It would be a “moral disaster” if the United States were to default on its debts and become unable to pay its obligations, Jamie Dimon said at an appearance in Colorado Thursday evening. The U.S. is the financial linchpin of the world, and the economic effects of the U.S. defaulting could be “potentially catastrophic,” he said at a dinner for the University of Colorado Denver Business School. “It will dwarf Lehman,” Dimon said. [HP]
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
the default will be so bad, dimon will foreclose on military families on purpose
All joking aside, how is this topic even open for discussion? It’s so fucking obvious that it’s the end of the world as know it if the US defaults this summer.
So don’t default. Problem solved. My invoice is in the mail.
Would it? I don’t trade treasurys but the debt ceiling seems to me like an arbitrary construct and that not raising it wouldn’t really affect the ability of the US to service its debt in the longer term.
And if it were a real concern, then wouldn’t higher yields be priced in now? Intrade http://intrade.com/v4/markets/contract/?contractId=749123 seems to believe that there’s a 15% chance that the “end of the world” will happen, and I’m not seeing “end of the world” yields right now.
Then again, during the LTCM thing off the run treasurys at one point traded at a steep discount to on the run ones for no rational reason.
/guy who is genuinely curious and doesn’t really know
The preferred term is “little person.”
Hmmm, why did my comment about Blythe get deleted? Someone here can’t handle the truth.
Default = “end of the world”.
Not raise debt limit = “political games that might imply end of the world, or might not”
I’m not sure if that site is a real useful way of determining probabilities here… but do note that it shows 95% probable for a Sep-30 debt limit increase. I think the treasury market itself is pricing in a zero probability of actual default.
I think truth is, even if the debt limit isn’t increased, the US wouldn’t be crazy enough to default on this debt. They’ll probably stop paying the defense department or social security before they stop paying the Chinese and Arabs.
Trust me, I know dwarfs, and JD speaks the truth
- Galleon small cap analyst
i thought you guys knew yoga pants?
A default could be the best thing that’s ever happened since going off to gold standard: creditors would know we are serious about cutting spending. They’d know the crack addict has gotten serious about going clean. Bottom line: some pain, long-term benefits
A default could be the best thing that’s ever happened since going off to gold standard: creditors would know we are serious about cutting spending. They’d know the crack addict has gotten serious about going clean. Bottom line: some pain, long-term benefits
Right, I’m sure Countrywide was jumping in joy when the Smiths stopped paying their mortgage… because, you know, that means they’re cutting back.
Right, I’m sure Countrywide was jumping in joy when the Smiths stopped paying their mortgage… because, you know, that means they’re cutting back.
In all seriousness, kill yourself.
In all seriousness, kill yourself.
Oh intrade is definitely a back of the envelope ref at best. This is why they need to legalize larger, more liquid political betting in Vegas.
Oh intrade is definitely a back of the envelope ref at best. This is why they need to legalize larger, more liquid political betting in Vegas.
”Once JPMorgan repaid the [TARP] aid, Dimon said he was tempted to include a note to Treasury Secretary Timothy Geithner that said, “P.S. During the whole time you were lending us $25 billion, we were loaning you $200 billion” in the form of Treasury instruments the company holds.”
Gee I wonder why he doesn’t want a Treasury default.
LTCM had bought convergence (split among different banks) Their USTs were their best assets, but liquidating turned out to be technically challenging.
Something similar happened during AIG.