The once-unthinkable loss of the AAA rating will constitute a further hit to already fragile business and consumer confidence.

Once you start moving [market] lower, then you trigger of all sorts of things. You trigger people who have to sell because they're over-levered. So they sell their winners and their losers. They're just trying to raise cash. So, what you then get is spreading malaise throughout the global markets.

I remember when I was growing up, you would go to a bank to open a deposit, and they'd give you a toaster. A free toaster. These days, if you're a company, and you go to a bank, they could easily turn you away! They don't want your deposits anymore.

As we spend more, and as companies are pushed to invest, they say, "Hey wait a minute! There's more demand in the system. Let's invest more."

Investors should be cautiously positioned as the global economy and markets face major uncertainties. The downgrade will be a further headwind to growth and job creation in the U.S.

The theory is that if you take interest rates negative, people are going to say, "That's a silly game! I'm not going to lend my money to governments who want me to pay them. I am going to go into the stock market where I can get positive returns!"

Investors have to ask themselves two questions. How much can we grow our investments? And, can we afford our mistakes?