Tags: obama | stock | selloff | gasparino

Gasparino: Obama Wants Massive Stock Sell-off

Tuesday, 26 Jul 2011 03:32 PM

By David A. Patten

Why is the Obama administration publicly warning about a U.S. default, while at the same time privately reassuring U.S. banks that a default won’t occur?

Fox Business Network senior correspondent Charlie Gasparino, who broke the story that the White House has been privately reassuring the banks, thinks he knows the answer.

“I think the administration is being really duplicitous in this,” Gasparino told Fox News host Martha MacCallum Tuesday afternoon. “Listen, we know that we don’t have to default. I’m not saying the other scenario is pretty, but we know they don’t have to default.

“Why are they saying it?” he asked. “I believe they’re saying it to get the markets insane, to basically cause a massive sell off … that’s the only thing you can surmise from this. Why do you keep bringing up default when they don’t have to default?”

For months the administration has been warning that equity markets would nosedive if Aug. 2 approaches without an increase in the debt ceiling. The goal apparently was to increase the sense of urgency in order to motivate Congress to act.

Editor's Note: 50% unemployment, 90% stock market drop, 100% inflation.
See the Evidence. Click Here

Lately, however, there have been indications that strategy is backfiring for the president even among supporters.

“The administration may have made a strategic mistake in warning too soon that the market would react negatively,” financial columnist Andrew Ross Sorkin wrote in Tuesday’s New York Times. “It ultimately undercuts the government’s negotiating position because the doomsday scenario has not played out, even though the deadline is fast approaching.”

With the administration’s self-imposed Aug. 2 deadline now looming just six days away, Wall Street appears unconcerned.

There has been increased volatility in international markets. If the drumbeat of pessimistic public warnings caused a massive stock selloff, it would give the administration much more leverage in its negotiations with grass-roots conservatives in Congress. And that, Gasparino appeared to be suggesting, is precisely the administration’s objective.

Gasparino also told MacCallum that Treasury Secretary Timothy Geithner is talking out of both sides of his mouth, privately telling banks not to worry about default in private while invoking sturm and drang in public.

“That’s exactly what’s going on,” he said.



© 2015 Newsmax. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Mali's Islamists Withdraw Cease-Fire Pledge

Friday, 04 Jan 2013 13:06 PM

Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they we . . .

Fmr. CIA Director Hayden: Iran Nuclear Crisis Gets 'Scarier'

Tuesday, 17 Jul 2012 18:11 PM

 . . .

Join Fmr. CIA Director for Special Iran Briefing, Assess the Danger

Friday, 13 Jul 2012 12:27 PM

 . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved