US CEOs Opine On America's Debt And The Fiscal Cliff

Tyler Durden's picture

While earlier we were presented with an extra serving of hypocrisy courtesy of the Fed's James Bullard who lamented the lack of income for America's "savers", next we get a less than random selection of US CEOs, those of UPS Scott "Logistics spending would be great if only world trade hadn't completely collapsed" Davis, Honeywell's David "Look over there, Isn't Iran bombing something" Cote, NASDAQ's Bob "I destroyed IPOs" Greifeld, and, of course, Larry "About to switch jobs with Tim Geithner" Fink, who via Bloomberg TV get to opine on such issues as the fiscal cliff and America's $16.2 trillion, and very rapidly rising debt. Some of their views: "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." Larry 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." And thanks to the Fed, which has come at just the wrong moments, and always bailed out Congress every time a difficult decision had to be taken, the likelihood of a benign outcome on the fiscal cliff is far worse, than even Goldman's latest worst case scenario which sees just a 33% probability of resolution before the year end.

Needless to say, and quite paradoxically, every single CEO is delighted that the Fed stepped in with QE 3 to push their stock prices to fresh 2012 highs to provide a better selling point, even if doing so made it far less likely that Congress would even move its little finger until the stock market tumbled by at least 20% in a replica of last summer's debt ceiling SNAFU.

Watch live on Bloomberg TV below.


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iDealMeat's picture

I can't wait till the next ceiling hike..


Stupid sheep don't care..

redpill's picture


ACP's picture

The problem is, THAT jump is so far away, the Earth's gravitational pull would no longer pull him back.

Voyager II anyone?

TruthInSunshine's picture

Translation = The CronyCapitalists (aka FBMGUW = Financial, Bankster, Military and Government Unionized Worker Complex) want to see more private sector deleveraging and public sector leveraging up (the foundation by which their New Normal profits are derived), because this is the only way the true crisis that is the debt coupled with annual trillion USD+ deficts as far as the eye can see can be continued to be perpetuated.

You can't get water from a rock and you can't get slave tribute from a "middle class" that still has discretionary monies to spend when those monies could be forcibly transferred to the Banksters, Defense "Contractors" and Government Unions, bitchez.

SNAP, EBT, SSI, Social Security, UEI, Medicare/Medicaid/ObamaCare, and other Bread/Circus for all plebes!

Kitler's picture



April 2010 EMail   Wall Street Larry Fink’s $12 Trillion Shadow

Though few Americans know his name, Larry Fink may be the most powerful man in the post-bailout economy. His giant BlackRock money-management firm controls or monitors more than $12 trillion worldwide—including the balance sheets of Fannie Mae and Freddie Mac, and the toxic A.I.G. and Bear Stearns assets taken over by the U.S. government last year.


LMAOLORI's picture



Analyzing Jamie Dimon's Bear Stearns "Favor" to the Fed


Just how did Maiden Lane become profitable?  As we first wrote in June, 2010, Maiden Lane's Fed-appointed investment manager, BlackRock Financial Management, Inc., would aggressively trade the government-backed agency mortgage backed securities (MBS) portion of the portfolio ($10.1 billion of the initial $30.0 billion).  Any profits would be reinvested in investment grade securities, including additional agency MBS.  Conveniently, BlackRock was also trading on behalf of the Fed as part of the $1.25 trillion in QE1 MBS purchases.  Anyone FOIA-minded might make a request to the New York Fed for detailed CUSIP holdings of the initial portfolio (detailed holdings snapshots would be published beginning in 2010).

How did BlackRock get the job?  According to an internal New York Fed email (original here) turned over to Congress at the behest of Daryl Issa, it was a no-bid "sole source" contract award (emphasis and brackets ours):

lineskis's picture

Surprised we're not in the debt ceiling SNAFU just yet. ZH predicted it would be game on by September 14th:

Looks like ZH was off by a few month...

lolmao500's picture

Of course. They over-estimated the spending. I have it for mid-February 2013.

NotApplicable's picture

Or perhaps under-estimated the book-cooking?

walküre's picture

Wasn't QE3 announced just around that time frame? Could be related at least partially?

Antifaschistische's picture

...what we in the real world need is certainty, or, as close as we can get to certainty.   To invest (read "hire") we need to have reliable expectations about the future.   We need to have very high degrees of certainty about the value of our currency (Ben??), the predictability of our liabilities (Obamacare??), the stability of interest rates (Ben??), etc.

Hope and Change is incredibly "anti-business" and "anti-investment".  To invest and hire we do not need hope and we certainly do not want change in the form of someone in Washington always changing the rules.   Rule changes put us in risky situations where risk taken on our part (i.e. investment/hiring) may end up favoring our competitors in a game changing rule.  Do we hire permanent employees?  Do we hire temps?  Do we stockpile cash?  Do we stockpile Euros?  What in the heck do we do?   What's going to change tomorrow?   And don't even bring up the Elections and the "Fiscal Cliff".

Our government, The Fed, and dreamy politicians who keep thinking they're creating "incentives" are killing us.   Washington only creates constraints.   I'm fed up with them all.  The best thing they could do for investment is take a 36 month recess so at least we'd know the crap rules we live with now won't change for another 36 months.

And would the pathetic American public stop thinking our Presidents and his/her sidekicks in Washington were hired to "create job" and "save the economy."  All they do is get in the way and destroy productivity and the otherwise efficient allocation of financial and human resources.

camaro68ss's picture

if you converted the debt into inches baumgartner would have to jump 255,681,818 miles from space to earth. hahaha

thats just a little bit past the moon if anyone was wondering. :-)

Overfed's picture

A little past the moon? Hell, that's halfway to Jupiter! :-D

He'd hit the atmosphere at like 44,000 mph.

Payable on Death's picture

As a legislative event (not to be confused with reality), fiscal cliff is a non-issue. It is unconstitutional for one congress to bind another. First order of business upon returning from election recess will be to postpone the cliff.

Itch's picture

Ba ba stupid sheep have you any debt

yes sir yes sir my house is to let

HP on my ipad, money on my card

trading stock with leverage, because im a retard.

redpill's picture

There is tremendous incentive to borrow to the hilt and then some.  Today, the problem is that people spend their cash and THEN they borrow and spend more.  The smart people buy gold with their cash, borrow money to spend, and then walk away from the debt with their pocket of yellow coins and tell the creditors to go fuck themselves when the shit finally hits the fan.


Itch's picture

If you had saved all the money paid in interest to bulid your credit rating over the years, you would be loaded already. I see where you are comming from, I dont advise it though.

redpill's picture

It's gross of course, that's why it's criminal to have a system that encourages it.  And it depends what you mean by "over the years" - in a truly long term sense I would agree, but interest rates have been so far below market rates for so long that the bigger opportunity cost has been in retiring debt instead of using the capital for something else.  As long as interest rates are near zero, maintaining a credit rating is not expensive or difficult.

We've now created a generation of people that think in terms of debt being perpetual and credit as an asset, and it will take at least another generation to break the cycle.

walküre's picture

It's gross of course

Why? Just say that you were hoping for a bailout that never came. By doing exactly what they do, you can't go wrong. It's their system, their game. Don't be a pawn.

Itch's picture

I know, i know, its not the money, its the scantily clad principle.

lolmao500's picture

The facts speak for themselves...

Since the beginning of the recession in December 2007, the US lost 3.3 million jobs and it cost $8.9 trillion in new debt.

So keep going at this pace, I'm sure it's gonna fix itself!

Kitler's picture

I don't know about fixing itself, but if patriotic Americans are willing to join Romney and Ryan and bite the fiscal bullet by accepting a 20% tax reduction and a massive increase in spending on the military, things should be humming smartly by 2016.

blunderdog's picture

Funny, but maybe a tad bit too dry.

Kitler's picture

What did you expect? Mormons don't drink.

The Angel Moroni (pl. moron?) double checked all the budget numbers for Mitt. He says it's a winner.

walküre's picture

Haven't read much of you lately .. like in a couple years. Overslept in hybernation?

Keep 'em coming.

Kitler's picture

Parole. Long story...

JimS's picture

Not true, as they are called "Jack" Mormons.

JimS's picture

Those Mormons that drink are referred to as Jack Mormons.

JimS's picture

Those Mormons with more than one wife are in the same catergory that Jack Mormons are in, among Mormons in general. As with all religions, there are "Good" followers and "Bad" followers.

Offthebeach's picture

It started with a sip.

LawsofPhysics's picture

I've always wondered how you cut revenues but increase spending.  I need a printing press.

Kitler's picture

To hell with the press... if you believe that shit you are in more immediate need of a functioning brain. At least when it comes to religion however Mitt buys "Made (up) in America"

LawsofPhysics's picture

No shit, it's always been about power and control, but hey, at least I know how to keep the mormons from drinking my scotch when we go fishing, bring more than one mormon along.  I made the mistake of only bringing only one once.

Oldwood's picture

They cut taxes under Reagan and saw significant increases in revenues. Unfortunately they saw even greater increases in spending. The same happened under Bush. The theory is that reduced taxes stimulate growth which may well be true, but regardless of the degree or overall taxation, the key has been spending. When times are good borrow big because we are rich! When times are bad borrow big because we have to "stimulate" ourselves out of the slump. Taxes should be voluntary. Americans have never had any trouble with spending money as long as they saw value in it. Hardly anyone sees value in our government and that is why Americans only want to spend other people's money. Unfortunately, those other people have figured out that by using the very government used to expropriate their wealth they can actually make everyone else , those who thought they were paying none, to pay all the taxes. We are paying taxes on our income, but also on everything we own through property taxes and primarily through the taxes incorporated into the costs of everything we buy. I keep hearing fools complain that the rich should be taxed more. Where you think they are going to get it from, China? Big business is complicit with government. Hand in hand. Left and right. I used to agree when Republicans were saying we need to get people off of welfare and onto tax roles. Now i think we should just get off of welfare and make the government beg for money. Lets have pledge drives like PBS. Lets see them make us truely BELIEVE!

XRAYD's picture

The .ooo1% moochers and parasites!

RSBriggs's picture
  • Yes.  That terrible upcoming fiscal-cliff-of-doom that will cut govt spending by about 2% over 10 years .  Oh, the horrors....
GFKjunior's picture

That will never happen.


But even if it did social security and medicaid are growing at a significantly faster rate than 2%. No turning back now.

LawsofPhysics's picture

Yes, yes, the CEOs want to make sure that the bailout budget is still intact.  Same as it ever was.

OneTinSoldier66's picture

Yep. 'Cliffs' do not effect those on the bailout name-sheet.

LMAOLORI's picture



Hypocritical Ass Holes all of them they whine about the debt except the portion that is going to them! I'm all for cutting the debt too but that's because I actually pay for it and don't get any bail outs or free obamaphones.

alstry's picture

It's time to outsource the overpaid CEOs....since nobody is milking off the system more than they are in the Udder World

Tsunami Wave's picture

What do the Wall Street CEOs think? Maybe to rephrase the question.. What's Goldman Sach's thoughts and sentiments on this?

LMAOLORI's picture



See for yourself hereeeeeeeeee's jamie demon

Jamie Dimon gets mad at Washington

Economy would be 'booming' with Bowles-Simpson

Dimon said that if Washington had just passed the Bowles-Simpson tax plan last year, the US economy would be booming. The plan was a bipartisan proposal that was commissioned by the Obama Administration and proposed eliminating tax loopholes so that more people and companies pay taxes. It also proposed reducing the tax rate for top earners. 

And just doing Gods work 

Washington must avoid 'fiscal cliff,' Goldman's Blankfein warns


The term comes from Federal Reserve Chairman Ben Bernanke, who used it to describe the peril of what will happen should the automatic tax increases and massive spending cuts be allowed to take effect on Jan. 1.

Oldwood's picture

Bipartisan yet no one supported it? I wonder what bipartisan actually means now?

dick cheneys ghost's picture

Lets build more overseas Military Bases!!

HurricaneSeason's picture

The fiscal cliff is coming, but I think this will be a speed bump. When they cut $500 billion out of the budget in one year, that will be the cliff.

Dr. Engali's picture

Move up retirement to 70 for the plebes, And we will keep raping the system and retire in Our 50s.

Parrotile's picture

Apart from the quaint notion that the "Upper Classes" have ever really worked for their income (seeing as it's often investment income, frequently from parental / grandparental fortune), increasing the retirement age for the masses might prove to be a double-edged sword.

With today's record longevity the vast majority of the  "delayed retirees" will not be conveniently dying over the extra five years (and there's plenty of evidence that continuing to work has a beneficial effect on lifespan - jobs provide far more than just a salary . . .); the significant "downside" is that the jobs that would have been vacated (allowing new entrants into the system) will now not be vacated. OK a steady state will return in 5 years time (unless the retirement age is further jacked, which may have to be the case), in which case the problems facing "new entrants" will remain.

Seeing as "The Devil finds work for Idle Hands" we could be opening quite an interesting social can of worms . . . . .