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drew a line in the sand," an upbeat Jim Cramer told viewers of his "Mad Money" TV show Tuesday.
He said that the Fed made it abundantly clear by its rate cut today that it will not tolerate a long, hard recession.
Cramer said after countless months of inaction, the federal government has now gone on the offensive, with the goal of saving the economy by any means necessary.
With today's action, Cramer said Fed chair Ben Bernanke can keep his job. "He finally did what we wanted," he said.
Cramer said that the worst is now behind us, and he's more confident than ever that a housing bottom will occur in July, 2009.
With fewer homes being built this year than in 1959, Cramer said its finally time to buy a home, or refinance one, and take advantage of record low interest rates that he says could see 3.50% to 3.75% by next year.
With the Fed on board, Cramer said it's also time to take another look at the banks, which he said are again investable. He recommended both
as two names to start with.
Cramer: Top Oil Service Plays
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The Plaxy Award
"It's been a great year for bad judgement," Cramer told viewers. So much so that Cramer gave out his first "Plaxy" award, a special honor for those who performed well below the call of duty and exhibited incredibly bad judgement.
Cramer said the four contenders for this coveted award were Federal Reserve chairman Ben Bernanke, Treasury Secretary Hank Paulson, SEC chairman Chris Cox and New York Fed chief Tim Geithner.
After today's historic interest rate cut, Cramer said Bernanke had redeemed himself, leaving only Paulson, who told the American people the economy was sound, Cox, who destroyed the SEC, and Geithner, who oversaw the destruction of Lehman.
After much deliberation, the Plaxy award went to Chris Cox, a man who Cramer said has done more to destroy wealth in America than any other.
Cramer said Cox systematically reversed decades of rules designed to level the playing field, and instead chose to favor short sellers over the individual investor.
By removing the uptick rule, allowing shorts to raid and destroy the financial stocks, and permitting ultra leveraged ETFs to manipulate the market, Cox has removed all of the faith and trust in the markets.
Cramer noted that Cox also gave the former Bear Sterns a clean bill of health just days before its collapse. He also completed an investigation of Bernie Madoff's hedge fund in 2007 and found no wrong-doing.
Cramer congratulated Cox on a job well done, adding he hopes Obama removes him from office promptly.
Private Food Label Conundrum
According to recent reports, consumers looking to save money on food costs are turning to private label store brands. That's why Cramer revisited his Sept. 16 recommendation of
( RAH), a call that he said has "not been working."
Cramer said the trade-down food story is for real, with CEOs from retail giant
, along with grocers
all confirming the trend.
Yet while the trade down trend should mean explosive growth for private label food makers, the market seems not to care. Ralcorp and rival
both trending lower.
Cramer said the problem with both companies seems to be that investors are worried about the company's growth prospects given the current credit crisis. Treehouse has $551 million of debt, compared to its $745 million market cap, while Ralcorp has $1.7 billion in debt riding along with its $3.1 billion valuation.
Yet after comparing the two, Cramer said he's sticking with Ralcorp, and believes the company's hybrid strategy, marketing both brand names and store brands alike, bodes will for the company no matter which way the economy trends.
He recommended averaging down at these lower levels.
Trading Down Works
Continuing on the trade-down food theme, Cramer talked with Sam Reed, chairman and CEO ofTreehouse Brands to find out how the Ralcorp competitor is performing given the latest trends.
Reed said Treehouse is a pure play on the private label trend and currently has products in 15 product categories. Treehouse, he said, has successfully doubled its size in the last three years.
When asked if the current credit crisis is affecting the company's ability to raise cash for acquisitions, Reed said that Treehouse has always been favored in the markets due to its great financial discipline and proven track record.
Reed also said that recent acquisitions have made Treehouse the No. 1 maker of pourable salad dressings and have given the company incredible access to the Canadian markets, two new areas of growth for the company.
Cramer said that Treehouse has the right strategy and at $24 a share, and that he'd be a buyer.
Cramer was bullish on
Nordic American Tanker
Johnson & Johnson
Cramer was bearish on
Principal Financial Group
United Parcel Service
James River Coal
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At the time of publication, Cramer was long Gilead Sciences, Johnson & Johnson.
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