Wall St. Plotting for Debt Doomsday Prospect of default fraying nerves By Rob Quinn, Newser Staff Posted Jul 21, 2011 6:13 AM CDT 23 comments Comments Volatility in the market is already rising, analysts say. (Getty Images) (Newser) – As lawmakers scramble to hammer out a debt deal, Wall Street firms are working on ways to deal with America defaulting on its debt—and on ways to make a buck out of any upheaval. Treasury bonds function like a currency on Wall Street and default after the Aug. 2 deadline could cause chaos, the New York Times finds. Some investors are already unloading bonds, while others may have no choice if the bonds lose their triple-A rating. There are currently few signs of panic but analysts warn that the change could be sudden. "The metaphor is a pile of sand,” the chief economist at Moody’s Analytics says. “You keep putting one piece of sand on the pile, nothing happens, and then, all of the sudden it just caves." Some bankers say the prospect of default has already tarnished America's reputation as the "gold standard" for credit-worthy nations. Moody's has warned several states that their credit rating is at risk along with the federal government's.