Cramer's 'Mad Money' Recap: Get Under GE's Umbrella

Click here for an archive of Cramer's "Mad Money" recaps.

---

"There's one stock that's the key to understanding this market," Jim Cramer told viewers of his "Mad Money" TV show Thursday. "And that stock is General Electric (GE Quote)."

General Electric is a great indicator of the economy, says Cramer, since the company deals is in so many diverse businesses. "If General Electric is doing well, then so is the economy."

Cramer noted that GE deals in everything from healthcare, media and entertainment to finance, aerospace and defense, and that makes it the perfect stock to take the pulse of the market.

Cramer: Dividends No Help Right Now

According to Cramer, General Electric is now signaling the end of the credit crunch.

Cramer then shifted his attention to Marcal Ospel, president and CEO of UBS (UBS Quote), whom he added to his "Wall of Shame." Cramer says Ospel, who's been at the helm of UBS for the past seven years, "has run a great franchise into the ground."

Cramer cited UBS' $3.7 billion loss on Oct. 30 as proof enough for Ospel's ouster. But that loss was immediately followed by a $10 billion write-down in December and another $4 billion write-down just a month later.

Cramer called the losses "a crime against capitalism" and told viewers to stay away from UBS at all costs.

A Healthy Safety Net

Cramer recommended HCP (HCP Quote), one of the largest real estate investment trusts focused on healthcare, as a perfect safety net for investors' portfolios.

Cramer advised investors to not roll over their certificates of ceposits at the bank and instead invest in HCP's 5.8% dividend yield. "HCP is the antidote of recession," said Cramer, noting that healthcare is not dependent on the economy.

HCP's current portfolio of properties totals just over $13.6 billion. In addition the company has recently been selling its less profitable properties and cutting its debt. Cramer expects the stock to edge higher each time one of these properties is sold and the debt comes down.

According to Cramer, HCP is "at the right place at the right time."

Getting Killed by the Shorts

"To understand why this market has been so brutal," Cramer told viewers, "you need to understand some market mechanics."

Cramer said the market volatility has been due, in part, to "bear raids," hoards of hedge funds and short sellers that gang up on a stock to drive the price lower.

"This kind of savagery has cost the average investor millions and millions of dollars," said Cramer.

He said the "savagery" can be explained by an action that the SEC took on July 6, 2007, when it rescinded what is commonly known as the "up-tick rule." This rule, originally put in place back in the 1930's, prevented short sellers from having the upper hand.

The removal of the uptick rule has clearly had a visible impact on the markets. Cramer noted that the Dow Jones Industrial Average was at 13,577 on July 6, 2007. On Thursday, the average closed at just 12,361.