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Lawmakers’ actions will hurt your wallet, declares Cramer.

Cramer says lawmakers' actions will cost you

Cramer says lawmakers’ actions will cost you

CNBC’s Jim Cramer has issued a warning to investors that they are at risk of losing money as politicians in Washington continue to struggle with debt ceiling negotiations. Cramer referenced the turmoil caused by a similar standoff in 2011 and suggested markets could plunge by as much as 12% if history repeats itself. He advised investors to brace themselves for losses, as most people won’t be able to buy back any sold positions quickly enough to make a difference. Cramer also noted concerns about China’s latest Covid-19 wave and the possible reintroduction of new travel restrictions.

FAQs:

What is the debt ceiling?

The debt ceiling is a legal cap on the amount of money the US government can borrow to finance its operations. It’s set by Congress and limits the Treasury’s ability to issue new debt when it reaches the limit.

What happens if Congress doesn’t raise the debt ceiling?

If Congress doesn’t raise the debt ceiling, the US Treasury may not be able to pay all its bills, leading to a potential default on its debt. This could have significant implications for the wider economy, both in the US and around the world.

How might the debt ceiling affect investors?

If the debt ceiling isn’t raised, it could lead to significant market volatility as investors worry about the potential for a US debt default. Investors may also feel the impact of any economic fallout from this scenario, particularly if it causes a recession.

Cramer says lawmakers' actions will cost you
Cramer says lawmakers’ actions will cost you

Lawmakers’ actions will cost you, says Cramer.

CNBC’s Jim Cramer issued a warning to investors following a sour day in Washington and on Wall Street, stating that lawmakers will inevitably cost them money as debt ceiling negotiations drag on. Cramer cited the impasse surrounding the debt ceiling in 2011 as an example of politicians hurting investors, saying, “They aren’t done hurting you now. But unless you trade full time it’s very hard to get out and get back in early enough for it to make a difference, which means most of us need to take the pain.”

Cramer also discussed market watchers’ concerns about the emergence of a new Covid-19 variant in China and the potential for new travel restrictions. He expressed uncertainty about whether the recently ebullient Chinese consumer will be impacted and warned investors to prepare for a potential market swoon.

Although Cramer considered the merits of selling stocks before the potential decline, he worried that many will not be able to buy them back fast enough to see real gains. “That said, if you think our leaders are serious about making a deal, then it might be worth trying to sidestep the coming decline – and if we’re following the 2011 script, there’d be about a 12% decline from here until the bottom,” he stated.

Cramer’s pessimism about lawmakers’ ability to come to a deal before chaos reigns reflects anxieties among Wall Street investors, who fear the impact of a failure to lift the U.S. debt ceiling.

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