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"The financials of the financial stocks cannot be trusted," Jim Cramer warned viewers of his "Mad Money" TV show Monday.
Cramer made his comments in the aftermath of what he described as the "sweet-heart" deal
got from the
The Fed's actions led Cramer to urge investors to stay clear of the all of the financial stocks, with the lone exception of JPMorgan.
In his analysis of the Bear deal, Cramer said those with money invested at Bear are not in jeopardy of losing their accounts while those who invested in the company will likely see their investments vanish as the common stock drifts towards zero.
"You can't count on takeovers anymore," Cramer said, "there will only be take-unders from here on out."
According to Cramer, any financial company that has lent a lot of money to hedge funds is in jeopardy because its book value will fall as a result of the fire sale of Bear whose book value dramatically fell over the weekend to a stunning $2 a share.
"Until we hear otherwise," Cramer said, "consider all of the banks' book values to be lies." "These companies will likely be saved, but the pattern will be to have their equities wiped out."
On a side note, Cramer remained bullish on the coming IPO of Visa, stating that with the financials in such turmoil, the Visa IPO will likely be priced below its true value, offering investors a rare opportunity to post a gain.
"Visa is a financial with absolutely no credit risk," he said.
In Apple I Trust
"After this selloff," Cramer told viewers, "investors should pick amongst the rubble for the real banks."
The real banks, he said, are not banks at all but rather recession-proof companies that are flush with cash.
Cramer recommended companies in the "real" economy such as those that manufacture products. These companies, which all benefit from a weak dollar, include
Procter & Gamble
Cramer also recommended strong companies in the tech sector, such as
"All of these companies also have strong balance sheets," said Cramer.
He also reiterated buys in the agriculture sector, such as
. And he also likes
Cramer welcomed Michael Ward, President, chairman and CEO of
, back to the show to discuss the company's outlook. Earlier today, CSX raised its guidance for 2008, beating Wall Street's consensus estimates by 7 cents to 10 cents a share.
Ward explained that his company is performing well, shipping a mixed bag of products ranging from coal, grain and fertilizer to metals, chemicals and ethanol.
He also noted that competing trucking companies are being challenged by both higher fuel costs and a shortage of labor that is giving railroads the upper hand in the current economy.
A long-time supporter of CSX, Cramer first recommended it on Nov. 16, 2007, at $43 a share, then again on Jan. 24 at $46 a share. Both of those recommendations are up, by 18.6% and 9.6%, respectively.
Cramer recommended the stock again tonight, citing both the company's strong performance and its $2.4 billion stock repurchase program as strong catalysts in its favor.
Doing Well Even in Real Estate
Cramer also welcomed Peter McCausland, chairman and CEO of
, to the show.
McCausland said his company continues to do well and sees no signs of recession. He said the company is doing well even in the residential construction market, which, while down from its highs, is mirroring levels seen in 2006.
Cramer touted Airgas as just another example of his "two-economy" thesis, stating that here was another example of a strong company with a safe dividend that's buying back stock.
He continued to recommend the stock as a member of the "real" economy.
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
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At the time of publication, Cramer was long ConocoPhillips.
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