Cramer's 'Mad Money' Recap: Oct. 16

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In the daily struggle to figure out what's driving the market, Jim Cramer told viewers of his "Mad Money" TV show Thursday that the fundamentals of the world economy and hedge fund industry are the two forces pushing stocks down.

While the global economic situation is unfolding, Cramer focused on the hedge fund industry as an opportunity in the making. He said hedge-fund selling is occurring at a record pace, with $43 billion in redemptions alone in September.

With that gigantic amount of selling pressure, Cramer said the market is littered with broken stocks, but not necessarily broken companies.

Cramer noted consumer products maker Kimberly Clark ( KMB) as an example of a broken stock that deserves to be higher.

The company's products are not economically sensitive, but since the company is part of the S&P500, its stock price has plummeted, pushing its dividend yield to very attractive levels.

With Kimberly's stock higher today on an upgrade from Goldman Sachs ( GS), Cramer recommended waiting on a pullback before pulling the trigger.

"Never pay the market price, let the stock come to you," he told viewers. He recommended buying incrementally on weakness and taking advantage of the dividend yield while the market is determining its bottom.

Cramer: Know When to Cut Your Losses

One on One With Boone Pickens

In a special interview, Cramer welcomed legendary oil and gas tycoon Boone Pickens to the show to discuss his campaign promoting energy independence for America.

Pickens said he doesn't understand why his plan, which calls for a$1.2 trillion investment to convert 20% of the country's energy supply to wind power and the use of natural gas as a bridge fuel, is not gaining more traction with the presidential candidates. "They just don't get it in Washington," he said.

Pickens said that the American people, however, do support the plan. He pointed his Website, pickensplan.com, has attracted more than 10 million visitors and has a mailing list of 1.25 million people.

Asked if lower oil prices make implementing the plan harder, Pickens said that lower oil prices don't change the fact that 65% to 70% of America's energy comes from overseas.

Stockpickr

He called the huge level of dependence on foreign oil a "real security issue" for the country. He reminded viewers that for every gallon of domestic natural gas they use, the country imports one gallon less of foreign oil.

Pickens said he still supports Clean Energy ( CLNE), a provider and operator of natural gas fueling stations and a big proponent of wind power as a clean, renewable and domestic energy source.

Day of Reckoning

On Thursday's "Sell Block" segment, Cramer sentenced AIG ( AIG) to a life sentence without parole. He said Oct. 21 will be a day of reckoning for the once great insurance company.

BankingMyWay

On that date, Cramer noted that the companies who wrote insurance policies against the debt of the now defunct Lehman Brothers, will be forced to pay up. He said that thanks to failed regulation by the Securities and Exchange Commission, the $158 billion worth of Lehman debt was allowed to be insured for $365 billion.

Cramer said he believes that AIG, which was given a gracious bailout by the federal government, is likely to be on the hook for most of this egregious amount. He said it's outrageous that the company's management could have allowed it to take on such an incredible amount of debt.

Cramer took further issue with the company's management and board of directors who, despite the recently approved federal bailout, still allowed $440,000 worth of corporate retreats, golden parachutes and millions of dollars in bonuses for its executives.

"How could this happen," Cramer asked?

Mad Mail

In this segment, Cramer told a viewer that Wal-mart ( WMT), a stock which he owns for his charitable trust Action Alerts PLUS, is the only retailer he likes in this market.

Cramer told a second viewer that he's still a buyer of Tootsie Roll ( TR).

Lightning Round

Cramer was bullish on ConocoPhillips ( COP) and CVS Caremark ( CVS).

He was bearish on E-House (China) Holdings ( EJ), Garmin ( GRMN), Key Energy Services ( KEG)and CBS Corp ( CBS).

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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 Wal-Mart.

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.

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