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Jim Cramer, in his "Mad Money" show Monday, said that more than 7 million "teaser" mortgages are likely to be defaulted.
Investors should keep an eye out for the mortgage meltdown's ripple effects and protect their portfolios from the House of Pain."Stay defensive," he insisted, as he predicted more problems to come for banks, brokers and funds. Cramer said to avoid the companies related to lending and homebuilding, such as Thornburg Mortgage (TMA), Washington Mutual (WM - Get Report) , Lehman Brothers (LEH), KB Home (KBH) and Beazer Homes USA (BZH - Get Report). Cramer said to look to the companies focused on staples, soft goods and drugs. He recommended Procter & Gamble (PG - Get Report), Coca-Cola (KO - Get Report) and Colgate (CL - Get Report). The Fed's betting that the mortgage mess will subside, Cramer said. However, Cramer believes that the Fed should cut rates.