Jim Cramer's 'Mad Money' Recap: On the Brink of Disaster

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NEW YORK ( TheStreet) -- Don't believe that we won't go over the deadline, Jim Cramer warned on "Mad Money" Tuesday. Cramer said the possibility of a debt default is still in the cards and it would be catastrophic if it actually happened.

The markets seemed to wake up today as ratings agency Fitch put U.S. debt on a credit watch, the first step towards lowering our nation's AAA credit rating. Yet, despite the warning, Cramer said some in Washington still believe that a default is not a big deal. The Senate gets it, he said, but the House is still acting like anarchists, defiling the legacy of a nation that even during the Revolutionary and Civil wars took great lengths to make sure that a promise by the U.S. was beyond reproach.

Isn't there another way for Congress to win? Cramer asked. He's not a fan of out-of-control government spending either, but surely there has to be another way to make a point and curb entitlements. "I'm astounded at the recklessness," Cramer continued, astounded that anyone would risk our nation's status as the bedrock for the global economy to make a point.

That's why Cramer continued to urge caution as the next few days play out.

Off the Charts

Some stocks even Washington can't crush, Cramer told viewers, as he went head to head with colleague Tim Collins over the chart of Whole Foods Market ( WFM) in his "Off the Charts" segment. Whole Foods is just off its 52-week high, noted Cramer, a fact that may scare some investors, but is actually a sign of tremendous strength.

Collins noted two bullish trends in the daily chart of Whole Foods. He said the flag pattern created by the stock's rapid rally, then sideways trading in a narrow range is a very bullish sign. Additionally, Collins noted the MACD momentum indicator is indicating a bullish crossover, which makes him like the stock even more as its likely at the beginning of another big rally.

Collins also pointed out three big volume spikes in Whole Foods this past May, August and September, all of which were consolidation periods worth buying. Turning to the weekly chart, Collins also said the usually bearish dome pattern from March through August was followed by a sharp rise to the upside, once again proving that the bulls in the stock just cannot be stopped.

Cramer said he agrees with Collins, saying that any market-induced pullback would be a good time to buy. He also called out Sprouts Farmers Market ( SFM), a fresh-faced organic IPO from a few months ago, as another way to play the space on continued Washington weakness.

Executive Decision: Patrick Doyle

In the "Executive Decision" segment, Cramer spoke with Patrick Doyle, president and CEO of Domino's Pizza ( DPZ), which today delivered a penny-a-share earnings miss on in-line revenue, news that sent shares plunging 5.7%. Despite today's loss, however, shares of Domino's are up 540% since Cramer first got behind the stock in Jan 2010.

Doyle said he was pleased with the quarter, noting that earnings at the store level have risen five years in a row. U.S. store growth is also starting to pick up, which is great news for Domino's employees because near 90% of franchisees start off as hourly workers.

Doyle said Domino's continues to provide quality products and a great digital ordering experience. He said the chain has no interest in running gimmick promotions every few weeks, especially given it is already taking market share from both local and regional players as well as some of the national names.

When asked about digital ordering in particular, Doyle said 40% of all orders now some in digitally and the more who switch from phone to online or mobile, the better because the process is faster and more accurate.

Turning to Europe, Doyle said his company still sees slow improvements in the region.

That was enough for Cramer to once again reiterate his buy on the stock. He said he's not backing away from Domino's.

Lightning Round

In the Lightning Round, Cramer was bullish on Royal Bank of Scotland ( RBS) and Illumina ( ILMN).

Cramer was bearish on 1-800-Flowers ( FLWS) and Walter Industries ( WLT).

Executive Decision: Tom Rogers

In the "Executive Decision" segment, Cramer sat down with Tom Rogers, president and CEO of TiVo ( TIVO), a $12 stock that sits with almost $8 a share in cash on its books. TiVo currently trades at just 16 times earnings despite a 48% long-term growth rate.

Rogers reminded viewers that TiVo invented the DVR and now it's reinventing TV with its latest generation of products that integrate broadband content into a unified experience that can now be streamed to any screen, anywhere. He called the new offerings "something special" that only TiVo can provide.

Rogers also noted that unlike years past, where the company was propped up by legal victories defending its extensive patent portfolio, TiVo is now sustainably profitable, which has allowed its stock to stabilize and a new class of investors to invest.

Cramer said Rogers' last point is the one that matters because investors can now invest in TiVo based on its earnings and growth rather than when the next legal victory or defeat is expected in court.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer pondering how, with the debt ceiling looming, a stock like Tesla Motors ( TSLA) could still be up 443% for the year and -- just this week -- see another analyst upgrade.

While it may seem there's no rhyme or reason to the stock's sky-high valuation, Cramer said the valuation actually makes sense if you look at the company's "out years," or what it could potential year a few years from now. Based on that analysis, Tesla could grow to sell 300,000 to 500,000 cars by 2017, which puts its current multiple at just 30 times earnings.

A lot of things would have to go right for Tesla to achieve those numbers, Cramer admitted, but it's easy to see how starry-eyed investors could get. For the time being, however, Tesla trades on buzz, the positive publicity the company is getting from, well, just about everyone. As long at the positive press keeps flowing in, so, too, will investors' money, he concluded.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had no position in stocks mentioned.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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