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) -- "The politicians are the tide our companies are surfing," Jim Cramer told his

"Mad Money"

TV show viewers Thursday, as leaders in both the U.S. and in Europe seem to be meddling in just about every aspect of capitalism.

Cramer explained that there are so many cross-currents in this market, it's hard to know why stocks seems to be ignoring just about every negative data point out there. Yet under the surface, he said, the moves in the markets make perfect sense. Cramer said we're in a political ocean, and not an economic one, and that's why negative economic data is taking a back seat to political rhetoric.

In retail, Cramer said its the hopes that Obama has the votes to extend unemployment benefits that's sending stocks like


(KSS) - Get Report



(M) - Get Report

higher. While in manufacturing, stocks like


(CAT) - Get Report

, a stock which Cramer owns for his charitable trust,

Action Alerts PLUS, is rallying because the markets have priced in a full blown recession, and not a simple slowdown.

Meanwhile, the banking sector is preparing for a Lehman Brothers-style collapse in Europe, while Treasury Secretary Tim Geithner said Wednesday that option is off the table. Thus, stocks like

JPMorgan Chase

(JPM) - Get Report

edged higher. And if Europe isn't going to collapse, we'll need more oil, said Cramer, so buying the oil drillers and oil service stocks makes sense as well.

In technology, investors have been betting on a weak Europe as well, yet the seasonally strong fall season will trump any weakness out of the Euro zone, said Cramer. Forget

Research in Motion


, said Cramer, "they're done, stick a fork in them." He instead advised buying more


(AAPL) - Get Report

, another Action Alerts PLUS holding.

Know Your IPO

In this IPO segment, Cramer highlighted

Francesca's Holdings

(FRAN) - Get Report

, a company which came public on July 21 at $17 a share, only to see its shares skyrocket 63%. Since then however, shares have slumped back to the $20 range.

Cramer said this specialty retailer of women's apparel and accessories is currently in no man's land, delivering only inline earnings during its first quarter as a publicly traded company. He said Francesca is unproven, and therefore cannot be bought, or sold, at current levels.

On the good side, Cramer noted that Francesca has growth, adding some 70 stores to its already growing portfolio of 279 locations. The company also has high margins and is growing revenues at a 40% clip.

However on the bad side, Cramer noted that Francesca's same-store sale have slowed to just 5%, down two-thirds from where it was a year ago. Cramer feared that this means the company is expanding too fast and is having trouble executing at its existing locations.

Cramer said Francesca's multiple of 28 times earnings will shrink fast if the company cannot deliver same store sales growth in at least the high single digits. Without solid execution at its existing locations, he said the company will see its shares shrink quickly.

More Buyers Key Turnaround

In the "Executive Decision" segment, Cramer spoke with Alex Smith, president and CEO of

Pier One Imports

(PIR) - Get Report

, which is up 28% since Cramer first got behind it in April, 2010. Pier One recently delivered same-store sales growth of 10.8%, as the company continues its turnaround efforts.

Smith said that Pier One's turnaround started with their buyers, and an increase in staff from 10 to 24 people. Smith said the increased staff has allowed buyers to concentrate on their own departments and source better merchandise at better prices. He said that Pier One still has a small share of a very large market, so it's not impossible for the company to grow its share, especially with products that resonate so well with their customers.

Smith also addressed rising costs out of China, saying that his company has been able to cut costs in other areas to offset the margin pressures. He said Pier One is not passing on the full cost of these increases to their customers, although the company is not seeing any price resistance from its customers.

When asked about the company's stock buyback program, Smith said that the buyback does not curtail efforts to invest in its stores. He said the company has been able to take advantage of the dip in the share price and buy shares at great prices. Smith still sees a lot of upside still left in Pier One shares.

Cramer said he remains a fan of the Pier One story and continued to recommend the stock.


Lightning Round

Cramer was bullish on

Texas Instruments

(TXN) - Get Report


Cliffs Natural Resources

(CLF) - Get Report


Yum! Brands

(YUM) - Get Report


Chipotle Mexican Grill

(CMG) - Get Report



(AA) - Get Report


Total SA

(TOT) - Get Report


Cramer was bearish on

P.F. Chang's China Bistro






American Capital Agency

(AGNC) - Get Report


Mea Culpa

In his "No Huddle Offense" segment, Cramer admitted he "got greedy" when continuing his recommendation of


(NFLX) - Get Report

. Wearing the "Post-it Note of Shame" on his forehead, Cramer said he didn't add up all of the negatives surrounding the stocks and failed to tell investors it was time to move on.

Cramer said the realization that customers were leaving Netflix in droves as a result of its new pricing structure was only the beginning. He said increased competition from all fronts, along with the fears that content costs from partners like Stars are also troublesome for a company that just lost nearly 800,000 subscribers in a single quarter.

Cramer said shares of Netflix will likely bounce off these lows, but he would be a seller of that bounce. "It's time to move on," he concluded.

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

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Scott Rutt


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At the time of publication, Cramer was long Caterpillar, Apple.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 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, 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, 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 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, 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.