NEW YORK ( TheStreet) -- "We have at last arrived at DEFCON 2," Jim Cramer warned his "Mad Money" TV show viewers Tuesday. Cramer said that the Currency Shares Euro Trust ( FXE), a key measure of the strength of the euro vs. the dollar, took out the critical $130 level that he warned about Monday, ushering in the possibility of a severe recession. Cramer said that he sometimes struggles to put this market into context, but noted that with the euro continuing to weaken, the possibility of a nationalization of a major European bank is back on the table, as is the possibility, and probability, of big downgrades on the debt of one or more soverign nations. That, in turn, will lead to the likelihood of a severe recession, said Cramer, lowering growth worldwide. "Our markets will fall in that scenario," said Cramer, and that scenario is becoming increasingly more likely. Cramer reiterated his call for investors to raise cash and trim their positions in all stocks except those with high dividend yields. He said the master limited partnerships he's recommended still work, as do the REITs and the food stocks with big yields. Cramer said that investors can take a chance on U.S. retailers like Ross Stores ( ROST) or Dollar General ( DG) as well. Cramer also gave the nod to restaurant names with strong growth, names like Domino's Pizza ( DPZ) and Yum Brands ( YUM), as well as the high-growth domestic oil and natural gas stocks
Tale of Two Deep-Water Drillers"A rising tide does not lift all boats, especially those with holes in them," Cramer told viewers as he compared two deep water oil drillers, Transocean ( RIG) and Ensco ( ESV), a stock which he owns for his charitable trust,
High-End Sales Doing Jolly WellIn the next installment of his "Stocking Stuffers" series, Cramer sat down with Steve Sadove, chairman and CEO of Saks ( SKS), at the company's flagship Fifth Avenue store for the latest read on how the high-end consumer is doing this holiday season. Sadove painted an upbeat picture of Saks' outlook, saying that sales this holiday season are going well, up 9% for the month of November and up 10% so far this year. He said that Saks is seeing strength across the board, but especially in shoes, handbags, jewelry and women's sportswear. Overall, Sadove said that high-end customers are feeling reasonably well and are spending accordingly. When asked about the company's continued turnaround efforts, Sadove said that Saks has closed seven stores this year, but that decision has freed up not only capital and inventory, but also management expertise, to focus on higher growth areas. Saks continues to expand its "Off Fifth" outlet footprint by adding three to five new stores annually. Sadove said that thanks to the Internet, along with the mobility of their clientele, Saks does not need to open a lot of stores in order to be successful. Delving into the outlet concept a little further, Sadove noted that customers come to Saks for the products, the fashion and the service, but outlet customers come for the brands and the deals. Finally, when asked about the company's finances, Sadove said that Saks continues to generate free cash and has little debt, which is why it has chosen to buy back shares of its own stock. He said the company can also offer dividends and increase its capital spending, investing more in its stores as it needs to. Sadove called shares of Saks an "opportunity" for investors to buy stock, as the company has historically seen higher multiples for its shares. Cramer continued his recommendation of Saks.