FEATURED SLIDESHOW
Who Is The Worst CEO?Mad Money needed new inductees for its
Wall of Shame, so we asked viewers for
nominations.
MAD MONEY FEATURES
PODCASTSWatch the Lightning Round whenever and wherever you want.
OFFICIAL MAD MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.
CRAMERS SOUNDBOARDAdmit it: You've always wanted to hit the "They
know nothing!" button. Here’s your chance.
CHECK OUT OUR PHOTOSCheck out Cramer on set, back to school, behind the scenes and more.
SHOP FOR MAD MERCHANDISEBuy Cramer books, bobbleheads and other Mad Money merchandise.
RING TONESPick up the phone! It's Cramer! New Mad Money sounds for your cell phone.
TEXT MESSAGE ALERTMad Money's mobile. Get show highlights sent to your phone.
Text Size 
Now matter which area of the market is hurting, Cramer said during Wednesday’s show at the University of Iowa, it all comes back to housing.
Cramer was in the Hawkeye State for his latest Back to School Tour stop at Iowa’s Henry B. Tippie College of Business. He opened the show talking about the “parade of horribles” we’ve seen lately:
- Best Buy [BBY
Loading...
()
] said “seismic changes in consumer behavior have created the most difficult climate we have ever seen” - Treasury Secretary Henry Paulson announced he won’t be using the $700 billion granted him for toxic mortgages, focusing instead on consumer debt
- AIG [AIG
Loading...
()
] taking even more money from the federal government in order to stay alive
- GM [GM
Loading...
()
], Ford [F
Loading...
()
] and Chrysler on the verge of collapse
- Insurers like MetLife [MET
Loading...
()
], Prudential [PRU
Loading...
()
] and Principal Financial Group [PFG
Loading...
()
] desperately needing to raise cash
The list goes on. But no matter what we’re talking about, Cramer thinks the epicenter of these problems is housing. Consumers who couldn’t afford a home took out a mortgage anyway – even GM got in on the action, lending money through its GMAC division. Banks and brokerages packed these subprime loans into bonds and sold them. AIG insured them. Then the housing market imploded and all these players took a hit.
Now, as the price of their homes decline, consumers have cut back spending. As the economy gets worse, employers cut jobs. And the government is then forced to rescue business after business to keep the whole system from collapsing. As a result, the stock market continues to drop.
The solution is to fix housing. So anytime you hear of a new plan or initiative to bring –much-needed stability to that sector, Cramer said you should be happy. Fannie Mae and Freddie Mac are going to make it easier for people to stay in their homes? Great. Such moves are the only way stocks will go higher and give your 401(k) the chance to recover.
We also need to stop new building, Cramer said. Banks should be forbidden from granting credit to homebuilders, at least for now. We have to get the supply down. And the government should offer a huge tax credit to anyone who buys a house. That’s another way to get some inventory off the market.
So until home prices even out, Cramer can only recommend his usual stable of stocks: accidental high-yielders like Caterpillar [CAT
Loading...
()
], companies trading at or near their cash like KBR [KBR
Loading...
()
] and recession-resistant plays with good dividends like Kimberly-Clark [KMB
Loading...
()
] and Clorox [CLX
Loading...
()
].
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website?
Data is a real-time snapshot *Data is delayed at least 15 minutes