US Politics Feature: Explaining the Next Fiscal Crisis...Coming To You in 6 Weeks

(Cartoon: Monte Wolverton)

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After the recent drama and supposed escape from the "fiscal cliff", two developing stories in Washington will affect the global economy. The first is whether Congress can pass measures to address three additional fiscal dilemmas, all of which need to be resolved by the end of March. The second, a vital sub-plot in the larger play, is the intentions and aims of the Republican-controlled House of Representatives.

Near the end of February, the US Treasury will have exhausted all contingency measures to avoid breaching the debt limit, currently $16.4 trillion, and the US will immediately default on 40% of its fiscal obligations. America could still afford to pay foreign debts through its continual receipts of tax revenues. It could even fund Social Security and other low-income payment programs...provided it is willing to make cuts such as the closure of the FBI.

As the talks on raising the debt limit reach the status of Urgent, Congress will also have to address the "sequestration cuts", delayed for two months by the fiscal cliff deal.

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US Elections Analysis: The "Fiscal Cliff" and the Races for the New Congress

A Democratic ad criticises Minnesota Republican Chip Cravaack for his opposition to President Obama's health care plan

See also US Elections Video: Obama or Romney? And Does It Make Any Difference? --- "Seminar" at the University of Birmingham

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The first two debates between President Obama and Mitt Romney have been political theatre at its most dramatic –-- whether a comedy or a tragedy depends on the audience you ask --- but their dominance of the headline has obscured an answer to the most important question of this election year.

Will the next p#President, whoever he is, be able to work with the newly-elected Congress and find a legislative solution to the problems he will face immediately upon taking office?

The “fiscal cliff”, and America's headlong rush over it, approaches; however, amidst the daily controversies over funding for Big Bird and Mitt Romney's “binders full of women”, neither candidate has addressed how he will work with a partisan Congress to avoid the scheduled tax rises and spending cuts that will not only plunge the American economy into another recession but exacerbate the economic slowdown around the globe.

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Bahrain Feature: Problems for the Financial Sector? (French)

Bahraini financial firms face a tough task raising funding in 2012, as political tensions from last year's Arab Spring unrest fester and real estate investments show no sign of paying off.

Analysts say one option for banks in the tiny island kingdom is to look to neighbour Saudi Arabia, but getting a hearing is often a challenge because lenders there have enough local business on their hands.

The violent protests against Bahrain's rulers rattled Western banks operating there and equally importantly dealt a body blow to real estate prices, leading to impairments at Islamic banks in particular.

"Bahrain is a ghost town right now," said one Dubai-based banker who makes frequent trips to the island, speaking on condition on anonymity.

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