Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

USA : The fiscal cliff

share with twitter share with LinkedIn share with facebook
share via e-mail
0
10/09/2012 | 01:40pm CEST

Major European events this summer have demonstrated the willingness of the Old Continent to end the debt crisis. Investors appreciated the measures taken, but now they are worried about the American situation.


The lack of a majority in Congress requires compromise between Republicans and Democrats prevented a true fiscal policy. This is very problematic because many tax measures expire on 31 December 2012. These tax cuts have a cost between 1100 and 1400 billion dollars each year and the debt to GDP ratio has doubled since 2007. The first deadline would have a value of $ 550 billion, which represents 3.5% of U.S. GDP.


In addition, the U.S. debt ceiling (USD 16 934 billion) will be reached in three months and an agreement should be signed before this date otherwise a new lock as the summer 2011 will occur.


It seems unthinkable that the U.S. government allows such a deficit and let get support measures expire what would lead ultimately the U.S. economy into recession (estimated at -0.3% according to the Congressional Budget Office against a projected growth of 2.3% in 2012). This situation would be totally contradictory while the Fed policy which has launched its third quantitative easing aimed at supporting growth and lower unemployment. Meanwhile investors remain on alert.


 

US GDP vs  US federal budget deficit (Bloomberg)


 
 



© 4-traders.com 2012
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
12:28p VICTORY VENTURES CANA : to Acquire 100% Stake in Four Contiguous Metallic and Industrial Minerals Exploration Permits in Canada
12:28p WAM CAPITAL : Acquires Chelsea Management
12:28p MOLY MINES : to Acquire 100% Stake in Gulf Alumina
12:28p AEGON : TAS Insurance to Acquire 100% Shares in Aegon Life Ukraine from Aegon
12:27p YOKOTA MANUFACTURING : Cancellation - Purge & Trap Gas Chromatography Mass Spectrometry
12:27p NETS TECH : Modification/Amendment - NETCENTS-2 VENDORS ONLY - MarkLogic Software
12:27p CISCO : Award Notice - Cisco Unified Call Manager (CUCM) system CISCO/2901-2951/Unified Border Element Enterprise License 636-16-2-6007-0021
12:27p WESTERN PACIFIC TRUST : Modification/Amendment - Annual Bulk Petroleum Purchase for Western Pacific and Middle East Regions
12:27p UNITEDHEALTH : New Report Highlights New Level of Detail in Wide Variations of Women and Children's Health Across the Country
12:27p REDT ENERGY : Interim Loss Widens As It Works Towards Commercialisation
Latest news
Advertisement
Hot News 
0.55%SABMILLER : Shareholders Approve AB InBev Merger
3.10%PHOENIX : to Buy Abbey Life From Deutsche Bank Unit for GBP935 Million
-2.41%German nuclear commission warns of delay to waste storage deal
3.69%TATA STEEL : Distinctive Dalzell reopens in effort to salvage steel jobs
1.11%Canada Gives Conditional Approval to Petronas's LNG Terminal
Most Read News
05:52a ROYAL BANK OF SCOTLAND : RBS to pay $1.1 billion to resolve some of its U.S. mortgage claims
05:54a BOEING : British sun worshippers help TUI outshine Thomas Cook
09/27 E D F : EDF board confirms approval for Hinkley Point decision
05:01a STANDARD CHARTERED : StanChart tells authorities about corruption allegations at Indonesian firm
06:00a Monsanto ally Novozymes sees opportunity, risk in Bayer merger
Most recommended articles
09/26Predicting the U.S. Elections With The WMA Trump/Clinton Barometer
06:23a SABMiller shareholders comfortably back AB InBev takeover offer
06:19aDJSABMILLER : Shareholders Approve AB InBev Merger
06:15aDJDeutsche Post Snaps Up UK Mail for $315 Million -- Update
06:14a INTERNATIONAL CONSOLIDATED AIRLNS : British Airways, Qatar Airways sign revenue-sharing deal