Cramer's 'Mad Money' Recap: Sept. 9

Cramer said oil and natural gas are also being held down by what he called the John McCain factor. As the Republican candidate pulls ahead in the polls, investors worry that more drilling with lead to greater supply and even lower prices. Cramer said oil could hit $80 a barrel or $3 a gallon at the pump if McCain is elected.

Cramer also blamed the inexperience of "young gun" hedge fund managers for the rapid decline in commodity prices.

In the worst case scenario, he predicted there could be a repeal of the run-up commodity prices as they retreat to their April 2005 levels. This would result in a 68% decline in stocks like Companhia Vale (RIO Quote), a 50% decline in US Steel (X Quote) and a 30% decline for many oil and natural gas producers.

Cramer said the only way to stop this "worst case" scenario would be for the world's central banks to cut interest rates aggressively.

"If China recovers, we can avoid the losses," he said.

Early-Cycle Stocks

On a horrible market day, Cramer turned his attention to Whirlpool (WHR Quote), a stock that is up 44% despite a whirlwind of negative news on the company and the current economic slowdown.

Cramer said investors may wonder why Whirlpool has jumped from $55.22 on July 15 to as much as $83.99 today during a period when analysts are cutting numbers and have serious worries about shipments going forward.

He said it may seem especially absurd after a recent Wall Street Journal article theorized that the company only met last quarters numbers because of favorable Brazilian tax credits.

Cramer, though, credited Whirlpool's rise in stock price to the work of large mutual funds, who are buying the stock based on the long-term business cycle. He said the company is a perfect "early-cycle" play, the kind of stock one would buy in an economic slowdown in anticipation of a recovery.

Cramer explained that while that recovery may have been delayed by oil prices and the housing crisis, the recovery is coming, and mutual funds are still buying ahead of it.

He cited the earnings of retailer Sears Holdings (SHLD Quote) and the strength of home builder Toll Brothers (TOL Quote) as two other examples of this "pre-recovery" trend.

Cramer said he's not ready to recommend Whirlpool given the topsy-turvy market conditions, but he did want investors to keep an eye out for this trend to continue as the recovery draws near.

Cutting Drug Development Costs

Cramer talked with Joe Herring, chairman and CEO of Covance (CVD Quote), about his company's ability to lower costs for big pharma.

Herring said many big pharmaceutical companies don't even know their true drug development costs. But he said every one of them wants to lower those costs.

Herring said that Covance saves drug companies as much as 20% by helping them to effectively manage their clinical trials to accelerate the FDA approval process. He said this clinical trial work --- Covance's core competency --- is valuable because it allows the drug companies to focus in other areas.

Cramer said that with all that's wrong in the markets, there's money to be made in Covance.

Lightning Round

Cramer was bullish on Frontline (FRO Quote) and Onyx Pharmaceuticals (ONXX Quote).

He was bearish on Juniper Networks (JNPR Quote) and UAL Corp (UAUA Quote). P/>Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

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