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Feb.13
9:30 PM ET
Friday, 13 Feb 2009
Mad Mail: Mastercard or Visa?

Jim: Everyone seems to be talking about mortgage modifications including principal write-downs. I would like to know how they plan to accomplish this. Many of these mortgages are wrapped up in securities that have been sold many times over and nobody seems to know who owns them. Doesn't the owner of a mortgage contained in a security they have purchased need to agree to a reduction in the principal value of their underlying investment? --Mark

Cramer says: “Mark, you have hit upon the single biggest reason why we haven’t stopped this process. You’re exactly right. The owners of the CDOs have the right, and so far to date they’ve done a lot of blocking of the ability to be able to change principal. We fix that, we get to a lot of the bottom of it. Eighty percent of the loans are locked into this junk. Thank you for brining it to our viewers attention.”

          ___


Jim: Marathon Oil [MRO  Loading...      ()   ] recently announced they no longer plan to split their E&P and Refining businesses into separate companies. Do you consider MRO a "trade" whose thesis no longer applies? Would I be better off consolidating into BP [BP  Loading...      ()   ] for their notoriously BIG dividend or continue to hold a little of each for diversification? --Stephen

Cramer says: “I like BP. I own that for my charitable trust. It does have an absolutely great yield. You know, Marathon said they put it off. I think if Marathon’s approached  by someone they would buy it. I think the Chinese are on the prowl to buy an oil company. In the mean time, 4% yield and decent earnings profile.”

          ___

Jim: First, I have to say you are so good looking! Now, my question: how do you feel about Visa [V  Loading...      ()   ] these days? I got in at its IPO at $49 a share, then again months later at $85. Your thoughts? By the way, how do you feel about younger women? --Thanks, JB

Cramer says: “Hey, come on, don’t try to win me over. I like Mastercard [MA  Loading...      ()   ] more than Visa…we don’t care where a stock’s coming from, we care where it’s going to. You paid too high for the second lot. My take on Visa is, it’s fine. Mastercard’s better. And younger women? Dyn-o-mite.”

          ___

Cramer: Why do financial reporters continue to use the Dow Jones Industrial Average as a milestone? It appears that this index has outlived its usefulness as it only contains 30 stocks, which seem to be of dubious importance in the marketplace. I am a dinosaur who watches your program every night and wonders why the older generation and their portfolios do not appear to be represented. --Don

Cramer says: “You’re right. I, too, have fallen back way too long on the Dow because I’m not that young, and I always think of it as the market. It should be the S&P [500]. When I was a hedge fund manager, I always compared myself to the Standard & Poor’s because it’s a much better benchmark.”

          ___


Hey Jim: While recently watching the CEO of Shaw Group [SGR  Loading...      ()   ], I found out that regulated companies seem to be doing well and his business specifically is hiring for the next 2 years. So, when are we going to see more regulation on Wall Street so that more companies can do well? In your opinion, at around $30, is this going to be a ceiling for SGR or a new bottom? --Grant

Cramer says: “I don’t like the market. It doesn’t have a good [dividend] yield. It does have a lot of cash, and it did have a great quarter. Regulation on Wall Street? Wall Street owns Washington, despite whatever you hear. There will be no new regulations to speak of. Prosecutions maybe, regulations I doubt it.”







Cramer's charitable trust owns BP.

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