Cramer's 'Mad Money' Recap: Down in Front

When an analyst who has been consistently wrong about a stock changes his or her mind about it, you should change your mind about it too and do the opposite of what the analyst thinks you should do, Cramer said.

At $11.60, XM Radio is now a $3 billion company and is the perfect takeover target, just like AT&T was, he said.

XM Radio has some problems with the Federal Trade Commission, but it is a short-term issue, he said.

It would cost Sirius Satellite (SIRI) $4 billion to buy XM Radio because the company has $1 billion in debt.

But Cramer believes that buying XM Radio would be good for the company because Sirius could have a monopoly in the sector.

"Right now there is genuine competition, and it's hurting both companies," he said, adding that the iPod is not a threat, and the companies offer more than just music.

The only thing hurting the companies now is competition, he said, adding that he believes XM Radio has hit bottom and could be bought by Sirius here -- and make you some mad money.

Cramer said we are heading into a Fed-mandated recession unless it stops raising rates.

The last time this happened was five years ago, he said. At that time, cereals, soaps and soups performed well for six months.

The exact same thing is happening again, and we are in month three right now, Cramer said.

We have about three-and-a-half more months where PepsiCo (PEP), General Mills (GIS) and Heinz (HNZ) should perform well.

"Look over your stocks," Cramer advised. "If you own anything that peaked on May 11, you need to use last week's strength to lighten up on these stocks."

These stocks will have 14 more bad weeks before things start getting better, so trim back your positions now and buy more financials and soft goods, Cramer said.

Cramer suggested Altria (MO), which he owns for his charitable trust, Action Alerts PLUS, for soft goods and Wells Fargo (WFC) for a financial stock.

Vox Humana

Cramer welcomed Humana (HUM) CEO Mike McCallister to the show and asked him to explain how significant increases in Medicare membership and better-than-expected earnings in Medicare Advantage could continue.

"Our approach all along has been to grow the PDP program, which is just the drugs, because we believed over time the opportunity to move these people into Medicare Advantage was going to provide a longer-term growth opportunity for us," McCallister said.

"We've taken a view of Medicare as a longer-term opportunity, as opposed to just a drug offering this year," the CEO said.

McCallister went on to say that the company has done a lot of research with seniors. Although more than 80% of seniors have some sort of drug coverage, McCallister said there are still 4.2 million out there who could enroll in the latter part of this year.

In fact, he said, the company announced today that it is going to invest more in marketing efforts in the latter half of 2006.

Humana has had the first unbelievable quarter of many, Cramer said. This is the one to buy when Aetna (AET) and Cigna (CI) mess up, he said.

To view Cramer's interview with Mike McCallister, please click here.

Lightning Round

Cramer was bullish on Nokia (NOK), Garmin (GRMN), Global Imaging Systems (GISX), Southern (SO), Glaxosmithkline (GSK), MetLife (MET), Prudential (PRU), Allstate (ALL) and Genzyme(GENZ).

Cramer was bearish on Rackable Systems (RACK), Brunswick (BC), International Paper (IP) and Alkermes (ALKS).

In his "Sudden Death" round, Cramer was bullish on Black & Decker (BDK) and bearish on Wal-Mart (WMT).

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For more of Cramer's insights during the most recent Lightning Round, click here.

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