Einhorn: Shutdown 'Bad Enough,' Default Unthinkable

Oct 3 2013 | 12:19pm ET

As the U.S. government shutdown enters its third day, the Obama Administration is warning that worse could be on the horizon should Congress fail to raise the federal debt limit. Greenlight Capital's David Einhorn agrees.

Einhorn told Bloomberg Television that it is unimaginable that the debt limit would not be increased, leading to a default on U.S. sovereign debt—the first in the country's history.

"Frankly, not working this out so the government shuts down is bad enough," Einhorn said. "It doesn't seem that they tried to sit down and talk through their differences. It's a real shame. I think it is embarrassing to all of them."

Congressional Republicans have tied both the federal budget and an increase in the debt limit to a number of demands, including a delay of President Barack Obama's signature healthcare law and major spending cuts. The president and Senate Democrats have rejected those requirements as blackmail; Obama said he will not negotiate over debt limit.

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