Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Tuesday December 2.
"Enough with the Hysteria" Citigroup (NYSE:C)
While things are bad, Cramer advised investors to avoid doom and gloom scenarios and comparisons of the current situation to the Great Depression; "Enough with the hysteria," he said. While the unemployment number is expected to be high, China is still in the doldrums, other nations have yet to make rate cuts and commercial real estate is in trouble, Cramer says today's problems are a far cry from the 33% unemployment and bank failures of the 1930s. Cramer is pleased with the government's handling of Citi and feels it is a model for reviving other financial institutions. FDR's reforms created the FDIC, Social Security, unemployment insurance and the Federal Housing Authority to cushion financial blows, Cramer added. However, Cramer doesn't agree that this is a time to be overly bullish, but would focus on defensive stocks with good dividends.
Cramer for SEC Chairman
Cramer submitted his humble request to the President-elect to make him SEC chairman. If appointed, Cramer would make the following reforms.
Investigate bear raiders. Cramer would look for evidence of wrongdoing that brought down Lehman Brothers and other financial institutions.
Reinstate the Uptick Rule which made short sellers wait until a stock first ticked up in price. When Chris Cox repealed the law, stock prices became more volatile.
Get Rid of Overleveraged Exchange-Traded Funds like double or triple short ETFs that make the bearish pressure on a stock artificially intense. Also, these tend to be ordered at the last minute and create the huge late-day declines we've been seeing lately.
Watch for Market Manipulation that makes major stocks like Exxon (NYSE:XOM) trade like a penny stock. One way is to examine the activity of aforementioned ETFs.
Demand Transparency. Cramer said he was surprised that AIG's (NYSE:AIG) and Citigroup's (C) balance sheets did not show signs of problems that led to a government bailout. He wants companies to give a clear accounting of their financials.
Cramer said Christopher Cox is an "ideological fool and announced, "I'm ready for the job. Let's make the change."
Energy Transfer Partners (NYSE:ETP)
Cramer revisited Energy Transfer Partners which offers a hearty 11.8% dividend because it is a master limited partnership; it has to return a certain amount to the shareholders. Since ETP is involved with the transportation of natural gas, it is not affected by the price of gas. ETP beat its estimates of 44 cents by a long shot: 93. The company has several projects in the pipeline and is buying back stock. Hedge funds are driving the stock price down. However, as ETP's stock price falls, its dividend rises, which makes ETP an "accidental high-yielder," Cramer's favorite kind of stock in a market like this.
Cramer told one viewer who said she wanted to buy stocks for her children as gifts to look at McDonald's and Disney; “…They will go to McDonald’s. They will go to Disney. They will, therefore, learn what they own.” Concerning Marathon, Cramer said, “Refining’s good. The other part is bad," and he thinks Marathon should be bought. Cramer recommended Schlumberger. Cramer commented on cash flow in Vector and observed Altria broke $15 and yields 8%.
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