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NEW YORK (
) -- The fiscal battle in Washington is playing out like the James Dean film "Rebel Without a Cause," with all of us caught in a high-speed game of chicken and about to go over the cliff, Cramer told
CEOs, including many who didn't vote for President Obama, have been going to the White House lately and saying that they, the 2%, would accept a tax hike if it would lead to a compromise, Cramer said.
But they've been had. President Obama was re-elected and Cramer noted the feedback he's been getting indicates the CEOs' offer meant nothing. The CEOs figured the president wrong, and we're not much closer to compromise than before.
Cramer said the President's position seems to be "my way or the highway" but it's actually "my way or the cliff's way."
"What worries me most about the declines is that the market is realizing the President might get his way," Cramer said. That would mean higher taxes and little in the way of spending cuts.
"We have to hope that history isn't repeating itself to go down the path of the pre-debt ceiling debacle or the TARP debacle before we get crushed and then get the deal," Cramer said.
He explained, "If you're a member of the business community who thought compromise was in the air, the only thing that turned out to be in the air was you. In your car. Going over the cliff, without wings. Without a parachute and with a full tank of soon-to-explode octane," a la "Rebel Without a Cause."
Off the Charts
Are technical charts stronger than the fiscal cliff? No, Cramer said. But colleague Carolyn Boroden has been "eerily prescient" is her projections, based on Fibonacci ratios, on where the
She was right about the recent rally, Cramer said, and now that the markets have fallen after steady advances, Boroden says it is all about jumping hurdles.
The S&P has jumped its previous resistance ceiling of 1388 but now the next resistance ceiling is between 1436 and 1446. The S&P closed at 1419 Thursday.
But there is also a support floor of 1414, which is "just below where the S&P went out," Cramer noted.
Even in today's ugly market, "the floor held," Cramer said. Boroden's new support point is 1398, and Cramer said that "if we go below that we'll really be in a house of pain."
She thinks the S&P can rally and also sees the
Dow Jones Industrial Average
going to 13985 and the
up to 2982. Cramer said he agrees with Boroden -- be cautious, wary and opportunistic.
Mind the Gap
Like clothing, retailers go in and out of fashion. Cramer said
is a fabulous turnaround story that's not getting the credit it deserves.
"The recent sell-off is a buying opportunity, one you don't want to miss," he said.
As we approach the end of the year, "it sure doesn't seem like retail's having a holly-jolly Christmas," Cramer said. "We've got worries on the low end with concerns about margins at
There are also worries on the high end at
where Chairman and CEO Stephen Sadove has to be more conservative in his outlook given the amount of uncertainty being caused by Washington's failure to avoid the fiscal cliff, Cramer said.
Cramer cited the comeback of
, calling it "an under-appreciated comeback play, and its same-store sales are trending in the high-single-digits."
And there is Gap, which has its detractors. Although Cramer thinks Gap is terrific, the stock has sold off. But he sees the per-share pullback from $35 to $31 as the pause that refreshes and "a great opportunity to buy Gap on weakness."
Even with the recent decline, Gap stock is rallying 70% year-to-date.
"That tells me that some of the selling has been fiscal cliff-related," he said, as people go to their tax adviser and take advantage of the capital gains tax rates this year.
Selling of Gap stock "is a lot of people taking profits at the same time," Cramer opined.
"Once we get the higher tax rate (after Jan. 1), you don't want to sell anything," Cramer said. "Psychologically, you might be inclined to hold on."
Cramer dismissed Gap's November same-store sales miss. Monthly sales for November are always choppy and don't predict how December will be. Plus, November was an abnormal month with Hurricane Sandy and its aftermath suppressing sales.
Buy some Gap shares now, and buy some more later if it goes down, Cramer said. The company is in the early stages of its turnaround and "I think the stock could have multi-year gains ahead."
In the Lightning Round, Cramer was bullish on
Bank of America
He was bearish on
When Hurricane Sandy struck New York City and New Jersey, a lot of people were in the dark -- and wishing they had bought a portable generator, Cramer said.
Now, with the fiscal cliff looming, Cramer interviewed the CEO of a company he said three weeks ago should be on investors' radars --
Briggs & Stratton
Generators only make up about 10% of the company's business. Its bread and butter is gas engines for outdoor power equipment.
CEO Todd Teske told Cramer that after last year's drought and the continuing concerns about the housing market he's cautiously optimistic about the market for the lawn mowers and power washers, among other equipment, the company sells.
However, he's very optimistic in the long term because it is getting to be about time for people to replace their old equipment. He said the replacement cycle is usually seven to nine years, with the most recent peak in 2003-2005.
So the next peak "should be kicking now," Teske said.
He added Briggs has been working to comply with new U.S. emissions standards and he thinks the company will be in a better competitive position against overseas competitors.
Briggs' strategy is to expand its engine sales, sell more higher-margin products and expand overseas. There are a lot of products in the company's R&D pipeline, he said.
As for those people who had wished they'd had a generator, he said that after a power outage like Sandy portable generators are big sellers immediately. "But the longer-term play is standby generators," he said. With an aging power grid that's not getting any better, the company is putting more into development to make better standby generators.
Cramer extolled the Briggs pipeline and said he doesn't think the stock is done.
No Huddle Offense
The U.S. has more natural gas than it can use. There's so much natural gas, some companies have stopped drilling for it.
"We must not squander this once-in-a-lifetime opportunity for North America to achieve energy independence," Cramer said of the government's reluctance to adopt natural gas, at least in its military fleet by, say 2016.
That could stimulate development of truck engines that use natural gas instead of diesel -- which accounts for 25% of our oil imports. Right now there's no infrastructure for trucks to use natural gas. The technology is not yet efficient. "We can do this without a national mandate," Cramer said, or government subsidies.
CEO Mark Papa recently explained the situation behind the natural gas glut. He is bearish on natural gas prices and expects the price to remain at $5 for years to come.
EOG's North American revenue shifted from 79% natural gas in 2006 to 14% today.
The Department of Energy said it expects the U.S. to be a net exporter of energy by 2025.
"Thanks to homegrown technology, I think the U.S. has an incredible opportunity to secure our energy future," Cramer said. "We need to cut back on our oil imports and break the back of OPEC, a cartel that has held our country hostage for 40 years," Cramer said. We need to utilize our natural gas glut for cleaner power plants and manufacturing.
"I think cheap energy fueled by domestic natural gas could cause more industry to move to the U.S.," he said.
"Until there's a national mandate backing natural gas, I expect it to sputter along as a surface fuel, " Cramer said. "There's a limited time for the government to act. The natural gas glut won't last long."
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-- Written by Anthony Buccino and Margo D. Beller in New York.
At the time of publication, Cramer's Action Alerts PLUS had a position in EMC.
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."
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