Mad Money Recap - by The Cramer Report - Full Recap

Mad Money Recap Monday, August 20, 2007

Cramer started his Mad Money show with the words "You've heard enough people blab about Mr. Bernanke opening the screen-door window.”

He went on to say that, he believes the market was saved from dropping 1,000 points when the Federal Reserve cut its discount interest rate to 5.75%. Not only does this decision help around seven million homeowners but it “helps your stocks go higher, and it will continue to help your stocks go higher.”

Cramer described the stock market like “a gigantic fashion show,” where stocks “come in and out of style.” One he believes will become fashionable is regional banks. The banks make money off what is between “the short rates” the money borrowed from customers and the “long rates”, which is what is given to homebuyers.

In Cramer’s opinion the Federal Reserve, cutting the rate will make the difference. The regional banks will “go from making no money” except for ATM fees to “making a huge amount of money” from “what they take from you and loan to others.”

KBW Regional Banking ETF (KRE) is Cramer’s pick out of the regional banks. It has more than 50 holdings and over the last five years, the growth has been more than 9.4 percent.

Cramer also mentioned National City (NCC) and Comerica (CMA) but said that KBW was the safe pick.

"If you can't get a good price, wait until it settles down," explained Cramer when talking about buying KBW. “We're buying a sector here, not best of breed," he said and went on to say,” best way to play the upcoming cycle of the Fed."

eBay Bargain

"I see a bargain in tech," Cramer stated, "and that bargain is eBay (EBAY)." However, they are "not a buy right now."

Cramer said that eBay has a “pristine balance sheet” and over $3.6 million cash available.

Analysts on the other hand are “looking at eBay in the past.” Cramer explained he looks at the company differently staying “one step ahead of the Street” and went on to say that eBay is “mostly about ads these days.”

EBay has other holdings such as Skype along with PayPal, which it purchased in 2002. PayPal is another means of payment such as MasterCard (MA). Cramer told viewers to look into MasterCard as it was “done going down.”

eBay also owns 25 percent of Craigslist and has been “ramping up locals and classifieds.”

Cramer suggested buying eBay while it is under $34. eBay is a “long-term investment play” and a “digitalization of commerce play,” just like Google (GOOG), Garmin (GRMN), and Research In Motion (RIMM).

Cramer showcased United Online (UNTD) and stated they were “too cheap to ignore.” United paid out a dividend of 20 cents for the 10th consecutive quarter. United is a low cost internet provider along with being in the “content business.” United owns Juno and Netzero which are internet providers but it owns MyPoints.com and Classmates.com.

Cramer went on to explain that he does not recommend buying into Classmates.com at this time as “the parent company to the spin-off. On the other hand, they have over 2.7 million paying members at this time.

Cramer advised waiting until United came down to $14 before buying and went on to say that if the price was not right “take a pass.”

Tech Sector

With the mortgage sector not being at the top of the pick, Cramer said to keep all eyes on the tech sector. In 1990, during the “credit crunch” technology related stocks did well. he speculates that history will repeat itself.

On Cramer’s recommended list is Riverbed Technology (RVBD). Cramer talked with Jerry Kennelly, the chairman and CEO of Riverbed over the telephone.

Cramer asked Kennelly about the upcoming product, Steelhead Mobile product which will extend to the laptop market. Kennelly explained that workers are not just 8 to 5 workers today and with this product, they will be able to do “remote work at the same speed.”

Cramer said Riverbed was a buy under $40.

Cramer is BULLISH on these stocks:

Under Armour (UA)

Crocs (CROX)

Texas Instruments (TXN)

Analog Devices (ADI)

Intel (INTC)

Consolidated Edison (ED)

Deere (DE)

Agrium (AGU)

Monsanto (MON)

Seaspan (SSW)

Eagle Bulk Shipping (EGLE)

General Maritime (GMR)

Integrys Energy (TEG)

NYSE Euronext (NYX)

Air Products & Chemical (APD)

Cramer is BEARISH on these stocks:

Atmel (ATML)

Hansen Natural (HANS)

Terra Nitrogen (TNH)

American Electric (AEP)

Akamai (AKAM)

GrafTech (GTI)