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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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Mon, 10/15/2012 - 16:08 | 2891761 iDealMeat
iDealMeat's picture

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

 

Stupid sheep don't care..

Mon, 10/15/2012 - 16:10 | 2891774 redpill
redpill's picture

BREAKING: BAUMGARTNER EXPECTED TO ATTEMPT DEATH DEFYING JUMP FROM DEBT CEILING, IN PROJECT REDBULL WE'RESOFUCKED.

Mon, 10/15/2012 - 16:26 | 2891810 ACP
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?

Mon, 10/15/2012 - 16:39 | 2891831 TruthInSunshine
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!

Mon, 10/15/2012 - 16:42 | 2891845 Kitler
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.

http://www.vanityfair.com/business/features/2010/04/fink-201004

 

Mon, 10/15/2012 - 16:52 | 2891875 LMAOLORI
LMAOLORI's picture

 

 

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

snip

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):


Mon, 10/15/2012 - 17:30 | 2892057 walküre
Mon, 10/15/2012 - 16:44 | 2891854 lineskis
lineskis's picture

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

http://www.zerohedge.com/news/us-debt-ceiling-d-day-september-14-2012

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

Mon, 10/15/2012 - 16:53 | 2891877 lolmao500
lolmao500's picture

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

Mon, 10/15/2012 - 19:05 | 2892444 NotApplicable
NotApplicable's picture

Or perhaps under-estimated the book-cooking?

Mon, 10/15/2012 - 19:15 | 2892462 walküre
walküre's picture

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

Mon, 10/15/2012 - 18:15 | 2892338 Antifaschistische
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.

Mon, 10/15/2012 - 17:23 | 2891937 camaro68ss
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. :-)

Mon, 10/15/2012 - 18:29 | 2892363 Overfed
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.

Mon, 10/15/2012 - 21:20 | 2892685 Payable on Death
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.

Mon, 10/15/2012 - 16:28 | 2891814 Itch
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.

Mon, 10/15/2012 - 16:32 | 2891823 redpill
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.

 

Mon, 10/15/2012 - 16:52 | 2891872 Itch
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.

Mon, 10/15/2012 - 17:27 | 2891990 redpill
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.

Mon, 10/15/2012 - 17:34 | 2892147 walküre
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.

Mon, 10/15/2012 - 19:25 | 2892483 Itch
Itch's picture

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

Mon, 10/15/2012 - 16:07 | 2891762 lolmao500
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!

Mon, 10/15/2012 - 16:31 | 2891816 Kitler
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.

Mon, 10/15/2012 - 16:36 | 2891835 blunderdog
blunderdog's picture

Funny, but maybe a tad bit too dry.

Mon, 10/15/2012 - 17:08 | 2891884 Kitler
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.

http://en.wikipedia.org/wiki/Angel_Moroni

Mon, 10/15/2012 - 17:26 | 2891968 walküre
walküre's picture

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

Keep 'em coming.

Mon, 10/15/2012 - 17:45 | 2892270 Kitler
Kitler's picture

Parole. Long story...

Mon, 10/15/2012 - 18:14 | 2892335 JimS
JimS's picture

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

Mon, 10/15/2012 - 18:15 | 2892339 JimS
JimS's picture

Those Mormons that drink are referred to as Jack Mormons.

Mon, 10/15/2012 - 18:22 | 2892353 JimS
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.

Mon, 10/15/2012 - 18:25 | 2892357 Offthebeach
Offthebeach's picture

Applejack.
It started with a sip.

Mon, 10/15/2012 - 16:44 | 2891855 LawsofPhysics
LawsofPhysics's picture

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

Mon, 10/15/2012 - 17:14 | 2891913 Kitler
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"

Mon, 10/15/2012 - 17:27 | 2891982 LawsofPhysics
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.

Mon, 10/15/2012 - 19:35 | 2892504 Oldwood
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!

Mon, 10/15/2012 - 16:10 | 2891772 XRAYD
XRAYD's picture

The .ooo1% moochers and parasites!

Mon, 10/15/2012 - 16:19 | 2891783 RSBriggs
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....
Mon, 10/15/2012 - 16:23 | 2891803 GFKjunior
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.

Mon, 10/15/2012 - 16:19 | 2891797 LawsofPhysics
LawsofPhysics's picture

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

Mon, 10/15/2012 - 17:15 | 2891921 OneTinSoldier66
OneTinSoldier66's picture

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

Mon, 10/15/2012 - 16:22 | 2891799 LMAOLORI
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.

Mon, 10/15/2012 - 16:22 | 2891800 alstry
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

Mon, 10/15/2012 - 16:22 | 2891802 Tsunami Wave
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?

Mon, 10/15/2012 - 16:46 | 2891857 LMAOLORI
LMAOLORI's picture

 

 

See for yourself hereeeeeeeeee's jamie demon

http://video.cnbc.com/gallery/?video=3000121449&play=1

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

snip

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.

Mon, 10/15/2012 - 19:37 | 2892506 Oldwood
Oldwood's picture

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

Mon, 10/15/2012 - 16:27 | 2891812 dick cheneys ghost
dick cheneys ghost's picture

Lets build more overseas Military Bases!!

Mon, 10/15/2012 - 16:43 | 2891853 HurricaneSeason
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.

Mon, 10/15/2012 - 16:48 | 2891862 Dr. Engali
Dr. Engali's picture

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

Mon, 10/15/2012 - 17:50 | 2892274 Parrotile
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 . . . . .

Mon, 10/15/2012 - 16:59 | 2891869 earleflorida
earleflorida's picture

'no big-gulp' 4U!?

this 4th estate... this metaphoric anachronism gone wild in a surreal altruistic world of born-again gargoyles...

http://www.cjr.org/the_audit/bloomberg_uncovered.php

ref:     http://www.cjr.org/resources/index.php

plug in comcast

check out:     http://www.muckety.com

follow'd up by Dr. Judith Rodin     http://www.forbes.com/profile/judith-rodin-1/

CNN's debate and unbiased moderator?

jmo 

Mon, 10/15/2012 - 17:15 | 2891920 realtick
realtick's picture

Is The Data Better Off Than It Was Five Years Ago: Light Weight Vehicles Sales http://chartistfriendfrompittsburgh.blogspot.com/2012/10/is-data-better-...

Mon, 10/15/2012 - 17:16 | 2891925 NewWorldOrange
NewWorldOrange's picture

James Bullard again?

Bull. James Bull.

Mon, 10/15/2012 - 17:22 | 2891938 walküre
walküre's picture

UPS Scott "Logistics spending would be great if only world trade hadn't completely collapsed"

He said this?

Mon, 10/15/2012 - 17:54 | 2892280 Parrotile
Parrotile's picture

"No shit, Sherlock!" - the BDI trend would be great too - notice the trend downwards over the past few years?

It would be interesting (and I suspect quite informative) to compare the build rate of Commercial vs. Military fleet tonnage since 2007. One will show a significant decrease, the other a significant increase (I wonder which one??)

Mon, 10/15/2012 - 18:02 | 2892295 HardAssets
HardAssets's picture

UPS Scott "Logistics spending would be great if only world trade hadn't completely collapsed"

He said this?

Yeah, but he also said "Living would be great if only you didnt die in the end."

Time to short UPS

Mon, 10/15/2012 - 18:59 | 2892436 Shizzmoney
Shizzmoney's picture

Should be retitled:

CEOs Opine on America's Debt and the Fiscal Cliff....while taking on more Corporate Debt.

Mon, 10/15/2012 - 19:03 | 2892437 toomanyfakecons...
toomanyfakeconservatives's picture

It's either the slammer for the global cabal clowns or it's WWIII, and everybody knows it. The FED banks and the BIS have had liens placed on them by the BRICs alliance of nations and THE WORLD WANTS IT'S GOLD BACK. The end of debt-slavery, the end of dollar-denominated trade, and the return of the Republic are all within sight.

Mon, 10/15/2012 - 20:55 | 2892657 Cabreado
Cabreado's picture

If this article made you (literally) nauseous, then you recognize the vital importance of the message.

A final saturation point of Self-Absorption in places of influence and control is not only why we're here, it also precludes any solutions (until it all falls down).

Thu, 10/18/2012 - 14:19 | 2901950 earleflorida
earleflorida's picture

'the town-crier weeps for all ye stricken self mutilated deaf

as his tongue is bifurcated by ones own master too saith what doth pedal

thy imminence grise wield but a chariot of appian deception... ?'

 

*'tis best to keep your ear to the ground'

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