JEREMY HOBSON: We’ll let’s get the latest now our New York Bureau Chief Heidi Moore on how Wall Street’s reacting to all this. She’s with us live. Good morning.
HEIDI MOORE: Hi, how are you?
HOBSON: Very good, Heidi, so tell me, you’ve been talking to your sources all weekend long — what are people saying about this downgrade?
MOORE: Well, beyond grumbling of being ripped off the beach, they’re pretty surprised as you can imagine. Everyone thought we would get downgraded eventually, but not quite this fast. And, it’s a little depressing. It’s kind of mortifying for them to realize this is where the U.S. is right now. Now, that said, everyone is looking at the markets. And, the markets are probably going to react pretty strongly — they’re not the whole story. I talked to Jim Sarni. He’s a bond manager at Payden & Rygel, and this is what he said we should be looking for.
JIM SARNI: It’s not that big of a deal. I think that the bigger issue is the economic growth here in the U.S. and Europe. That, I think, is really a bigger issue than this debt downgrade.
MOORE: Right, so if you think about it in terms of the five stages of grief, we’ve been in denial all this time about how much debt we’re wracking up as a country — and the S&P move might move us into acceptance.
HOBSON: Acceptance — and Heidi, if the market’s are not what we should be watching, then what is the bigger implication here of the downgrade?
MOORE: What it tells us is that we have to pull-up short and reform the way we make political decisions, first of all. That’s a big thing the S&P said. Our political system is dysfunctional and not befitting the world’s greatest economy. So, that’s the first thing. And the second thing is we still have to get rid of debt. We’re all struggling under huge debt load. The country and everyone in it.
HOBSON: Marketplace’s New York Bureau Chief Heidi Moore. Heidi, thanks.
MOORE: Thank you, Jeremy.
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