Cramer: The Redemption of Ben Bernanke

Well, it took him long enough.

Finally, Federal Reserve Chairman Ben Bernanke seemed to recognize just how dire the market and the U.S. economy is right now. Instead of meager interest-rate cuts and talk of inflation, Uncle Ben – now a term of endearment, Cramer said Tuesday – slashed those rates and promised to keep them low. And he recommitted to his plan to buy mortgage-backed securities as a way to bring down mortgage rates. (Click here for the full report on the Fed’s announcement.)

Cramer was, of course, ecstatic. This is exactly what he’s been calling for since his infamous “They know nothing!” rant on Aug. 3, 2007. The Fed’s move was so bold that he’s confident that his housing-bottom prediction for the third quarter of next year is virtually guaranteed. And the willingness with which the Bernanke seems ready to throw money at the problem – any amount of money necessary – has opened the door for the lending and borrowing that is so essential to a properly-functioning market and economy. Banks will open their coffers. Mortgage money will be available.

So how does an investor take advantage?

Buy the early-cycle plays, like Fortune Brands, in anything housing or housing-related, Cramer said. He thinks mortgage rates could drop as low as 3.5% now, so homeowners should refinance and spend that extra money. Renters should consider buying a house.

Buy a bank, too. JPMorgan Chase was downgraded Tuesday – use that as an entry point. Buy Wells Fargo on the potential for its mortgage portfolio to turn around. Or go for Goldman Sachs, which has cut wages by 50% and is ready for a rebound.

The bottom line here is that the Fed has signaled it is ready to do anything that’s needed to save the markets and the economy. So now a recovery can happen.

Anyone out there who still doubts Cramer’s change of heart, that we don’t have to worry any longer about another Great Depression?

Jim's charitable trust owns Goldman Sachs and JPMorgan Chase.

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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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