Explaining the downgrade to the average consumer

Robert Lenzner of Forbes.com likes how Bloomberg Television’s Tom Keene performed on Sunday night in explaining the Standard & Poor’s rating downgrade of U.S. debt.

Lenzner writes, “Downgrade! the Bloomberg TV special report was masterly handled by  the well-read, well-informed enthusiastic Tom Keene, as he tried to relate a complicated, fast-changing scenario to the ordinary American.  He opened with the coup of having Standard & Poor’s John Chambers, a key figure in the rate downgrade, explain in plain  terms his uneasiness about the rising debt to GDP and his awareness there was no political consensus to go ‘all the way’ on the cuts needed.  For the hopeful, Chambers explained there have been 5 nations that  got their Triple A rating back in 9 to 18 years. He was handled with due respect, and thankfully there was no shouting. Tom Keene and his helpers were civilized. Nice.

“A little later Pimco’s Bill Gross defended S & P ‘for enforcing some discipline’ and suggested t he change in interest rates from the downgrade would be minimal, no more than a move of 10 to 25 basis points. S&P, Gross said were ‘white hot people’– not knaves.

“While Keene energetically looked for solutions, the markets were diving in Asia, stocks and commodities alike – though gold spiked and is closing in on $1700 an ounce. And  the bow-tied maestro also  helpfully explained that  the European Central Bank was going to support Spanish and Italian sovereign bonds to hopefully stem that crisis. Also, he fairly inserted the views of Goldman Sachs and J.P. Morgan that growth is slipping to no more than 1-2%.  Another theme; the nation’s debt is unsustainable. Meanwhile, CNBC was cleverly showing that  interest rates are just as likely to ease as climb after a downgrade. I wish Keene had gotten his favorite chart man to put that  up. Switched back to Bloomberg when I heard Donald Trump was about to sound off on another subject about which he knows nothing.”

Read more here.