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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.
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) -- 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.

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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 Free 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 Free 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

Simon Properties

(SPG) - Get Free 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


. 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 Free 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.

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

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