Cramer: The Return of Citigroup?

Cramer on Friday removed Citigroup CEO Vikrim Pandit from the Mad Money Wall of Shame, saying the government bailout has provided the company a real opportunity for a turnaround.

Even those who don’t follow Wall Street will most likely remember Washington’s 11th hour intervention back in late November, where Citi received a $20 billion cash injection and federal backing for just over $300 billion of the bank’s troubled assets. The move came just before what was widely believed to be Citi’s imminent collapse. Also a part of the deal was some breathing room for Pandit to get his firm back on track, and Cramer thinks the CEO can do it.

The bailout gives Pandit some much-needed capital and it takes some of the pressure off Citi’s balance sheet. Washington also left the bank’s shareholders with an arguably valuable stake, Cramer said, and provided some incentive for other investors to buy the stock. That wasn’t the case when Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke stepped in to help Fannie Mae, and definitely not Lehman Brothers.

What Cramer would really like to see is the Sheila Bair and the FDIC insure $2.5 million CDs, issued by Citi to corporations, for a .25% fee. Such a CD is just what corporate treasurers need right now, Cramer said, and it would offer funding to Citi without the need for Washington to keep printing money.

But regardless, Cramer seems confident Vikrim Pandit can redeem Citigroup. After all, Pandit was the architect of Citigroup’s turnaround back in 1991. And if he could do that as just a young investment banker, then he has a good chance of untangling the mess left behind by former CEO Chuck Prince.

So if Pandit’s coming off the Wall of Shame, then who will take his place? That honor goes to Take-Two Interactive Executive Chairman Strauss Zelnick, who scoffed at a $25-a-share offer from Electronic Arts back in February. TTWO closed Friday at $8.43.

One more thing: Cramer has decided that to SEC Chairman Christopher Cox is so worthy of our spite and vitriol – have you noticed how he’s blaming everyone else at the SEC other than himself for Madoff’s $50 billion fraud and the market’s other regulatory problems? – that it’s actually an insult to New York Giants wide receiver Plaxico Buress to award Cox the Plaxy Good Judgment Award.

So going forward the award will be called the Christopher Cox Award for Good Judgment. And, as a way to enshrine the men who defined this era of no regulation, the Wall of Shame will henceforth be named the Cox-Madoff Memorial Wall of Shame.

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