MAD MONEY: DEFENSIVE PICKS FOR THE MORTGAGE MESS

Back to work for Mr. Cramer. He’s been getting a lot of backlash from his crys for a cut because many economist and analyst were saying that if we used the rate cut option now that if there was a big problem then we can’t use anything else. I’m thinking that Cramer is a little more proactive by saying cutting will soften this “mortgage mess” that will happen when rates reset. Cramer said to avoid: Thornburg Mortgage (TMA), Washington Mutual (WM), Lehman Brothers (LEH), KB Home (KBH) and Beazer Homes USA (BZH)

Once again Cramer says get defensive with companies that focused on staples, soft goods and drugs like Buffet pick Procter & Gamble (PG), Coca-Cola (KO) and Colgate (CL).

The stock of the day for Cramer was Schering-Plough (SGP), a healthcare company which develops and markets medical therapies and treatments worldwide. Because of weakness and lack of exposure in the mortage problems, Cramer suggest this was another safe safe play. Also Cramer noted that Schering-Plough CEO Fred Hassan was a great CEO that knew how to change a company for the better. However the negatives were that the company’s operating margin were low, and it recently issued a secondary offering so people should expect the price to come down because of it then go for it!

An international pick was Vodafone (VOD) the second-largest wireless carrier in the world. With 32 million subscribers, Vodafone leads the U.K. and Germany. Cramer said investors should consider looking overseas. Cramer sees organic growth for Vodafone by bringing in more revenue per user. The wireless company seems to be the new utility. Other good points is that Vodafone owns a large percentage of Verizon Wireless (VZ) and has a great dividend while also is experiencing growth in other emerging areas. Safe yet growing with a back up of a dividend, that sound pretty stable to me.

On the show was Hologic (HOLX) Chairman and CEO Jack Cumming When Hologic, which Cramer owns for his charitable trust, Action Alert PLUS. Owning it would make Cramer a natural bull but Cummings reiterates that when Hologix finishes its acquisition of Cytyc later this year, it will have $400 million to $500 million in EBITDA and nine No. 1 brands in women’s health products. Sounds like some good points. Anyone want to dispute this?

LIGHTNING ROUND HIGHLIGHTS:

EMC (EMC) – Cramer owns this stock for his charitable trust, Action Alert PLUS. “People thought I was an idiot. But you know what? Stocks don’t always tell the truth in their direction. … I think it goes to $23. It’s not too late to pull the trigger.”

Harley Davidson (HOG) A Sell he says! “I used to like this stock very much. It is very clear that … they have too many motorcycles. This stock has finally broken down from the $60 level. It’s going down. I don’t want to be there. I think you should sell it.”

ConocoPhillips (COP): After recommending gas for the last few weeks, Cramer’s been buying Conoco for Action Alerts PLUS

Corning (GLW) which Cramer owns for Action Alerts PLUS. “I’m going to pull the trigger on it again because I think it’s so cheap. … That’s the right play.” I read an article about Cornign which is making a pendable fiber optic cable which will change how it’s installed and it may make fiber optics a realistic standard because right now you can’t bend it or else it’ll lose it’s transmitting power. This may be huge for them.

MAD MONEY: NO MAD MONEY IT WAS RERUN

Hey folks.  Jim Cramer was off.  So take this Friday off and forget about your portfolio.  It’ll be ok.  I promise.  It was a rerun so look forward to my article about Syneron Medical and Seth Klarman, super value investor over the weekend.

MAD MONEY: LIARS POKER ON WALL STREET

Jim Cramer basically called everyone liars in terms of the Fed, CEOs and Wall Street meaning that they all had a poker face and were all bluffing.  Why is this man always upset?  He wouldn’t be Cramer without it.  No wonder some many people hate this guy huh.  Anyhow, he said that some good people held good hands such as CEO John Chambers of Cisco (CSCO) which jumped today and was the fire under the Nasdaq’s bon fire today.  Included in that list was Under Armour (UA), Coca-Cola (KO) and PepsiCo (PEP) are good plays in this roller coaster market.  But he reiterated that Cisco has the hottest hand and Level 3 (LVLT) should benefit from the greatest networking boom of history.

Even through financials have been running up the last couple days and I’m sad that I missed it, Cramer said they still have “crummy” hands. “They sit there every day and keep folding,” “They’re not even trying to bluff any more.” So they are still not a buy yet but those PEs are getting tempting especially with Morgan Stanley (MS) with a 7ish PE.  I say wait a little bit too.  It was strange to see Bear Stearns (BSC) drop below $100 then come back 15% yesterday and now it’s close to $120.  Wow volatility.

Next, Cramer interviewed VFC Corp. (VFC)’s Chairman and CEO Mackey McDonald who has been persisted under the crumbling disposable income with their popular North Face brand.

Lightning Round (I just picked out the goods ones because a lot of it is just fluff):

Perfect World (PWRD): “If I’m gonna do China, I’m gonna do China Tel (CHA) and Baidu (BIDU), and everything else, I’m letting some other guy handle it.”  See my article on Ctrip.com another Chinese web growth story!

Nymex (NMX): “Very valuable institution that I believe somebody would buy. … Earnings are unbelievable. … I wanna own your stock. The fact that it was up really big today is not enough to make me feel like we should ring the register yet.” He doesn’t own it…yet.

 RealNetworks (RNWK): “You gotta sell that stock now. … No thank you.”  This will be my next short story.  Watch out for it.

Oh yes, he recommended buying defense and oil stocks again.

MAD MONEY: CRAMER PITCHES UNIVLEVER AND SYNERON

 Jim Cramer seemed satisfied with the Fed Meeting today with the acknowledgement that there is a problem and that the government could ask Fannie Mae (FNM) which was set up for these situations to save the liquidity issue (Cramer owns Fannie for his charitable trust, Action Alerts PLUS)

Cramer emphasized his favoritism to internationally levered, such as oil, infrastructure and agriculture as we move ahead toward the end of the year.

Defense Trade: As a defensive play, Cramer picked international consumer product company, Unilever (UN) because it’s an international company that is based outside the US who won’t face any domestic problems.  It’s also invested in growth countries like China and India.  I’ve noticed that all the buzz about India is going down but I’ll write about that soon.  Cramer also pointed out that the 3.6% dividend yield will help the stock stay up.

Cosmetic Trade: Cramer picked Syneron Medical (ELOS) who collaborating with Procter & Gamble (PG) to develop noninvasive skin treatments and by itself, a fat removal product.  This pick is based the growth in “I wanna look young” trade like Allergan (AGN) who made crazy profits on established products.  Syneron is profitable but lacks that product but it trades at forward PE of 12 and it dropped 6% today so we may see some crazy gains with a 11% short and $4 cash with no debt.  This maybe a story in the making.  I’ll definitely do a piece on this tomorrow.  Watch out for it.

Lightening Round

Oil trade: Schlumberger (SLB) was called best of breed and Cramer advised getting back into Oil now that it’s down.

Infrastructure Trade: Shaw Group (SGR): In his words, “Smokin’! A smokin’ situation. … Shaw is on a remarkable run. … The infrastructure bull market is probably the strongest market on Earth.”

Conference Call Trade: Trades based on conference calls: Pitches included Garmin (GRMN) “That conference call for Garmin was amazing. … Garmin’s a keeper! Stay with Garmin!” because it raise guidance by a few hundred million!, Chipotle (CMG) who he says knows how to open stores and compared it to Starbucks, Crocs (CROX), Under Armour (UA) “That conference call for Garmin was amazing. … Garmin’s a keeper! Stay with Garmin!”

MAD MONEY: WHY HANK PAULSON COULD SAVE US OR EVEN CHINA

 After a refreshing record rise of the year in the DOW of 286 points on a near record 5 billion shares, Cramer was back at it trying to push for a rate.  Although doubtful because he thought that Ben Bernanke was focusing on the wrong problem which is inflation because the collapse of the mortgage market was definitely deflationary driving down prices instead.  But he was hopeful that Treasury Secretary Hank Paulson would be the catalyst to help this problem.  He announced that he was encouraging the lending agencies, Fannie Mae, FNM 62.5 5.87 (+10.37%) and Freddie Mac Freddie Mac (FRE 60.0 4.30 (+7.72%)) to alleviate the problem by issuing billion of new loans backed by federal insurance that will allow people to refinance and new loans so that the terms may be more favorable and avoid foreclosure.  Seeing that the lenders jumped today, there may be a reason to get a little more optimistic but could it just be your opportunity to get out?

If the government doesn’t step in, Cramer suggest there are five ways to solve this problem:

1. The banks, Goldman Sachs (GS) and Morgan Stanley (MS)  are healthy and provide liquidity to the market.
2. China comes in and buys an interest in a bank and provides liquidity
3. Private sector could come in (e.g. Warren Buffet) and buy bank (example Salomon Brothers) and provide liquidity
4. The Middle East comes in and buys bank and provides liquity
5. Seven million people lose their homes then banks merge along with home builders and self correct the system

Cramer pitched Allergan (AGN) as a stock for the future because it’s become a monopoly on looking good treatments such as Botox (anti-fine line, sweat preventing, migraine vanishing wonder drug), Juvederm (face filler), silicone implants and their eye treatments (which overtook Merck as number 2) has boosted the company and he sees a bright future.  It’s the numbers. Botox is 30% of the company’s sales and it grew 21% year-over-year in the last quarter with rest-of-world growth roughly matching domestic growth. Juvederm has 175% growth and 20% of the facial-filler market now. Allergan’s “breast aesthetics” division was up 22% last quarter and its obesity business, the lap band, was up 50% year-over-year.

Next pitch was NuStar GP Holdings LLC[NSH 34.02 -0.76 (-2.19%) which fell because it was grouped as an oil stock when it’s in the business of blending oil and has nothing to do with the oil price because it collects the same fees regardless of the price of oil, high or low.  Cramer said it was down for the wrong reason so it should be bought (insiders bought as well – usually a bullish sign)

Jim’s charitable trust owns Fannie Mae.