{"id":9919,"date":"2011-08-08T04:08:54","date_gmt":"2011-08-08T04:08:54","guid":{"rendered":""},"modified":"2011-08-08T04:08:54","modified_gmt":"2011-08-08T04:08:54","slug":"Wall-Street-veterans-weigh-in-on-the-debt-issue-and-market-crisis","status":"publish","type":"post","link":"https:\/\/asiancemagazine.com\/?p=9919","title":{"rendered":"Wall Street veterans weigh in on the debt issue and market crisis"},"content":{"rendered":"

The downgrade of U.S. sovereign debt by Standard & Poor’s has provoked a range of reaction, from faith in the democratic process to derision about the politicians whose wrangling prompted S&P’s action late Friday. S&P hasn’t been immune from criticism either.<\/p>\n

While the immediate effect of the downgrade has been a drop of over 300 points on the Dow Jones Industrial Average, it will take longer to learn what effect the downgrade will have on the American economy and way of life.<\/p>\n

Here are what some of Wall Street’s veteran market watchers told CNBC Monday:<\/p>\n

Kenneth Langone, Invemed Associates chairman\/CEO<\/strong>:
\n“The sky is not going to fall, the problem is not going to go away\u2026The American people need to know that nothing is going to change without some pain for them. We’re going to pay our debt but who is going to get screwed in the long run? The poor guy that’s living on fixed income because inflation will take its toll.”
\n<\/object><\/p>\n

Neel Kaskari, managing director, Pimco:<\/strong>
\n“It\u2019s just a matter of time before Moody\u2019s and Fitch follow S&P\u2019s lead. I think anybody who analyzes the U.S. deficit situation and our trajectory has to conclude that we\u2019re not truly triple-A today and we have to get our fiscal house in order and Republicans and Democrats have to make hard choices\u2026Our debt and deficit situation is unsustainable and getting worse, and that\u2019s what S&P focused on.”
\n<\/object><\/p>\n

Sean Egan, Egan-Jones Ratings Co. president:<\/strong>
\n“Another thing that is somewhat bothersome [about S&P] is they use the debate in a democracy as a reason for downgrading. The way I see it\u2026is the debate is healthy. You almost worry if there isn\u2019t a debate. There\u2019s a lot of uncertainty as to how the country should proceed and I think debate airs a lot of arguments\u2026It\u2019s as much an economic problem as to how we go forward as a political problem.”
\n<\/object><\/p>\n

Jack Bogle, sehior chairman, Vanguard Group:<\/strong>
\n“I\u2019m kind of amused by the fact that a year or so ago Standard & Poor\u2019s Ratings was the gang that couldn\u2019t shoot straight, a joke, and now they\u2019re the last word. Interestingly enough, Moody\u2019s hasn\u2019t said a word\u2026We\u2019re focused on very short-term things here, too much noise and not enough perspective.”
\n<\/object><\/p>\n

Wilbur Ross, WL Ross & Co.<\/strong>:
\n“All that they really based the downgrade on is that democracy is a messy process and so the fact that we went through what we went through with the Congress, at least they came out in the direction that has some promise of some fiscal stability going forward.”
\n<\/object>
\n<\/p>\n","protected":false},"excerpt":{"rendered":"

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