Market Overview

Obama Telling Banks That U.S. Will Not Default


According to a report from Fox Business Network's Charlie Gasparino, President Obama has been privately telling top bankers that the United States will not default, even as he steps up his rhetoric over the debt ceiling negotiations. While the Obama Administration cannot be sure that a deal to raise the debt cap will be reached by August 2, it does appear as if they will have enough cash to avoid an outright default.

A senior banking official who was quoted in Gasparino's report said that "They also know they can pay the debt with cash on hand." This is what the President's officials are telling the big banks anyways. This, despite the fact that Obama has been issuing warnings saying that if a deal isn't passed by August 2, the country will default on its obligations.

While a default, in any shape or form, appears to be unlikely, the same cannot be said for a U.S. ratings downgrade. The senior banking official in the Fox Business Network report said that senior people in the Obama administration have told him that a downgrade "is a real possibility for no other reason than S&P and Moody's have to cover (themselves) since they've been speaking out on the debt cap so much."

Posted-In: Charlie Gasparino Fox Business NetworkNews Bonds Economics Markets Media


Related Articles

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Jones Lang LaSalle Gets Five-Year NASA Contract

Calls Purchased on Laboratory Corporation of America