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NEW YORK (
) -- "There were some serious wrecking balls out there today," Jim Cramer told the viewers of his
TV show Monday, as the markets closed down on another roller-coaster day.
He said the threat of $4 a gallon gasoline and the deluge of earnings estimate cuts that could follow is looming larger than ever.
Cramer said even some of his most favorite companies, like
, got hit hard after it delivered what by all accounts was a terrific quarter. But that's to be expected, said Cramer, as we've seen this pattern before.
Cramer recalled how in the fall of 1990, Saddam Hussein caused the markets to behave very similar to how they are today. He said every day the markets would rally on rumors of Saddam's death, or capture or exile, only to come crashing back down as those rumors failed to materialize. Cramer said the only strategy that made sense then, and now, is to sell these rumors, not buy into them.
But Cramer said investors shouldn't leave the table, as eventually, Gadhafi will be defeated, or exiled, and the world will return to normal. He said the markets will likely rally 1,000 points on that news, unfortunately we just don't know from what level that rally will begin.
Cramer told viewers they don't want to be overly long in this market, nor do they want to be overly short. He encouraged defense, and picking up opportunities as they arise.
Weighing Canadian Banks
What's the best way to play the banking recovery? It's not with a U.S. bank, Cramer told viewers, as he looked to the great white north, in Canada, for some solid banking growth. Cramer said Canada didn't have a major housing crisis like the U.S., which makes its banks far more stable than our own. He then looked at Canada's top five banks, to see which ones made the grade.
Cramer said that
is primarily an international growth play, with 50% of its revenues coming from outside of Canada. However the bank is not his favorite, as it trades just one point off its 52-week high. Cramer said he'd consider it on a pullback.
Bank of Montreal
, the value play of the Canadian banks, according to Cramer. He said Bank of Montreal isn't the highest quality bank, and thus isn't his favorite either, even though the bank does offer a 4.6% dividend yield.
, which Cramer said was his least favorite of the top five. He said this bank was hardest hit, and had the most exposure to the U.S. markets. He said while the bank didn't cut its 4.2% dividend, it didn't raise it, either. Cramer said Canadian Imperial was his least favorite.
Royal Bank of Canada
, a solid bank making inroads into the riskier capital markets game. Cramer said this stock has a lot of volatility, and he'd be cautious.
Finally, there was
, which made the cut for Cramer's most favorite Canadian bank. Cramer said Toronto Dominion delivered an 11-cent-a share earnings beat and an 8% boost in its dividend when it last reported, and is doing well with its acquisition of Commerce Bank in the U.S., as well as a chunk of Chrysler finance.
Riding Oil and Gas Expansion
In the "Executive Decision" segment, Cramer spoke with Alan McKim, president and CEO of
, which is up 33% since he first recommended it in June, 2010. Clean Harbors recently delivered a 10-cent-a =share earnings beat on a 22% increase in revenues.
McKim said Clean Harbors' growth is definitely being fueled by the expansion of the oil and gas industry. He said in the Canadian oil sands regions, 1.5 million barrels a day of oil are being recovered, and there are plans for five to six million barrels a day in the future. He said all of these plants will need huge amounts of service and maintenance and that's what Clean Harbors provides.
Turning to the controversy here in the U.S. surrounding hydraulic fracturing and water contamination, McKim said that "fracking," as its called, has been a around a long time and is very successful. He said the main issue is not an environmental one, but rather one of building the infrastructure needed to use the procedure responsibly.
McKim explained that an average fractured well can use upwards of four to six million gallons of water, and the key will be to provide clean water for that well and to recover and recycle as much of that water as possible when the procedure is completed. "The technology is available," said McKim.
McKim said that the new technology now being deployed will transform energy in the U.S., both in the natural gas and in the oil markets in areas like the Bakken region of Montana and Wyoming. "This is the right place to be," McKim concluded.
Cramer said Clean Harbors has a great story to tell and he's still a believer in the company.
Beyond Land Lines
In a second "Executive Decision" segment, Cramer sat down with Jeff Gardner, president and CEO of
, a company whose stock has been struggling as of late as it transitions from primarily a land line telco into one with broader offerings. Windstream currently offers an 8% dividend yield.
Gardner said while Windstream does continue to lose land lines to cell phones and cable companies, the company is offsetting that loss by moving into other areas. He said the company's revenue decline shrunk from 5% in 2009, to just 2% in 2010 and is looking even better for 2011.
Windstream is making up for its losses by expanding into broadband access, data centers and also providing fiber optic services to cell tower sites. The company also received $200 million in grant money from the federal government to provide broadband to the most rural of areas.
Gardner said that Windstream is constantly looking for new opportunities to grow, and because of their non-traditional approach, the company doesn't have a lot of peers for analysts to compare them to. He said the company's data center business alone is a real hidden gem for the company, but also one analysts frequently overlook.
Cramer said he's a believer in the Windstream story, and feels the company's monster 8% dividend yield is safe.
Cramer was bullish on
Starwood Hotels & Resorts
He was bearish on
Advanced Battery Technologies
In his "No Huddle Offense" segment, Cramer sounded off against the pundits who endorse raising interest rates to slow the economy, which he said will, in turn, lower the demand for oil. Cramer said this plan is totally idiotic, saying putting the brakes on the entire economy isn'e needed to bring oil prices back under control. He then outlined three easy steps to solve our nation's sky-high oil problem.
First, Cramer said the government needs to sell oil futures contracts against our strategic reserves to stop the rise of oil futures cold in its tracks. Second, the government must be vocal about its support for Bahrain and Saudi Arabia, which will help prevent unrest from spilling over into these countries. And finally, Cramer said Congress must pass the natural gas act to subsidize 18-wheelers converting from oil to natural gas.
With 18% of our nation's oil imports going to fuel 18-wheelers, Cramer said this final step would significantly cut our nation's dependence on foreign oil, and bring the oil market back into balance.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was not long any stock mentioned.
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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