Publish date:

Cramer's 'Mad Money' Recap: Fed Effect

Cramer says the market didn't fall today because the real rate that matters is the federal funds rate, not the discount rate.
Author:

Search Jim Cramer's Mad Money trading recommendations using ourexclusive Mad Money Stock Screener and watch Jim Cramer's Mad Money Post Game videoexclusively on TheStreet.com.

Editor's note: Because of CNBC's winter Olympics coverage, Cramer's "Mad Money" TV show has been rescheduled to noon EST.

NEW YORK (

TheStreet

) -- The markets weren't alarmed by the

Federal Reserve

's discount rate hike because it doesn't matter that much, Jim Cramer told "Mad Money" TV show Friday.

> > Bull or Bear? Vote in Our Poll

Cramer said the discount rate doesn't affect 99% of the borrowing in this country. He called the Fed's move more symbolic, than functional. It's the federal funds rate, he said, that matters, and that rate has yet to move. "The Fed doesn't want to be asleep at the wheel," said Cramer, and this surprise move lets everyone know it's on the job.

Cramer also said that the Fed's move last night proved that things are indeed getting better, which is always welcomed news for stocks. Finally, Cramer said today's inflation data has also helped to further calm the market.

Cramer said there's nothing to be concerned about because the markets aren't negatively impacted by rate hikes until there have been three of them, and the first one hasn't even occurred yet.

Nuclear Play

With President Obama talking nuclear power in a big way this week, Cramer spoke with David Crane, president and CEO of

NRG Energy

(NRG) - Get Report

, about the country's changing energy policy.

Crane said that NRG hopes to be the second nuclear facility approved for construction, adding the company already has an application in for a project in Texas. He explained that Obama's extension of loan guarantees are vital to build capital-intensive nuclear plants, which can require up to $8 billion in up front capital. "Even when the credit markets were working well, it was hard to find $8 billion," he said.

Crane went on to say that NRG's nuclear facility in Texas has been a phenomenal performer for the company and is a great site for expansion. He said that NRG has 90% public approval for the new facility.

Regarding other fuels, Crane said that coal plants are in a challenged position, with increased scrutiny on their carbon output and other pollutants. He said the future will be nuclear, renewable energy and natural gas.

Cautious Moves

In a second interview, Cramer sat down with Don Wood, president and CEO of

Federal Realty Trust

(FRT) - Get Report

, which he said continues to outperform in a sector that's riddled with skepticism.

Wood said that Federal's strategy has been to protect its downside while enjoying a little upside. He acknowledged that commercial real estate has a lot of mitigating headwinds at the moment, but he said that Federal only invests in high quality properties, and that makes all the difference.

Wood also said that Federal is not likely to snatch up distressed properties in Florida and other areas, since that's where most of the risk in the industry lies. He said that Federal will stick to properties in densely populated, and established, areas.

Asked about

TheStreet Recommends

Simon Properties

(SPG) - Get Report

bid for General Growth, Wood said the deal will likely be good for Simon, but there are a lot of details yet to be worked through, given that General is under bankruptcy protection.

Finally, Wood provided some insights into a $15 million project that it's trying to start using federal stimulus money. He said the process has included a lot of red tape and delays, but eventually he hopes it will help put some Americans to work as the stimulus intended.

Fear Factor

Cramer also sat down to discuss mergers and acquisitions with David Faber, a market news analyst with

CNBC

. Despite radical changes between the Bush and Obama administrations, Faber noted that we have yet to see a merger blocked by the Justice Department. However, Faber also noted that there simply hasn't been a lot of merger activity lately.

Cramer and Faber also discussed how many companies are now flush with cash, but are reluctant to spend it. Faber said that fear is a powerful motivator for companies, and he doesn't expect to see a new wave of new acquisitions in the coming months. He said there will likely be more, but not a lot.

Both Cramer and Faber agreed that 2009 was a year focused on balance sheet repair at most companies, and while they may have more cash than they need at the moment, they will likely not spend it on mergers, or dividends, any time soon.

Closing Comments

Cramer told viewers to buy

Devon Energy

(DVN) - Get Report

, which he has championed on the show.

Cramer said Devon is set to sell 2% of its reserves for $3 billon, a move which values the entire company north of $100 billion. He said it's not a pipe dream to think that Devon, which is valued at just $31 billion today, could be valued that high in the future.

-- Written by Scott Rutt in Washington D.C.

To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC

.

Want more Cramer? Check out Jim's rules and commandments forinvesting from his latest book by

clicking here.

For more of Cramer's insights during the Lightning Round, clickhere

.

At the time of publication, Cramer was not long any stock mentioned.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.