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Jim Cramer continued the pump price talk Wednesday, telling his

"RealMoney" radio show listeners that an investigation into price-gouging isn't going to bring gasoline prices down.

Instead, he said that people should look at the underlying fundamental factors that have kept prices higher, including the switchover from MBTE as the main gasoline additive to ethanol.

"There was a sense that we could have a huge crisis of health had we continued to put this MBTE in gasoline," he said. "But we were so worried about this that the government and the

system that gets the gasoline to you were unprepared to for the problems of switching to this new blend."

Because there are many distribution points between the oil well and the gas pump, he said that making this changeover has created gasoline production bottlenecks.

And that's where the problem is, Cramer said. Ethanol is not easily added to gasoline, and many distribution centers were unprepared for the move.

Making gasoline has become more labor intensive, and so it's more expensive, he said. Plus, the U.S. is not the largest maker of ethanol. It's Brazil, Cramer said, adding that the country produces more than half of world's ethanol.

He also said that 70% of cars sold in Brazil are flex cars, meaning that they run on gas or ethanol.

Will we see the U.S. import ethanol from Brazil as a stopgap measure, he asked? Given the steep tariff on Brazilian ethanol, Cramer said that would be an unlikely solution.

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Because of intense lobbying, he said there is an instinct to protect U.S. corn farmers, who are trying to make their own ethanol.

The U.S. doesn't matter anymore in terms of oil production, he said, and that is another reason why our oil prices so high.

The swing producers that have excess oil capacity vs. what they would use include Iran, Nigeria and Iraq, pointing out that these are hardly stable places. When Venezuela is your safest supplier nation, it's time to think twice about whether we're in good shape with oil, he said.

Toothsome Weight Watchers

Many of you have been on a diet since the beginning of the year, Cramer said, and if the going has been slow, you can still make money on the diet business.

The one company that has had the most consistent, successful track record for weight loss is the one that forces people to change the way they eat and take care of themselves, he said, referring to

Weight Watchers



With the stock down a $1 on a Lehman downgrade, Cramer said he would sink his teeth into it.

Cramer said that the company, which was spun off by



, is well-run company and will be around as long as people need to lose weight.

In the world of diet drugs, he suggested taking a look at



, a company that he said also has good management.

What it does best is take prescription drugs that have come off patent and "make great hay with them," once they are eligible for over-the-counter sales, Cramer said, which is what they did with Nicorette.

Glaxo is waiting for approval to sell the diet drug Xenical, and Cramer believes that it will happen later in the year. And even though the drug's side effects include flatulence and diarrhea, he said it's still likely to be a big seller.

People took phen-fen, and that produced heart attacks, he said, adding that some people will take just about any pill to lose weight.

But even though


( NSI) is a much-loved stock, he doesn't recommend it.

It was up 17 points the day before, he said, and he doesn't want investors to dive into this soaring stock at these levels.

In other consumer-centered businesses, he said to be wary of


, even though it just reported a big $10 billion revenue.

He said the stock didn't vault on the news because Amazon had huge expenses. "They are spending a ton of money to get new customers," he said. "We like growth, but we don't want to have to pay for it."



added 600,000 customers in the most recent quarter, and it didn't spend money to get them, Cramer said.

Cramer said that the spending at Amazon shows that business is slowing and that the company is trying to "stoke it." He said that he would take a look at

Barnes & Noble




( BGP) instead.

And in his final consumer thought for the day, he said that choice is the new reality for companies that want to meet consumer demand.

The nation's largest beer company,



, is broadening its beer products after trying for a long time to produce a single beer that would appeal to everyone, Cramer said.

But the company finally realized that this doesn't work in a time of consumer choice, he said. Beer drinkers want small beers, which could be why

Boston Beer


is at a 52-week-high, he added. "Beer drinkers want region and niche beers."

"I will give BUD the fact that it had a good quarter," he said, adding that over the last few years the company has introduced about 20 different beers.

The quest for a universal taste is a thing of the past, Cramer said, using






as examples.

Snack-food performance is best way to judge whether Pepsi is doing well, not soda, he said. So he told listeners that he is going to start looking at companies that meet local and diverse consumer demands.

Cramer's Callers

The first caller wanted to know if Cramer was backing off on



. Cramer said that he had "correctly interpreted a sentiment I felt up until today."

"I have been saying until today that we have had a persistent trend going on for about a week, where a company will report a beautiful quarter and the stock will sell off," he said, calling it the "glass half empty" phenomenon.

"Well today we switched to half full," he said.

This shift has led him to believe that Conexant may not sell off after it reports. He reminded the caller that he is not worried about the company at all, but that his concern has been the way that Wall Street has greeted good earnings reports.

He said that there has been some stagnancy in the tech sector, noting that



reported a great quarter but did nothing on the news. He owns the stock for his charitable trust

Action Alerts PLUS.

He told a caller that in this environment, he would wait for a pullback before buying



. The stock has not fallen, he said, which is why he would wait a little before getting in.

The company will likely see some profit-taking, he said. He would wait for the stock to come down to $31 and put half his position on, and then buy the rest after it fell to $30 or below. The stock was trading above $33.

As for


( TMX), Cramer said that he does not bless buying shares of the largest phone company in Mexico. Even though the stock has a 3% yield, he said that the company is facing too much competition.

A caller wanted to know why



has been taking a beating. Cramer said that when companies like oil-services play

Baker Hughes


are seeing 89% earnings growth, a formerly hot sector like biotech will take a hit.

"There are hotter areas now

than biotech," Cramer said. He added that mutual funds, sensing this shift, are likely pulling massive amounts of money from biotechs and health care and putting it into energy and minerals.

But this will not last forever, Cramer said, adding that there is nothing wrong with the company. "Stick with Gilead ... they have a terrific HIV franchise."

He said that



is falling because "President Bush is focusing on the refining industry, and not in a good way."

He said that people are using Valero as a whipping boy because there is sentiment that refiners are making too much money. Plus, he said that people feel that Bush will be able to push to have new refineries built.

But Cramer said that building new refineries is not a federal issue. "It's a local issue. ... No one wants a new refinery built near them."

He said that Valero is almost done going down, and that he would buy more at this low level because it will run higher again.

Finally, he told a caller that


( PALM) will make a comeback as its Treo takes more market share from the competition.

He put a price target of $30 on the stock, which currently trades below at about $22.75, and said to stick with it.

To see the most recent edition of The RealMoney Radio Recap in its entirety, please click here. This recap is published every day around 3 p.m. ET.

At the time of publication, Cramer was long Qualcomm.

James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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