3. Home prices have come down to bargain levels (as much as 30-40% in some areas).

4. The hottest housing markets are starting to cool off.

5. Mortgage rates should decline once Freddie Mac (FRE Quote) and Fannie Mae (FNM Quote) are nationalized.

6. The bulk of "teaser rate" home loans have reset and foreclosures will now decline.

7. The rate of household formation will increase as thousands camped out in apartments can now afford homes.

8. Immigration levels should rebound after the November election.

9. The biggest problem areas are now contained in such problem states as California, Florida and Arizona.

10. The areas with the highest foreclosure rates are starting to stabilize.

Lowe's on Points

In a new segment called "In The Ring," Cramer pitted home improvement superstore Lowe's (LOW Quote) against its biggest rival, Home Depot (HD Quote), to determine which company is the one to own.

Cramer outlined how professional money managers would evaluate the two stocks. First, he looked at the sector for both companies. With housing set to rebound next year, he assigned the home improvement sector a value of 2 or 3 on a five-point scale for both companies.

Second, he focused on growth. He said Lowe's reported a 5.2% decrease in same-store sales and raised its guidance, while Home Depot reported a decrease of 7.9% in same-store sales. Cramer gave one point to Lowe's and only half a point to Home Depot.

Third, Cramer looked at marketshare. With Lowe's reporting a 1.2% increase in marketshare and Home Depot reported a loss, Cramer gave one more point to Lowe's.

Next Cramer looked at how much room each company has for growth. Home Depot expects to open 55 new stores, compared to Lowe's 120 expected new stores. Cramer awarded Lowe's an additional point for its expansion prospects.

Finally, Cramer considered each company's dividend. After comparing the companies' near identical PE ratios, he said Lowe's dividend clearly comes out on top. His final conclusion: buy Lowe's and sell Home Depot.

Advantage: Johnson & Johnson

In a second installment of "In The Ring," Cramer compared Pfizer (PFE Quote) to bellwether Johnson & Johnson (JNJ Quote) to see who came out on top.

Cramer looked first at the drug sector overall and gave it only a 3 out of 5 due to the uncertainly of the current election cycle. "Drugs are not as safe as a utility in this environment," he noted.

Cramer said the key things to look for with drug stocks are growth, patent protection and invention.

When comparing the companies' growth prospects, Cramer noted that Pfizer sold much of its consumer products division to Johnson last year, leaving the company with almost no revenues from non-drug related sources. By contrast 24% of Johnson's revenues came from consumer goods. He awarded Johnson 2 points for keeping the "boring stuff" and diversifying its product mix.

Next, Cramer looked at patent expirations. Johnson expects to lose $3.8 billion in sales from patent expirations in the coming years, while Pfizer expects to lose $6.6 billion. Advantage Johnson, said Cramer.

Finally, Cramer looked at each company's product pipeline. Here he found Johnson with 7 to 10 new products expected between 2008 and 2010, while Pfizer expects 15-20 new products in their pipeline. He awarded one point to Pfizer on this front.

Tallying up the points, and accounting for some intangibles, like Johnson's great corporate culture and its famed shareholder Warren Buffet, the prize goes to Johnson & Johnson, he said. Pfizer, he said, may look cheap, but it isn't.

Maintenance Pays

Cramer talked with Robert Gross, chairman and CEO of Monro Muffler (MNRO Quote) to see if the tightening credit markets means people are keeping their cars longer.

Gross confirmed Cramer's theory, saying that Monro is seeing an uptick in business as people with older cars look for more expensive repairs.

He said that while some customers are delaying some maintenance due to the slowing economy, many are investing in increase maintenance to help increase fuel economy.

Gross also said the the market still looks great for acquisitions, and with nine recent transactions already completed, he still looks for more in the coming months.

Cramer told viewers that he thinks Monro is a buy.

Lightning Round

Cramer was bullish on AT&T (T Quote), Cal-Maine Foods (CALM Quote) and Freeport-McMoRan (FCX Quote).

He was bearish on Ford Motor (F Quote), United States Steel (X Quote) and Lumber Liquidators (LL Quote). P/>Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

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