The Missing Piece of the Recovery Puzzle

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Oct. 18 (Bloomberg) -- On today's "Chart Attack," Citigroup's Nathan Sheets and Bloomberg's Adam Johnson look at business confidence. They speak on Bloomberg Television's "Street Smart." (Source: Bloomberg)

It's time for "chart attack." we have got two today.

All this uncertainty taking its toll on businesses.

When you look at the chart of business confidence, what is your interpretation?

It's extraordinarily volatile.

The businesses have been making a lot of money.

Their balance sheets are strong.

Business confidence has failed to convince.

It is up and down.

Those downward spikes tend to correspond with periods of big, outside kinds of shocks like the european crisis emerging in its first downturn, and then fiscal cliff and debt ceilings and this sort of thing.

These are big risks.

It happens very quickly.

It's not as though we are up at one of these peaks and it slowly curves.

It is down.

You see it there.

It makes the business sector very uncomfortable.

In that world, we are unlikely to get the hiring and investing we need to stimulate the economy.

Let's talk about what is creating these nasty spikes down in business confidence.

Where is that coming from?

When i look at the survey, it is telling me again that it is uncertainty about government.

The small firms are asked, what is the biggest impediment, the biggest challenge you face in doing business?

Through the global financial crisis.

They said it is weak demand, poor sales.

Over the last few years, government requirements, red tape and uncertainties.

It gradually climbed up.

In other words, people are less concerned about poor sales than they are about government requirements.

All that concern about the government is increasing.

Concern about sales is falling.

You are seeing the early stages of economic recovery.

The firms are less worried about, is there demand therefore the stuff i'm purchasing, and increasingly worried about, how is the government going to respond?

What will fiscal policy be like?

And so forth.

Ronald reagan, the nine most dangerous words in english language, we are from the government and we are here to help, that is the proof.

So what do we need to get the stronger recovery?

More clarity, more certainty

This text has been automatically generated. It may not be 100% accurate.


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