Cramer's 'Mad Money' Recap: Sept. 23

The government's pricing of failed loans will force banks to take huge write-downs. Calling this argument ridiculous, Cramer said that the responsible banks have already written down the value of their loans, and the irresponsible ones could easily be given forbearance.

Critics argue that there's no need to rush towards a solution to the crisis. Cramer responded, saying "Rome is burning," and citing Washington Mutual's (WM Quote) last debt writedown that occurred Monday night. "We need this deal if only to save Washington Mutual," he said.

Staying on Track

Cramer talked with Michael Ward, president, chairman and CEO of CSX (CSX Quote), which Cramer recommended on Aug. 21 at $61.96 a share. CSX recently reported a solid quarter, raising guidance from between $3.40 to $3.60 a share to between $3.65 to $3.75 a share.

Ward said CSX is still growing, with demand for coal, fertilizer, ethanol and metals still strong. He said while auto and housing related shipments such as lumber, paper, rocks and gravel are sluggish, the rail industry is still taking marketshare from trucking as concerns over congestion and high fuel prices continue.

Ward said the modest moves in the dollar have had little impact on the company's export businesses because 85% to 90% of the company's business is domestic. He said CSX continues to innovate and focus on productivity and cost savings.

Regarding CSX's recent battle with hedge funds, Ward said he continues to welcome the new board members and is doing his best to educate them and bring them into the company.

Cramer said rails are still the place to be, as he gave the nod to both CSX and competitor Union Pacific (UNP Quote).

Early-Cycle Play

Cramer reiterated his long-held prediction that the bottom to the housing market is just 281 days away. He said the way to play this coming bottom is invest in companies in the early phase of the cycle.

In particular, he citied Masco (MAS Quote), which makes kitchen cabinets and owns the Behr paint brand.

Cramer called Masco a best of breed play for the coming bottom in housing. With 37% of the company's earnings from new homes, 40% from remodeling, and the remaining 20% coming from outside the country, Cramer called Masco the best early-cycle play out there.

At just $17.43 a share, the stock has already priced in the lower housing starts, leaving only upside potential, he said. Moreover he said the company boasts a 4.9% dividend yield which pays investors to wait for the housing turn to come into fruition. Masco recently boosted its dividend for the 50th straight year in a row.

Cramer said he also likes the company's huge cash flow, which comes in at three times earnings. The company also has 33 million shares left in its stock repurchase program and trades at just 22.8 times its growth rate.

After being battered by downgrades and the recent market action, Cramer said Masco is exactly the kind of company investors should be looking for.

Mad Mail

In this segment, Cramer told a viewer that gold is a better metal play than silver and other metals, since gold is more in demand around the world. He reiterated support for Barrick Gold (ABX Quote) and Agnico-Eagle Mines (AEM Quote).

Lightning Round

Cramer was bullish on Ultra Petroleum (UPL Quote) and Ameritrade (AMTD Quote).

Cramer was bearish on Salesforce.com (CRM Quote), Exxon Mobil (XOM Quote), Echelon (ELON Quote), Warren Resources and Discovery Holdings .

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