NYSE, Honeywell CEOs call for action on "fiscal cliff"

Tue Nov 13, 2012 11:52pm EST
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By John McCrank

NEW YORK (Reuters) - U.S. politicians face a stark choice over the next six weeks: come together on a deal to avoid the fiscal cliff, or prepare for a recession as companies seek other places to invest, said the CEOs of NYSE Euronext NYX.N and Honeywell International Inc (HON.N: Quote).

President Barack Obama and congressional Republicans have sounded conciliatory notes on the fiscal cliff since last week's election, but there is still plenty of skepticism in the business community on the chances of a deal, NYSE's Duncan Niederauer and Honeywell's David Cote told Reuters on Tuesday.

In August 2011, Congress did not agree on raising the U.S. debt ceiling until the last possible minute, leading to massive volatility in equity markets and a downgrade of America's debt rating.

"If the debt ceiling was playing with fire, this is nitroglycerine," said Cote. "If they go off the cliff, I think it would spark a recession that's a lot bigger than economists think. Some think it would just be a small fire. I think it could turn into a conflagration."

Since the election, markets have been focused on the fiscal cliff of steep government spending cuts and tax rises due to be implemented under existing law in early 2013 and the uncertainty surrounding it, along with more long-term fears about the size of the U.S. debt, Big Board boss Niederauer said.

"The next 60 days are critical," he said.

He said the market seemed to be pricing in more uncertainty in the months ahead, and that there could be an upside surprise in store if real progress is made in the lame-duck session of Congress, which would set the table for a credible solution to conquering the debt burden in the following months.

CAPITAL IS A COWARD   Continued...

New York Stock Exchange CEO Duncan Niederauer listens during an interview in his office, November 13, 2012. REUTERS/Chip East