Cramer's 'Mad Money' Recap: Obama Needs to Act (Final)

Cramer says the president has the firepower to overcome the obstacles to a stronger economy and a market turnaround.
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NEW YORK (

TheStreet

) -- "The president needs to be the point man on unemployment," Jim Cramer told the viewers of his

"Mad Money"

TV show after another dismal day on Wall Street.

Cramer said Obama has the power to turn the markets and the economy around, he just doesn't know it.

Cramer said President Obama has the ability to change the psychology of the markets, if only he'd take a more active role, and show investors that he actually cares about equities and people's IRAs and 401Ks.

Consider today's disappointing housing numbers. Cramer asked what if Obama came on TV today and reminded investors that with interest rates and home prices at historic lows, it's a great time to consider buying a home. What a difference a statement like that would make, he said.

Cramer asked what if Obama told Wall Street that he understands that keeping taxes low on capital gains and dividend is important. He said it would make a big difference if he pledged to work with business to create jobs, if he endorsed natural gas as a way to create jobs and head toward energy independence and if he announced a fix for the stock market's "flash crash" from earlier this year.

Cramer said Obama not only needs some new rhetoric, he needs new people with new ideas. He said the president needs to sit down with corporate America and find out what they need to begin hiring again. "Private industry is not the enemy," he reminded the president, all we need is a little imagination.

"Mr. President, we need to hear from you," said Cramer, "sit down with some business leaders, compromise and create some jobs."

Head and Shoulders Pattern

In the "Off The Charts" segment, Cramer went head to head with colleague Dan Fitzpatrick over the chart of the

S&P 500

, to figure out whether the dreaded "head and shoulders" pattern spells trouble for the markets.

When looking at the S&P 500's weekly chart, Fitzpatrick confirmed the head and shoulders pattern, noting that after a 75% gain from March 2009, the index has reversed course and is demonstrating the tell-tale head pattern flanked by smaller shoulders on either side.

Creating a "neckline" by connecting the lows of the head and both shoulders, Fitzpatrick determined that if the S&P 500 falls below the neckline, the average could fall as low as 810, a 23% decline from current levels. However, he noted, if the average bounces off the neckline, the S&P is likely in the clear.

Cramer said while he respects the power of the technical analysis, and its self-fulfilling nature, he's a fundamentalist and is more concerned with the health of the underlying companies, not the averages. He said the technicals may keep stocks from heading higher, but they can't drive stocks much lower.

Cramer said he feels better about companies like

Clorox

(CLX) - Get Report

,

Medcohealth Solutions

(MHS)

, a stock which he owns for his charitable trust,

Action Alerts PLUS, and favorite

Pepsico

(PEP) - Get Report

after they reported their earnings. He said he's also a believer in dividend raising stocks like

Kinder Morgan Energy Partners

(KMP)

and

3M

(MMM) - Get Report

.

Casino Play

"There's one company that's just pull off one of the greatest turnaround stories in history," Cramer told viewers, and that company is

Las Vegas Sands

(LVS) - Get Report

.

Just 18 months ago, shares of Las Vegas Sands were trading for just $1.50, as investors worried whether the company could remain a going concern. But Cramer noted that today shares trade over $27 a share, near its 52-week high, and the company just reported a eight-cent-a share earnings beat on revenue up 50% from year ago levels.

Cramer explained that Las Vegas Sands' bet on its properties in China's Macau and in Singapore are paying off big, as the rise of the Chinese and Indonesian middle class is playing big in that region of the world.

Las Vegas Sands saw a 74% increase in earnings from its three properties in the Asian region, with its new venture in Singapore earning $94.5 million in just its first 90 days of operation. The company has also restarted its construction project on its third casino in Macau.

How what does a turnaround look like? Cramer said it started with a $3 billion equity offering in November, 2009. Then on Aug. 18, 2010, the company paid down over $1 billion in debt and restructured its credit facilities, pushing back debt payments until 2015 and 2016.

Cramer said

Wynn Resorts

(WYNN) - Get Report

, trading at 38 times earnings, remains his favorite casino stock, but with Las Vegas Sands still trading at just 26 times earnings, he said the company is a steal, and is definitely worth a second look.

Bank Merger Details

In the "Executive Decision" segment, Cramer sat down with John Koelmel, CEO of

First Niagara Financial

(FNFG)

, to discuss the company's recent merger with

New Alliance Bancshares

(NAL)

.

Koelmel said the deal with New Alliance was a one plus one equals three transaction, and the combined company can accomplish a lot more than the individual companies could have done on their own. He said the two banks were mirror images of each other as far as their capital position and credit profiles, which made the deal easy.

Koelmel said his strategy moving forward is to take advantage of the tough times and use his company's strength to grow. He said many of the smaller banks are still trying to reorganize themselves and trying to raise capital to stabilize themselves, which leads to lots of opportunities.

Finally, when asked about First Niagara's stance on shareholders, Koelmel said he remains committed to the company's 4.78% dividend yield and is always working to drive meaningful returns for its shareholders.

Cramer once again recommended First Niagara as one if his favorite banks.

Lightning Round

Cramer was bullish on

Ford Motor

(F) - Get Report

and

Citigroup

(C) - Get Report

.

He was bearish on

Research In Motion

(RIMM)

and

Walgreens

(WAG)

.

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

To contact the writer of this article, click here:

Scott Rutt

.

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.

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.

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

.

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clicking here.

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

.At the time of publication, Cramer was long XXX.

Jim Cramer, host of the CNBC television program "Mad Money," is aMarkets Commentator for TheStreet.com, Inc., and CNBC, and a directorand co-founder of TheStreet.com. All opinions expressed by Mr. Crameron "Mad Money" are his own and do not reflect the opinions ofTheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or theirparent company or affiliates. Mr. Cramer's opinions are based uponinformation he considers to be reliable, but neither TheStreet.com,nor CNBC, nor either of their affiliates and/or subsidiaries warrantits completeness or accuracy, and it should not be relied upon assuch. Mr. Cramer's statements are based on his opinions at the timestatements are made, and are subject to change without notice. No partof Mr. Cramer's compensation from CNBC or TheStreet.com is related tothe specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes arecommendation by Mr. Cramer, TheStreet.com or CNBC that anyparticular security, portfolio of securities, transaction, orinvestment strategy is suitable for any specific person. You must makeyour own independent decisions regarding any security, portfolio ofsecurities, transaction, or investment strategy mentioned on theprogram. Mr. Cramer's past results are not necessarily indicative offuture performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBCguarantees any specific outcome or profit, and you should be aware ofthe real risk of loss in following any strategy or investmentsdiscussed on the program. The strategy or investments discussed mayfluctuate in price or value and you may get back less than youinvested. Before acting on any information contained in the program,you should consider whether it is suitable for your particularcircumstances and strongly consider seeking advice from your ownfinancial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held inMr. 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 Portfoliocontains all of Mr. Cramer's personal investments in publicly-tradedequity securities only, and does not include any mutual fund holdingsor other institutionally managed assets, private equity investments,or his holdings in TheStreet.com, Inc. Since March 2005, the ActionAlerts PLUS Portfolio has been held by a Trust, the realized profitsfrom which have been pledged to charity. Mr. Cramer retains fullinvestment discretion with respect to all securities contained in theTrust. Mr. Cramer is subject to certain trading restrictions, and musthold all securities in the Action Alerts PLUS Portfolio for at leastone month, and is not permitted to buy or sell any security he hasspoken about on television or on his radio program for five daysfollowing the broadcast.

At the time of publication, Cramer was long Medcohealth Solutions.

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.