Thursday Financial Headlines
Budget Deficit Continues To Climb
The budget deficit hit $172 billion in November, an increase from $120 billion in October, the Treasury Department reported Wednesday.
For the fiscal year to date, the deficit is up 24 percent compared to the first two months of fiscal 2012 and is 25 percent higher than the same month last year.
Odds Of Falling Off Fiscal Cliff Looking More Likely
The negotiations over the fiscal cliff hit a snag on Wednesday as momentum began to wane and resolution seems farther away. The House and Obama exchanged plans to resolve the crisis, but taxes remained the primary sticking point.
The markets are feeling the pressure, and so too is Federal Reserve Ben Bernanke, who used his press conference to warn lawmakers of the dangers of going over the cliff.
“Why is it that consumer confidence dropped so sharply this week? Why is it that small-business confidence dropped so sharply? Why are markets volatile? Why is business investment among its weakest levels during the recovery? All of these things, at least to some extent, can be traced to the anticipation and concern over the fiscal cliff,” he said.
In Geithner’s Footsteps
Following on the heels of the fiscal cliff deadline is another looming confrontation between President Obama and Congress – the debt ceiling.
One thing that is fairly certain is that by the time that fight rolls around, there should be a new Treasury Secretary. As is usual in a second term, Timothy Geithner will be departing Treasury and there already is discussion about his replacement. According to Jim McTague of Barron’smagazine, the potential candidate likely will have few ties to Wall Street, which greatly limits the pool.