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"Global capitalism just might be saved by Chinese communism," Jim Cramer told viewers of his "Mad Money" TV Show Tuesdays.
He said that country's economic stimulus plans could lead the whole world out of its financial woes.
Cramer said the Chinese are pulling out all of the stops, doing everything in their power to create jobs and save their economy. The reason why, he said, is necessity.
He said the Chinese communists cannot afford the country's economy to get any worse without risking widespread protests and civil unrest. To stay in power, they have to get the economy back on track, and fast.
So far the Chinese have cut interest rates five times in efforts to stimulate growth. They've also announced over $600 billion in stimulus packages, including a $40 billion telecom package to upgrade the country's infrastructure. That plan, said Cramer, should be a win for
Why do these moves in China matter? Cramer said because the trend is the only bullish thesis our markets can rally around.
He said this catalyst has resulted in a huge rotation out of names like
, and into names like
, a stock which he owns for his charitable trust
Action Alerts PLUS.
"The Chinese are giving us a reason to like the stocks that need a strong economy to work," said Cramer.
Cramer: Dow 30 in '09 Playbook, Part II
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Eaton's New Look
Cramer checked in with
chairman, president and CEO, Sandy Culter, for an update on that company's outlook since his last appearance on Nov. 14, 2008.
Since then, shares have risen 27%, despite the company lowering2009 guidance last month.
Cutler confirmed that demand for Eaton's goods did decline dramatically in the fall, but said the decline was not unexpected given the global liquidity crisis. He said the damage is clearly evident in the markets and he doesn't expect manufacturing to pick up for another six to nine months.
Cutler said Eaton's strength, however, comes from the rebalancing of its businesses. Seventy percent of the company's sales are now derived from electrical, hydraulic and aerospace products, with 55% of sales coming from international sources. Likewise, the company now has an even mix between early, mid and late cycle businesses, he said.
Cutler also credited the company's aggressive cost-cutting measures for some of its success. Eaton now has a strong balance sheet, said Cutler, with $125 million in cost savings this year.
Cramer said "no more selling for Eaton," and re-recommended the stock.
Cramer recommended telco giant
as the second among his top five stocks in the
Dow Jones Industrial Average
Verizon shares took a 6.2% tumble after an analyst recently downgraded the company from neutral to underweight, lowering their expectations for the company by 12% and giving Verizon a target price between $27 to $32 a share.
But Cramer called the downgrade short cited and characterized the thesis behind it as flawed. He said the market is in love with the cyclical stocks and with competitor
imploding, Verizon is taking sizable market share.
Cramer said he's also a fan of Verizon for the Blackberry Storm, a new smartphone which sold out in just hours. Cramer said he's still a fan of Blackberry maker
Research In Motion
Cramer discounted the notion that Verizon's FiOS service affords the company lower margins. FiOS, he said, is also taking sizable market share in the areas where its available and is a boon for the company.
Verizon's dividend is safe, said Cramer, and he's a fan of its 5.8% yield. Verizon is not cyclical as many people think, said Cramer, and he's a buyer.
Cramer talked with Ken Powell, chairman and CEO of
, a stock which he owns for his charitable trust
Action Alerts PLUS, to find out more about the company's business and its renewed sponsorship of the NBC program "The Biggest Loser."
Powell said that January is weight loss month at General Mills and the company recently announced its "pound-for-pound" program which donates 10 cents for every pound lost at the Website to the nation's food banks. He called "The Biggest Loser" program a terrific partner to helping the company promote a healthier lifestyle.
On the business front, Powell said General Mills just announced a great second quarter and he's happy that the company grew its margins. He said he's happy with how the business plan is unfolding at General Mills.
Cramer said he's still a fan of General Mills, and its long 110-year tradition of paying its dividend.
Cramer was bullish on
Hartford Financial Services
Cramer was bearish on
Goodyear Tire & Rubber
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At the time of publication, Cramer was long General Mills, Freeport McMoRan.
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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