Jim Cramer's 'Stop Trading!': Consolidation Nation

01/10/08 - 03:27 PM EST

TheStreet.com Staff

Consolidation in key industries may help investors in this oversold market, Jim Cramer said on CNBC's "Stop Trading!" segment Thursday.

Cramer commented on the overall economic condition, prodded by Federal Reserve Chairman Ben Bernanke's speech today: "We are at the precipice. ... We need shotgun marriages."

Bank of America (BAC Quote - Cramer on BAC - Stock Picks) helped the odds of one such marriage today by announcing a deal with beleaguered mortgage lender Countrywide (CFC Quote - Cramer on CFC - Stock Picks).

"This is what happens at the bottom," Cramer said. "I just don't know why the Fed would say you got to pay a premium for Countrywide." He added that "They don't want Countrywide to go out of business, because the servicing thing would play havoc." Cramer believes that Wachovia (WB Quote - Cramer on WB - Stock Picks) and Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks) will respond well to a rate cut: "These stocks go down every day."

Berkshire Hathaway's (BRKA Quote - Cramer on BRKA - Stock Picks) overtures to bond insurers Ambac (ABK Quote - Cramer on ABK - Stock Picks) and MBIA (MBI Quote - Cramer on MBI - Stock Picks) yesterday also indicated there may be hope in the troubled financial markets, Cramer said.

"We're so oversold, these things don't go away easily," Cramer said of today's jumps in financial stocks. Calling short-sellers "keen," he noted that the financials "were just the greatest shorts in the world," until news of potential consolidation in the industry caused some squeeze plays.

Airline stocks were treated to a similar rebound today, Cramer noted. Calling American Airlines operator AMR (AMR Quote - Cramer on AMR - Stock Picks) "worth a lot," Cramer said that in a month, he will be recommending the group.

Cramer continues to recommend the agricultural sector. "I love the ag guys because ag is so good," he said. "That Mosaic (MOS Quote - Cramer on MOS - Stock Picks) was down yesterday was just the shorts pressing their bets again."

At the time of publication, Cramer had no positions in any of the stocks mentioned.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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