Mish's Global Economic Trend Analysis |
- Greece Prime Minister Calls "Crisis Meeting" Attacks EU, IMF; Does Germany Want a Deal?
- Cameron Announces "Open Door" Policy Welcoming French Banks if France Start Tobin Tax
- Privatizing of Gains and Socializing of Losses; You Want the News? From Where?
- Euro Area Unemployment Rate Up 0.2 Percentage Points to 10.4%; 8th Consecutive Monthly Rise; Further Deterioration Coming; Country-by-Country Comparison; Expect Germany to Turn for the Worse
- CNBC's Best Alternative Financial Websites; Strategist News' Best Business Blogs 2011; Business Blogs vs. Financial Blogs
- German Retail Sales "Unexpectedly" Fall in December, November Revised Lower; Unexpected by Whom?
Greece Prime Minister Calls "Crisis Meeting" Attacks EU, IMF; Does Germany Want a Deal? Posted: 31 Jan 2012 06:25 PM PST Things are going so well in Greece (just one step away from a deal for weeks on end), that Greek officials attack EU and IMF as debt talks stall Greek officials launched a vociferous behind the scenes attack on European Union and International Monetary Fund negotiators as talks in Athens over the country's mounting debts appeared to stall.Greece Must Pledge Tough Reforms for Debt Swap Deal CNBC reports Greece Must Pledge Tough Reforms for Debt Swap Deal "The debt swap agreement is ready, but it will not be announced before the end of the week and until the government has made certain commitments on reforms, labour issues and the pension system," said the banker, who declined to be named.Greece is Irrelevant Let's dispense with the nonsense first. The world economy will not go into a recession over Greece. However, it is highly likely to go into recession regardless of what Greece does. At this point, Greece is irrelevant. Pertinent Questions
The answer to the first question should be clear. Germany has had enough. I wrote about it on Friday in Prepare for Greece to Leave Eurozone; German Government Calls for Greece to Cede Sovereignty Over Tax and Spending Decisions to Eurozone "Budget Commissioner"; Text of the German Demands . German and IMF demands make meaningless any hint of a deal "soon". Germany has signaled it has had enough and will not throw another 130 billion euros down a rathole. The IMF signaled the same thing but not as emphatically.France Does Want a Deal Complicating matters for Merkel, France does want a deal, and Sarkozy stepped in to support Greece. Is this a game by Germany to extract concessions? I do not think so. This goes far beyond hardball. People do not understand the pressure on Merkel within her own party to end these nonsensical bailouts. Merkel is fighting for her political life. She has no wining plays. In chess terms, she is in a Zugzwang position. Please see Political Zugzwang for a discussion of 4 losing options Merkel faces. I believe she selected the best one from her perspective: Let Greece go, and fight another day. Will Germany be Overridden? The only question of relevance is "Will Germany be Overridden?" If the EMU and EU leaders know what is good for them, they can take some pressure off Germany, by making demands so great that Greece will not accept them. That may or may not be the state of the current game, but it sure is a possibility that explains a lot of things, especially the never-ending announcements that a "deal is at hand" and today's declaration of an emergency meeting by Papademos. Insisting that "all Greek parties commit to measures agreed under the bailout irrespective of who wins the next elections" is an extremely bitter pill, especially given the demands Germany forced on Greece. Does Germany want Greece to comply with those demands? I highly doubt it. Will Greece comply? I do not know. Merkel's actions strongly suggest she is rooting this deal collapses in spite of obstacles by placed by Sarkozy who clearly does want a deal. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Cameron Announces "Open Door" Policy Welcoming French Banks if France Start Tobin Tax Posted: 31 Jan 2012 05:01 PM PST In a move sure to raise the ire of French President Nicolas Sarkozy, British Prime Minister David Cameron says French banks would come to Britain to avoid tax. In comments aimed squarely at Nicolas Sarkozy after the French president reportedly criticised British industry, Cameron said the concept of the tax at a time of economic difficulty was "mad" and "extraordinary".Open Feud This is not a rift, it's an open feud. The only reason it's not bigger is Cameron would rather deal with Sarkozy than Sarkozy's challenger François Hollande. Note that Hollande also wants a financial transaction tax. For further details please see Hollande Vows to Tax the Rich, Take Pay Cut; Sarkozy Promises German-Style Reforms; Merkel Cannot Save Sarkozy, But She Can Hurt Herself Trying Transaction Tax a Bad Idea Rest assured the Tobin Tax is a bad idea. I made the case in Why the Tobin Tax is a Bad Idea; Sweden's Experience With the Tax; Details of Sarkozy's Proposed Tax; Sarkozy Wants to "Provoke a Shock" Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Privatizing of Gains and Socializing of Losses; You Want the News? From Where? Posted: 31 Jan 2012 01:18 PM PST I am a fan of Michael Hudson. I was pleasantly surprised to see him on Capital Accounts with Lauren Lyster a few days ago. Capital Account is produced by RT. That stands for Russia Today. I have numerous emails criticizing me for being on "Russia TV". Let's take a look at what Wikepedia says about RT. RT is the second most-watched foreign news channel in the United States, after BBC News. By March 2010, its videos had garnered more than 83 million views on YouTube and has also set a TV News Channel record after exceeding a view count on YouTube of half a billion.Last week RT interviewed Mohamed A. El-Erian, the CEO of PIMCO. They also interviewed me. More recently they interviewed Michael Hudson. Alternate Sites vs. Mainstream Media Most of the mainstream sites do one of three things (over and over and over).
Reflection on News vs. Opinions Please consider Rupert Murdoch In an era of media empires, Rupert Murdoch, the Australian-born chairman and controlling shareholder of News Corporation, is perhaps the preeminent global media magnate.News vs. Opinion If you watch Fox News, rest assured it has a general overall spin that is approved by Rupert Murdoch. Fox News will toss an occasional bone to Ron Paul, primarily from Judge Napolitano. I suspect it is out of necessity of hoping to appear balanced. Much of what appears on Fox News belongs on "Reality TV" not news stations. Understanding Bias When someone reads my blog they understand what they see is "my opinion". When someone listens to Fox News many do not realize they are not getting facts, they are getting "political opinions" disguised as the news. The Fox news slant is Republican, anti-Paul, pro-warmongering. The Financial news sites are very biased towards "economic cheerleading". Those who want something else turn to blogs like Calculated Risk, the Big Picture, Zero Hedge, Max Keiser etc. Please see CNBC's Best Alternative Financial Websites; Strategist News' Best Business Blogs 2011; Business Blogs vs. Financial Blogs for further discussion of alternative sites. Impossible Not to be Biased It is impossible to not be biased, but as least everyone understands the alternative sites generally offer commentary that comes from the heart, not from robots hired to say and do exactly what the media giants want. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 31 Jan 2012 10:27 AM PST Courtesy of a Barclays Capital email here are the latest unemployment numbers in Europe. Euro Area: +0.2 to 10.4% based on slight upward revisions in November, September, August. This was the 8th consecutive rise.
Quarterly Perspective From a quarterly perspective, the unemployment rate in Germany fell 0.2pp to 5.6% in Q4 (from Q3 - and -1.1pp from a year ago). Following the same trend, in Ireland, it has edged down from 14.5% to 14.4%.Hiring Intentions Barclays comments "We find that the overall picture is fairly negative and that it will not get any better in the short run. We expect the unemployment rate in the euro area to continue increasing - possibly at a faster pace - and we think it is more likely to stabilise in 2013 than in 2012." Germany Unlikely to Keep the Boat Afloat Barclays says Germany Unlikely to Keep the Boat Afloat Germany is the only country among the main countries whose sentiment on future employment is levelling off at such high levels. This bodes well for the future performance of its economy, on top of its strong fiscal position.Expect Germany to Turn for the Worse Like Barclays, I expect the European picture to deteriorate. Unlike Barclays, I expect a dramatic reversal in Germany. The German export machine cannot keep humming mightily along with a slowdown in China and the huge recession that is going to hit Europe. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 31 Jan 2012 08:48 AM PST Best Business Blogs 2011 Strategist News presents the Best Business Blogs 2011 This is our third year publishing this ranking. The business blogs field is getting more competitive than ever! Seth Godin continues to dominate the business blogosphere, while Guy Kawasaki and Robert Scoble still rule.Business Blogs vs. Financial Blogs I came in 14th on the "business blog" list, but have to admit that I never heard of most of the sites selected by Strategist News. Then again, the concept of "business blogs" encompasses a broad range of categories including marketing, careers, work finance, technology, small business, entrepreneurship, personal finance, microfinance, project management, and numerous other categories. The categories are so broad, I am pleased to be on the list at all. Calculated Risk and Barry Ritholtz (Big Picture) were also on the list, in well-deserved positions of 5 and 8 respectively. For those not familiar with the columns "Alexa Rank" and "Google Page Rank" in the above link, the general idea is the lower the Alexa number the better, the higher the Google Page Rank Number the better. It is very tough for economic blogs to do better than a "6" in Google Page Rank. There is much controversy over Alexa and I pay scant attention to it other than occasional curiosity. Certainly, popularity based on those who have an Alexa toolbar installed is skewed at best. Best Alternative Financial Websites CNBC has an interesting 20-page slideshow on The Best Alternative Financial Blogs. Today's Best Money BlogsIn contrast to the Business Blog list, I have heard of nearly every blog on CNBC's Alternative Financial Website list. 20 Page Slideshow of Best Alternative Blogs
Each page has a brief discussion about the website chosen. I am Page 6 on CNBC's List with this description and image. Mish's Global Economic Trend Analysis I did recognize nearly every name on the above list and am pleased with that image and description for four reasons.
Missing From the List Some very noteworthy alternative sites are missing from the list. Here are some of them in alphabetical order.
Apologies offered in advance to anyone I missed. Other Financial Citations New York Times: NYT 10th Annual Year in Ideas - #1 Idea of the Year 'Do-It-Yourself Macroeconomics' Time Magazine: Best 25 Financial Blogs Bloomberg: Financial Blogs: The Best of the Bunch It is an honor to be named on so many lists. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
German Retail Sales "Unexpectedly" Fall in December, November Revised Lower; Unexpected by Whom? Posted: 31 Jan 2012 02:30 AM PST I am amused to report German Retail Sales Unexpectedly Fall in December German retail sales fell unexpectedly in December, dropping 1.4 percent on a monthly basis in real terms, preliminary data showed on Tuesday.More Amusement I am even more amused by Barclays Capital Research (via email) that suggests "household consumption to be a major GDP growth driver in 2012." German retail sales (real, sa, excluding cars/petrol) unexpectedly fell again in December, by 1.4% m/m (-0.9% y/y), according to the Federal Statistical Office (Destatis). The weak November figure was slightly revised down to -1.0% from a previously reported -0.9%. On average, retail sales in Q4 2011 were 0.7% below their level in Q3 2011 in real terms, indicating a weak performance of household consumption in last year's final quarter.Household Consumption Major GDP Driver?! Points of Contention
Then again, in reference to number 4 above, that is precisely why the falloff in retail sales was "unexpected" in the first place. Analysts and economists crunch numbers, looking in the rear view mirror instead of thinking ahead. Watch for analysts' reports in the months ahead to comment on "unexpected" declines in German consumer sentiment, further "unexpected" declines in German industrial output, further "unexpected" drops in GDP, and further "unexpected" drops in retail sales. Bear in mind, given the above cited "volatility" in retail sales, we just might see an unexpected "rise" in German economic numbers for a month or so. If so, don't make anything of it. It won't last. Math Addendum If it's fair for me to criticize Barclay's it is equally fair for them to criticize me. In response to Greek Bond Math (Assuming the Deal Goes Through) ; Merkel Faces Backlash Over Deal; Political Zugzwang I received an email from a credit analyst at Barclays who prefers to remain anonymous. Here are his personal thoughts ... The majority of the 145bn is for paying down existing debt, it is not additional debtMike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
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