Wall Street Executive: Congress Must Raise Debt Limit Or Risk Second Crisis

WASHINGTON -- A Wall Street executive is urging Congress to raise the government's borrowing limit in the coming weeks, saying failure to do so could lead to a second financial crisis.

Matthew E. Zames, a managing director at J.P. Morgan, says in a letter to Treasury Secretary Timothy Geithner that a delay by the government in making payments on its debt obligations would be catastrophic. Zames says borrowing costs could rise for the government, consumers and businesses, and a run on money market funds similar to what occurred after the collapse of Lehman Brothers in September 2008 is possible.

Geithner has warned lawmakers that the government will hit its $14.3 trillion debt ceiling by May 16 and that he could only delay an unprecedented default on the debt until July 8.

Comments

[PaganKMcK]

02:40 AM on 05/14/2011

I believe the Government should do what is best regarding the debt ceiling. However, it is hard for me to be sympathetic to Wall Street. They wanted t he Republicans... they got their wish.

[taydenisuk]

11:43 PM on 04/29/2011

I agree raise the debt ceiling, I mean in the long run it will help us economically and saving us from another financial crisis is what everyone wants. I feel as though as well that the Government needs to step up, they haven't really done much in my eyes that is helping us remove our debt and if the Gov wont help you know that the people wont. The people are just gonna keep spending. Maybe a shut down is what we need. All it takes is time until the people that we owe money say "too late" and we are back at it again. Will be interesting to see how this plays out.

[mrsm00the]

09:58 PM on 04/27/2011

The poor unfortunates who found themselve stuck on the top floors of the World Trade Center buildings back on 9/11 had a choice. They could either stay or jump. Their decision wasn't going to change their outcome; only the manner in which it was realized and the time until it eventually happened.

Congress can either raise the Debt Limit or not raise it. Its decision isn't going to change the eventual outcome; only the manner in which it is realized and the time it takes until it eventually happen.

[bichn]

06:27 PM on 04/27/2011

The sky is falling.

[demshuff]

04:03 PM on 04/27/2011

Poor little Timmy. So much to manipulate, so little time these days.

[Tiggy]

02:07 PM on 04/27/2011

Well Mr. Zames exactly how much did JP Morgan get from Tarp? 25 billion? And you in turn did what to help this country avoid getting to this point? Ahhh yes, that would be Nothing so shut your trap. Zames et al should take on this expense as we tax payers paid enough already.

[JudeOnPolitics]

01:53 PM on 04/27/2011

Remember the big "Our Enconomy Will Collapse, without the TARP fund?" The TARP fund was used for outrageous bonuses paid to people doing inept jobs.

Don't raise the debt ceiling.

You don't give alcohol to alcohol addicts.
You don't give heroine to a drug addicts.
You don't give casino chips to gambling addicts.
And...You don't give credit cards to inept spending addicts.

This is just another trap being set for President Obama to bare the blame for raising the debt ceiling. Let's just take our lumps and let the "non-tax paying" corporations pick up the tab for the extra interest we will incur.

[themasterpuppeteer]

12:33 PM on 04/27/2011

Didn't they learn from 2008 mortgages? I guess this huge American powerHOUSE will continue to refinance until this country is foreclosed, forcing the citizens to find refuge, and a profitable company like China will buy us 200% below market value, a great deal!

[themasterpuppeteer]

12:30 PM on 04/27/2011

The amazing FEAR TACTICS! This fear tactic method was used by good ole' Georgia Bush by saying Iraq has "WMD's", Wall Street used this to get a bailout, now they're using this for the debt limit because if it's not raised then their evil companies will fall once and for all. The more debt we accumulate, the more they profit, I guess every 5 years to a decade we will continually raise this debt limit (allowing more debt to pile on) until we default, then China will want its return on investment. :)

[baldguy]

12:09 PM on 04/27/2011

Every time I see Timmy's face, I want to slap it.....

[nothingchanges]

10:22 AM on 04/27/2011

Seems to me to be kind of like a bank offering to refinance your debt at a higher interest rate to avoid bankruptcy..............."We'll consolidate and pay off all of your bills, and put thousands into your checking and savings account....you'll be rich" ...........

as long as you can't understand a balance sheet, or the fine print.

"The country needs to raise it's debt limit, to pay for our tax cuts". might have been a more honest statement.

IMPO................Fiscal bankruptcy isn't our biggest problem, moral bankruptcy is.

[halfpricefaustian]

09:27 AM on 04/27/2011

If this guy is so worried, shouldn't he be in Boehner's and McConnell's offices? The Democrats don't have an issue with raising the debt ceiling.

[up2uamerica]

04:04 AM on 04/27/2011

This is such fear mongering, they will not vote against the debt ceiling. They may take it to the wire to manipulate everyone but at the end of the day THEY WILL vote to raise it, mark my words. Just like the government shut down, they are a bunch of lying manipulators!!!

[judow]

06:43 AM on 04/27/2011

"lying manipulators" is too kind, they're ALL sociopaths

[sonofsamphm1c]

05:10 PM on 04/27/2011

Just curious, what do you think happens in the first month after the USA defaults?

[Heyman]

03:30 AM on 04/27/2011

Congress should tell the Federal Reserve to go pound sand. And tell those Wall Street IDIOTS that if our dollar takes a dive? We will arrest all involved in inside trading and money manipulation. Then tell the Federal Reserve they are dissolved. Arrest all of them. And start printing REAL currency. Such as the old "Green Back". Before the Federal Reserve was enacted. At the same time? Tell the IMF to find another sucker to leech off of!

[up2uamerica]

04:05 AM on 04/27/2011

YOU GO, I agree, let em do it, what have we got left to loose!

[bjj4525]

09:41 AM on 04/27/2011

I totally agree. I am so tired of bailing these greeding CROOKS out all of the time. It is time to stand up and make THEM pay. If they fail so be it. They should be placed in prison and ALL of their assets confiscated and given back to the Treasury.

[Y3rMawm]

02:04 AM on 04/27/2011

Turbo Tax Timmeh, engaging in yet more executive branch extortion. It's 2008 all over again!

So glad we hoped for change. Too bad hope accomplishes a d@mned thing