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Bankers Warn Obama, Don't Mess With The Debt Ceiling (Again)

Tyler Durden's picture




 

15 Bankers just paid a visit to the White House, listened to President Obama, and explained what a total disaster it would be if the US debt-ceiling is breached and Treasuries technically default. While the politicians exclaimed how bad a government shutdown would be, the banks have turned the panic dial to 11 as Goldman's Lloyd Blankfein noted, bankers are “in a position to really know early what the consequences are,” and it would be catastrophic. The irony that the firm which the government is trying to fine $20 billion for selling fraudulent debt and giving bad advice is now providing the same government with advice on its own bad debt, is not lost on us as Dimon was among the visitors but it is Blankfein's warning, echoing Obama, that will get the headlines, "they shouldn't use the threat of causing the U.S. to fail on its obligation to repay debt as a cudgel."


Via Bloomberg,

Blankfein - "You can litigate these policy issues, you can relitigate these policy issues in a public forum, but they shouldn't use the threat of causing the U.S. to fail on its obligation to repay debt as a cudgel."

 

*BLANKFEIN: BANK CEOS EXPLAINED IN MTG HOW BAD DEFAULT WOULD BE

 

*BLANKFEIN SAYS HE'S `NOT ANXIOUS' TO BE WITNESS TO DEFAULT

 

*BLANKFEIN SAYS ECONOMIC DAMAGE OF DEFAULT WOULD BE `SEVERE'

 

“There’s no debate on the seriousness of the U.S. not paying its debt,” Bank of America CEO Brian Moynihan tells reporters after he, other executives met with President Obama.

 

Default might affect small businesses, Treasuries

 

Debt ceiling fight in Aug. 2011 led “to a slowdown in the economy, and we’re facing that again”

 

Bankers are “in a position to really know early what the consequences are,” Goldman’s Lloyd Blankfein tells reporters

 

Says bankers “listened” in conversation with Obama, then told him “exactly how bad it would be”

 

Blankfein: “There’s precedent for a government shutdown; there’s no precedent for default”

 

“We’re the most important economy in the world, we’re the reserve currency in the world, payments have to go out to people”

 

“If money doesn’t flow in, then money doesn’t flow out, so we really haven’t seen this before and I’m not anxious to be part of the process to witness this”

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Wed, 10/02/2013 - 14:53 | 4014877 LawsofPhysics
LawsofPhysics's picture

Let me guess, "tanks in the streets"?

Roll the motherfucking guillotines to the fucking hamptons and let's end this shit, now.

Nothing changes otherwise.  (fuck you Hank TARP/TALF Paulson, karma is a bitch)

Wed, 10/02/2013 - 15:00 | 4014905 nope-1004
nope-1004's picture

So, Blankfein is there to protect "small businesses"?

LMFAO!!!

 

LIE after LIE... he's there to protect himself, his income, bonus, etc...

Fucking thief.  Go to hell, Blankfein.

 

Wed, 10/02/2013 - 15:01 | 4014921 LawsofPhysics
LawsofPhysics's picture

Notice that the puppet mentions social security.  Social security has a revenue stream dipshit.  My employees and I pay that in every check, yet do not use it.  Again, the propaganda is unbelievable.  Fine, time to pay everyone in silver.

Wed, 10/02/2013 - 15:01 | 4014931 radiotom
radiotom's picture

I hope they can't fix the debt ceiling issue. That way they'll be forced to balance the budget. "Defaulting" is just BS, they will still be collecting taxes which legally and constitutionally have to be used to fund the debt.

Wed, 10/02/2013 - 15:08 | 4014963 Manthong
Manthong's picture

and the ATMs will shut down.. yada yada yada.. 

they rolled the Republicans with TARP..

maybe it's the Dem's turn now.

Wed, 10/02/2013 - 15:11 | 4014971 nope-1004
nope-1004's picture

Banks are 100% dependent on the state.

Worse than a child, bum, homeless person, or inmate.

I say default... I'll take the risk of taking care of myself without those generous bankers.

 

 

 

Wed, 10/02/2013 - 15:11 | 4014995 Keyser
Keyser's picture

I love it when the bankers get their panties in a twist. I'll huff and I'll puff and I'll blow your house down. Fuck 'em. 

 

Wed, 10/02/2013 - 15:33 | 4015114 The Juggernaut
The Juggernaut's picture

Buying Treasuries cheap from the Fed Reserve (like a good agent will do) as a primer and lend out a bunch of other levered shit based on that bundle of treasuries... what a racket they're trying to protect.

Wed, 10/02/2013 - 16:31 | 4015434 ndotken
ndotken's picture

Those 15 assholes all borrow from the Fed at 0% and loan it back to the Treasury (us) at 3-4%.  Even those morons can't fuck that up.  However, if the debt limit isn't raised, their entire fucking business model collapses.  THAT'S why they're in Washington ... to protect their gravy train.  FUCK YOU DIMON, BLANKFEIN, ETAL

Wed, 10/02/2013 - 17:26 | 4015678 Scarlett
Scarlett's picture

 

 

 

"Give us our fucking money!"

"I'm trying, I'm trying, sorry!"

Wed, 10/02/2013 - 15:08 | 4014974 max2205
max2205's picture

TSLA TANKING 7%...TIDE moving

Wed, 10/02/2013 - 15:09 | 4014978 NoDebt
NoDebt's picture

On Yahoo Finance this story is titled "Bank CEOs Go To Bat For Main Street"

Funny, huh?

Fortunately it's Jeff Macke and he's plenty salty about calling it that.  I don't know if he reads ZH, but I think he still gets it.

http://finance.yahoo.com/blogs/breakout/big-bank-ceos-bat-main-street-17...

Wed, 10/02/2013 - 15:41 | 4015153 gamera9
gamera9's picture

Josef Goebbels would be so proud of our media today

Wed, 10/02/2013 - 15:59 | 4015258 NotApplicable
NotApplicable's picture

Unfortunately, he should know better than to say one thing in a headline, with the total opposite message in the story, as the number of headline readers outnumbers the number of article readers by a longshot.

So... intentional troll, or unintentional?

Wed, 10/02/2013 - 18:29 | 4015944 cougar_w
cougar_w's picture

He doesn't write the title that is used on the site. An anonymous editor gets to do that.

Wed, 10/02/2013 - 16:20 | 4015375 DaveyJones
DaveyJones's picture

Bank CEOs take a bat to Main St. 

Wed, 10/02/2013 - 15:17 | 4015029 eclectic syncretist
eclectic syncretist's picture

Everyone knows that the US will never be able to fully pay off it's debts, yet these assclowns act as if it were a distinct possibility.  The only possibility left is to borrow more money (by raising the debt ceiling) in order to make the interest payments on the debt.  Everyone knows where this ends up.  The fact that the Fed will no longer tolerate more than 3% yield on the 10-year bond is a clear indication of how much closer we are to the end of the perception that the dollar has any sort of intrinsic value.

Wed, 10/02/2013 - 15:44 | 4015170 kralizec
kralizec's picture

As long as there is revenue to pay interest and principle hitting maturity date the rest of the talk is all verbal masturbation!

Wed, 10/02/2013 - 15:50 | 4015224 Blammo
Blammo's picture

"If money doesn’t flow in, then money doesn’t flow out"

Win!Win!

Wed, 10/02/2013 - 17:25 | 4015671 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

"legally"?  "constitutionally"?  

If you are going to introduce foreign ideas into the debate you best define your terms if you want to be taken seriously.

Wed, 10/02/2013 - 15:02 | 4014939 CrazyCooter
CrazyCooter's picture

When I see this:

*BLANKFEIN: BANK CEOS EXPLAINED IN MTG HOW BAD DEFAULT WOULD BE

 *BLANKFEIN SAYS HE'S `NOT ANXIOUS' TO BE WITNESS TO DEFAULT

 *BLANKFEIN SAYS ECONOMIC DAMAGE OF DEFAULT WOULD BE `SEVERE'

I can't help but think they are betting on the opposite...

Regards,

Cooter

Wed, 10/02/2013 - 15:08 | 4014973 Chupacabra-322
Chupacabra-322's picture

Wonder what they're going to threaten CONgress with now.

Banksters Threaten Martial Law in America

http://m.youtube.com/watch?v=0Xv5d2GOg4s

Wed, 10/02/2013 - 15:10 | 4014986 max2205
max2205's picture

All show...boener would never default. Ever

He knows about the car crashes and hot tubs

What a joke

Wed, 10/02/2013 - 15:32 | 4015097 JLee2027
JLee2027's picture

Eventually, there will be no choice but to default. Are we here now? Probably not, but you never know.

 

Wed, 10/02/2013 - 15:41 | 4015154 thelibcentury
thelibcentury's picture

I don't get this meme of "there is no precedent for a default"

 

what in the heck was 1971 then??

Wed, 10/02/2013 - 17:15 | 4015624 NidStyles
NidStyles's picture

1933.

Wed, 10/02/2013 - 15:22 | 4015046 asteroids
asteroids's picture

Obozo was begging the bankers in the room NOT to tank the markets. LOL.

Wed, 10/02/2013 - 15:33 | 4015109 ziggy59
ziggy59's picture

Wonder who will wake with horse head soon...

Wed, 10/02/2013 - 17:10 | 4015604 AbbeBrel
AbbeBrel's picture

Wow when the Banksters show up - it means that even tugging with all their might on the strings hooked up to The Bernank might not pull this SuperKlunker around. Kinda suggests that their ability to Cow CONgress might have its limits. Not even a simple SheepleShearing will take care of this mess - if it will cost them some basis points in the long run!

Add little to little and you have a big pile
—Ovid

And it probably works with subtraction too !!

Wed, 10/02/2013 - 18:31 | 4015951 cougar_w
cougar_w's picture

I thought exactly the same thing: Briar rabbit.

Blankfein is short and wants to punk the longs.

Wed, 10/02/2013 - 15:03 | 4014949 nope-1004
nope-1004's picture

"I'm not anxious to see a default".

 

Really means "I'm not anxious to have my gov't assistance pulled".

Fucking teet sucker.  Can't even create a new job, let alone balance the book for his own.  100% suckface.  Worse than a leech.

 

Wed, 10/02/2013 - 15:06 | 4014958 DJ Happy Ending
DJ Happy Ending's picture

"If money doesn’t flow in, then money doesn’t flow out"

Last time I checked, the money never flowed out, they are sitting on almost all of it.

Wed, 10/02/2013 - 15:48 | 4015198 Smartie37
Smartie37's picture

Let's just clarify source of funds and use of funds----

"If money doesn't flow in [From the FED], then money doesn't flow out [To the PRIMARY DEALERS] !  

then NO BONUS for YOU !!!!

Lloyd you deceitful self-serving scumbag------nice try with the propaganda!

 

Wed, 10/02/2013 - 16:25 | 4015402 DaveyJones
DaveyJones's picture

why is it that people who claim to do "God's work" are often working for the competition?

Wed, 10/02/2013 - 15:07 | 4014960 Atlasshruggedme
Atlasshruggedme's picture

Have you asked your employees if they will work for silver? Not sure your legal stance regarding payroll taxes. But your trading a good for the service of your employees. 

 

Do whats right, save your employees and their families. Pay in Silver.

Wed, 10/02/2013 - 15:12 | 4014988 LawsofPhysics
LawsofPhysics's picture

I have exchanged many things (including silver) for the fruit of another's labor.  I suspect this will become more common as the true counterparty risk in fiat is recognized and become apparent.

Wed, 10/02/2013 - 15:45 | 4015178 Jethro
Jethro's picture

You are a good employer.

Wed, 10/02/2013 - 16:01 | 4015270 LawsofPhysics
LawsofPhysics's picture

A dependable tribe is very important.

Wed, 10/02/2013 - 15:06 | 4014961 Atlasshruggedme
Atlasshruggedme's picture

server error - double post. Sry. F- Benny

Wed, 10/02/2013 - 15:03 | 4014937 SilverIsKing
SilverIsKing's picture

Did the bankers know early what the ramifications of CDO, CDS, etc etc were?

Wed, 10/02/2013 - 15:02 | 4014943 viahj
viahj's picture

“We’re the most important economy in the world, we’re the reserve currency in the world, payments have to go out to people”

 

- Im sure that the "we" in this quote is not the "American public" and the use of "people" really means "us"

Wed, 10/02/2013 - 16:14 | 4015349 Wahooo
Wahooo's picture

Yes, painful to whom? Why Wall Street of course. Loss of dollar will KILL these bastards. They don't control the Ruble, or the Yuan, or Commodities. I hope the debt ceiling is breached and these muthers get breached with it.

Wed, 10/02/2013 - 16:41 | 4015490 Common_Cents22
Common_Cents22's picture

Well Lloyd can't say "its for the chiilllllllllrennnnn!!!"

Wed, 10/02/2013 - 17:38 | 4015725 edwardo1
edwardo1's picture

Yes, about as credible as Walter White "doing it for his family".

Wed, 10/02/2013 - 15:00 | 4014910 Grande Tetons
Grande Tetons's picture

IMO, Looks to be the same stage as 2008. This time instead of talking about banks/solvency they are talking about nation states/solvency. 

 

Either way, this fall should be a hoot. 

Wed, 10/02/2013 - 15:03 | 4014944 fonzannoon
fonzannoon's picture

I sure hope not because I have been loading up, lol.

By the way, are these miners dead money or what? Holy crapola.

Wed, 10/02/2013 - 15:08 | 4014965 Grande Tetons
Grande Tetons's picture

DUST in the wnd. Great call..BTW.  

 

Wed, 10/02/2013 - 15:11 | 4014993 fonzannoon
fonzannoon's picture

Dust was all dimeshowman. He laid the path out. As I said, the most astute invstor I have ever come across, anywhere.

Wed, 10/02/2013 - 15:17 | 4015028 Grande Tetons
Grande Tetons's picture

He is no slouch. Your posture is not so bad either.  

I stlll think they are going to tear this bitch down. Time will tell. 

Wed, 10/02/2013 - 15:32 | 4015067 Dr. Engali
Dr. Engali's picture

CNBC says these comments were directed to congress. Who is telling da troof?

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