To paraphrase the old E.F. Hutton commercials, "When Jamie Dimon talks, people listen."
Dimon, the chairman and chief executive officer of JPMorgan Chase & Co., was one of the group of Wall Street honchos who met with U.S. president Barack Obama last week to talk about all the reasons that it's a really bad idea for Congress to use raising the debt ceiling as a political bargaining chip. Now that a debt default is looming larger and larger on the horizon, Dimon shared his thoughts with me in a brief conversation on Tuesday afternoon.
Dimon said the government has $30 billion of cash available to pay its bills, and that while the Treasury's Oct. 17 deadline is getting scarily closer with each passing day, he suspects the real fireworks won't begin until around Nov. 1 when some $100 billion of payments -- among them for interest on government debt and Social Security checks -- come due and the government comes dangerously close to running out of money or defaulting. "It's a terrible way to go about this," he said of the colossal game of chicken the politicians in Washington are playing. (His mathematics -- that the government might be $70 billion light -- got me thinking that maybe, in an ironic twist, Dimon should offer the Treasury a loan for the shortfall.)
He says he suspects that it looks like the politicians won't act until the markets plunge and the message of their collective stupidity comes home to roost. Sadly, Dimon's right. When we wake up one day before long to find that the Dow has plunged 1,000 points after the opening bell, even the constituents of the intransigent Tea Party Republicans will finally realize that this whole political gambit really was not worth it.
(William D. Cohan is a Bloomberg View columnist. Follow him on Twitter @WilliamCohan.)