Fear Is Ruling Finance

Fear Is Ruling Finance: "How often do you think the executives of Apple ponder reducing their spending on new product development because of the “fiscal cliff?” Or sweat bullets over the growing U.S. national debt? I’d say not often.

So if one of the most successful companies in the U.S. economy goes about its business regardless of outside circumstances, why does it appear so many others do not?

I ask because the latest Duke University/CFO Magazine Global Business Outlook Survey suggests that the drama playing out in Washington, D.C. (and its potential outcomes) has finance chiefs unnerved. Rattled. Really rattled.

If President Obama and Congress don’t reach a deficit-reduction deal and stave off automatic government spending cuts and tax increases, finance chiefs say they are going to take drastic action.

Sixty-seven percent of the 411 U.S. CFOs surveyed said they will reduce capital spending for 2013 and 70% cut hiring if the spending cuts and tax increases are triggered. On the other hand, if Washington adopts a Simpson-Bowles-like plan (pairing two dollars of spending cuts with each dollar of tax increases), just 18% said they would cut capex and 20% pull back on hiring."

'via Blog this'