Jamie Dimon: Here’s What Will Happen If The Debt Ceiling Isn’t Raised And The U.S. Defaults

jamie dimon

A PBS anchor put together a great series of clips from various financial experts talking about what would happen if the debt ceiling isn’t raised and the U.S. defaults.

PBS has a transcript of the show, which has a number of great quotes from Ben Bernanke, Jamie Dimon, Nouriel Roubini, on the topic of a debt default. 

Specifically, they all talk about the effects of a default on bond prices, but the potential effects so bad that it really shows the effects on the financial markets across entire world.

One quote from Jamie Dimon is especially chilling:

Now, here’s what really would happen.

Every single company with treasuries, every insurance fund, every — every requirement that — it will start snowballing. Automatic, you don’t pay your debt, there will be default by ratings agencies. All short-term financing will disappear. I would have hundreds of work streams working around the world protecting our company for that kind of event.

And recently, he told the US Chamber of Commerce, “If anyone wants to [cap the debt ceiling], which I think would be catastrophic and unpredictable, I think they’re crazy.”

And Dimon apparently brought up the subject on JPMorgan’s earning call yesterday too. According to the Wall Street Journal, he said that the bank is preparing for the (unlikely) case of default.

“We are praying,” Dimon said, then, after a pause, “And we are planning.”

Now click here to see the 20 banks that could bring the financial system to its knees >

Last quote via SeekingAlpha