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NEW YORK (TheStreet) -- The buyers in this are starting to think Washington has become a big joke, Jim Cramer said on "Mad Money" Wednesday, but he fears that the punchline could be deadly.
Simply put, Cramer said the market, and our economy, simply cannot afford to see a default on our debt come Oct 17. He said investors from around the world buy U.S. bonds for safety, stability and income, and if Congress takes those away, those investors will move their money elsewhere. This is a big deal, Cramer warned, and one investors should be taking seriously.
Yet, today's initial public offerings of Remax (RMAX) and Burlington Stores (BURL), operators of the Burlington Coat Factory chain, were up sharply despite the fact that real estate will be hurt badly by a bond default and apparel has been among the hardest-hit retailers this quarter. Cramer said investors are betting that a deal will come in the knick of time, but aren't factoring in the downside if it doesn't.The buyers of these stocks are either worried they'll miss the rally if they don't get in now or they feel that stocks can withstand a default, but neither could be further from the truth if a deal is not reached and our country defaults on its debts, Cramer said.
Executive Decision: Marty MucciIn the "Executive Decision" segment, Cramer checked in with Marty Mucci, president and CEO of Paychex (PAYX), to see how the government shutdown and Obamacare are affecting employment in our country. Paychex last reported a one-cent-a-share earnings beat on better-than-expected revenue with the important metric of paychecks per client rising a modest 1.6%. Overall, Mucci painted a bullish picture for small business in America. He said while some businesses are sitting on the sidelines and others are confused or delayed by the new laws and government shutdown, small business is starting to make a comeback as evidenced by 14 quarters in a row of rising checks per client. Mucci said the biggest factor for small business formation is consumer confidence. He said if consumers are buying products, then entrepreneurs will open new businesses to meet those needs.
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