Cramer's 'Mad Money' Recap: Riding Out the Bottom

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"At the bottom, things can go right," Jim Cramer told viewers of his "Mad Money" TV show Thursday.

To bring that point home, he revisited his "Mortgage Madness Index," an index of financial and homebuilding stocks that he created on Aug. 3. The index has been more than cut in half since then, but Cramer now feels "the bottom is in" for some of the most hated names on the list.

First up, Countrywide Financial (CFC Quote). Cramer said he likes all the chatter about a possible acquisition of Countrywide by Bank of America (BAC Quote). He hopes investors picked up some of the preferred shares of Countrywide on his earlier recommendations.

Next up, Washington Mutual (WM Quote). Cramer feels the company could be a takeover target and is now turning positive on WaMu.

As for Citigroup (C Quote), Cramer says it will make a lot of money if the Federal Reserve continues to cut rates. Citigroup is a stock that he owns for his Action Alerts PLUS portfolio.

Cramer is also warming up to Bear Stearns (BSC Quote), but still prefers Merrill Lynch (MER Quote).

In the homebuilding space, Cramer now likes KB Homes (KBH Quote) and Centex Homes (CTX Quote), but feels Beazer (BZH Quote) is "still too troubled."

In the mortgage insurance space, Cramer says he's no longer a seller of MGIC Investment (MTG Quote) and MBIA (MBI Quote) but would not necessarily be a buyer at these levels, either.