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Blitzing Bernanke

Tuesday, 11 Sep 2007 | 10:39 AM ET

Investors are going to need some strong defense if the Fed keeps on its present course, Cramer said. Pepsico, Medco Health, Altria, Northrop Grumman, McDonald’s and Procter & Gamble were his all-star picks.

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Cramer likes Pepsi’s beverage and healthier Frito-Lay divisions, and he said the 2.2% yield offers some downside protection.

Medco, as a pharmacy benefit manager, has a business that’s consistent and impressive, Cramer said. The recent purchase of Polymedica opened the door to the huge diabetes supply market, and some Medicare money too.

It’s not like smokers quit when the economy tanks, so Altria is still the classic defensive stock. The 4.4% yield makes a great safety net and provides a good income, Cramer said.

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Northrop Grumman actually is in the defense business, and Cramer liked the fact that the stock is flying under the radar relative to other companies in the sector. Not to mention, it’s cheaper. That’s why he highlighted NOC during his Friday visit to USC.

McDonald’s is doing great overseas, Cramer said, and its growth in the U.S. has been steady. If the fast-food chain keeps executing the way it has been, Cramer said it could overtake Yum! Brands in China.

Lastly, Cramer called P&G the “quintessential soft-goods stock.” A recent Supreme Court decision put the company in control of setting the minimum resale prices for its products, which is great news for any company. And don’t be deceived by the 2.1% yield. It is deceptively small because P&G has a long history of increasing its dividends with its profits, Cramer said.

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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