Cramer's 'Mad Money' Recap for July 21

"Commissioner Cox has already shown he can level the playing field for the financials, now he needs to step up and enforce the rules for all stocks," said Cramer.

Fortress Banks

"We have emerged from one of the darkest times in American banking history," Cramer told viewers. He identified four banks that he said will still be standing after the dust settles from the recent turmoil in the financial sector. These "fortress" banks, he said, will survive to see 2009 and have the incredible opportunity to buy failing banks at bargain prices.

Cramer said that Wells Fargo (WFC Quote), US Bancorp (USB Quote), Bank of America (BAC Quote) and JP Morgan Chase (JPM Quote) all reported quarterly results that showed they will survive.

These banks, he said, have worked through the bad loans and are now successfully raising capital, putting them in a position to capitalize on everyone else's mistakes.

Of the four banks, Cramer said he'd be a buyer of only US Bancorp right now. US Bancorp, he said, is the only one that's fallen far enough to make him comfortable.

Cramer said he would be a buyer of the other three only on weakness. He also cautioned that there will likely be other bank failures and negative news continuing to pressure the sector in the days to come.

Cramer said there are three positives taking the bank stocks higher. First is the fact that all four banks reported better-than-expected earnings. Second, Congress has finally begun moving on a housing bill to offer relief to homeowners and banks alike. Lastly, the federal government is considering lifting antitrust rules, making it easier for larger banks to begin buying up the smaller, failing ones.

The combination of these factors, along with new housing starts finally approaching sustainable levels, should usher in a new era for the bank stocks, he observed.

Biotech's Glow

Two week's ago, Genentech (DNA Quote) fell to just $75.93 a share after a negative article in the New York Times raised concerns that the company's cancer drug, Avastin, was too expensive. Cramer advised buying Genentech after the news, and the stock is now up 23% since that recommendation.

Cramer said Roche's bid to acquire Genentech confirms his thesis that biotech stocks are right for this market. With the U.S. dollar so weak, he said, it makes sense for European companies and others to acquire U.S.-based companies.

Cramer said Forrest Labs (FRX Quote) might appear be a tempting way to play the drug stocks, but advised against buying shares.

He also advised against building a position in either ImClone (IMCL Quote) or Genzyme (GENZ Quote).

Cramer instead recommended shares of generic drug maker Watson (WPI Quote) as the next possible takeover target.

Cramer said he likes the company for its 60 new drug applications pending at the FDA, and recommended buying shares on any weakness in the sector.

More on the Uptick Rule

Cramer talked with Rep. Gary Ackerman, a Democrat from New York, about his support of for the reinstatement of the uptick rule. Ackerman said it's unbelievable that the SEC allows short sellers to sell stock without first waiting for support in the price. He called the practice "highway robbery."

Ackerman said he's not a proponent of over-regulating, but does agree with Cramer that existing market rules should be enforced and not allow short sellers to "beat companies to death."

Lightning Round

Cramer was bullish on Windstream (WIN Quote), Verizon (VZ Quote), Centurytel (CTL Quote), 3M (MMM Quote) and Nexen (NXY Quote).

Cramer was bearish on Oshkosh Truck (OSK Quote), Apple (AAPL Quote) and Otter Tail (OTTR Quote).

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