be beneficial for nickel as well as copper and zinc. Cramer notes that LMC is putting together an "unbelievable group of properties that will dominate minerals in Europe" and says he doesn' t understand why LMC hasn't been bought. Cramer thinks it has been hovering around $10 to $12 for too long and is "busting out."
Washington Mutual (NYSE: WM - News): Cramer suggests staying away from tech which he feels is as troubled as housing. Although he feels WM has sloppy lending practices, Cramer likes it a bit better than its rivals because of its large deposit base. He likes its 5.5 % yield but does not like the way subprime has been creeping up. Although he feels WM has been overdone to the downside, he cautions investors to watch out for charges for bad mortgages.
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Labels: Jim Cramer, LMC, RIO, Stop Trading, WM

Wachovia (NYSE: WB - News), Washington Mutual (NYSE: WM - News), Prudential (NYSE: PRU - News), MetLife (NYSE: MET - News), AIG (NYSE: AIG - News) and Allstate (NYSE: ALL - News)
Cramer warns the shorts are going to make a comeback attack on financials and claim Tuesday's rally was merely a short squeeze. "That's the way to play it," said Cramer, who predicts the shorts may claim that WB will have to spend its dividend or WM is in "big trouble." However, Cramer likes insurance companies PRU and MET, but is a "little more concerned" about ALL because of sluggish growth. Although AIG had a "blowout quarter," he adds $70 is where former CEO Hank Greenberg "lives to sell the stock." Cramer would stay away from regional banks because of mortgage issues; "I could rumor down any of the regional banks right now," Cramer continued. They are easy to take down."

Labels: AIG, ALL, Jim Cramer, MET, PRU, Wall Street Confidential, WB, WM