Fed Should Cut Rates - Cramer's Mad Money (9/5/08)

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Friday, September 5.

Rate Cut Needed According to Cramer

“We need to get America moving again,” Jim Cramer told viewers. He had a simple message for the Federal Reserve: “We need another rate cut.” Cramer said the country is in the grips of some of the worst deflation he's ever seen, and it's imperative that the Fed cuts rates to save it. Deflation is all around us, he said. Oil and natural gas continues to plummet, along with just about every commodity out there. The retail sector, said Cramer, is also horrible. Worst of all, the housing market continues to sink, with homes still losing value by the minute. Cramer said that while no one is talking about a Fed rate cut yet, they will be by next week. He said the Fed needs to step up and answer the call, and unlike last year, take swift and decisive action to stop the deflation.

Bail out Needed - Fannie Mae (FNM), Freddie Mac (FRE)

Cramer also again called for an immediate end to the mortgage crisis, and urged the Treasury to bail out Fannie Mae and Freddie Mac. The markets need this mess to finally be over, he said. “Save our homes.” Cramer told investors that their game plan for next week should be to buy more of his recommended banks and brokers before the rest of the market wakes up to the possibility of a rate cut and before the mortgage crisis get solved.

National Semiconductor (NSM) Chief Speaks

Cramer asked National Semiconductor Chairman and CEO Brian Halla -- “What have you done for us lately?” Halla explained that the rise of the semiconductor business came right along with the mainframe, personal computer, Internet and has trailed off ever since. So before former buyers get back in, they need a reason. Today, he said, it's being driven by energy conservation, health care and security and surveillance. He still sees growth in all of these areas. “There’s a few pretty good analog companies,” he said. “We think we’re one of the best.” When asked about solar technology in particular, Halla said that National Semiconductor is working on technology that bolts onto solar cells and can improve efficiency of any solar ray by as much as 20%. He called solar a very exciting area, since the technology is now just 6 times less efficient than its carbon-based competitors. “We're within striking distance,” he said.

Cramer acknowledged that it's been a horrible year for the semis, part of a longer five-year slide for the industry. However, prices for these stocks have not been this low in over five years. He said now might be the time to start looking into these companies, as they can't go much lower. “I can’t tell you to stay away from National Semiconductor,” Cramer said. “It’s just too cheap. But the whole semiconductor group is darn cheap, too.”

Fun Times - Cedar Fair (FUN)

“Happier days have arrived for some companies,” Cramer told viewers. Cramer’s been talking a lot about how lower gas prices put more money in the pockets of consumers, and that translates into more cash to spend at the mall. But retailers aren’t the only companies that benefit from consumers’ much-needed relief at the pump. A regional amusement park operator like Cedar Fair does, too. In a market that's decidedly been no fun for many companies, Cramer recommended the stock of Cedar Fair. Cramer said “Eighty percent of the people who visit the company's many theme parks arrive by car, and with gas prices continuing to fall, that is positive for Cedar Fair.” Cramer said Cedar Fair has been taking big hits recently, due to rising gas prices and a slowing economy. Actually, the company's attendance is up 3% this year, with revenue up 2%. Given that the declines were mostly psychological, Cramer now feels Cedar Fair is now ready to run. Also on the company has a 9.3% dividend yield, which Cramer called relatively safe. Cedar Fair recently was awarded “Best Amusement Park” for its property in Sandusky, Ohio.

Mad Mail - Novo Nordisk (NVO), Parker Hannifin (PH), McDermott (MDR)

In the “Mad Mail” viewer feedback segment, Cramer told a viewer that he got it wrong with Novo Nordisk. I could not believe that they did not on their conference call address the new drug and give us a time frame. Until they address the new diabetes drug and give us a time frame we are going to be in purgatory with this one.”

Cramer said “I think Parker Hannifin is terrific, and I would not sell that here.” He reiterated a buy on “new tech” company Parker Hannifin but said that exposure to coal will continue to hurt rival McDermott. “McDermott is coal. And at this point, if people think Obama is going to win, coal is done for. And that is really going to hurt McDermott.”

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Comments

[Britishsteel:]

Listen up Cramer heres the deal, [ and for anyone who wants to learn google Ben Bernakes speech to the economists club in the year 2000].
You by declaring another brate cut is needed is aiding and abeeting the pig men who planned this out in the yaer 2000 . everything Ben talked about in this speech is being played out now and the worst thing that could happen is that Ben cuts rates again. If he does he will continue to transfer wealth from the middle class to the wealthy and thats the plan. The fed does not set interest rates the BOND MARKETdoes, and for you Cramer to preach this does a gross injust to your viewers the helpless and weak and uninformed who you pretend to be helping. People look to you for guidance and you are helping to rip them off. This whole credit crisis has been perfectly engineered . The barney Franks, the Dodds, Chris Cox ect... have turned a blind eye to all this, and they have profited through special mortgage rates and no one is investigating them from the ethics commitee [ Ha ethics commitee ] Our governement is corproately sponsored and bought and paid for. If anyone saw nightline on friday saw how corporations have sponsored the dempocratic and republican conventions and how special interest grups control our government . Come clean Cramer and do the right thing, Tell america what time its is , Its depression time , pain and suffering coming our way. thsi rant is not doom and gloom its just the facts . People need to educate themselves and not rely on talking heads and the media they are owned by the very same people who are out to make you poor/ Just another example of creative destruction at work

2008 Sep 06 03:55 PM

[Britishsteel:]

By the way sorry about the misspelled words , I did not check it and I am a two finger typist. lol

2008 Sep 06 03:58 PM

[Did U Think...:]

Brit, Cramer is, as you say, deliberately suckering sheeple into his nasty bank stocks so that his wall st pals can escape. We are nowhere near the bottom. Cramer makes it sound like the fed can clean up the mortgage mess with a snap of its fingers and then it's all off to the races again. Too bad the nationalization of fnm and fre will cost money that the us doesn't have and will have to print from thin air. Thus, nationalization is inflationary. That means more rising prices on everything which means less money available for buying a house. Soon the interest rates will be skyrocketing no matter what the fed does because the USD itself will get called into question and before anyone sinks their cash into a bond it will have to return more than the rate of inflation.

You simply cannot fix one leveraged indebtedness problem by creating another.

2008 Sep 07 02:05 AM

[fredissy:]

Cramer......you are insane!!!

2008 Sep 07 01:57 PM

[blondino:]

cramer's an idiot - reminds me of crazy eddie, but hey clowns geth high ratings in US media! :))

2008 Sep 08 06:32 AM

[tinman:]

Gee, another half a trillion of debt on top the $8 trillion courtesy of our beloved borrow&spend neocons. No big deal. Hey, since borrow&spend is such a good policy, why don't we bite the bullet, cut taxes to zero, and just borrow the whole enchilada?

2008 Sep 08 01:09 PM