Cramer's 'Mad Money' Recap: Playing Defense Against Obama's Banking Overhaul (Final)

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NEW YORK ( TheStreet) -- "The markets would have been up huge on earnings today," Jim Cramer told the viewers of his "Mad Money" TV show Thursday, "if it weren't for President Obama once again taking aim at the banking system."

Just like in the past, Cramer said the markets have sent Washington a message that increased regulation is not welcome on Wall Street.

Cramer said Obama's proposed regulations do nothing but hurt any company that needs credit. The big investment banks were not responsible for the crisis, he concluded, it was the mortgage brokers and the insurers like AIG ( AIG).

But with Obama's relentless assault on the big banks, Cramer said investors will need to play defense, investing in safe companies outside of the president's radar. He said stocks like General Mills ( GIS), Procter & Gamble ( PG) and Bristol-Myers Squibb ( BMY), the latter two stocks which he owns for his charitable trust, Action Alerts PLUS .

Cramer said other defensive names work as well, companies like Coca-Cola ( KO) and rival Pepsico ( PEP), another Action Alerts Plus name. He also said investors need to look towards foreign stocks for safety, as well as towards long-term themes like the mobile Internet tsunami.

"Let's not take any chances," said Cramer, "we need to steer clear of the banks for awhile."

Rewarding Shareholders

In the "Executive Decision" segment, Cramer spoke with Richard Kinder, chairman and CEO of Kinder Morgan Energy Partners ( KMP), one of Cramer's favorite master limited partnerships and a solid performer in a down economy.

Kinder said his company has been able to deliver great results from its "toll-road" business model, where the company gets paid regardless of the price of the underlying commodity. He said Kinder Morgan makes money of everything from jet fuel to gasoline, natural gas to ethanol.

Kinder said the most important metric for the company is its distributed cash- flow per unit, a metric of how much money the company returns to its shareholders via its dividend. He said that in the company's last quarter, cash-flow per unit shipped was $4.25, of which $4.20 was paid out to shareholders.

When asked about the company's longer-term plans, Kinder said his company is betting on a number of technologies, including clean coal, ethanol and natural gas. Kinder endorsed natural gas as the most likely bridge fuel to a sustainable and eco-friendly future. He said the new technology in natural gas is safe, cost efficient and good for the environment.

Cramer continued his support for the company and for Kinder. "The man is money," he concluded.

A Formula for Success

Cramer sat down with Ronald Shaich, chairman and CEO of Panera Bread ( PNRA), a stock that soared over $5 a share today on a positive earnings pre-announcement. Panera shares has risen 51% since Cramer last recommended the stock on July 23.

Shaich said Panera's growth and performance comes from making a difference for their customers. He attributed the company's success to the totality of the Panera experience: great food, served by good people, in a positive environment.

Shaich also said that this is the time to grow, when real estate prices have plummeted and construction costs are down 20% from their peak two years ago. He said that customers also want food they respect, which is why the company is re-doubling their emphasis on soups, salads and vegetarian choices.

Shaich said that Panera is so much more than just a lunch destination. He said the company has expanded into breakfasts with fresh breads and bagels and is also a gathering place in the evenings. Shaich said Panera runs the largest free WiFi network in the U.S., and customers take notice.

Cramer continued his buy recommendation of Panera.

Chip Strength

Cramer spoke with Xilinx ( XLNX) president and CEO, Moshe Gavrielov. Xilinx, in addition to trending higher today, is up 18.5% since Cramer added it to his "Mobile Internet Index" on Aug. 11.

Gavrielov said his company's strength is being fueled by strength in all of its market segments and geographies. He said revenue for the company's most recent quarter was up 24% thanks to continued growth in its new product offerings.

Gavrielov also characterized Xilinx' growth as part of a secular transition to products that require more bandwidth. He said Xilinx has over 10,000 customers around the world who use the company's programmable devices for a whole host of unique applications.

When asked about the company's dividend, Gavrielov explained that since the company has consistently generated free cash, it felt is was only fair to share that cash with shareholders. Xilinx currently yields 2.5%.

Finally, when asked about China, Gavrielov said the country is still aggressively investing in infrastructure projects, from high-speed trains to wireless, and just about all of them require more Xilinx chips.

Lightning Round

Cramer was bullish on Google ( GOOG), Wal-Mart ( WMT), Intel ( INTC), Sprint Nextel ( S) and Electronic Arts ( ERTS).

He was bearish on Advanced Micro Devices ( AMD), Sallie Mae ( SLM), MetroPCS Communications ( PCS) and Gamestop ( GME).

-- Written by Scott Rutt in Washington D.C.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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For more of Cramer's insights during the Lightning Round, click here .
At the time of publication, Cramer was long Procter & Gamble, Bristol-Myers Squibb, Pepsico.

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