>> i don't believe it. >> you remind me of half a horse. >> thing a space has been under question. i'm telling you something. >> thanks for watching. see you tomorrow at meantime "mad money" with jim cramer starts right now. >> my mission is sim. 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. you want to make friends, try to make a little money. my job is not just to entertain you but to educate and teach you. call me 800-743-cnbc. now, where was the cornage? last 20 minutes not so hot. but wrs the vast destruction? in the face of what could be the worst washington showdown yet!

since the obama administration began. you got to ask yourself why isn't this market down more than it is? how in the heck have stocks managed to stay resilient with the averages actually up most of the day before backsliding. dow closing off 67 points. s&p declining 0.2%. but the nasdaq actually inching up 0.08%. any explanation for the underlying strength is pure supposition. we should be going down hard right now. right here. as we did right about now, for every single federal level imbroglio since we've had so far. in other words this was the day they started versus the event. the october 1st date for when a government shutdown is supposed to be begin, it looms so large. there isn't a single sign that there will be a deal. none. we could be in for a prolonged period of ranger and indecision, both of which are bad for business. so how can we think this time will be different? why aren't we down, 4%, 5%, 6%,

instead of a measly couple of down days? let me give it a try. first, maybe the market is saying, there won't be a showdown. maybe there are forces at work that we don't know about which will make the episode more benign than skeptics including me realize. hard to believe anything's happened behind the scenes. but we never know with washington. put that in. i don't know, 20% chance. second, even if there isn't a deal immediately, well, people are expecting there will be one down the road. as much as we hate our political system we do end up paying the bills. that's been the lesson from the other times when they were done, we caught a big rally. perhaps the market going to the troubled moment portfolio managers are using whatever weakness they can get including intraday include the last three days to put money to work. maybe that's what's going on. third the fed has managed to keep rates down. see them today really, really low. so maybe we shouldn't worry if we get a government shutdown because low waits buttress the

valuations of so many stocks. 3% plus yielders we've got a positive one-two punch from the fed no larry summers. rightly or wrongly to be anti-accommodating as well as the surprise nontaper. the market gave up these instant gains since the sell-off. everything we got that wednesday is now gone. but today's reversal seems to me signal kind of a, i don't know, pretty benign close. i mean ugly but it did say to me that you're not, that you can pick. you should never, ever fight the fed even when you think it's out of bullets. fourth reason our stocks aren't getting an a lighted the market sees lower interest rates reinvigorating the housing business. one element of the earnings released was a clear miss more on that later but you know obviously people looking through the valley. the market's willingness to overlook these key orders number for leonard and have the stock go up anyway shows you that perhaps we don't have nearly as much to fear from the weakness

in housing as we 3450i9 have thought. when housing goes higher it takes a large swath of related stocks, furniture, clients, names retailers associated with home building. fifth the foreign markets are not taking their cue from washington. no they are incredibly robust. the baltic drive freight index which i always say to keep your eye on is getting stronger and stronger almost doubled. from the low it has doubled signaling that china's starting to order raw materials again. part of that is turnaround in europe. spain just declared end to its hideous recession yesterday. greece tells us now budget surplus. remember when we were worried about italian bonds? should have bought them. meanwhile european central bankers are saying they'll remain accommodative because the market is so fragile. sixth reason, merger acquisition and breakup pressures continue. it makes it an environment for short sellers. you never know when lightning could strike. medical technologies fairly

recent ipo launches a $9 billion takeover for cross border rival tokyo electron. a 5% stake in bob evans farms wants to break the company in two and another value move. this stuff happens every day. it acts like a trach lean under the market. we're up on activist related moves later. oil is coming down given that iran is acting nice with the united nations. i don't trust iran. you don't trust iran. i'm sure you don't but regardless of trust any suspension of tensions, prices lower. gasoline of course. retail possible weakness in the economy going to the holidays could get a boost from lower gas prices. remember we're just trying to come up with some suppositions why this market isn't down five, eight, ten percent, eight possible reason, autos. car max gigantic used car retailer reported outstanding sales and earnings today. auto market has been a huge engine in the economy. car max, fantastic news. i don't know.

i kind of hoping for a chrysler ipo. ninth explanation, president obama was forced well this is a political statement but he was forced to make a foreign policy speech today. the market likes resolve and dislikes indecision. tenth reason, growth stocks are thriving in a lower growth environment and that is incredibly bullish. facebook is leading the parade going to an all-time high on one more upgrade. the high growth rally across the board we've got a cluster note from jpmorgan about starbucks. stock rallied up $1.19. that's strength. chipotle's been strength. netflix back on track amazon yelp, tesla lincoln roared. for the long only momentum managers nothing gets the juices flowing like these kinds of rallies. they always change the tone of the tape and make short selling downright dangerous. eleventh explanation for why we haven't been hammered hedge

funds are negative. so many funds are betting a shutdown will be terl that they keep shorting the market endlessly. they're brooding on the presence. the short washington play has been terrific during the manufacturing crises i have to believe many hedge funds are reading from the same playbook that worked when we were going to the debt ceiling debacle the fiscal cliff debacle and the sequester. each time short sellers got good opportunity to cover positions. perhaps the short side has become too crowded. short sellers tend nod to make money when everyone is expecting the same bad circumstances. we're only a few days away from a good quarter. the hedge funds have to show they weren't totally out of it. the longs might be bidding up stocks to boost the performance underneath. dow has now components, a little more wild. finally remarkable run in the transports which has been the lovey blanket of the market. they finished up today. you can't have them advance without believing that commerce is picking up. if you have commerce picking up and rates going down we should

be in good shape. when the transports rally it lists boeing and all suppliers and airbus things are looking better than ever they got a 20 year plan, too. i'm sticking with the gal that brought us here. here's the bottom line we can't be sure why the market's holding its own against pending washington meltdown of epic proportions. maybe the market's dead wrong and it's just a matter of time before the stocks collapse. maybe the last 20 minutes of trading were not so hot. but given that the cataclysmic washington event is only five sessions away you've got to believe some of these positives are playing out making sailing a lot smoother than you'd expect. except for the short sellers. mike in illinois. mike. >> caller: booyah from chicago. home of the 3-0 chicago bears the monsters of the midway. >> rub it in. you think we're all from chicago here or something. is that what you think? >> caller: yes, i do. >> all right. >> caller: my, my, my company is gse capital corporation symbol gsec it was up 6.25% today and

hit a 52-week high is this the best way to play the upcoming twitter ipo? >> when i saw that i said geez this is the way. i'm going to tell you that i don't know everything else that it owns. but i think the twitter ipo is going to be gigantic. i hear numbers and they're way too low. i've been sticking by my prediction that you're going to get $18 to $20 billion which should send up gsc capital to a higher level. i've always been a bears fan. we don't play them that often. we being the eagles. kurt in colorado with peyton manning with the winning winning orange -- kurt. >> caller: booyah, jim, how are you? >> all right. glad to go to denver next week. >> caller: just calling in regards to wendy's and how do you see long-term growth and also how do you see it competing against the larger fortune 500 food companies like mcdonald's, chipotle and burger king? >> we talk about moving the needle. believe it or not this bacon

pretzel roll cheeseburger is actually working. although my friend last week didn't like it. now here's what you need to know. wendy's is on a major roll. management is terrific. that stock can go to 10 without hurting mcdonald's, without hurting burger king. i like the fries at burger king but it's not enough to move the needle. jimmy in california. >> caller: booyah, cramer, how are you? >> real good. >> >> caller: i want to talk to you about a company that you've been behind for for a good reason for the last six months. it just hit a 52-week high, 14 days ago before reported earnings. since then it's gone through 78 down to 61. today the stock went from 61 back up to 64.5, and i want to know what you're position on restoration hardware holdings. >> okay. i went through this quarter with a fine tooth comb but it happened to come when interest rates are going higher. the stock is recovering. reminds me the way coors

recovered. even fossil reported. this is not in that league. it is better than those. i'm sticking with restoration hardware. i think it's a buy. against all odds the market is hanging tough. yes we had an ugly close. the fact is there was no cataclysmic selling yet. your survival guide which says i have your back is telling me maybe we won't have that monster sell-off before the shutdown. coming up, stable foundation? this morning's headlines show home prices are continuing to rise across the country. but steadily rising interest rates have made wall street worried about the future of the mortgage market. cramer gets an inside look in his earnings exclusive when home bedder lenard. and later cash connection? when verizon's $130 billion buy to spent's acquisition of clearwire. wireless deals are aplenty. is it time to make a connection of your own? cramer speaks with ceo dan hissy for the first time since the deal to find out what it means

for the future. plus, berry good? pack it, wrap it, contain it and cap it. there's one company that does it all. berry plastics is the household name you've never heard of. but you might not want to forget it. is it time to fill up your cup? all coming up on "mad money." don't miss a second of "mad money" follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send an e-mail to madmonmadmoney madmoney @cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.

ever since interest rates sky rocketed over the summer everybody's been wondering what kind of damage it would do to the home building business. we know home build being stocks were hurting but was it warranted based on what's happening to the underlying companies. today we heard from two home builders who said it is more like hitting a speed bump than crashing into a retaining wall.

kb homes. and lenard had a terrific quarter and nine cent earnings beat off of 45 cent basis with higher than expected revenues that rose 45.7% year over year. this wasn't a perfect quarter. lennar's were under expectations. and ever since the fed announced it wasn't going to taper the bond buying program interest rates have been crawling back down. something that could make the next quarter even better than this one. no wonder the stock was up today. housing is a very important for economies. let's take a closer look with the ceo of lennar. welcome to "mad money." >> good afternoon, jim. happy to be here. >> stewart, congratulations, first of all. this was one of the best quarters i've ever seen lennar have. while everyone's worried about the granularity august was actually the strongest month. whatever anybody was thinking it

didn't play a role with you. >> well, listen, i think that we're particularly well positioned, but as we noted on our call today, june was a pretty strong month. july tapered way back. and then august was a strong month again. so we saw some strength out in the field. we saw some strength both in our customers and in traffic. so it was a -- it's been an interesting ride. >> and maybe you sent some great charts over that some of this what people are missing, is the limited amount of inventory, because of the actual incredible, almost depression-like lack of building of homes during the last part of the cycle. >> that's exactly right. and i think the dominant theme for housing over the next few years is filling the hole of production that has not been filled over the past years. if you look at the average during the downturn, we were delivering about 7,000 homes -- 700,000 homes. per year.

both multifamily and single family. the need in the country just by population and household formation alone is a million two to a million five. that underproduction is going to -- is going to define where we go over the next few years. there will be speed bumps, as you noted before. that derive from interest rates, public policy, international events. but the trajectory in our view over the next three to five years is generally positive. >> one of the things i don't like about your group is because of the power of the real -- of the actual etfs, the good and the bad are amalgamated and homogenized. you were doing a huge number of things away from just home building including rialto, including apartment -- literally renting that perhaps you're not getting enough credit. what can you do and you hint upon it in your conference call to bring up that value because you're not just another home builder. >> well, happy that you're noting that. look, we think that the primary

driver of our short-term earnings quarterly performance is going to be driver be in the near term by our housing and financial services businesses, which are our core. and we think we're extremely well positioned in those two areas. our ancillary businesses of rialto, our multifamily communities division, and our five-point large-scale communities division are longer-term shareholder value creation machines that are going to realize their maturity over the next few years. we keep the investor focused on our core business, but we keep them apprised of what we're doing to create long-term shareholder value, and i think we've got a great balance. >> i follow the apartment real estate investment trust. none of them has the growth of your apartment unit. why not give that to the public so that i can push the really hard because it's got growth and would upgrade? >> over time. right now we are maturing a -- a

brand-new business. as you've noted, our pipeline has been growing steadily. we have built a national franchise, and we've left ourselves by segmenting this business, giving it complete visibility to the street, as we grow it, we've left ourselves maximum flexibility, and over time, we think that the optionality embedded in that business is going to give us a lot of opportunity to create value, depending on where the market is at a given moment in time. the ability to build, produce, and stabilize brand-new apartment units in this environment where we have a shortage of inventory, both on the apartment side and the for sale side we think gives us a great position. >> fed last week takes basically literally takes rates people think they're going to ten year going to three, maybe three and a quarter right down, right down in the face of the short takes them to what now is 2.6. is that meaningful for september traffic to your homes?

>> well, listen, interest rates are fluctuating and i'm not even sure that we can tell what's driving the fed decisions. is it really derived from a question as to what's going to happen relative to the debt ceiling discussions? or are there some other factors involved that relate to the macro economy? i think that as things stand right now, lower interest rates are bringing customers and traffic back to the field. we'll see how this plays out over the short term. but, again, our focus is not so much on what's happening with short-term fluctuations. over the long-term, we think that we're in for a steady rebound in housing, over years. and that's going to define where we go. >> one last question, gross margins. can they stay as high as they are, given the labor cost that you mention on the conference call? >> yes, we've noted that we think that gross margins in the industry, and particularly in our company, can exceed prior highs. even at the peak. and we think in part it derives

from pricing power in the product, due to the shortage of inventory, and what we've seen to date and are likely to see as we go forward is that pricing power and revenue increases have outstripped the increases in cost. we noted this morning that our cost year over year were up about 8.4%. but you saw that our revenues were up some 1 %, and our revenues in the sales that we've made in the past quarter were up 16% year over year. this gives us the ability to maintain and even grow margins. >> well, thank you so much, stuart miller. make your dad proud. this was just a terrific quarter. fantastic job for shareholders. good to talk to you. >> thank you, jim. nice to be you. >> that's stuart miller ceo of lennar corp. you haven't missed anything. yet longer-term this is the winner. they've got the land, the housing, the gross margins, and they've got the magic. coming up, cash connection? from verizon's $130 billion buy

to sprint's acquisition of clearwire, wireless deals are aplenty. is it time to make a connection of your own? cramer speaks with ceo dan hessy since the first time since the deal to find out what it means for the future. >> is there a future for blackberry? >> something called national security. blackberry is a standard on which armed forces and other parts of the u.s. government operate. >> our expectations by 2018 is going to be roughly 1.5 billion subscriptions in the world. >> you wanted apple shipping a lot? u.p.s., fedex. it can impact their numbers. >> the long-term ecosystem in terms of the profitability is roughly a third apple, a third samsung and a third chinese manufacturers. ♪

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time to talk about one of my favorite wireless, sprint. they sold 78% of the company to the japanese in exchange for $21.6 billion in cash of which sprint got to keep about $5 billion the rest going to you shareholders. sprint which already owned half of mobile broad band provider clearwire bought the other half giving the company control over a tremendous amount of high quality electromagnetic spectrum. remember wireless providers need more spectrum to provide subscribers with better, faster service. and it's becoming sparse. the spectrum and the deep pockets needed to finish building out the ultrafast next generation 4g lte network. the sprint of today is different from the company of a few months ago. the stock was shoving down its old network in order to cut cost while capturing new buyers with unlimited voice, text and data plans. something they continue to offer. the stock is giving you about a 50% return since we last spoke to the ceo and that was 13

months ago. sprint is no longer the third wheel of the wireless world. does sprint have that staying power and will too many customers deserve in the interim? let's talk with the ceo of sprint, get a better sense of where his company is heading. welcome back to "mad money." >> nice to join you. >> the biggest worry i had was you might be leaving now that you had new owners. but you're sticking around. >> i am. they just signed me up to a new five-year deal. >> in that situation, you -- they own 78%. >> yep. >> is there a they or is it you guys? because you know, your new owner softbank's got a 300 year perspective. i don't know last i look 300, 207 years from now you may not be still there. >> we're like a team one team between softbank and sprint but it's an independence company. we have eight board members. they have two. we have five independent members and then there's me and we envision the board being ten, six independent members as many

as three from softbank and then plus me. so it's run as an independent company. very good governments and we make the decisions at sprint management. but sprint management and softbank management get together at least once every month and share best practices. we've learned lots of things from them and them from us. >> a lot of people who watch the show bought sprint. they're confused. they think they're down on the position if they bought it in the last six months. >> we're up 28% year to date and up 11% since the transaction with softbank. a lot of people you know get confused because if you will the stock quantity quantities of shares as well as price changed with the transaction. i guess the way to look at it is, i think we closed last year at about 567 on a pro forma basis the close yesterday was about 726. okay, so, so we're up -- you have to add that back in. we're up 11% since the transax. >> you've always been very honest about the near-term and the longer-term. september 20th, iphone launch the 5s, 5c.

look i know you have up-to-the minute analysis how are is the demand for this phone? >> well, very strong. matter of fact from our perspective a little too strong because we're, you know, we're beginning to run out of inventory especially the 5s. >> there was a very famous analyst who came down today and said listen the inventory is really basically it's stuck at the telecommunications level. that's not true. >> no, we're short inventory. especially the "s." >> isn't that a telling statement? >> yeah. i mean there are -- we have some "ss," but there are multiple colors and multiple, if you will, memory vices. but we are out of a number of them already. >> that's a great fact. thank you for sharing that with us. when i look at what you're trying to do, you gave an interview, you talked to some analysts and you're saying listen, be careful, this is a difficult transition and you're even talking about cutting back some advertising. right? because you were. >> well, 2013 is kind of a transitional year for us. difficult network year because a

lot of people know we shut down the nextel network, which we did at the beginning of this quarter. but it's also a complete replace of the entire 3g network which really has never been done. it's the most massive network change any company's ever, you know, ever gone through. so it's not only expensive but if you take a city like chicago, would be a great example, it was good. and then we had to rip out all the 3g networks we got, not so good. now we're largely done, it's great. so what we want to do is keep our powder dry, until the networks are great. so we're bringing on a lot of new ltd around the end of the third quarter and in the fourth quarter. we'll have about 200 million pots covered by the end of this. that's when we're going to put a little more pedal to the medal in terms of offers in marketing when the network transition is mainly behind us. >> verizon and sprint -- verizon and at&t aren't slowing down their spending. how can you stay up in that arms race? >> from a capital perspective we're staying up.

as far as the network is concerned we're spending $8 billion on cap-ex this year and we told analysts to expect a similar amount of spending, just to put it in perspective in 2008 and 2009, we were spending $2 billion a year on capital. so we're spending a lot of money on capital to make sure our network is great. our goal is to build the best network of any carrier in the world. and we think we have that when we're done. >> how is clearwire? >> hugely important. >> it was. it was and turns out you got in there and everything's what you thought. >> yeah. i mean of course we were a 50% owner for a long time. so we had our eyes wide open. but tremendous spectrum position which allows us to offer it wasn't coincidental that we announced unlimited for life right after that acquisition closed. and it will also give us the opportunity to really provide unheard of speeds on the network. because you have 120 megahertz of contiguous spectrum. so when people talk about lte they talk about 10 megahertz

channels, i'm trying not to be too technical. ten. so think of that as one highway. we have 120. think of that as 12 highways. tremendous amount of capacity. >> that's a good stat. you always told us you couldn't necessarily convert all the nextel peep and i have to believe that at a certain place where you're not where you don't have where you have the spotty network you're not gaining what are you doing in terms of gaining from verizon and at&t net? >> well, you -- that will -- that we hope will happen in '14. you know, 2013 -- >> not happening now though, right? >> because of a couple of things. number one, when we put in this new network, i talked about chicago, we call it pardon our dust, the transitional issues. the network performance went down in markets as we were building out and putting the new gear in. the good news, it's all brand-new. it's the best. the 3g and 4g will be the best. the other thing is with respect to our business accounts. most of our business accounts had what we call mixed accounts. they had sprint subscribers and

nextel subscribers so we put so much focus on winning back the nextel subs that was important and they had to leave by the end of the second quarter. the sprint customers, if we lost that business account, they tend to come off in the second half so we're still going to lose a lot of cdma or sprint brand customers in q3 and q4 because of the accounts we lost because we shut off the network. for those 60% of the business accounts that we didn't retain, we won 40% which say lot more than anybody expected us to win. >> much better. >> much better. but if you will the nextel customers came off in the first half. the sprint customers come off in the second half so that so those customers leaving this is not going to be a great subscriber year. >> right. >> but you got to take the long-term view. >> take the long-term view. do you most fear facebook? do you fear google? do you fear microsoft's skype? do you fear your own owners who have such a long-term perspective that they may not want the shareholders to win right now? >> all the companies you named we look at as partners.

>> partners? >> partners and people that we can work with. the other thing about softbank is they own a piece of over 1,000 internet-based companies. the kinds of companies that you've described. that's their world. and i think there's more opportunity for us embracing over the top players applications companies, software companies, social networking companies than there are threats. >> dan hesse you've been talking straight the whole way. you made people a huge amount of money particularly when we were talking best $2 and you told people not to give up the ship. ceo of sprint corporation. look, what can i say? its been a great win. maybe it stays that way. stay with cramer. hero: if you had a chance to go anywhere in the world, but you had to leave right now, would you go? man: 'oh i can't go tonight' woman: 'i can't.' hero : that's what expedia asked me.

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you may not know it yet but "mad money" is better than ever. i'm talking about zee box. think of it as a tv side kick that makes watching your favorite shows even better. you can download the free app or go to zeebox.com/madmoney you get exclusive content and chat

with cray americaens across the country. plus you'll see me in there, so download the free app today or head to zeebox.com/madmoney. now it's time for the lightning round. what is that about? and then the lightning round is over. are you ready skee-daddy. going to start with bill in maryland. bill. >> caller: bill, maryland. motorola solutions and lionsgate. >> you know, one at a time here. motorola solutions i don't know. i mean it's another -- it's got government services, no. no. you know what? i like cisco. cisco is down and out but shouldn't be. let's go to chris in south carolina. >> caller: love you show, jim. my question is pacific coastal oil trust royt. >> yeah, you know, these have been such declining asset stocks. this is a california based stock i'm not going to go with it.

i don't like these anymore because they're depleted assets. eog. now i want to go to dave in florida. >> caller: big booyah to you from sunny tampa, florida. >> go bucs i think. i don't know. >> caller: i was happy with the result of the patriots game to tb honest with you. >> what's up? >> caller: go go. i took my first position -- >> this was a mistake that i didn't recommend this thing when it came public. it's a good situation. it's got real momentum. buy buy buy. now morgan in california. >> caller: doctor cramer big booyah from walnut creek, california. >> how are you? >> caller: i'm doing great. i've been doing my homework with all these record truck sales in august i've been thinking everyone wants to tow a boat with that truck and i've been getting bullish on a boat manufacturer ticker bc. >> brunswick is the best. i personally have a boston whaler, it's a 17 footer.

but brunswick is the boat company. now be careful. the stock has had a monster run. if i recommend it up here i'm violating all my discipline because i do think while it's good i think it can come down a bit. let's go to gary in illinois. >> caller: mr. cramer i want to tell you that you and your staff are excellent. keep up the good work. >> i got a great staff. they make me look good every single day particularly regina my executive producer. >> my stock today is home depot supply, hds. >> home depot supply. no! you can't come out and disappoint from day one, and have me on the team. i am not on the team hd supply. as far as i'm concerned three nfl teams. vince in pennsylvania. >> caller: jim this is vince from philadelphia booyah! >> i'm giving you a sean mccoy comes to play booyah. >> caller: my question is

regarding unxl i'm playing as a short play seems like 44% of the stock is being shorted. >> haven't short but did you see the touch screen today? ooh nasty. i'm going to agree with you i don't want to be there. but i don't like to crowd it short and i don't recommend short on it. abdul in texas. >> caller: yes, cramer. thank you for taking my call. amd. >> last quarter was nasty. but you know they do have some gaming revenues coming in. i think under $4 you want to buy the stock. i can tell you that was such a miserable quarter that a lot of people lost heart. but i haven't. i think it's a buy right here. and that ladies and gentlemen is closing out the lightning round. >> the lightning round is sponsored by td ameritrade. coming up, berry good? pack it, wrap it, contain it and cap it. there's one company that does it all berry plastics is the

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you all know that sometimes the stock market overreacts. take berry plastics bery maker of value added consumer packaging and engineering materials came public a little less than a year ago. very much a tech company as it is a plastics play. they use proprietary technology to create innovative products. just yesterday they announced 1 huns% recyclable material to make to go cups to maintain hot and cold beverages. it will keep your coffee hot or smoothie cold. according to management, 4% of the american market could bring in more than $500 million in sales but here's the rub. a little over a week ago berry gave an analyst presentation where management lowered the boom. the company came from predicting a mild increase to a 10% decline. not good news. in response the stock got poleaxed from 25 to 20 in a

matter of days. to me feels like an overreaction. especially selling 16.5 times next year's earnings estimates. stock is giving 19% gains since i recommended it in january. i think we can go higher from here. don't take it from me. let's talk to jonathan rich, chairman and ceo of berry plastics find out what companies next for his company. welcome to "mad money." >> thanks, jim. >> have a seat. >> great to be here. >> look you had a huge analyst meeting with lots of great slides. lots of great information. there was one line you just said this one line which, you know, september quarter will be lower by approximately 10% versus the prior year. that's all anybody heard wasn't it? >> yeah, jim. we got impacted by two things in the quarter. first of all demand remains muted. and that's because the consumer is still cautious. you know, berry plastics we sell to more than 13,000 customers in consumer staples, nondurable goods products like food, health care and so forth and we've seen the consumer be soft all year long. we do sell some products in to

durables like duct tapes that go in to automobiles and housing, those have been better. the second thing that happened to us in the quarter, frankly, is that our raw material costs went up significantly. our plastics costs are linked to oil prices. and in the third quarter we saw oil prices go up significantly, due to the geopolitical events in the middle east. >> but that could be short-term in your conference call you say today the discoveries of shale are being led by united states will change the global landscape, including yours. is it short-term to think of you as a play on the price of oil? >> short-term it is, jim. but long-term we are incredibly excited about the discoveries here with north american shale gas. it's going to change the manufacturing landscape here in north america. it's going to be an incredible boone to berry plastics. >> how quickly can you make that transformation? any way you can lock those prices in? >> i think those investments are coming online now in the next three to five years and they're

going to be incredibly significant for us. >> okay. now, we often talk about moving the needle. for instance we've been talking about the apple. new phones. and i said on this show that they would move the needle. they're important. you've got a new invention. it's an invention. can it really move the needle because you said how many products you have. you have to deal with a sluggish consumer. can it really accelerate earnings? >> well, this is a completely new greenfield space for us. berry plastics today does not participate in the insulated packaging segments, which go in to things that have to be kept hot or cold. we have a breakthrough technology here with our new versalight product which includes new inventions in materials, manufacturing processes, and product design. you know today, jim, there's over 130 billion disposable cups used by americans every year. and the paper coffee cup has been around since almost 1900, and frankly it doesn't satisfy consumer needs for keeping the

coffee hot, keeping your hand cool, and preventing the 80 billion cups that go into landfills today from continuing to do that. >> there's a lot of people who say listen plastic that's the last thing we want. but this isn't really plastic, right? >> no, this is from a recyclability and sustainability standpoint this is going to be the most readily recyclable disposable cup in the market. because it's made 100% of number 5 polypropolene. today we're working with municipalities, waste handlers, recyclers like preserve and their gimme 5 polypropolene recycling program from a sustainability standpoint, lower energy use, lower carbon footprint. so, this really is a breakthrough in product design by thermal management. >> if we're looking for what to be able to model for next year and say that people overreacted do we care about the sluggish consumer and whether consumer packaged goods go up?

do we watch the price of oil? do we look at the innovation? what can put you back on that growth path that you had until you mentioned it in this quarter? >> well, obviously the economy, and the cost of oil are some things that are out of our control. but we try to focus on the things every day that are in our control. we lengthlessly deliver on productivity and efficiency. continue to generate substantial amounts of positive free cash where we're generating more than 200 million a year and deliver exciting and innovative new products like versalite and you already taukt talked about the fact that it could be 500 million in new revenues or more. >> you're not deserting it obviously the stock took a big hit from where it was, still up nicely from where we said to buy. jon rich chairman ceo of berry plastics. innovation. consumer package good component. oil is coming down that doesn't hurt either. stay with cramer. mad about "mad money"? immerse yourself in the cramer's world while you watch the show with zeebox.

on your phone, tablet or on the web, get sneak peeks, go behind the scenes. and join the conversation. download the free app today for the ultimate cramerican adventure. tomorrow everyone's got a home for skiing and sunbathing. what about a home for the end of the world. plus who wants a piece of this action? >> a $150 million offer. we're going to make this deal. >> and we dare you not to get lost inside the biggest home in america. >> i'm going to run the entire length of the first floor. >> still running. still running! >> secret lives of the super rich. premieres tomorrow 9:00 eastern. cnbc at 9:00 is the all new cnbc prime. are you sure we should take this billboard down?

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look at today, applied materials, not happy with the stock price. makes a huge bit for tokyo electron. japan. this is a 9.3 billion dollar deal that would give the combined company tremendous marketing power. it's a massive transaction which would give this semiconductor equipment company enough clout with intel and samsung for cheap customers to put them at a tremendous disadvantage over pricing. it is entirely possible that this deal could raise the price of all sorts of consumers electronics made by these customers. i doubt it gets aproved by the regulators. we don't think it will go through. still though it's incredible to me that the company would even make the attempt this is still one more deal where the stock rallied up 9% today, the merger would be so good by the combined entity. how about this -- just came public. health care records company. became public about two years ago. then it lost its way. preannouncing a hideous miss back in april, transition for more cloud bases. what the heck, we'll sell ourselves to a company called

vitara and the stock soars 19%. it wasn't happy with how the stock was doing so management took action. how about this money manager i never heard of took a 5.1% stake in bob evans farms. hoping management will unlock hidden value from having a food distribution business and a restaurant chain. this one amazes me. the stock is up 43% for the year. what more could you ask of a company. 21 times earnings, total winner at least this year. there's some years that it lied. but i could see bob evans farms trading up to 20 points from the current level if it does split up because i think hillshire brands, remember sara lee, could easily make a bid for bob evans' terrific pork sausage business. and management could use the proceeds to buy back the rest of the stock. when i bought this stock 34 years ago i expected this breakup to happen. better late than never i guess. what else. you got to be impressed national oil is not standing still. it's buried within larger oil

rig manufacturing enterprise. it shows you just how friendly ceo pete miller is to shareholders he's one of our favorites come on pete and explain this deal. finally, sotheby's simple bid just today the stock got recommended by citigroup and i bet sotheby's is going higher because dan loeb would like management to bring out more value. i know 2018 has been a bust for m&a. talk about that with anybody, david faber on squawk on the street. however this kind of relentless drum beat of companies spinning off properties and activists bushing to unlock value has swept wall street by storm consider this a huge behind-the-scenes pop to the stock market and given all the money being raised by activists as well as cheap money available for acquirers we're going to see many more of these kinds of deals. what's really amazing? the companies in question were all doing pretty well on their own. but pretty well just doesn't seem to cut it anymore. stay with cramer.

tomorrow, kick off the trading day with strauk on the street live from post nine at the nyse. >> and i watch it on my device. we all watch it on a device. >> it all starts at 9:00 a.m. eastern. >> why are republicans beating up on ted cruz? we have senator kelly ayotte to tell us why. there are no plans of progress on the debt ceiling and did iran snub president obama today? next up kudlow report. hero: if you had a chance to go anywhere in the world,

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i think sprint is a cautionary buy, it's not going to go right back up but i do like it. always moving somewhere. just be ready, i'm jim cramer. i'll see you tomorrow! i intend to speak in opposition to obama care. i intend to speak in support of defunding obama care until i am no longer able to stand. >> all right. that was senator ted cruz beginning his filibuster to buy time and support to de-fund obama care. but republicans are deserting him in droves, and right now it looks to me like a big victory for president obama and the senate democrats. meanwhile, nothing's been done about the mid-october debt ceiling limit. the house has no clear plan, the president won't negotiate and this could well