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Republicans Double Down on Demands as US Inches Closer to Statutory Default

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BlackBerry is in talks with several tech companies to possibly sell off its assets.

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Stock markets around the world are plummeting as Republicans expanded their demands from delaying or defunding the Affordable Care Act to more budget reductions from Medicare and Medicaid.

House Speaker John Boehner said yesterday that he will not allow a vote on a so-called "clean" increase to the statutory debt limit without any strings attached.

"We're not going to pass a clean debt limit increase," Boehner said in a television interview yesterday. "The votes are not in the House to pass a clean debt limit. And the president is risking default by not having a conversation with us."

Investors are bracing for a protracted fight over the next 10 days before the Treasury can no longer pay for past bills.

Before the opening bell, futures were down sharply. Dow (INDEXDJX:.DJI) futures were off 0.77% at 14,882 while futures contracts on the S&P 500 (INDEXSP:.INX) sank 0.81% to 1,671.10. Nasdaq (INDEXNASDAQ:.IXIC) futures fell 0.77% to 3,209.75.

If the US falls into technical default, China, the biggest foreign holder of Treasuries, will be greatly affected. China's Vice Finance Minister Zhu Guangyao publicly urged Congress to do the right thing.

"The United States is totally clear about China's concerns about the fiscal cliff," he said. "We ask that the United States earnestly takes steps to resolve in a timely way before October 17 the political [issues] around the debt ceiling and prevent a US debt default to ensure safety of Chinese investments in the United States and the global economic recovery."

Goldman Sachs (NYSE:GS) analysts told clients that if the Treasury is forced to cut back on spending drastically, it would cut 4.2% off of annualized GDP.

In companies news, the shutdown is also affecting the military industrial complex. Last week, United Technologies (NYSE:UTX) said that it will furlough about 2,000 employees for Sikorsky aircraft, but cancelled after the government ordered the military's 400,000 civilian employees to return to work. Lockheed Martin (NYSE:LMT) will go through with furloughing 3,000, however.

Japan Airlines (TYO:9201) made its first purchase from Airbus rather than the Boeing Company (NYSE:BA). JAL ordered 31 A350 planes from the European manufacturer. Boeing had long held dominance in the Japanese market, but the 787 Dreamliners had problems with batteries that caused them to be grounded.

BlackBerry (NASDAQ:BBRY) is looking for options apart from the $4.7 billion offer from Fairfax Financial Holdings, according to a Reuters exclusive. The smartphone company is in talks with Cisco Systems (NASDAQ:CSCO), Google Inc (NASDAQ:GOOG), and SAP (NYSE:SAP) to discuss selling itself in whole or in part. It will also meet with Intel (NASDAQ:INTC) and Samsung (OTCMKTS:SSNLF) by next week. The tech companies might be interested in BlackBerry's patents and servers. It is possible that the original deal to bring the company private will fall short of financing.

Twitter: @vincent_trivett

Disclosure: Minyanville Studios, a division of Minyanville Media, has a business relationship with BlackBerry.
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