Mohamed El-Erian, chief executive officer and co-chief investment officer  of Pacific Investment Management Co. (PIMCO), said there will be massive consequences if the U.S. is downgraded. El-Erain made these remarks in an interview on Bloomberg radio.

El-Erain said in the interview that PIMCO has done the hard work on an account-by-account basis to determine what they would be required to do in the event of a downgrade, and he warned that many could be "frozen in the headlights" if they haven't done the same.

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