Fox Business Network Reports Money Management Firms Are Completely Unprepared For Lower Than AA Downgrade

FOX Business Network (FBN) Senior Correspondent Charlie Gasparino reports that “money management firms are completely unprepared for anything lower than a AA rating downgrade.” He also said that if the United States credit rating does go below a AA, we are going to see a “dramatic market implosion.” Excerpts from the report are below, courtesy of Fox Business Network. On if the United States credit rating goes below AA: “Every major money management firm is prepared for a downgrade to AA. If this hits single A or much less D, we are going to get a pretty dramatic market implosion. Sources tell the FOX Business Network that money management firms are completely unprepared for anything lower than a AA rating downgrade. If this goes below a AA, that's when all hell breaks loose. The firms all have to keep certain amounts of AAA rated bonds on their balance sheet. If this goes to D, they have to sell all their Treasury bonds and S&P has been the most clear and forthcoming about this, saying you miss a bond payment, you go into D. If you take Jay Carney, Tim Geithner, President Obama at their word that there could be a default, that means bonds don't go to AA, they go to D, the lowest rating in the world. Here's where the market impact will become catastrophic.”