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Cramer's 'Mad Money Recap': Putting Housing Ahead of Inflation

Cramer says the Fed should deal with the country's housing woes before it tackles inflation.

Click here for an archive of Cramer's "Mad Money" recaps.

The

Federal Reserve

is making a mistake by focusing on inflation instead of dealing with the housing crisis, Jim Cramer told viewers on his Mad Money show on Tuesday.

Cramer said Fed chairman Ben Bernanke adopted the same approach last year during the crisis in the housing industry and financial services sector that resulted in almost $500 billion in losses.

He said Bernanke apparently is in the same mode again, judging from recent comments he made when he said the risks to the economy had diminished in the last few months.

Cramer said he would tackle the country's energy-based inflation problems by scrapping the ethanol mandate, which has raised fuel prices and done very little to increase gas supplies.

Cramer said raising interest rates now would do severe damage to banks and cause the country to move into a recession.

Tackle the problems sequentially, he argued: housing first, then inflation. Cramer expressed fears that Fed's current inflation-first approach will devastate the economy and cause millions of people to lose their homes and millions more to lose their jobs.

Cramer: Ag Plays Are Twice Blessed

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A New-Tech Wildcatter

Cramer continued his series on wildcatters by turning his attention to

Rex Energy

(REXX)

.

He said Rex has been making all the right moves in its exploration for oil and natural gas.

But what most impresses Cramer is how it is applying new technology to drill for hard-to-reach oil. The company accomplishes this by pumping chemicals into the ground to bring out oil.

TheStreet Recommends

Cramer said Rex's approach could yield as much as 84 million barrels and lift the company to a $40 stock.

Cramer says analysts who follow Rex's new technology have been far too conservative about the company's chances, giving it only a success rate of 33%.

Cramer thinks these estimates are far off the mark and rates the company a buy.

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Another New-Tech Stock

Cramer added

Donaldson

(DCI) - Get Donaldson Company, Inc. Report

to his growing new-tech stock portofolio.

Cramer's new tech companies do the grubby but necessary work needed in the global economy. And Donaldson fits that bill as the world's second largest manufacturer of filters for just about every industrial and auto application.

He said the company excels because it is constantly working to improve its technology, making smaller and more efficient filters.

In addition, he likes Donaldson because more than half of its sales come from overseas and it beat earnings estimates by 6 cents in the past quarter despite pressures in the North American truck filter market.

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Lightning Round

Cramer was bullish on

Freeport McMoRan

(FCX) - Get Freeport-McMoRan, Inc. Report

;

Canadian Solar

(CSIQ) - Get Canadian Solar Inc. Report

;

Costco

(COST) - Get Costco Wholesale Corporation Report

; and

Skyworks Solutions

(SWKS) - Get Skyworks Solutions, Inc. Report

.

He was bearish on

Monsanto

(MON)

;

Sony

(SNE) - Get Sony Corp. Report

;

Coach

(COH)

;

SanDisk

(SNDK)

;

Apple

(AAPL) - Get Apple Inc. Report

;

Starbucks

(SBUX) - Get Starbucks Corporation Report

; and

Brunswick

(BC) - Get Brunswick Corporation Report

.

Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here

.

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

.

At the time of publication, Cramer was long 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."

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.