Jim Cramer's 'Stop Trading!': Lehman, Thornburg Got It Right

Banks should use today's rally as an opportunity to issue preferred stock and raise capital, Jim Cramer said on CNBC's "Stop Trading!" segment Tuesday.

"These preferreds work," Cramer said. He praised Thornburg Mortgage (TMA Quote) and Lehman Brothers (LEH Quote) for raising capital today and suggested that Wells Fargo (WFC Quote) and Wachovia (WB Quote) follow suit.

Cramer said he had liked Countrywide (CFC Quote) preferred paper when the mortgage lender issued it. In fact, he said he likes preferred stock generally. "The only time I saw it violated was when Hovnanian (HOV Quote) got rid of its preferred," he said.

Timing was important to the successful sale of shares. "If it were a down day today, we would not want" to buy preferred stock, Cramer said.

Of Lehman's efforts to raise capital, Cramer said, "Brilliant of them to place it with people who cannot short. ... [CEO] Dick Fuld is a very smart man, and he did indeed do the right thing."

Cramer called for more banks to take advantage of the day's bullish action. "We need to see financings right now. Right on the heels of this," he said. Cramer said that National City (NCC Quote) was probably ripe for a takeunder.

He also noted that Fannie Mae (FNM Quote) and Freddie Mac (FRE Quote) "are running. Take advantage of the short squeeze and issue preferred," he urged.

On news that FedEx (FDX Quote) was aiding British Airways in reducing a backlog of baggage at Heathrow Airport, Cramer said, "FedEx is remarkable. ... The stock is now up more than 10 points from where it disappointed." Of the broader market's rally today, he said, "This one feels like up 500. Someone at some point better start believing in these rallies because they are powerful."