Wall Street, focused more on Greek debt woes, is not yet rattled by the drama surrounding budget talks in Washington.

On Thursday, the GOP walked out of Vice President Biden’s talks aimed at finding a deficit reducing compromise by Aug. 2 when the nation’s $14.3 trillion debt ceiling will have to be raised to avoid a default.

{mosads}Rick Rieder, the top bond executive for BlackRock, the world’s largest asset-management firm said Friday he continues to believe the odds are about 80 percent that the U.S. will avoid a default.

“People are watching that interplay, and seeing that on June 23 or June 24 the fact that you would get some contentious nature of the discussions is what many people would have anticipated would have happened, that there is posturing in the negotiations,” he said.

But the market will be focusing on the talks next month, Rieder added.

“If we are having the same dynamic take place at the end of July, then I think the markets would be much more disrupted by this,” he said.

To some on Wall Street the walkout looks very much like a typical negotiating tactic, and they are not worried yet.

He said that at this point European debt is presenting so much risk that it overshadows any concerns about U.S. bonds, even though the bond market is focused somewhat on the debt-ceiling issue.

The debt ceiling and those discussions are certainly important, but Europe is the forefront of risk is in the market.

“As far as Wall Street is concerned this is much ado about nothing,” said Daniel Alpert of Westwood Capital.

{mosads}He said he does not see any influence on the bond market from the politics around the debt ceiling.

“The bond market is trading the bonds up,” he said, describing U.S. treasuries as at worst the “winner amongst losers” on sovereign debt.

“Whose debt are investors going to buy? Japan’s?” he said.

On Wall Street “only the rating agencies” see any real risk of default, he said. “And their reputation is somewhat suspect.”

He said investors do not expect huge, near-term spending cuts.

Rieder said that Wall Street is in “virtual unison” in believing the debt load needs to be dealt with, but there is division of opinion on the role of taxes. He said some on the Street are not as opposed to some tax increases as other.

He said there also needs to be growth and with the Federal Reserve unable to lower interest rates further, “fiscal policy has got to take the lead” in job creation.

Senate Democrats are pushing for some sort of stimulus in connection with the deficit talks. PIMCO CEO Bill Gross in recent days also called for stimulus such as infrastructure investment.

Rieder recommended allowing repatriation of foreign profits at lower tax rates if the profits are used for capital for expansion or hiring here. Tax incentives to hire are also “constructive” he said, as would be permanent extension of the research and development credit.

Short-term incentives like the first-time homebuyer credit are less effective, he said.

Andrew Busch of BMO Capital Markets said that the walkout is a good thing because it accelerates the deficit talks to the level of President Obama and House Speaker John Boehner (R-Ohio).

“No one believed Biden would close the deal,” he said.

{mosads}He said Wall Street is not pricing any uncertainty about the debt ceiling into the current market.

“If you conducted a poll of people on Wall Street and asked whether they think the U.S. will default, almost no one thinks the U.S. will default,” he said.

Busch agreed that “the biggest thing in the marketplace is Greece.”

“There is nothing else being focused on,” he said. Next week the Greek parliament will vote on austerity measures that the EU wants in order to help it deal with its debt crisis. The markets will be trained on that vote, he predicted.

On Aug. 3, The Treasury has to make a huge Social Security payment that it says it cannot swing without more borrowing. Busch said he believes missing that payment will rattle the market.

“Missing that Social Security payment is a huge negative,” he said.

If that happens with assurances the final details on an agreement were being worked out, the disruption could be limited, he added.

“If everybody goes home for the weekend without a deal, there will be panic in the streets.”

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