Reuters Summit-Stifel CEO says U.S. debt smothers economy

(For other news from the Reuters Wealth Management Summit,
click on
http://www.reuters.com/summit/WealthManagement10?pid=500)

* Stifel CEO sees Obama policies “pummeled” in elections

* Wants to see government spending reduced

* Says weak U.S. economy “keeps me up at night”

By Joseph A. Giannone

NEW YORK, Nov 2 (BestGrowthStock) – Stifel Financial Corp (SF.N: )
Chief Executive Ronald Kruszewski said the U.S. midterm
elections on Tuesday could help financial markets and the U.S.
economy by reining in government spending.

The brokerage and investment banking chief told Reuters he
is confident that Stifel is well positioned to continue its
decade-long ascent, but that mounting U.S. government debt and
an unsteady economy keep him up at night.

“The problem is policies that continue to build government.
Government that is too large can, in and of itself, smother an
economy,” Kruszewski said at the Reuters Wealth Management
Summit in New York.

Government spending that is “nearly 50 percent of GDP is a
government too large,” he said.

Kruszewksi’s comments came as Americans headed to the
polls. Amid high unemployment and economic uncertainty, the
Democrats were expected to lose their majority control of one
or both houses of the U.S. Congress, a setback for President
Barack Obama.

“There’s a lot of policy decisions that have to be made,
starting with that today,” he said. “Obama’s going to get
pummeled today.”

Economic growth is critical for Stifel, a middle-market
investment bank that underwrites stock offerings, arranges
deals, trades securities and helps manage money for
individuals. These businesses have suffered this year and the
St. Louis company’s stock has dropped 18 percent.

The outspoken Kruszewski forecast a Congress where neither
party has control and said this would be a positive outcome for
financial markets.

“There’s going to be gridlock, regardless,” he said. “The
best outcome for the election for us is an outcome which
instills a sense of some urgency in Washington across political
lines.”

In particular, he argues taxes cannot be raised for any
Americans, given the shaky state of the economy. Long-term
entitlement programs, for one thing, cannot be sustained, he
said.

“What keeps me up at night is trying to build the next
generation investment firm into a market that I hope is going
to be robust,” he said.
(For more on the Reuters Wealth Management Summit, see
[ID:nN01148980])
(Reporting by Joseph A. Giannone; editing by John Wallace)

Reuters Summit-Stifel CEO says U.S. debt smothers economy