Take Cover in Defensive Stocks

If you watched Stop Trading! Tuesday, you know how disappointed Cramer was with the Federal Reserve's quarter-point interest rate cut. His utter disbelief bled into Mad Money tonight, where he said Bernanke and gang were a bunch of "cockeyed optimists" who refuse "to recognize the gravity of the problems in the financial system."

"By giving us a dinky quarter-point rate cut, the Fed has just done its unwitting best to hasten the possibility of a recession," Cramer said.

The Fed didn't even provide a much-needed morale booster either. Instead of hearing about the central bank's willingness to help the U.S. out of its housing and banking problems, Bernanke talked inflation. The whole affair was just recklessness disguised as prudence, Cramer said.

So it's time to circle the wagons as far as he's concerned. It's time to break out the 1990 defensive playbook. Homegamers should look toward the supermarket and drug store stocks again. Coke , Pepsi , Merck , Altria -- considering buying the usual suspects. And definitely look for companies that do a good part of their business overseas, far away from the reach of Ben Bernanke.

It's like Cramer said: "You need to invest with the same cowardice, the same care and the same caution that the Fed is embracing until these people get their acts together."

Don't panic, but definitely take cover in the recession stocks.

Jim's charitable trust owns Altria.

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    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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