Cramer's 'Mad Money' Recap: The Case for Rate Cuts

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"I'm sick and tired of taking abuse from people who say I've gotten it wrong," Jim Cramer told viewers of his "Mad Money" TV show on Monday.

Cramer defended his stance in favor of Federal Reserve rate cuts in response to an article in the most recent edition of Newsweek. In the article, Robert Samuelson says that Cramer only advocates rate cuts to receive a short-term boost in the stock market.

Not so, Cramer insisted. "The Federal Reserve does not cut rates to boost the markets," Cramer said. The recent rate cut, he argued, did not even have anything to do with a softening economy. Rather, he said, the most recent rate cut "was pure and simply to avoid a financial crisis."

For the record, Cramer said he's been advocating rate cuts for more than a year now, and that call has fallen on deaf ears. He expressed his unhappiness with emergency cuts or stimulus packages "that give away taxpayer monies that we don't have."

Instead, Cramer said he prefers small, measured rate cuts that help avoid a crisis in the first place and ones that keep long-term bull markets rolling.

By contrast, he characterized the recent Fed moves as "unsophisticated, arrogant and ultimately reckless."

But now that the Fed has chosen its course, Cramer said he still sees strength in companies like United Technologies (UTX Quote), Microsoft (MSFT Quote), Honeywell (HON Quote) and IBM (IBM Quote). He also still likes oil and agriculture stocks.

Cramer also said he'd be a buyer of Fluor (FLR Quote) at these levels and thinks rail stocks such as Union Pacific (UNP Quote) and CSX (CSX Quote) are both "on fire."

No Excuses, Please

"Every company that reports bad results like to blame the economy," Cramer told viewers, "but that's just an excuse."

Cramer said that usually when one company reports bad numbers, it's because a competitor is slaughtering them. That's the case, he noted, with Motorola(MOT Quote) and Nokia(NOK Quote).

Last Wednesday, Motorola reported abysmal numbers, with mobile device sales down 38%. In response, the markets sold off both Motorola and Nokia under the assumption that the whole industry must be bad, he said.

But Cramer said that thinking is just wrong. He noted that Nokia recently posted a 44% jump in sales for the quarter, forecast increased market share and reported strong sales in several red-hot foreign markets.

Cramer said it all clearly shows that Nokia is taking share from Motorola, and that makes Nokia the company to buy in his book.

The Lure of Retail Stocks

Cramer says retail stocks are the place to be when the Fed starts cutting rates.

In this regard, Cramer has liked Phillips-Van Heusen (PVH Quote) since September, a call that he acknowledged has been wrong so far.

But he says Van Heusen, a shirt and neckwear company, has been using the weakness to buy back its shares; Cramer still likes the company's brands, such as Calvin Klein and Geoffrey Beene. He welcomed CEO Emanuel Chirico to the show to talk about the company's outlook.

Chirico noted that his company was one of the first to warn investors about a weak consumer. Despite that warning, he said, the company still beat its earnings by 2 cents a share in its latest quarter.

He said inventories are slightly up and that the company is coming into January lean and healthy. He said the company is also committed to its stock-buyback program. He also stood by the company's decision to go after the naming rights to the arena where the New Jersey Nets play. The arena, which was named Continental Airlines Arena, is now called Izod Arena and will be a great marketing ploy, he said.

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