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"Carnage creates the best buys," Jim Cramer told viewers of his "Mad Money" TV show on Wednesday.

One company, he said, that fits this description is Annaly Capital Management ( NLY - Get Report), which he also owns for his Action Alerts PLUS portfolio. He's liked it since the inception of the show, and is once again re-recommending the stock.

He called Annaly "the king of all mortgage plays," saying it's one of the few lenders that actually buys mortgages with no credit risk. He said the company is flush with cash that it uses to pick through the rubble to buy the best assets.

Mike Farrell, the CEO and president of Annaly, once again appeared on the show to provide an update on the company. "Sometimes you win by not playing," he said, in reference to the company's decision not to get involved with subprime loans.

Farrell said his team spotted problems with subprime loans as early as 2003 and started to play it safe. He said Annaly now trades at a premium compared with its book value, making it the "business investors now want to be in."

Cramer reminded viewers about Annaly's great dividend and said the company is the way to play this environment.

The Best Oil Growth Company

In the second part of his series this week on great Brazilian stocks, Cramer touted Petroleo Brasilero ( PBR - Get Report).

He said Petrobras is not another "joke of an oil company" but rather a serious integrated oil conglomerate that deserves some respect.

Cramer said the oil company has the two things he looks for in an oil company: reserve growth and production growth.

Unlike Exxon-Mobil ( XOM), whose production has remained stagnant, Petrobras plans to increase production 47% from 2006 through 2012.

Petrobras also has incredible reserves with the newly discovered Tupi deep-water oil field that may contain as much as 8 billion barrels. Overall, Petrobras has increased its reserves 42% to 68%.

Cramer said he's still a fan of Anadarko ( APC), Devon ( DVN - Get Report), Apache ( APA - Get Report) and XTO Energy the latter of which he also owns for his Action Alerts PLUS portfolio.

However, Cramer insists Petrobras is the highest-growth oil company in the world.

Huckabee on the Housing Crisis

In an interview, Cramer talked with Republican presidential hopeful Mike Huckabee about the current housing crisis.

Huckabee said he's not a supporter of the proposed $600 federal tax rebate and doesn't think it will stimulate the U.S. economy. Noting he's not a fan of the federal government getting involved with the housing crisis, the former Arkansas governor said he prefers that the lenders step in and work with customers who have defaulted on their loans.

Cramer said more rate cuts are needed as well as the help of the Federal Housing Administration (FHA) to support the loans of those homeowners who are credit risks. Huckabee said that idea made sense to him.

Huckabee said the domino effect of 2 million homeowners losing their homes would have a devastating impact on the economy.

Am I Diversified?

In this segment, viewers called Cramer to find out if their portfolios are right for this volatile market. The first caller's portfolio included Research In Motion , Transocean ( RIG), Corning ( GLW), Thompson Creek Metals ( TC) and EMC ( EMC).

Cramer said there was three of a kind with Research In Motion, EMC and Corning. He recommended replacing two of them with a health care company and defense name to round out the portfolio.

The second caller had

Apple ( AAPL), AT&T ( T), Merck ( MRK), ConocoPhillips ( COP) and US Bancorp ( USB) as their top holdings.

Cramer liked this portfolio, saying "that's what I'm looking for."

The third caller's portfolio had Yamana Gold ( AUY), Annaly Capital ( NLY - Get Report), Corning ( GLW), Sirius ( SIRI) and Triple-S Management ( GTS).

For this portfolio, Cramer simply said "Hallelujah."

Sudden Death

Cramer was bullish on Manitowoc ( MTW - Get Report), Terex ( TEX - Get Report)and Wachovia ( WB).

Lightning Round

Cramer was bullish on Wal-Mart ( WMT), TJX Companies ( TJX), Foster Wheeler ( FWLT), Textron ( TXT), Elan Corp ( ELN), Arch Coal ( ACI), Peabody Energy ( BTU)and Chimera Investment ( CIM).

Cramer was bearish on American Eagle Outfitters ( AEO - Get Report), Ford Motor ( F - Get Report), Mindray Medical ( MR - Get Report), Intercontinental Exchange ( ICE - Get Report)and Intel ( INTC - Get 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 Annaly Capital Management, Foster Wheeler, XTO Energy, Transocean, Corning, EMC and ConocoPhillips.

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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