Mad Money Recap | Nightly Recap for: Tuesday, December 16, 2008

Opening Segment #1:

'Fed On Target'

Tuesday, December 16, 2008

Jim: The Fed finally did it... Oh, you saw the rally... huge, 300-point plus rally. Why?... Well, after doing nothing but following... constantly being behind the curve... after being dragged kicking and screaming into acknowledging reality, the Fed drew a line in the sand. They are simply not going to tolerate a long and hard recession. Period. They are going to do everything they can so that housing turns around in 2009. They are going to do everything they can to make the banks investable again.

The Fed has proven this statement from my friend, Michael Semblas, from J.P. Morgan, dead right... "We are now indeed in a Malcolm X. world." Ben Bernanke is going to turn this economy around by any means necessary!...

I cannot emphasize how important this is... how everything the Fed did mattered. What they did today matters... it will make things better. Ben Bernanke recognized that we were in extreme peril... at last. He recognizes that the fundamentals are totally unsound. He understood that everything that can be done must be done... so that President-elect Barack Obama will have the wind at his back, for what ever he wants to do to breathe some life back into this economy.

In short - and I say this as someone who has been extremely critical of the Fed chairman - Ben Bernanke just kept his job. He is not going to let this economy become a disaster area. He is doing exactly what he needs to do; what he is doing is right. He is no longer "Ben Bernanke"... He is now Benjamin "booyah" Bernanke... better yet, he's Santa Ben!... He did exactly what we wanted... Santa Ben is coming to town...

Continued below...

Market Results today:

Dow: + 359

Nasdaq: + 81

S&P 500: + 44

See all of tonight's stocks mentioned
on Yahoo! Finance, here...

Tuesday, December 16, 2008
(Cont'd from above)...

Jim (cont'd):

I was wondering why the heck this market would not come in... why it stopped going down... because Ben Bernanke is not going to let it come in...

I am totally and completely blown away by what he did today... No wonder the market went up so many points. This is huge, huge news...

The Fed is now on our side. Ben Bernanke is now one of us. That's how you get up 359 points in the Dow...

Today, Ben Bernanke finally took a helicopter off the helipad... he filled it with trillions of Federal Reserve dollars... and like Colonel Kilgore in Apocalypse Now... he unleashed a barrage... of Benjamins...

The way to play it?...

Bernanke is saying that I will make it so that it pays off to borrow and lend... I will make it so that banks will want to lend... not forcibly... but because it will be so darn lucrative... I will make it so that there will be so much mortgage money out there that housing the bottom in 2009. Frankly, how can it not?...

Do you know that we haven't built this few homes... we got the numbers today... since 1959... when we only had 179 million people living in this country?... Now we have 310 million people...

Yet Ben Bernanke, who will now be called, "Uncle Ben" as a term of endearment, rather than ridicule... he did everything but guarantee that I should be right on my call that housing should bottom in the middle of next year... by June 30.

I think you can start buying the early cycle plays now... the ones that I've been talking about... certainly the accidental high yielders that were the best acting stocks today... the ones that bottom first, other than the NYSE... whew!... Think everything housing-related... the financials. Honestly, this is a wake-up call. I've got to go some land...

I can see mortgage rates falling to 3.75%... maybe even 3.5%...

I command you to go out and buy a house in the next three months. I insist that you sell Treasuries and by Corporate Bonds... I demand that, three months from now, you refinance, and take the money and spend the heck out of it... Go buy a bank stock... How about J.P. Morgan, downgraded just today... How about Wells Fargo?... years of a repository of mortgages that will come back to life with pleasure... How about Goldman Sachs, which reported exactly what I said it would... a loss... how many times did I tell you that... and has now poised to make fortunes, because they have cut wages by almost 50%... Booyah Blankfein!...

This is Malcolm X. by any means necessary... needs Colonel Kilgore... It's the smell of victory in the morning... in the afternoon... and in the evening!... And boy does it smell good... Malcolm X., Colonel Kilgore, and Ben Bernanke... I say, Uncle Ben, you're in some awesome company...

Thanks for getting it right... really, really, really right. The Fed is no longer going to do that wait and see nonsense... more inflation, deflation... no...

Here's the bottom line...

▼ ▼ ▼ ▼ ▼

The Bottom Line!: For anyone who doubted that Armageddon was off the table... that the Great Depression part two was no longer a possibility... go ahead and take that Fed statement and shove it where the moon don't shine!...
The Benjamins are going to fly from the sky!...

[verbatim recap]

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