Rating Downgrade Causes Concern For Local Economy

Anyone who remembers what happened to Charlotte when the banking crisis hit in 2008 has to wonder if the city might be in for a repeat.

But Dr. Jay Bryson, an economist with Wells Fargo, does not think so.

"I don't think you're looking at thousands of layoffs because of this, but on the margin, something of a negative," Bryson said Monday, the same day that stocks had their biggest drop since December 2008.

"This hurts banks," Bryson said, but he added he doesn’t see the same kind of crisis banks and Charlotte's bank-heavy economy went through three years ago.

"Most banks aren't leveraged like they were back then, and we're not going to see hundreds of billions of dollars of breakdowns, but on the margin it's a negative for banks,” he said.

Charlotte may also feel the impact of tighter credit, as interest rates may edge up.

The Charlotte Regional Realtors Association said sales have been encouraging so far this year, but the downgrading of the U.S. credit rating might change that.

“We think it'll be tougher to get a mortgage if the powers that be don't get together and find a solution to the problem," said Laurie Knudsen, president of the association.

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