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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 - 15:28 | 4015081 world_debt_slave
world_debt_slave's picture

sadly there isn't an Andrew Jackson today to stand up to the banks as he did to the banker of that day named Nicohlas Biddle that threatened to crash the economy unless Jackson renewed the banks charter. Jackson called his bluff, Jackson nearly assassinated, and was the only president to ever beat the bank. Short lived as it was.

Wed, 10/02/2013 - 15:29 | 4015083 wisehiney
wisehiney's picture

Pack of scheming scumbags.

(or should I say scheming youngand healthys?)

Wed, 10/02/2013 - 15:30 | 4015085 no more banksters
no more banksters's picture

The 1% blackmails Obama: US government has been shut down by the banksters

http://failedevolution.blogspot.gr/2013/10/the-1-blackmails-obama-us-gov...

Wed, 10/02/2013 - 15:32 | 4015108 Spastica Rex
Spastica Rex's picture

You've chosen a tough row to hoe there, my friend - leastways, 'round here.

+1 from me.

Wed, 10/02/2013 - 15:32 | 4015095 Sizzurp
Sizzurp's picture

"Technical default" would be very bad for the banks since most are hyperleveraged out the A with gov. paper and associated derivitives.  They would all be decimated quickly in any kind of US bond crisis. Not to mention, their most profitable business, frontrunning the fed's bond purchases, would be over. They must hate to see how close they are to disaster by the hands of a few bumbling politicians.  I bet it drives them nuts.  The event would be quite difficult for the general population as well, but it would also be liberating.  It would expose the facade for what it is, a giant house of cards that was due to come down sooner or later.  

Wed, 10/02/2013 - 15:38 | 4015148 shovelhead
shovelhead's picture

They smell bank run in the wind...

Wed, 10/02/2013 - 17:23 | 4015659 All_Your_Base
All_Your_Base's picture

"They would all be decimated quickly in any kind of US bond crisis."

Are you saying they would be reduced by merely 1/10th? Just asking.

Wed, 10/02/2013 - 15:34 | 4015120 involuntarilybirthed
involuntarilybirthed's picture

Reason has been left unattented.  

Wed, 10/02/2013 - 15:37 | 4015127 JR
JR's picture

Why would Harry Reid want to save a child? It's all about priorities, n'est pas? Here’s the story from World News Views today:

During a Wednesday afternoon press briefing, CNN’s Dana Bash asked Senate Majority Leader Harry Reid about agreeing to fund the National Institute for Health, as the GOP is proposing to do with no strings attached. Bash mentioned the fact that due to the shutdown, children with cancer are being turned away from clinical trials at the NIH and that the GOP will pass a bill today funding the NIH.

Reid and Democrats, however, are insisting they will vote against or table the limited CR. President Obama has already threatened a veto.

After Reid danced around the question, Bash drilled down and Reid’s response was quite revealing and a little chilling:

BASH: But if you can help one child with cancer, why wouldn’t you do it?


REID: Why would we want to do that? I have 1100 people at Dulles Air Force Base sitting home. They have problems of their own.

Reid then attacked Bash’s intelligence, “For someone of your intelligence to suggest such a thing is irresponsible.”

Apparently, Reid sees healthy furloughed workers sitting comfortably at home as equal to children dying of cancer.

http://worldnewsviews.com/2013/10/02/harry-reid-on-saving-one-child-through-nih-funding-why-would-we-want-to-do-that/

Wed, 10/02/2013 - 15:42 | 4015160 shovelhead
shovelhead's picture

LOL.

"Fuck kids with cancer...These are Democrat voters."

Wed, 10/02/2013 - 15:50 | 4015222 NOTaREALmerican
NOTaREALmerican's picture

Like, OMG, the Blue Team doesn't like children?

Next thing you'll be telling me is the Red Team doesn't care about family values!!

Politics exists to create a forum where the smart-n-savvy people hire sociopaths to manipulate the dumbasses with bullshit in order to confuse the dumbasses while the smart-n-savvy people take their money.

Wed, 10/02/2013 - 18:11 | 4015870 Bobportlandor
Bobportlandor's picture

I posted on U tube a comment to the following

http://www.youtube.com/watch?v=O0lFyFJeZSY

 

'NOW YOU KNOW WHO IS AHEAD OF THE DEATH PANELS"

Within 20 sec is was deleted.

Wed, 10/02/2013 - 15:37 | 4015130 22winmag
22winmag's picture

Something smells here.

Wed, 10/02/2013 - 15:44 | 4015180 DUNTHAT
DUNTHAT's picture

I believe the last time these same bankers met with Obama, in March 2009, was the begiining of the great manipulation aka stock "bull market"

Wed, 10/02/2013 - 15:38 | 4015147 johnjkiii
johnjkiii's picture

I'll bet two things:

1. They will make a deal that continues the status quo because they have no guts or brains

2. If 1. is wrong not much will happen except that a few pols lose their jobs.

Russia defaulted, greece defaulted and others are dead but just don't know it. Life will go on.

Wed, 10/02/2013 - 15:41 | 4015157 thismarketisrigged
thismarketisrigged's picture

i would fucking love a default. i want to see things get out of control.

 

 

Wed, 10/02/2013 - 17:14 | 4015618 HardlyZero
HardlyZero's picture

Maybe they were reviewing the new Monopoly Money they are starting to print up.  Approving the seal.  Voting on the signs and logos.      How many Masonic symbols.   Eye of Providence.  Pyramid.    Their input was required.   /sarc  or not /sarc...its hard to tell.

Wed, 10/02/2013 - 18:46 | 4016022 SmittyinLA
SmittyinLA's picture

No dude, we're already way beyond out of control, the only place left to go is Beirut, Municipal America will turn into Beirut with a banker collapse.

Wed, 10/02/2013 - 15:49 | 4015172 involuntarilybirthed
involuntarilybirthed's picture

October 2, 2013   THE DAY BANKERS TOOK OVER THE UNITED STATES

Bankers set on committees to manipulate the Fed, Treasury and now the White House.    They printed their way to power. 

Wed, 10/02/2013 - 15:52 | 4015213 Dr. Engali
Dr. Engali's picture

Ummm try a midnight vote in December 1913 when the federal reserve law was passed while the majority of the senate was away for Christmas.The fed's sole purpose is to protect the bankers.

Wed, 10/02/2013 - 16:18 | 4015371 no more banksters
no more banksters's picture

More specifically, on 23 december of 1913, which means that banksters will celebrate 100 years of absolute sovereignty in less than three months from now.

Wed, 10/02/2013 - 16:46 | 4015517 Son of Captain Nemo
Son of Captain Nemo's picture

"October 2, 2013   THE DAY BANKERS TOOK OVER THE UNITED STATES"...

Aren't you a little late coming to the party?  I think it happened 5 years er No 100 years ago.

Wed, 10/02/2013 - 15:46 | 4015181 GrinandBearit
GrinandBearit's picture

All banksters need to be exterminated.   

I want to be in charge of the concentration camp.

Wed, 10/02/2013 - 16:05 | 4015291 ebworthen
ebworthen's picture

Cudgels!  More cudgels!

Cudgel Blankfein, Dimon, the TBTF banks, and the FED to unrecognizable pulps then bury them for all eternity!!!

Wed, 10/02/2013 - 16:07 | 4015293 lasvegaspersona
lasvegaspersona's picture

How true Lloyd speaks.

The greatest function of the USA in the monetary system is to borrow and spend. We gave up manufacturing and we can't just spend our savings so the 'borrow and spend' have to go together. If the USA does not continue doing that then we are useless to the rest of the world.

Triffin saw this coming in the 60s. We either had to be exporters and give up reserve status or we had to import and borrow and spend. For the past 38 years we have done just that and done it well.

Things are so tight and fragile  now that we cannot back off even a few billion a month (ie no taper).

I,m betting the bankers are not joking about the consequences of failure to allow more borrowing. It is in their best interests and I personally don't care but if Bernacke runs out of things he is allowed to buy that could be 'it'.

Wed, 10/02/2013 - 16:11 | 4015328 john milton
john milton's picture

If you give free hands for a bankster you know where they will be... in taxpayers pockets

Wed, 10/02/2013 - 16:11 | 4015333 robertocarlos
robertocarlos's picture

Is that a threat? Sounds like a threat.

Wed, 10/02/2013 - 16:20 | 4015378 Son of Captain Nemo
Son of Captain Nemo's picture

So as I was saying...

Any chance we can have that Staples panic button that screams out over a loudspeaker "That was Easy"... Once Blankfein and Dimon's head role into the basket upon separation from the rest of there bodies?

Wed, 10/02/2013 - 16:22 | 4015379 Racer
Racer's picture

Biden 'You have to spend money to save from going bankrupt'

 

Wed, 10/02/2013 - 16:26 | 4015380 RaceToTheBottom
RaceToTheBottom's picture

They should just put all those Bankster jerks on motocycles on NYC freeways and give us all RangeRovers

Wed, 10/02/2013 - 16:21 | 4015386 Constitutional ...
Constitutional Republic's picture

Jail 'em. Don't bail 'em. Bank bosses who wrecked the U.S. and world financial system in 2008 should have been prosecuted and jailed then. Never too late...

Wed, 10/02/2013 - 16:24 | 4015395 venturen
venturen's picture

Tomorrow Obama meets with Jon Corzine and Bernie Madoff for advice!

Wed, 10/02/2013 - 17:17 | 4015626 HardlyZero
HardlyZero's picture

Maybe they won't let Jon out of Bernie's cell...that would be Justice, have both in the same cell...forever.

Wed, 10/02/2013 - 16:33 | 4015449 Caggge
Caggge's picture

So, a default would be really bad for Wall Street. How bad would it be for Main Street? Those with everything have something to lose. Those with nothing have nothing to lose. 1% of the population has everything to lose. 99% of the population has nothing to lose. The needs of the many outweight the needs of the few. Let the default begin.

Wed, 10/02/2013 - 16:40 | 4015481 Common_Cents22
Common_Cents22's picture

Yes, a drug addict would tell you it would be catastrophic to cut them off.

 

How can America be so stupid and gullible?

Wed, 10/02/2013 - 16:44 | 4015502 Common_Cents22
Common_Cents22's picture

Just WHERE is the left and media pressuring obama to do something about the evil bankers?   They are silent!   

Talking about modern day voluntary slavery.   The sheeple all fall in line and comply.   There will be no dissent!

Wed, 10/02/2013 - 17:49 | 4015777 chart_gazer
chart_gazer's picture

Oh please, this is theatre for the stupid fucking americans who have no idea what any of this stuff means! There will NEVER be a default on the debt. The interest on all outstanding debt is $400B, they recieve $2.8T from taxes. Interest on debt will be paid first as they recieve taxes on an ongoing basis. This is all show and scare tactics

Wed, 10/02/2013 - 23:20 | 4017193 DionysusDevotee
DionysusDevotee's picture

I was hoping someone had beat me to the obvious. "Wow, so the bankers have joined the theater!" Yawn.

Wed, 10/02/2013 - 18:18 | 4015906 mobydick
mobydick's picture

Bringing the banksters into the White House for advice. That's kinda like letting the fox into the hen-house isn't it?

Wed, 10/02/2013 - 18:19 | 4015910 Herkimer Jerkimer
Herkimer Jerkimer's picture

'

'

'

Well, having watched INside Job and feel I'm an expert…

 

Maybe they're worried that if the US technically sort of defaults on the bonds, then Credit Default Swap's, or whatever, the insurance on the bonds, like the Greek mess, somebody will be on the hook to pay for the bonds?

 

•?•
V-V

Wed, 10/02/2013 - 18:32 | 4015960 SmittyinLA
SmittyinLA's picture

Time to bend the bankers over, first with a cut off of the FNM FRE bailout at $200B, then prosecutions for securities fraud, then denial of non-compliant loans, then mass deportations and rent revenue taxes, eliminate US corporate taxes, deregulate, free building permits.

Repeat. 

For every punch we can counter punch 10X as hard.

 

 

Wed, 10/02/2013 - 18:41 | 4015996 MedicalQuack
MedicalQuack's picture

Congress needs their own "Wellness Portal" complete with behavior modification algorithms...it's about time we get some data on these folks:)

We need to start doing risk assessments and start getting some predictive analytics going and put these folks, just like doctors are. on a pay for performance system..that we would get to monitor and add input as well :) 

http://ducknetweb.blogspot.com/2013/10/congress-needs-wellness-portal-as...

They tell us that these portal algorithms (right) will fix us, well how about these folks that seem to need the help far worse:)  Sounds like a good beta to me. 

Wed, 10/02/2013 - 19:45 | 4016291 roadhazard
roadhazard's picture

Fuck a bunch of bankers.

Wed, 10/02/2013 - 19:51 | 4016323 Antifederalist
Antifederalist's picture

This one is easy.

If the bankers oppose it, I say bring it on.

These banker guys are financial terrorists/bullies.

They say. "All your healthy economy belong to us."

Only one way to deal with a bully. Call his bluff/hit him in the nose.

Jackson did it to Biddle.

Not expecting much from Barry, but we can dream.

Thu, 10/03/2013 - 08:42 | 4017854 gyue
gyue's picture

Good time to long gold.....

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