Cramer's Mad Money - The Bernanke Basket (3/16/09)

by: Miriam Metzinger

Stocks discussed on the the in-depth session of Jim Cramer's Mad Money TV Program, Monday March 16.

The Bernanke Basket: Citigroup (NYSE:C), US Bancorp (NYSE:USB), Blackstone (NYSE:BX), Wells Fargo (NYSE:WFC), CSX (NYSE:CSX), Norfolk Southern (NYSE:NSC), Procter&Gamble (NYSE:PG), Heinz (HZ)

Bernanke knows something; Cramer has reversed his enmity for the Fed Chairman after his bullish statements on 60 Minutes brought up the Dow 167 points. While Cramer was famous for bashing Bernanke a year and half ago for stalling interest rate cuts and not opening the Fed discount window for banks, a lot has changed since then. Bernanke says the economy will grow unhindered by inflation, a recovery might occur within the year and without nationalizing banks. On Monday morning, transports like CSX and Norfolk Southern and soft goods such as Procter&Gamble and Heinz rallied. Banks that had been in the single digits were up substantially, and Cramer sees some buying opportunities in the financial sector. He put together a "Bernanke Basket" of bank stocks: Citigroup, U.S. Bancorp, Blackstone and Wells Fargo, which can be bought on a decline after investors take profits from the rally.

CEO Wall of Shame, Ed Liddy, AIG (NYSE:AIG)

AIG CEOs have had a long tradition on Cramer's Wall of Shame; Former Chairman Robert Willumstad and former CEO Martin Sullivan both enjoyed this dubious honor. While Cramer initially gave Ed Liddy the benefit of the doubt, and he acknowledges the present CEO didn't create the problems, Cramer is baffled that those who brought the company down not only retain their positions but are eligible for bonuses; "Where are the subpoenas?" he asked. Cramer's main issue with AIG is the lack of transparency; the company said its exposure to CDOs was only $53 million, but the losses were $103 billion. "They just lied to us," Cramer said.

Since the taxpayers now "own" AIG, they have the right to know what is going on with the company, Cramer.

Four Year Anniversary: iShares China 25 Index (NYSEARCA:FXI), Treehouse Foods (NYSE:THS), Ralcorp (RAH), Family Dollar (NYSE:FDO)

For his fourth year anniversary Mad Money Program, Cramer renewed his "vow" to viewers that the purpose of his program is to help the average stockholder rather than the institutional investors. While he has conceded to critics that he has made some mistakes, Cramer says Mad Money is not just about stock picking, but about educating investors, even in tough times when the Dow is down 56%. Buy and hold doesn't cut it anymore. Investors need to look to China plays such as FXI and sturdy tradedown plays Treehouse Foods, Ralcorp and Family Dollar.

CEO David Ratcliff of Southern Company (NYSE:SO)

David Ratcliff discussed the potential impact of Obama's cap-and-trade carbon initiative legislation on Southern Company, which generates 71% of its power form coal. While the legislation may be good for the environment, the midst of a recession is not a good time for a carbon tax that would result in "significant price increases," agreed Ratcliff and Cramer.

Ratcliff called for a transition period to allow utilities to adjust to energy reforms. Such a radical move could nullify the benefits of Obama's middle-class tax cuts, Ratcliff said.


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