Mad Money Recap
Cramer's 'Mad Money Recap': Putting Housing Ahead of Inflation
TheStreet.com Staff
06/10/08 - 07:50 PM EDT
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The Federal Reserve is making a mistake by focusing on inflation instead of dealing with the housing crisis, Jim Cramer told viewers on his Mad Money show on Tuesday. Cramer said Fed chairman Ben Bernanke adopted the same approach last year during the crisis in the housing industry and financial services sector that resulted in almost $500 billion in losses. He said Bernanke apparently is in the same mode again, judging from recent comments he made when he said the risks to the economy had diminished in the last few months. Cramer said he would tackle the country's energy-based inflation problems by scrapping the ethanol mandate, which has raised fuel prices and done very little to increase gas supplies. Cramer said raising interest rates now would do severe damage to banks and cause the country to move into a recession. Tackle the problems sequentially, he argued: housing first, then inflation. Cramer expressed fears that Fed's current inflation-first approach will devastate the economy and cause millions of people to lose their homes and millions more to lose their jobs.
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A New-Tech Wildcatter
Cramer continued his series on wildcatters by turning his attention to Rex Energy(REXX Quote). He said Rex has been making all the right moves in its exploration for oil and natural gas. But what most impresses Cramer is how it is applying new technology to drill for hard-to-reach oil. The company accomplishes this by pumping chemicals into the ground to bring out oil.
Another New-Tech Stock
Cramer added Donaldson(DCI Quote) to his growing new-tech stock portofolio. Cramer's new tech companies do the grubby but necessary work needed in the global economy. And Donaldson fits that bill as the world's second largest manufacturer of filters for just about every industrial and auto application. He said the company excels because it is constantly working to improve its technology, making smaller and more efficient filters. In addition, he likes Donaldson because more than half of its sales come from overseas and it beat earnings estimates by 6 cents in the past quarter despite pressures in the North American truck filter market.