number. xrt is the way to play. >> thanks for watching and see you back for "squawk on the street" tomorrow and back here at 5:00 followed by money in motion at 5:30. mad money with jim cramer starts right now and he has an exclusive from sirius. cramer starts right now and he has an exclusive with mel karmazan of sirius. >> i'm jim cramer and welcome to my world. you need to get in the game. >> they're going to go out of business and he's nuts! they're nuts! they know nothing. >> i always like to say there's a bull market somewhere. >> "mad money." you can't afford to miss it. >> hey, i'm cramer. welcome to "mad money" welcome to cramerica. my job not just to entertain, but to educate and teach. so call me at 800-743-cnbc. hey, we've got to give this market its due. when good things happen. when actors in the world stage try to solve many of the problems they're facing, problems that caused the dow to

plummet two days ago, the market reacts the right way and goes almost back up and the dow climbs 71 points. the nasdaq soared 1.18%. thank you again, apple. ten points a day keeps the bear away. let's just tick down the amazing point-counterpoint transformation that's unfolded in the 48 hours since the sell-off. one by one, the fears have been checked and you can see how they've bounced back. hey, listen. including yours truly, better own it. just when it looked like the whole bailout would break down and lead to the total disaster, the european union blowing up. the leaders of europe pull the rabbit out of a hat and etch roo the agreement and one that was high and the participation rate and it would fail on monday and the fewer than 60% were going to be involved and how the heck did this happen? turns out that behind the scenes arm twisting makes the difference in the world and they're in charge. they're not going to let this

fail. once again, just like everything in europe, they waited right until the last minute as nothing seems to go right until it looks like everything will blow. they're beginning to remind me of every bond movie and the ticking time bomb and deaf fused the explosives with 007 seconds remaining. e merginging markets and they've been sagging. economies of china, india and brazil are all slowing and slowing quickly. brazil's central bank knowing that growth must accelerate just took the extraordinary step, right after the previous cut, they get it. they're not going to be the reason why brazil goes into the recession. we know they lowered the growth rate. i am now expecting a similar large cut right around the corner from the chinese maybe this weekend. third, genuine recovery going in america where i expect the unemployment rate will continue to get better. tomorrow's payroll number i

think could be good, but the federal reserve isn't taking chances because they read the papers. the feds worry as i'm worried that the higher price of energy can throw this economy back in recession, curtailing consumer spending and i'm doing the nascent housing recovery. just when the housing market started rolling over, the fed let it be known quietly and starting one more round of easing. i think ben bernanke is recognizing his stakes. once again he seems to have taken this economy into his own hands and i think he'll make it so money maintains it easy to retain. the market roared back to life. we also have windfalls that were totally unexpected. last week we got a industrial production number out of germany out of nowhere. perhaps a serious recession can avoid europe and now it's the slowdown. this was the first solid growth number and gives you the sense

that the worst can be avoided. finally on a big down day tuesday, president obama laid it on the line and made it very clear that iran would not be allowed to get a nuclear weapon. while we learned not to test the iranians -- that's put a stop to oil's endless march higher for the last few days. oil is ridiculously high and gasoline is still going higher in most of the country and we can't rule out a preemptive air strike, but as long as the larger powers are tacking, plus the israeli government has spent the last three years on iran's nuclear facility and it's the best way of pressuring the rest of the world into taking action so they don't have to. will we get back to even? come o we have a lot of problems here and i think they'll hurt many stocks going forward and it's still very case by case. stocks you must trim asap. the rise in energy prices and mcdonald's. cramer fife, mcdonald's issued a

cautionary comment that causes the stock to get hammered and the shockingly bad earnings report and more on that later. merck, that was a shocker and cypress semi, were they outliers? no, after the close, both texas instruments and altera joined cypress, really disappointing. it would be hard to recover more than what we lost on tuesday and we won't get back to even especially if the employment numbers disappoint and we catch negative earnings announcements and maybe they can say the market rallied today because they hope to get it tomorrow. it is amazing how when we get bad news the glaring thrusts are met with parities. it does not get to that set, 3% to 7% that i was worried about. bottom line, these days governments are responsive to the needs of the stock market. policymakers worldwide are embracing the malcolm x mantra and will combat recessions by any means necessary. and beginning three years ago

today. yeah, the birthday of this fabulous bull market that hasn't finished running its course and i'm still taking profits from my charitable trust. with bernanke leading the charge and domestic housing plays as ways to play the by any means necessary strategy. stick with a plan, stay cautious and keep outsized profits, but as always, stay the course. ron in pennsylvania. >> caller: jim, thank you so much for taking my call. >> my pleasure. >> caller: i want to send you a happy birthday belated boo-yah. >> i want to issue a happy belated birth day to the bull market. thank you very much. >> caller: you're welcome. my question is about johnson & johnson. the ceo is out and a new cancer drug coming out. is it a buy or sell? >> it's funny, that old ceo who was revered by fsh and was incredible, that reverence

should have been irreverence, and i think the stock won't go down as well as other stocks, how about that? because he's gone before i get involve in that one. joseph in flo are da. >> caller: cramer, boo-yah from tallahassee, florida. >> let's get some barbecue! what's up? >> caller: listen, jim, i wanted to get your opinion on exxon mobil, xon. i was reading how the ceo was doing that presentation at the nyse talking about i big expansion in the next five-year plan, and i wanted to get your opinion, buy, sell or hold long term, and i'll take your answer off the air. >> no one's gotten hurt out of exxon. they want to get growth going and hay want to be able to endorse and embrace the natural gas company. when they bought xtl, this was -- let's put it this way, exxon has got to start buying natural gas if they'll get earnings momentum in this

country and right now they're not. we have plenty of problems. we're staying cautious, but we have to admit that the skeptics, let's just say we learned another lesson, but don't forget to take profits because while we're almost back to where we were, we're not there yet. "mad money" will be right back. >> coming up, a fuel that's cleaner, cheaper and more abundant than oil, we may be exporting it soon. >> who stands to profit from sending nat gas abroad? cramer is talking to the ceo next. and later, join rest losing. it's one of the most treated stocks in the street. is it time for you to get serious about satellite radio or will free music through smartphones and tablets lead to static? the exclusive with the ceo offer isius xm radio is just ahead. plus, no place like home. while rents have soared, record low mortgage rates in rock bottom housing prices are looking more attractive to

investors. cramer dishes on which stocks should be evicted from your portfolio. all coming up on "mad money." miss out on some "mad money?" get your "mad money" text alert today text mm to 26221 to get cramer right on your phone. for more info, visit madmoney.cnbc.com or give us a call at 1-800-743-cnbc. choose control.

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>> we all know that here in the united states we have more natural gas than we know what to do with and the rest of the world is desperate to get its hands on the stuff. japan, same amount, $17. how come we don't ship all of our nat gas to japan, europe or china or anywhere else? here, why do we fetch a much higher price? simple, takes too much space. you have to chill it in liquid form and building export terminal, something we haven't done in ages because the price differential is a huge thing caused by a huge boom in

domestic shale drilling. lng for you home gamers, owner of a nat gas import terminal in louisiana and they're spending billions to turn it into an export and import terminal that should be operational in 2015. they have another export facility planned this corpus christi, texas and could be up and running by 2017 if it gets approved by the federal energy administration. the stocks just moved, it's doubled since i first got behind it back in june at $8.17. bulls make money, bears make money and pigs get slaughtered so don't get too greedy. that said, if everything goes right, obviously it's more risky at these levels. the big of the concern is funding and it gots billions to build one of these terminals and that was partially address the just last week when we learned that the subsidiary would receive a $2 million investment from blackstone. what a score. this has been a speculative story. let's check in with the

co-founder of cheniere energy. >> good to be with you again. >> thank you. it's been a worrisome time in the energy market because lots of people are worried that we're going to raise the price of natural gas if we let many people export it. where are you in the process that you could perhaps still be stopped by the federal government because people are worried that we shouldn't be exporting this important commodity? >> jim, what has happened in the natur natural gas business in the last couple of years is astonishing. we've gone from throw years in being in a situation where we thought we needed to import gas to a place where we are now coming into march with 2.5 million cubic feet in storage, 60% full. we have a be in of wells that are waiting to be hooked up

$5,000, $6,000 on a nation basis and we can a com bait a tremendous amount of increase today without much difficulty. the demand has simply not kept up with it. now with $2.20 prices, i am reasonably sure we'll find new demand initiatives or core substitutions or investment renewal. the truck fleet becoming natural gas based on several years, but it's the real process. demand is not keeping up with the supply and --? the federal energy commission says everyone will let you do it each though they look like they're pausing for everybody else? >> think they will pause for everybody else, but i think they will let the others come through, too, because we need it. we don't know what to do with the gas. we drilled 45,000 wells last year. 15% more than the year before. in other words, we employed 15%

more people than the year before and the drilling business and we employed more people to accommodate the communities and it's been an incredible boom for the economy and helped people in lots of places, pennsylvania, eastern colorado, all of north dakota, all of oklahoma, south texas. it is making a change in the way people live and have sorry viefed the last two or three years. it is too critical and too important and it's a phenomenal revolution, and i think it's just started. >> all right. so you were able to get a lot of money in between the time you were last on and now. is the $2 billion that you just brought in plus the secondary that you did enough money to get you to where you need to be able to make it so that you're going to be finished with your -- with

the initial buildout? >> with the initial two absolutely. >> you will. >> as you know, and -- as you know, we want to continue very quickly to move to the second phase and build two more trains. those are all permitted and ready to go, and sold. we want to expand to corpus christi and continue to do the same thing. there is an enormous need for the gas and we have just too much of it. in corpus cresty just 75 miles from us, last year there were 650 applications for flaring permits. in other words, we've got so much gas we're just burning it. >> incredible. bg group, gas and natural, india, korea, you've got spanish, you've got the british. do you have even more customers than you've announced since the last time you were here?

i mean guys that could sign up? >> we have been forced not to sell to people starting in puerto rico, dominican republic, chile, singapore, japan, people that are friends of the united states that would benefit tremendously from this, and at the same time we continue the job creation that this phenomenon has started to a few years ago in the united states. it's a win-win situation. it's good for us. it's good for them, and it helps us help ourselves and helps our friends around the world. >> one last question, how many thousands of people will you have to put to work to be able to finish these projects? >> directly, we'll peak at about 3,000 people working on the site, but we will also help louisiana continue to develop the gas production and employ 40,000 to 50,000 more people indirectly. >> incredible. sharif souki, you just made a

lot of problems on the show and you delivered more than you promised and i thank you so much for coming on "mad money." >> thank you, jim. and thank you for being a supporter of this. >> well, look, you made me a believer. you did much more than i thought you'd ever do. thank you so much, sir. that's sharif souki, who stood there and made a series of promises that i really didn't believe and he made good on so much more than that, and that's why i still happening in lng. i think it can go higher. stay with cramer. >> coming up, join the revolution. it's one of the most traded stocks in the street. is it time for you to get serious about satellite radio or will free music through smartphones and tablets lead to static? cramer's exclusive with the ceo of sirius xm radio is just ahead.

>> the radio company in america finally got its group back. it's up 35% in the last few months and now seems to have more catalysts than it can count. i was skeptical of sirius before approving the merger with xm. as a result the combined company did have a near-death experience

in late 2008. for only being saved from liberty media which purchased a 40% stake in the satellite radio company and more on that in a moment. auto sales are now on fire and it's a huge market for sirius. they also moved into the used auto market which is gigantic for them and in the most recent quarter the company added 540,000 new subscribers. it is 21.9 million. sirius xm has become so successful and it could buy the whole company on the cheap, something that i regard as a high-quality problem and i'm thrilled that mel karmazan, the ceo of sirius xm radio, and before that, successful in tv and he was celebrating in an amazing fashion. what is sure to be a legendary bruce springsteen concert for sirius subscribers. there was a ticket going for $10,000 on ebay this afternoon. to give us a sense of where the company is headed, mr. karmazan,

welcome to "mad money." good to see you. >> my father got sick while he was in the hospital and he didn't have cnbc so we very quickly got him a sirius xm radio which had cnbc. you guys are doing a whole lot more than when you first started. >> oh, yeah. things have been great. i've been here now almost eight years and when i joined the company we had 600,000 subscribers and we had revenues of $67 million. so it's been an extraordinary run. >> i'd like to measure your company as a cash flow company because you taught me to do that when i was in raid why. it must be losing a lot of money. can you explain to people how it's the cash flow that matters and how that is really ramped up since the merger? >> i believe and have for a long time that free cash flow is the only metric that creates wealth for investors. free cash snow what enables you to buy back your stock and make acquisitions and pay down debt, and i believe free cash flow is an important metric.

our free cash flow now is growing extraordinary. before the merger, we had negative free cash flow of $500 million. negative free cash flow. this year we will have $700 million of free cash flow and we haven't given guidance of next year. analysts have us at $1 billion of free cash flow and continuing to grow. >> they are in tune. they are off the mark. >> who am i to say what analysts say and we have not acknowledged what will happen -- >> it wouldn't shock you to do that. >> if we've gone from 400 last year to 700 this year, and the year before that, we were at 100 and something and that growth rate looks like it will continue for some time. >> if that's the case, you're one of the smartest guys in the world, the 40% shareholder in liberty, why shouldn't they now that it's gone away start buying and buy the rest of the company for 250 which is capping all of the return that you can give

shareholders. liberty media is free to do anything they want. >> you can't tell them what to do. >> and i have no interest in telling them what to do, but what i am able to do is represent the best interests of the non-liberty shareholders as well, so the way i look at my job now i'm responsible for all of my shareholders including liberty. if there ever was to be a transaction that liberty would want to initiate, my responsibility would be to our shareholders to make sure they're treated very fairly. >> just a couple of days, pandora reported a number. all these free internet models can destroy you. >> i look at pandora and i see this they have rising costs that you don't have and that the competitive threat is overstated, but i need to hear it from you because you're nuts believing in sirius at this point. >> we have a lot of competition, and i believe business models matter. some people can sit there and disagree and say it's about

eyeballs or it's about something else. i believe it's about the business model. we competed with our terrestrial radio for the last 11 years and grew from zero subscribers to 22 million subscribers. we now have competition from i.p. anybody could be an i.p. audio content company. they have a questionable business model because it's dependent upon advertising. i have believed for the last ten years from the day i came to sirius xm that the internet has created so much inventory, so much inventory in the advertising world that a business model that is principally advertising driven. whether it be terrestrial radio or ip radio it's advertiser driven and is it risk? i don't particularly like that. great company, pandora and great product and question about the business model. >> speaking of your programming

costs there were deals put together when xm and sirius were fighting tooth and nail so you paid a lot more. is it possible? i don't know how much the stern contract is, and i know he'll be on nbc soon, and i'm very excited about that, but i'm trying to figure out whether you have a bunch of levers. including your cost could principally go down as contracts roll over. >> if you take the entire premium entertainment category, so include television and cable television, satellite television and their costs are all going up. you see how there are these wars between the msos and the content owners. >> right. >> what we have said is that our content costs are going down and as a percentage of revenue it's going to be less. there is no -- your company comcast is faced with the idea that their programming costs are going up. ours are going down and they're going down because though we have all of this competition, and there's only one satellite

radio. if cnbc wants to be on satellite radio because it's one of the thicks they want to do, they want to be on the internet and they want to be on cable, there's one conversation they can have and that's with us and that's different than when they're at war with each other. >> i got my bill, and i didn't notice, i guess it's higher. am i like anybody else? that enough time to gauge whether there's been a falloff in the price increase. >> sirius started getting your first subscriber ten years ago and has never had a price increase. >> when i first came to the company i thought we ought to raise prices because from the time it started got howard stern, got the nfl and other great content and never passed along those costs. we wanted to grow rapidly and decided to hold off. it was looking at doing a price increase again and the merger came along. i said you know what? we don't need to do a price increase. we can get the savings that way. so now 11 years later, we've

raised the price for the first time and i think we handled it really well. we learned a lesson from another company. >> that company is valued much less than you, but it's ayyub is subscription model and not 7 billion like netflix. >> on the price increase and i'll give you the answer on that one is our consumers have been really loyal and they really love our product, and the reaction has been very modest. very modest. so you know, we feel very good about, you know, the subscriber growth in light of the fact that we put in a price increase. on the valuation, i don't make the valuation -- >> i know you don't, but it's hard for me to get my arms around why you should be at 15. >> 80% of the ebitda is free cash flow. the free cash flow is growing at 75% last year. it's going to normalize and keep growing and the idea is that the

competition that we are facing today, the competition we are facing today, terrestrial radio is not investing in new contact. they're not going to get bigger. on the i.p. side of the house, you don't know who is going to win. today we are the number one radio revenue company. number one radio in the world. >> that's different. >> and have growth characteristics. a growth company characteristics. >> i want to know -- boy, i would love to make news, you can only buy so much dead because you have restrictions and call options. why not initiate a buyback and make the people who have been with the stock for so long making them believe like they do that the stock is way too cheap. >> this sn the first time i am acknowledging this though i always lovemaking news. >> i appreciate that.

when you have the free cash flow for acquisition and there's nothing out there. there is nothing, zero, throughout they want. okay. so you're not going to make -- you can return the capital to shareholders. at end of this year, at the end of this year we'll have between $1.2 or $1.5 of cash in the balance sheet? i don't know what to do with it other than to use it -- >> oor a board decision. i would hope decision, i would hope that the board would have to share my view, but that has to be the agenda. >> he's still amazing after all these years. you like that from your point of view? you don't mind sharing him with nbc? >> i think howard is absolutely the greatest radio performer of all time. >> in history of all time. we are very identified with howard because he does these radio shows. the bigger howard gets and the

more exposure howard gets, the better it is for me, for us, our company. howard's not doing it for us. howard's doing it -- >> and he's getting paid hundred of millions. >> he's worth it. it's not that he's paid badly. he's other wo the money that he's getting and it's good for us that he's successful. >> where do you get your customers. the average car is 11 years old. are you beginning to see from used cars a major growth initiative or will it have to come from new cars and the 14.5 billion built could provide is up side in 20 twef12. >> so far this year on the new car side most people see 14 and 15. that's up huge. >> from a couple of years ago. >> that will drop the top line together with the price increase and that's where the top line revenue growth is at. the used cars there's 200 million used cars on the road

today. we -- a lot of them have satellite radios in them because it started five years ago and started ramping it up. we believe that used cars will be a big driver. we're, working hard to find the information. as an example, i know how to deal with the certified preowned and autonation. if you sell the car to me i have to find out how i can get that information so i can market to you and give you a three-month trial. it is a big deal. >> a little work and we're getting better every day. used cars are contributing to the growth number that you said in the fourth quarter. >> you talked about pandora. in 2011 last year with the competition we added the number of subscribers since our serger. >> it's sort of a remarkable story. i did think you were dead, mel. >> in fairness to me, it hurt.

>> i appreciate you coming on the show because it was a hard-hitting thing that i did. >> you're right. a lot of companies -- a lot of companies -- warren buffett was lending money to goldman sachs and ge at 10% plus warrants. so when we folk 22 companies, okay, that were frozen, that wouldn't do it and to his credit john malone and greg la lefevre stepped up and made a great investment for them and a great investment for us. >> you're a winner and thanks for coming on "mad money." mel karmazan, che of sirius radio. gooing teleand you'll know exactly why sirius xm is going to be a huge success beyond where it is now. stay with cramer. coming up, ride the lightning, take a nonstop thrill ride as cramer knows stock after stock. all of your calls to get rapid fire on the lightning round.

>> later, no place like home, while rents have soared rock bottom housing priceses looking more attractive to investors. what stocks should be evicted from your portfolio? all coming up on "mad money."

it is time -- it's time for the lightning round on cramer's mad money. play until you hear this sound -- and then the lightning round is over. are you ready skee-daddy? time for the lightning round. start with glen in michigan. glen. >> caller: boo-yah, prince jim. >> boo-yah, chief. >> caller: the tigers have a prince of their own now. >> tigers look good, what can i tell you? >> caller: i bought this on pullback today. mcdonalds. >> you know that these monthly numbers should not control and we think the boil are plate negativity, i am a buy, buy, buy, of mcd. let's go to frank in california. frank! >> caller: boo-yah mr. jim from california in long beach state

49ers. >> yeah! >> caller: i'm calling you regarding the wells fargo -- >> wells fargo is precisely the kind of bank i want to buy here. i was worried that the fad would start moving the wrong way and they said maybe we're okay. wells fargo is a buy, buy, buy. how about deb in pennsylvania. >> caller: i'm loving the new commercials of jc opinion me. what do you think of jcp? >> i think the stock has won and i'm willing to pull back. i've told people before he started ron johnson, he should buy it it. the stock rated at 42 and 43, and i walked away. let's go to gary in oregon. >> gary! >> hi, jim, my stock is bgc partners. is the dividend safe and how do they make money? >> okay. we had it going the other day, and i thought that you made it very clear that the company can pay that dividend as a return of capital. i am not that concerned and we need to see the markets better and your dividend's fine. let's go to kevin in florida.

kevin? >> boo-yah to you, cramer. the man with the plan! >> boo-yah back to you, sunshine. >> caller: my question to you is anr still in the doghouse? >> a america r, 52-week low. the coal market is just endlessly down, but you know what? i don't want to sell it anymore. i can't tell you to buy because theria no reason to buy, but at 16 i'm not a seller. let's go to debbie in new york. debbie! >> caller: hi. boo-yah to you, jim. >> boo-yah to you. >> caller: wbw. >> i don't like the quarter. i think you should sell into the tender offer and the earnings are what matters. let's go to dana in montana. >> caller: hi, cramer. i was looking at cypress semiconductor, are you moving out of it? >> you know what? it's inexpensive, but tonight texas instruments and altera, i think cypress gets it again. i think at 14, and you should buy it because the company has a boat load of cash and it has been disappointing. >> let's go to larry in florida.

larry? >> caller: boo-yah from jacksonville, jim. thanks for taking the call. >> my pleasure. >> reporter: my stock is accuright corporation. >> i thought i could play the turn with autos. i thought that i could do it with that one. you know, because i just felt it was, you know, truck car, truck, car, it was the wrong play. comments for truck and auto is mga. okay? the accuride was not the bull market and it's a vehicle market, and i thought it was and that was a mistake. let's go to math you in massachusetts. matthew. >> jim, boo-yah from boston, buddy. >> boo-yah. yeah, man. looking forward to the season. go ahead. >> your thoughts on odp. >> against the sixers and it was just a disaster an odp is similar and they should put odp on the lineup and ron dough. >> let's go to neil in virginia. neil? >> caller: jim, boo-yah!

>> any time i've recommended game stop, they should shoot me! i'm not going start now. let's go to greg in new york. greg! >> caller: mr. imkraer first-time caller and a boo-yah from long beach, new york. >> long beach, got to get out there. good weather. >> bob, he'll blow out the numbers, and i think this is a big year for celgene and they have a lot of new approvals and that's my favorite biotech stock in the group and that, ladies and gentlemen, is the conclusion of the lightning round! [ male announcer ] what if you had thermal night-vision goggles, like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep,

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my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i came to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does that mean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country. ♪ weight loss programs cae expensive. so to save some money, i just got the popular girls from the local middle school to follow me around. ew. seriously? so gross.

ew. seriously? that is so gross. ew. seriously? dude that is so totally gross. so gross...i know. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more. >> hey, look. eventually even the greatest bull markets have to come to an end. for the last few years we've seen a raging bull market in rental apartments. people can't own, they rent and with all of the foreclosures as the totally moribund housing

market have their have been a ton of renters. they make fortunes in reits, but a las, i think the bull market may be coming to an end slain by the matadors known as affordable housing. it's time to put the apartment reits in the sell stock and it's the investment in management and equity residential. the reason it's pretty simple. when nobody was buying homes, now that weir looking at the genuine bottom in housing, the rental reits may not be such winners. this is about the economics of owning versus renting and when the market fell apart and nobody wanted to buy anyway, even as homes were getting less and less expensive, but just yesterday we got new data suggesting that houses have never been affordable than they are right now. every year they release a housing affordability index that relyes how it stacks up with the median family income and the average interest rate on a mortgage.

when that's at 100, it means the typical median household is existing single family home. in other words, a rating of 100 means the average family can afford to buy an average house and the higher it goes the more affordable it gets. do you know where that index was in january? it did a record high of over 206 and named the typical family more than doubled. it's never happened before. not since the nar's been keeping records since 1970. it's never been a better time to buy a house than right now which is one of the reasons i'm putting my money where the math is. all of this is great news for the me, but it's horrible for the rental business because for the first time in ages owning is cheaper than renting. rentals have become more expensive and way more, and in fact, it's become more like apartment buildings have become victims of their own success. that's a 12% increase and astounding and as a result, vacancy rates have dropped in

levels that they can see in years. which is exactly what's been happening. last year's sales of residential rental property owned 50% from 2010 and this year there's a ton of new supply coming online and when you throw in the competition from people who can afford to buy their own homes and it seems to me that the rental rates, that climb, let's just say it's not going keep up and that way it will not register the apartment reits. they've not performed the average real estate investment trust for the last few years. the worst of the bunch happens to be some of the best run and equity residential and apartment investment and management and these two have both had huge runs and they now sport some of the lowest yields in the space. really crucial considering that the main reason to own a reit is a dividend. the management has run up 292% from the generalal low three years ago. now yields is 2.9%. this is one of the largest owners and operators of apartment properties in america and it could be hurt the most

with the available housing and rallied 20% since november and i think it could be due for a pullback, and even if it raises the dividend from current levels, the yield will still be too low for my taste with the better yielding reits. how about this equity residential? up 241% from the bottom and not only is it a 2.7 pure yield and this is the best managed apartment reits out there and solid balance sheet. however, i think the upside is limited and equity residential has become a good house in what could be a deteriorating neighborhood. the bottom line, the ultraaffordability is not good news for everybody, and i think it could spell the end of an outperformance run in the real estate investment trust which is why i'm putting all of the reits in the sell block and apartment investment management, they have the low of the yield and thus issue the lowest and least protection. "mad money" is back after the break. it's kind of hard to make decisions by yourself

all of a sudden, when you have been making them with somebody else for 35 years. i guess there is something in me that has always been strong. i've always gotten through some pretty rough stuff without falling to pieces. ♪

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>> it was the best of quarters, it was the worst of quarters. forgive me for quoting from charles dickens' greatest work, a tale of two truck bakers, but that's how i felt after hearing about the hideous quarter of from navistar, compared to the principal competitor cummins reported a month ago. you don't need to look further than these two truck stocks to understand why execution is so darn important in this business particularly if you're a global manufacturer selling to china and europe because some

companies have it, and other companies just don't. cummins knows how to execute. it's the company with the midas touch, taking advantage of the latest technology built fool-proof engines that are the envy of the world, but navistar, these couldn't execute if their lives depended on it. it's a staggering $153 million loss and $2.19 cents a share came from warranties and recalls. without one-time charges, the company reported a still horrendous loss of $2.17 per share. talk about upon droing the ball. navistar had to recall 19,000 trucks and busses courtesy of brakes, but of course, that loss is on navistar. the company's had $120 million from warranty losses and stemming from the manufacturing in 2006 and 2008. hideous. as pathetic as those charges may have been, they were the tip of the iceberg. was it last month from $5.79 to

a much lower range from $5.24 and talk about not being in control of the situation? navistar is like a str that jack knives across the highway all because the driver was asleep at the wheel. contrast that with cummins which delivered a remarkable quarter last month, sales up 19% and earnings coming up at $2.56 a share and the street was looking at $2.54. it was riding high and only a huge increase in truck orders worldwide, but particularly from china. ever since the beginning of january, it was becoming the year of the stock picker and nothing drives it home more than the disparity of the two truck companies. we tend to look at price to earnings multiples and growth rates we need to figure out the price to earnings that figure out the comparison of stocks, but sometimes it all comes down to management and in this case navistar doesn't have its act together while cummins is running circles around the competition. at the moment it might top buy

it off this disparity. when china lowered the growth boom this southbound the stock shed 12 points which tells me it has more risk up here than when it traded in the '90s and '80s. when you want to mri a theme like, for example, the global growth of trucking, you must absolutely play it with the best of breed, even if it's the most expensive stock of the bunch. sure navistar is cheaper than cummins, and then again, it deserves to be. stick with cramer. medicare. it doesn't cover everything.

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