Cramer's Mad Money - AIG: Criminal or Stupid? (3/18/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday March 18.

AIG (AIG), Citigroup (C), Bank of America (BAC), Wells Fargo (WFC), Fannie Mae (FNM), Freddie Mac (FRE)

There have been significant gains on The Street recently, but to consolidate this upturn, Treasury Secretary Tim Geithner needs to show leadership. While Geithner has a formidable task of pacifying irate taxpayers while turning around the crippled banking system, he need not befriend AIG, which should bear the brunt of the criticism for the current mess. Cramer recommends Geithner restore confidence by singling out AIG and separating it from the rest of the financials so Citigroup, Bank of America, Wells Fargo do not become guilty by association. AIG is an anomaly because while other financial companies might have been stupid, AIG’s actions were downright criminal; Cramer believes AIG insured products it couldn’t afford to insure as a way of avoiding capital rules. While Cramer is calling for AIG to be investigated, along with Freddie Mac and Fannie Mae, the main concern right now is to heal the situation.

CEO Interview: David Steiner, Waste Management (WMI)

While according to conventional wisdom, waste management is a recession-resistant business, one part of Waste Management’s company – the commercial construction segment – has been feeling significant pain. However, Steiner says the other businesses have been holding up well, the company has plenty of cash and its 4.5% dividend is safe. Falling commodity prices pose a challenge to Waste Management’s recycling business, but Steiner thinks prices should stabilize. With its extra cash, the company plans more mergers. “There are certainly parts of our business that are more subject to the economy than others,” said Steiner. “Overall we like to think that we’re a pretty good recession-resistant company.” Cramer says he still likes Waste Management.

Bernanke’s Got It

Cramer applauded Ben Bernanke’s aggressive actions toward recovery by providing mortgages at fixed rates of 4%, buying up $300 billion in long-term government bonds and mortgage securities, keeping interest rates low and bringing back the uptick rule. Cramer is hoping Bernanke’s next move is to encourage the SEC to ban UltraShort ETFs. The Dow rallied 91 points on the news of Bernanke’s proposals, and Cramer thinks that thanks to his ex-nemesis Bernanke, his prediction of a bottom in housing by the end of June may come to fruition. While some critics may claim the moves are too radical and the dollar will be weakened, Cramer says such reforms are necessary and a weak dollar might actually be good for American companies that have international exposure.

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Comments

[Duke Wong:]

Citi-Group, NO STOCK AVAILABLE FOR SHORT.

Swab, TD-Ameritrade, Scott have no stock for shorting C. My freind told me the SEC doesn't allow to short Citi-group.

Is it true?

Mar 19 09:11 AM

[JPTinKY:]

OK, Remember the scene in "Stranger than Fiction" when the bakery owner told the IRS agent that she only paid part of her income taxes because she wanted her tax money to go to roads, and schools, and not to big corporate executive bonuses and bailouts? Well, do the American taxpayers have enough courage to do the same thing? What if every American taxpayer refused to pay 50% of our income taxes for 2008 and specify that we refuse to pay for misappropriated bonuses for undeserving corp. executives, bankers, rating agents, etc. that created this mess in the first place. Bankers have already confessed that they approved mortgages for dead people in order to feed the Wall Street behemoths...and AIG insured all of this foul fodder to feed the monster...and now the fed wants us to pay up to feed all those involved in these llegal dealings? We are sick of double talk, excuses and lies. We are sick of shouldering the burden of those white collar criminals who take their bonuses and then thumb their noses at us.This is not capitalism...this is not socialism...this is not communism...what is this anyway?

Mar 19 09:29 AM

[sr9web:]

None avail to short at Fidelity either - just checked.


On Mar 19 09:11 AM Duke Wong wrote:

> Citi-Group, NO STOCK AVAILABLE FOR SHORT.
>
> Swab, TD-Ameritrade, Scott have no stock for shorting C. My freind
> told me the SEC doesn't allow to short Citi-group.
>
> Is it true?

Mar 19 10:29 AM

[concerned c...:]

> ...and now the fed wants us to pay up to feed all
> those involved in these llegal dealings? We are sick of double talk,
> excuses and lies. We are sick of shouldering the burden of those
> white collar criminals who take their bonuses and then thumb their
> noses at us.This is not capitalism...this is not socialism...this
> is not communism...what is this anyway?

Hey,

Just call it what "it" truly is.. "good ol' fashioned highway robbery"..

Mar 20 02:43 AM

[holmesnmanny:]

www.youtube.com/watch?...

That's really all that needs to be said about Cramer and his commentary. I wouldn't be surprised if he makes a killing off telling people to do something he doesn't do himself.

Mar 20 05:38 AM

[holmesnmanny:]

I don't give a rat's ass about the petty 165million AIG gave out to thier execs.

I care about the 3 to 4 BILLION that Merril gave to their employees. We're talking about apples and oranges here.

Mar 20 05:40 AM

[fireball:]

holmesnmanny
don't forget the citi and boa bonuses. and the flood of money out of the u.s. to foriegn banksters via aig. we got our own banksters to steal from us. we don't need theirs.
jptinky
facsism? socialism? communism? they are all very similar beasts. painfully aware calls it corptacracy or something like that. i call it getting rearended and they didn't even give us a little kiss or a nice dinner first. forget a follow up courtesy call. they won't do that either.

Mar 20 07:10 PM