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While the Fed and Wall Street keep
pushing the storyline that ultra-low yields, endless credit, and other
central bank magic can do more than just pump up
(already overinflated) share prices, decimate the
economic wellbeing of people who are trying to survive on
their savings, and further
undermine the structural underpinnings of the financial system, it
would appear that those who operate on Main Street's front lines see things
differently [italics mine]:
"Economy
Still Stuck, CFOs Say" (CFO.com)
In latest
Duke/CFO Global Business Outlook Survey, finance chiefs say QE3 will not be
the answer to their economic woes.
Although
finance chiefs are becoming more pessimistic about the U.S. economy,
quantitative easing is not going to perk them up, according to the latest Duke University/CFO magazine
Global Business Outlook Survey, now in its
66th consecutive quarter. In the global survey of more than 1,400 finance
executives, U.S. CFOs rated their optimism levels at 52 out of 100, down from
56 last quarter. Their European peers are also less
optimistic than they were three months ago, while optimism in Asia has
improved slightly.
When asked
whether a 1% decrease in interest rates would spur them to initiate or expand
investment, 91% of responding CFOs said they would not be likely to change
their investment plans, even with such a dramatic — and unlikely
— rate move.
Eighty-four
percent of CFOs would not initiate or expand investment plans even with a 2%
rate decrease, indicating that whatever the Federal Reserve announces
following its meetings this week, further quantitative easing does not appear
to be a solution to the corporate sector’s sluggish spending and the
overall tepid recovery. “I think the Fed has pretty
much pulled all the levers that it can,” says Greg Bubp,
CFO at Eclipse, a manufacturer of industrial heating products based in
Rockford, Illinois.
A cynic might
wonder why Bernanke & Co. continue on the same path despite these and
other reports that suggest they are pushing on a string. Maybe it's because
they care more about Wall Street than Main Street?
Michael J. Panzner
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