US shutdown: Barack Obama warns of default danger

Obama: "Absolutely, I am exasperated because this is entirely unnecessary"

US President Barack Obama has warned that Wall Street should be concerned that a conservative faction of Republicans is willing to allow the country to default on its debt.

The US government has partially closed after Congress failed to agree a budget and will run out of cash on 17 October unless its debt ceiling is raised.
In a TV interview on Wednesday, Mr Obama said he was "exasperated".

John Boehner (Republican) and Nancy Pelosi (Democrat) both spoke after the talks

He later held talks with Congressional leaders that ended without agreement.
The US government closed non-essential operations on Tuesday after Congress failed to strike a deal on a new budget.
Republicans and Democrats are blaming each other for the impasse.
The shutdown has left more than 700,000 employees on unpaid leave and closed national parks, tourist sites, government websites, office buildings, and more.
However, as one budget crisis raged in Washington DC, another one - potentially more dangerous - loomed in the coming weeks.
On 17 October, the US government will run out of cash to pay its bills unless the debt ceiling is raised.

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All the signs are that neither side is preparing to blink, quite yet. But while the president is staring hard and straight ahead, the Republicans' eyes are beginning to water, and they are glancing at the ground. ”

On both issues, the Republicans who control the House of Representatives have demanded concessions from Mr Obama and his fellow Democrats in return for funding the government's continued operation and for raising the debt ceiling.

Chiefly, the Republicans demand the repeal, delay or defunding of a healthcare reform law - dubbed Obamacare - passed by the Democrats in 2010.
Major portions of that law, which was subsequently validated by the US Supreme Court and was a major issue in the 2012 presidential election, took effect on Tuesday.
'Profound impact' On Wednesday, Mr Obama met the heads of some of Wall Street's biggest banks - including JPMorgan Chase, Goldman Sachs and Bank of America - to discuss the debt ceiling and other economic issues.

James Clapper: "This seriously damages our ability to protect the safety and security of this nation"

The bankers are members of the Financial Services Forum, a lobby group which has, along with 250 other businesses, sent a letter to Congress urging it to raise the debt limit.
Following the meeting, Mr Obama told CNBC "it's important for them to recognise that this is going to have a profound impact on our economy and their bottom lines".
Mr Obama also said he was unwilling to negotiate "with the extremist wing of one party" as the 17 October deadline neared.
"The message I have for the [Congressional] leaders is, as soon as we get a clean piece of legislation that reopens the government... until we get that done, until we make sure that Congress allows [the Department of the Treasury] to pay for things that Congress itself already authorised, we are not going to engage in a series of negotiations," he said.
As foreign markets anxiously monitored the US budget crisis, European Central Bank chief Mario Draghi warned that a protracted shutdown was "a risk not only for the US, but also the world economy".