Driving the Day: 7/10/12

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by Free Enterprise

Jul 10, 2012

Need to know…

Small Business Confidence Drops by Most in Two Years. Confidence among U.S. small businesses dropped in June to its lowest point since October, driven by concern that sales and the economy will deteriorate. The National Federation of Independent Business’ optimism index fell to 91.4 from 94.4 in May, the biggest monthly decline in two years. Eight of its 10 components contributed to the slump, according to NFIB.

Entrepreneurs Not Impressed by Yesterday’s Tax Announcement. President Obama on Monday called for the Bush-era tax rates to be extended for family incomes below $250,000 annually, touting it as a good move for the small business community. Some small business advocates, however, are crying foul on the move, concerned about entrepreneurs who earn more than $250,000 annually.

Regulators Expected to Vote on New Clearinghouse Rule for Large Financial Firms. In a potential setback for large financial firms, regulators are expected to vote today on a rule requiring banks with more than $10 billion in assets to trade swaps through a central clearinghouse, forcing banks with more than $10 billion to post extra cash to back their swaps deals. The vote will be accompanied by a separate ruling on the precise definition of swaps. That definition will set in motion a series of other rules affecting trillions of dollars of financial contracts.

June Deficit Rises to $60 Billion, Bringing Federal Budget Gap to $905 Billion. The CBO yesterday estimated that the federal budget deficit for the first nine months of fiscal 2012 is $66 billion lower than in 2011. However, the deficit through June is still estimated to be $905 billion. CBO said the main reason for the change is an increase in tax revenue and a shift of $36 billion in July benefit payments because July 1 fell on a Sunday. Corporate tax revenue grew by $42 billion.

EU to Speed Aid for Spanish Banks. European finance ministers agreed early today on the terms of a bailout that will jump-start as much as $123 billion in loans to shore up Spain’s banks. More than $36 billion will be lent by the end of July with the goal of eventually using the euro-area bailout fund to recapitalize banks directly instead of saddling the Spanish government with the debts. As part of the agreement, finance ministers gave Spain a one-year extension, until 2014, to achieve a budget deficit of 3%. There will be specific conditions for specific banks, and the supervision of the financial sector overall will be strengthened.

Worth the read…