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.