Thursday, September 1

EU Bank Chief: Markets 'in the worst crisis since the second world war'

MATT LAUER, co-host: but we are starting to massacre here on a Tuesday morning with Monday's Wall Street. CNBCS Maria Bartiromo was here in the midst of chaos. Maria, good morning to you.

MARIA BARTIROMO reporting: good morning, Matt. Shares fell overnight in Asia, Europe followed suit this morning how angst dominated Wall Street. Now is the focus, the Fed. And investors hoping for good news later today after suffering the worst day in two years. Investors responded to the first downgrade of U.S. credit fast and furiously on what was the worst day on Wall Street in two years. The Fed is meeting Tuesday's important now, as the pressure increases for Ben Bernanke and his colleagues policy-makers, fresh impetus to the economy or an other recession threatens.

Mr. ART CASHIN (Director of floor operations, UBS): it is feared that the S & P downgrade can something to consumer confidence do and thus help us a little closer at the infamous double dip, that everyone is concerned.

BARTIROMO: Monday at noon, the President tried to inject confidence into the market.

President BARACK OBAMA: Our problems be solved in the near future, and we know what we do to solve them.

BARTIROMO: But as the President spoke, the Dow was tanking, sale more 400 points after his speech, ending the day 600 or 5.5 percent. S & P-Deven Sharma, President of defended in an exclusive on CNBC the downgrade. Why downgrade the debt when it actually comes to the political process? Mr. DEVEN SHARMA (Standard Poor's President): Yes. The political process is important, because that speaks, how these tax and economic and monetary decisions. The credit influences. BARTIROMO: In addition to the drama, Central Bank tried the European it avert a further spiral, through the purchase of bonds of Italy and Spain. With money moved move assets, investors of shares as secure ports such as gold. It closes at a record of $1700 ounce. Investors flocked also treasuries with an emphasis on a weak economy and the prospect of the low prices for some time to come, instead of the downgrading of the credit. Mr DANIEL gross (Economics Editor, Yahoo! Finance): in theory, if downgraded S & P credit card you should Staats­an­lei­hen dump. It means that less likely back pay. But the Government is so extraordinary, because no one believes that the United States standard.

BARTIROMO: And by the close of trading Monday, investors lost $1 billion in value, one reason for this are, for the good news of Ben Bernanke and company later today, Matt hope.

LAUER: all right, Maria, thank you. We are now joined by your colleagues Jim Cramer on CNBC. JIM CRAMER coverage: morning, Matt.

LAUER: Jim, good morning to you.

CRAMER: Morning.

LAUER: I'm going to start with you, I'm not picking on you...

CRAMER: No problem. WARM:.. But yesterday, the markets opened, she went about 230 points.

CRAMER: Right.

 LAUER: You have been on our agenda for the West Coast live.

CRAMER: Right.

LAUER: You said that you actually encouraged, because it seemed somewhat stable, nothing too pathetic.

CRAMER: Right.

LAUER: Then it went south very. What happened?

CRAMER: Well, remember, we have the perspective that the panic is not a strategy here. We are only 6 percent for the year for the Dow Jones, much better than everywhere else. And where we come off - I point loss white is large, but we remember lost 22 percent in one day, when we were by 508 points in 87. The point decline was almost as strong as not, you know, the percentage decline was not as bad.

LAUER: Is this panic, Maria, or these investors and see something fundamentally wrong with the U.S. economy?

BARTIROMO: I think that is what it is, Matt. I think that people look to an economy that has worsened. It is no longer a soft patch. The question is we for a double bad move? And they say "I am now sell and think later." I agree with Jim. At some point we will find an end. You will feel 'OK, that is a good buying opportunity.', as,

LAUER: Are we close to it?

BARTIROMO: I feel not as it is panic through and through. And that's what you really want to see, be expected to surrender.

CRAMER: Right. And remember, it abroad is still the major problem. It is Europe. Ceiling is obvious problem the debt and then in conjunction with the S & p gives a lot of panic. But Matt, again, I must tell you, unless we have a severe recession is it an opportunity to buy on the way down.

LAUER: And I talk about these possibilities in a second. I was shocked. I'll tell you, I was looking on Monday at the Bank of America fate. This Bank camp...

CRAMER: Right. WARM:.. .went down about 20 percent. I know that you want to be very cautious, Jim.

CRAMER: Yes. LAUER: What happened? Why take it as a hit?

CRAMER: Bank of America is the core of the mortgage crisis in this country. One of five mortgages, which are directly related to the Bank of America. I think the people believe that as long as housing goes down in value, Bank of America who are injured. A lot of people feel it needs more capital. The company says that it's not.

LAUER: In order. Stay on the market, Maria? I mean, is said to Jim, this is not 2008, there are options here. Where are the opportunities in your opinion?

BARTIROMO: Well, I agree that long-term this probably is a buying opportunity at some point, but it worse, can be before they get better, because it is based on real basic weakness in the economy. Bank of America one separate history from this...

CRAMER: Right.

BARTIROMO:.. .upset on the need for the capital. But I think we are still in it, and we have come some messed up.

LAUER: a few seconds for each of you to stop.

CRAMER: Right. LAUER: I liked your interview yesterday with the President of standard & poor's. Of course, you are on the defensive. People, the fingers on it for the downgrading of U.S. debt rating. The President on it, which begin to Finance Minister, but now you say a lot of people listen to, "wait a minute, the right thing done." New York's Mayor Michael Bloomberg said. Other people say, 'We can thank them in the long term for what they have done.' Feel like both of you to do this?

BARTIROMO: I think that ultimately we should thank them, because there are real problems.

CRAMER: Right. BARTIROMO: Everyone understands that we are more money than we are. Something has to give. If this is a wake-up call, more power for standard poor ' s.

CRAMER: right. We deserve it. I was surprised that the President didn't say ' do you know what, we again that AAA,' instead of just saying, that we are a nation of AAA. Facts, real substance, real budget cuts, real revenue increased their requirements. I think that everyone in the world thinks if she goes United States to step up and do the right thing?

BARTIROMO: LAUER: bumpy day today here?


BARTIROMO: Yes. LAUER: Yes? More bumps in the road?

BARTIROMO: Yes, sure. Volatility.

LAUER: Order, Jim Cramer, Maria Bartiromo. And don't forget, you can take a look at the markets and follow, los all day on CNBC. Thanks, guys, appreciate it. You 1A and Ann we go back to the Studio.

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