lion's gate. where there's smoke, there's fire. plus you own it anyway because it held. >> "catching fire." >> i also have a happy birthday also to my mom and my brother. happy birthday. we're back 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. other people want to make friends. i'm trying to save you money. my job not just to entertain but to teach. call or tweet me @jimcramer. it's totally annoying. the newfound volatility is

driving potential investors to the stock line as the american stock market but not the american economy suffers daily from hedge funds starting rel t relentle relentlessly in and out of our stock. the dow sank 42 points and s&p gave up and dow declined it's one more day we have to suffer from the volatility these funds leave in their wake. they obscure the good news happening in this country. our horribly weak stock market this morning was like a different market for the rest of the day. it reflects their collateral damage an not our fundamentals which is why i came bouncing back later in the day. the market regained it's equilibrium. consider the positives for a moment. positives hidden by bizarre moves like the hideous opening this morning. before the opening i was incredibly heartened to learn consumer spending in this country rose .5%, income

increased .3%. they show a confident consumer emerging. it's something that should have driven our stock market up and not down. it's clearer there's more shopping and dining out. we wouldn't get such a bullish hiring number from macy's today as the company plans to bring on 86,000 part time workers from the holiday season. i was surprised to see such a big figure given that the ceo made comments about consumer spending. made me ask could there be a turn to the positive? you also have to be concerned that an oil company most of us never heard of got a $7 billion take over bid from a canadian gas giant. they produce 30,000 barrels a day out of the now red hot basin in texas. it's going high.

why? american ingenuity and engineering. if the price is going to keep falling why wouldn't canada wait to do this deal? perhaps because oil is another commodity temporarily caught in the grip of hedge funden bandits who equate a strong dollar with weak oil. maybe oil's not going down as much as we think. that's okay. it's in a sweet spot for the consumer. then the business analytics software company that got a leverage buyout this morning. i knew the company was for sale thanks to the excellent reality check but this is a nice sized bid from a nice sized firm and then near the close computer sciences said it too was exploring a leverage buyout. remember those deals? stay tuned for more reflections of this rarity of a deal later on. may not be such a rarity after all. in the meantime markets seem to forget that just last thursday nike reported a fantastic quarter with terrific worldwide growth. by the way, micron lost

thursday. they are seeing increased demand. it was extraordinary. it was forgotten by sunday. the dreadful lack of positive pinks, for me either company i find totally absurd. how can you not extrapolate from those nike numbers more than a day. it would be on micron itself until the end of the day. then we have the quite but immensely positive deal that nisource the huge utility announced last night. they're taking advantage of a newfound natural gas well by splitting into a regular utility and tax advantage pipeline company that will spend billions upon billions of dollars building pipelines that can tap into it. it's the second in the world and it is just now there. we keep hearing that apple's new

iphone launch is doing poorly. they do a story like that every single hour but any other consumer products company on earth would kill for this. how about that go pro launch that sent go pro up another 10%, i could go on endlessly. we're getting within the context of the united states being the best global safe haven for people to put their money to work but it's precisely this best safe haven characteristic that is causing the latest round of whirling volatility. the set up right now is so weak that many of the hedge funds that made big bets in emerging markets like latin america and china are panicking. there are no bids worth hitting in the on going disaster that is brazil. major riots in hong kong come at a time when they're acting like they really believe in communism for the first time in a generation. cracking down on the kind of

showy merchandise and spending habits that have given so much of china's growth. the riots are frightening but you have to ask yourself are they more important to our stock market than the good news from nike or micro or macy's. do they outweigh computer sciences? absolutely not. they spent most of the day repounding after this morning's hideous opening. we might have finished in the black if ford hadn't disappointed it's meeting. why? european renewed losses. i can't think of a good reason to invest anywhere overseas. ukraine russia tensions, hong kong riot, isil gaining team. you want to get out of those markets alive. if you're rich you almost have to wire your money out of your country and into american dollars and american bond. strong dollar is bad for oil, bad for exports and bad for the nation as a whole. wrong. a strong currency is a sign of

america's might. it's not a negative. now what to do if you're one of these leveraged hedge funds that made these foolish bets in emerging markets? raise capital right? many of these guys are making the time honored stupid trade of selling the good, the united states, and keeping the bad. all those countries that are falling off a cliff. they sell the good. that's often not the case with overseas junk. they're just in your nature. these idiotic hedge funds. but once the hedge funds liquidations are finished and the smoke clears, it's today's session. before selling is over and nobody else wants to bail. buyers reach for uniquely american situations, restaurants, retailers, health care stock and move them right back up. they're so high up that you again get the volatility on the

outside. i don't like it either way. i think they make enormous sense here. they have everything to do with the increased consumer spending i just mentioned and the leftover dollars that lower gasoline prices give you. we have to stop talking about the fed already. it's classic misdirection play. look, you have to let these hedge funds lash out with their selling causing all of this volatility it's so unnerving and then buy what makes sense that has nothing to do with their silly gyrations. the problem common sense is obscure. here's the bottom line, the next time the volatility drives your stocks up or -- let's say it drives them up. take some profits and buy them right back when our hedge funds volatility inevitably drives stocks down and then they unwind again the moronic risky bets that should have never been made in the first place but are causing them to sell our good stocks here just to keep their

bad businesses afloat. mark in wisconsin, mark. >> jim, i've had a position now for quite awhile. it's been as high as north of 20 but now it's banking around 10 plus. should i hold my position or should i sell it and move on? >> look, i think he has more up his sleeve than the one drug people feel is already played out because they have given away the royalties. i think that selling down immunogen here is not just a mistake but a big mistake. let's go to bill in washington. bill. >> hey, jim. i'm calling to see what your outlook is on goodyear tire with it's recent last month or so it's fell a little bit. >> i've never been a big fan of the tire companies. you did catch a good move on goodyear tires still not too late to go. gordon in oregon please, gordon. >> hello jim, gordon from oregon.

a second time caller. >> okay. >> i am calling about matel. it has a juicy durable dividend yield of 5% with a 63% pay out. stable margins however today it was downgraded. my question is should i swap out mattel for competitor hasboro. >> mattel had a bad quarter. it was like it can't be that -- please, stop here, i mean -- it read like the game plan from a really bad nfl coach. all right. the hedge funds are darting in and out, darting in and out and hurting the market. they're collateral damage but underneath it all i see good news. that's why you should use their volatility to your advantage. mad money tonight, a deal to take tibco private sparks a surge in the stock. can you cash in? and it's doubled over the year and a half and it may be the best supermarket stock in the game plus the cloud stocks lost

after a spell of sky high gains but have they come down enough to be buys again? i'm giving you my forecast. stick with cramer. >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question, tweet cramer, #madtweets. send an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. how much money do you have in your pocket right now? i have $40, $21. could something that small make an impact on something as big as your retirement? i don't think so. well if you start putting that towards your retirement every week and let it grow over time,

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when i opened up the papers this morning and saw tibco software was selling itself to a private equity shop for 4.3 billion i almost did a double take. after all when was the last time we saw a large scale leverage buyout. last year there were four public to private deals. this year hasn't been a single one. oh and then we hear about how computer sciences they might be doing it. holy cow 2-in-1 day after a yearlong drought.

we have to ask ourselves where have they all gone. we know this has been an incredible year for mergers and acquisitions with them already exceeding each of the last six years. in fact when it comes to activity 2014 is on track to be 20% higher than the previous peak in 2006. this is a secular trend. but the pace of private equity transactions it hasn't kept up at all. it's increased year over year representing nearly 20% of total volume and down over it's average of 30%. on the surface doesn't make a lot of sense. why? private equity firms worldwide are sitting on $465 billion in cash. they can borourow money at low rates and take companies they bought years ago public again. you might think if private equity shops are selling aggressively right now it would

make sense they wouldn't be buying but historically it's not how it works. they have been pretty quick about putting that money right back to work in the market. so after multiyear period where it looked like the private equity guys are going to buy everything in sight, what the heck is going on here. typically they have much longer horizons than hedge funds. their investors count on them to make big money every five or seven years like a cycle. but still you can't make your investors squad if all you do is sit on the sidelines parking that money where you know you're not get anything return. so what exactly is keeping these well funded private equity firms from taking companies private in this environment? okay with the averages near their all time highs you might think the private equity guys are worried about their valuation. why are we seeing so many acquisitions where one publicly

traded company buys another. perhaps it's more a question of currency when a private equity shop tries to do a buyout they can only use one currency and that's cash. but when a publicly held company makes an acquisition they can use another currency, they can pay with their own stock. when companies are at or near their all time highs, paying with stock is brilliant. that's one reason we're seeing so few leverage buyouts in this country this year. private equity firms can't compete with publicly held companies that make stock fuelled acquisitions. that's just part of the puzzle. another factor is most of these private equity shops have a very clear cut business model. what they stick to. they use boroughed money to buy public companies and take them private, in other words, remove their stock while at the same time loading up their balance sheet with debt and then they cut cost to the bone and

generally try to improve the way the business is run. fast forward a few years and the p.e. guys sell a leaner, meaner, new and improved version of that exact company back to the public for a nice profit like they did at hca. like they did at dollar general. here's the problem. right now there aren't very many american companies that would make good leverage buyout targets. not only are stocks more expensive but most public companies have been cutting costs so long that they're now at peak levels. aren't a lot of opportunities for operational improvements from a private equity firm buys one of them. lately they even had to pony up more cash to do their deals and the leverage buyout business the key performance me trick is what's known as the internal rate of return you're going to hear it as irr. all these firms are looking for companies that can give them a descent irr but in a recent

really excellent research report they found that only 60 companies in their entire coverage universe excludeing the financials could generate an internal rate of return greater than 15%. 15% given the risk isn't all that great. just listen to what some of the top private equity player hearsay to say about the value lag la -- valuations. the investment environment across the board is challenging. it's hard to find compelling things to do and it's a good time to be careful. oak tree capital great company says quote there is no question that bargains are harder to come by. that doesn't mean it's come to an end. the private equity guys are still sitting on fortune and that needs to be put to work. they'll be putting more of that money to workout side the united states. or through partnership deals with nonprivate equity investors. like i said before globally private equity firms of 465 billion in cash just sitting

there. that's nearly the highest level on record and 300 billion of that is raised since the beginning of last year based on the way the private equity business works that means this money will need to be put to work 2016 by 2018 probably. on the most recent conference call they had a stock we liked very much and said that international now represents 66% of its announced deals that have yet to close. much of this money could be headed overseas and many will be nontraditional. take last year's heinz deal. it did have a buyout partnering up with berkshire hathaway to cover the cost of the deal. that could be the new model for private equity deals going forward. that was the warren buffet model. everybody loved that deal. at the end of the day it's almost impossible for the private equity guys to compete at least here in the united states at this particular moment. when public companies make strategic acquisitions they can save a fortune by cutting

overhead and eliminating spending. that's what activists are aiming to do in their bidding war. for cramer fave drug company allergen. a lot of these potential take over targets are simply worth more to publicly traded companies in the same business than they are to private equity shops. they have a very good eye care franchise and so does allergen. here's the bottom line. with them taken private today it's worth thinking about just how rare these leverage buyout deals have become lately. private equity firms may be flush with cash but they don't have many opportunities to put that cash to work. right now m and a wins the day but they have years to make the purchases and we'll see a gigantic influx the next time we get a major swoon in the stock market that creates real bargains for these buyers and judging by this newfound and yes

off putting volatility we may not have that long to wait. there's much more "mad money" ahead including a ride around the aisle of one supermarket chain right to buy t. weather has been dark and gloomy but is the sun about the come out? don't miss my forecast. find out the key to this market's next move and stay with cramer. t's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

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in this confusing market allow me to point out one major bright spot. a grocery store that defied all odds through a string of raises. causing stock prices to soar as it's competitors look by in disbelief. i'm talking about kroger. kr, the second largest supermarket chain in the united states and a stock i still believe is worth buying even up here. even if it's only a point or so off it's 52 week high. in the last year and a half kroger has gone from 0 to hero. in 2005 to early 2013 this stock was kind of stuck trading sideways for ages. 2030, 2030, the company was a consistent performer but that was about it. then early last year kroger broke out of its shell and it's stock has not looked back since doubling over the last 17 months. this is a supermarket chain

people. give me a 40% return since i started recommending it in july of last year. that was an incredible almost unbelievable run for an old fashioned supermarket chain. but not only did kroger deserve every single point of that run i think it also deserves to go higher still because this is an incredibly well run company that's taking share and taking names all over america. so let me explain how kroger's managed to rally like crazy and why i think this move can continue. let's start with the fact that the last several years have not been a good time for the supermarket industry. since the year 2000 walmart rolled out or converted more than 2,000 super centers growing it's share to 32%. they're the biggest. for ages they had to slug it out just to deliver positive numbers. you know the same numbers we look at. for a decade kroger tried to

compete against walmart on price causing it's margins to get pancaked. over the last few years they have the company taking market share from walmart and nearly everyone else in the space including the once mighty whole foods. in fact it's gotten to the point where kroger seems to be in a whole different class from the supermarket stocks. now they have been better run than the competition. they managed to deliver 48 consecutive quarters of positive sales growth. they have begun to deliver traumatically superior numbers. same store sells are a little less than a hundred basis points better than the average supermarket chain. since 2013 that gap widened to between 150 and 200 basis points and if anything i think kroger is poised to do even better going forward. why? first of all some of kroger's biggest competitors, discounters like target and walmart they have been struggling. i'm beginning to think these are

not the places where people love to shop for food. they might want to get some slacks there. most of the market share is losing the food aisle goes straight to my buddies at kroger. second we're now seeing serious consolidation of the supermarket space. once that deal closes you know that to combine anything will be closing a lot of stores. that's how you make money on an acquisition like this one which means less competition for kroger plus the combined one will be highly levered and won't have the cash to go toe to toe against kroger when it comes to investing in the business. third, i think this is the big one. kroger grasps the importance of the rapidly growing market for natural and organic foods much earlier than many of its competitors in the traditional grocery space. the company is aggressively invested in the natural and organic category. in late 2012 they launched their own private label organic brand simple truth which has 400 items in 45 different product

categories according to the ceo who is a smart fellow. well over half of kroger's customers buy something natural. isn't that amazing? kroger's management suggested their entire organic and natural business could double within a relatively short time frame. this is how the company is able to take share from the likes of whole foods. last but not least kroger is ahead of the curve when it comes to technological innovation and yes the supermarket needs technology. the company invested heavily in mobile coupons and apps and they have terrific insight into the customer's preferences via a fantastic program. they have the london based marketing science and kroger is not just resting here. companies developing a track record of making smart acquisitions. last year i really love this one, they bought a supermarket chain 2012 scores, southeastern united states giving kroger an up scale presence in a region where they had very little exposure.

it's very exciting. then last month the company completed $270 million acquisition. it was an online retailer supplements or vitamins or organic groceries. one more way they're doubling down on the fast growing category. this deal should expand and improve the company's e-commerce platform. they emphasize that for that acquisition. kroger has been able to do well delivering consistent results. i think at any up tick in consumer confidence which is something kroger's management eluded to on the last couple of conference calls could send the stock soaring higher. the price of gasoline is coming down and that's the equivalent of a tax cut for the consumer that can afford to spend more at the grocery store though they'll likely spend less at the gas stations but much of the savings at the pump will flow back into the higher margins store. the higher cost of commodities that go into the food that kroger sales make, i have to tell you, you're not seeing it

yet. a lot of people say to me you keep saying that commodity prices are plummeting and we're not seeing it. it takes awhile to go through the system. some guys will pass it on. coffee just came down in price. incredible year over year. the last year and a half. the stock sells at just a ridiculous 14 times next year's earnings estimates. that is really cheap. 12% long-term growth and that is so some of the most consistent reliable growth around. people don't stop buying food because the economy slows and if they trade down store brand merchandise that's a huge positive for kroger. they carry much higher margins than the nationally branded stuff. they have more exposure than any other traditional supermarket chain. they are getting bigger. in the past kroger traded 18 times size earnings but kroger is better off than it's ever been. plus kroger has become very

shareholder friendly. descent 1.4% dividend yield. magnificent billion dollar buy back that the board of directors authorized back in march. i bet they run through that billion dollar authorization pretty quickly as kroger retired nearly 20% of the share count since 2010. here's the bottom line. kroger doubled over the past year and a half but it still trades to a discount to the average stock in the s&p 500 and it's shown that it's a heck of a lot better than the average stock. i could easily see the 52 dollars kroger headed to 62 in the near future and this is the perfect cure for hedge fund volatility. robert in arizona, robert. >> hello jim, thanks for taking my call. appreciate it. >> of course. >> jim i'm a long time fan of whole foods. i've been a consumer and shareholder for quite awhile and

i love the company and i'm just wondering if your outlook going forward is positive. feels like it's on sale right now, the stock and just curious what your outlook is. >> have to tell you. i'm pulling for them. it's where i shop. i was there the other day. chlts estimates might be too high. i think the program is going to work. i think there's three down and ten up. so why aren't i saying -- because i think the three down could come first but i like the level. it's just that i like kroger more. so much cheaper. can i go to alex on facebook? alex? >> good to have you. >> it's a pleasure to be on the show. i wanted to ask about gmcr green mountain coffee. it had a great return around it's one of the best stocks in the s&p 500 i missed my chance

unfortunately to buy it while it was just getting started but i want to get rich carefully and i'm wondering will there be another buying opportunity and if so should i take it? >> you have to wait for buying opportunity there but i will tell you right now that i think monster beverage which is a similar situation to coca-cola that's one you can buy at 91 and i would feel much more confident about that than i would about recommending green mountain up here at 130. i just think that the big money is kind of made in gmcr. attention mad money shoppers looking to stock your shelves this season? add the kroger company to your shopping list. much more mad money ahead. taking your rapid fire questions. taking the call in stock after stock in the lightning round plus they're depending on one market moving number. it has nothing to do with janet yellen but first the company is modernizing a $1.5 trillion t

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as the cloud based softwares

come down to the point where they're viable again. the cloud based software marketing firm that allows clients to streams line and automate their marketing decisions while helping them build long-term relationships with their customers through social media. it became public with a bang last year. priced at 13 rising 77% on its first day of trading and then it kept rising as part of the rally in the cloud stocks climbing as high as 45 this february at which point the softwares and surface names got hurt. since then they bounce bakd to 31 and change. more importantly the most recent quarter substantially better than expected. 51% increase in billings. management raising it's full year revenue guides. it is still not yet profitable. the stock is trading 8.8 times sales here which is not cheap even for a cloud play but because of the way subscription revenue works you'll become cash flow positive soon. let's take a closer look with

the chairman and ceo. welcome back to "mad money". >> good to be here. >> i'm accurate in saying you advanced how quickly you can be cash flow positive even from the last time you were here. >> we did. we have given specific guidance now talking about the 2016 full year and we think that's definitely in sight. >> definitely. i want people to understand this. this is an out fit i never heard of and 65 million users put out a release last week. my fitness pal engages 65 million users and the hello healthy campaign they have is something you're rung. >> that's right. >> tell people what this is and how you got this -- how you got the account and where we see it. >> right. well this is pretty different. you think of us our historic strength has been b to b. general electric and samsung and that kind of organization. on the business side, the business is really moving to consumer and we see my fitness pal as one of those examples. this is one of the most popular

iphone apps. hundreds of thousands of users and it helps people stay healthy and do their stats and everything else. it's a perfect example of how we see the marketing opening up. >> you see them e-mails about how they're doing? what is the interaction. >> it's a great little mobile app. what do you want to do? how many steps do you want to do? their product is monitoring people's watches and fit bits and the like and they know your goals so if you didn't do your steps today you might get a message that says come on you know you can do it or if you're selling you might get something that says keep going strong and that ability to build a personal communication with that consumer in that mobile app environment we think is an example of a new frontier for where our technology is going. >> who is doing that kind of thing? where's that competitive

landscape? >> it's typical for target. >> that's what i thought. >> i know got bought by sales force.com. now they have a suite of products and would cut you out. that's not been the case. >> absolutely not been the case. we're thriving. the whole market is thriving. we continue to lead it very strongly. >> talk about at one point in the july 24th earnings call you say now in terms of exactly what kind of results facebook advertising is yielding twitter advertising or linked in as everything to do with the quality of the content and execution. a lot of people are on twitter that follow the show and people always say to me how is twitter making money? what is twitter doing? well, they have a plan with you to make money, right? >> they do. they have a plan with us to do data cards in the feed that are one way for people to want to buy presence in twitter to acquire presence in twitter and catch the follow up when people share or engage with that message. they make money. our system helps them propagate

that into an e-mail or some follow up interaction to build a customer conversation. >> we had dave cody on many times. honeywell is a good customer. that's business to business. how do they help them. >> honeywell is selling to other systems. as they go through that evaluation our product helps honeywell stay in touch with those building designers or engineers or whatever it might be overtime. >> but that's not a conflict that you also have them for communication and infrastructure business? >> we're an arms supplier i guess. it's not a conflict in the sense that the customers use the softwares to run their own campaigns. >> it's a platform you're not writing the ad copy for that. >> they get used in all the companies. >> exactly. look, you had a great run here and i know that the cash flow was pulled through positive because people are saying listen if they're not making a profit jim i'm not interested but subscription, do it as a

service, the numbers are there. >> you look at the unit economics it's there. >> that's what you have to do. that's the chairman and ceo of marketo. far more successful than if you look at the profit and loss. "mad money" is back after the break.

it is time. it's time for the lightning round. >> and then the lightning round is over. are you ready? time for the lightning round. i want to start with mikie in new york. mikie. >> caller: booyah jimmy. with a 7% yield who are still selling ensco. i don't get it. >> this is one of four stocks killing me. these stocks have not had even a 60 cent lift. i cannot welcome you to the house of pain. let this one go lower. it's not going higher than i can tell. let's go to john in california. john. >> caller: hello mr. cramer. i listen to you every day. >> thank you.

>> caller: but one day about several weeks ago i turned on late you had a president of opk on. >> right. >> caller: and i didn't hear him but i followed up on the stock and every day he buys stock on the open market and every day the stock goes down. i wonder why. >> well, i don't know. it's phil frost. you're backing him because long-term he's created a lot of wealth. i'm not going to back away from that. i think that sometimes you just have to go with a guy. i know his stock is not working right now. he puts his money where his mouth is. he has a great long-term track record. i'm still with phil frost. let's go to jay. >> caller: hey jim. i've done quite well with suggestions over the last couple of years but west port wasn't one of them. >> no, i backed away from them. their engine isn't doing well.

their natural gas engine has not been embraced the way i thought it would be embraced and we had to back away from the company for some time now. peter in alabama. please, peter. >> caller: war eagle from auburn alabama. >> nice, war eagle. >> caller: dow chemical. >> i think dow chemical acted surveillance pushily. i just beat myself up but my charitable trust keep buying dow. it's a good yield and a lot of momentum at that company. i like dow. robert in texas. >> caller: jim i have a question on pandora. >> sure. i have to tell you, this pandora. up down, up down. i can't make an investment case for it. if i'm going to own a stock where i can't make an investment case for it it has to be breaking out and have some moment momentum. >> caller: they should put you all over the world and the countries would be much richer.

>> thank you. >> too speculative for me. i feel it's played out. they're trying to do great things. i would issue like 10 million shares. get all they need. >> let's go to ed in california. please, ed. >> booyah from riverside california. >> i'm doing well. how about you? >> caller: doing great. i have a stock here. an old favorite of yours. a .14 beta. looks like an old utility stock back in the 70s. >> not a fan. these companies take a little too much risk for me. i'm not a buyer of annaly capital management. i need to go to alex in new york. alex. >> caller: hey jism. thanks for taking my phone call. >> no problem. >> caller: what are your thoughts on or car length? once again they missed. i would like to see some

consistent earnings growth from them. it's been very inconsistent. it's a charitable trust name and i'm not happy with it and that ladies and gentlemen is the conclusion of the lightning round. >> the lightning round is sponsored by t.d. ameritrade. ... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade.

$28 billion in how much? i'm talking about the $28

billion raised in less than two weeks and how that's royaling the market. not enough stock has come off the table to offset the alibaba new supply. 2014 has been a huge year for buy backs. this year companies in the s&p 500 will spend $500 billion repurchasing stock that would be lying all over the place. deals done already well in excess of where we were last year takes out even more supply. how can such a meager amount of ipo driven money be an issue? i think it's because this new stock came to market at a time when many big accounts went to sell and not buy and neither the buy backs nor the sporadic acquisitions can handle or absorb that new stock. it was a tipping point in more ways than one. you heard that all over the place right? more important the alibaba ipo

consumed a huge amount of capital from classic mutual fund types while the hedge fund flippers took the money from the deal and ran to the sidelines or to the short side betting that with the fed no longer at the bulls backs and the season coming into focus it's a good time to leave plus so many people are looking for a correction that acting like it's done on the back of short sellers making the case that we must go lower now that the bond buying is about to come to an end. they come back with a vengeance of today's opening. out of nowhere the federal funds rate needs to be at 4% camp somehow seems now to be in charge of the discourse and they're sounding smarter than ever laying out the case for gigantic rate hike which is could cause a recession. do they know some secret about recessions that makes them good for the economy? do they care about it? or do they just want to create a recession in the name of profits

for their hedge fund partners? why does anyone ask what would happen if they spike to 4%. heavy initial public offerings that drain real buying power and no additional capital to speak of. they can't buy these ipos anyway. it has created a momentary in balance that allows this market to go up or down on a hair trigger. the amazing thing that is that the fed is more powerless than they think. when the fed is done buying bonds it's hard to see how interest rates will go higher. it brings money from overseas so quickly we can't seem to take out the 2.7 level from the tenure when the news is good. it's not janet yellen. it's the horrendous economic atr change. i see down shifting everywhere in the world except for the united states and india. it's not like we're in

acceleration mode. we're growing more slowly than a couple of months ago. without more personal income we can't get more savings and without more savings we can't get the mutual fund fuel that allows them to keep their old merchandise at the same time. the next leg of the market up and down depends on supply. specifically holding ipos back from the market. if it continues into the historically tough month of october then we'll have more days of defeat than a victory for the bulls for as long as the deal parade continues. in other words it's not the fed. it's the supply of new stock and it's not going away. it's increasing. stick with cramer.

okay. when you're looking for the types of stocks that should be bought during the volatility which we used to call whipsaw what you want are great domestic companies that are not being impacted by all these different problems overseas. i hear a lot of people say they're worried about hong kong. i came back with kroger. i had people worried about ukraine-russia, i come back with kroger.

i don't like to overthink things. kr is doing well. i highlight it tonight because it's the kind of stock you need in your arsenal when we have big downdrafts caused by hedge fund volatility. volatility. there's always a bull marke >> it's crunch time at frito-lay. the push for the 4th of july holiday. in the next week, the crew will make about three million pounds of doritos... fritos... and the all-american classic... >> this right here is a perfect potato chip. >> they'll run 12 production lines, 24/7, then bag, pack, and ship out to the grocery shelves. it's a race to the picnic table... >> it's going to be a tough