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Cramer's 'Mad Money' Recap: Sept. 3

Scott Rutt

09/03/08 - 07:41 PM EDT

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

"The failure of Integrity Bank over the weekend is not just another bank failure," Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

He said the breakup of Integrity "a monumental shift in strategy" illustrates how the Federal Deposit Insurance Commission (FDIC) will handle bank failures from now on.

Cramer commended the FDIC for adopting a plan which he has been advocating for months, one that splits failed entities into "good" and "bad" parts.

The Integrity deal calls for Regions Financial (RF Quote) to acquire Integrity's "good" parts, mainly $900 million worth of deposits, while the FDIC assumes the "bad" parts, including all of the bank's failed and failing loans.

"This is the plan we've been waiting for," said Cramer, who replayed an appearance on NBC's Today Show back in July where he advocated the plan. He called the FDIC's shift in strategy terrific news for stronger banks which are now poised to pick up great assets from failing entities.

Cramer recommended BB&T (BBT Quote), a strong, yet conservative, Southern bank with a 6.36% yield. He said the bank is ready to reap the rewards of the FDIC's new strategy.

Cramer said BB&T tightened its underwriting policies back in 2005, ahead of the subprime crisis. Only 1.36% of its loans are currently listed as non-performing and the bank has only a .63% charge off rate. The bank is also still growing, with loans up 9% last month.

Cramer: Deal Is Likely for Lehman

He called BB&T the logical choice to acquire assets from future failed banks.

Coal's Big Drop

Cramer put Joy Global (JOYG Quote) president and CEO Mike Sutherlin in the hot seat to get answers about the company's recent earnings miss.

Stockpickr

Sutherlin said his company enjoyed record orders and revenues this quarter and felt the market overreacted to the company's margin issues. He called the current market environment negative on anything commodity related.

Sutherlin said Joy Global is in a strong position with share buybacks, solid cash reserves and tremendous upside potential. The company's backlogs extends well into 2010 to 2011, he said.

On China's currently soft market, Sutherlin said the country often goes through stocking and restocking cycles and is now suffering from weakness due to the Olympics and seasonality. He still sees China as desperately short of coal and expects strong demand to return soon.

Cramer predicted more pain for Joy Global. He said the oil service sector will have to bottom first before he would recommend buying Joy Global and his other favorite Bucyrus (BUCY Quote).

Am I Diversified?

Cramer took questions from callers about their portfolios and evaluated them. The first caller's portfolio included Teva Pharmaceuticals (TEVA Quote), Altria (MO Quote), Walgreens (WAG Quote), Home Depot (HD Quote) and General Mills (GIS Quote).

Cramer said this portfolio has two retailers with Home Depot and Walgreens and needed a financial stock.

The second caller's top holdings included Bank of America (BAC Quote), ConEd (ED Quote), General Dynamics (GD Quote), General Motors (GM Quote) and Verizon (VZ Quote).

Cramer called this portfolio perfect.

Mad Mail

In this segment, Cramer told a viewer that although he felt bad about selling Schering-Plough (SGP Quote), he stood by his comments on Tuesday's show that the negative press surrounding the company will limit any upside.

Cramer told a second viewer that the selling in IBM (IBM Quote) is overdone, and he sees the company as a buying opportunity.

When a third viewer asked about CPFL Energia (CPL Quote), Cramer said he still thinks that company is a buy.

He also reiterated buying Celgene (CELG Quote) and said he prefers CSX (CSX Quote) over railroad competitor Norfolk Southern (NSC Quote).

Sudden Death

Cramer was bearish on Salesforce.com (CRM Quote), Genentech (DNA Quote) and Steel Dynamics (STLD Quote).

Lightning Round

Cramer was bullish on Agnico-Eagle Mines (AEM Quote), Research In Motion (RIMM Quote), Molson Coors (TAP Quote), Sociedad Quimica (SQM Quote), Frontline (FRO Quote) and Red Hat (RHT Quote).

He was bearish on Yamana Gold (AUY Quote), ADC Telecommunications (ADCT Quote), MGM Mirage (MGM Quote), eBay (EBAY Quote), Eagle Bulk Shipping (EGLE Quote) and CVS Caremark (CVS 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.

For "Mad Money" performance statistics and other links, check out Mad Money stats

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