Jim Cramer knows that the central bank in the U.S. is supposed to be separate from politics. But on the night of the Iowa caucus, where two extremist candidates are poised to do well, he had to acknowledge the connection between these two subjects.
The fact is that the Fed really matters. Not just in terms of monetary policies and the economy, but in terms of America's political stability.
"Second, right now, the Fed seems to be doing a pretty terrible job," the "Mad Money" host said.
If the Fed continues on its slated course of raising interest rates four times this year, Cramer thinks it is very likely that the U.S. will go into a recession.
Cramer fears that the Fed will flub the statement at its next meeting in March, and Yellen won't make any decision to hold off on rate hikes. This could give the impression that the Fed is waiting for the right time to slam on the brakes and could even consider reversing the last rate hike and go back into quantitative easing mode.
"In a way, the Fed holds this whole presidential election cycle in its hands," Cramer said. (Tweet This)
Cramer believes that the Fed has the power to create real damage to the economy by continuing to raise rates. If that happens, candidates he views as extremist — like Donald Trump and Bernie Sanders — will gain a lot more traction.
Monday brought the official end to January, and traders always whisper about how February is historically a bad month for the stock market. Refusing to subscribe to that notion, Cramer reviewed the patterns of the past so that investors aren't misled.
Investors are always trying to look at patterns for stocks. There are times when it makes sense, and times when it doesn't. For instance, if a company has a pattern of missing quarters, then investors will not touch the stock until that pattern ends.
"But these other patterns, the seasonal ones? They just don't hold up under scrutiny," the "Mad Money" host said (Tweet This)
The truth is that no one knows what will happen, and Cramer thinks it is foolish to try to strictly relate cause and effect every time. In fact, Cramer reminded investors that they shouldn't be investing in patterns in the first place.
Read More Cramer debunks the myths of a bearish February
And while the market can be far from encouraging, Cramer still sees some individual stocks out there that can give investors some terrific performance — it's just a matter of hunting them down.
One of those stocks is Coach, the handbag maker that reported a so-so quarter last Tuesday, and then the stock soared nearly 10 percent in a single session.
Coach has been a total dog stock for years, struggling with gaining sustainable growth. It seemed to Cramer that the market now believes that Coach is making a comeback, and is loved again practically overnight.
"I think the turnaround here is for real. That's right, Coach has finally gotten its groove back," Cramer said.
Lately, it seemed to Cramer that the crazy linkage between oil and stocks would last forever. Whenever oil would go up, the market would rally; whenever oil went down, stocks were crushed.
"That is lunacy, as I've said repeatedly, because the vast, vast majority of companies in the S&P actually benefit from cheaper crude," the "Mad Money" host said.
Cramer finally saw some light at the end of the tunnel on Wednesday last week, when for the first time in ages, it became clear that the stock market and oil futures were trying to decouple.
That is why Cramer spoke with Carley Garner, a technician, commodities expert, co-founder of DeCarley Trading and a colleague of Cramer's at RealMoney.com — to get a sense of when the linkage between oil and stocks will finally snap.
It is still too early to call a bottom in oil or stocks, but Garner says the charts suggest that oil futures and the S&P 500 might finally be ready to divorce from one another.
"That on its own would be a major positive, exactly as we saw in today's session," Cramer said.
Read More Cramer: Oil's link to stocks is about to snap
Cramer has been saying for weeks now that investors could feel more comfortable when there was a resumption of merger and acquisition activity, as they had almost disappeared in the beginning of 2016.
On Monday there was one deal that Cramer thinks could turn out to be very important. Dominion is one of the largest gas and electric utilities in the country, with a major gas gathering and distribution pipeline business.
Dominion announced that it would acquire Questar for $4.4 billion in cash, and Cramer thinks this could be the first of many opportunistic M&A transactions in the energy space.
To learn more, the "Mad Money" host spoke with Dominion Chairman and CEO Tom Farrell. The CEO commented on the significance of Questar as a major player for gas distribution, pipeline, storage and supply in the northern part of the Western U.S.
"A great percentage of the gas runs through that company, and we are looking to help expand," Farrell said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
GNC Holdings: "At these levels you might want to buy it ... I'm going to say yes."
International Paper: "This has a very big yield. Remember, my Dad used to sell for them ... It's at 5 percent, but the estimates are too high and whenever estimates are not beaten, stocks go lower. Wait until we see the whites of their eyes."
Read MoreLightning Round: Wait until it reports to pull the trigger