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Merrill Lynch's

( MER) fire sale of financial toxic mortgage-related assets could offer a way out of the jungle of problems that have bedeviled financial stocks and the market, James Cramer told viewers of his "Mad Money" TV show Tuesday.

Cramer was heartened by Merrill's decision to sell its "bad bonds and collateralized debt obligations." He said the move was significant because it finally offered both a buyer and a seller for its financial toxic waste.

As a result, the moves could pave the way for other financially plagued institutions such as


(CIT) - Get Report



(WB) - Get Report


Washington Mutual

(WB) - Get Report

. He said it offers them a model for "what they have to do to save themselves."

The second piece of the puzzle that ignited a 266.48-point rally in the

Dow Jones Industrial Average

was the "remarkably great earnings" of

Colgate Palmolive

(CL) - Get Report


US Steel

(X) - Get Report

. Their results, he said, are "a sign that market wants to rally."

The third piece of the puzzle that helps explain the rally is the collapse of oil prices. He said a fall of oil prices to $110 would drop gas prices to $3.50 a gallon.

And he said the rally is not over if the the federal government issues a decent "employment numbers" on Friday.

Looking back at the Merrill deal, Cramer said he was unhappy at how he was hoodwinked time and again by John Thain, the company's chairman and CEO, who, he said, "overpromised" and "underdelivered" both at Merrill and at

NYSE Euronext

(X) - Get Report


For his actions, Cramer placed Thain on his "Wall of Shame."

Cramer: Google's the Once and Future King

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Unconcerned about Oil Prices

Core Laboratories

(CLB) - Get Report

shouldn't be falling along with oil and gas prices.

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That's the contention of David Demshur, CEO of the company, who maintains his company should do well as long as oil stays above $70 and natural gas is above $6.

Core Labs employs proprietary technology to analyze rock in and round oil fields and then furnishes that information to show clients how best to use that it to their advantage. It applies the same kind of analysis to natural gas.

Despite a drop in the stock in the past month, Demshur said the company is insulated from volatile commodity prices because the demand for its services is "inelastic."

That's the reason why the company has been able to enjoy record profits in 11 of the past 21 quarters, he said. Moreover, he said the company has guided for record revenue and profits for the third quarter and full year.

Demshur said he is an advocate for off-shore drilling. If Congress were to pass legislation to allow for such drilling, "we could eliminate all of our imports from the Middle East," he said.

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A Reversal of Fortune


(KMB) - Get Report

is a classic defensive play that investors normally would flock to during these tough times, Cramer says.

However, the company has had its lumps because oil is an active ingredient in many of its health and hygiene products. For every $1 in the average price of oil increases, the company's annual earnings lose a penny. And for every $1 increase in natural gas, KMB's annual earnings lose 4 cents.

But Cramer says the company is in a position to turn things around. He says the company's conservative guidance and the downward trend in oil and gas prices will help. So should a coming price increase it is planning.

There's a real chance of a turnaround here, he predicts.

Mad Mail

In this segment, Cramer told a viewer that analysts have been "ridiculously negative" on


(T) - Get Report

. He says the stock is cheap and he likes the dividend.

For that matter, he also likes


( VZN) and predicts both stocks will be much higher at year's end.

When one viewer noted she was not saving any money using gas/ethanol mixture, Cramer expressed his dislike again of the ethanol mandate. "No one wants it. It's all about politics. It should be scrapped," he said.

Lightning Round

Cramer was bullish on


(ABB) - Get Report

, and


(RIG) - Get Report


He as bearish on


(GRMN) - Get Report


General Electric

(GE) - Get Report


Huntington Bancshares

(HBAN) - Get Report


Intrepid Potash

(IPI) - Get Report




, and


( AUTH).

Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here


For more of Cramer's insights during the Lightning Round, click here


At the time of publication, Cramer was not long on any stock.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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