Jim's comments BEFORE the interview:     How do you use a nasty selloff like we had yesterday and today to make money?   We've got our patented ways here in Cramerica, and one of them is to look for great companies that reported great quarters in the chaos - the decline... that were, therefore, overlooked...

I've always felt that carnage creates the best buys... it always has...

And we've got one for you... It's a Cramer fave...  if I don't mind saying... I'm proud of that actually...  Last night, I was not proud of the New York Stock Exchange (NYX*)...

Let me have a little price, and say that I've liked - since the beginning of the show - Annaly Mortgage (NLY*), which reported stupendous numbers, but could gain only 79 cents in that horrible tape yesterday.

NLY* is a stock that's practically tailor-made for this environment of lower rates... and you know I believe the Fed has to keep easing, and easing fast, to keep the recession from being deep.

NLY* is THE rate cut play, and the fact that it reported on such a horrible day, I regard as a gift...

This is a company that buys mortgages that have no credit risk...  I know that's a hard point to get around, because we've heard so many negative things about sub-prime... But, believe it or not, there are mortgages that have an implicit guarantee, and you don't have to buy mortgages that default.  You can get rid of the credit risk and just have interest rate risk... and, sometimes, that works to your benefit...

In fact, I regard NLY* the king of all mortgage plays... because it has a really smart CEO, Mike Farrell, and he got everything right...  NLY* stayed away from the bad paper... even admitted that they couldn't make as much money as the other companies... kind of stayed in a dormant state, until they felt it was right to strike...

And everybody else was buying every piece of junk mortgage out there - the good and the bad.  Not NLY*...

NLY* now has the capital to come in and pick among the rubble, buying the very best stuff at, I think, incredibly reduced prices...

As we learned yesterday from the quarter, the strategy has paid off.

Now, I have said endlessly that you have to buy the financials here, because, even the Washington Mutual (WM)'s of the world - and I have to hold my nose, when I say that - do tend to go higher, after rate cut, after rate cut, after rate cut...   But, if you really have to hold your nose, maybe you shouldn't buy them at all... Not when you have NLY*...

NLY* is the anti-Washington Mutual (WM)...

And then there's the yield... 6.6%, after the close today...

By the way, this is one of the few stocks I know in this market that have hit the 52-week high list...  I mean, that is a treasured list right here.  I like to pick from it.  This is the only one that is consistently showing up there...

When rates come down, you must own stocks with big dividends, because money that has been kept in cash for the income, starts to flow into these stocks, as lower rates make cash less attractive...

These are all just arithmetic points...

That makes NLY* a triple buy for the safe dividend alone... but let's not just take it from me.  Let's hear it from the mortgage master himself, Mike Farrell...