This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cramer's 'Mad Money' Recap: Europe's Problems Difficult but Can Be Solved

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK ( TheStreet) -- The situation in Europe may be difficult but that doesn't mean it can't be solved, Jim Cramer told "Mad Money" viewers Tuesday. Cramer said that while the odds of a favorable resolution in Europe are about even, the markets could see a 10% pop if the best-case scenario does happen.

But what is the best-case scenario? Europeans need to create the equivalent of the U.S.'s Federal Deposit Insurance Corporation, an organization that can insure all European banks, in euros, so citizens don't have to flee their home country's banks for what they perceive as safer investments.

Cramer said with this one simple move, a "virtuous circle" would be created. The increased certainty in Europe would likely spur the Chinese to offer stimulus for their country, he said, which would, in turn, boost the confidence of international companies to invest and expand. From there, hiring would increase, the pressure would be off the U.S. banks and earnings would no longer be in danger.

Without such a deal, however, Cramer expects to see a wave of earnings pre-announcements and cuts in the second half of the year. He said the Germans, who appear to be holding all of the cards in this game of international poker, don't seem to think it's in their best interest to prop up the poorer European countries, but Cramer hoped that attitude will change.

If the best-case scenario happens, he continued, investors should look to buy international growth stocks, names like Starbucks (SBUX) and McDonald's (MCD). He would also look at companies like Ralph Lauren (RL) and the automakers such as Ford (F).

But until the best-case scenario happens, Cramer cautioned, investors need to "stay the course" and remain defensive.

'Naive' Investors, Shameful Sellers

With shares of Facebook (FB) inking a fresh 52-week low Tuesday, Cramer took a moment to sound off against comments made by Morgan Stanley (MS) CEO James Gorman, who said investors were "naive" to think putting money into Facebook's initial public offering would net them quick profits.

Cramer said it's clear the Wall Street machine doesn't care about the individual investor, even though individuals are the lifeblood of the markets. He called the execution of the Facebook IPO a disgrace, saying that either the Facebook executives got greedy or those at Morgan Stanley were just plain stupid in their pricing of the deal.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CAT $84.60 0.00%
SGEN $37.14 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs