(Reuters) – Three of the world’s most powerful bankers warned of terrible consequences if the United States defaults on its debt, with Deutsche Bank chief executive Anshu Jain claiming default would be “utterly catastrophic.”
“This would be a very rapidly spreading, fatal disease,” Jain said on Saturday at a conference hosted by the Institute of International Finance in Washington. Continue reading
It wouldn’t only cause a depression or another Great Depression, but the Greatest Depression.
Thursday brought a change to that trend, though, as investors heeded a dire message from President Barack Obama, who intimated in a CNBC interview Wednesday that Wall Street was taking the crisis too lightly.
Consequently, stocks sold off sharply and the Treasury Department warned of the dire consequences that might result from a full-blown debt default.
Picking up on that message, Bove said the situation could be more dramatic: A Depression that would cause severe and lasting economic damage.
“The devastation to the United States would be so severe that it would take decades to recover from the Depression caused by a default and the attendant dumping of trillions of dollars of U.S. Treasury securities on the global financial markets,” said Bove, vice president of equity research at Rafferty Capital Markets. Continue reading