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El-Erian Says Massive Consequences of Default: Tom Keene

The U.S. faces “massive consequences” if a failure by lawmakers to lift a ceiling on the nation’s debt leads to a default and loss of its top rating, Pacific Investment Management Co.’s Mohamed El-Erian said.

While a credit-rating downgrade likely wouldn’t cause credit markets to freeze as they did after Lehman Brothers Holdings Inc.’s collapse in 2008, the world’s largest economy would experience “headwinds” to growth and employment, already in a crisis, El-Erian, chief executive and co-chief investment officer at the world’s biggest manager of bond funds, said in a radio interview on “Bloomberg Surveillance” with Tom Keene.