FEATURED SLIDESHOW
Who Is The Worst CEO?Mad Money needed new inductees for its
Wall of Shame, so we asked viewers for
nominations.
RECENT POSTS
- 4 Enemies of Bull Markets
- Experiencing Technical Difficulty?
- The Importance of Good Breadth
- How Big Money Rules the Markets
- Follow the Leader
- Mad Mail: Chesapeake Energy Is Hiring?
- Lightning Round: Royal Dutch Shell, Bank of America, RF Micro Devices and More
- Lightning Round OT: Harley-Davidson, Heartland Payment and More
- Cramer’s Christmas List
- Cramer: This Stock Offers ‘Plenty of Upside’
MAD MONEY FEATURES
PODCASTSWatch the Lightning Round whenever and wherever you want.
OFFICIAL MAD MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.
CRAMERS SOUNDBOARDAdmit it: You've always wanted to hit the "They
know nothing!" button. Here’s your chance.
CHECK OUT OUR PHOTOSCheck out Cramer on set, back to school, behind the scenes and more.
SHOP FOR MAD MERCHANDISEBuy Cramer books, bobbleheads and other Mad Money merchandise.
RING TONESPick up the phone! It's Cramer! New Mad Money sounds for your cell phone.
TEXT MESSAGE ALERTMad Money's mobile. Get show highlights sent to your phone.
Text Size 
This market continues to decline, companies continue to struggle because the people in the corner office never thought things would get this bad, Cramer said during Tuesday’s Mad Money.
CEOs, regardless of their industry, created business plans based on certain assumptions they held about the market, but it turns out they were dead wrong. Look at Procter & Gamble [PG
Loading...
()
]. Management there never anticipated the drop in oil prices, which has a direct effect on raw costs, leaving P&G to wait until next year to feel the positive effects. The company never expected the U.S. dollar to be as strong either, which hurts profits brought in from overseas. And Procter is a strong company, so imagine how lesser firms are faring.
The same goes for life insurers like Hartford [HIG
Loading...
()
], Prudential [PRU
Loading...
()
], Lincoln National [LNC
Loading...
()
], MetLife [MET
Loading...
()
] and Principal Financial [PFG
Loading...
()
], all of which were downgraded by Goldman Sachs Tuesday. None of these companies expected stocks to take the dip they did, so now they lack the cash needed to pay off the stock-based annuities they’ve issued. Goldman said to expect a round of capital raising. And these insurers bet big on commercial real estate, another industry in trouble, so the assumption there were wrong as well.
Oil companies never thought oil would drop to $50 a barrel. Tyson Foods [TSN
Loading...
()
] never figured commodity costs would skyrocket. Nobody expected the sudden slowdown in China. One thing people did expect, though, is a rise in consumer spending thanks to declining gas prices, but, of course, that assumption was wrong, too. That’s why J.C. Penny’s [JCP
Loading...
()
] plummeted to $19 from $51 and Saks [SKS
Loading...
()
] to $4 from $23.
And this isn’t even taking into account the two biggest assumptions: that housing prices would never drop and unemployment wouldn’t see double digits. We haven’t reached 10% yet, but the unemployment rate is spiking closer tot that mark. And everyone knows the housing market’s story over the past couple of years.
Everyone got it wrong, Cramer said. So wrong that stocks look cheap. But don’t be fooled. Share prices are low because companies are doing so poorly.
The one reason to be positive is that commodities have come down in price, and that’s good news for virtually everyone outside of the commodities business. We just haven’t seen the upside yet. Until we do, though, expect more down 176-point days. That’s probably the one assumption you can count on.
Jim’s charitable trust owns Procter & Gamble.
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website?
Data is a real-time snapshot *Data is delayed at least 15 minutes