Driving the Day: 12/3/12

Dec 3, 2012

Need to know…

  • Fiscal Cliff Negotiations Fruitless as Deadline Nears. With less than a month before automatic spending cuts and tax increases go into effect – the much-debated "fiscal cliff" – government leaders on both sides of the political aisle presented their messages and grievances on several Sunday talk shows. Negotiations thus far have proven fruitless, with House Speaker John Boehner calling the administration’s initial proposal, which includes $1.6 trillion in tax increases, $400 billion in unspecified tax cuts, and a bevy of additional stimulus spending, “nonsense.” The Washington Post reports that lawmakers and congressional aides following the negotiations think there is growing chance a deal will not be reached before the end of the year.
  • Growing Optimism Drives Business Borrowing. Small businesses increased borrowing in October, according to the Thomson Reuters/PayNet Small Business Lending Index, which measures the volume of financing to American small businesses. Borrowing in October rose to 107.5 on the index, up from 96.4 in September. The October volume was also 11% higher than a year earlier. Rather than a product of the Federal Reserve's low-interest rates, PayNet says the increase in borrowing can be attributed to growing optimism in the small business community, which is hesitant to assume debt in an uncertain economy.
  • Market Indicators Rise on Global Stimulus Efforts. U.S. stocks, bonds, commodities, and the dollar all saw gains last month, only the second time this year where the four market measures rose together. There is growing investor optimism that bank stimulus programs around the world are fostering growth. The Federal Reserve has pushed $2.3 trillion into the U.S. financial system, and similar bank measures in China, Japan and the European Union have strengthened investor sentiment.

Worth the read…

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