Cramer's 'Mad Money' Recap: Sept. 19

Click here for an archive of Jim Cramer's Mad Money recaps.


Investors should look to take a hard look at their portfolios and make some sales tomorrow after today's huge rally, Jim Cramer told viewers of his "Mad Money" TV show Thursday.

Cramer advised selling into any future rallies to free up cash for the declines that are most certainly ahead. "Get into position for the next big sale," he told viewers.

He said today's 410-point rally in the Dow was entirely due to rumors that the federal government is considering a resolution mortgage trust to begin buying up bad home loans in an effort to rescue the U.S. banking system.

Cramer said he first floated this very idea on NBC's "Today Show" back on July 16, but said it's only one part of "the Cramer plan" for saving the markets. He said a resolution trust will not only put a floor in the housing market but is far more effective and inexpensive than the current plan of nationalizing entire companies.

He said the Federal Reserve needs to cut interest rates to 1% to spur growth and add liquidity into the markets. He again urged the re-instatement of the uptick rule, which is designed to prevent relentless short-selling of companies. And finally, Cramer said regulation is needed to stop the credit default swap activity that companies have been engaging in.

All of these things, said Cramer, are what the markets need to finally put the housing and financial crisis behind us.

Cramer: No Recovery Without Confidence

A Turn in Housing

Cramer talked with Richard Dugas, president and CEO of Pulte Homes ( PHM), about the state of the housing market.

Stockpickr

Dugas said he still feels there's a ways to go before the housing market hits bottom. He said that while the situation is improving, there is still a lot of excess home inventory that needs to be worked off. On the upside, Dugas confirmed that deposit cancellation rates, which peaked in 2007, have moderated so far in 2008.

For would-be homeowners, Dugas said now is a great time to buy a home, citing low mortgage rates and depressed home values that make owning a home more attractive than renting.

When questioned about Pulte's financials, Dugas said his company currently has one of the best balance sheets in the industry, with over $1 billion in cash.

With the housing market still underselling the growth rate and pent-up demand for homes building, Cramer and Dugas agreed that now may be a great time to buy a home and shares of Pulte Homes.

The New Banks

"The market is speaking and I hear it," said Cramer in his "Sell Block" segment.

He said that the markets are clearing saying that investment banks, like Goldman Sachs ( GS), a stock which he owns for his charitable trust Action Alerts PLUS, just cannot be owned, while other companies, like General Mills ( GIS), another Action Alerts name, and Heinz ( HNZ) are the place to be.

BankingMyWay

According to Cramer, the time has come to put the investment banks, like Goldman, on the back burner, and instead focus on the deposit banks, such as Wells Fargo ( WFC), US Bancorp ( USB), Bank of America ( BAC), Wachovia ( WB) and JPMorgan Chase ( JPM), which he also owns for his Action Alerts PLUS portfolio.

Ever since the takeover of Fannie Mae ( FNM) and Freddie Mac ( FRE), the confidence in the financials has been shattered, with the markets now clearly favoring the more stable food names and deposit banks, said Cramer.

Cramer said even names like Tootsie Roll ( TR), which is now on the SEC's watch list of heavily shorted names, will likely see a pop as the shorts vacate in droves.

Mad Mail

In this segment, Cramer told a viewer that he expects Cal-maine Foods ( CALM) to rise now that it's on the SEC's list of heavily shorted names.

He said he still likes Panera Bread ( PNRA) more, but thinks that any profitable company on the SEC's list should do better going forward.

He told another viewer that he's still a believer in Clean Energy ( CLNE) as a speculative stock.

Lightning Round

Cramer was bullish on Frontline ( FRO), Nordic American Tanker ( NAT), Sears Holding ( SHLD), Southern Peru Copper ( PCU), Walgreens ( WAG) and Apple ( AAPL).

He was bearish on Regions Financial ( RF)and ING Group ( ING).---

P/>Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

Read more of Cramer's Mad Money Lightning Round insights.

For "Mad Money" performance statistics and other links, check out Mad Money stats

At the time of publication, Cramer was long Goldman Sachs, General Mills and JP Morgan Chase.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com 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 TheStreet.com, 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 TheStreet.com. 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 TheStreet.com, 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.

More from Jim Cramer

The Trouble With Trump's Tariffs: Cramer's 'Mad Money' Recap (Friday 6/22/18)

The Trouble With Trump's Tariffs: Cramer's 'Mad Money' Recap (Friday 6/22/18)

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Jim Cramer: Some Industrials Stocks Are Becoming Great Values

Jim Cramer: Some Industrials Stocks Are Becoming Great Values

Jim Cramer Reacts to Toni Sacconaghi's Latest Tesla Note

Jim Cramer Reacts to Toni Sacconaghi's Latest Tesla Note

Howard Schultz to Jim Cramer: Starbucks Stock Is Cheap and Undervalued

Howard Schultz to Jim Cramer: Starbucks Stock Is Cheap and Undervalued