Nov 19, 2012|
Sudeep Reddy, WSJ, on Companies Cutting Back
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
But the big question is are we gonna go off the fiscal -- Our guest is a deep ready from the Wall Street Journal good morning city -- -- -- well more so. City you've done some studying of corporations. During this period of time post election what are corporations doing regarding capital expenditures. And their planning for the next year. But look with a lot of companies are scaling back their investment plan stated. Looked out on the horizon and seeing all the trouble. And potential trouble Al into next year and maybe even beyond the so there's they're starting to pull back. And they realize that if we go over the fiscal Cliff Lee and if we threatened to go to the fiscal cliff. Then we're gonna see some substantial. Pullback in the economy at least for the first half of next year and a lot of companies are starting to prepare for that. When was the last time we saw this type of -- slowdown on corporate spending. Well what we've seen so far is that over the last five or six months really since mid year. There's been pulled back in net corporate spending. It had been growing actually for more than three years you know by the recession and it is the end of 2000 as a middle 2009. It's it's in the -- a little over three years we've actually you know pull back and any kind in business investment. And at this point it's not that bad -- A stalling in some areas small declines and others we are seeing in an enormous. Of retrenchment back in 20082009. That's not quite that bad but it still a concern especially. Given the fact that we haven't fully recover from the last recession in allocating things started benevolent. In it would seem even if they resolve the fiscal cliff issue we're looking at a packed with. I mean they were probably even if Boehner and Obama can get together my guesses it's a one year patch. And they were going to be in the same boat EU corporations want and what their tax it's going to be for the next ten or twenty years. Retail -- no what other people. Tax rates are going to be if you think of a corporation they're retailer and they wanted to know whether consumers could have. That extra thousand dollars 2000 dollars in their pocket to go -- televisions compact car. Next year and if they don't see that kind of clarity on the right and they might pull back. As well and and you're exactly right that whatever we see almost certain that it's gonna be some kind of it passed for three months six months and months year whatever it is that just believe the answer in the concerns about the murky outlook. Now whipped lately when you look at it though because -- he did forty fortune 500 companies that -- out of the small business owners feel like power they respond because it it seems like there's a stark contrast. It's it's very interesting you hear so much about how small business owners are there. -- we're really worried about the outlook. And if you look at small business sentiment there ways to measure that based on surveys small business sentiment actually fairly close to what consumer sentiment is that. It's it's. State percent more resilient consumer sentiment index shot up back to a five year -- bit small business sentiment hasn't dropped off the -- The way you might have expected given this murky outlook. And there's there's some divergence between opposite and big -- years. And what sixty years are looking at that small business owners are still concerned you can tell that they're not except apparent party at this point but there -- at least. Maintaining some additional in the optimism about the outlook. All right -- city thank you very much for your time good job on the article per share a -- ready Wall Street Journal joining us today on the finding financial exchange. JPMorgan Chase and Credit Suisse have agreed to pay a combined 417. Million dollars to settle. Federal civil charges that they sold risky mortgage bonds to investors ahead of the 2008. Financial crisis. That the banks knew could fail. JPMorgan did not repeat JPMorgan did not warn investors. That homeowners were behind on their payments for the mortgages tied to these bonds -- Securities and Exchange Commission said this on Friday. And both banks. Failed to properly disclose their practices. That allowed them to profit while investors. Lost millions the SEC said this is part of June which creates an environment. Where individual investors do not trust -- JPMorgan chat. -- -- Guy Credit Suisse Goldman Sachs is also mentioned in the story under the settlement it was disclosed on Friday. JPMorgan Chase JPMorgan is paying 200 in 96 million dollars Credit Suisse based in circle pay a 120 million dollars. And the money will go to the investors burned by the more risky mortgage bonds. But there's all leads the they say the statement today -- you know we we are making this payment but we knew we are not ignorant admitting an unaccountable. Not admitting it and Goldman Sachs also agreed in July 2010 to pay 550 million dollars to settle charges of misleading. Buyers of complex mortgage investments. JPMorgan noted in -- statement that the SEC accused the banks of negligence but not. Misconduct. JPMorgan is pleased to have reached an agreement with the SEC to put these matters behind it. The SEC's allegations against JPMorgan Chase included risky mortgage bronze sold by Bear Stearns. And it just goes up and it just keeps going on night bringing up. Yet here but it it. OK they're gonna take care right they're gonna help me with my investments what do they do. Not some. We've we've got questions coming in at 68688. Just wanna remind people that. They can email you open your questions if you don't get the question in the before 11 o'clock or it's too long or too personal. You can tech actually email Barry Armstrong at WR KU dot com when we take a look at some of those emails when we come back okay.