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It is easy to be discouraged when we look at the US debt level, partisan gridlock, and what many say is the ‘new reality’ of tepid economic conditions.  We may wonder if the system can change and if improvement is possible.  The answer is yes, it can happen. 

All of us are capable of putting off the inevitable and procrastinating as long as possible.  We make promises to ourselves that are based on good motives, but for some reason we don’t carry through.  Nations can be the same way.  The US will be facing a financial cliff someday (no, not 2013), but our government leaders and the voters continue to ignore the very real consequences of our burgeoning debt issue and horrifically expensive demographically-driven future medical expenses.  

Business-to-business spending, as measured by Nondefense Capital Goods New Orders (excluding aircraft), is growing at a noticeably slower rate. New Orders on an annual basis are still a healthy 7.1% ahead of this time last year, but the rate of rise is diminishing. This may be why some people are mistakenly using the R-word (recession) while the US is still growing.

Spain sold 3.1 billion euros of debt today.  The interest rate was the second highest in over 10 years at 6.65%, which makes it expensive.  The pretty part was that the Spain Treasury sold more than their goal, showing that there is a market for their debt.  The market was emboldened by the bold declarations of ECB President Mario Draghi (the Dr. Bernanke of Europe).  It will be weeks before the details of Pres.

You may not know his name, but Sandy Weill is the man who started today’s megabank trend when back in 1998 he merged Citigroup and Travelers Group.  The importance there is that it created the world’s largest bank and required Congress to repeal the Glass-Steagall Act.  Mr. Weill now says that America’s biggest banks should be broken up.  He is right - the repeal of Glass-Steagall was an expensive mistake. 

The business community seems to be feeling uncertain about the next few months.  Many of you are no doubt having a good year with sales tracking above year-ago levels, and yet there is a nagging doubt about the rest of 2012.  The media does not help as the drumbeat regarding Europe and a faltering US economy never seems to stop.  The reality is that the US economy, as measured by US Industrial Production, will be move onward and upward in the second half of 2012. 

Washington’s bid to boost the economy through tax cuts to small- and medium- sized businesses is a bust. 

The European Central Bank (ECB) recently cut to zero the interest it will pay to banks on what amounts to excess reserves held overnight by the ECB.  European banks have been holding “excess liquidity” at the ECB.  US banks are doing the same at the Federal Reserve.  Excess reserves amounts to the cash banks have above and beyond what they are legally required to “hold” with the Central Bank/Federal Reserve.  Paying interest to the member banks on this excess liquidity gives them an incentive to not lend money.  This

It is reported that 31% of Americans see the economic situation as good, meaning 69% see it as bad or at least uncertain.  My first thought was that 69% must be watching “Family Guy,” and they probably think it is a documentary; thus, they are to be excused for being unaware of reality.  Then I realized that it is hard to blame the 69% because of the constant bombardment of bad news in the media (both conservative and liberal).

Political/Economic/Emotional stability encourages investment and the growth of business, which in turn provides jobs and prosperity for people.  The Eurozone, the 17-nation currency bloc, is moving closer to providing that stability via a significant improvement in the Eurozone banking system.  The EU Commission has taken definitive steps toward the establishment of a pan-European bank supervisor who will control the 25 largest banks in Europe.  The supervisor will also have authority over the individual national bank regulators who have direct authority over the smaller bank