NEW YORK ( TheStreet) -- "It was like the old days today," Jim Cramer told his "Mad Money" TV show viewers Tuesday. He said what companies said today actually mattered, and for the first time in a long time "investing was fun." Cramer said that all it took was a quiet day in Europe, with no news out of Washington, and the positive comments from individual companies started to shine through the malaise. In particular, the bullish sentiment came from a trucking industry conference stating that business improved from July to August and into Sept. Transportation, it seems, is seeing both volume and pricing strong, and as a leading indicator, this is very good news, he said. But Cramer noted that this news is not only good for FedEx ( FDX) and UPS ( UPS), a stock which he owns for his charitable trust,
European Bank WoesIn a "Know Your Enemy" segment, Cramer outlined in plain English what's going on in Europe and why everyone is so worried. He said when it comes to the European banks, there is the possibility of a Lehman Brothers-style failure and a non-Lehman failure. The former would be a disaster, but the latter is far less worse and indeed, even manageable. Cramer used the French bank Societe Generale, and its slow side toward oblivion, as an example. He explained that in the U.S., banks borrow against depositors' money and their own debt and loan that money out to businesses and individuals. But in Europe, banks also borrow against sovereign debt from countries like Greece and Italy, which seemingly now cannot repay their debts. This fact, coupled with more lax rules in Europe on how far banks can leverage themselves and the lack for stress tests for banks has left many, like Societe Generale, vastly underfunded. Cramer said this will lead to one of two scenarios. The first, non-Lehman style collapse means that banks will have to be bought, merged or semi-nationalized, think AIG ( AIG). In this case, no one really gets hurt and the banks feel the brunt of the pain for the next several years while they recover from their mistakes. The second scenario, ala Lehman, means bankruptcy, wiping out monies owed to countless funds, hedge funds and agencies. Cramer said hedge funds know this, which is why they're likely desperately unwinding their derivative positions with Societe Generale, trying to escape possible annihilation. The problem however, is that these liquidations mean the banks must take the other side of these trades, increasing their need for capital and choking them to death. Cramer said since no one in Europe in talking, and those that are can't be trusted to tell the truth, no one knows just how bad things are with the European banks. And that he said, is why our markets gyrate on a daily basis based on every whisper from Societe Generale and every other European entity.
Off the ChartsIn this chart segment, Cramer went head to head with colleague Tim Collins over the chart of the iShares Philadelphia Semiconductor Index ( SOXX), or SOX, to see if now's the time to buy into the chip making sector. Looking at a chart comparing the performance of the SOX to that of the overall NASDAQ, Collins noted that the SOX has been underperforming the market since March, not once breaking out with any strength, until now. He said the move is still early, but a recent breakout is being confirmed by its relative strength indicator and by the stochastics. Collins noted that the last two times the charts were so bullish for the SOX, it massively outperformed the markets in the months that followed. After trading sideways since Aug, the SOX has completed a reverse head-and-shoulders pattern, indicating a pop to the 430 to 450 level for the index. Cramer said he agrees with Collins that now is the time to buy into the semiconductors, but rather than buy into an index, Cramer said he likes owning individual stocks, the best of the best. He reiterated his buy recommendations on both NVIDIA ( NDIVIA) and also ARK Holdings ( ARMH), two stocks recently featured on "Mad Money."