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Investors looking to sum up what's gone wrong in the markets need only one word: assumptions, Jim Cramer told viewers of his "Mad Money" TV Show Tuesday.

Cramer said the markets simply assumed that everything couldn't possibly go wrong all at once, but they did.

Cramer provided numerous examples.

Proctor & Gamble

(PG) - Get Report

, which he also owns for his

Action Alerts PLUS portfolio and normally a recession resistant bellwether, admitted on a conference call last week that it made incorrectl assumptions on their raw costs and the strength of the dollar, both of which hurt the bottom line and the stock price.

Insurance companies like

Hartford

(HIG) - Get Report

,

Prudential

(PRU) - Get Report

and

MetLife

(MET) - Get Report

all received a downgrade from

Goldman Sachs

(GS) - Get Report

, which he also owns for his

Action Alerts PLUS portfolio, because they made wrong assumptions about the strength of their stock price and the health of the commercial real estate market, both of which are forcing them to seek additional financing to pay their obligations.

Cramer said the hedge fund industry assumed the price price of oil would climb forever. Meanwhile, no one anticipated that demand in China would ever fall off a cliff, leaving coal, steel and copper companies upside down in their assumptions.

Bad assumptions are affecting everyone, said Cramer, from

Tyson Foods

(TSN) - Get Report

, which failed to forecast higher feed prices, to retailers

JC Penney

(JCP) - Get Report

and

Saks

(SKS)

, both of which are sitting on mountains of inventory from assumptions of higher Christmas demand.

Cramer: Currency Fluctuations Can Sting Companies

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Ship Shape

Cramer talked with Herbjorn Hansson, chairman and CEO of

Nordic American Tanker

(NAT) - Get Report

to get the latest on his company whose stock has slipped 44% since he last recommended it on May 8.

Despite the slide, Cramer believes a turnaround is coming after the company reported a strong quarter last Friday.

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Hansson said Nordic American is in great shape, having paid its dividend for 45 consecutive quarters and no debt. He said his approach is conservative because he has found from his experience that a company can get into trouble if it borrows too much.

Hansson said that his company is in a great position to buy tankers at distressed prices. And he said Nordic American is very profitable and doesn't sees any reason why it won't stay that way.

Cramer said Nordic American is the only tanker company he's going to recommend. "All the other tanker companies are just too risky," he said.

Cramer reminded viewers that Nordic American is not levered to the price of crude, but rather to the supply of available tankers. With that supply of ships shrinking, Nordic American can charge more and send more money to its bottom line.

A Juicy Dividend

Cramer said

Emerson Electric

(EMR) - Get Report

is "exactly what we're looking for" in the kind of high-yielding dividend stocks he's been touting.

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Cramer said Emerson hasn't seen a dividend yield like its current 4.1% since 2003, and the company's stock actually rose during the last big recession. He said with Emerson's stock now down 40% from its highs, it's the most attractive industrial automation company around.

Cramer reminded investors of the "rule of 72." That formula calls for dividing a company's dividend yield by 72 to determine how long it would take your money to double, given reinvested dividend payments.

In the case of Emerson, the rule of 72 predicts a doubling of an investment in 17 years with a 4% dividend yield, 14 years with a 5% yield and only 13 years with a 5.5% yield.

Cramer said Emerson's dividend couldn't be safer, with a long 52 consecutive year history of paying, and raising, dividends. The company also reported a better- than-expected quarter, beating estimates by 2 cents a share. Cramer called Emerson a buy.

Mad Mail

Cramer told a viewer he's been wrong every time he's tried to call a bottom in

Starbucks

(SBUX) - Get Report

, so he's not calling one now.

Cramer told another viewer that he can't recommend

Goodyear

(GT) - Get Report

, since it's too levered to new cars, but he is still a fan of

Monro Muffler

(MNRO) - Get Report

in the auto-part space.

Lightning Round

In the Lightning Round, Cramer was bullish on

United Parcel Service

(UPS) - Get Report

,

Enterprise Products Partners

(EPD) - Get Report

,

Kinder Morgan

(KMP)

,

Mastercard

(MA) - Get Report

,

Verizon

(VZ) - Get Report

and

Intel

(INTC) - Get Report

.

Cramer was bearish on

Hercules Offshore

(HERO)

,

Vodafone Group

(VOD) - Get Report

,

Microsoft

(MSFT) - Get Report

and

Ecolab

(ECL) - Get Report

.

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

clicking here

.

Read more of Cramer's Mad Money Lightning Round insights

.

For "Mad Money" performance statistics and other links, check out Mad Money stats

At the time of publication, Cramer was long Goldman Sachs, Procter & Gamble.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com 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 TheStreet.com, 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 TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.