Overnight News Digest: Potential Economic Catastrophe Edition

Welcome to the Overnight News Digest with a crew consisting of founder Magnifico, current leader Neon Vincent, regular editors side pocket, maggiejean, wader, Man Oh Man, rfall, and JML9999. Alumni editors include (but not limited to) palantir, Patriot Daily News Clearinghouse, ek hornbeck, ScottyUrb, Interceptor7, BentLiberal, Oke and jlms qkw. The guest editor is annetteboardman.

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• China tells US to avoid debt crisis for sake of global economy

BBC
 

A senior Chinese official has warned that the "clock is ticking" to avoid a US default that could hurt China's interests and the global economy.

China, the US's largest creditor, is "naturally concerned about developments in the US fiscal cliff", vice finance minister Zhu Guangyao said.

Washington must agree a deal to raise its borrowing limit by 17 October, or risk being unable to pay its bills.

He asked that "the US earnestly take steps to resolve" the issue.

US Treasury Secretary Jacob Lew has said that unless Congress agrees an increase in the debt ceiling by 17 October, Washington will be left with about $30bn (£18.6bn) in cash to meet its obligations - about half the $60bn-a-day needed.

• Obama Repeats No-Talks Stance as Democrats Plan Debt Bill

Bloomberg News
 

President Barack Obama reiterated that he won’t negotiate with Republicans over the partial government shutdown and the U.S. debt limit as Senate Democrats began preparing for a test vote on a clean debt-ceiling bill.

Many U.S. government services have been shuttered for a week and the country is 10 days away from running out of borrowing authority. Republicans are insisting on changing the 2010 Affordable Care Act, while Obama refuses to engage in discussions about policy conditions tied to opening the government or raising the debt limit.

“We’re not going to negotiate under the threat of economic catastrophe,” Obama said today during a visit to the Federal Emergency Management Agency in Washington.

• Default Threat Generates Fear Around Globe

New York Times
 

LONDON — The bitter fiscal stalemate in Washington is producing nervous ripples from London to Bali, with increasing anxiety that the United States might actually default on a portion of its government debt, set off global financial troubles and undercut fragile economic recoveries in many countries

Five years after the financial crisis in the United States helped spread a deep global recession, policy makers around the world again fear collateral damage, this time with their nations becoming victims not of Wall Street’s excesses but of a political system in Washington that to many foreign eyes no longer seems to be able to function efficiency