STEVE CHIOTAKIS: What exactly are investors thinking about today in another big sell-off? A little perspective now
from Ellen Zentner, senior U.S. economist at Nomura Securities. She’s with us live from New York. Good morning.

ELLEN ZENTNER: Hi. Good morning.

CHIOTAKIS: Your initial reaction — I mean another steep drop.

ZENTNER: Well, I like the show’s background music, it’s sort of that New Orleans style funeral music — because that’s how I feel about the stock market, lately. Over the past week and a half, the drop has just been extraordinary. And I think no one’s surprised by this climb today, because of course we have to have some reaction to the S&P downgrade. It’s certainly an unprecedented event. The unthinkable — that the U.S. could lose its AAA rating has happened. Investors have to react, and the only thing they know to do is sell, sell, sell.

CHIOTAKIS: I mean we were down 500 points last Thursday, and probably over the past few months, we’re down 10 percent or more, right?

ZENTNER: Absolutely, we’re down more than 10 percent, that’s just a profound affect on wealth — you look at household wealth and it’s dropped by billions of dollars in a very short period of time and that can have long-term implications for the economy, especially through that wealth effect on spending. Typically we see a knee-jerk reaction in the personal savings rate, which rises.

CHIOTAKIS: Ellen Zentner, senior U.S. economist at Nomura Securities. Thanks.

ZENTNER: Thank you.