Cramer's 'Mad Money' Recap: The Citi Model Sleeps

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After Citigroup's(C) disappointing second quarter, it's obvious the supermarket financial model is broken, said Jim Cramer on his "Mad Money" show Monday night.

Indeed, everyone got financial services wrong. Everyone thought that having all of the services under one roof was the right way to go. Cramer told his CNBC audience that the market no longer wants a general practitioner. Instead, Cramer said, it wants a specialist.

So what's the takeaway from Citigroup's lackluster report? Investors should be in the companies that specialize in Citigroup's categories. Investors should be in the best-of-breed companies that compete in those areas in which Citigroup operates.

That means if you want the best retail banker, you should own Commerce Bancorp(CBH).

If you want the best credit card company, you want to own Capital One Financial(COF).

In mutual funds, you want to own Legg Mason(LM).

The best commercial lender? CIT Group(CIT).

The best brokers to own are Bear Stearns(BSC) and Lehman Brothers(LEH).

But don't jump in just yet. Wait for Citigroup to get downgraded. And then wait for brokers to downgrade other financial companies as well. After they do, you'll want to come in and scoop up all of the specialists. In other words, stick with purity, Cramer said, and stay away from dilution.

'The Lightning Round'

Bullish

Cramer was bullish on: Time Warner(TWX), Lowe's(LOW), Halliburton(HAL), Fortune Brands(FO), Southwestern Energy(SWN), Sears Holdings(SHLD), Senomyx(SNMX), Genzyme(GENZ), Grey Wolf(GW), UnitedHealth Group(UNH), Corning(GLW), Tesoro(TSO), LSI Logic(LSI), PMI Group(PMI), Medtronic(MDT), Martha Stewart Living Omnimedia(MSO) and Marathon Oil(MRO).

Bearish

Cramer was bearish on: Broadwing(BWNG), InfoSpace(INSP), Lone Star Technologies(LSS), MFA Mortgage(MFA), Netgear(NTGR), Mosaic(MOS), Grant Prideco(GRP), FuelCell Energy(FCEL), Anheuser-Busch(BUD), Gartner(IT), Denny's(DENN), Nokia(NOK), Geron(GERN), Paychex(PAYX), Extreme Networks(EXTR) and Shanda Interactive(SNDA).