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Lots of apocalyptic talk coming from the white house on the US defaulting on its debt but is the White House singing a different tune to private bankers.
In private to bankers and on the airwaves Charlie's here with more in store so what is your reporting -- -- today.
A story that you find know where -- even at that ridiculous network across the the Hudson River this is what this was it on the fox business and what network the administration.
Is actually downplaying the chance of default in these private -- -- private conversations with bankers even if a debt ceiling -- -- It's a fascinating so to take -- -- think because it contradicts.
Essentially what Tim Geithner the Treasury Secretary what Barack Obama the price of the United States said on Friday.
Geithner said over the week injured tops on the morning shows that we need to raise debt ceiling if you don't raise the debt ceiling we will before they must -- used.
The before word between them about 45 times in the last three days.
But I'm telling you and this is what we're getting this from senior sources at the big banks at the major banks in New York.
That the administration is -- -- okay forget about the rhetoric.
We will not default on the debt and obviously they don't have to default that -- that it's a point that made on this show.
On other shows and columns in the New York Post we taken trip two trillion a year.
We -- 200 billion a year in interest on our debt we don't have the default now that does mean will be a pretty situation we don't -- that -- August 2 is to drop dead date.
But we don't have to default on the than I affiliate that's what they're -- bankers right.
Now so parsed language though aren't so we're not gonna default on that interest payment to the debt but what about the obligations and heard a -- not full of weeks ago and not are out -- -- -- -- well that's a different that's what I'm trying to go out with don't man at the EC -- -- falling into the Meredith Whitney not any particular plane that was -- OK I.
I don't think -- -- -- exactly principally this is the Meredith Whitney.
You know twisted way of looking at the world of the -- is when you default on your bonds right.
That's the full that's which kills you in the markets that's -- that's what will up in the markets and cause a financial crisis because if the US government is in good on on that.
And everything falls apart people don't think that American Express is good -- -- that so He can't issue short term notes.
So you can use your American Express -- that's when that system blocks down that's what could really happen.
If we default case that is it from what -- would have to do is we would have to prioritize we would probably not pay sort of defense contracts we might not -- Agribusiness giant story on subsidies.
Government will shut down.
But we will not -- -- and also to actually come to a deal a pace and then what's the broader picture of the reaction of the -- because of we finally make our debt obligations pay that interest -- we can't.
As are playing up Haiti's other obligations -- and to -- oil markets that default is what you see now.
Nothing else I mean I -- market knows we are not going to listen.
If the president wants to default on the debt He could win if -- debt ceiling has raised.
And we're gonna probably more on this and I'm Republican plans as competing plans -- there we hear more on this later.
He could choose not to pay bondholders and He could set off Armageddon.
It's his choice we have enough money to pay debt pay other bills not everything we're trillion dollar short a year if we don't -- the debt ceiling.
But I am telling you do we don't have the default and I'm telling you they are telling banks.
Contradicting what they're saying on on there that they are not truthful even if we don't -- them to -- real possibility is a downgrade.
And with bankers -- tell me about the downgrade it won't be a catastrophic.
Sort of -- we go from triple A to double -- but we will see an impact the impact will be on bond deals member all these bond deals this gets esoteric.
But bond deals that derivatives all these things are priced off for Tripoli treasury.
-- based on a spread a price differential between triple -- and whatever they are and whatever whatever their worth.
And imagine if the US bond gets downgraded to -- triple a double -- -- then oil's price hosting a town gap to be an issue that will be an issue.
Back to tell me they don't think it's going to be catastrophic and maybe that's what you see the -- being OK let's hope hangs odds for at least but no default according to administration and I don't necessarily.
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