Cramer's 'Mad Money' Recap: Financial Innovation Kills Small Investors

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NEW YORK ( TheStreet) -- We've seen the enemy and it's not who you think it is. That's what Jim Cramer told his "Mad Money" viewers Monday as he railed against the true enemy of individual investors' net worth: financial innovation.

Cramer said he's a big fan of innovation in other areas such as technology, where Apple ( AAPL), a stock he owns for his charitable trust, Action Alerts PLUS , reigns supreme, and also in health care, where countless new drugs save lives daily.

But when it comes to your money, Cramer said financial innovation and engineering is not our friend. Whether it was the financial meltdown of 2008, the flash crash of 2010 or most recently the meltdown of J.P. Morgan Chase ( JPM) and the botched Facebook ( FB) initial public offering, financial engineering has taught us one thing, said Cramer -- it destroys nest eggs and the reputation of the markets.

Cramer called the swamped computers and botched trades surrounding the Facebook IPO a big black eye for the Nasdaq, a market that prides itself on its technology. Then there's J.P. Morgan, the bank that speculated using instruments so complex that even those who created them didn't see the risks until the whole thing blew up.

Cramer said that individual investors are not important enough nor powerful enough to stop these "advances" in investing. The banks' pull in Washington will ensure that lawmakers never question these tactics thoroughly, he said, which is a shame for those little guys who continue to get hurt by them.

'Udderly' Delightful Dean

With U.S. markets continuing to be held hostage by the woes of Europe, Cramer said investors need to stick with stocks that offer domestic security. When it comes to domestic-oriented stocks, nothing is more domestic than Dean Foods ( DF), our country's largest purveyor of milk and dairy products.

According to Cramer, Dean Foods has transformed itself from an "udder" disaster to a world-class food company. It delivered a 10-cent-a-share earnings beat on a 5.4% pop in revenue, with increased operating margins to boot. Dean is also cleaning up its balance sheet and enjoying declining dairy costs, which are expected to drop by 20% in 2012.

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