Cramer's Mad Money - The System Has Been Saved (9/14/09)

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday September 14.

The System Has Been Saved: Goldman Sachs (GS), Wells Fargo (WFC), Boeing (BA), UPS (UPS), FedEx (FDX)

With all the pessimistic talk, even from President Obama, one would think that Lehman just collapsed. But a year after this disaster, the economy is going stronger than anyone could have expected, said Cramer, who listed reasons to have hope in the market. Housing is back on track thanks the the government's $8,000 tax incentive, and should be healthy enough to continue to thrive when the program ends in November. Cash for Clunkers solved the auto's inventory problems. Tech is strong and retail is stronger than many people think.

Anyone who thinks the consumer is ailing should look at numbers from UPS and FedEx. Commodities are solid, and Cramer thinks the long-awaited release of Boeing's Dreamliner will help aerospace take off. He is also a believer that natural gas will become a more popular fuel, and will power other sectors. Cramer also pointed to the healthy dollar, low interest rates and robust banks like Wells Fargo and Goldman Sachs; "The system has been saved," declared Cramer.

Don't Trust Credit Rating Agencies: Moody's (MOS)

There are many lessons to be learned a year after the collapse of Lehman; one thing that is clear is that "credit rating agencies are totally and completely broken." Cramer criticized these agencies for approving the kind of mortgages that led to the financial collapse and giving the nod to Lehman's bonds just prior to its bankruptcy; "We need to get rid of these people,” Cramer said. “We need to stop relying on them. They did nothing but harm here.”

The problems arise from the system; Standard & Poor's, Fitch and Moody's are supported by businesses whose debt they rate. Cramer likened this to the unlikely scenario of film critics paid by movie studios. The reason few saw the total collapse of Lehman coming is they relied on the ratings of these agencies rather than doing individual research; Lehman's own pre-announcements were telling a good part of the story.

Cramer urged reform for this flawed system in which information from credit rating agencies is "bought and paid for by its clients."

CEO Interview: Peter McCausland, Airgas (ARG)

Cramer praised Airgas' CEO for seeing a 43% gain in his company's stock price since October. While McCausland acknowledged the economy has been tough on this producer of industrial gases, and some projects had to be canceled, Airgas' ability to expand its customer base has seen it through the crisis. With "crucial" infrastructure reforms in place, Airgas is seeing an increase in new clients and projects. Cramer said McCausland is a "bankable" CEO and he would buy the stock.

Cramer's Double Outrage: Corus Bank, United States Natural Gas Fund (UNG)

Cramer approves of the closing of Corus Bank but says the FDIC made the move two years too late. In the meantime, Corus made "reckless" decisions; "We have to clean things up faster than that." Cramer also had a go at UNG, which he warned viewers about a week ago. Since the ETF had to issue new shares, UNG investors only saw 2% of the 12% uptick in natural gas.

Mad Mail: CVS (CVS), Walgreen (WAG), Heinz (HNZ), Encana (ECA)

Cramer told one viewer that CVS and Walgreen are good plays on swine flu. Heinz is more of a defensive stock and is not the right choice for the current environment. When a viewer asked about Encana, Cramer replied; “If you believe … that coal is going to be king again … then you will not make money. If you believe like I do that natural gas is the bridge fuel of the future, then you will. I think the latter course is the way to go.”

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Comments

[Chris B (Sl...:]

Not impressed, ultimately the Dollar is going down a long way, this may take a year or two, and most people should be concerned about deflation for now.
With so many jobs going a consumer recovery will be muted to say the least. Make no mistake we are at the start of the Second Great Depression and this is going to take many many years to climb out of this dark hole our Government and banks have put us in. Eventually the stimulus will have to end, because further bankrupting your nation is not the answer. In the end things have to be allowed to unwind. There have been 90 Retail Bank failures this year and there are many many more queuing up to go bust. Trying to pep up the economy and stock prices through unrealistic optimism is irresponsible and only going to lead to disaster. Reality will bite back, no matter what you think. Chris B UK

Sep 15 08:22 AM

[ultrabrowser:]

One day Cramer hates Obama, hates Bernacke, hates Geithner, next day he loves them. He is totally inconsistent, blows with the wind.

Sep 15 11:27 AM

[Wreckdiver:]

I agree with ultrabrowser- Cramer blows in the wind and is really an entertainer not an analyst.

Having said that, BA is a solid investment even with the 787 issue. There really are few, if any companies in the world with their high technology manufacturing expertise. For those of you who think America has lost that capability, think again with Boeing and be pround they are a self-sufficient US company.

Disclosure- no position in BA, long NOC.

Sep 15 01:52 PM

[User 422955:]

MOS is the ticker symbol for Mosaic. Moodys' symbol is MCO.

Sep 15 08:10 PM

[Liz:]

SHOULD the system have been saved? That is the question.

A system which enables Wall Street to take foolish gambles with the money of innocent persons (while at the same time throwing risk management to the wind) should be allowed to collapse under its own accord.

Greed, recklessness, and corruption should not be rewarded with government bailouts!

Sep 16 08:19 PM