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
TheStreet Open House

Jim Cramer's 'Mad Money' Recap: A Gloom and Doom Forecast

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

NEW YORK ( TheStreet) -- Unless there's a compromise in Washington, doom and gloom will be returning to the markets in short order, Jim Cramer told his "Mad Money" TV show viewers Wednesday. He said even the upbeat news of a new Federal Reserve chairman will not be enough to buoy the markets for long.

The market craves certainty, Cramer reminded viewers, which is why it responded so positively to the appointment of Janet Yellen. Yes, for the most part, the markets like Yellen's policies, but they also like the fact that the decision has been made and that's one less uncertainty to worry about.

But as positive as Yellen's appointment was, Cramer warned the non-negotiating in Washington continues, sending the chance of an actual U.S. bond default into the 20% range. He said while many still believe a last-minute compromise will be reached, Cramer noted that many on Wall Street also felt a buyer would be found for Lehman Brothers.

The fact remains that on Oct. 17, the government can no longer guarantee that it will pay its bills and will need to begin the painful process of picking and choosing who gets paid, and when. That will lead to yet another crisis of liquidity, causing credit to tighten, sending auto and home sales back into a tailspin, just when they were starting to regain their footing.

Cramer said there's no doubt a default would send the U.S., and likely the globe, back into a recession, which is why even a 20% change of a default is enough for investors to begin preparing.

Alcoa's Undeserved Reputation

Cramer said he's got a stock that definitely deserves to be trading higher. Unfortunately, deserving has nothing to do with it. That stock, Alcoa (AA), is a fabulous company, he said. Sadly, no one cares.

Cramer explained that Alcoa is actually two companies: one that makes aluminum, the commodity, and another that makes products from aluminum. It's the former that's been dragging the company down for years because Alcoa has no control over the price of the commodity and, frankly, there's still just too much of the stuff, he said.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,031.14 +43.63 0.26%
S&P 500 1,984.13 -1.41 -0.07%
NASDAQ 4,518.9020 -48.6960 -1.07%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs