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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) , Lehman Brothers ( LEH), KB Home ( KBH) and Beazer Homes USA ( BZH).

Cramer said to look to the companies focused on staples, soft goods and drugs. He recommended Procter & Gamble ( PG), Coca-Cola ( KO) and Colgate ( CL).

The Fed's betting that the mortgage mess will subside, Cramer said. However, Cramer believes that the Fed should cut rates.

Swearing by Schering

One stock Cramer recommended was Schering-Plough ( SGP), which develops and markets medical therapies and treatments worldwide.

Its brands include Coppertone, Dr. Scholl's, Solarcaine and Tinactin. Schering-Plough's net sales for the second quarter of 2007 totaled $3.2 billion, up 13% from last year. Seven out of 10 of its largest-selling products posted double-digit sales for the second quarter, Cramer said.

The stock is getting knocked down now, but Cramer still believes it's a buy and is naturally far removed from the "mortgage madness." Cramer noted that Schering-Plough CEO Fred Hassan was one of his transformational CEOs back in May.

The company's operating margin is well below the sector's averages, and it recently issued a secondary offering. However, investors should wait for the stock to come in some pricewise before buying, Cramer stressed.

While this is not "an ideal economic climate," Cramer stressed that people still can make money. Even if "we have no control over what the Fed will do," investors must be ready for anything.

Hold the Vodafone

Cramer said investors should consider looking overseas. He recommended Vodafone ( VOD), the second-largest wireless carrier in the world. With 32 million subscribers, Vodafone leads the U.K. and Germany.

Cramer believes Vodafone will bring in more revenue per user. He also pointed out that Vodafone owns a "serious chunk" of Verizon Wireless ( VZ) and is part of a still-emerging market; there are still areas of the world without cell phones. And the company has a strong dividend.

Cramer welcomed Hologic ( HOLX) Chairman and CEO Jack Cumming to the show and asked him about his company's pending merger with women's health company Cytyc ( CYTC).

When Hologic, which Cramer owns for his charitable trust, Action Alerts PLUS , finishes its acquisition of Cytyc later this year, it will have $400 million to $500 million in EBITDA and nine No. 1 brands in women's health products, Cumming said.

Moreover, the chief executive said he is not worried about financing the deal, as there is no financial risk.

To view Cramer's interview with Jack Cumming, please click here .

Sudden Death

During his "Sudden Death" round, Cramer was bullish on TBS International ( TBSI) and Goldman Sachs ( GS), which he owns for his charitable trust.

Lightning Round

Cramer was bullish on FMC Technologies ( FTI), Rite Aid ( RAD), EMC ( EMC), TJX ( TJX), Costco ( COST), ConocoPhillips ( COP), Siemens ( SI), Schlumberger ( SLB), Corning ( GLW), First Solar ( FSLR), Arris Group ( ARRS), ABB ( ABB), Gentiva Health Services ( GTIV) and Sears Holdings ( SHLD).

Cramer was bearish on Harley-Davidson ( HOG), Optium ( OPTM), Evergreen Solar ( ESLR), USEC ( USU) and WCI Communities ( WCI).

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

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.
At the time of publication, Cramer was long ConocoPhillips, Corning, EMC, Goldman Sachs, Hologic and Sears Holdings.

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."

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