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

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After Citigroup's(C Quote) 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 Quote).

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

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

The best commercial lender? CIT Group(CIT Quote).

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

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

Bearish

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