Mish's Global Economic Trend Analysis |
- Chinese Manufacturing Recession Continues 3rd Straight Month; Romney’s Tough China Talk May Fall Flat in South Carolina
- Le Pen Inches Closer to Bumping Off Sarkozy in First Round of French Elections; Interesting Crossover Vote Opportunity for Hollande Supporters to Dump Sarkozy
- Reason for Watered Down Merkozy Treaty Comes to Light; The Answer is Ireland
- Chickens Come Home to Roost in Croatia
- Money Supply Figures Suggests Italy Headed Into Depression; Non-Performing Spanish Loans Hit 134 Billion Euros, 7.51% of All Loans, Highest in 17 Years; Eurozone Unemployment Charts
Posted: 19 Jan 2012 10:41 PM PST The manufacturing slowdown in China continues for the third consecutive month prompting a Bloomberg headline China Manufacturing Boosts Case for Easing A Chinese purchasing managers' index signaled manufacturing may contract for a third month as a slowing economy boosts the case for the government to further loosen credit controls.Romney's Tough China Talk Please consider Romney's Tough China Talk May Fall Flat in SC While Mitt Romney is a long way from the White House, he already knows what he would do on his first day in the Oval Office: crack down on Chinese "cheating" on trade.I do not know if his Romney's talk will fall flat in South Carolina, but I do know the results will be a disaster if actually implemented. Expect to see a net loss of jobs if Romney is economically-stupid enough to do what he says. If Romney increases tariffs three things will happen, all of them bad.
In essence everyone will pay higher prices for goods and services in hopes of bring back a few hundred manufacturing jobs (while losing tens-of-thousands of jobs in the ensuing economic slowdown). Once again, Ron Paul is the only candidate on the right side of this issue. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 19 Jan 2012 04:32 PM PST Latest polls show French President Sarkozy is losing ground to right-wing anti-euro candidate Marine Le Pen in the first round of the France presidential election. Via Google translate, please consider Le Pen and Bayrou Back François Hollande is still leading the voting intentions of a presidential first round to 28%, unchanged from January 6, according to a poll Ifop-Fiducial. Nicolas Sarkozy, who is still not officially a candidate, lost two points to 24%. Marine Le Pen gains 1 point to 20% and Francois Bayrou 12.5%.Those surveys were conducted January 11 to 13 - when the Standard & Poor's withdrew to France's triple A rating. French far-right threatens to upset Sarkozy's poll hopes Reuters has a slightly different set of numbers but with the same general theme in its report French far-right threatens to upset Sarkozy's poll hopes. French leader Nicolas Sarkozy faces a battle to avoid a shock first round exit in April presidential elections, a poll showed on Thursday, after far-right candidate Marine Le Pen closed to within two points of the incumbent.Crossover Vote Opportunity to Dump Sarkozy Reuters did not give the date of the poll showing Sarkozy's lead over Le Pen shrunk to a mere two points. It did say "Thursday" which I interpret to mean today. Interestingly, anyone who wants Hollande to win can crossover and vote for Le Pen in the first round, just to get Sarkozy off the ballot. Hollande would likely trounce Le Pen. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Reason for Watered Down Merkozy Treaty Comes to Light; The Answer is Ireland Posted: 19 Jan 2012 10:00 AM PST The treaty hammered out by French President Nicolas Sarkozy and German Chancellor Angela has been watered down to complete meaningless with new provisions that would allow countries to "temporarily deviate from the rules in case of an unusual event" or in "periods of severe economic downturn." Bear in mind the there is an existing "Growth and Stability Pact" and among the first violators of that pact was Germany. Eventually every nation in the EMU violated the pact. The point of the Merkozy Treaty was to prevent that from happening again. So why was the treaty watered down? The Answer is Ireland The Financial Times comments on the Irish legal threat to European fiscal treaty The Irish government is likely to face a court challenge if it decides not to hold a referendum on a new European fiscal treaty, potentially plunging the country and Europe into months of legal uncertainty.So behind the scenes Irish conspirators working with the EU have put in language that waters down the treaty hoping to do two things.
Give the Voters a Chance The very last thing the unelected EU officials want is a public vote on anything. They intend come hell or high water to make their socialist nanny-zone state complete with a bureau of nightmarish regulations and agencies governing virtually every aspect of everyone's lives. I praise Sinn Féin's insistence that voters be given a chance. If Ireland is stupid enough to sign this treaty or any modifications to the treaty that would allow majority-rule voting on treaty changes, Ireland can kiss its lower tax corporate rate goodbye. Ireland's lower tax rate irritates the heck out of the EU, yet it is the one thing that prevents a complete collapse of the Irish economy. See the New York Times article In Ireland, Low Corporate Taxes Go Untouched for a discussion. Not only would Ireland lose its lower tax rate, a majority-rule scheme would see the ultimate nanny-zone dream come to fruition: eurobonds (likely packaged as stability bonds). As the economic collapse in Europe strengthens (see Money Supply Figures Suggests Italy Headed Into Depression; Non-Performing Spanish Loans Hit 134 Billion Euros, 7.51% of All Loans, Highest in 17 Years; Eurozone Unemployment Charts for a discussion) there will be still more pressure on countries to "temporarily" agree to all sorts of bad ideas. Rest assured nothing will be temporary. Ireland would be better off outside the EMU, and so would Germany. Moreover, the UK would be better off outside the EU or by some means the EU will cram down the Tobin Tax on financial transactions down London's throat. Let those who want a one-size fits all socialist nanny-zone have it. I assure you, no one will like the result if it happens. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Chickens Come Home to Roost in Croatia Posted: 19 Jan 2012 08:48 AM PST Thanks to massive propaganda, Croatia is foolishly about to join the EU. Chicken farmers (Croatians in general) are about to pay a steep price. The New York Times reports As European Union Beckons, Allure Fades for Wary Croatia "Nothing Good is Coming" Any country that joins the EU now instead of waiting a couple years to see the results of a Eurozone breakup, has mush for brains. To understand why Croatia is likely to plow ahead anyway, please consider the following snip from the above New York Times article. The campaign against European Union membership is being run from a cramped three-room office with no heating. The only visitor before 10 a.m. one recent morning was the landlord asking about the rent. Mr. Bosnjak, the secretary of the Council for Croatia, said the council represented about 25 small groups that together had just $4,000 to $5,000 to spend. (The government said it planned to spend about $800,000 on television spots and a pro-integration information campaign.)Chickens Come Home to Roost Expression The chickens are about to come home to roost. To help those unfamiliar with the expression please consider Chickens Coming Home to Roost As a proverbial expression it's half a millennium old. The older fuller form was curses are like chickens; they always come home to roost, meaning that your offensive words or actions are likely at some point to rebound on you. The idea goes back to Chaucer, though he expressed it rather differently in The Parson's Tale, around 1390, writing that curses are like "a bird that returns again to his own nest".Bureaucrats can and will cram this down the throats of Croatians, because they, not Croatia will benefit. Bigger salaries and benefits await representatives of the European Parliament. There is absolutely no reason for Croatia to join now, especially as the UK ponders an EU exit. Nonetheless, if recent polls are correct, it seems likely. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 19 Jan 2012 12:26 AM PST Ambrose Evans-Pritchard says The euro is pushing Italy into depression Here is the latest money supply chart from the Banca d'Italia. Just look at M3. Horrendous.Non-Performing Spanish Loans Hit 134 Billion Euros, 7.51% of All Loans Italy may be headed for depression, but Greece, Spain, and Portugal are already in depression. The most important country in that sad group is Spain, and the Spanish hit-parade keeps right on rolling. Via Google Translate, please consider Non-Performing Spanish Loans Highest in 17 Years. The NPL ratio of credit granted by banks, savings banks, cooperatives and credit institutions rose in November to 7.51%, the highest percentage for seventeen years due to increased volume of bad loans, which exceeded the 134,000 million euros. [134 billion]Eurozone Unemployment Rates click on chart for sharper image Tax Hikes, Austerity Measures Will Backfire Spain, Greece, Ireland, and Portugal and Italy already have high and rising unemployment rates. France unemployment rate is relatively stable near 10%. In contrast, the unemployment rate in Germany is low and falling. Don't expect that condition to last. A European recession will affect the German export machine and Germany's unemployment more than most suspect. Given various austerity measures in Spain, Portugal, France, and Italy coupled with high and rising taxes, expect eurozone economic conditions to get much worse. The sad thing is, four eurozone countries are already in depression. Changing work rules, pension rates, retirement ages, is badly needed. Raising taxes in a harsh recession is inane. Greece is going to default and Portugal will soon follow. The ECB is attempting to fence off Italy and Spain, but the only way it can do so is by buying massive quantities of Italian and Spanish debt (and doing so puts Germany and France at risk when the setup blows up). How long the ECB can get away with this policy before the bond market focuses on France and Germany remains to be seen, but it sure will not be forever. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
Google Inc., 20 West Kinzie, Chicago IL USA 60610 |