Cramer's 'Mad Money' Recap: It's Not 2008 (Final)

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NEW YORK ( TheStreet) -- "Repeat after me, we are not Europe and it's not 2008," Jim Cramer told the viewers of his "Mad Money" TV show Monday after yet another gut-wrenching day on Wall Street.

Cramer said with so many comparisons being made between the U.S. and Europe and 2008 versus today, he highlighted the reasons why today's markets are totally different.

"The U.S. is not Europe," Cramer reiterated. He said that first of all, we have one currency, unlike Europe's multiple currencies. Second, Cramer noted that the U.S. has only one central bank, unlike Europe. Thirdly, Cramer said that the U.S. has the capability to act quickly, much unlike Europe who has been dragging their crisis on for month after month.

Fourth, Cramer said that the U.S. has a mix of natural resources at its disposal to help it out of economic weakness. And fifth, unlike the U.S., the Europeans are still in total denial about the size and scope of their crisis.

So why is today not a replay of 2008? Cramer said three reasons. First, corporate balance sheets have regained a solid footing. Second, earnings are holding up and multiples sit at just 10 times earnings, compared to over 30 times earnings before the crash in 1987. Lastly, Cramer said that the markets now have a support systems in place to prevent another 2008 panic.

Cramer said in no uncertain terms that Greece needs to be resolved, even if that means by default. He said that Europe's multiple political agendas are crippling the markets, but the bottom simply won't come until a collapse in Greece finally happens.

Poised for the Times

In the "Executive Decision" segment, Cramer spoke with Tony Alexander, president and CEO of FirstEnergy ( FE), a utility that's returned 90% to shareholders over the past decade when factoring in reinvested dividends.

Alexander noted that with FirstEnergy's fleet of power plants, including nuclear, renewable, natural gas and clean coal generating facilities, are poised to fair well against ever-tightening EPA regulations. He said the company anticipates spending only $2 billion to $3 billion on upgrades over the next few years, well within what the company's balance sheet can support.

When asked about the company's dividend, Alexander said that FirstEnergy's dividend remains of paramount concern and a focus for the company.

Alexander also noted that with the Utica and Marcellus shale formations within the company's service area, FirstEnergy is very bullish on natural gas. He said that generating capacity will most certainly shift towards the clean, plentiful fuel source as dirtier options like coal become harder and harder to maintain.

Finally, when asked about the economic picture in FirstEnergy's service area, which is mainly the mid-atlantic. Alexander said that while industrial levels are not back to 2007 levels, they are improving and there are several positives, including the automotive and steel sectors as well as the continued development of natural gas.

Cramer said that a company like FirstEnergy is exactly what investors need in their portfolios during times like these.

Playing Good Defense

"In this market, you need stocks that play a good defense," Cramer reminded viewers, as he highlighted Microchip Technology ( MCHP), one of the few technology companies with a sizable dividend yield.

Cramer explained that Microchip manufactures micro-controllers for everything from autos to appliances, but unlike many of the highest-tech chips, micro-controllers don't require billions of dollars of new equipment every year. Instead, Microchip manufactures its own chips using older technology and makes a fortune doing it.

Microchip last reported on Aug. 4 with a penny-a-share earnings beat on a bump in revenues of 4.9%. The company reported inline guidance however, sending shares near its 52-week lows with the broader markets.

That said, Cramer noted that shares of Microchip, which now trade at 10 times earnings when you back out the company's $8 a share in cash, will likely fall even lower with the markets. Cramer said he'd wait until shares yield 5% before beginning to build a position.

Risky Dividend

In uncertain times, you need to own certainty, Cramer told viewers, as he followed up on Veolia Environ ( VE), a company that stumped him during an earlier show. Cramer said that while Veolia, an environmental water and waste management company, currently pays a hefty 12.5% dividend yield, the company's dividend is a huge red flag and one that should be avoided.

Veolia is currently a battleground stock, explained Cramer, with Citigroup ( C) rating the stock a buy, while Morgan Stanley ( MS) has a sell rating on Veolia shares.

Veolia has lost 22% of its value since the company reported a strategy shift in its strategy on Aug. 4. The company is currently a pastiche of over 2000 different companies all under one roof. After struggling to manage, let alone integrate, these entities that reside in 77 countries, Veolia decided to focus on just 44 countries and sell the other assets.

But Cramer noted that Veolia relies heavily on Europe, and suffers from many of the same problems as the continent does, including little clarity, being locked into unprofitable contracts and unable to control its costs.

Cramer said Veolia will likely see a dramatic cut in its dividend, which is extremely risky for its stock, which trades at a premium to the market. He said Veolia would be a decent environmental play if the company had its act together, but this market will not reward uncertainty.

Lightning Round

Cramer was bullish on EMC ( EMC).

He was bearish on Apple ( AAPL), Visteon ( VC), Frontier Communications ( FTR), SandRidge Energy ( SD) and Ralcorp Holdings ( RAH).

Closing Comments

In his "No Huddle Offense" segment, Cramer said "get it over with already," referring to Greece's default. Cramer said the markets secret want to rally, but that rally will come until Greece is resolved.

Cramer said the European banks have all said they have enough cash on hard to weather the storm, so "who needs more time?" He said doing anything other than letting Greece default is just plain silly given the effect they're having on the worlds' economies.

The Greek bonds need to be restructured, Cramer said pointedly, "get it over with."

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

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At the time of publication, Cramer was not long any stock mentioned.

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