Jim Cramer's 'Mad Money' Recap: Blame China, Greece for the Meltdown

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.


NEW YORK (TheStreet) -- Investors won't find the reason for Thursday's market meltdown on Wall Street or Main Street, Jim Cramer told his Mad Money viewers Thursday. Those answers will be found overseas.

Cramer explained that the news from America was actually very positive today, with jobless claims the lowest since 2007 and the smallest federal budget deficit in ages. Yet, despite this good economic news, bond prices still raced higher, sending interest rates sharply lower.

There wasn't any earnings news that would've sent stocks plummeting, Cramer continued. Rite-Aid (RAD) reported a great quarter, sending shares up 8%, and Bed Bath & Beyond's (BBBY) lackluster numbers weren't important enough for the markets to notice.

That only leaves overseas, particularly China and Greece, to explain today's meltdown. Indeed, a continuing parade of horrible numbers from China continued Thursday, and a bond offering in Greece was most disappointing.

That news sent investors searching for yield, said Cramer, which explains why a great company with no dividend, Chipotle Mexican Grill (CMG), got crushed while a not-so-good company with a yield, McDonald's (MCD), was able to rally.

So while everything went right in America, Cramer concluded, everything was going wrong in the rest of the world -- and that apparently makes all the difference.

Dimon's 'Must Read'

Just about everyone has become a "risk expert" now that the mistakes of 2008 are finally fading into history. That was Cramer's takeaway after reading JPMorgan Chase (JPM) CEO Jamie Dimon's remarks in his company's annual report.

Cramer said that JPMorgan, like all financials, now sees risk behind every rock in our post-recession landscape. While Dimon's comments overall were upbeat, they were also riddled with warnings against making risky investments again.

Cramer called Dimon's remarks a "must read" for all investors because it's a perfect reminder in today's market that the mistakes of the past could indeed happen again, even with the mountain of new regulations aimed at preventing them.

Greed will forever be a part of our markets, even if we've already seen the dangers and those dangers are now just behind us, Cramer concluded.

Best For Your Buck

For the next installment of his "Best For Your Buck" series, Cramer offered up his pick for the best stock trading in the $10 to $50 range. That honor went to GT Advanced Technology (GTAT), a stock that's up 84% so far in 2014.

Cramer said GTAT should only be bought for speculation, which means investors mustn't buy all at once and must use limit orders to avoid chasing shares higher.

What makes GTAT so exciting? The company was primarily a solar and LED equipment supplier up until a few months ago, when the company's sapphire technology caught the eye of Apple (AAPL), which already uses sapphire, the second-toughest material on Earth behind diamonds, for its fingerprint readers and camera lenses.

Apple offered GTAT a $578 million loan five months ago, presumably to allow the company to significantly ramp up its sapphire production with a new plant and supply Apple with more sapphire for its products. If that happens, Cramer said shares of GTAT would be worth significantly more than they trade today as 2014 could become the year the company becomes profitable.

Mr. Volatility

In a special interview, Cramer sat down with Robert Whaley, creator of the CBOE Market Volatility Index or the VIX, as it's known by many, and an adviser to AccuShares, which is close to introducing a new exchange-traded fund based on the VIX.

Whaley explained the VIX is simply a measure of the volatility in the market, which is largely based on investor fear and uncertainty. However, all of the ETFs currently based on the VIX are correlated to the trading of futures indices, which slowly lose value over time as they are reset daily.

Whaley noted that some VIX-based ETFs have lost 99% of their value since their inception, and certainly don't trade along with the VIX as novice investors would expect. That's why he's been working with AccuShares to offer a new ETF, one that is based on the VIX and behaves as investors would expect.

Cramer explained that all of the ETFs available today are deceptive in what they actually do, but the one being developed by AccuShares and Whaley will not be.

Lightning Round

In the Lightning Round, Cramer was bullish on Service Corp. (SCI) and Magnum Hunter Resources (MHR).

Cramer was bearish on BioMarin (BMRN), Carriage Services (CSV), Swift Energy (SFY) and Sangamo BioSciences (SGMO).

Executive Decision: Charif Souki

For his "Executive Decision" segment, Cramer sat down with Charif Souki, chairman, president and CEO of Cheniere Energy (LNG), a stock that's up 25% since Cramer last featured the company just three months ago.

Souki explained it takes years to plan an LNG export facility like the two Cheniere currently has under construction, and years more to actually build one. That's why even if America wanted to assist Ukraine with its energy needs the infrastructure is still years away.

That time to completion plays to Cheniere's favor, however. Souki said he doesn't expect any competition until 2018 or 2019 at the earliest. When asked about the confusion surrounding that competition, Souki explained Cheniere always has all of its first permits, which puts it far ahead of the competition.

Souki said the oil and gas markets are never standing still. While just a few years ago 80% of American drilling was for natural gas, now 80% of production is for oil, which has created a tremendous backlog in West Texas Intermediary and is sending producers looking for new markets to sell their products.

Cramer told investors to read the reports from Cheniere's recent analyst day and do the homework so they understand what the company is really all about.

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

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

-- 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 a position in AAPL and JPM.

If you liked this article you might like

Dow Trades Lower as Walmart Shares Fall Sharply, S&P 500 Rises

Dow Trades Lower as Walmart Shares Fall Sharply, S&P 500 Rises

Inside Albertsons' Humble Beginnings: Video

Inside Albertsons' Humble Beginnings: Video

Rite Aid Surges After Albertsons Plans to Buy Part of Drugstore Chain

Rite Aid Surges After Albertsons Plans to Buy Part of Drugstore Chain

Blame Amazon for Walmart's Surprising 2018 Outlook

Blame Amazon for Walmart's Surprising 2018 Outlook

Walmart, Home Depot, Rite Aid, Elon Musk and KFC - 5 Things You Must Know

Walmart, Home Depot, Rite Aid, Elon Musk and KFC - 5 Things You Must Know