Bloomberg News' Yalman Onaran wrote an article on Monday about the disaster that would unfold if we don't raise the debt ceiling and the U.S. has a technical default by missing an interest payment on U.S. Treasuries. James Kochan's quote summed up my feelings: "Well, holy cripes!" It has never happened in modern history and would be a disaster greater than the September 2008 financial crisis.
China and Japan combined own $2.4 trillion in U.S. Treasuries, and they are understandably upset with the U.S. about the possibility of a technical default.
Most of the financial press has focused on how awful a technical default would be, and who is upset. But our leaders might ask a different question. Who are the reprobates that are cheering for the possibility of a technical default on the U.S.? Who stands to gain? Who might be happy to set off this financial bomb?...
Follow the Money
My reason for writing the 2010 commentary was to encourage Congress to ban credit derivatives on U.S. debt due to the potential for abuse. Perhaps no one is abusing this situation for financial gain. But while we're asking about the horrific consequences of not raising the debt ceiling--and possibly throwing the U.S. into a technical default--we should also ask who would benefit if this happened?
If you follow the money, you often find someone moving levers behind the scenes.The Huffington Post
President Obama Might Ask Who Benefits from U.S. Debt Default
Janet Tavakoli | President, Tavakoli Structured Finance
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