>> my mission is simple, to make you money. i'm here to level the playing field for all investors. there is 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. other people want to make friends. i'm trying to save you a little money. my job is not just to entertain you, but to put it all in context and educate you. so call me 1-800-743-cnbc. the stock market craves certainty, decisiveness, confidence. it hates uncertainty, waffling, and the unknown.

so when president obama acts decisively and appoints a near universally liked candidate, janet yellen, as the next fed chair, the market reacts positively. aided by a whiff of secret talks on the debt debacle with the dow climbing. the nasdaq declined. it shows you that washington may not be totally dysfunctional. it's reminiscent of when government worked. sure, washington is poisoned enough to question yellin, along with motherhood and apple pie. but i do think she'll pass muster in the senate. unfortunately, the appointment of yellin seemed a bit like a sideshow today. kind of like "our american cousin," a play that mrs. lincoln indeed might have liked except for the fact that her husband was assassinated while she watched it.

the odds seem to be growint that the nontalks will stay nontalks right through the secretary's drop dead deadline of october 17th. sure, we've been heartened today as we've heard one more chimera of reconciliation. talks between the house leadership and the president. but follow the arc of this whole thing. we were thinking just last week that a default is as unlikely as a meteor hitting washington. i heard that sound bite. now i think the odds are about 20% it does hit the capital, given how forceful both sides are about not talking to each other. yesterday if these two were buddies, you would never see them in the same room again, right? ex-buddies. what have we got here? obama's comet? now 20% doesn't mean the event is going to happen. especially if there is anything to these whispered talks. after all, there is an 80% chance the talks work. and we saw today that when there is any hope that we might have a deal, the market reverses and goes higher so quickly that if you do sell out tomorrow morning, i know i won't be able to get you back in. not in time. that's why i don't favor that

course. that's why my charitable trust was a net buyer today. but a 20% chance of default means you have to plan like it could happen. to me, i don't know about you, i don't know if it sounds like the treasury department has a plan. when you're playing a game of chicken, the odds increase by the day that something goes wrong, even if our leaders don't intend for to end go that way. did anyone expect buzz gunderson to go over the cliff in "rebel without a cause"? think back five years ago. people in government were looking hard at lehman brothers. they were worried. before it fell, they were worried. but they all kind of figured that someone had a solution. they had a solution so it wouldn't go under. there was the same amount of confidence that someone was going to buy that company then that i hear now that a debt ceiling deal will be done. back then it was going to be barclays or the koreans riding to the rescue. but it turned out to be no time left on the clock. it turns out the confidence was totally misplaced and we had the calamity of all calamities until

perhaps this one. so what would this calamity actually look like, do you think? first we had a great insight from mark patterson, a senior fellow at the center for american progress, and former chief of staff of the treasury department, who appeared on "squawk box" this morning. he explained in english that while the deadline isn't hard and fast, it is the day when the treasury can no longer guarantee all the bills of the nation will be paid. it's possible that all payments will get a haircut, or that some will be delayed or that the treasury must pick and choose what to pay and who to ignore. that's a horror show. as the month goes on with no new debt issue, these stop gaps won't even work and the government will be flat-out broke and most likely have to stop paying everything at the end of the month. remember, we're running a deficit, for heaven's sake. the treasury is a lot like a bank account for any small business. you don't want it to run out entirely. now, there are plenty of republicans who apparently think that the whole thing is just a

big charade. there is plenty of money kicking around, for whatever that matters. how can that be? if that's the case, why do we ever need to raise the ceiling? i mean, let's lower the ceiling, unless they really have a problem with arithmetic or believe the government takes in enough to pay its bills and is hoarding some of that money somewhere. what do people want the treasury to do? cut the size of the social security cuts? only pay the interest on the five-year. cut back on the air force, not the navy. pay some doctors, not others. does that sound responsible to you? what lesson does it teach to not pay your bills, anyway? why should i pay my bills if the government is not paying its bills? why should i have to pay my tax bill? for a moment, let's deal with the reality of what happens when the actual event occurs. how do we know what it will look like? we are fortunate now have a terrific default map put out this morning by michael cembalest, the brilliant eye on the market editor from jpmorgan. you may sneer ah-ha, capitalist from the house of jamie dimon. but he is someone with

tremendous insight about world events and correctly told you europe would collapse before it happened. plus, listen up, gop. he is a deficit hawk. certainly more than most of the republican politicians who claim they're deficit hawks because he would actually cut entitlements. and i bet if push came to shove, most of the gop that wants to default wouldn't cut these entitlements the way that cembalest wants to. if social security and medicare really do get slashed. he points out that if you trigger even a technical default, you could have a liquidity event that would force job cuts, tighten credit and particularly that credit would be tightened for small and medium-sized businesses. ironically, that's who the gop says they stand for. that sure sounds like a recession to me. maybe even a severe one that the president predicted yesterday.

expect this to happen in two to six months. simply proclaims that we're unwilling to pay our bills, not unable. to if we do, the economy could roar out a few quarters from now. although the shutdown itself is starting to really crimp things, people. it's crimping confidence on its own right. i'm not a political guy. hey, that's one of the reasons why i'm bringing chris matthews on tonight, shed some light on how opposites can attract, because he is schooled in the ways of washington and compromised. as he worked for the ultra liberal speaker of the house tip o'neill when he was forced to work with ronald reagan. chris just published chip and the gipper, when politics work, because they're sure not working now. i am, however, schooled in the ways of wall street where we know that jobs were coming back and the world was getting stronger before the government got shut down and we had to put a percentage on the default. the just released fed minutes this afternoon, it made it clear the fed was split between those who saw the data getting better in the past, and those who clairvoyantly thought we might have an off the rails debt ceiling discussion. thank goodness for the latter

clique, because we may need the fed to buy hundreds of billions of dollars of bonds if bondholders want to dump their treasuries, and rates will spike even ahead of the default occurring. still just another sideshow. here is the bottom line. unless the president starts negotiating or the gop caves, notice i did it one or the other, the post yellin announcement glow will be replaced once again by the gloom and doom that we had last night. it would be terrific to believe that the market knew something today when it turned up mid afternoon, but then again, a week ago friday when it turned up sharply, it seemed to know a lot too. alas, it turned out to know nothing at all. why don't we go to larry in massachusetts? >> caller: jim, i wish you and your dad well with the eagles this year. >> well, i appreciate that. i think a rematch of the new england patriots and the philadelphia eagles would be a super super bowl right here in new york city. what's up? >> caller: hey, i look forward. i'm suddenly down 11% on biomarin, one of the anointed stocks. yesterday they announced an

offering the senior subordinating convertible notes for r&d, which will more than double the cash and receivables announced at the end of the second quarter, but at the price of uncertainty, which is a dirty word in cramerica. and i think it's because of the way the notes were structured. was this drop worrisome or just more washington noise? >> look, i didn't want to see the subordinating convertible notes. you never want to see that. it drives the stock down. i know a lot of people are angry about this. what am i going to do? you recommend a stock and it goes up and up and up and then they do a deal and it goes down. i guess you would say i never recommended it when it was going up, but i can't. i did. i wish they hadn't done the deal. they did the deal and now i think it will be okay again. biotech will come back. it tends to come back after a three or four-day decline as i said in realmoney.com yesterday and again today. jason in california. jason? >> caller: a big boo-yah from silicon valley. >> excellent. >> caller: all right. a little background. pge is about to settle a huge lawsuit resulting from their 2010 pipeline explosion.

the settlement could be in the billions. on the heels of this settlement, they just shut down another pipeline due to safety concerns. stock is near 52-week lows, but offers a 4.5 dividend. is this a great time? >> no. i never reach or yield. i would rather own dominion with a lower yield or con ed, okay, because i never reach for yield. that's always a sucker's game. never reach for yield in a situation that has that kind of liability. what can i say? that's the way i know it. there is one thing this market loves, it craves, it's certainty. we could see some more gloom and doom. so never forget, even the appointment of a new fed chair is a sideshow compared to the debt ceiling. "mad money" will be right back. coming up, mighty metal? alcoa is in the green after beating the bears. but can it keep its shine in light of the debates going on in d.c.? cramer's cracking open the quarter to find out. and later, state of emergency? >> open the government, pay our bills and we'll negotiate.

>> the d.c. debate doesn't show any sign of compromise as washington barrels towards an historic default. your money is on the line and cramer is on the job. plus, "hardball" host chris matthews just ahead. all coming up on "mad money." >> don't miss a second of "mad money." have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. [ woman ] dear chex cereal, you've done the impossible.

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alcoa may have been booted from the dow jones average unceremoniously, but it shouldn't be booted from its status as a bellwether for you because the company has more to say about the state of the global economy than just about any other enterprise out there. aluminum because of its lightweight, sturdy, anti-corrosive and recyclable

qualities is used for everything from cars and trucks, bench cans, aircraft screws, that's why when alcoa ceo klaus kleinfeld gives you his world overview in the conference call you got to marvel at his insight and his grasp of the international business scene. so, you might ask, that if i think so much of the ceo, which i do, what the heck is alcoa stock doing only at eight smackers? the answer is pretty simple there are two alcoas, the one that makes aluminum, and the one that makes aluminum into useful products. it's the former, the actual commodity, it's got alcoa running in place. although i don't think it's going to go down that much more unless the u.s. defaults. you see, kleinfeld can't control the world price of aluminum, and the darn metal has been in glut for years. that's been a constant drag on the company, which has had to take out costs and capacity pretty much around the globe just to tread water. it doesn't matter. even after alcoa's gigantic

capacity cuts in spain and italy, you know what it's like to close a factory there? there is still way too much of the stuff. but klaus has been able to fashion aluminum into products that are taking share from other materials that are selling well in growing markets. even if you can't stand the stock because you never think that aluminum is ever going to go up in price again, and you're in belief that the company is actually hemorrhaging money, you should still want to know what alcoa is saying about its customers. before i tell you how they're doing, let me first tell you that klaus wants everyone to know that the debt ceiling talks are taser-like when it comes to all of alcoa's customers. meaning that -- that's not really a taser. they're illegal in jersey. meaning that right now they're being stunned and paralyzed by the lack of negotiation or promise. that said, alcoa is painting an incredibly rosy picture, one that shows we're really about to break right out with a global head of steam before the total breakdown, the chaos and

dysfunction that is washington. ♪ leading the pack, aerospace, where there is now a 10,000 aircraft backlog. amazing. sales growing at a 9% to 10% clip. this is an industry that klaus believes can't be held back by the debt ceiling debacle. unlike aerospace, the other products are divided by sales growth in three regions -- europe, usa, and china. and all three are doing better than they were just that last linked quarter, and much better than they were a year ago. china in particular really seems like it could be accelerating at a very healthy clip. for example, for example, take heavy truck and trailer. that's an important category. it's an incredibly big market for alcoa. the united states and europe show sluggish orders in this category, but alcoa boosted for europe and upped the china growth rate from 12 to 16%, up to 17 to 20% range. that's pretty amazing. same with auto.

alcoa keeps u.s. positive, europe minus, but china goes from 7 to 10 to 9 to 11. i know that doesn't sound a lot to you, but that is very big and very positive tightening of the range. alcoa's keeping its worldwide building construction, maintaining its bench can. hey, by the way, it's worth pointing out that u.s. beverage cans continue to be soft. europe has gotten even weaker, down to 2 to 3 from down 1 to 2%. so keep that in mind. but overall, the global picture is robust for the engineered products portion of this aluminum maker. and you know what? i think you get even better in 2014 when costs come down and cash flow continues to rise. here is the bottom line. i'm going to say it right here. i think this stock aa deserves to sell higher. but this is a true "deserves has nothing to do with it" situation right out of the movie "unforgiven."

however, any read of alcoa's quarter shows you the world was getting to be a stronger place, i'll take it. assume it stays that way. when it doesn't, you can kiss every positive statistic i gave you goodbye. courtesy to the tasering, and then you have to buy some staple stocks. stay tuned. i'll tell you which ones you should be buying. after the break, we'll make some money. coming up, state of emergency? >> open the government, pay our bills, we'll negotiate. >> the d.c. debate doesn't show any sign of compromise as washington barrels towards an historic default. your money is on the line and cramer's on the job. plus, "hardball" host chris matthews just ahead.

tonight we're thinking about the unthinkable. we're thinking about what the world looks like if there is no deal to raise high the debt roof beams, carpenters -- oops, i mean congress people. i'm a salinger lover from way back. we're pondering what happens if the president can't figure out how to negotiate in a non-negotiating way, and whether the grand old party is going to throw a grand old party if it can get the government to stop paying its bills because the bills are too high. the president wants the status quo. who likes the status quo? gop wants to follow the organization that could lead to

defaults and what should be paid and what shouldn't be. figuratively, yes that's what they want. and that's why i've taken the chances of a meteor hitting washington, or at least grazing the washington monument, from 0% last week all the way up to 20% today. you've got to be thinking of it that way. you got to. you know why? because the market is thinking that way. it's sending down the stocks of the highfliers. many did bounce when we heard of secret debt talks. but can they really be secret if we heard of them? it's walking away from the big industrials because the president has assured us that we'll have a severe recession if and when we default. some are saying he is basically guaranteeing that we'll have one if he doesn't negotiate. and the market is taking the man at his word. it will keep doing so as we get closer and closer to the default deadline which the president declared october 17th, and not one day later, even if it seems there is some money in the till to hold us over until whatever happens. something tangible that would make main street business people turn on the congress people who don't want to accept the

president's view on the ceiling. at least that's the democratic party line. now, we have to be out tomorrow, but an actual investment one isn't as simple as saying i see green on my computer. i want to buy kellogg's. that's a huge mistake, because maybe the i see green rally unwinds the moment bad news hits. catching a real move into the safety stocks involves battle-tested psychology and a recognition that you're going to survive in these stocks no matter what, including an actual deal. it tells me this group has been de-risked from earning shortfalls for the moment. usual caveats. if we default, everything does go down. this week's survival guide is a cockroach-based analysis, though. after the thermonuclear financial catastrophe that some seem not to fear and others seem to actually want, these defensive staple stocks could survive the fall and then

breed -- too metaphorical. how about prosper and come back to life very quickly. let me go over the three clues that tell me this part of the survival guide is right. first, costco. this is a company that does well when americans hunker down. you join the club to save money. you shop for bargain. you even shop for free samples. costco is the trading down place for the well off, and for the poor and middle class who don't like the bargains at the dollar store. you need closet space to put all the bulky items. it's like you're hoarding toilet paper in a studio apartment. so why am i so confident that costco is right? because it disappointed this very morning. it did so severely. i was up at 3:00 a.m. to see the results. pathetic. and i wanted to see -- i also wanted to check. i was hopping mad because when it came over at 3:00, it was disappointing because my charitable trust had sold at 118. we had told people the company could still deliver the

earnings. it didn't. guess what -- the stock barely went down, and then it took off. higher. one of the best performers in the whole market today. now that's what i'm talking about when i say something is immunized. heck, costco disappointed. it's not going to disappoint again tomorrow. the rally suggests that the next quarter could be post nuclear. and in a post nuclear environment, costco does very well. although we've actually really had a post nuclear. speaking figuratively. the second, conagra. it's been on a one-way ticket. consumer packaging, hunt's, orville redenbacher, pam, healthy choice. it has finally caught a bid as we say on the street, which means there are buyers surfacing at last. they're willing to overlook the last quarter because these people are all obamaists, a new word. they believe the president when he says we're about to have a severe recession. why do i say that? conagra has traded down not just its branded products which tend

to be inexpensive, but the store bought private label brands which are stocked up when people feel poor. these store bought brands no longer look like cans and boxes from a maximum security prison. it actually looks pretty cool. it helps. it's like butter. nice. those are all store-bought. nice 3% yield. very good in a world where we don't know what treasuries will yield. there is coca-cola which has also leveled off. here is a premium branded product with a stock that has been unable to catch a bid. last night we heard klaus kleinfeld, the erudite ceo of alcoa, talk about beverage sales. that means coca-cola sales. believe me. i put two and two together and came up with that. but in a post thermonuclear war environment we still drink coca-cola. and that's why that stock feels de-risked too. the best thing about the the best thing about the staples world is when it gets green

lighted, we don't necessarily have to buy coca-cola or conagra. we can take our cue from them and my charitable trust did with costco. so i'm exempting that one from this analysis. what are the best staples? four is j & j. here is a multiple ways to a win-win situation. relatively new management alex gorsky which is a total tnp. meaning what, people? you know my vernacular. takes no prisoners. you have you a aaa balance sheet which is terrific where the environment where the ratings agency doesn't have to cut. even though a default would be caused by an unwillingness to pay as opposed to an inability to pay, a default is a default. if it quacks like a default and walks like a default, it's a default. to allow people to see all the fast-growing drugs that the company is pumping out, as well as the partnership on a cancer-fighting agent. j&j works, closing today just shy of $86.. finally, procter & gamble. remember that company? the one that brought in trusted old hand -- they always use that phrase, a.g. lafley to turn the business around? i have contended that it really wasn't in the wilderness and the

former ceo bob mcdonald had started to turn it around before he got released. proctor is taking share back from its competitor unilever and is getting reinvigorated. it could restructure in a heartbeat. it should see the benefit of the cratering of the dollar and it would benefit from the remarkably deflationary event that is a default. procter stands head and shoulders above many of the consumer goods names and a 3% yield. so here is my bottom line. the staples, those redoubtable cockroaches of the stock world have caught a bid. they have been immunized from the vicissitudes of the market. i guess you could say that washington's failure is, alas, their success. sonny in illinois. sonny? >> caller: sonny giving you a big chicago bears ba-ba-ba-boo-yah. >> i'm going to give you a winless giants.

they used to be the new york football giants. now the winless giants. boo-yah. what's up? >> caller: we got a chance of beating them up, right? >> you know, i just cut ruben randle. >> caller: okay. >> i took percy harvin, he is going to start. what's up? i'm not kidding. >> caller: i just want to say i'm a long-time fan. love your show and love your books and everything. really appreciate what you do for us small investors. >> thank you. >> caller: so with our friends in the government not being able to come together on a decision and are making our country look bad, i'm taking your advice on buying companies with global exposure. can i get your opinion on two companies, gannett and aes corporation, please? >> gannett -- let's just take gannett. gannett is a domestic company. you own gannett because they're turning from a print to a tv -- more tv. it's kind of like oil and gas. if you're a nat gas company, you're trying to get more oily. gannett is a newspapery company that wants to get more tv-ish. and that's what that acquisition

is about and why i like gannett so much. let's go to anne in kansas, please. anne? >> caller: yes. what i have a question about is hero, if you would recommend investing in them? >> no, no, no. let's buy the highest quality. let's buy highest quality. hero, which is a good company. but for my charitable trust, my charitable trust is buying national oil well varco. it's splitting up. nate in virginia. nate? >> caller: boo-yah from northern virginia. >> hey, it's for lovers. >> caller: thank you for all your literature and for your recent constitutional scholarship. i really appreciate it. >> quite welcome. >> caller: in the doomsday day of october 17th and what i call the effective doomsday of november 1 or 2. >> right. >> caller: i have about half my portfolio coming up for earnings announcements, and i was wondering if i could get a little guidance from you on how to play it this time. >> well, i think earnings are going to be tough. the outlook is going to be difficult.

however, at one point today we heard a whiff, a scintilla even of possible talks between the president and congress. and the market reversed so quickly. if i told you to get out and get back in, i would be making your head spin, not unlike reagan in the exorcist. i'm not going to do that to you, sir. the staples are back. in the midst of political ping-pong, the staples will keep your portfolio together. d.c. pulls itself together, then maybe the staples won't be as strong. but right now they're going higher. stay with cramer. tomorrow, kick off the trading day with "squawk on the street." live from post nine at the nyse. >> you said yourself this is absolutely the best that america has to offer. >> it all starts at 9:00 a.m. eastern.

it is time! it is time for the "lightning round" on cramer's "mad money." you say the name of the stock -- >> buy, buy, buy! >> sell, sell, sell! >> and then the "lightning round" is over. are you ready skee-daddy? what is going on with shawn in massachusetts. shawn? >> caller: hey, jim. boo-yah out to you from red sox nation. >> well, congratulations. really quite a team.

the flyin' hawaiian is starring. what's up? >> caller: thank you. i'm just actually wanted to throw a question out to you. i owned cce for about 11 years. and i'm just wondering, it's finally going up a little bit. and it's always been paying a decent dividend. i want to know your take on whether i should hold it or get rid of it. >> it's okay. i have to tell you i do prefer owning pepsico, but that's been a good company, cce. so i'm not going to tell you to sell it. but i do like pepsico more. may i go to nick in sweet home alabama? nick? >> caller: how you doing, jim. >> all right. how about you, partner? >> caller: i'm doing pretty good. i have a question pertaining to united therapeutics, uthr? >> yes, yes. >> caller: it has kind of pulled back roughly about 5 or 10 in the past few days. i was wondering if you think it is a correction. >> these are going to have four days worth of sell-offs before they can bottom. my friend bob lange, he and i were consulting back and forth on this. it's four days before you can

expect to bottom. i expect more pain ahead for united therapeutics. guthrie in tennessee, please. guthrie? >> caller: boo-yah from memphis, jim. >> wow, man, memphis. i'm digging that. what's going on? >> caller: all right. i have a play on obama care. i've been scaling into hhs. the impressive ceo was on your show in june. the stock price can't find the bottom. on monday the stock took a 14% dive on no news i could find. what am i missing, or am i just looking at the company in the wrong way? >> no. i just think that's just a good solid business. that's surprising. let me do some more work on that. i think that's a good solid business. it's mystifying to me. let's do some work. let's go to lloyd in alabama. lloyd? >> caller: hi, jim. what's going on? >> hey, man, what's happening with you? >> caller: my question is about insys pharmaceuticals.

is 44 a good entry point for it? >> you know, this stock has defied the gravity that is pulling down so many of the other biotechs and it was up big today. i'm not inclined to tell you to buy. the group is for sale. wait a couple of days. i know that sounds like a doctor. but the group is for sale. let's be careful. let's go to sandeep in connecticut. sandeep. >> caller: thanks for taking my call. my stock is fly. i bought at 55. should i buy more or sell it? >> oh, boy, the leasing of aircraft. you know, i don't know the leasing of aircraft business, how it's doing now. i presume it's doing well, so i'm doing work. let's go to shannon in michigan. shannon? >> caller: how you doing, cramer. i just wanted to know what you think about facebook at its current levels. >> stephanie link, who was on the previous show on "fast money" went back and forth a little bit today, frantic on facebook. i said that stock is for sale. who else has that kind of

growth? i was stumped on that. i think the stock has great growth, but all the highfliers were in day three of the sell-off other than biotech day two. i expect the stock to be under pressure for a couple more days. i think it will be okay. let's go to c.c. in indiana. c.c., close to home. c.c.? >> caller: yeah. iowa, not indiana. >> oh, all right. my bad. what's up? >> caller: i'm john deere. i got a lot of money in john deere stock. >> deere is not my favorite. they keep executing poorly. however, they make the best tractors in the world. so it's a difficult thing to say. but i do like agco more. i think agco is taking share and taking names. and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is >> the "lightning round" is sponsored by td ameritrade. five tech stocks with more than a 10%...

we've entered a moment where the market hangs on every word from washington, not wall street. every press conference with the president, every interview with republican leaders. you don't have to like it. i certainly don't. be you obviously need to understand it. and the reality of it is i'm a stock expert, not a politics guy. which is why tonight we're

talking to someone who understands the situation better than pretty much anyone out there. chris matthews, the host of msnbc's "hardball," which you can catch weeknights at 7:00 p.m. eastern. and before that, way back during the reagan administration when the democrats controlled the house of representatives, he was the chief of staff to legendary house speaker tip o'neill. in fact, chris has a new book out called "tip and the gipper: when politics worked." about how president reagan and tip o'neill actually compromised to get things done. wonder of wonders. i think it should be required reading. i'm enjoying it. chris is an old friend and philadelphian. welcome to "mad money," chris. how you been? >> thank you, jim, so much. >> i'm enjoying the book. when i read about social security, which i think is actually going to have a potential stoppage, neither man would ever even dream of that happening. everybody would come together. what has happened since then? >> well, they were -- they were at odds on social security. reagan had that strange history back in the '60s when he was very conservative, saying he wanted to become -- make the program voluntary, which of course scared the heck out of the liberals. and then of course he tried to

reduce the colas and penalize early retirement, take it from 80% if you retire at 62 down to 55%. he tried a number of those things. he basically lost the '82 midterm election over that issue and then decided now it's time to deal. and jim baker, the chief of staff to the president, let's not take any more heat on this. let's get this monkey off our back. and alan greenspan came in and he put together a commission. and with the help of people like pat moynihan of new york and bob dole of kansas, they put together a deal. the speaker and the president that basically leaned a bit left because it basically had an implicit -- what do you call it, a means test, because it basically said if you make more than a certain amount of money, it was $20,000 then, half your social security benefits are taxable. so they did that they also delayed the cola three months and also raised the retirement age later in the legislative process. and what do you know, it's been good all these years. they could put it together. neither guy agreed on either principle. they disagreed on all the

particulars, but added it up and said i'll give you this pile of chips, you give me your pile of chips. make sure they're equal. no one said i am not negotiating on this, like president obama is saying right now about the debt ceiling. no one ever said that during this whole period? >> well, i think there is a difference in that this usually you grab the baby and ask for the money. but in this case, they have grabbed the money and asked for the baby. this is something that obama created. he's not going to allow it to be dismembered, have a toe cut off dismembered, have a toe cut off or something, and say i'll take the baby back with maybe a toe missing. see not going to do it because he just created this program and hasn't even been put into effect yet. i'm just talking politics here. i don't think obama will give an inch on that issue. i think he'll give inches on -- he always talks about entitlement reform. he always talks about corporate tax reform of some kind. but he always wants something in return. maybe the deal now is what he gets in return is a debt ceiling. i think that might be the game if they delay this a couple of weeks or even if they cut a deal in principle next week. >> are we going to default? >> i don't know.

i know this -- i don't know. i don't know how you can predict this. boehner hasn't moved. where i do see progress is paul ryan, who is talking about the things i'm talking about, broader set of reforms, rather than focusing at all on health care. i think they all know what they have to do. they got to increase growth. the president said that yesterday. got to make it better for us to compete in the world, our corporations. those are realities he addressed yesterday. i think what will happen, i've written an article about this. i think what will happen is somebody in the budget committee more likely the ways and means committee or the senate finance committee is going to come up with something the next couple of days. it's not going to be the president, because if it has his name on it, it is doa. i don't think boehner has the authority to come up with anything. but somebody at the committee level, and those are the guys and women who actually write these bills, is going to come up with something. i hope by tuesday. >> that is the best news that i have heard. no one -- >> can smell it. i can smell it. >> one last question i've got to

ask you. when reagan gets elected, tip o'neill says hey, you know what? the majority has shifted. i'm now in the minority. they don't do that anymore. >> there is an old tradition, jim. you remember. it was called the honeymoon. you get elect the president of the united states, the voters respect it, not the new guy on the block. the voter, hey you voted for this guy. he's got to get his day in court. so tip said we're going to get every single thing you want voted by august 1st. you'll have the whole thing if you can win. he won the tax cut, the spending cut on domestic programs and the hike on defense. tip didn't like any of that. but he said i want the monkey off my back. i'm not going to be an obstructionist. i want reagan to be responsible. so by august 1st, everything was passed. that is the way government used to work. it used to. >> they cared about deadlines. i think 80 million social security checks may not go out on time november 1st. >> well, they're waiting in line after the debt payments. i'll tell you one thing. you're the expert. if you see an airline that goes

from 100% safety record, they're averaging over 100 years, which we've always had on paying our debts and announced the next day 95% safety record. nobody is getting on that plane. >> right. exactly. >> they'll say what the hell happened here? you used to have 100% safety record, which was our pride and joy. i was a paper boy, philadelphia bulletin, and i bought savings bonds because everybody said it didn't pay as high interest, but it's as solid as the government. the chinese billionaire still buys our paper because we pay our debts. what happens when the word gets out that we don't? this is playing with crazy. >> i'm glad you put it that way. you're a straight shooter. thank you so much for coming on "mad money." >> thank you, jim. >> i will enjoy this book. i'm only a couple of pages through it. but i've read every single one of your books and you know that because you've quizzed me. thank you so much for coming on the show. >> thanks, jim. >> i got to tell you, i do love all his books and i read them and we talked about it. when politics worked.

government may shut its doors, the treasury might stop making interest payments on its bonds. some things never change. here at "mad money" we're always trying to peer into the future, trying to figure out what will be the next big thing. sometimes we have to go off the tape talking to people at privately held companies with really cool products. take mobeam. it's a private company, so you can't invest in it. i wouldn't be surprised that one

day it comes public. it is changing the way we spend money. that's what is key. they do an app that allows you to use your cell phone to interact with a cash register whenever you go to buy something. many scan in coupons and other bar coded data. without mobeam, it can't process it. it causes your phone to send a beam of light that scanners can actually detect. all the digital coupons you get offered online, mobeam makes them easy to use, definitely worth knowing about as we head into a government-induced recession. it works only on samsung phones at the moment. but that's pretty darn cool. and it brings you one step closer to the future where you use your phone for everything. let's take a closer look with ben dupont, in order to learn more about the future of mobile commerce and mobeam. welcome to "mad money." >> have a seat. >> thank you so much. >> is this the u.s.'s first shopping phone? >> i think so. >> you do? >> i do. i do.

i mean, jim, there are 200 million supermarket checkout scanners in the world that cannot talk to a cell phone today, and mobeam changes that. >> mobeam changes that, why didn't apple pay you to keep it from samsung? >> that's a great question, jim, and i don't know that i can answer that. we're talking with all the major hand set manufacturers. >> so the deal with samsung is not exclusive? >> the exclusivity tapers out. >> tapering? oh my god. ben bernanke, welcome aboard. keep it vague, ben. how does it work? at starbucks they already have it. but this is different from starbucks. >> right. if you're a retailer, you can do what starbucks did, which is spend some money, upgrade your entire point of sale systems, and that's millions and millions of dollars. >> right. >> and i think they have about 20,000 stores, and i don't think they have all of them yet. with mobeam, you get the same functionality at 200 million scanners. it works today globally, and

we're only in the samsung galaxy 4 and the samsung note 3, their two flagship devices. but the beautiful thing if you had to pick two devices to be in, those would be good ones. we'll be in over 100 million devices by the end of december. >> mobeam will be? >> mobeam will be. >> this is not a downloadable app. this comes built-in. >> yes and no. >> i want to download it tonight. >> you can download it tonight. >> but have i an apple. >> you can only download it on a samsung galaxy 4 and a samsung note 3 that just came out. >> okay. so this just came out? >> this just came out. and the app is very simple. it's just loyalty cards and gift cards for the time being. so it's a little inefficient. >> are you in gamestop? they have 32 million people. are you in any of the ones in my supermarkets in philly? >> i'm not sure what you mean. but we will work with all major -- >> i'm trying to figure out some of the biggest loyalty program i

know is the game stop. >> anything that is bar code-based, we'll work with. all these cards you have to carry around and i'm dropping them down -- >> yes. which i do. >> i never carry mine. you know, this phone replaces all of this. >> really? >> all of it. >> can you show us? >> it's quite simple. that's my son there. if i wanted to take -- >> private companies. >> if i was going to take you shopping to acme, first, there is my gift card. and it's beaming right now. that's a dummy bar code. put it over the scanner, beep. >> why doesn't my phone work? >> it's got to have a little piece. there is a little piece -- >> what is the matter with my screen? >> it's great question. there are about ten reasons why your screens won't display bar codes. i mean, if you have studied physics in high school, there is parallax. supermarkets are bright places. it just doesn't work. when i say it doesn't work, it doesn't work like a thousand out of a thousand times. >> and why can't i just invent this?

you have patents. >> the smart people at mobeam. not me, the smart guys at mobeam worked really hard on all this. so this is a simple app. again, right now it's just loyalty and gift. >> but you're making it sound like one day it will be everything, point and click. >> right. it will be everything. give us until q1 or maybe q2. and here is a gift card. an amex gift card i want to pay. i just put that over the scanner. it's just like i paid with an amex gift card. so it's that simple. >> so if i go -- >> it works everywhere. there is an app called beep and go. and i think that's the key message. i love your board back there. i looked at a little bit of the show. you have all these sounds. the sound you don't have, jim, the sound of a supermarket checkout scanner going beep. >> that's very true. >> that's the sound of commerce. that's the sound. that's what mobeam enables.

>> ben dupont, founder and managing director of yet two ventures. i want it on my phone, apple. stay with cramer. mad about "mad money"? immerse yourself into 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. customer's not happy, i'm not happy. sales go down, i'm not happy. merch comes back, i'm not happy. use ups. they make returns easy. unhappy customer becomes happy customer. then, repeat customer. easy returns, i'm happy. repeat customers, i'm happy. sales go up, i'm happy. i ordered another pair. i'm happy. (both) i'm happy. i'm happy. happy. happy. happy. happy. happy happy. i love logistics.

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it's cloudy because of citrix. we've got to do more work on that stock. there is always a bull market somewhere. i promise to try to find it right here on "mad money." i'm jim cramer. see you tomorrow. >> $1 million, ladies and gentlemen! >> thank you. >> there's this top-secret club of watch collectors. >> i realize on people's wrists, there's probably $1 million worth of watches. so you want to keep that a little under the radar. >> right. >> well, it's not quite as good as sex... [ engine revs ] [ chuckles ] but it's close. [ laughs ] >> it's the ultimate access with the ultimate insider. [ echoing ] money. power. and the secret lives of the super rich.