president met with some of his treasury department advisers, regarding the ifrp rs scandal. irs in the tresry want it. if i had to make a wild guess without knowing anything, you will see him take greater actions, the you dig into it. so that's one possibility. >> yeah, ayman, no surprise, a lot of lawmakers out there are call, for heads to rom on this. >> reporter: that's right, mellissa. this administration has been on its heels as far as scandal. we do know what the speaker of the house said should happen. take a listen to john boehner earlier. >> my question isn't about who's going to resign. my question is, who's going to jail over this scandal? >> and, obviously, mellissa, who is going to jail is a very tough question to ask. we know eric holder, the

attorney general says he has oldered a department of justice and fbi investigation into this irs situation. he testified four hours on capitol hill today facing a barrage of questions that got very testy today with arguments back and forth over a range of issues including this irs investigation. where that investigation will go is unclear at this point. but what we are seeing right now within the past hour or so is an administration that wants to be on the offense here just about 5:00, they released e-mails in the benghazi situation. 100 place or more. now, we are seeing the president talking about the irs. they're trying to get out in front of this stuff to take the leader. >> larry, in order for this administration to move from the defense to the offense, what does the president need to say in five minutes time? >> i think it will be difficult for him to get on the defense. my thoughts here, he should appoint some kind of special

prosecutor or counsel to oversee this. one of the points is they will be leading committee hearings on friday. the ways and means hearing, for example, as well as the oversight regulatory hearings. they are saying the leading people in the irs lied before a congressional committees or in letters to congressional committees. they are calling them liars. this has made bad blood, but, unfortunately, the actual irs problem has spread. it's not just centered in cincinnati. it's moved to california. it's moved to washington, d.c. it looks like nobody is in the irs to run this shop. >> right. >> that's why i'm suspicious maybe they're going special further, not just the fbi but a special council. >> they have the senate finance committee announcing a hearing next tuesday. oversight and government reform committee of the house announcing another hearing next wednesday. tyler, this is just the latest scandal at this point for this administration.

>> that's quite right. this has not been a good week at all for the administration. because this one, kind of the icing on the cake of a real trifecta of problems for the administration. there was, of course last week the hearings into responsibility for, the administration's reaction to and the statements made by administration officials over the deaths of the american ambassador and other americans in benghazi last fall and also, of course the scandal that broke earlier this week about the subpoenaeing of phone records of both work records and personal phone records for a.p. reporters who were as part of an investigation into leaks of national security material. so when you add these three things in there, the white house, the administration's word, it's rep takes for honesty -- reputation for honesty and transparency for being forthcoming in on attack on three fronts now.

>> does the administration lose credibility? does it lose the aura of transparency now it is on the defensive, i should say, of the three different scandals this week? larry. >> oh, i beg your pardon. well, listen, i agree with tyler's summary. there is no question question t administration is back on its heel, things like immigration, gun reform, maybe a deficit deem or entitlement form. in other words, republican, we had mitch mcconnell, senator mcconnell on our show last night. republicans are moving on the aumpls. they will use these hearings, whether it's benghazi the secret appearance of the a.p. phone calls or the irs. the republicans smell blood for 2014. so the president is noeft most certainly on his heels. he needs to make a dramatic

announcement. i could be dead wrong, timer. maybe out of the blue, we're not figuring this, there is an announcement about something like syria. sometimes presidents will do this for national security purposes. maybe. maybe. i don't know anything about that. all i know is he met with the treasury team a few hours ago. that meeting, i think, is going to look into this announcement. i think one leads to the other. >> you can almost hear the gop recalculating how they're going to go about attacking the administration's second term agenda at this point. >> absolutely. the question sheer about the democrats on xichlt i w-- on ca. that member of congress today was expressing real concern here about both the irs situation and the a.p. phone records situation. not really sure where these things are going to go, not getting communication from the white house. democrats up on capitol hill seem to be a lot more concerned about the a.p. situation and the

irs situation than they are about benghazi. they feel like benghazi in the words of jay carney is a political circus drummed up by republicans to take advantage of a tragedy. in the casetheirs situation and the a.p. phone records situation, they're concerned. they're worried where this is going to go. that report up on capitol hill is going to be really important to the president as all these things go forward. presidents need to have their own political party, have their flank on the hill. >> can i add one quick thing here for discussion? >> yes. >> it is also possible that president obama will announce the resignation of the acting irs director steven miller, who was one of the people that republicans have said lied to them in committee hearings and in written material. he may ask -- he may announce the resignation of miller. i'm surprised that hasn't happened already and to show action, he may announce a new appointment to be the new director of the irs. that is possible to try to get him back on the offense. >> all right. well, let's bring in mark

hannah, who was an ad advisor to the obama campaign and a contributor to the huffington post. you know this administration really well. is it your anticipation the president will go ahead and be on the offense, take the ball into his own court and say, you know what, i am going to announce the resignation of miller and appoint a few director? >> thank you for having me on, first of all. who knows specifically what he will do. i can tell you this, i can tell you the administration doesn't have to have a need to distance itself from this. the irs as you snow an independent agency. so the sort of party line here, what the president has been saying all along, if she as outraged as everybody else, what we have are two mid-level bureaucrats in cincinnati that have made this sort of political calculation completely inappropriately. and the president is being as extreme as he needs to be. it's completely justified and

outrage. >> i disagree respectfully with my best friend hannah. the idea that it will not be credible, we are now up to 500 applications from conservative groups that were held back and attacked. that two-person thing is not credible. secondly, the irs is an independent agency inside the treasury department. and the council of the irs must report to the general council of the treasury department who, in turn, reports to either the secretary of the treasury. at that point it was timothy guitener or the general council in the white house. so the idea that the irs is a completely independent agency off to the side is incorrect. the president appoint the top two people and the lawyers have to report through the treasury, back into the white house. >> larry, i grant you that. but granted me this, the commissioner of the irs is a holdover from the bush administration. if we want to politicize this. >> not now. >> we can point fingers

anywhere. >> no. >> do you think the people in washington, the people working in the white house are overseeing, looking over the shoulder of these staff members in cincinnati. you think this has been political sized as a broad conspiracy? >> i actually do think it has been politicized. let me say this, the bush holdover showman is gone. also the data show the meetings show, he, too, lied before congress. so i'm not xejt hexemting him. the other person must go, too. that's why i'm starting to think, maybe the president is going to announce some resignations tonight. maybe he's going to announce some new appointments. if i were president obama, that's one of the things i'd do. as i said earlier, i also think they should go further than the fbi. they should appoint a special council, not an independent prosecutor. but a narrowly defined special

council that will deal root and the branch with this irs corruption problem. >> larry, if i can jump in on that one. there are two blank spots here in this inspector general report that came out earlier this week. one is a question i have been trying to get from the department of treasury on. i don't have an answer from them yet. that is when did treasury first learn that there were problems with the irs in terms of its examinations of these political and conservative groups? we don't exactly know in the time line when treasury found out about this? did they know about this before the election? we don't know the answer to that. and then the other question, the inspector general report, oddly, in my view, takes the passive view when it says at one point an employee of the irs was asked to start to fimter for tea party people. what the report doesn't say is who asked for that filter to be applied? who asked for the tea party to be a criteria that these

organizations were going to be judged on. we are missing the name on that figure inside the irs who made that decision. there are a couple key questions we don't know the answer to. the president will move to try to get ahead of that. >> i think that's right. i think larry is right on this. i think the timing of this, the fact that it's in the east room of the white house, trying to get out ahead of the 6:30 newscasts on the major networks suggests to me major changes are afoot within the irs and the only way the president is going to get ahead of this before this gets ahead of him is by seeming to and appearing to and actually taking charge of it and rolling some heads, actually. >> the key point in the ig report as reported by steve weissman of jonathan weissman of the new york times who is quite a good reporter in my opinion, august 4th, 2011, there was a meeting august 4th, 2011, of a lot of people to talk about the attacks on the conservative

groups the so-called tea party groups. the question is, at that meeting, was the irs general counsel there? initially the i.g. report says he was there. inway which case he has to report and jump the fence into the white house. however, the irs denied that today. they said representatives of his office was there, he himself, wasn't there. the key date is august 4th, 2011. that's when all the senior people in the irs would have known about these attacks and, you know, slowing down the applications for the conservative groups. >> mark, i want to bring you back in. wouldn't it be powerful to ayman's point? he brought up key important questions. one is who in the irs requested that screen? wouldn't it be powerful for the president to come out and say, excuse me, i want to know who requested that screen? >> absolutely t. president will do that. i think the president's primary

focus here is to restore the credibility of the irs with the american people and, frankly, with the administration, itself. of course, the president isn't a huge fan of the tea party movement that tried to, you know, ramally against -- rally against him during an election cycle. at the same time, there has to be an element that the president and people like me like to see the civic engagement, civic activism that is happening with the tea party with the occupied wall street. so he's got to be disgusted. i think he is when an agency like the irs starts going after people for democratic participation. i think he's not going to, again, try to distance himself from this. he already distanced from it. i think what we're going to see here is specific action being pickled, made that reenforced the -- >> mark, i'm giving you with way out, mark. that's what he has to do. announce some firings tonight. announce a few director of the

irs. that's a way out. announce a special counsellor to oversee the whole operation. by the way, i think that missing name, i'm go back to my pal ayman javers, lois lerner was in charge of the tax exemt division. her name is littered throughout all the meetings and memoranda regarding the attacks against the conservative tea groups. in fact, she is a target of the darryl i darryl issa. lois lerner is absolutely the key point and her head should roll, also. >> larry, you are exactly right. she was the head of that department. the voice goes into the passive voice and says somebody was asked to do i. we don't know who did it.

lois lerner will be testifying on capitol hill before darryl issa's committee. on wednesday. we may get answers, neil woland is the number two official whose responsibility includes overseeing the irs. he also served as the acting secretary of the treasurer. he's a key figure over there. he will be able to fill in the gaps. the key question there politically, not necessarily legally, politically is did treasury and the administration know about this problem before the election and what did they do to bring that to the public attention? obviously, most people are just finding out about this in the past week or couple days. >> you just mentioned ayman the house oversight committee t. latest flash is the oversight committee asked the irs committee to make five irs employees available for a specific, transcribed interviews. that's according to reuters, so we don't have who those five irs

employees are. but one could assume that some on that list would be the, miss lerner whom you mentioned and presumably others who are involved in this targeting of conservative groups. >> steven miller, steven miller will be on that list. >> you bet he is. >> he's the acting director. he's the guy that should have re59ed a couple retired a couple years ago. fire miller, put your own guy in, mr. obam pa, go ahead. >> mark hannah, our thanks to you. contributor to the huffington post. we want to bring in tony prado. tony, your thoughts on what the president should do to take control of the situation tonight? >> well, i think he certainly is going to have to be accepting some resignations here. i think it is critical to show there will be a leadership change there. he's going to have to demand changes in the way irs does business, but, look, i think the real test of this, somewhat, larry and aran were talking

about is dates and times and activities and who spoke to who when. and this crisis for them is not going to go away until all of those questions are answered. i can tell from you having gone through a lot of these kind of inquiries in the past, you know, every -- they had to put out e-mails today on benghazi, e-mails in and out of the irs. none of them can be protected. they will all become public. we will find out who was communicating with irs. by the way, don't forget, it may include some members of congress who were communicating with the irs, too, and asking them to take a look at certain group also. we all heard them at the time, there were people talking about, you know, tea party and other parties that were filing. >> one of the problems here, i say this to all of my colleague, one of the problems is the irs right now is disagreeing with the inspector general's report.

okay. that's the treasury department's inspector general for tax policy. they put out this voluminous report. it was leaked to the "wall street journal" and leaked for everybody else to see. the irs is disagreeing in a crucial area, whether the irs chief council was in this meeting august 4th, 2011. because if he was in that meeting as the ig says, the chances to the white house are much greater than if he weren't in that meeting. if he weren't in that meeting, everybody is going to ask, where the heck was he and didn't his subordinates that were there tell him what to do? so this guy is going to be a pivotal guy. >> larry, you are right. but the irs says, the general council of the irs was not there. he did not attend that meeting. we could be having a miscommunication over the term general counsel or counsel

oofls. they may be referring to a large office with thousands of lawyers. you mentioned the five names you want to see on capitol hill next week. they are low level figures, in washington, holly paz, liz hoffbaker and joseph herr are the five officials the house would like to hear from and have transcribed with the irs. >> i don't know if the president is coming up quickly here, one thing about all those individuals, you have to remember these are, in fact, criminal violation, very potentially and so i wouldn't be surprised, i might be surprised if they actually do testify. >> including the big shots, by the way. i want to go back to this other thing, this guy steve miller. >> it's a danger for the people who are named, or questioned. >> when those people go before darryl issa's committee, correct me if i'm wrong, they are under oath? they are under oath?

>> are you right. >> therefore, there are crimm -- >> they can be, yeah. >> that's right. therefore, there are criminal consequences here if they say the wrong tooin thing. >> and oftentimes that's why you see people, not saying anything about these specific people, but just generally within have you these house hearings, you will often see people take the fifth before congress because they don't want to implicate themselves in a simultaneous criminal situation that's going on. that could be what we'll see here. we have to wait to see. often the house will let them off the hook and let them take the fifth publicly. but if they want to have a real set to, they'll force them. >> the president is approaching the podium. let's listen in. >> i just finished speaking with secretary lew and senior officials to discuss the investigation of irs personnel who improperly screened groups applying for tax exempt status.

today i want to make sure to get out to all of you some information about what we're doing about this and where do we go from here. i reviewed the treasury department watchdog's report and the misconduct that it uncovered is inexcusable. it's inexcusable. americans are right to be angry about i. -- i. i am anr am angr about i. as i said earlier, it should not matter what political stripe are you from, the fact of the matter is, is that the irs has to operate with absolute integrity. the government generally has to conduct itself in a way that is true to the public trust. that's especially true for the irs. so here's what we're going to do. first, we're going to hold the

responsible parties accountable. yesterday, i directed secretary lew to follow up on the a.g. aude it to see how this happened and who is responsible and to make sure that we insurance all the facts. today secretary lew took the first step by requesting and accepting the resignation of the acting commissioner of the irs. because given the controversies surrounding this audit, it's important to institute new leadership that can help restore confidence going forward. second, we're going to put in place new safeguards to make sure this kind of behavior cannot happen again. i directed secretary lew to insure the irs john boehner implementing the i.g.'s recommendations right away. third, we will work with congress as it performs its oversight role. and our administration has to make sure that we are working hand-in-hand with congress to get this thing fixed. congress, democrats and

republicans owe it to the american people to treat that authority with the responsibility it deserves and in a way that doesn't smack of politics or partisan agendas. because i think one thing have you seen across the board, everybody believes what happened in, as reported in the i.g. report is an outrage t. god news is it's fixable. it's in everyone's best interest to work together to fix it. i will do everything in my power to make sure nothing like this happens again. by holding the responsible parties accountable. putting in checks new checks and safeguards and going forward by making sure the law is applied as it should be, in a fair and impartial way. we're going to have to make sure the laws are clear, so that we can have confidence that they're enforced in a fair and impartial way and there is not too much ambiguity surrounding these laws. now, that's what i expect.

that's what the american people deserve. that's what we're going to do. thank you very much. from president obama, announcing most importantly the resignation of stephen miller, the acting head of the intern am revenue service, that resignation submitted and send today to secretary jack lew. falling short on a couple of the other things larry said he would like to see here. obviously, this is an evolving story. larry, here is step one, among other things, saying new safeguards will be in place. the president and other officials will hold responsible the parties, hold responsible the parties responsible for this targeting of conservative groups. what did you think of the statement? does it go far enough? >> i thought the statement was fine. iglad he fired this guy steve

miller. i'm glad for the safety of the country and the irs, you can't have it reduced to some podunk corrupt agency. having said that, he is given jack lew the new secretary a tremendous amount of influence. you recall a few moments ago, i said the irs is not completely independent. it reports up to the treasury. so the secretary of the treasury is now going to be running whatever transition and whatever criminal investigations and civil investigations regarding the irs. the last point is, the president is going to say some more about this tomorrow. we may learn more tomorrow. remember the fbi is coming in. they're probably already in the building from the justice department. so i don't think we've heard the last of it. i'm prepared to say i thought the president did the right thing in firing miller. i hope he appoint a new director post-haste to straighten out this irs matter. >> exactly. and ayman javers, he did not go there. he did not make any announcement

on who a new acting director would be, merely, mr. miller has been fired. your reaction, ayman. >> it's similar to the written statement the president put out, except this was on camera. the key difference, what he said, i am angry about it. he made it an emotional story t. president has been criticized for being too formal, liamistic. >> what did i -- legalistic. >> what did i say? raises this to the next level of the president of the united states. >> ayman javers, thank you very much. that concludes our coverage of the ongoing events, scandal unfolding involving the internal revenue service and its targeting of certain conservative groups. larry kudlow will have more at the top of the hour. meanwhile, "mad money" starts now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market

somewhere. and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. my job is not just to entertain but to coach you and teach you. call me at 1-800-743-cnbc. you saw the timor of two cities today. it was the best of times for google. the stock was the worgslet worst of times for apple. the stock plunging. the dow climbed, s&p gained one and the nasdaq edged up .26%. the portions of these two cities cap cured if imagination of everyone who focused on the stockmarket. i know, you want answers about this divergence. you ka imto the right place. first, the tale is not a good one. apple is down 19%.

so we shouldn't just say, wow, what happened there today? this spread has gotten wider and wider. second, we know google is red hot. hardly a day goes by where we don't hear an analyst yapping about why gool google is heading. thank heavens they didn't predict google is going to $is,000. almost every time we get a one price thingy, we have a quick sell-off. it's like a thousand dollars, oh, sem, sell, sem, at the same time, wall street has been worried about apple. the stock bottomed on all that bad news, perhaps by a decent yield of 3%, kind of like kimberly-clark and clorox. from there, apple roared 80

points before collapsing back to $489. you look at the charter of that move, it does have the feel of what wall street calls the dead cat bounce. something i know can cause a bit of a lift. given that i saw my cat get hit by an 18-wheeler and the poor soul had a bit of a lift at the fatal point of impact. of course, apple is in a much better opportunity. that's when you name your cat after a distribe component on the 52-week low list at the time of the accident. and we know apple fell below the 52 day average. something i point out. on tuesdays, we hear about the traders blown out of the stock when it takes out that key level support. we have to throw that in the mix, too. you fwhee this is really about? it's what it's always about. it's about the earnings, the future earnings, how to value them, place a price tag on them. right now, google has a core business that is hitting on 12 cylinders.

like that boomer 760. especially a search business and a promising advertising business that's taking the interfet world by storm. we call the problematic. google is pulling away from the search competition to charge more than everyone else. it has the android by samsung, it hasn't begun to exploit it much for cash. you know that will happen. finally, google looks like it's getting around to monetizing youtube, which morgan standly says will be the next $20 billion in revenue business. who has a business suddenly worth $20 billion? that's incredible. when i read it, i said, wow, $20 billion buried within that company. that's amazing. morgan stanley makes it sound like youtube is the next abc, nbc, cbs, fox, and time warner all combined, with massive market penetration and much love from both viewers and advertisers. i will go one step further,

unlike apple, microsoft or yahoo, google does not need to buy netflix to grow faster. it's growing faster than netflix, which brings me to the real issue, valuation. are you getting an droisd, new google maps, some will pan out, maybe big time. which means the earnings estimates can be too low and the earnings might be accelerating. arg. what does apple have next? what does apple have to compare with google? what do they got? what's going on at apple that can move the needle? not sure. i don't know. i can't say. it beats me. one thing we do know is apple keeps beating the earnings estimates, falling far sure. wall street presumes they will miss the next quarter, too, unlike google, there are no issues that we know can help them beat or meet the estimates. there is a growing potential that apple's earnings might be lower next year than this year, very different from google,

which may gree to 18% next year. as earnings shrinkage is only something i expect with coal or iron companies. somehow you don't want to be in that cohort. of course, apple pays half the dividends. there would u could be down 50 points. the dividend like apple is a double-edged sword. someone on twitter asked me if i thought google should pay a dividend? goodness, no. i want all these fabulous opportunities so it can grow them and accelerate erevenue growth from here. you want to keep the money in the business when the growth is in front of you. for google, it's low, hanging fruit to be harvested. for apple at the moments, i think it can bounce back. at the moment the tree seems to be bar ren. that's not just me b.c. the ironic. how do you value them? first with google, you have to look at the compare, right now google trades at 20 times earning, 20 times next year's lowball estimate, even as i

expect 18% growth. that's really cheap. who else trades at 20% earnings? who else values the same earnings in the future? how about clorox? how about kimberly-clark? campbell pork and beans? in other words, companies with a third of google's growth rate sell at the same eastern e earnings rate multiple. if you are a growth investor, you want the super oxygenated growth of google. if you use the same yardstick as the group, you'd be willing to pay substantially more. how much more? it's too insane. this is where things get subjective. we know we should be willing to pay a price earnings multiple twice the size of the rapidly earning rate f. we do that on what google supposed to earn next year, that means you get a stock at 1,600. no, that's too crazy, too. isn't it equally yaez that google sells at that time multiple as clorox when google

is growing four-and-a-half times faster. that's a head scratcher, isn't it? we get a price earnings multiple 2.5 times the growth rate. i got to be rigorous on this thing. if you use that growth rate, what do you get? you get google at $1,000. that's why the analysts gravitate to that level. it makes sense. especially if that growth rate is accelerating, as i believe it is, but apple, it's not that i think apple should be lower, okay. i'm not making that case to sell or anything like that. my charitable trust owns it. it's what price multiple with the climbing inconsistent earnings should trade at? i have never been able do that in my years in the business. we can't be sure. gookle ge goggle gets the benef the doubt. what can change this divergence? when what gets apple to turn around or google to turn down? anything that shows apple can

beat the estimates or anything that suggests google will fall short. right now, we don't have either. so here's the bottom lean. the timor of two cities is, indeed, playing out, like that amazing stock picker charles dickens predicted. it is the season of darkness for apple. the spring of hope for owners of gog and season of despair for apl. until we hear otherwise, i expect them to fall short of estimates and google to beat the expectations. it shows google at $915 is cheaper than apple at $489. amazing when you think about it. let's go to ted in texas. >> caller: first time carole, long-time viewer. >> i welcome to you the show. >> caller: thank you. my question today is on why rcw is up 21.5% today at a 52-week

high with the stock with little to no move over the last i'd say month, years, even, is this one here to is stay? >> this one exploded. you know, i got to tell you, the truckers are very hot, but this one is too sizzling for eme. look, the momentum is unbelievable here. if you want to take a shot at it. i can't handle it. it's too had for me. let's go to chris in new york. >> caller: jim, i know you used to be bullish on toyota a couple years ago. >> i was. >> caller: how about now? they seem to be ramping back up there. >> i said this morning, i think toyota is real. because the japanese got serious. they are devaluing themselves daily so it makes it toyota will be cheaper than the other cars. that makes sense. i think it can go higher still. it always was a great car company. now it has a great advantage. it's a tale of two cities for two tech titan, gook goggle with

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time to address one of the most controversial stocks, a crossfire stock, a battlefield stock in this market. i'm talking about cree. rocking 78% higher just since the beginning of 2013. yesterday we got a pair of dualing analyst reports about cree. the guys who cover this stock came out and downgraded from buy

to neutral, cutting the price target from 56-59, roughly a buck below where the stock is trading right now. doesn't that say sell, sell, sell? at the same time, literally one minute later, laczar which is created as a buy, come out and raise their estimates and dramatically boost their price target from 62 up to 73. it's literally this -- all aboard? now, regular viewers foe that we love these analysts especially when they're fighting over an uber stock like cree. it has a lot of bullish backers along with equally ardent bears and short sellers. when two analysts come out with contradicting opinion, you get to process the argument on two sides. judy colins saying i used to play that music. can you fake i make the most inform process of where the stock is headed. we like the process of figuring out stocks so you can like it too. before we get to the face off,

you should by a ware i like to play with an open hand, even one that is six clubs high. i got a history with this stock. way back in 2010, i remed cree as a play on -- remed cree as a play on old fashioned light bulbs towards light emitting diodes, that are way more energy efficient. can you leave them on for weeks. i never turn off the one next to my bed. then again, i never go to sleep. they can last decades. cree at the time was using video displace, your smart phone, as well as lg chips for the lighting market. i thought they would take off the stock would roar, talk about being early? no, i was wrong. not early. it dropped like a rock. falk from $70 where it got behind down to $52 in six weeks. faster than tesla going to 98 or

wherever it's going these days. i mutt a post-it on my head like confections of a street addict. i apologized for recommending the stock and told you i was dead wrong. it is a good stock to own, get rid of it. i was right, cree was up 20 bucks and changed. i have been burned before, burnt to a crisp like a smores. the cree today is very different from the cree of two-and-a-half years ago, which is is very reason they have been nearly able to triple. these days, cree is geared to the display back-lighting business, it crushed the stock after i recommended it wrongly in 2010. the company has a lot more exposure to general lighting. like the light bupings for the lamps in your house. led-based lights have become increasingly popular. i feel like i'm the sham-wow guy here. yeah, the chap swapper, whatever that thing is.

when i originally recommended this, they're indestructible. what i originally recommended this stock and got annihilated, they didn't sell lights. in august of 2011, cree bought this company rude lighting. since then, they have been selling led light bulbs and light fixtures. in fact, this accounts for 37% of this company's sales, in other words, cree is now vertically integrated led lighting play. that is a lot more, makes that stock a lot more attractive. the second big change is led lighting is much bigger these days as leds have rapidly taken market share. you see them on the shelves of every hardware store, supermarket and discount store in the land. cree has become a much better company than i said to by it. it has had an epic run. can it keep going higher or is it due for the long-awaited pullback? hence the need for the analyst's face off. first, they seem so

contradictory that i find it per plekt per plekting. lazar raises their product because they see a demand. in fact, their checks were more positive than the company itself is saying. amazing. they downgraded the stock, why? whaus because their light lullb business could be in serious danger of getting squeezed out by the competition from phillips. holy cow, it's a behemoth. we don't want that thing coming down on us. so, not only do tease two these two guys disagree about stocks, it seems like are cree's bulbs selling well or is philips muscling them out of this space? the bear cage is simple. they talk to lighting distributors all over the country. and what they've heard is that philips throughout the lighting business is forcing distributors to choose, choose between their

products and cree's. they think that roughly half of cree's distributors kwaer cree and philips and know these guys believe those distributors will stick with philips, which has a broader product portfolio if they are forced to choose. they think this can put 15-20% of cree's total sales at risk. that's a lot during the current quarter and the next one. that means estimates are way too high. what about lazar? it says cree's bulbs are selling well? are they as contradictory as they seem? no. no. in fact, it turns out the lazar checks were with home depot. the key here is cree tells to them directly. stern ag check with lighting acts who account for the other two-thirds to four-fifth's of cree's sales. phillips could, indeed, be squeezing them out with those agents. you'd never know if you only spoek spoke to home depot.

that itself the flaw, two different methodologists methodologys, two different results. the new bulbs cost less than $10, without hurting the company's margins. they were nearly sold out because they actually look like an old fashioned light bulb. not a prop from the low bucket science fiction movie. so who's right? i think it's important to note that even when stern ag says they're worried about the next couple quarters, they take great pains to make sure negative impact will be short term. they believe over the long term, cree will be the major player. i don't think philip is going to muscle out cree. this kind of thing is not knew. it's been going on for years. these companies night for lighting agents all the time. psychiatry not cheap. no, selling for 33 times next year's earnings with a 16.5

growth rate. i do not like to recommend anything on this show which sells two times its growth rate. google, i like this company. at these levels, no, only on a pullback. for once, i happy the bears will be right. if cree gets hit, that will give you terrific buying opportunities. this is what i think. bottom line, when two analysts contradict each other, you need to go with the side that's more ris rigorous. lazar says their trusts were strong. lazar only checked with home depot. stern is important. they cast a much wider net to make the best judgment. the best judgment is a decree against cree. i can't recommend cree at tleefls. if we get a pullback like this guys if ace 82 are predicting, i think cree, indeed, would be an excellent buy. sally in illinois. sally. >> caller: hi, jim. are you the best of the best on cnbc. let me tell you. >> thank you. >> caller: my question is, what is going on ge?

is it time to get right rid of that and bring back another jack welsh? he's not doing good at all for ge. it's been a long time. i don't understand the last shares that i bought were in '08. they were 24, 39? '08. what is he doing? >> well, first off, look, do i know him? i know him as a business plan. if you know, he works as hard as he can. i think there are a lot of businesses doing okay. last quarter wasn't that good. that said, i put my money where my mouth is. my charitable trust owns ge. you are right, it has been disappointing. i don't know how else to put it. it's been a disappointing stovenlth i believe the prospects are improving. i think it's worth earning as the business increases and the business comes together. analysts at cree are saying that cree is, analysts are saying cree is worrisome. lazar disagrees. i like the netcast by stern ag

on a pullback. i actually like cree. don't move. the lightning round is next! . ♪

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♪ it is time, it is time for the lightning round! what's that about? i tell you to buy, buy, buy, or sell, sell, sell. my staff is here.

play this out and then the lightning round is over. are you ready, ski daddy? it is time for the lightning round. i start with mario in georgia. >> caller: cramer, i love the show. first time caller. long time listener, baby. >> thank you. >> caller: my stock is pvl, far ma. >> i think it's a spec, but i do like this one. richard if texas. >> caller: yes. >> hey, rich. >> caller: a big texas boo-yah. >> i like that one. >> caller: what is your opinion of ford common stock, what is your opinion? >> i think europe is bottoming. i think ford is a buy. don't just quote me because cisco, john chambers got one 84 on that conference call. he says europe is bottoming. that's fabulous for letter f. jerry in illinois.

jerry! >> caller: boo-yah, jim, first time buyer in 25 years. i need your opinion on my first purchase berkshire hathaway brkb. >> jerry, you got poor sense, i don't know a better way that start the first wife than buying warren buffet's company. jack in ohio. jack. >> caller: jim. hey, i'm in it for the long term but the monthly dividends payout arr. >> man, that one's too hard. i got to tell you, i don't like the mortgage reach. i don't know what the feds are going to do with mortgage rates, i'm suspending judgment until we have further clairity from the feds. patricia in hawaii. >> caller: hey, cramer, how are you doing? >> i'm fine how are you? >> caller: what should we do at

skyworks? >> we feel t it hit bottom. cisco kind of confirmed that. skyworks is fine. it's not the best. but let's go to mike in new york. mike. >> caller: yes, i was wondering about sun powerment it had a great report today, jim. >> it did. after first solar, they have a staying power. i still like first power more t. chinese have pulled away from the market. i go to div you a in california. >> caller: big boo-yah to you from california. >> bob: thank you, same. >> caller: i want to ask you about ddd. it's had a good run. i want to know from you the expert whether or not it's a buy. >> that's too ricky for me. there are so many good stocks that are in this 3d business right now that it worrys me you could have a hiccup. you need to wait. you can't change ddd. i need to go to vince in

virginia. vince. >> caller: >> go ahead, vince, are you up. >> caller: a big boo-yah from the capital commonwealth of virginia. >> nice, i like that. >> caller: beginning of last year you had on mpc. >> i like that. that's a company that you can buy, buy, buy, marathon petroleum. oil was down today, the inventorys will offer you some opportunity to buy oil. brian if new york. brian. >> jim, welcome. boo-yah, cramer. >> yeah, ha. >> caller: how are you doing? >> not bad. you. >> caller: i'm good. i got some housing money i'm playing with, with this stock travel america. ta. >> oh, we like that. we just said the other day, we thought it was a good stock, i answered an e-mail query. we went with it. i think it's okay. i think you have a good one there. and that, ladies and gentlemen, is the conclusion of the

lightning round! did the irs scandal deliberately defund the tea party? stocks are down. and might obama's scandal end his second term agenda? "kudlow" up next. se tech jobs m. we teach cutting-edge engineering technology, computer information systems, networking and communications management -- the things that our students need to know in the world today. our country needs more college grads to help fill all the open technology jobs. to help meet that need, here at devry university, we're offering $4 million dollars in tech scholarships for qualified new students.

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yes, this is good, we learn from the charitable trust. i promise to find more money for you right here on "mad money." i'm jim cramer. i'm see you tomorrow. ♪ the big story tonight, president obama is weighing into the irs controversy. he just finished a live address at the white house where he announced the resignation of the acting chief of the irs. it was a something i called for him to do moments before it happened. anyway, ynbc's own ayman javers joins us from capitol hill. what else did the president say and good evening to you? >> good evening, larry. as you say within the past couple of minutes, we got a letter jack lew