Cramer's Mad Money - A Bizarro Market (3/9/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday March 9.

A Bizarro Market: IBM (NYSE:IBM), Hewlett Packard (NYSE:HPQ), FedEx (NYSE:FDX), Norfolk Southern (NYSE:NSC), Wal-Mart (NYSE:WMT), McDonald's (NYSE:MCD), Verizon (NYSE:VZ), Procter & Gamble (NYSE:PG), Colgate Palmolive (NYSE:CL), Coca Cola (NYSE:KO), Freeport McMoRan (NYSE:FCX), GE (NYSE:GE)

Everything he has learned in his 30 years of investing did not prepare him for this market, said Cramer, which is like a Bizarro world in which all the investment rules are turned upside down. Secular stocks are supposed to be up when cyclicals are down, but not in this market; IBM, Hewlett Packard, Fed Ex and Norfolk Southern were down alongside Procter&Gamble and Colgate Palmolive. Utilities are not as strong as they usually are in a weak market. Another conventional equation is that increased insider buying plus decreased insider selling equals a bottom; this has happened with McDonald's and Freeport McMoRan and yet both stocks are down. The same is true of GE and the major banks. Bearish sentiment and new lows have not been followed by rallies, money has remained on the sidelines and even Warren Buffett isn't sure what to do. The collapse of the financials and reduced dividends might bring the Dow down another 15%, said Cramer. In such an environment, he recommends with caution, but notes McDonald's Wal-Mart, and Verizon are cheap.
Cramer's Outrage: The Wall Street Gamble
Why is it easier to get a gaming license than it is to be an investment advisor? Why are the rules more relaxed on Wall Street than on Las Vegas Boulevard? Bernie Madoff is a testament to the hazards of hands-off policies. While Obama has done the right thing asking for a 13% increase in headcount at the SEC, Cramer says that number should be closer to 3,000%. Wall Street has to be regulated to prevent more thieves from getting their hands on the funds of an unwitting public.
Cramer Answers His Critics: Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), JP Morgan Chase (NYSE:JPM)
Cramer is no stranger to criticism, but when White House Press Secretary Robert Gibbs questioned the Mad Money Host's assessment of the economy, Cramer decided it was time to defend himself. His response was also directed at other critics such as The Daily Show's Jon Stewart and Frank Rich of The New York Times.
Sure, Cramer said Obama is responsible for "The greatest wealth destruction I have seen by a President," but he feels such a statement is justified and that a second Great Depression might become a reality if Obama continues his present course of action. While he applauds the President's vision and even agrees on an eventual tax on the rich, Cramer doesn't think now is the time to pass cap-and-trade regulations against polluters or to reform the entire healthcare system from the bottom up. Right now, the President should focus on the top priorities: fixing housing and creating jobs. Meanwhile, the great banks: Citigroup, Bank of America, Wells Fargo and JP Morgan Chase, are going bust under a lack of leadership.
CEO Interview: Jim Rogers Duke Energy (NYSE:DUK), Dominion Resources (NYSE:D)
Obama's emissions legislation threatens utilities that depend on coal. While Dominion Resources has diversified into alternative energy, Duke may not have moved fast enough to avoid problems, worried Cramer, who has been bullish on the stock. CEO Jim Rogers, however painted an optimistic picture of Duke's future because of its healthy balance sheet and measures to try to forestall the potential damage that may be caused by Obama's legislation. Meanwhile, Duke is diversifying into wind and solar power and is going ahead with its controversial coal facilities which use "clean coal." Cramer believes Rogers that Duke is diversifying, but the process might be too gradual to catch up. Cramer prefers Dominion Resources.

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