Congressional Record, Volume 156 Issue 118 (Thursday, August 5, 2010)

[Congressional Record Volume 156, Number 118 (Thursday, August 5, 2010)]
[Senate]
[Pages S6845-S6848]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

SMALL BUSINESS LENDING FUND ACT

Ms. LANDRIEU. Mr. President, I rise to speak on an issue that is
still pending before this body. Unfortunately, it looks as though we
will not be able to wrap this up in the next few hours. It looks
encouraging that we may be able to take it up immediately when we
return in September.
Before I speak about that, I compliment Senators Lincoln, Casey,
Harkin, and others who have come to the floor in the last few hours but
have been working for months, if not years, on the child nutrition
bill. It is quite extraordinary that this Chamber at this late hour,
because of the work of Senators Lincoln, Harkin, Casey, and others, has
decided by unanimous consent to pass a significant and major piece of
legislation the Senator from Pennsylvania beautifully described. I
compliment all of them for their work.
I wish we had been able to do the same thing for the small business
bill we have been fighting for, the Small Business Job Creation Act of
2010. We can't seem to get to a point where we can get unanimous
consent. So we will have to fight this out a step at a time. We had
some significant votes this last week by including a Republican
amendment, including in the small business bill a $30 billion lending
program. We have potentially other aspects to strengthen it. But the
bill is in extremely good shape.
I wish to put this up for a visual. I know people will find it hard
to believe we could have literally over 100 organizations,
extraordinarily strong and powerful bipartisan, conservative, moderate
and liberal organizations, supporting small business. It may seem
surprising that with all this support, we couldn't pass the bill before
we leave. I wish to call out again just a few: The American Hotel and
Lodging Association, the American International Automobile Dealers
Association, the Associated Builders and Contractors of California, the
California Bankers Association, Engineering Contractors, Hispanic
Bankers of Texas, National Association of Self-Employed, National
Restaurant Association, Recreation Vehicle Industry Association, the
U.S. Hispanic Chamber of Commerce. I just listed one-half dozen or a
dozen. Members can see we have hundreds of extraordinary organizations
that have stepped up to say what I have been saying, what the Senator
from Washington, Ms. Cantwell, has been saying, what the senior Senator
from Washington, Senator Murray, and Senators Boxer and Merkley are
saying: We are not going to end this recession until we find a way to
get capital and cash in the hands of small business. That will lead the
way out of this recession. It is not going to be led by Wall Street. It
is going to be led by Main Street.
I would like to put up our Main Street sign. Main Street is going to
lead the way. There was a beautiful article written by Harold Meyerson.
It was dated August 4 in the Washington Post. The article is entitled
``Jobs in the Cards?'' It reads, in part:

He is right. If we don't get small business started up again and
focus on them and help them, this recession will never come to an end.
Maybe that is what some people on the other side of the aisle want.
Maybe they put politics before progress. But this is dangerous, it is
wrong, and it is painful. We have to figure out a way.
I ask unanimous consent to have the article from which I just quoted
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Washington Post, Aug. 4, 2010.]

Jobs in the Cards?

(By Harold Meyerson)

All things considered, American big business is doing just
fine, thank you. Profits, productivity and exports are up.
New hires, rehires and wage increases, as I have written, are
nowhere to be seen. They're no longer part of the U.S.
corporate business plan, in which higher profits are premised
on having fewer employees. Sell abroad, cut costs at home--
the global marketplace that American business has created is
paying off big-time.
Not so for American small business, which inhabits those
less rarefied realms of the economy in which depressed
domestic demand and bottled-up credit remain a mortal threat.
The great private-sector trickle-down machine has largely
stopped working for small businesses. A May report from the
Congressional Oversight Panel on the TARP (chaired by
consumer advocate Elizabeth Warren) found that bank lending
to small businesses has plummeted, particularly among the big
banks that taxpayers helped bail out. The Wall Street banks'
lending portfolio declined 4 percent between 2008 and 2009,
the report concludes, but their lending to small business
declined 9 percent. Smaller banks--``strained by their
exposure to commercial real estate and other liabilities''--
have similarly reduced their lending.
As the corporate sector hums along without hiring, hope for
a recovery increasingly depends on boosting consumer demand
through public investment and jump-starting small-business
expansion through tax

[[Page S6846]]

credits and a reopened lending window. For the past half-
year, the administration and congressional Democrats have
been unable to overcome Republican senators' resistance to
increasing public investment. Senate Republicans have also
blocked their efforts to cut taxes and increase loans to
small business--even though such policies have long been GOP
priorities and small business has long been considered a key
Republican constituency.
Late last week, the Senate's 41 Republicans united to block
a bill that would have temporarily eliminated the capital
gains tax on small businesses that issue stock, increased the
tax deduction for start-ups, increased their depreciation
allowance, and established a $30 billion fund, offset by
budget cuts elsewhere, dedicated to small-business lending by
small banks. The bill was backed by generally pro-Republican
business lobbies; to add a further note of absurdity to the
GOP opposition, some of the bill was written by Republican
senators. The Republicans' ostensible reason for opposing
these motherhood-and-apple-pie provisions was that Democrats
were limiting the number of amendments they could bring up.
Their actual reason was to deny Democrats a legislative
victory on the kind of stimulus package that still commands
substantial public support and, just possibly, to forestall
any economic uptick before November.
Republicans are certainly right that Democrats, for
political and economic reasons, are focusing more on helping
small business recover. A June survey from the firm of
Democratic pollster Stan Greenberg argued that ``Democrats
can win the economic debate by making small business the
center of their agenda.''
But there's another way Democrats can assist small business
besides continuing to press for their small-business
stimulus. The president can choose a champion of small
business to direct the newly created Consumer Financial
Protection Agency. He can nominate Elizabeth Warren.
To date, we have heard chiefly that the big banks look
askance, and then some, at the prospect of Warren heading the
agency. She is among the nation's leading critics of the
credit card rip-offs that big banks have long inflicted on
cardholders as a matter of policy. Precisely for this reason,
she stands out as a small-business hero, because in the
absence of bank lending, small businesses increasingly are
turning to credit cards as a source of funding or operating
revenue. Fully 83 percent of small businesses, the Federal
Reserve reported in May, use credit cards. Three-quarters of
small businesses that apply for business credit cards secure
them, according to a 2010 survey from the National Federation
of Independent Business, while just 39 percent of bank-loan
applicants obtain loans. A 2009 study from the National Small
Business Association concluded that 59 percent of small
businesses used cards to meet their capital needs.
Bank loans to small businesses have been increasingly
supplanted by bank credit cards. And no one is more expert
that Warren on how banks exploit their cardholders. She is,
by common consent, one of the leading academic authorities on
the topic as well as a passionate advocate for getting
cardholders a fairer shake.
Enemy of Wall Street? When necessary, absolutely. Friend of
Main Street? None better. If he nominates Warren and can get
her confirmed, President Obama will have found one more way
to aid American small business.

Ms. LANDRIEU. The bill we have put forward, supported by hundreds of
organizations, has a way forward.
I wish to also include for the Record another editorial by Mr.
Richard Neiman of the Wall Street Journal. I submit it again because it
is so good. The Journal mistakenly editorialized against this bill, but
there are people sending letters to the Wall Street Journal to take a
second look. Richard Neiman is one of them.
He writes:

Unlike TARP, the SBLF would incentivize banks to loan by
lowering the dividend rate at which banks must repay the
government if the banks meet lending performance metrics.
Further, the SBLF removes the TARP stigma that discouraged
small banks from participating in government programs that
support lending. It is these banks that are the primary
source of credit for small businesses which lack the same
access to capital markets as large companies.
The SBLF is not a sequel to TARP, but it can be a segue
toward a stronger future for our nation's small businesses
and their employees.

I ask unanimous consent to have this article printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Wall Street Journal, Aug. 5, 2010]

Small Business Lending Fund Will Help Recovery, Jobs

(By Richard Neiman)

Your editorial, ``Son of TARP'' (July 30) is unfortunately
titled, and underestimates the potential of the proposed
Small Business Lending Fund (SBLF).
Small business growth is the only way out of this
recession. Yet our entrepreneurs are not being provided the
credit they need, as the TARP Congressional Oversight Panel
often hears from small business owners. Our recent report on
the issue demonstrates that, during the crisis, lending to
small businesses fell by 9 percent at our Nation's largest
banks, and the bankruptcy of nonbank business lenders such as
the CIT Group has further limited credit options.
The financial crisis and recession have created the lack of
demand for credit that your editorial points out, but it is
as important to point out the lack of supply. Small banks are
reluctant to take on more risk when small businesses'
customer base is weak. Breaking this stalemate requires old-
fashioned underwriting to identify the good deals which are
still waiting to be made.
The SBLF is intended to provide public-sector support to
bring credit- and lending-worthy parties back to the table.
Unlike TARP, the SBLF would incentivize banks to lend by
lowering the dividend rate at which banks must repay the
government if the banks meet lending performance metrics.
Further, the SBLF removes the TARP stigma that discouraged
small banks from participating in government programs that
support lending. It is these banks that are the primary
source of credit for small businesses which lack the same
access to capital markets as large companies.
The SBLF is not a sequel to TARP, but it can be a segue
toward a stronger future for our nation's small businesses
and their employees.

Ms. LANDRIEU. I also ask unanimous consent to have printed in the
Record another very nice article that appeared in the Wall Street
Journal by Ruth Simon, one of their reporters, who outlines a
particular story about Pinnacle Bank, which is basically in support of
our bill. This is a story about a bank in Florida. It will be in the
Record for Members to read.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Wall Street Journal, Aug. 5, 2010]

SBA Program Proves a Hit, But Now It Is in Limbo

(By Ruth Simon)

Pinnacle Bank made just two loans through the Small
Business Administration in 2007 and 2008. So far this year,
the Orange City, Fla., bank's total is nine, to borrowers
from an auto dealer to a computer-equipment wholesaler to a
bakery.
``The SBA program is the only way we can continue to lend
right now,'' says David Bridgeman, president of Pinnacle,
which has two branches and assets of $213 million, including
about 600 loans. For many of the $3.4 million in loans
Pinnacle made through the SBA in 2010, the bank has to set
aside capital against only the 10% slice that isn't
guaranteed by the U.S. government.
Across the nation, many banks have turned to the SBA's so-
called 7(a) program to help unfreeze credit. Nearly 3,000
lenders have made 7(a) loans in the current fiscal year, up
21% from 2008.
The 7(a) program, the SBA's largest loan program, is hardly
a cure for the credit shortage affecting many borrowers. The
agency is involved in less than 10% of all small-business
loans, and some banks won't participate because of red tape.
Lenders must follow the SBA's rules when making 7(a) loans,
which can be used for working capital, fixed assets and other
business expenses. The term of the loan can be as long as 25
years.
Last year, Congress temporarily sweetened the 7(a) program
by increasing the SBA guarantee to 90% of any given loan from
as little as 75% previously. Lawmakers waived fees costing
borrowers as much as 3.5% of the loan amount, as well as
costs charged in a separate SBA program providing structured
financing for fixed assets.
But the sweetened program is now in limbo, drawing
complaints from borrowers and lenders, as lawmakers haggle
over broader small-business legislation.
Since the SBA program was sweetened, more than 1,300
lenders that hadn't made an SBA loan since at least 2007 have
barreled in, while existing participants like Pinnacle have
been pushing more borrowers through the agency's pipeline to
take advantage of better terms.
About $16.2 billion in 7(a) loans have been made under the
more-attractive terms. By May, the program's loan volume had
returned to before-the-credit-crunch levels.
``The extra 15% of guarantee helped us stretch a little
more,'' says Vito Pantilione, president of Parke Bank, a unit
of Parke Bancorp Inc. The five-branch Sewell, N.J., bank
recently used the program to make loans to two printing
companies looking to adapt to electronic publishing.
Since hiring a local banker with expertise in SBA loans in
August 2009, Bank of Holland, a Holland, Mich., unit of Lake
Michigan Financial Corp., has made more than two dozen loans
through the federal agency.
``We do not have capital issues, but it's very difficult to
find businesses that . . . have not lost money and suffered
some weakening of their balance sheet,'' says Garth Deur,
Bank of Holland's president.
Sweetened government backing makes it easier for banks to
stomach the risks of lending to local businesses that hit
bumps when the economy slowed or to finance entrepreneurs
with a solid business plan but little track record, Mr. Deur
says.
The SBA has repurchased 0.2% of the loans made with the
higher guarantees. That rate,

[[Page S6847]]

which reflects defaults, is in line with the program's
historical levels.
Congress extended the higher guarantees three times, but
the latest round of funding was exhausted in May, causing a
decline in SBA loan volume. A provision included in the
small-business job-creation bill now before the Senate would
resuscitate the 90% guarantee through Dec. 31 and allow the
SBA to increase the maximum loan amount to $5 million from $2
million. The bill already has passed the House, but the
Senate is bogged down by disputes over the broader bill.
``On the financing side we're stuck'' until Congress acts,
says Mark DeHaan, who is hoping to get a 7(a) loan for $1.6
million from the Bank of Holland to pay construction and
start-up costs for an educational child-care center in Grand
Rapids, Mich.
Pinnacle largely avoided the worst sins committed by banks
throughout in Florida, such as lending on raw land being
purchased for housing developments. Still, Pinnacle had a net
loss of $1.8 million in 2009 as falling real-estate values
and rising unemployment forced the bank to boost loan-loss
reserves. Pinnacle has shed about a third of its troubled
loans but is looking for additional capital.
Mr. Bridgeman, who started his banking career 28 years ago
as a teller in Kentucky and took over as Pinnacle's president
in 2003, says the bank decided to rev up its SBA lending
after a tough regulatory exam forced it to halt most
traditional lending in order to conserve capital.
Pinnacle made 11 SBA loans for $3 million in 2009. The bank
has generated fee income by selling some of its SBA loans on
the secondary market.
Car dealer J. Brendan Hurley was rejected by four other
banks before Pinnacle won approval in March for a $560,000
loan through the SBA to help him add Dodge cars to his
Chrysler franchise in DeLand, Fla. Since getting the loan,
Mr. Hurley has hired six new employees, and service volume
has doubled, he says.
``The fact that I had a commitment from Pinnacle sealed the
deal to get the Dodge franchise,'' he adds. Mr. Hurley is
seeking a second SBA loan from Pinnacle that would allow him
to build a new facility designed to meet Chrysler Group LLC's
requirements.

Ms. LANDRIEU. Finally, I have another article written by Barbra
Barrett of the Miami Herald. It reads:

The U.S. Senate might leave town this week without
finishing up what Democrats had hoped would be a significant
political achievement . . .
On its face, the legislation would pour billions into a
slate of programs to help small business obtain federal
microloans, government contracts and export assistance.

I ask unanimous consent to have this article printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the Miami Herald, Aug. 5, 2010]

Small Business Bill Appears to be Stuck in Senate

(By Barbra Barrett)

Washington.--The U.S. Senate might leave town this week
without finishing up what Democrats had hoped would be a
significant political achievement before the August recess:
passing a multibillion-dollar swath of programs to help
struggling small businesses.
On its face, the legislation would pour billions into a
slate of programs to help small business obtain federal
microloans, government contracts and export assistance. But
the bill also is part of the political wrangling that's going
on in Washington ahead of fall's midterm elections.
Republican senators unanimously blocked the legislation a
week ago, preventing an up-or-down vote that could have given
the Democratic majority a political victory going into the
August recess. In response, President Barack Obama gave a
speech Monday urging the Senate to pass the bill.
Senate Majority Leader Harry Reid has vowed to try again
this week, but it's uncertain whether the vote will happen.
Observers say the legislation could have sweeping effects
in North Carolina.
More than 85 percent of companies in the state have fewer
than 100 employees, said Scott Daugherty, N.C. small-business
commissioner and executive director of the Small Business and
Technology Center.
``We are substantially a state of small companies,'' he
said.
The Economic Policy Institute recently calculated that
there are nearly five job seekers for every open job. The
unemployment rate in North Carolina remains above 10 percent.
Failure to pass the bill would bring Democrats such as U.S.
Sen. Kay Hagan, who supports the act, back to their states
this weekend with one fewer success to show from their party.
And it would give Republican U.S. Sen. Richard Burr, who is
running for reelection, another point of criticism against
the Democratic majority and the Obama administration.
Burr declined to be interviewed for this story, but in a
prepared statement, his spokesman, David Ward, turned blame
for the struggle of small businesses on the Democrats.
``What (small businesses) really need is for Congress and
the administration to stop overburdening them with federal
mandates, excessive bureaucratic red tape, tax increases and
high energy costs,'' Ward said.
Carter Wrenn, a Republican political consultant in Raleigh,
said Burr should easily be able to defend his ``no'' vote to
his Tar Heel constituents.
``He can explain that all the job programs haven't worked,
and he can explain that this is just one more,'' Wrenn said.
He said the legislation is a spending bill dressed up as a
bailout.
``The truth is there's a trillion dollars now in the
banking industry now that's loanable that ain't being
loaned,'' Wrenn said. ``The real problem is everybody's so
uncertain about the future that no one wants to loan money.''
Burr's no vote last week on the procedural question on the
bill drew immediate criticism from the Democratic Senatorial
Campaign Committee, which supports his challenger, Elaine
Marshall, in the upcoming Senate race.
``Again and again, Burr shows he's more loyal to Republican
leaders in Washington than to North Carolina small
businesses,'' Deirdre Murphy, DSCC spokeswoman, said in a
statement.
And David Axelrod, Obama's senior adviser, said Tuesday
that GOP senators can expect to hear questions from
constituents about why the bill didn't move forward.
``Make no mistake: It will be an issue if politics intrudes
on what we should be doing,'' Axelrod said. ``I think if I
was in the position of Senator Burr, I'd rather go home and
say I did something constructive for the small businesses of
my state.''
Much of the bill includes bipartisan proposals. Among them
are provisions that would increase amounts of Small Business
Administration loans, leverage $1 billion in export capital,
offer tax breaks for investments and startup costs, and give
temporary funding for rural exports.
At the bill's center is a $30 billion program for community
banks to extend loans to small businesses. Burr's opposition
puts him at odds with the N.C. Bankers Association, which
supports the legislation.
``We think it is imperative,'' said Thad Woodard, the
group's president. ``Our folks have emphasized this as a
lubricant for small-business lending.''

Ms. LANDRIEU. She is right. We have worked across the aisle as much
as we could. But for some inexplicable reason, we can't seem to get
unanimous consent to move such an important and extraordinary bill
forward.
The small business bill, the Main Street bill, has $12 billion in tax
cuts for small business. Democrats are for tax cuts for small
businesses that will help them to create the jobs we need. It is very
targeted, very strategic, very thoughtful, very careful, and focused on
reducing the deficit as well. All I hear from the other side is: Extend
tax cuts permanently to everybody, to heck with the deficit. Who cares
if we get to a balanced budget. We want to go back to the way things
were.
Democrats don't want to go back to the way things were. We want to go
forward in a new way--with sound fiscal policy, balanced budgets,
focused on Main Street, focused on small business. That is what
Democrats and a handful of our Republican colleagues want--
unfortunately, not enough to get the job done. I do thank the great
coalition of Senators who have helped.
I also wish to submit an article by Jeff Cox, of CNBC, ``Four Things
That Could Help Companies Start Hiring Again.'' He talks about positive
momentum, loans to small business, and foreign demand.
One of the things he mentions is:

American consumers--even those with jobs and savings--are
focused on paying down debt and not greasing the economic
skids.
As such, job markets may have to rely on low export prices
and consumers in robust developing economies to help generate
demand.

He is correct. We are going to have to rely on markets outside the
United States to sell our goods there and pull ourselves out of this
recession. Do Members think small businesses get the least amount of
help with exports? No, they don't. In our bill, we have extra support
for the Department of Commerce and the Small Business Administration to
help small businesses in Louisiana, in West Virginia, and around the
world to reach out from our main streets to main streets in foreign
countries to try to sell goods. It is going to be a Main Street-to-Main
Street partnership around the world. With the Internet, this is
possible. Before the Internet, it would be laughable to even suggest
such a thing.
But with the Internet, with the global air transportation, with
expanded trucking and train transportation, we literally can move goods
from Main Street right here. I would not be surprised if Georgetown
Cupcake, which I

[[Page S6848]]

spoke about yesterday, ships their cupcakes to India or China because
they are really good cupcakes and maybe they do not make them as well
there. That may be a little exaggeration, but I think it makes the
point that if we can help our small businesses, there is no telling
where these cupcakes--and in my State, it would be King Cakes--can go
to support businesses on Main Street.
So I ask unanimous consent that this article be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From CNBC, August 5, 2010]

Four Things That Could Help Companies Start Hiring Again

(By Jeff Cox)

Job creation in 2010 has been slow but unsure, coming in a
weak trickle that has left investors unsatisfied and asking
what it will take to actually get employment moving in a
meaningful way.
Thursday's weekly jobless claims report only reinforced
what Wall Street already knew--that despite halting signs of
improvement, 479,000 new filings for unemployment insurance
was hardly indicative of a robust recovery.
As such, the stock market sold off and strategists and
analysts were left to ponder how long it will take for things
to turn accelerate off the weak growth that has taken place
this year.
``The question is when is that going to pick up enough to
meaningfully lower the unemployment rate and spark the
virtuous cycle of upward momentum, to get employment, wages
and aggregate demand higher,'' says Tom Higgins, chief
economist at Payden & Rygel in Los Angeles. ``That takes
time. If you look back at the last two cycles, employment
recoveries have been slow.''
Economists and employment experts say four things will have
to happen to get jobs moving:

1. Positive Momentum

Slowdowns are as much psychological phenomena as they are
economic, with confidence the key as much as any other
factor.
With the news mostly bad about the economy, companies are
afraid to hire until a more positive tone comes about.
``Hiring has tended to be slow the last two cycles,''
Higgins says. ``The trajectory coming out of this recession
is even shallower. That likely means the trajectory of hiring
is much shallower.''
One of the main problems is an economic Catch-22: Companies
won't hire until they see more strength from consumers, and
consumer spending can't get stronger if people don't have
jobs. That means corporate America will have to rely on
``small positives'' to keep building until confidence is
established, says Kurt Karl, chief US economist at Swiss Re
in New York.
``Businesses like to look at year-over-year growth in
sales, and that just isn't that strong yet. But it should be
better and better as we get deeper into the recovery,'' Karl
says. ``With these unemployment recoveries, you either get
one extreme or the other. You're either booming, or it's
crash and burn. But we're muddling in between.''

2. Loans to Small Business

While the biggest companies sit on the lion's share of the
$1.8 trillion in cash on corporate balance sheets, small
businesses are groping for funds.
That's not been made any easier by banks that have been
loathe to lend as they meet capital requirements laid out in
the new financial reform legislation. Without that access to
capital, small businesses will be unlikely to add new
employees.
``We need small businesses, which generate 60 percent of
the jobs, to get more access to lending, to capital, so
people can take risks,'' says John Challenger, CEO at job
outplacement firm Challenger, Gary & Christmas.
``Entrepreneurs rely on savings, but those savings have been
depleted.''
The ability to invest in companies and develop products
will help spur the demand needed to create jobs, Challenger
says.
Small businesses in the recessionary environment ``don't
have access to the savings they might normally have. On the
front end, with small businesses not there to pick up the
slack, that's a very important hindrance to getting this
economic engine going,'' he says.

3. Foreign Demand

American consumers--even those with jobs and savings--are
focused on paying down debt and not greasing the economic
skids.
As such, the jobs market may have to rely on low export
prices and consumers in robust developing economies to help
generate demand.
``One thing we do know is exports are strong. Overseas
economies are doing quite well,'' says Brian Gendreau, market
strategist with Financial Network Investment, based in El
Segundo, Calif. ``For large-cap stocks, more and more
revenues are going to come from abroad. That's where we're
going to get the growth.''
Of 250 companies in the Standard & Poor's 500, 46.6 percent
of all sales came outside the US in 2009, actually a slight
decrease from the previous year, according to S&P.
But Gendreau sees capital expenditures increasing in a way
that seems to anticipate more spending coming soon.
``Companies seem to be spending a lot of money in
anticipation of demand that doesn't look obvious it will show
up,'' he says.

4. Capital Spending

Indeed, one of the main precursors seen for employment
growth is capital spending by companies on plants and
equipment.
In fact, Deutsche Bank analysts say cap-ex spending this
year is robust--growing 20 percent over the previous
quarter--and the trend traditionally leads the jobs market by
a full quarter. The movement in cap-ex, says Deutsche
economist Joseph A. LaVorgna, suggest a strong jobs-creation
move in the third quarter.
``Taken literally (the comparison between cap-ex and jobs)
implies we will see several million jobs created over the
next few quarters,'' LaVorgna said in a note to clients.
``While we are not so bold to forecast such sizeable job
gains, we wonder whether there is some upside risk to our
slightly above consensus forecast for July private
payrolls.''
Deutsche is projecting Friday's nonfarm payrolls to show
job gains of 110,000 in July, compared to the consensus of
90,000.
That would be some indication that Wall Street is putting
cash to work.
``We all know companies are sitting on mounds and mounds of
cash, possibly record amounts of cash,'' Gendreau says. ``The
question is, when are they going to start putting it to
work?''

____________________