Cramer's 'Mad Money' Recap: Proceed Cautiously on Health Care Reform Vote (Final)

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NEW YORK ( TheStreet) -- With the markets teetering over the prospects of health care reform, a subdued Jim Cramer told the viewers of his "Mad Money" TV show Monday to proceed with caution ahead of the vote.

"Don't get blindsided," he said. According to Cramer, the big money managers he spoke with vary greatly in their opinions of whether health care reforms will pass, and how the markets will react.

He said while some are predicting the bill's demise and congressional gridlock, others see passage of health care reforms as a weight lifted off the markets' shoulders and something to celebrate. Still others, said Cramer, feel health care doesn't even matter because the economy is strong.

Cramer said he now believes that health care reforms will pass in Congress, giving President Obama new energy, and making the bull markets harder to find. He said he's been scaling back his positions in his Action Alerts PLUS charitable trust as a preemptive defensive move.

According to Cramer, it will be shareholders who will likely pay for many of Obama's new initiatives, as industry after industry comes under fire. He said that stocks without dividend protections and stocks that had big runs should be scaled back ahead of this historic vote.

As for the winners, Cramer said he remains bullish on gold stocks and foreign stocks but he said there will be far fewer bulls out there going forward.

Looking Good

In the "Executive Decision" segment, Cramer spoke with Jonah Shacknai, chairman and CEO of Medicis Pharmaceuticals ( MRX), makers of the Botox alternative, Dysport.

Shacknai said that while larger plastic surgery procedures have been weak throughout the recession, smaller, non-invasive procedures, like the kind Medicis offers, have been flat to slighter higher.

He said that once the economy recovers more, he expects the non-invasive market to boom, as more and more people can afford these safe and effective procedures.

When asked about the company's Dysport product, a Botox alternative, Shacknai said the product has been very well received and the Medicis is offering a $75 rebate for anyone who tries the product, but doesn't like it.

Despite the success of Dysport, Shacknai said that Medicis continue to diversify its product line between aesthetics and acne products, where it has several patented drugs on the market.

He said that Medicis plans to continue doing between 10 and 15 smaller acquisitions a year, but is keeping cash on the books for larger opportunities as they arise.

Medicis also has a product called LipoSonix, a non-invasive, weight-loss treatment that's currently available in Europe and Canada. Shacknai said LipoSonix will be applying for FDA approval in the U.S. later this month.

Cramer said that Shacknai has always made him money, and he continues to recommend the stock.

Pure Natural Gas Play

Cramer spoke with Larry Nichols, chairman and CEO of Devon Energy ( DVN), which last year decided to sell its international and Gulf of Mexico assets to become a pure play on North American natural gas.

Nichols said that he has 100% confidence in his decision to bank on domestic natural gas. He said while Washington may not be on board with the fuel as of yet, the industry has made tremendous progress in getting the word out and swaying public opinion.

Nichols said that while the Marcellus shale region in Pennsylvania is an attractive place to be, Devon will continue to grow its production in the Barnett shale region of Texas, as well as at the company's other locations. He said that Devon has the ability to drill tens of thousands of new wells at its existing locations.

When asked about short-term weakness in the price of natural gas, Nichols said that low prices are an opportunity for investors to take advantage of. He said while oil is at a price where it should be, natural gas is not, and the market will self-correct as soon as production drops and stabilizes prices.

Finally, when asked about the prospects for more natural gas vehicles in the U.S., Nichols said that even without gas powered cars, the demand from utilities alone for power generation is enough to send natural gas stocks markedly higher.

Cramer said he's sticking with Devon, whose shares are up 587% over the last 15 years.

Outrage of the Day

Cramer sounded off against bailing out the home builders, something that was secretly done as part of the homebuyer tax credit extension that passed last year.

Cramer said this bill essentially provided a bailout for the worst homebuilders that is deteriorating the housing market and leading to increased foreclosures. He said that as home prices struggle to recover, the home builders can now build more homes, keeping prices depressed.

Cramer said the extent of these government handouts only recently became apparent, with Hovnanian ( HOV) receiving $291 million, KB Homes ( KBH) receiving $101 million, Pulte Homes ( PHM) getting $800 million, just to name a few.

Cramer said the country needs fewer homes, not more, and artificially allowing even the worst home builders to survive is a grave mistake. "These companies are not too big to fail," he said, "they're too weak not to fail!"

Lightning Round

Cramer was bullish on Oracle ( ORCL), L-3 Communications ( LLL), FirstEnergy ( FE), Bank of America ( BAC) and Nucor ( NUE).

He was bearish on Force Protection ( FRPT), Southern Co ( SO), CapitalSource ( CSE) and United States Steel ( X).

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

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At the time of publication, Cramer was long Bank of America.

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