Cramer still expects hardships in both the financial and home building sectors and advised using caution in investing in them. He doesn't foresee a bottom in the housing market until late 2009, and he still expects to see at least one or two of the major home builders to fail in the coming months.

Sirius Static

Cramer welcomed Sirius Satellite Radio (SIRI Quote) CEO Mel Karmazin to the show to discuss his company's future in the wake of the Federal Communications Commission's recent approval of its merger with rival XM Satellite Radio (XMSR Quote).

The upbeat Karmazin said the merger was well worth waiting for and he's looking forward to making his company's stock reflect the true value of the combined companies.

He defended his decision to raise $1.25 billion, seemingly at the last minute, to close the deal by saying that he had to play the hand he was dealt. He said his only concern was getting the deal done before additional challenges could be raised.

Looking forward, Karmazin said that any notions of Sirius defaulting on its debt is ridiculous. The combined company has $2.4 billion in revenues and offers consumers the best deal in radio today, he said.

In the future, customers wanting to keep subscribing to both services would pay $25.90 a month. By early the fall, the company will offer a "best of both" package for $16.99 (that is all of Sirius and the best of XM, or vice versa).

Outrage of the Day

In his "Outrage of the day" segment, Cramer recounted the Dec. 15 analyst meeting of AIG (AIG Quote), where the company said it had no exposure to sub-prime debt and would not have to dilute its shares to cover losses. The company also estimated its total losses at just $314 million.

Cramer called these statements shameful, stating that executives had to have known the losses would be significantly more.

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