Cramer: Worst-Case Scenario, Part II - TheStreet

Cramer: Worst-Case Scenario, Part II

Most of the Dow 30 will be severely punished if the Paulson plan isn't passed.
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Be sure to check out the first part of this two-part column on where the Dow Industrials may be headed if the Paulson plan isn't implemented.

OK, let's continue our projections of the individual components.

11

.

McDonald's

(MCD) - Get Report

: This one's going to suffer for pennies by a stronger dollar, but not much more, and it just boosted the dividend. I think it would be a gift below $57.

12

.

Home Depot

(HD) - Get Report

retreats to where it was on that July 15 low, $21, where it finds buyers for that dividend.

13

.

Bank of America

(BAC) - Get Report

: With the plan, this is the biggest winner in the

Dow

. Without the plan? Sorry, it revisits the low of July 15 as it has to get rid of these bad mortgages it is stocked with. Target is $18.

Cramer: Dow's Most Bearish Scenario

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14

.

Chevron

(CVX) - Get Report

: This is a slow-growth company with decent oil assets that would quickly go down to where its dividend made it compelling. Call it $54 as in a falling-oil environment -- perhaps down to $70. You will see price/earnings shrinkage continuing.

15

.

Hewlett-Packard

(HPQ) - Get Report

: This company's acquisition of EDS is going to work and help numbers for years, but the stock will still have to revisit at least its recent lows on fears of a worldwide tech slowdown; call it $41.

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16

.

JPMorgan

(JPM) - Get Report

: This company keeps doing everything right, but the plan would make this the best bank on earth other than Bank of America. Without the plan, it goes to its July 15 low of $31.

17

.

Pfizer

(PFE) - Get Report

: Here's a company that can only make more money by firing people, which is a good strategy until you run out of people. Still, the dividend is safe for at least another two years, so I think the stock stays at $18.

18

.

Kraft

(KFT)

: A food company that is getting better run is nothing to rave about, but this new addition to the Dow sure beats the disastrous run

AIG

(AIG) - Get Report

has had. I think it can drop a couple to $30 but not go much below that because it is so defensive.

19

.

Alcoa

(AA) - Get Report

is a great mystery. During the great 21st-century commodity boom that say

Phelps Dodge

and

Alcan

disappear, this homely little aluminum company has done

nothing

! Now it is free to go to $19, as the boom is totally over.

20

.

Johnson & Johnson

(JNJ) - Get Report

is a super stock. Well managed, great earnings, good pipeline, I think it goes up a couple from here.

21

.

Boeing

(BA) - Get Report

: Here's one that could get cut in half if the strike doesn't settle and the airlines around the world contract. It could go as low as $24. It's one of the most vulnerable stocks in the Dow because of its clients' stress and voracious need for hard-to-get capital.

22

.

Intel

(INTC) - Get Report

retreats back to where it was during the last tech recession -- $13. Think of it this way: It bought back a lot of stock. That money was wasted.

23

.

AT&T

(T) - Get Report

faces landline challenges and corporate weakness. In a disaster scenario, it could lose a third of its value. Call it $21. I only say that because look at what the competition, outfits like

Qwest

(Q)

and

Winstar

are selling for with slackened to no growth. Bad geographies. At the bottom, there will be a lot of fretting about the dividend.

24

.

Verizon

(VZ) - Get Report

needs more phone lines, more frivolous texters and photo-senders and a heck of a lot of clients for FiOS. None is likely to happen in this environment. I could see the stock retreat back to $26. It didn't help that they bought Alltel ... for now. Same dividend worries as above.

25

.

Microsoft

(MSFT) - Get Report

is like Intel. Bought back a lot of stock. Nothing to show for it, and it now goes to $21.

26

.

Wal-Mart

(WMT) - Get Report

either stays the same or goes up, because that's where everyone will shop -- they'll all be trading down in retail.

27

.

Merck

(MRK) - Get Report

is pretty much where it is going to go. It's a challenged company with safe yield. $31.

28

.

IBM

(IBM) - Get Report

could be facing a huge headwind of global recession, and I think that its business is far more economically sensitive than people realize. It could lose as much as 50 points -- it used to be that low for a long time -- sending it to $60. This and Boeing are probably the two most severe cuts, and the ones I am most likely going to be too pessimistic about if things get a little better.

29

.

Procter

(PG) - Get Report

stays at $68 or goes a little lower, not much. The company is set up to win in this environment.

30

.

Exxon

(XOM) - Get Report

: If you repeal the whole oil boom, which is what will happen in a worldwide recession or worse, Exxon's failed buyback strategy will be revealed for what it was: a giant money pit. The stock could retreat to $57, as it has minimal dividend support.

At the time of publication, Cramer was long Wal-Mart, Procter & Gamble, JPMorgan and Hewlett-Packard.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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