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Cramer's 'Mad Money' Recap: Get Under GE's Umbrella

TheStreet.com Staff

Click here for an archive of Cramer's "Mad Money" recaps.

"There's one stock that's the key to understanding this market," Jim Cramer told viewers of his "Mad Money" TV show Thursday. "And that stock is General Electric (GE Quote - Cramer on GE - Stock Picks)."

General Electric is a great indicator of the economy, says Cramer, since the company deals is in so many diverse businesses. "If General Electric is doing well, then so is the economy."

Cramer noted that GE deals in everything from healthcare, media and entertainment to finance, aerospace and defense, and that makes it the perfect stock to take the pulse of the market.

According to Cramer, General Electric is now signaling the end of the credit crunch.

Cramer then shifted his attention to Marcal Ospel, president and CEO of UBS (UBS Quote - Cramer on UBS - Stock Picks), whom he added to his "Wall of Shame." Cramer says Ospel, who's been at the helm of UBS for the past seven years, "has run a great franchise into the ground."

Cramer cited UBS' $3.7 billion loss on Oct. 30 as proof enough for Ospel's ouster. But that loss was immediately followed by a $10 billion write-down in December and another $4 billion write-down just a month later.

Cramer called the losses "a crime against capitalism" and told viewers to stay away from UBS at all costs.

A Healthy Safety Net

Cramer recommended HCP (HCP Quote - Cramer on HCP - Stock Picks), one of the largest real estate investment trusts focused on healthcare, as a perfect safety net for investors' portfolios.

Cramer advised investors to not roll over their certificates of ceposits at the bank and instead invest in HCP's 5.8% dividend yield. "HCP is the antidote of recession," said Cramer, noting that healthcare is not dependent on the economy.

HCP's current portfolio of properties totals just over $13.6 billion. In addition the company has recently been selling its less profitable properties and cutting its debt. Cramer expects the stock to edge higher each time one of these properties is sold and the debt comes down.

According to Cramer, HCP is "at the right place at the right time."

Getting Killed by the Shorts

"To understand why this market has been so brutal," Cramer told viewers, "you need to understand some market mechanics."

Cramer said the market volatility has been due, in part, to "bear raids," hoards of hedge funds and short sellers that gang up on a stock to drive the price lower.

"This kind of savagery has cost the average investor millions and millions of dollars," said Cramer.

He said the "savagery" can be explained by an action that the SEC took on July 6, 2007, when it rescinded what is commonly known as the "up-tick rule." This rule, originally put in place back in the 1930's, prevented short sellers from having the upper hand.

The removal of the uptick rule has clearly had a visible impact on the markets. Cramer noted that the Dow Jones Industrial Average was at 13,577 on July 6, 2007. On Thursday, the average closed at just 12,361.

"The markets have just been overwhelmed by this change in the law," said Cramer, who called those at the SEC "morons" for not realizing how the market would react to the change, especially in times of crisis.

He urged viewers to write Congress and the SEC and demand that the "up-tick" rule be reinstated to help preserve their investments.

Mad Mail

Cramer told a viewer that Foster Wheeler (FWLT Quote - Cramer on FWLT - Stock Picks) is his favorite stock in the group and is a "serious buy" at these levels.

Showing Your Support

On a final note, Cramer once again urged viewers to visit the Federal Communication Commission's website at FCC.gov and show their support for the merger of Sirius Satellite (SIRI Quote - Cramer on SIRI - Stock Picks) and XM Satellite Radio (XMSR Quote - Cramer on XMSR - Stock Picks).

Cramer has been a long time supporter of the merger, calling it good for both the companies and consumers. A decision on the merger, now in process for one year and 31 days, is expected soon.

Lightning Round

Cramer was bullish on Willbros Group (WG Quote - Cramer on WG - Stock Picks), Western Refining (WNR Quote - Cramer on WNR - Stock Picks), Public Service Enterprise Group (PEG Quote - Cramer on PEG - Stock Picks), Enterprise Products Partners (EPD Quote - Cramer on EPD - Stock Picks), Verizon (VZ Quote - Cramer on VZ - Stock Picks), Agrium (AGU Quote - Cramer on AGU - Stock Picks) and Goldman Sachs (GS Quote - Cramer on GS - Stock Picks).

Cramer was bearish on Alcatel Lucent (ALU Quote - Cramer on ALU - Stock Picks).

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

For more of Cramer's insights during the Lightning Round, click here.