Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Fiscal Cliff Threatens U.S. With Recession, Politicans Lack Ability to Find Solution

Politics / US Economy Oct 16, 2012 - 02:32 AM GMT

By: Bloomberg

Politics

Best Financial Markets Analysis ArticleBloomberg Television's Trish Regan sits down with four CEOs for a special edition of "Street Smart" focused on fixing the country's debt. Tune in to hear from BlackRock CEO Larry Fink, NASDAQ CEO Bob Greifeld, UPS CEO Scott Davis and Honeywell CEO David Cote, who are all part of the Fix the Debt campaign.

The CEOs agree: It's Washington's fault we're not hiring and not spending. Honeywell's Cote says, "If we were playing with fire in the debt ceiling, we'll be playing with nitroglycerine now when it comes to the fiscal cliff."


BlackRock's Fink says, "We need to speak out as CEOs...Politicians generally address things when their back's against the wall...We have the threat of going into a recession in the first quarter...This is a very uncertain moment."

Highlights below and full transcript available upon request.

Fink on QE3:

"Quantitative easing is probably the right thing to do at this moment. I believe because consumers are pulling back, CEOs are pulling back. I think we have a threat right now of going into a recession in the first quarter. The Federal Reserve in QE3 is trying to keep the economy afloat while we go through this transition. My expectation would be, if we had a grand bargain, the Federal Reserve would cease QE3 quite rapidly... And so, to me, this is a very uncertain moment."

Cote on why Bernanke is right to enact QE:

"Somebody is acting as an adult and buying some time for people to actually do the fiscal work that they need to do."

Cote on the fiscal cliff:

"And one of the concerns that we have as CEOs is that if you take a look at the way the debt ceiling was addressed in the U.S. a few months ago, it's interesting. I've talked to politicians that say, where was the business community? You know, why weren't you guys in there and saying something and pounding on our desk? And my response has generally been, we thought this was just the normal political baloney you guys went through. We never thought you could be this reckless or irresponsible with the country's finances. And the response back is generally, well, now you know. So when you think about it that way, if we were playing with fire in the debt ceiling, we'll be playing with nitroglycerine now when it comes to the fiscal cliff."

Fink on why he's buying stock instead of hiring and investing:

"We're buying back huge amounts of our own equity. We are helping our shareholders because we can't feel comfortable, at the moment, in terms of hiring more or reinvesting, especially plants and equipment, which have a five-ish-year breakeven. So you're not going to jump in and invest until you feel more comfortable."

Fink on why the debt needs to be addressed now: "Ultimately the marketplace is going to rebel on this large amount of debt. And we most probably will see higher interest rates. Obviously, that's a big impact in my business. If you see much higher interest rates, ultimately that will be a drag on equities. We need to address the fiscal deficit before we begin to see higher interest rates."

Fink on the lack of ability to address fiscal cliff in Washington:

"We need to speak out as CEOs. We need to address this with politicians. Politicians generally address things when their back's against the wall. I think their back's against the wall for the last two years, and they just haven't felt it."

Davis on the impact of Washington gridlock on investing:

"Our millions of customers have to know what the rules of the road are, what policy is for the next four or five years, to make those [hiring and spending] decisions. If they want to stock inventories, if they want to hire people, if they want to invest in equipment, you have to know the rules of the road more than three or four months out. The small- and medium-sized businesses, really are the backbone of UPS's customer base, are sitting on their hands. You know, they're not going to start spending money, hiring people until they have an idea - a decision to be made."

Cote on Washington lawmakers:

"They're a pretty odd bunch, all in all. You listen to Republicans say there won't be a revenue increase unless there's entitlement reform. And you listen to the Democrats say there won't be entitlement reform unless there's a revenue increase. Now, most of us as businesspeople would say, well, that sounds like a deal, actually. But for some reason, they have the ability to complexify everything. If you got a couple of businesspeople together and said, OK, we understand, now we just need to discuss numbers, for some reason, they turn it into this unbelievable problem."

Fink on what's holding up the economy right now:

"Corporations are sitting with $1.7 trillion in cash. The amount of money that's sitting in money market funds and bank deposits and low-duration bonds, if we felt that there is a fix, and if this fix is tangible, understandable, and most importantly credible, I believe confidence would be renewed and we would have a new renaissance."

Greifeld on low treasury rates:

"We have 1.6 percent interest rate on 10-year Treasuries. There's nothing the U.S. government has done in the noble past to deserve that low of a rate, in my mind."

bloomberg.com

Copyright © 2012 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in