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"What's it mean when stocks goes higher on the worst of news?" Jim Cramer asked the viewers of his "Mad Money" TV show Thursday.

Cramer said it means that people think the worst is behind us.

Cramer brought up the case of FedEx ( FDX) where he said it's almost impossible to imagine how the stock could rally in the face of a 75% profit decline. Yet instead, investors chose to hone in on CEO Fed Smith's comment that "we do believe we've seen the worst of the declines."

Just three short months ago, said Cramer, the markets would not have believed comments like these from a CEO. What's changed? Cramer said there's now leadership in the markets, and where there are leaders, eventually there are followers as well.

According to Cramer, this market is being led by oil above $50 a barrel, by technology with its upside surprises, and by the banks with their swing towards profitability. The markets are no longer a bottomless pit of despair, said Cramer, and soon the hedge funds and short sellers will also reverse course and join in.

Adding to the virtuous circle are the food and drug stocks, both of which got clobbered today as money continues to move away from those sectors. "People feel like the worst is over," said Cramer, "they're following the leaders."

A Fan of Oil

Cramer said the big story in today's market shouldn't be big bonuses at AIG ( AIG), it should be that oil is back above $50 a barrel.

Cramer said he's a big fan of the oil story, and of BP ( BP - Get Report), a stock which he owns for his charitable trust, Action Alerts PLUS. Cramer said BP is currently trading at the same level it did when oil was at $40 a barrel and that just doesn't make sense.

Cramer said he's also a fan of BP subsidiary BP Prudhoe Bay Royalty Trust ( BPT - Get Report). This master limited partnership pays all of its profits to shareholders, said Cramer, and should also be trading 1 to 1 with the price of oil. Yet while oil is 52% off its highs, Prudhoe Bay is only up 23% from its lows.

Cramer said Prudhoe Bay is a safe bet, with 10 years of proven reserves to back it up. With the industry overall shutting in extra capacity, oil is poised to trend even higher, and both BP and Prudhoe Bay should be popping higher as they play catch up to the price of crude, he said.

Cramer said said he's also still a fan of Permian Basin Royalty Trust ( PBT - Get Report), which he mentioned on Feb. 26, and is up 27%.

Sell Block

In this segment, Cramer found two REITs that are taking the "trust" out of "Real Estate Investment Trust." He said with the help of colleague David Peltier, he's discovered that the dividends of both companies cannot be trusted.

In much the same fashion as his comments last week on Alcoa ( AA - Get Report), he said both Kimco Realty ( KIM - Get Report) and ProLogis ( PLD - Get Report) are in danger of cutting their dividends.

Cramer said Kimco lost 44 cents a share in fourth quarter and needs to issue almost $1 billion in equity to sustain its operations. ProLogis has $260 million worth of bonds it needs refinance in August. Both companies face record high vacancy rates and continued problems in the credit markets.

Cramer said dividend cuts usually indicate other bad things to come. In the case of Alcoa, that company diluted shares with a secondary offering in order to raise much needed cash. Cramer said to stay away from all three of these names.

Outrage of the Day

Cramer said that if there ever was any doubt that the SEC under Christopher Cox was beyond bad, an article today article in the Wall Street Journal should prove it.


For months, Cramer has railed against the SEC and Cox for their failure to enforce practically every law on the books. The article, he said, proves without a doubt that this was the case. According to the article, of the 5,000 complaints the SEC received, only 123, or 2.5%, were ever investigated. Of those, none was ever brought to trial.

Cramer said it was this complete disregard for the rules that allowed naked short sellers to destroy the financials. He said in the days leading up to the Lehman Brothers collapse, 32.8 million shares were sold short, but never delivered. "If this isn't manipulation, I don't know what is," said Cramer.

Cramer said he doesn't want to say "I told you so," but noted that "this stuff is just killing me."

Lightning Round

Cramer was bullish on Whole Foods ( WFMI), Tiffany & Co ( TIF - Get Report), Fluor ( FLR), Hawaiian Electric ( HE), Terra Nitrogen ( TNH)and Apple ( AAPL).

He was bearish on Tetra Tech ( TTEK), Matthews International ( MATW), Xerox ( XRX), International Paper ( IP)and Sun Microsystems ( JAVA).

Check out the latest edition of "Cramer's Take onTop-Searched Stocks" on Stockpickr.

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

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At the time of publication, Cramer was was long BP.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of 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, 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 is related to the specific opinions expressed by him on "Mad Money."

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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 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, 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.